<PAGE>





                             AGREEMENT AND PLAN OF MERGER


                                     BY AND AMONG


                                 HALLIBURTON COMPANY


                                HALLIBURTON N.C., INC.


                                         AND

                                           
                               DRESSER INDUSTRIES, INC.
<PAGE>

                            TABLE OF CONTENTS
                                                                      Page
                               ARTICLE I

                              DEFINITIONS

SECTION 1.01   Definitions . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1.02   Rules of Construction . . . . . . . . . . . . . . . . . .1

                               ARTICLE II

                            TERMS OF MERGER

SECTION 2.01   Statutory Merger. . . . . . . . . . . . . . . . . . . . .2
SECTION 2.02   Effective Time. . . . . . . . . . . . . . . . . . . . . .2
SECTION 2.03   Effect of the Merger. . . . . . . . . . . . . . . . . . .2
SECTION 2.04   Certificate of Incorporation; Bylaws. . . . . . . . . . .2
SECTION 2.05   Directors and Officers. . . . . . . . . . . . . . . . . .2

                             ARTICLE III

          CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

SECTION 3.01   Merger Consideration; Conversion and Cancellation of 
               Securities. . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 3.02   Exchange of Certificates. . . . . . . . . . . . . . . . .3
SECTION 3.03   Closing . . . . . . . . . . . . . . . . . . . . . . . . .6
SECTION 3.04   Stock Transfer Books. . . . . . . . . . . . . . . . . . .6

                                      ARTICLE IV

                     REPRESENTATIONS AND WARRANTIES OF THE COMPANY

SECTION 4.01   Organization and Qualification; Subsidiaries. . . . . . .6
SECTION 4.02   Certificate of Incorporation and Bylaws . . . . . . . . .6
SECTION 4.03   Capitalization. . . . . . . . . . . . . . . . . . . . . .6
SECTION 4.04   Authorization of Agreement. . . . . . . . . . . . . . . .8
SECTION 4.05   Approvals . . . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.06   No Violation. . . . . . . . . . . . . . . . . . . . . . .8
SECTION 4.07   Reports . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 4.08   No Material Adverse Effect; Conduct . . . . . . . . . . 10
SECTION 4.09   Certain Business Practices. . . . . . . . . . . . . . . 10
SECTION 4.10   Certain Obligations.. . . . . . . . . . . . . . . . . . 10

                     AGREEMENT AND PLAN OF MERGER
                                 -ii-
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SECTION 4.11   Authorizations; Compliance. . . . . . . . . . . . . . . 10
SECTION 4.12   Litigation; Compliance with Laws. . . . . . . . . . . . 11
SECTION 4.13   Employee Benefit Plans. . . . . . . . . . . . . . . . . 11
SECTION 4.14   Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.15   Environmental Matters . . . . . . . . . . . . . . . . . 14
SECTION 4.16   Insurance . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.17   Pooling; Tax Matters. . . . . . . . . . . . . . . . . . 15
SECTION 4.18   Affiliates. . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.19   Opinion of Financial Advisor. . . . . . . . . . . . . . 15
SECTION 4.20   Brokers . . . . . . . . . . . . . . . . . . . . . . . . 15

                                 ARTICLE V

               REPRESENTATIONS AND WARRANTIES OF THE PARENT

SECTION 5.01   Organization and Qualification; Subsidiaries. . . . . . 16
SECTION 5.02   Certificate of Incorporation and Bylaws . . . . . . . . 16
SECTION 5.03   Capitalization. . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.04   Authorization of Agreement. . . . . . . . . . . . . . . 17
SECTION 5.05   Approvals . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.06   No Violation. . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.07   Reports . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.08   No Material Adverse Effect; Conduct . . . . . . . . . . 19
SECTION 5.09   Certain Business Practices. . . . . . . . . . . . . . . 20
SECTION 5.10   Certain Obligations . . . . . . . . . . . . . . . . . . 20
SECTION 5.11   Authorizations; Compliance. . . . . . . . . . . . . . . 20
SECTION 5.12   Litigation; Compliance with Laws. . . . . . . . . . . . 20
SECTION 5.13   Employee Benefit Plans. . . . . . . . . . . . . . . . . 21
SECTION 5.14   Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.15   Environmental Matters . . . . . . . . . . . . . . . . . 24
SECTION 5.16   Insurance.. . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.17   Pooling; Tax Matters. . . . . . . . . . . . . . . . . . 24
SECTION 5.18   Affiliates. . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.19   Brokers . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.20   Opinion of Financial Advisor.   . . . . . . . . . . . . 26
SECTION 5.21   Acquiring Person. . . . . . . . . . . . . . . . . . . . 26

                                ARTICLE VI

                                COVENANTS

SECTION 6.01   Affirmative Covenants . . . . . . . . . . . . . . . . . 26
SECTION 6.02   Negative Covenants. . . . . . . . . . . . . . . . . . . 27
SECTION 6.03   No Solicitation by the Company. . . . . . . . . . . . . 33

                         AGREEMENT AND PLAN OF MERGER
                                   -iii-
<PAGE>

SECTION 6.04   No Solicitation by the Parent . . . . . . . . . . . . . 34
SECTION 6.05   Access and Information. . . . . . . . . . . . . . . . . 35

                               ARTICLE VII

                          ADDITIONAL AGREEMENTS

SECTION 7.01   Meetings of Stockholders. . . . . . . . . . . . . . . . 35
SECTION 7.02   Registration Statement; Proxy Statements. . . . . . . . 36
SECTION 7.03   Appropriate Action; Consents; Filings . . . . . . . . . 38
SECTION 7.04   Affiliates; Pooling; Tax Treatment. . . . . . . . . . . 40
SECTION 7.05   Public Announcements. . . . . . . . . . . . . . . . . . 40
SECTION 7.06   NYSE Listing. . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.07   Rights Agreement; State Takeover Statutes . . . . . . . 40
SECTION 7.08   Comfort Letters . . . . . . . . . . . . . . . . . . . . 41
SECTION 7.09   Assumption of Obligations to Issue Stock and 
               Obligations of Employee Benefit Plans; Employees. . . . 41
SECTION 7.10   Indemnification of Directors and Officers . . . . . . . 44
SECTION 7.11   Newco . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.12   Event Notices.. . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.13   Parent Board of Directors; Committees.. . . . . . . . . 46
SECTION 7.14   Transition Management . . . . . . . . . . . . . . . . . 46
SECTION 7.15   Employment Contracts. . . . . . . . . . . . . . . . . . 46
SECTION 7.16   Waiver by Company Joint Venture Partners. . . . . . . . 46

                             ARTICLE VIII

                          CLOSING CONDITIONS

SECTION 8.01   Conditions to Obligations of Each Party Under This 
               Agreement . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.02   Additional Conditions to Obligations of the Parent 
               Companies . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 8.03   Additional Conditions to Obligations of the Company . . 48

                              ARTICLE IX

                   TERMINATION, AMENDMENT AND WAIVER

SECTION 9.01   Termination . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 9.02   Effect of Termination . . . . . . . . . . . . . . . . . 51
SECTION 9.03   Amendment . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.04   Waiver. . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 9.05   Fees, Expenses and Other Payments . . . . . . . . . . . 52

                       AGREEMENT AND PLAN OF MERGER
                                  -iv-
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                                ARTICLE X

                            GENERAL PROVISIONS

SECTION 10.01  Effectiveness of Representations, Warranties and 
               Agreements. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.02  Notices . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.03  Headings. . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.04  Severability. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.05  Entire Agreement. . . . . . . . . . . . . . . . . . . . 55
SECTION 10.06  Assignment. . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 10.07  Parties in Interest . . . . . . . . . . . . . . . . . . 56
SECTION 10.08  Failure or Indulgence Not Waiver; Remedies Cumulative . 56
SECTION 10.09  Governing Law . . . . . . . . . . . . . . . . . . . . . 56
SECTION 10.10  Specific Performance. . . . . . . . . . . . . . . . . . 56
SECTION 10.11  Counterparts. . . . . . . . . . . . . . . . . . . . . . 56

                      AGREEMENT AND PLAN OF MERGER
                                  -v-
<PAGE>

                                       ANNEXES


Annex A   Schedule of Defined Terms
Annex B   Affiliate's Agreement (Dresser Industries, Inc.) Affiliates)
Annex C   Affiliate's Agreement (Halliburton Company) Affiliates)

 

                                AGREEMENT AND PLAN OF MERGER
                                            -vi-
<PAGE>

                             AGREEMENT AND PLAN OF MERGER


     THIS AGREEMENT AND PLAN OF MERGER, dated as of February 25, 1998 (this
"Agreement"), is by and among Halliburton Company, a Delaware corporation (the
"Parent"), Halliburton N.C., Inc., a Delaware corporation and a wholly owned
direct subsidiary of the Parent ("Newco"), and Dresser Industries, Inc., a
Delaware corporation (the "Company").  The Parent and Newco are sometimes
referred to herein as the "Parent Companies."

                                      RECITALS:
     
     The Company and the Parent have determined to engage in a business 
combination as peer firms in a merger of equals.

     In furtherance thereof, the respective Boards of Directors of the 
Company, the Parent and Newco have approved this Agreement and the Merger of 
Newco with and into the Company.

     For federal income tax purposes, it is intended that the Merger will 
qualify as a reorganization within the meaning of the provisions of Section 
368(a) of the Code.

     The Merger is intended to be treated as a "pooling of interests" for 
accounting purposes.

     The parties hereto acknowledge the execution and delivery of the Stock 
Option Agreements concurrently with the execution and delivery of this 
Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the respective 
representations, warranties, covenants and agreements set forth in this 
Agreement, the parties hereto agree as follows:

                                      ARTICLE I

                                     DEFINITIONS

     SECTION 1.01   DEFINITIONS.  Certain capitalized and other terms used in 
this Agreement are defined in Annex A hereto and are used herein with the 
meanings ascribed to them therein.

     SECTION 1.02   RULES OF CONSTRUCTION.  Unless the context otherwise 
requires, as used in this Agreement: (a) a term has the meaning ascribed to 
it; (b) an accounting term not otherwise defined has the meaning ascribed to 
it in accordance with GAAP; (c) "or" is not exclusive; (d) "including" means 
"including, without limitation;" (e) words in the singular include the plural; 
(f) words in the plural include the singular; (g) words applicable to one 
gender shall be construed to apply to each gender; (h) the terms "hereof," 
"herein," "hereby," "hereto" and derivative or similar words refer to this 
entire Agreement; and (i) the terms "Article" or "Section" shall refer to the 
specified Article or Section of this Agreement.
<PAGE>

                                      ARTICLE II

                                   TERMS OF MERGER

     SECTION 2.01   STATUTORY MERGER.  Subject to the terms and conditions 
and in reliance upon the representations, warranties, covenants and 
agreements contained herein, Newco shall merge with and into the Company at 
the Effective Time.  The terms and conditions of the Merger and the mode of 
carrying the same into effect shall be as set forth in this Agreement.  As a 
result of the Merger, the separate corporate existence of Newco shall cease 
and the Company shall continue as the Surviving Corporation.

     SECTION 2.02   EFFECTIVE TIME.  As soon as practicable after the 
satisfaction or, if permissible, waiver of the conditions set forth in 
Article VIII, the parties hereto shall cause the Merger to be consummated by 
filing a Certificate of Merger with the Secretary of State of the State of 
Delaware, in such form as required by, and executed in accordance with the 
relevant provisions of, the GCL.

     SECTION 2.03   EFFECT OF THE MERGER.  At the Effective Time, the effect 
of the Merger shall be as provided in the applicable provisions of the GCL. 
Without limiting the generality of the foregoing, and subject thereto, at the 
Effective Time, except as otherwise provided herein, all the property, 
rights, privileges, powers and franchises of Newco and the Company shall vest 
in the Surviving Corporation, and all debts, liabilities and duties of Newco 
and the Company shall become the debts, liabilities and duties of the 
Surviving Corporation.

     SECTION 2.04   CERTIFICATE OF INCORPORATION; BYLAWS.  At the Effective 
Time, the certificate of incorporation and the bylaws of the Company, as in 
effect immediately prior to the Effective Time, shall be the certificate of 
incorporation and the bylaws of the Surviving Corporation.

     SECTION 2.05   DIRECTORS AND OFFICERS.  The directors of Newco 
immediately prior to the Effective Time shall be the directors of the 
Surviving Corporation, each to hold office in accordance with the certificate 
of incorporation and bylaws of the Surviving Corporation, and the officers of 
the Company immediately prior to the Effective Time shall be the officers of 
the Surviving Corporation, in each case until their respective successors are 
duly elected or appointed and qualified.

                                     ARTICLE III

                  CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

     SECTION 3.01   MERGER CONSIDERATION; CONVERSION AND CANCELLATION OF 
SECURITIES.  At the Effective Time, by virtue of the Merger and without any 
action on the part of the Parent Companies, the Company or the holders of any 
of the following securities:

          (a)  Subject to the other provisions of this Article III, each share
     of Company Common Stock, including the associated right to receive or
     purchase shares of Series A 

                                AGREEMENT AND PLAN OF MERGER
                                            -2-
<PAGE>

     Junior Preferred Stock of the Company pursuant to the terms of the 
     Company's Rights Agreement, issued and outstanding immediately prior to 
     the Effective Time (excluding any Company Common Stock described in 
     Section 3.01(c)) shall be converted into one share of Parent Common 
     Stock.  Notwithstanding the foregoing, if between the date of this 
     Agreement and the Effective Time the outstanding shares of the Parent 
     Common Stock or the Company Common Stock shall have been changed into a 
     different number of shares or a different class, by reason of any stock 
     dividend, subdivision, reclassification, recapitalization, split, 
     combination or exchange of shares, the Common Stock Exchange Ratio shall 
     be correspondingly adjusted to reflect such stock dividend, subdivision, 
     reclassification, recapitalization, split, combination or exchange of 
     shares.

          (b)  All shares of Company Common Stock shall, upon conversion thereof
     into shares of Parent Common Stock at the Effective Time, cease to be
     outstanding and shall be automatically canceled and retired, and each
     certificate previously evidencing Company Common Stock outstanding
     immediately prior to the Effective Time (other than Company Common Stock
     described in Section 3.01(c)) shall thereafter be deemed, for all purposes 
     other than the payment of dividends or distributions, to represent that
     number of shares of Parent Common Stock determined pursuant to the Common
     Stock Exchange Ratio and, if applicable, the right to receive cash pursuant
     to Section 3.02(d) or (e) or both. The holders of certificates previously
     evidencing Company Common Stock shall cease to have any rights with respect
     to such Company Common Stock except as otherwise provided herein or by law.

          (c)  Notwithstanding any provision of this Agreement to the contrary,
     each share of Company Common Stock held in the treasury of the Company and
     each share of Company Common Stock, if any, owned by the Parent or any
     direct or indirect wholly owned Subsidiary of the Parent or of the Company
     immediately prior to the Effective Time shall be canceled and extinguished
     without conversion thereof.

          (d)  Each share of common stock, par value $1.00 per share, of Newco
     issued and outstanding immediately prior to the Effective Time shall be
     converted into one share of common stock, par value $.25 per share, of the
     Surviving Corporation.

     SECTION 3.02   EXCHANGE OF CERTIFICATES.

          (a)  EXCHANGE FUND.  At the Closing, the Parent shall deposit, or
     cause to be deposited, with the Exchange Agent, for the benefit of the
     former holders of Company Common Stock and for exchange through the
     Exchange Agent in accordance with this Article III, certificates evidencing
     that number of shares of Parent Common Stock equal to the product of the
     Common Stock Exchange Ratio and the number of shares of Company Common
     Stock issued and outstanding immediately prior to the Effective Time
     (exclusive of any such shares to be canceled pursuant to Section 3.01(c)). 
     The Exchange Agent shall, pursuant to irrevocable instructions from the
     Parent, deliver certificates evidencing Parent Common Stock, together with
     any cash to be paid in lieu of fractional interests in shares of Parent
     Common Stock pursuant to Section 3.02(e) and any dividends or distributions
     related 

                          AGREEMENT AND PLAN OF MERGER
                                        -3-
<PAGE>

     to such Parent Common Stock to be paid pursuant to Section 3.02(d),
     in exchange for certificates theretofore evidencing Company Common Stock
     surrendered to the Exchange Agent pursuant to Section 3.02(c).  Except as
     contemplated by Sections 3.02(f), (g) and (h), the Exchange Fund shall not
     be used for any other purpose.

          (b)  LETTER OF TRANSMITTAL.  Not later than five (5) Business Days
     after the Effective Time, the Parent will cause the Exchange Agent to send
     to each record holder of Company Common Stock immediately prior to the
     Effective Time a letter of transmittal and other appropriate materials for
     use in surrendering to the Exchange Agent certificates that prior to the
     Effective Time evidenced shares of Company Common Stock.

          (c)  EXCHANGE PROCEDURES.  Promptly after the Effective Time, the
     Exchange Agent shall distribute to each former holder of Company Common
     Stock, upon surrender to the Exchange Agent for cancellation of one or more
     certificates that theretofore evidenced shares of Company Common Stock,
     certificates evidencing the appropriate number of shares of the Parent
     Common Stock into which such shares of Company Common Stock were converted
     pursuant to the Merger.  If shares of Parent Common Stock are to be issued
     to a Person other than the Person in whose name the surrendered certificate
     or certificates are registered, it shall be a condition of issuance of
     Parent Common Stock that the surrendered certificate or certificates shall
     be properly endorsed, with signatures guaranteed, or otherwise in proper
     form for transfer and that the Person requesting such payment shall pay any
     transfer or other taxes required by reason of the issuance of Parent Common
     Stock to a Person other than the registered holder of the surrendered
     certificate or certificates or such Person shall establish to the
     satisfaction of the Parent that such tax has been paid or is not
     applicable. 

          (d)  DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES OF COMPANY
     COMMON STOCK.  No dividends or other distributions declared or made with
     respect to the Parent Common Stock with a record date after the Effective
     Time shall be paid to the holder of any certificate that theretofore
     evidenced shares of Company Common Stock until the holder of such
     certificate shall surrender such certificate.  Subject to the effect of any
     applicable abandoned property, escheat or similar laws, following surrender
     of any such certificate, there shall be paid to the holder of the
     certificates evidencing whole shares of Parent Common Stock issued in
     exchange therefor, without interest, (i) promptly, the amount of any cash
     payable with respect to a fractional share of Parent Common Stock to which
     such holder is entitled pursuant to Section 3.02(e), (ii) the amount of
     dividends or other distributions with a record date after the Effective
     Time theretofore paid with respect to such whole shares of Parent Common
     Stock and (iii) at the appropriate payment date, the amount of dividends or
     other distributions, with a record date after the Effective Time but prior
     to surrender and a payment date occurring after surrender, payable with
     respect to such whole shares of Parent Common Stock.  

                           AGREEMENT AND PLAN OF MERGER
                                       -4-
<PAGE>

          (e)  NO FRACTIONAL SHARES.  Notwithstanding anything herein to the
     contrary, no certificates or scrip evidencing fractional shares of Parent
     Common Stock shall be issued in connection with the Merger, and any such
     fractional share interests to which a holder of record of Company Common
     Stock at the Effective Time would otherwise be entitled shall not entitle
     such holder to vote or to any rights of a stockholder of the Parent.  In
     lieu of any such fractional shares, each holder of record of Company Common
     Stock at the Effective Time who but for the provisions of this
     Section 3.02(e) would be entitled to receive a fractional interest of a
     share of Parent Common Stock by virtue of the Merger shall be paid cash,
     without any interest thereon, as hereinafter provided.  The Parent shall
     instruct the Exchange Agent to determine the number of whole shares and
     fractional shares of Parent Common Stock allocable to each holder of record
     of Company Common Stock at the Effective Time, to aggregate all such
     fractional shares into whole shares, to sell the whole shares obtained
     thereby in the open market at then prevailing prices on behalf of holders
     who otherwise would be entitled to receive fractional share interests and
     to distribute to each such holder such holder's ratable share of the total
     proceeds of such sale, after making appropriate deductions of the amount,
     if any, required for federal income tax withholding purposes and after
     deducting any applicable transfer taxes.  All brokers' fees and commissions
     incurred in connection with such sales shall be paid by the Parent.

          (f)  TERMINATION OF EXCHANGE FUND.  Any portion of the Exchange Fund
     that remains unclaimed by the former holders of Company Common Stock for 12
     months after the Effective Time shall be delivered to the Parent, upon
     demand, and any former holders of Company Common Stock who have not
     theretofore complied with this Article III shall thereafter look only to
     the Parent for the Parent Common Stock and any cash to which they are
     entitled.  Notwithstanding any other provisions herein, neither the
     Exchange Agent nor any party hereto shall be liable to any former holder of
     Company Common Stock for any Parent Common Stock, cash in lieu of
     fractional share interests or dividends or distributions thereon delivered
     to a public official pursuant to any applicable abandoned property, escheat
     or similar law.

          (g)  WITHHOLDING OF TAX.  The Parent shall be entitled to deduct and
     withhold from the consideration otherwise payable pursuant to this
     Agreement to any former holder of Company Common Stock such amounts as the
     Parent (or any affiliate thereof) or the Exchange Agent is required to
     deduct and withhold with respect to the making of such payment under the
     Code or state, local or foreign tax Law.  To the extent that amounts are so
     withheld by the Parent, such withheld amounts shall be treated for all
     purposes of this Agreement as having been paid to the former holder of
     Company Common Stock in respect of which such deduction and withholding was
     made by the Parent.

          (h)  INVESTMENT OF EXCHANGE FUND.  The Exchange Agent may invest any
     cash included in the Exchange Fund in deposit accounts or short-term money
     market instruments, as directed by the Parent, on a daily basis.  Any
     interest and other income resulting from such investments shall be paid to
     the Parent.  The Parent shall deposit with the Exchange Agent as part of
     the Exchange Fund cash in an amount equal to any loss of principal
     resulting from such investments promptly after the incurrence of such a
     loss.     

                           AGREEMENT AND PLAN OF MERGER
                                       -5-
<PAGE>

     SECTION 3.03   CLOSING.  The Closing shall take place at the offices of
Vinson & Elkins L.L.P., 4000 Trammel Crow Center, 2001 Ross Avenue, Dallas,
Texas 75201, at 10:00 a.m. on the next Business Day following the date on which
the conditions to the Closing have been satisfied or waived or at such other
place, time and date as the parties hereto may agree.  At the conclusion of the
Closing on the Closing Date, the parties hereto shall cause the Certificate of
Merger to be filed with the Secretary of State of the State of Delaware.

     SECTION 3.04   STOCK TRANSFER BOOKS.  At the close of business on the date
of the Effective Time, the stock transfer books of the Company shall be closed
and there shall be no further registration of transfers of shares of Company
Common Stock thereafter on the records of the Company.

                                      ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company hereby represents and warrants to the Parent Companies, subject
to the limitations set forth in Section 10.01, that:

     SECTION 4.01   ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.  The Company
and each Significant Subsidiary of the Company are legal entities duly
organized, validly existing and in good standing under the Laws of their
respective jurisdictions of incorporation or organization, have all requisite
corporate power and authority to own, lease and operate their respective
properties and to carry on their businesses as they are now being conducted and
are duly qualified and in good standing to do business in the jurisdictions in
which the nature of the businesses conducted by them or the ownership or leasing
of their respective properties makes such qualification necessary, other than
any matters, including the failure to be so qualified and in good standing, that
could not reasonably be expected to have a Material Adverse Effect on the
Company.  Section 4.01 of the Company's Disclosure Letter sets forth a true and
complete list of all the Company's directly or indirectly owned Significant
Subsidiaries, together with (A) a specification of the nature of legal
organization of such Subsidiary, and (B) the jurisdiction of incorporation or
other organization of such Subsidiary.  

     SECTION 4.02   CERTIFICATE OF INCORPORATION AND BYLAWS.  The Company has
heretofore marked for identification and delivered to the Parent complete and
correct copies of the certificate of incorporation and the bylaws, in each case
as amended or restated to the date hereof, of the Company. The Company is not in
violation of any of the provisions of its certificate of incorporation or
bylaws.

     SECTION 4.03   CAPITALIZATION.

          (a)  The authorized capital stock of the Company consists of
     (i) 400,000,000 shares of Company Common Stock, of which, as of February 
     23, 1998, (A) 175,479,962 shares were issued and outstanding, all of which
     are duly authorized, validly issued, fully paid and nonassessable and not
     subject to preemptive rights created by 

                           AGREEMENT AND PLAN OF MERGER
                                       -6-
<PAGE>

     statute, the Company's certificate of incorporation or bylaws or any 
     agreement to which the Company is a party or is bound and (B) 9,385,769 
     shares were held in the treasury of the Company and (ii) 10,000,000 
     shares of Preferred Stock, with no par value, of which none are issued 
     and outstanding but of which 2,000,000 shares have been designated as 
     Series A Junior Preferred Stock.  Since October 31, 1997, except as set 
     forth in Section 4.03(a) of the Company's Disclosure Letter, (x) no 
     shares of Company Common Stock have been issued by the Company, except 
     upon exercise of Company Stock Options outstanding under the Company 
     Stock Plans and (y) the Company has not granted any options for, or 
     other rights to purchase, shares of Company Common Stock.

          (b)  Except for shares reserved for issuance pursuant to the Company
     Stock Plans described in Section 4.03(b) of the Company's Disclosure Letter
     (which reservations are also listed in detail in Section 4.03(b) of the
     Company's Disclosure Letter), no shares of Common Stock are reserved for
     issuance, and, except for the Company's Rights Plan and Company Stock
     Options, there are no contracts, agreements, commitments or arrangements
     obligating the Company (i) to offer, sell, issue or grant any Equity
     Security of the Company or (ii) to redeem, purchase or acquire, or offer to
     purchase or acquire, any outstanding Equity Security of the Company.  

          (c)  Except as set forth in Section 4.03(c) of the Company's
     Disclosure Letter, (i) all the issued and outstanding shares of capital
     stock of, or other equity interests in, each Significant Subsidiary of the
     Company are owned by the Company or one of its Subsidiaries, have been duly
     authorized and are validly issued, and, with respect to capital stock, are
     fully paid and nonassessable, and were not issued in violation of any
     preemptive or similar rights of any past or present equity holder of such
     Subsidiary; (ii) all such issued and outstanding shares, or other equity
     interests, that are owned by the Company or one of its Subsidiaries are
     owned free and clear of all Liens; (iii) no shares of capital stock of, or
     other equity interests in, any Significant Subsidiary of the Company are
     reserved for issuance, and there are no contracts, agreements, commitments
     or arrangements obligating the Company or any of its Significant
     Subsidiaries (A) to offer, sell, issue, grant, pledge, dispose of or
     encumber any Equity Securities of any of the Significant Subsidiaries of
     the Company or (B) to redeem, purchase or acquire, or offer to purchase or
     acquire, any outstanding Equity Securities of any of the Significant
     Subsidiaries of the Company or (C) to grant any Lien on any outstanding
     shares of capital stock of, or other equity interests in, any of the
     Significant Subsidiaries of the Company; except for any matter under
     clause (i), (ii) or (iii) of this Section 4.03(c) that could not reasonably
     be expected to have a Material Adverse Effect on the Company.

          (d)  Except for the revocable proxies granted by the Company or its
     Subsidiaries with respect to the capital stock of Subsidiaries owned by the
     Company or its Subsidiaries, there are no voting trusts, proxies or other
     agreements, commitments or understandings of any character to which the
     Company or any of its Significant Subsidiaries is a party or by which the
     Company or any of its Significant Subsidiaries is bound with respect to the
     voting of any shares of capital stock of the Company or any of its
     Significant Subsidiaries.  

                          AGREEMENT AND PLAN OF MERGER
                                        -7-
<PAGE>

     SECTION 4.04   AUTHORIZATION OF AGREEMENT.  The Company has all requisite
corporate power and authority to execute and deliver this Agreement and the
Company Stock Option Agreement and, subject, in the case of this Agreement, to
approval of this Agreement by the holders of a majority of the outstanding
shares of Company Common Stock in accordance with the applicable provisions of
the GCL and the Company's certificate of incorporation, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby.  The execution and delivery by the Company of this
Agreement and the Company Stock Option Agreement and the performance by the
Company of its obligations hereunder and thereunder have been duly and validly
authorized by all requisite corporate action on the part of the Company (other
than, with respect to the Merger, the approval and adoption of this Agreement by
the holders of a majority of the outstanding shares of Company Common Stock in
accordance with the applicable provisions of the GCL and the Company's
certificate of incorporation).  This Agreement and the Company Stock Option
Agreement have been duly executed and delivered by the Company and (assuming due
authorization, execution and delivery hereof by the other parties hereto)
constitute legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the same may be
limited by legal principles of general applicability governing the application
and availability of equitable remedies.

     SECTION 4.05   APPROVALS.  Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in Section 4.05 of the Company's
Disclosure Letter, (f) the NYSE, (g) the filing and recordation of appropriate
merger documents as required by the GCL and (h) those Laws, Regulations and
Orders noncompliance with which could not reasonably be expected to have a
Material Adverse Effect on the Company, no filing or registration with, no
waiting period imposed by and no Authorization of, any Governmental Authority is
required under any Law, Regulation or Order applicable to the Company or any of
its Subsidiaries to permit the Company to execute, deliver or perform this
Agreement or the Company Stock Option Agreement or to consummate the
transactions contemplated hereby or thereby.

     SECTION 4.06   NO VIOLATION.  Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by and receipt of all Authorizations of Governmental Authorities
indicated as required in Section 4.05 and receipt of the approval of this
Agreement by the holders of a majority of the outstanding shares of Company
Common Stock as required by the GCL and except as set forth in Section 4.06 of
the Company's Disclosure Letter, neither the execution and delivery by the
Company of this Agreement or the Company Stock Option Agreement nor the
performance by the Company of its obligations hereunder or thereunder will
(a) violate or breach the terms of or cause a default under (i) any Law,
Regulation or Order applicable to the Company, (ii) the certificate of
incorporation or bylaws of the Company or (iii) any contract or agreement to
which the Company or any of its Subsidiaries is a party or by which it or any of
its properties or assets is bound, or (b) with the passage of time, the giving
of notice or the taking of any action by a third Person, have any of the effects
set forth in clause (a) of this Section, except in any such case for any matters
described in this Section (other than clause (ii) hereof) that could not
reasonably be expected to have Material Adverse Effect on the Company.  Prior to
the execution of this Agreement, the Board of Directors of the Company has 

                          AGREEMENT AND PLAN OF MERGER
                                        -8-
<PAGE>

taken all necessary action to cause this Agreement and the transactions 
contemplated hereby to be exempt from the provisions of Section 203 of the 
GCL and to ensure that the execution, delivery and performance of this 
Agreement by the parties hereto will not cause any rights to be distributed 
or to become exercisable under the Company's Rights Agreement.  Assuming the 
representation of the Parent in Section 5.17(g) is true, neither of the 
Parent Companies is (a) an "Acquiring Person" as defined in the Company's 
Rights Agreement or (b) will become an "Acquiring Person" as defined therein 
as a result of any of the transactions contemplated by this Agreement.

     SECTION 4.07   REPORTS.

          (a)  Since October 31, 1994,(i) the Company has filed all SEC Reports
     required to be filed by it with the Commission and (ii) the Company and its
     Subsidiaries have filed all other Reports required to be filed by any of
     them with any other Governmental Authorities, including state securities
     administrators, except where the failure to file any such Reports could not
     reasonably be expected to have a Material Adverse Effect on the Company. 
     Such Reports, including all those filed after the date of this Agreement
     and prior to the Effective Time, (x) were prepared in all material respects
     in accordance with the requirements of applicable Law (including, with
     respect to the SEC Reports, the Securities Act and the Exchange Act, as the
     case may be, and the applicable Regulations of the Commission thereunder)
     and (y), in the case of the SEC Reports, did not at the time they were
     filed contain any untrue statement of a material fact or omit to state a
     material fact required to be stated therein or necessary in order to make
     the statements therein, in the light of the circumstances under which they
     were made, not misleading.

          (b)  The Company's Audited Consolidated Financial Statements and any
     consolidated financial statements of the Company (including any related
     notes thereto) contained in any SEC Reports filed by the Company with the
     Commission after the date of this Agreement (i) have been or will have been
     prepared in accordance with GAAP (except (A) to the extent required by
     changes in GAAP and (B), with respect to the Company's Audited Consolidated
     Financial Statements, as may be indicated in the notes thereto and (C), in
     the case of any unaudited interim financial statements, as permitted by
     Form 10-Q) and (ii) fairly present the consolidated financial position of
     the Company and its Subsidiaries as of the respective dates thereof and the
     consolidated results of their operations and cash flows for the periods
     indicated (subject, in the case of any unaudited interim financial
     statements, to normal and recurring year-end adjustments).

          (c)  Except as set forth in Section 4.07(c) of the Company's
     Disclosure Letter, there exist no liabilities or obligations of the Company
     and its Subsidiaries that are Material to the Company, whether accrued,
     absolute, contingent or threatened, and that would be required to be
     reflected, reserved for or disclosed under GAAP in consolidated financial
     statements of the Company as of and for the period ended on the date of
     this representation and warranty, other than (i) liabilities or obligations
     that are adequately reflected, reserved for or disclosed in the Company's
     Audited Consolidated Financial Statements,(ii) liabilities or obligations
     incurred in the ordinary course of business of the Company since October
     31, 

                          AGREEMENT AND PLAN OF MERGER
                                        -9-
<PAGE>

     1997, (iii) liabilities or obligations the incurrence of which is
     permitted by Section 6.02(a) and (iv) liabilities or obligations that are
     not Material to the Company.

     SECTION 4.08   NO MATERIAL ADVERSE EFFECT; CONDUCT.

          (a)  Since October 31, 1997, no event (other than any event that is of
     general application to all or a substantial portion of the Company's
     industry and other than any event that is expressly subject to any other
     representation or warranty contained in Article IV) has, to the Knowledge
     of the Company, occurred that, individually or together with other similar
     events, could reasonably be expected to constitute or cause a Material
     Adverse Effect on the Company.

          (b)  Except as set forth in Section 4.08(b) of the Company's
     Disclosure Letter, during the period from October 31, 1997 to the date of
     this Agreement, neither the Company nor any of its Subsidiaries has engaged
     in any conduct that is proscribed during the period from the date of this
     Agreement to the Effective Time by subsections (i) through (xiv) of
     Section 6.02(a).  

     SECTION 4.09   CERTAIN BUSINESS PRACTICES.  As of the date of this
Agreement, neither the Company or any of its Subsidiaries nor any director,
officer, employee or agent of the Company or any of its Subsidiaries has
(a) used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity, (b) made any unlawful payment
to any foreign or domestic government official or employee or to any foreign or
domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended, (c) consummated any transaction, made
any payment, entered into any agreement or arrangement or taken any other action
in violation of Section 1128B(b) of the Social Security Act, as amended, or
(d) made any other unlawful payment, except for any such matters that could not
reasonably be expected to have a Material Adverse Effect on the Company.

     SECTION 4.10   CERTAIN OBLIGATIONS.  Except for those listed in
Section 4.10 of the Company's Disclosure Letter, neither the Company nor any of
its Subsidiaries is a party to or bound by any (a) Noncompete Agreement or
(b) any agreement that contains change of control or similar provisions that
would give any Person that is a party to any such agreement the right, as a
result of the execution of this Agreement or the consummation of any of the
transactions contemplated hereby, to purchase any Material interest of the
Company in any joint venture, partnership or similar arrangement.

     SECTION 4.11   AUTHORIZATIONS; COMPLIANCE.  The Company and its
Subsidiaries have obtained all Authorizations that are necessary to carry on
their businesses as currently conducted, except for any such Authorizations as
to which, individually or in the aggregate, the failure to possess could not
reasonably be expected to have a Material Adverse Effect on the Company.  Such
Authorizations are in full force and effect, have not been violated in any
respect that could reasonably be expected to have a Material Adverse Effect on
the Company and there is no action, proceeding or investigation pending or, to
the Knowledge of the Company, threatened regarding suspension, revocation or
cancellation of any such Authorizations, except for any suspensions, 

                          AGREEMENT AND PLAN OF MERGER
                                      -10-
<PAGE>

revocations or cancellations of any such Authorizations that, individually or 
in the aggregate, could not reasonably be expected to have a Material Adverse 
Effect on the Company.

     SECTION 4.12   LITIGATION; COMPLIANCE WITH LAWS.  There are no actions,
suits, investigations or proceedings (including any proceedings in arbitration)
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries, at law or in equity, in any Court or before or by any
Governmental Authority, except actions, suits, investigations or proceedings
that are disclosed in the Company's SEC Reports, that are set forth in
Section 4.12 or Section 4.15 of the Company's Disclosure Letter or that,
individually or, with respect to multiple actions, suits or proceedings that
allege similar theories of recovery based on similar facts, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect on the
Company.  There are no Material claims pending or, to the Knowledge of the
Company, threatened by any Persons against the Company or any of its
Subsidiaries for indemnification pursuant to any statute, organizational
document, contract or otherwise with respect to any claim, action, suit,
investigation or proceeding pending in any Court or before or by any
Governmental Authority.  Except as set forth in Section 4.12 of the Company's
Disclosure Letter and with respect to the matters covered by Sections 4.09,
4.13, 4.14 and 4.15, the Company and its Subsidiaries are in substantial
compliance with all applicable Laws and Regulations and are not in default with
respect to any Order applicable to the Company or any of its Subsidiaries,
except such events of noncompliance or defaults that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect on
the Company.

     SECTION 4.13   EMPLOYEE BENEFIT PLANS.  Except as set forth in the
Company's SEC Reports or in Section 4.13 of the Company's Disclosure Letter:

          (a)  With respect to each Company Benefit Plan, no event has occurred
     and, to the Knowledge of the Company, there exists no condition or set of
     circumstances in connection with which the Company or any of its
     Subsidiaries could be subject to any liability under the terms of such
     Company Benefit Plan, ERISA, the Code or any other applicable Law, other
     than any condition or set of circumstances that could not reasonably be
     expected to have a Material Adverse Effect on the Company.

          (b)  Each Current Company Benefit Plan intended to be qualified under
     Section 401 of the Code (i) satisfies in form the requirements of such
     Section except to the extent amendments are not required by Law to be made
     until a date after the Effective Time, (ii) has received a favorable
     determination letter from the IRS regarding such qualified status and
     (iii) has not, since the receipt of the most recent favorable determination
     letter, been amended other than amendments required by applicable Law.

          (c)  Except as would not reasonably be expected to result in a
     Material Adverse Effect on the Company, there has been no termination or
     partial termination of any Current Company Benefit Plan within the meaning
     of Section 4.11(d)(3) of the Code and, to the Knowledge of the Company,
     each Current Company Benefit Plan has been operated in material compliance
     with its provisions and with applicable Law.

                          AGREEMENT AND PLAN OF MERGER
                                      -11-
<PAGE>

          (d)  Any Terminated Company Benefit Plan intended to have been
     qualified under Section 401 of the Code received a favorable determination
     letter from the IRS with respect to its termination.

          (e)  There are no actions, suits or claims pending (other than routine
     claims for benefits) or, to the Knowledge of the Company, threatened
     against, or with respect to, any Company Benefit Plan or its assets that
     could reasonably be expected to have a Material Adverse Effect on the
     Company and, to the Knowledge of the Company, no facts or circumstances
     exist that could give rise to any such actions, suits or claims, except as
     would not reasonably be expected to have a Material Adverse Effect on the
     Company.

          (f)  To the Knowledge of the Company, there is no matter pending
     (other than routine qualification determination filings) with respect to
     any Company Benefit Plans before the IRS, the Department of Labor, the PBGC
     or any other Governmental Authority, except as would not reasonably be
     expected to have a Material Adverse Effect on the Company.

          (g)  All contributions required to be made to Company Benefit Plans
     pursuant to their terms and the provisions of ERISA, the Code or any other
     applicable Law have been timely made, except as would not reasonably be
     expected to have a Material Adverse Effect on the Company.

          (h)  As to any Current Company Benefit Plan subject to Title IV of
     ERISA, (i) there has been no event or condition which presents a
     significant risk of plan termination, (ii) no accumulated funding
     deficiency, whether or not waived, within the meaning of Section 302 of
     ERISA or Section 412 of the Code has been incurred (iii) no reportable
     event within the meaning of Section 4043 of ERISA (for which the disclosure
     requirements of Regulation section 4043.1, ET SEQ., promulgated by the
     PBGC, have not been waived) has occurred within six years prior to the date
     of this Agreement, (iv) no notice of intent to terminate such Benefit Plan
     has been given under Section 4041 of ERISA, (v) no proceeding has been
     instituted under Section 4042 of ERISA to terminate such Benefit Plan,
     (vi) no liability to the PBGC has been incurred (other than with respect to
     required premium payments) and (vii) the assets of the Benefit Plan equal
     or exceed the actuarial present value of the benefit liabilities, within
     the meaning of Section 4041 of ERISA, under the Benefit Plan, based upon
     reasonable actuarial assumptions and the asset valuation principles
     established by the PBGC, except as would not reasonably be expected to have
     a Material Adverse Effect on the Company.

          (i)  In connection with the consummation of the transactions
     contemplated by this Agreement, no payment of money or other property,
     acceleration of benefits or provision of other rights has been or will be
     made under any Current Company Benefit Plan that could reasonably be
     expected to be nondeductible under Section 280G of the Code, whether or not
     some other subsequent action or event would be required to cause such
     payment, acceleration or provision to be triggered.

                          AGREEMENT AND PLAN OF MERGER
                                      -12-
<PAGE>

          (j)  The execution and delivery of this Agreement and the consummation
     of the transactions contemplated hereby will not (i) require the Company or
     any of its Subsidiaries to make a larger contribution to, or pay greater
     benefits or provide other rights under, any Current Company Benefit Plan or
     any of the programs, agreements, policies or other arrangements described
     in the Company's Disclosure Letter in response to paragraph (k) below than
     it otherwise would, whether or not some other subsequent action or event
     would be required to cause such payment or provision to be triggered or
     (ii) create or give rise to any additional vested rights or service credits
     under any Current Company Benefit Plan or any of such programs, agreements,
     policies or other arrangements, whether or not some other subsequent action
     or event would be required to cause such creation or acceleration to be
     triggered.

          (k)  Neither the Company nor any of its Subsidiaries is a party to or
     is bound by any severance or change in control agreement, program or policy
     (involving $500,000 or more of future payments) with respect to any
     employee, officer or director.

          (l)  No Current Company Benefit Plan (other than a Company Benefit
     Plan maintained outside the United States that is either fully insured or
     fully funded through a retirement plan) provides retiree medical or retiree
     life insurance benefits to any Person and neither the Company nor any of
     its Subsidiaries is contractually or otherwise obligated (whether or not in
     writing) to provide any Person with life insurance or medical benefits upon
     retirement or termination of employment, other than as required by the
     provisions of Sections 601 through 608 of ERISA and Section 4980B of the
     Code.

          (m)  Neither the Company nor any of its Subsidiaries contributes or
     has an obligation to contribute, and has not within six years prior to the
     date of this Agreement contributed, had an obligation to contribute, or had
     any other liability to a multiemployer plan within the meaning of
     Section 3(37) of ERISA.

          (n)  The Company has not contributed, transferred or otherwise
     provided any cash, securities or other property to any grantee, trust,
     escrow or other arrangement that has the effect of providing or setting
     aside assets for benefits payable pursuant to any termination, severance or
     other change in control agreement.

          (o)  Except as would not reasonably be expected to have a Material
     Adverse Effect on the Company, (i) no collective bargaining agreement is
     being negotiated by the Company or any of its Subsidiaries, (ii) there is
     no pending or, to the Knowledge of the Company, threatened labor dispute,
     strike or work stoppage against the Company or any of its Subsidiaries,
     (iii) to the Knowledge of the Company, neither the Company or any of its
     Subsidiaries nor any representative or employee of the Company or any of
     its Subsidiaries has in the United States committed any Material unfair
     labor practices in connection with the operation of the business of the
     Company and its Subsidiaries, and (iv) there is no pending or, to the
     Knowledge of the Company, threatened charge or complaint against the
     Company or any of its Subsidiaries by or before the National Labor
     Relations Board or any comparable agency of any state of the United States.

                          AGREEMENT AND PLAN OF MERGER
                                      -13-
<PAGE>

          SECTION 4.14   TAXES.

          (a)  Except for such matters as could not reasonably be expected to
     have a Material Adverse Effect on the Company, all returns and reports of
     or with respect to any Tax ("Tax Returns") that are required to be filed by
     or with respect to the Company or any of its Subsidiaries on or before the
     Effective Time have been or will be timely filed, all Taxes that are shown
     to be due on such Tax Returns have been or will be timely paid in full, all
     withholding Tax requirements imposed on or with respect to the Company or
     any of its Subsidiaries have been or will be satisfied in full in all
     respects and no penalty, interest or other charge is or will become due
     with respect to the late filing of any such Tax Return or late payment of
     any such Tax.

          (b)  There is no claim against the Company or any of its Subsidiaries
     for any Taxes, and no assessment, deficiency or adjustment has been
     asserted or proposed in writing with respect to any such Tax Return, that,
     in either case, could reasonably be expected to have a Material Adverse
     Effect on the Company.

     SECTION 4.15   ENVIRONMENTAL MATTERS.

          (a)  Except for matters disclosed in the Company's SEC Reports or in
     Section 4.15 of the Company's Disclosure Letter and except for matters
     that, individually or in the aggregate, could not reasonably be expected to
     have a Material Adverse Effect on the Company, (i) the properties,
     operations and activities of the Company and its Subsidiaries are in
     compliance with all applicable Environmental Laws; (ii) the Company and its
     Subsidiaries and the properties and operations of the Company and its
     Subsidiaries are not subject to any existing, pending or, to the Knowledge
     of the Company, threatened action, suit, investigation, inquiry or
     proceeding by or before any Court or Governmental Authority under any
     Environmental Law; (iii) all Authorizations, if any, required to be
     obtained or filed by the Company or any of its Subsidiaries under any
     Environmental Law in connection with the business of the Company and its
     Subsidiaries have been obtained or filed and are valid and currently in
     full force and effect; (iv), to the Knowledge of the Company, there has
     been no release of any hazardous substance, pollutant or contaminant into
     the environment by the Company or its Subsidiaries or in connection with
     their properties or operations; and (v) there has been no exposure of any
     Person or property to any hazardous substance, pollutant or contaminant in
     connection with the properties, operations and activities of the Company
     and its Subsidiaries.

           (b) The Company and its Subsidiaries have made available to the
     Parent all internal and external environmental audits and studies and all
     correspondence on environmental matters (in each case relevant to the
     Company or any of its Subsidiaries) in the possession of the Company or its
     Subsidiaries for such matters as could reasonably be expected to have a
     Material Adverse Effect on the Company.

     SECTION 4.16   INSURANCE.  The Company and its Subsidiaries own and are
beneficiaries under all such insurance policies underwritten by reputable
insurers that, as to risks 

                          AGREEMENT AND PLAN OF MERGER
                                      -14-
<PAGE>

insured, coverages and related limits and deductibles, are customary in the 
industries in which the Company and its Subsidiaries operate.  All premiums 
due with respect to all such insurance policies that are Material have been 
paid and, to the Knowledge of the Company, all such policies are in full 
force and effect. 

     SECTION 4.17   POOLING; TAX MATTERS.  Neither the Company nor, to the
Knowledge of the Company, any of its Affiliates has taken or agreed to take any
action that would prevent (a) the Merger from being treated for financial
accounting purposes as a "pooling of interests" in accordance with GAAP and the
Regulations of the Commission or (b) the Merger from constituting a
reorganization within the meaning of section 368(a) of the Code.  Without
limiting the generality of the foregoing:

          (a)  Prior to and in connection with the Merger, (i) none of the
     Company Common Stock will be redeemed, (ii) no extraordinary distribution
     will be made with respect to Company Common Stock, and (iii) none of the
     Company Common Stock will be acquired by any person related (as defined in
     Treas. Reg. Section 1.368-1(e)(3) without regard to Section 
     1.368-1(e)(3)(i)(A)) to the Company. 

          (b)  The Company and the stockholders of the Company will each pay
     their respective expenses, if any, incurred in connection with the Merger.

          (c)  There is no intercorporate indebtedness existing between the
     Company and the Parent or between the Company and Newco that was issued, 
     acquired or will be settled at a discount.

          (d)  The Company is not an investment company as defined in section
     368(a)(2)(F)(iii) and (iv) of the Code.

          (e)  The Company is not under the jurisdiction of a court in a title
     11 or similar case within the meaning of section 368(a)(3)(A) of the Code.

     SECTION 4.18   AFFILIATES.  Section 4.18 of the Company's Disclosure Letter
contains a true and complete list of all Persons who are directors or executive
officers of the Company and any other Persons who, to the Knowledge of the
Company, may be deemed to be Affiliates of the Company. Concurrently with the
execution and delivery of this Agreement, the Company has delivered to the
Parent an executed letter agreement, substantially in the form of Annex B
hereto, from each such Person so identified.

     SECTION 4.19   OPINION OF FINANCIAL ADVISOR.  The Company has received the
opinion of Salomon Smith Barney on the date of this Agreement to the effect that
the Common Stock Exchange Ratio is fair, from a financial point of view, to the
holders of Company Common Stock.

     SECTION 4.20   BROKERS.  No broker, finder or investment banker (other than
Salomon Smith Barney) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of 

                          AGREEMENT AND PLAN OF MERGER
                                      -15-
<PAGE>

the Company.  Prior to the date of this Agreement, the Company has made 
available to the Parent a complete and correct copy of all agreements between 
the Company and Salomon Smith Barney pursuant to which such firm will be 
entitled to any payment relating to the transactions contemplated by this 
Agreement.

                                      ARTICLE V

                     REPRESENTATIONS AND WARRANTIES OF THE PARENT

     The Parent Companies hereby represent and warrant to the Company, subject
to the limitations set forth in Section 10.01, that:

     SECTION 5.01   ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.  The Parent,
Newco and each other Significant Subsidiary of the Parent are legal entities
duly organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization, have all requisite
corporate power and authority to own, lease and operate their respective
properties and to carry on their businesses as they are now being conducted and
are duly qualified and in good standing to do business in each jurisdiction in
which the nature of the business conducted by them or the ownership or leasing
of their respective properties makes such qualification necessary, other than
any matters, including the failure to be so qualified and in good standing, that
could not reasonably be expected to have a Material Adverse Effect on the
Parent.  Section 5.01 of the Parent's Disclosure Letter sets forth a true and
complete list of all the Parent's directly or indirectly owned Significant
Subsidiaries, together with (A) a specification of the nature of legal
organization of such Subsidiary and (B) the jurisdiction of incorporation or
other organization of such Subsidiary. 

     SECTION 5.02   CERTIFICATE OF INCORPORATION AND BYLAWS.  The Parent has
heretofore marked for identification and furnished to the Company complete and
correct copies of the certificate of incorporation and the bylaws, in each case
as amended or restated to the date hereof, of the Parent.  The Parent is not in
violation of any of the provisions of its certificate of incorporation or
bylaws.

     SECTION 5.03   CAPITALIZATION.

          (a)  The authorized capital stock of the Parent consists of
     (i) 400,000,000 shares of Parent Common Stock of which as of February 23,
     1998, 262,591,336 shares were issued and outstanding, all of which are duly
     authorized, validly issued, fully paid and nonassessable and not subject to
     preemptive rights created by statute, the Parent's certificate of
     incorporation or bylaws or any agreement to which the Parent is a party or
     is bound, and (ii) 5,000,000 shares of Preferred Stock, without par value,
     of which none is issued but of which 2,000,000 shares have been designated
     as Series A Junior Participating Preferred Stock.  Since December 31, 1997,
     except as set forth in Section 5.03(a) of the Parent's Disclosure Letter,
     (x) no shares of Parent Common Stock have been issued by the Parent except
     the Parent Common Stock issued pursuant to the exercise of outstanding
     Parent Stock Options and Parent Restricted Stock and Parent Common Stock
     issued otherwise as set forth in Section 5.03(a) of the Parent's Disclosure
     Letter and (y) the Parent has not granted any options for, or other rights
     to purchase, shares of Parent Common Stock.

                          AGREEMENT AND PLAN OF MERGER
                                      -16-
<PAGE>

          (b)  Except as set forth in Section 5.03(b) of the Parent's Disclosure
     Letter and except for shares reserved for issuance pursuant to the Parent
     Stock Plans described in Section 5.03(b) of the Parent's Disclosure Letter,
     no shares of Parent Common Stock are reserved for issuance, and, except for
     the Parent Stock Options, the Parent Restricted Stock agreements and for
     the Parent's obligations under the Parent's Rights Agreement, there are no
     contracts, agreements, commitments or arrangements obligating the Parent
     (i) to offer, sell, issue or grant any Equity Securities of the Parent or
     (ii) to redeem, purchase or acquire, or offer to purchase or acquire, any
     outstanding Equity Securities of the Parent or to grant any Lien on any
     shares of capital stock of the Parent.

          (c)  Except as set forth in Section 5.03(c) of the Parent's Disclosure
     Letter, (i) all the issued and outstanding shares of capital stock of, or
     other equity interests in, each Significant Subsidiary of the Parent are
     owned by the Parent or one of its Subsidiaries, have been duly authorized
     and are validly issued, and, with respect to capital stock, are fully paid
     and nonassessable, and were not issued in violation of any preemptive or
     similar rights of any past or present equity holder of such Subsidiary;
     (ii) all such issued and outstanding shares, or other equity interests,
     that are owned by the Parent or one of its Subsidiaries are owned free and
     clear of all Liens; (iii) no shares of capital stock of, or other equity
     interests in, any Significant Subsidiary of the Parent are reserved for
     issuance, and there are no contracts, agreements, commitments or
     arrangements obligating the Parent or any of its Significant Subsidiaries
     (A) to offer, sell, issue, grant, pledge, dispose of or encumber any Equity
     Securities of any of the Significant Subsidiaries of the Parent or (B) to
     redeem, purchase or acquire, or offer to purchase or acquire, any
     outstanding Equity Securities of any of the Significant Subsidiaries of the
     Parent or (C) to grant any Lien on any outstanding shares of capital stock
     of, or other equity interests in, any of the Significant Subsidiaries of
     the Parent; except for any matter under clause (i), (ii) or (iii) of this
     Section 5.03(c) that could not reasonably be expected to have a Material
     Adverse Effect on the Parent.

          (d)  Except for revocable proxies granted by the Parent or its
     Subsidiaries with respect to the capital stock of Subsidiaries owned by the
     Parent or its Subsidiaries, there are no voting trusts, proxies or other
     agreements, commitments or understandings of any character to which the
     Parent or any of its Significant Subsidiaries is a party or by which the
     Parent or any of its Significant Subsidiaries is bound with respect to the
     voting of any shares of capital stock of the Parent or any of its
     Significant Subsidiaries.

     SECTION 5.04   AUTHORIZATION OF AGREEMENT.  Each of the Parent and Newco
has all requisite corporate power and authority to execute and deliver this
Agreement and, in the case of the Parent, the Parent Stock Option Agreement and
subject, in the case of this Agreement, to approval of the Charter Amendment and
the Share Issuance by the holders of a majority of the outstanding shares of
Parent Common Stock in accordance with the applicable provisions of the GCL and
the Parent's certificate of incorporation, to perform its obligations hereunder
and, in the case of the Parent, thereunder and to consummate the transactions
contemplated hereby and, in the case of the Parent, thereby.  The execution and
delivery by each of the Parent and Newco of this Agreement and the execution and
delivery by the Parent of the Parent Stock Option Agreement and the performance
of their respective obligations hereunder and, in the case of the Parent,
thereunder have been duly 

                          AGREEMENT AND PLAN OF MERGER
                                     -17-
<PAGE>

and validly authorized by all requisite corporate action on the part of the 
Parent and Newco, respectively (other than, with respect to the Merger, the 
approval and adoption of the Charter Amendment and the Share Issuance by the 
holders of a majority of the outstanding shares of Parent Common Stock in 
accordance with the applicable provisions of the GCL and the Parent's 
certificate of incorporation).  This Agreement has been duly executed and 
delivered by the Parent and Newco and (assuming due authorization, execution 
and delivery hereof by the other party hereto) constitutes a legal, valid and 
binding obligation of the Parent and Newco, enforceable against the Parent 
and Newco in accordance with its terms, except as the same may be limited by 
legal principles of general applicability governing the application and 
availability of equitable remedies.  The Parent Stock Option Agreement has 
been duly executed and delivered by the Parent and (assuming due 
authorization, execution and delivery thereof by the other party thereto) 
constitutes a legal, valid and binding obligation of the Parent enforceable 
against the Parent in accordance with its terms, except as the same may be 
limited by legal principles of general applicability governing the 
application and availability of equitable remedies.

     SECTION 5.05   APPROVALS.  Except for the applicable requirements, if any,
of (a) the Securities Act, (b) the Exchange Act, (c) state securities or blue
sky laws, (d) the HSR Act, (e) the competition Laws, Regulations and Orders of
foreign Governmental Authorities as set forth in Section 5.05 of the Parent's
Disclosure Letter, (f) the NYSE, (g) the filing and recordation of appropriate
merger documents as required by the GCL and (h) those Laws, Regulations and
Orders noncompliance with which could not reasonably be expected to have a
Material Adverse Effect on the Parent, no filing or registration with, no
waiting period imposed by and no Authorization of, any Governmental Authority is
required under any Law, Regulation or Order applicable to the Parent or Newco to
permit the Parent or Newco to execute, deliver or perform this Agreement or, in
the case of the Parent, the Parent Stock Option Agreement or to consummate the
transactions contemplated hereby or thereby.  To the Knowledge of the Parent,
there are no facts or circumstances that could reasonably be expected to
preclude the Parent Common Stock to be issued in the Merger from being approved
for listing on the NYSE.

     SECTION 5.06   NO VIOLATION.  Assuming effectuation of all filings and
registrations with, termination or expiration of any applicable waiting periods
imposed by, and receipt of all Authorizations of, Governmental Authorities
indicated as required in Section 5.05 and receipt of the approval of the Charter
Amendment and the Share Issuance by the holders of a majority of the outstanding
shares of Parent Common Stock as required by the GCL and except as set forth in
Section 5.06 of the Parent's Disclosure Letter, neither the execution and
delivery by the Parent or Newco of this Agreement or by the Parent of the Parent
Stock Option Agreement nor the performance by the Parent or Newco of its
obligations hereunder or thereunder will (a) violate or breach the terms of or
cause a default under (i) any Law, Regulation or Order applicable to the Parent
or Newco, (ii) the certificate of incorporation or bylaws of the Parent or Newco
or (iii) any contract or agreement to which the Parent or any of its
Subsidiaries is a party or by which it or any of its properties or assets is
bound, or (b), with the passage of time, the giving of notice or the taking of
any action by a third Person, have any of the effects set forth in clause (a) of
this Section, except in any such case for any matters described in this Section
(other than clause (ii) hereof) that could not reasonably be expected to have a
Material Adverse Effect on the Parent.

                          AGREEMENT AND PLAN OF MERGER
                                      -18-
<PAGE>

     SECTION 5.07   REPORTS.

          (a)  Since December 31, 1994, the (i) Parent or its predecessor has
     filed all SEC Reports required to be filed by the Parent with the
     Commission and (ii) the Parent and its Subsidiaries have filed all other
     Reports required to be filed by any of them with any other Governmental
     Authorities, including state securities administrators, except where the
     failure to file any such Reports could not reasonably be expected to have a
     Material Adverse Effect on the Parent.  Such Reports, including those filed
     after the date of this Agreement and prior to the Effective Time, (i) were
     prepared in all material respects in accordance with applicable Law
     (including, with respect to the SEC Reports, the Securities Act and the
     Exchange Act, as the case may be, and the applicable Regulations of the
     Commission thereunder) and (ii) in the case of the SEC Reports, did not at
     the time they were filed contain any untrue statement of a material fact or
     omit to state a material fact required to be stated therein or necessary in
     order to make the statements therein, in the light of the circumstances
     under which they were made, not misleading.

          (b)  The Parent's Audited Consolidated Financial Statements and any
     consolidated financial statements of the Parent (including any related
     notes thereto) contained in any SEC Reports filed by the Parent with the
     Commission after the date of this Agreement (i) have been or will have been
     prepared in accordance with the published Regulations of the Commission and
     in accordance with GAAP (except (A) to the extent required by changes in
     GAAP, (B), with respect to the Parent's Audited Consolidated Financial
     Statements, as may be indicated in the notes thereto and (C) in the case of
     any unaudited financial statements, as permitted by Form 10-Q) and
     (ii) fairly present the consolidated financial position of the Parent and
     its Subsidiaries as of the respective dates thereof and the consolidated
     results of their operations and cash flows for the periods indicated
     (subject, in the case of any unaudited interim financial statements, to
     normal and recurring year-end adjustments).
     
          (c)  Except as set forth in Section 5.07(c) of the Parent's Disclosure
     Letter, there exist no liabilities or obligations of the Parent and its
     Subsidiaries that are Material to the Parent, whether accrued, absolute,
     contingent or threatened, that would be required to be reflected, reserved
     for or disclosed under GAAP in consolidated financial statements of the
     Parent as of and for the period ended on the date of this representation
     and warranty, other than (i) liabilities or obligations that are adequately
     reflected, reserved for or disclosed in the Parent's Audited Consolidated
     Financial Statements, (ii) liabilities or obligations incurred in the
     ordinary course of business of the Parent since December 31, 1997,
     (iii) liabilities or obligations the incurrence of which is permitted by
     Section 6.02(b) and (iv) liabilities or obligations that are not Material
     to the Parent.

     SECTION 5.08   NO MATERIAL ADVERSE EFFECT; CONDUCT.

          (a)  Since December 31, 1997, no event (other than any event that is
     of general application to all or a substantial portion of the Parent's
     industries and other than any event that is expressly subject to any other
     representation or warranty contained in Article V) has, 
                                       

                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -19-

<PAGE>

     to the Knowledge of the Parent, occurred that, individually or together 
     with other similar events, could reasonably be expected to constitute or 
     cause a Material Adverse Effect on the Parent.

          (b)  Except as set forth in Section 5.08(b) of the Parent's Disclosure
     Letter, during the period from December 31, 1997, to the date of this
     Agreement, neither the Parent nor any of its Subsidiaries has engaged in
     any conduct that is proscribed during the period from the date of this
     Agreement to the Effective Time by subsections (i) through (xiv) of
     Section 6.02(b).

     SECTION 5.09   CERTAIN BUSINESS PRACTICES.  As of the date of this 
Agreement, neither the Parent or any of its Subsidiaries nor any director, 
officer, employee or agent of the Parent or any of its Subsidiaries has (a) 
used any funds for unlawful contributions, gifts, entertainment or other 
unlawful expenses relating to political activity, (b) made any unlawful 
payment to any foreign or domestic government official or employee or to any 
foreign or domestic political party or campaign or violated any provision of 
the Foreign Corrupt Practices Act of 1977, as amended, (c) consummated any 
transaction, made any payment, entered into any agreement or arrangement or 
taken any other action in violation of Section 1128B(b) of the Social 
Security Act, as amended, or (d) made any other unlawful payment, except for 
any such matters that could not reasonably be expected to have a Material 
Adverse Effect on the Parent. 

     SECTION 5.10   CERTAIN OBLIGATIONS.  Except for those listed in Section 
5.10 of the Parent's Disclosure Letter or filed as Exhibits to the Parent's 
SEC Reports, neither the Parent nor any of its Subsidiaries is a party to or 
bound by (a) any Noncompete Agreement or (b) any agreement that contains 
change of control or similar provisions that would give any Person that is a 
party to any such agreement the right, as a result of the execution of this 
Agreement or the consummation of any of the transactions contemplated hereby, 
to purchase any Material interest of the Parent in any joint venture, 
partnership or similar arrangement..

     SECTION 5.11   AUTHORIZATIONS; COMPLIANCE.  The Parent and its 
Subsidiaries have obtained all Authorizations that are necessary to carry on 
their businesses as currently conducted, except for any such Authorizations 
as to which the failure to possess, individually or in the aggregate, could 
not reasonably be expected to have a Material Adverse Effect on the Parent.  
Such Authorizations are in full force and effect, have not been violated in 
any respect that could reasonably be expected to have a Material Adverse 
Effect on the Parent and there is no action, proceeding or investigation 
pending or threatened regarding suspension, revocation or cancellation of any 
of such Authorizations, except in the case of any suspension, revocation or 
cancellation of such Authorizations that could not reasonably be expected to 
have a Material Adverse Effect on the Parent.

     SECTION 5.12   LITIGATION; COMPLIANCE WITH LAWS.  There are no actions, 
suits, investigations or proceedings (including any proceedings in 
arbitration) pending or, to the Knowledge of the Parent, threatened against 
the Parent or any of its Subsidiaries, at law or in equity, in any Court or 
before or by any Governmental Authority, except actions, suits, proceedings 
or investigations that are disclosed in the Parent's SEC Reports, that are 
set forth in Section 5.12 or 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                     -20-

<PAGE>

Section 5.15 of the Parent's Disclosure Letter or that, individually or, with 
respect to multiple actions, suits or proceedings that allege similar 
theories of recovery based on similar facts, in the aggregate, could not 
reasonably be expected to have a Material Adverse Effect on the Parent.  
There are no Material claims pending or, to the Knowledge of the Parent, 
threatened by any Persons against the Parent or any of its Subsidiaries for 
indemnification pursuant to any statute, organizational document, contract or 
otherwise with respect to any claim, action, suit, investigation or 
proceeding pending in any Court or before or by any Governmental Authority. 
Except with respect to the matters covered by Sections 5.09, 5.13, 5.14 and 
5.15, the Parent and its Subsidiaries are in substantial compliance with all 
applicable Laws and Regulations and are not in default with respect to any 
Order applicable to the Parent or any of its Subsidiaries, except such events 
of noncompliance or defaults that, individually or in the aggregate, could 
not reasonably be expected to have a Material Adverse Effect on the Parent.

     SECTION 5.13   EMPLOYEE BENEFIT PLANS.  Except as set forth in the 
Parent's SEC Reports or in Section 5.13 of the Parent's Disclosure Letter:

          (a)  With respect to each Parent Benefit Plan, no event has occurred
     and, to the Knowledge of the Parent, there exists no condition or set of
     circumstances in connection with which the Parent or any of its
     Subsidiaries could be subject to any liability under the terms of such
     Parent Benefit Plan, ERISA, the Code or any other applicable Law, other
     than any condition or set of circumstances that could not reasonably be
     expected to have a Material Adverse Effect on the Parent.

          (b)  Each Current Parent Benefit Plan intended to be qualified under
     Section 401 of the Code (i) satisfies in form the requirements of such
     Section except to the extent amendments are not required by Law to be made
     until a date after the Effective Time, (ii) has received a favorable
     determination letter from the IRS regarding such qualified status, and
     (iii) has not, since the receipt of the most recent favorable determination
     letter, been amended other than amendments required by applicable Law.
     
          (c)  Except as would not reasonably be expected to result in a
     Material Adverse Effect on the Parent, there has been no termination or
     partial termination of any Current Parent Benefit Plan within the meaning
     of Section 4.11(d)(3) of the Code and, to the Knowledge of the Parent, each
     Current Parent Benefit Plan has been operated in material compliance with
     its provisions and with applicable Law.

          (d)  Any Terminated Parent Benefit Plan intended to have been
     qualified under Section 401 of the Code received a favorable determination
     letter from the IRS with respect to its termination.

          (e)  There are no actions, suits or claims pending (other than routine
     claims for benefits) or, to the Knowledge of the Parent, threatened
     against, or with respect to, any Parent Benefit Plan or its assets that
     could reasonably be expected to have a Material Adverse Effect on the
     Parent and, to the Knowledge of the Parent, no facts or circumstances 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -21-
<PAGE>

     exist that could give rise to any such actions, suits or claims, except 
     as would not reasonably be expected to have a Material Adverse Effect on 
     the Parent.

          (f)  To the Knowledge of the Parent, there is no matter pending (other
     than routine qualification determination filings) with respect to any
     Parent Benefit Plans before the IRS, the Department of Labor, the PBGC or
     any other Governmental Authority, except as would not reasonably be
     expected to have a Material Adverse Effect on the Parent.

          (g)  All contributions required to be made to Parent Benefit Plans
     pursuant to their terms and the provisions of ERISA, the Code or any other
     applicable Law have been timely made, except as would not reasonably be
     expected to have a Material Adverse Effect on the Parent.

          (h)  As to any Current Parent Benefit Plan subject to Title IV of
     ERISA, (i) there has been no event or condition which presents a
     significant risk of plan termination, (ii) no accumulated funding
     deficiency, whether or not waived, within the meaning of Section 302 of
     ERISA or Section 412 of the Code has been incurred (iii) no reportable
     event within the meaning of Section 4043 of ERISA (for which the disclosure
     requirements of Regulation section 4043.1, ET SEQ., promulgated by the PBGC
     have not been waived) has occurred within six years prior to the date of
     this Agreement, (iv) no notice of intent to terminate such Benefit Plan has
     been given under Section 4041 of ERISA, (v) no proceeding has been
     instituted under Section 4042 of ERISA to terminate such Benefit Plan,
     (vi) no liability to the PBGC has been incurred (other than with respect to
     required premium payments) and (vii) the assets of the Benefit Plan equal
     or exceed the actuarial present value of the benefit liabilities, within
     the meaning of Section 4041 of ERISA, under the Benefit Plan, based upon
     reasonable actuarial assumptions and the asset valuation principles
     established by the PBGC, except as would not reasonably be expected to have
     a Material Adverse Effect on the Parent.

          (i)  In connection with the consummation of the transactions
     contemplated by this Agreement, no payment of money or other property,
     acceleration of benefits or provision of other rights has been or will be
     made under any Current Parent Benefit Plan that could reasonably be
     expected to be nondeductible under Section 280G of the Code, whether or not
     some other subsequent action or event would be required to cause such
     payment, acceleration or provision to be triggered.

          (j)  The execution and delivery of this Agreement and the consummation
     of the transactions contemplated hereby will not (i) require the Parent or
     any of its Subsidiaries to make a larger contribution to, or pay greater
     benefits or provide other rights under, any Current Parent Benefit Plan or
     any of the programs, agreements, policies or other arrangements described
     in the Parent's Disclosure Letter in response to paragraph (k) below than
     it otherwise would, whether or not some other subsequent action or event
     would be required to cause such payment or provision to be triggered or
     (ii) create or give rise to any additional vested rights or service credits
     under any Current Parent Benefit Plan or any of such programs, agreements,
     policies or other arrangements, whether or not some other 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -22-
<PAGE>

     subsequent action or event would be required to cause such creation or 
     acceleration to be triggered.

          (k)  Neither the Parent nor any of its Subsidiaries is a party to or
     is bound by any severance or change in control agreement, program or policy
     (involving $500,000 or more of future payments) with respect to any
     employee, officer or director.

          (l)  No Current Parent Benefit Plan (other than a Parent Benefit Plan
     maintained outside the United States that is either fully insured or fully
     funded through a retirement plan) provides retiree medical or retiree life
     insurance benefits to any Person and neither the Parent nor any of its
     Subsidiaries is contractually or otherwise obligated (whether or not in
     writing) to provide any Person with life insurance or medical benefits upon
     retirement or termination of employment, other than as required by the
     provisions of Sections 601 through 608 of ERISA and Section 4980B of the
     Code.

          (m)  Neither the Parent nor any of its Subsidiaries contributes or has
     an obligation to contribute, and has not within six years prior to the date
     of this Agreement contributed, had an obligation to contribute, or had any
     other liability to a multiemployer plan within the meaning of Section 3(37)
     of ERISA.

          (n)  The Parent has not contributed, transferred or otherwise provided
     any cash, securities or other property to any grantee, trust, escrow or
     other arrangement that has the effect of providing or setting aside assets
     for benefits payable pursuant to any termination, severance or other change
     in control agreement.

          (o)  Except as would not reasonably be expected to have a Material
     Adverse Effect on the Parent, (i) no collective bargaining agreement is
     being negotiated by the Parent or any of its Subsidiaries, (ii) there is no
     pending or, to the Knowledge of the Parent, threatened labor dispute,
     strike or work stoppage against the Parent or any of its Subsidiaries,
     (iii) to the Knowledge of the Parent, neither the Parent or any of its
     Subsidiaries nor any representative or employee of the Parent or any of its
     Subsidiaries has in the United States committed any Material unfair labor
     practices in connection with the operation of the business of the Parent
     and its Subsidiaries, and (iv) there is no pending or, to the Knowledge of
     the Parent, threatened charge or complaint against the Parent or any of its
     Subsidiaries by or before the National Labor Relations Board or any
     comparable agency of any state of the United States.

          SECTION 5.14   TAXES.

          (a)  Except for such matters as could not reasonably be expected to
     have a Material Adverse Effect on the Parent, all Tax Returns that are
     required to be filed by or with respect to the Parent or any of its
     Subsidiaries on or before the Effective Time have been or will be timely
     filed, all Taxes that are shown to be due on such Tax Returns have been or
     will be timely paid in full, all withholding Tax requirements imposed on or
     with respect to the Parent or any of its Subsidiaries have been or will be
     satisfied in full in all respects and no 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -23-

<PAGE>

     penalty, interest or other charge is or will become due with respect to 
     the late filing of any such Tax Return or late payment of any such Tax.

          (b)  There is no claim against the Parent or any of its Subsidiaries
     for any Taxes, and no assessment, deficiency or adjustment has been
     asserted or proposed in writing with respect to any such Tax Return, that,
     in either case, could reasonably be expected to have a Material Adverse
     Effect on the Parent.

     SECTION 5.15   ENVIRONMENTAL MATTERS.  Except for matters disclosed in 
the Parent's SEC Reports or in Section 5.15 of the Parent's Disclosure Letter 
and except for matters that, individually or in the aggregate, could not 
reasonably be expected to have a Material Adverse Effect on the Parent, (a) 
the properties, operations and activities of the Parent and its Subsidiaries 
are in compliance with all applicable Environmental Laws; (b) the Parent and 
its Subsidiaries and the properties and operations of the Parent and its 
Subsidiaries are not subject to any existing, pending or, to the Knowledge of 
the Parent, threatened action, suit, investigation, inquiry or proceeding by 
or before any Court or Governmental Authority under any Environmental Law; 
(c) all Authorizations if any, required to be obtained or filed by the Parent 
or any of its Subsidiaries under any Environmental Law in connection with the 
business of the Parent and its Subsidiaries have been obtained or filed and 
are valid and currently in full force and effect; (d), to the Knowledge of 
the Parent, there has been no release of any hazardous substance, pollutant 
or contaminant into the environment by the Parent or its Subsidiaries or in 
connection with their properties or operations; and (e) there has been no 
exposure of any Person or property to any hazardous substance, pollutant or 
contaminant in connection with the properties, operations and activities of 
the Parent and its Subsidiaries.
     
     SECTION 5.16   INSURANCE.  The Parent and its Subsidiaries own and are 
beneficiaries under all such insurance policies underwritten by reputable 
insurers that, as to risks insured, coverages and related limits and 
deductibles, are customary in the industries in which the Parent and its 
Subsidiaries operate.  All premiums due with respect to all such insurance 
policies that are Material have been paid and, to the Knowledge of the 
Parent, all such policies are in full force and effect.

     SECTION 5.17   POOLING; TAX MATTERS.  Neither the Parent nor, to the 
Knowledge of the Parent, any of its Affiliates has taken or agreed to take 
any action that would prevent (a) the Merger from being treated for financial 
accounting purposes as a "pooling of interests" in accordance with GAAP and 
the Regulations of the Commission or (b) the Merger from constituting a 
reorganization within the meaning of section 368(a) of the Code.  Without 
limiting the generality of the foregoing:
     
          (a)  In connection with the Merger, none of the Company Common Stock
     will be acquired by the Parent or a person related (as defined in Treas.
     Reg. Section 1.368-1(e)(3)) to the Parent for consideration other than the
     Parent Common Stock except for any cash received in lieu of fractional
     share interests in the Parent Common Stock pursuant to Section 3.02(e) of
     this Agreement.
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -24-

<PAGE>

          (b)  Following the Merger, the Surviving Corporation will hold at
     least 90 percent of the fair market value of the Company's net assets, at
     least 70 percent of the fair market value of the Company's gross assets, at
     least 90 percent of the fair market value of the net assets of Newco and at
     least 70 percent of the fair market value of the gross assets of Newco,
     held immediately prior to the Merger, taking into account amounts used to
     pay Expenses relating to the Merger and any distributions other than
     regular dividends.

          (c)  The Parent has no plan or intention to (i) liquidate the
     Surviving Corporation, (ii) merge the Surviving Corporation with or into
     another corporation, (iii) sell or otherwise dispose of the stock of the
     Surviving Corporation except for transfers or successive transfers to one
     or more corporations controlled (within the meaning of section 368(c) of
     the Code) in each case by the transferor corporation, (iv) cause the
     Surviving Corporation to issue additional shares of its capital stock that
     would result in the Parent's losing control (within the meaning of section
     368(c) of the Code) of the Surviving Corporation, (v) cause or permit the
     Surviving Corporation to sell or otherwise dispose of any of its assets or
     of any of the assets acquired from Newco except for dispositions made in
     the ordinary course of business or transfers or successive transfers to one
     or more corporations controlled (within the meaning of section 368(c) of
     the Code) in each case by the transferor corporation, or (vi) reacquire 
     or cause any person related to the Parent (as defined in Treas. 
     Reg. 1.368-1(a)(3)) to acquire any of the Parent Common Stock issued 
     to the holders of Company Common Stock pursuant to the Merger.
 
          (d)  Newco has no liabilities that will be assumed by the Surviving
     Corporation in the Merger and will not transfer to the Surviving
     Corporation in the Merger any assets subject to liabilities.

          (e)  Following the Merger, the Surviving Corporation will continue the
     historic business of the Company or use a significant portion of its assets
     in a business, within the meaning of Treas. Reg. Section 1.368-1(d).

          (f)  There is no intercorporate indebtedness existing between the
     Company and the Parent or between the Company and Newco that was issued,
     acquired or will be settled at a discount.

          (g)  Neither the Parent nor any person related to the Parent (within
     the meaning of Treas. Reg. Section  1.368-1(e)(3)) owns, or has owned
     during the past five years, any shares of the capital stock of the Company
     other than up to 500 shares of Company Common Stock.
     
     SECTION 5.18   AFFILIATES.  Section 5.18 of the Parent's Disclosure Letter
contains a true and complete list of all Persons who, to the Knowledge of the
Parent, may be deemed to be Affiliates of the Parent, including all directors
and executive officers of the Parent.  Concurrently with the execution and
delivery of this Agreement, the Parent has delivered to the Company an executed
letter agreement, substantially in the form of Annex C hereto, from each such
Person so identified as an Affiliate of the Parent.
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -25-
<PAGE>

     SECTION 5.19   BROKERS.  Except as set forth in Section 5.19 of the 
Parent's Disclosure Letter, no broker, finder or investment banker (other 
than SBC Warburg Dillon Read Inc. and Goldman, Sachs & Co.) is entitled to 
any brokerage, finder's or other fee or commission in connection with the 
transactions contemplated by this Agreement based upon arrangements made by 
or on behalf of the Parent.  Prior to the date of this Agreement, the Parent 
has made available to the Company a complete and correct copy of all 
agreements between the Parent and SBC Warburg Dillon Read Inc. or Goldman, 
Sachs & Co. and pursuant to which either of such firms will be entitled to 
any payment relating to the transactions contemplated by this Agreement.

     SECTION 5.20   OPINION OF FINANCIAL ADVISOR.  The Parent has received 
the opinions of SBC Warburg Dillon Read Inc. and Goldman, Sachs & Co. on the 
date of this Agreement to the effect that the Common Stock Exchange Ratio is 
fair, from a financial point of view, to the Parent.

     SECTION 5.21   ACQUIRING PERSON.  Based on the information set forth in 
the Company's SEC Reports, no holder of 5% or more of the outstanding Company 
Common Stock whose existence is disclosed therein will at the Effective Time 
become an "Acquiring Person," as such term is defined in the Parent's Rights 
Agreement, as a result of any of the transactions contemplated by this 
Agreement.
                                       
                                  ARTICLE VI

                                  COVENANTS

     SECTION 6.01   AFFIRMATIVE COVENANTS.

          (a)  The Company hereby covenants and agrees that, prior to the
     Effective Time, unless otherwise expressly contemplated by this Agreement
     or consented to in writing by the Parent, it will and will cause its
     Subsidiaries to:

               (i)   operate its business in the usual and ordinary course
          consistent with past practices;

               (ii)  use all reasonable efforts to preserve substantially intact
          its business organization, maintain its rights and franchises, retain
          the services of its respective key employees (subject to its work
          force requirements) and maintain its relationships with its respective
          customers and suppliers;

               (iii) maintain and keep its properties and assets in as good
          repair and condition as at present, ordinary wear and tear excepted;
          and

               (iv)  use all reasonable efforts to keep in full force and effect
          insurance and bonds comparable in amount and scope of coverage to that
          currently maintained;

     except for any matters that, individually or in the aggregate, could not
     reasonably be expected to have a Material Adverse Effect on the Company.
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -26-

<PAGE>

          (b)  The Parent hereby covenants and agrees that, prior to the
     Effective Time, unless otherwise expressly contemplated by this Agreement
     or consented to in writing by the Company, it will and will cause its
     Subsidiaries to:

               (i)   operate its business in the usual and ordinary course
          consistent with past practices;

               (ii)  use all reasonable efforts to preserve substantially intact
          its business organization, maintain its rights and franchises, retain
          the services of its respective key employees (subject to its work
          force requirements) and maintain its relationships with its respective
          customers and suppliers;

               (iii) maintain and keep its properties and assets in as good
          repair and condition as at present, ordinary wear and tear excepted;
          and

               (iv) use all reasonable efforts to keep in full force and effect
          insurance and bonds comparable in amount and scope of coverage to that
          currently maintained;

     except for any matters that, individually or in the aggregate, could not
     reasonably be expected to have a Material Adverse Effect on the Parent.

     SECTION 6.02   NEGATIVE COVENANTS.

          (a)  The Company covenants and agrees that, except as expressly set
     forth in the Company's Disclosure Letter, as expressly contemplated by this
     Agreement or as otherwise consented to in writing by the Parent, from the
     date of this Agreement until the Effective Time, it will not do, and will
     not permit any of its Subsidiaries to do, any of the following:

               (i)  (A) increase the compensation payable to or to become
          payable to any director or executive officer, (B) except as otherwise
          provided in Section 6.02(a)(ii), grant any severance or termination
          pay; (C) amend or otherwise modify the terms of any outstanding
          options, warrants or rights the effect of which shall be to make such
          terms more favorable to the holders thereof; (D) take any action to
          accelerate the vesting of any outstanding Company Stock Options; (E)
          amend or take any other actions to increase the amount or accelerate
          the payment or vesting of any benefit under any Benefit Plan
          (including the acceleration of vesting, waiving of performance
          criteria or the adjustment of awards or any other actions permitted
          upon a change in control of such party or permitted upon a filing
          under Section 13(d) or 14(d) of the Exchange Act with respect to such
          party) or (F) contribute, transfer or otherwise provide any cash,
          securities or other property to any grantee, trust, escrow or other
          arrangement that has the effect of providing or setting aside assets
          for benefits payable pursuant to any termination, severance or other
          change in control agreement; except (i) pursuant to any contract,
          agreement or other legal obligation of the Company or any of its
          Subsidiaries existing at the date of this Agreement, (ii) in the case
          of severance or termination payments, pursuant to the severance 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -27-
<PAGE>

          policy of the Company or its Subsidiaries existing at the date of this
          Agreement and (iii) in the case of options, warrants, rights or
          Benefit Plans, amendments required by ERISA or other applicable Law.

               (ii)  (A) enter into any employment or severance agreement with,
          any director or executive officer, either individually or as part of a
          class of similarly situated persons, or (B) establish, adopt or enter
          into any new Benefit Plan; except employment and severance agreements
          and Benefit Plans for the benefit of any newly employed or promoted
          officers or employees, in which case the terms of such agreements and
          Benefit Plans shall be reasonably consistent with those existing at
          the date of this Agreement, and except Benefit Plans relating to
          health and life insurance benefits established or adopted in the
          ordinary course of business consistent with past practice;

               (iii) declare or pay any extraordinary dividend on, or make
          any other distribution in respect of  outstanding shares of capital
          stock, except for dividends by a wholly owned Subsidiary of the
          Company to the Company or another wholly owned Subsidiary of the
          Company and cash dividends on the Company Common Stock payable at
          approximately the same times as paid during the fiscal year ended
          October 31, 1997 and in amounts per share not to exceed those paid on
          the Company Common Stock during the fourth quarter of the fiscal year
          ended October 31, 1997;

               (iv)  (A) redeem, purchase or acquire, or offer to purchase or
          acquire, any outstanding Equity Securities of the Company or any of
          its Subsidiaries other than (1) any such acquisition by the Company or
          any of its wholly owned Subsidiaries directly from any wholly owned
          Subsidiary of the Company, (2) any repurchase, forfeiture or
          retirement of shares of Company Common Stock or Company Stock Options
          occurring pursuant to the terms (as in effect on the date of this
          Agreement) of any existing Benefit Plan of the Company or any of its
          Subsidiaries, (3) the repurchase or redemption of rights pursuant to
          the terms (as in effect on the date of this Agreement) of the Company
          Rights Agreement to the extent required by a court of competent
          jurisdiction or (4) any periodic purchase of Company Common Stock for
          allocation to employee's accounts occurring pursuant to the terms (as
          in effect on the date of this Agreement) of any existing employee
          stock purchase plan; (B) effect any reorganization or
          recapitalization; or (C) split, combine or reclassify any of the
          capital stock of, or other equity interests in, the Company or any of
          its Subsidiaries or issue or authorize or propose the issuance of any
          other securities in respect of, in lieu of or in substitution for,
          such Equity Securities;

               (v)   (A) offer, sell, issue or grant, or authorize the offering,
          sale, issuance or grant, of any Equity Securities of the Company or
          any of its Subsidiaries, other than issuances of Company Common Stock
          (1) upon the exercise of Company Stock Options outstanding at the date
          of this Agreement in accordance with the terms thereof (as in effect
          on the date of this Agreement), (2) upon the expiration of any
          restrictions upon issuance of any grant existing at the date of this
          Agreement of 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -28-
<PAGE>

          restricted stock or bonus stock pursuant to the terms (as in effect 
          on the date of this Agreement) of any Benefit Plans of the Company or
          any of its Subsidiaries, (3) that constitute periodic issuances of 
          shares of Company Common Stock required by the terms (as in effect on
          the date of this Agreement) of any Benefit Plans of the Company or any
          of its Subsidiaries or (4) issuances of Company Common Stock pursuant
          to the Company's dividend reinvestment program as in effect on the 
          date of this Agreement or (B) grant any Lien with respect to any 
          Equity Securities of any Subsidiary of the Company;

               (vi) acquire or agree to acquire, by merging or consolidating
          with, by purchasing an equity interest in or all or a portion of the
          assets of, or in any other manner, any business or any corporation,
          partnership, association or other business organization or division
          thereof or otherwise to acquire any assets of any other Person (other
          than any such transaction that is not Material to the Company and the
          purchase of assets from suppliers or vendors in the ordinary course of
          business and consistent with past practice);

               (vii)     sell, lease, exchange or otherwise dispose of, or grant
          any Lien with respect to, any of the assets of the Company or any of
          its Subsidiaries that are Material to the Company, except for
          dispositions of assets and inventories in the ordinary course of
          business and consistent with past practice and dispositions of assets
          and purchase money Liens incurred in connection with the original
          acquisition of assets and secured by the assets;

               (viii)    adopt any amendments to its charter or bylaws or other
          organizational documents that would alter the terms of its capital
          stock or other equity interests or would have a Material Adverse
          Effect on the Company;

               (ix) (A) change any of its methods of accounting in effect at
          October 31, 1997, except as may be required to comply with GAAP,
          (B) make or rescind any election relating to Taxes (other than any
          election that must be made periodically and that is made consistent
          with past practice), (C) settle or compromise any claim, action, suit,
          litigation, proceeding, arbitration, investigation, audit or
          controversy relating to Taxes or (D) change any of its methods of
          reporting income or deductions for federal income tax purposes from
          those employed in the preparation of the federal income tax returns
          for the taxable year ended October 31, 1996, except, in each case, as
          may be required by Law and for matters that could not reasonably be
          expected to have a Material Adverse Effect on the Company;

               (x)  incur any obligations for borrowed money or purchase money
          indebtedness that are Material to the Company, whether or not
          evidenced by a note, bond, debenture or similar instrument, except
          purchase money indebtedness as to which Liens may be granted pursuant
          to Section 6.02(a)(vii), drawings under credit lines existing at the
          date of this Agreement and borrowings evidenced by obligations 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -29-
<PAGE>

          having a term of up to five years issued in the ordinary course of 
          business consistent with past practice.

               (xi) subject to the fiduciary duties of its Board of Directors,
          release any third Person from its obligations under any existing
          standstill agreement relating to a Competing Transaction or otherwise
          under any confidentiality agreement or similar agreement;

               (xii)     enter into any Material agreement with any third Person
          that provides for an exclusive arrangement with that third Person;

               (xiii)    subject to the fiduciary duties of its Board of
          Directors, amend, modify or terminate the Company's Rights Agreement
          or redeem any rights to purchase shares of the Company's Series A
          Junior Preferred Stock except as may be necessary to consummate the
          transactions contemplated by this Agreement; or 

               (xiv)     agree in writing or otherwise to do any of the
          foregoing.
                                       
                                      
          (b)  The Parent covenants and agrees that, except as expressly set
     forth in the Parent's Disclosure Letter, as expressly contemplated by this
     Agreement or as otherwise consented to in writing by the Company, from the
     date of this Agreement until the Effective Time, it will not do, and will
     not permit any of its Subsidiaries to do, any of the following:
               
               (i)  (A) increase the compensation payable to or to become
          payable to any director or executive officer, (B) except as otherwise
          provided in Section 6.02(b)(ii), grant any severance or termination
          pay; (C) amend or otherwise modify the terms of any outstanding
          options, warrants or rights the effect of which shall be to make such
          terms more favorable to the holders thereof; (D) take any action to
          accelerate the vesting of any outstanding Parent Stock Options; (E)
          amend or take any other actions to increase the amount or accelerate
          the payment or vesting of any benefit under any Benefit Plan
          (including the acceleration of vesting, waiving of performance
          criteria or the adjustment of awards or any other actions permitted
          upon a change in control of such party or permitted upon a filing
          under Section 13(d) or 14(d) of the Exchange Act with respect to such
          party) or (F) contribute, transfer or otherwise provide any cash,
          securities or other property to any grantee, trust, escrow or other
          arrangement that has the effect of providing or setting aside assets
          for benefits payable pursuant to any termination, severance or other
          change in control agreement; except (i) pursuant to any contract,
          agreement or other legal obligation of the Parent or any of its
          Subsidiaries existing at the date of this Agreement, (ii) in the case
          of severance or termination payments, pursuant to the severance policy
          of the Parent or its Subsidiaries existing at the date of this
          Agreement, (iii) in the case of options, warrants, rights or Benefit
          Plans, amendments required by ERISA or other applicable Law and (iv)
          any such increase, grant, amendment, modification or action that,
          taken together with all other such increases, grants, amendments,
          modifications and 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -30-
<PAGE>

          actions, does not result in a Material increase in compensation or 
          benefits expense to the Parent and its Subsidiaries, taken as a whole;

               (ii) (A) enter into any employment or severance agreement with,
          any director or executive officer, either individually or as part of a
          class of similarly situated persons, or (B) establish, adopt or enter
          into any new Benefit Plan; except employment and severance agreements
          and Benefit Plans for the benefit of any newly employed or promoted
          officers or employees, in which case the terms of such agreements and
          Benefit Plans shall be reasonably consistent with those existing at
          the date of this Agreement, and except Benefit Plans relating to
          health and life insurance benefits established or adopted in the
          ordinary course of business consistent with past practice;

               (iii)     declare or pay any extraordinary dividend on, or make
          any other distribution in respect of  outstanding shares of capital
          stock, except for dividends by a wholly owned Subsidiary of the Parent
          to the Parent or another wholly owned Subsidiary of the Parent and
          cash dividends on the Parent Common Stock payable at approximately the
          same times and in amounts per share as those paid on the Parent Common
          Stock during the fiscal year ended December 31, 1997;

               (iv) (A) redeem, purchase or acquire, or offer to purchase or
          acquire, any outstanding Equity Securities of the Parent or any of its
          Subsidiaries other than (1) any such acquisition by the Parent or any
          of its wholly owned Subsidiaries directly from any wholly owned
          Subsidiary of the Parent, (2) any repurchase, forfeiture or retirement
          of shares of Parent Common Stock or Parent Stock Options occurring
          pursuant to the terms (as in effect on the date of this Agreement) of
          any existing Benefit Plan of the Parent or any of its Subsidiaries,
          (3) the repurchase or redemption of rights pursuant to the terms (as
          in effect on the date of this Agreement) of the Parent's Rights
          Agreement to the extent required by a court of competent jurisdiction
          or (4) any periodic purchase of Parent Common Stock for allocation to
          employee's accounts occurring pursuant to the terms (as in effect on
          the date of this Agreement) of any existing employee stock purchase
          plan; (B) effect any reorganization or recapitalization; or (C) split,
          combine or reclassify any of the Equity Securities of the Parent or
          any of its Subsidiaries or issue or authorize or propose the issuance
          of any other securities in respect of, in lieu of or in substitution
          for, such Equity Securities;

               (v)  (A) offer, sell, issue or grant, or authorize the offering,
          sale, issuance or grant, of any Equity Securities of the Parent or any
          of its Subsidiaries, other than issuances of Parent Common Stock
          (1) upon the exercise of Parent Stock Options outstanding at the date
          of this Agreement in accordance with the terms thereof (as in effect
          on the date of this Agreement), (2) as Parent Restricted Stock, (3)
          upon the expiration of any restrictions upon issuance of any grant
          existing at the date of this Agreement of restricted stock or bonus
          stock pursuant to the terms (as in effect on the date of this
          Agreement) of any Benefit Plans of the Parent or any of its
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -31-
<PAGE>

          Subsidiaries or (4) that constitute periodic issuances of shares of
          Parent Common Stock required by the terms (as in effect on the date of
          this Agreement) of any Benefit Plan of the Parent or any of its
          Subsidiaries; or (B) grant any Lien with respect to any Equity
          Securities of any Subsidiary of the Parent;

               (vi) acquire or agree to acquire, by merging or consolidating
          with, by purchasing an equity interest in or all or a portion of the
          assets of, or in any other manner, any business or any corporation,
          partnership, association or other business organization or division
          thereof, or otherwise to acquire any assets of any other Person (other
          than any such transaction that is not Material to the Parent and the
          purchase of assets from suppliers or vendors in the ordinary course of
          business and consistent with past practice);

               (vii)     sell, lease, exchange or otherwise dispose of, or grant
          any Lien with respect to, any of the assets of the Parent or any of
          its Subsidiaries that are Material to the Parent, except for
          dispositions of assets and inventories in the ordinary course of
          business and consistent with past practice and dispositions of assets
          and purchase money Liens incurred in connection with the original
          acquisition of assets and secured by the assets;

               (viii)    adopt any amendments to its charter or bylaws or other
          organizational documents that would alter the terms of its capital
          stock or other equity interests or would have a Material Adverse
          Effect on the Parent;

               (ix) (A) change any of its methods of accounting in effect at
          December 31, 1997, except as may be required to comply with GAAP,
          (B) make or rescind any election relating to Taxes (other than any
          election that must be made periodically that is made consistent with
          past practice), (C) settle or compromise any claim, action, suit,
          litigation, proceeding, arbitration, investigation, audit or
          controversy relating to Taxes or (D) change any of its methods of
          reporting income or deductions for federal income tax purposes from
          those employed in the preparation of the federal income tax returns
          for the taxable year ended December 31, 1996, except, in each case, as
          may be required by Law and for matters that could not reasonably be
          expected to have a Material Adverse Effect on the Parent;

               (x)  incur any obligations for borrowed money or purchase money
          indebtedness that are Material to the Parent, whether or not evidenced
          by a note, bond, debenture or similar instrument, except purchase
          money indebtedness as to which Liens may be granted pursuant to
          Section 6.02(b)(vii), drawings under credit lines existing at the date
          of this Agreement and borrowings evidenced by obligations having a
          term of up to five years issued in the ordinary course of business
          consistent with past practice.

               (xi) subject to the fiduciary duties of its Board of Directors,
          release any third Person from its obligations under any existing
          standstill agreement relating to 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -32-
<PAGE>

          a Competing Transaction or otherwise under any confidentiality 
          agreement or similar agreement;

               (xii)     enter into any Material agreement with any third Person
          that provides for an exclusive arrangement with that third Person;

               (xiii)    subject to the fiduciary duties of its Board of
          Directors, amend, modify or terminate the Parent's Rights Agreement or
          redeem any rights to purchase shares of the Parent's Series A Junior
          Participating Preferred Stock except as may be necessary to consummate
          the transactions contemplated by this Agreement; or 

               (xiv)     agree in writing or otherwise to do any of the
          foregoing.

     SECTION 6.03   NO SOLICITATION BY THE COMPANY.  From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement pursuant to Section 9.01, the Company agrees that neither the Company
nor any of its Subsidiaries nor any of the directors and  officers of the
Company or any of its Subsidiaries shall, and that it shall direct and use its
best efforts to cause the other employees, agents and representatives (including
investment bankers, attorneys and accountants) employed or retained by the
Company or any of its Subsidiaries not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate (including by way of furnishing
information or assistance) any Acquisition Proposal or any inquiries that may
reasonably be expected to lead to an Acquisition Proposal.  The Company further
agrees that neither the Company nor any of its Subsidiaries nor any of the
directors and officers of the Company or any of its Subsidiaries shall, and that
it shall direct and use its best efforts to cause the other employees, agents
and representatives (including investment bankers, attorneys and accountants)
employed or retained by the Company or any of its Subsidiaries not to, directly
or indirectly, engage in any discussion with or provide any confidential
information or data to any Person that may reasonably be expected to lead to an
Acquisition Proposal or engage in any negotiations concerning, or otherwise
facilitate any effort or attempt to make or implement, an Acquisition Proposal. 
Notwithstanding the foregoing, the Board of Directors of the Company shall be
permitted (A), to the extent applicable, to comply, with regard to an
Acquisition Proposal, with Rule 14e-2(a) promulgated under the Exchange Act, (B)
in response to an unsolicited bona fide written Acquisition Proposal from any
Person, to recommend such Acquisition Proposal to the Company's stockholders or
withdraw or modify in any adverse manner its approval or recommendation of this
Agreement, or both, or (C) to engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person, if and only to the extent that,
in any such case described in clause (B) or (C), (i) the Required Company Vote
shall not have been theretofore obtained, (ii) the Board of Directors of the
Company shall have concluded in good faith that such Acquisition Proposal (x) in
the case of that described in clause (B) above would, if consummated, constitute
a Superior Proposal or (y), in the case described in clause (C) above could
reasonably be expected to constitute a Superior Proposal, (iii) the Board of
Directors of the Company shall have determined in good faith on the basis of
advice of outside legal counsel that such action is necessary for such Board of
Directors to act in a manner consistent with its fiduciary duties under
applicable Law and (iv) prior to providing any information or data to any Person
in connection with an Acquisition Proposal by any such Person, the Board of
Directors shall 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -33-
<PAGE>

have received from such Person an executed confidentiality agreement 
containing customary terms and provisions.  The Company shall promptly notify 
the Parent of such inquiries, proposals or offers received by, or any such 
discussions or negotiations sought to be initiated or continued with, any of 
its representatives indicating, in connection with such notice, the name of 
such Person and the material terms and conditions of any proposals or offers. 
The Company agrees that it will immediately cease and cause to be terminated 
any existing activities, discussions or negotiations with any parties 
conducted heretofore with respect to any Acquisition Proposal.  Nothing in 
this Section 6.03 shall permit the Parent or the Company to terminate this 
Agreement (except as specifically provided in Article IX).

     SECTION 6.04   NO SOLICITATION BY THE PARENT.  From the date of this
Agreement until the earlier of the Effective Time or the termination of this
Agreement pursuant to Section 9.01, the Parent agrees that neither the Parent
nor any of its Subsidiaries nor any of the directors and  officers of the Parent
or any of its Subsidiaries shall, and that it shall direct and use its best
efforts to cause the other employees, agents and representatives (including
investment bankers, attorneys and accountants) employed or retained by the
Parent or any of its Subsidiaries not to, directly or indirectly, initiate,
solicit, encourage or otherwise facilitate (including by way of furnishing
information or assistance) any Acquisition Proposal or any inquiries that may
reasonably be expected to lead to an Acquisition Proposal.  The Parent further
agrees that neither the Parent nor any of its Subsidiaries nor any of the
directors and officers of the Parent or any of its Subsidiaries shall, and that
it shall direct and use its best efforts to cause the other employees, agents
and representatives (including investment bankers, attorneys and accountants)
employed or retained by the Parent or any of its Subsidiaries not to, directly
or indirectly, engage in any discussion with or provide any confidential
information or data to any Person that may reasonably be expected to lead to an
Acquisition Proposal or engage in any negotiations concerning, or otherwise
facilitate any effort or attempt to make or implement, an Acquisition Proposal. 
Notwithstanding the foregoing, the Board of Directors of the Parent shall be
permitted (A), to the extent applicable, to comply, with regard to an
Acquisition Proposal, with Rule 14e-2(a) promulgated under the Exchange Act, (B)
in response to an unsolicited bona fide written Acquisition Proposal from any
Person, to recommend such Acquisition Proposal to the Parent's stockholders or
withdraw or modify in any adverse manner its approval or recommendation of this
Agreement, or both, or (C) to engage in any discussions or negotiations with, or
provide any information to, any Person in response to an unsolicited bona fide
written Acquisition Proposal by any such Person, if and only to the extent that,
in any such case described in clause (B) or (C), (i) the Required Parent Vote
shall not have been theretofore obtained, (ii) the Board of Directors of the
Parent shall have concluded in good faith that such Acquisition Proposal (x) in
the case of that described in clause (B) above would, if consummated, constitute
a Superior Proposal or (y), in the case described in clause (C) above could
reasonably be expected to constitute a Superior Proposal, (iii) the Board of
Directors of the Parent shall have determined in good faith on the basis of
advice of outside legal counsel that such action is necessary for such Board of
Directors to act in a manner consistent with its fiduciary duties under
applicable Law and (iv) prior to providing any information or data to any Person
in connection with an Acquisition Proposal by any such Person, the Board of
Directors shall have received from such Person an executed confidentiality
agreement containing customary terms and provisions.  The Parent shall promptly
notify the Company of such inquiries, proposals or offers received by, or any
such discussions or negotiations sought to be initiated or continued with, any
of its representatives indicating, in 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -34-
<PAGE>

connection with such notice, the name of such Person and the material terms 
and conditions of any proposals or offers. The Parent agrees that it will 
immediately cease and cause to be terminated any existing activities, 
discussions or negotiations with any parties conducted heretofore with 
respect to any Acquisition Proposal. Nothing in this Section 6.04 shall 
permit the Parent or the Company to terminate this Agreement (except as 
specifically provided in Article IX).

     SECTION 6.05   ACCESS AND INFORMATION.

          (a)  Each of the Company and the Parent shall, and shall cause its
     Subsidiaries to, (i) afford to the other and its officers, directors,
     employees, accountants, consultants, legal counsel, agents and other
     representatives (collectively, in the case of the Company, the "Company's
     Representatives" and, in the case of the Parent, the "Parent's
     Representatives") access, at reasonable times upon reasonable prior notice,
     to the officers, employees, agents, properties, offices and other
     facilities of the other and to its books and records and (ii) furnish
     promptly to the other and its Representatives such information concerning
     its business, properties, contracts, records and personnel (including
     financial, operating and other data and information) as may be reasonably
     requested, from time to time, by or on behalf of the other party.

          (b)  Each party to this Agreement (the Parent Companies being
     considered one party for purposes of this Section 6.05(b)) shall hold in
     confidence all nonpublic information received from the other party to this
     Agreement until such time as such information is otherwise publicly
     available.  If this Agreement is terminated for any reason pursuant to
     Article IX hereof, each of the Company and the Parent shall, within ten
     days after a request therefor from the other, return or destroy (and
     provide the other party within such ten-day time period with a certificate
     of an executive officer certifying such destruction) all of the information
     furnished to such party and its Representatives pursuant to the provisions
     of Section 6.05(a) and all internal memoranda, analyses, evaluations and
     other similar material containing, reflecting or prepared from any such
     information, in each case other than information available to the general
     public without restriction.
     
                                     ARTICLE VII

                                ADDITIONAL AGREEMENTS

     SECTION 7.01   MEETINGS OF STOCKHOLDERS.  

          (a)  The Company shall, promptly after the date of this Agreement,
     take all actions necessary in accordance with the GCL and its certificate
     of incorporation and bylaws to convene a special meeting of the Company's
     stockholders to consider approval and adoption of this Agreement and the
     Merger (the "Company Stockholders' Meeting"), and the Company shall consult
     with the Parent in connection therewith.  Subject to Section 6.03 herein
     and to the fiduciary duties of its Board of Directors, the Board of
     Directors of the Company shall recommend to the stockholders of the Company
     the approval of this Agreement and the Company shall use all reasonable
     efforts to solicit from stockholders of 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -35-
<PAGE>

     the Company proxies in favor of the approval and adoption of this Agreement
     and the Merger and to secure the vote or consent of stockholders required 
     by the GCL and its certificate of incorporation and bylaws to approve and 
     adopt this Agreement and the Merger (the "Required Company Vote").

          (b)  The Parent shall, promptly after the date of this Agreement, take
     all actions necessary in accordance with the GCL and its certificate of
     incorporation and bylaws to convene a special meeting of the Parent's
     stockholders to consider approval of the Charter Amendment and the Share
     Issuance (the "Parent Stockholders' Meeting"), and the Parent shall consult
     with the Company in connection therewith.  Subject to Section 6.04 and to
     the fiduciary duties of its Board of Directors, the Board of Directors of
     the Parent shall recommend to the stockholders of the Parent the approval
     of the Charter Amendment and the Share Issuance and the Parent shall use
     all reasonable efforts to solicit from stockholders of the Parent proxies
     in favor of the approval of the Charter Amendment and the Share Issuance
     and to secure the vote or consent of the stockholders of the Parent
     required by the GCL and the rules of the NYSE to approve the Charter
     Amendment and the Share Issuance (the "Required Parent Vote").

     SECTION 7.02   REGISTRATION STATEMENT; PROXY STATEMENTS.

          (a)  JOINT PROXY STATEMENT/PROSPECTUS.  As promptly as practicable
     after the execution of this Agreement, the Parent and the Company shall
     jointly prepare and file with the Commission a joint proxy statement and
     forms of proxies in connection with (i) the solicitation of proxies to be
     voted at the Parent Stockholders' Meeting with respect to the Charter
     Amendment and the Share Issuance and (ii) in connection with the
     solicitation of proxies to be voted at the Company Stockholders' Meeting
     with respect to this Agreement and the Merger (such joint proxy statement,
     together with any amendments thereof or supplements thereto effected prior
     to the effective date of the Registration Statement, being the "Joint Proxy
     Statement").  At such time as the Parent and the Company deem appropriate,
     the Parent shall prepare and file with the Commission a registration
     statement on Form S-4 (such registration statement, together with any
     amendments thereof or supplements thereto, being the "Registration
     Statement"), containing a proxy statement for stockholders of the Parent
     and a proxy statement/prospectus for stockholders of the Company in
     connection with the registration under the Securities Act of the offering,
     sale and delivery of the Parent Common Stock to be issued pursuant to this
     Agreement in the Merger to stockholders of the Company (the "Joint Proxy
     Statement/Prospectus"). The Joint Proxy Statement/Prospectus shall include
     substantially all the information included in the Joint Proxy Statement, as
     it shall be then amended.  Each of the Parent Companies and the Company
     shall furnish all information concerning it and the holders of its capital
     stock as the other may reasonably request in connection with such actions. 
     Each of the Parent Companies and the Company will use all reasonable
     efforts to have or cause the Registration Statement to become effective as
     promptly as practicable, and shall take any action required to be taken
     under any applicable federal or state securities Laws in connection with
     the issuance of shares of Parent Common Stock in the Merger. As promptly as
     practicable after the Registration Statement shall have become effective,
     (x) the Parent shall mail the Joint 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -36-
<PAGE>

     Proxy Statement/Prospectus to its stockholders entitled to notice of and 
     to vote at the Parent's Stockholders' Meeting and (y) the Company shall 
     mail the Joint Proxy Statement/Prospectus to its stockholders entitled 
     to notice of and to vote at the Company Stockholders' Meeting.

          (b)  COMPANY INFORMATION.  The information supplied by the Company for
     inclusion in the Registration Statement shall not, at the time the
     Registration Statement is declared effective, contain any untrue statement
     of a material fact or omit to state any material fact required to be stated
     therein or necessary in order to make the statements therein not
     misleading.  The information supplied by the Company for inclusion in
     (i) the Joint Proxy Statement/Prospectus shall not, at the date the Joint
     Proxy Statement/Prospectus (or any supplement thereto) is first mailed to
     stockholders of the Parent, at the date (if different) the Joint Proxy
     Statement/Prospectus (or any supplement thereto) is first mailed to
     stockholders of the Company, at the time of the Parent Stockholders'
     Meeting, at the time (if different) of the Company Stockholders' Meeting or
     at the Effective Time, contain any untrue statement of a material fact or
     omit to state any material fact required to be stated therein or necessary
     in order to make the statements therein, in the light of the circumstances
     under which they were made, not misleading.  If at any time prior to the
     Effective Time any event or circumstance relating to the Company or any of
     its Subsidiaries, or its or their respective officers or directors, should
     be discovered by the Company that should be set forth in an amendment to
     the Registration Statement or a supplement to the Joint Proxy
     Statement/Prospectus, the Company shall promptly inform the Parent.  All
     documents that the Company is responsible for filing with the Commission in
     connection with the transactions contemplated herein shall comply as to
     form in all material respects with the applicable requirements of the
     Securities Act and the Regulations thereunder and the Exchange Act and the
     Regulations thereunder.

          (c)  THE PARENT COMPANIES INFORMATION.  The information supplied by
     the Parent Companies for inclusion in the Registration Statement shall not,
     at the time the Registration Statement is declared effective, contain any
     untrue statement of a material fact or omit to state any material fact
     required to be stated therein or necessary in order to make the statements
     therein not misleading.  Such information supplied by the Parent for
     inclusion in (i) the Joint Proxy Statement/Prospectus shall not, at the
     date the Joint Proxy Statement/Prospectus (or any supplement thereto) is
     first mailed to stockholders of the Parent, at the date (if different) the
     Joint Proxy Statement/Prospectus (or any supplement thereto) is first
     mailed to stockholders of the Company, at the time of the Parent
     Stockholders' Meeting, at the time (if different) of the Company
     Stockholders' Meeting or at the Effective Time, contain any untrue
     statement of a material fact or omit to state any material fact required to
     be stated therein or necessary in order to make the statements therein, in
     the light of the circumstances under which they are made, not misleading. 
     If at any time prior to the Effective Time any event or circumstance
     relating to the Parent or any of its Affiliates, or to their respective
     officers or directors, should be discovered by the Parent that should be
     set forth in an amendment to the Registration Statement or a supplement to
     the Joint Proxy Statement/Prospectus, the Parent shall promptly inform the
     Company.  All documents that the Parent Companies are responsible for
     filing with the Commission in 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -37-
<PAGE>

     connection with the transactions contemplated hereby shall comply as to 
     form in all material respects with the applicable requirements of the 
     Securities Act and the Regulations thereunder and the Exchange Act and 
     the Regulations thereunder.

          (d)  No amendment or supplement to the Registration Statement, the
     Joint Proxy Statement or the Joint Proxy Statement/Prospectus shall be made
     by the Parent or the Company without the approval of the other party, which
     shall not be unreasonably withheld or delayed.  The Parent and the Company
     each will advise the other, promptly after it receives notice thereof, of
     the time when the Registration Statement has become effective or any
     supplement or amendment has been filed, the issuance of any stop order
     suspending the effectiveness of the Registration Statement or the
     solicitation of proxies pursuant to the Joint Proxy Statement/Prospectus,
     the suspension of the qualification of the Parent Common Stock issuable in
     connection with the Merger for offering or sale in any jurisdiction, any
     request by the staff of the Commission for amendment of the Registration
     Statement, the Joint Proxy Statement or the Joint Proxy
     Statement/Prospectus, the receipt from the staff of the Commission of
     comments thereon or any request by the staff of the Commission for
     additional information with respect thereto.

     SECTION 7.03   APPROPRIATE ACTION; CONSENTS; FILINGS.

          (a)  The Company and the Parent shall each use all reasonable efforts
     (i) to take, or to cause to be taken, all actions, and to do, or to cause
     to be done, all things that, in either case, are necessary, proper or
     advisable under applicable Law or otherwise to consummate and make
     effective the transactions contemplated by this Agreement, (ii) to obtain
     from any Governmental Authorities any Authorizations or Orders required to
     be obtained by the Parent or the Company or any of their Subsidiaries in
     connection with the authorization, execution, delivery and performance of
     this Agreement and the consummation of the transactions contemplated
     hereby, including the Merger, (iii) to make all necessary filings, and
     thereafter make any other required submissions, with respect to this
     Agreement and the Merger required under (A) the Securities Act (in the case
     of the Parent) and the Exchange Act and the Regulations thereunder, and any
     other applicable federal or state securities Laws, (B) the HSR Act and
     (C) any other applicable Law.  The Parent and the Company shall cooperate
     with each other in connection with the making of all such filings,
     including providing copies of all such documents to the nonfiling party and
     its advisors prior to filings and, if requested, shall accept all
     reasonable additions, deletions or changes suggested in connection
     therewith.  The Company and the Parent shall furnish all information
     required for any application or other filing to be made pursuant to any
     applicable Law or any applicable Regulations of any Governmental Authority
     (including all information required to be included in the Joint Proxy
     Statement, the Joint Proxy Statement/Prospectus or the Registration
     Statement) in connection with the transactions contemplated by this
     Agreement.

          (b)  Each of the Company and the Parent shall give prompt notice to
     the other of (i) any notice or other communication from any Person alleging
     that the consent of such Person is or may be required in connection with
     the Merger, (ii) any notice or other communication from any Governmental
     Authority in connection with the Merger, (iii) any 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -38-
<PAGE>

     actions, suits, claims, investigations or proceedings commenced or 
     threatened in writing against, relating to or involving or otherwise 
     affecting the Company, the Parent or their Subsidiaries that relate to 
     the consummation of the Merger; and (iv) any change that is reasonably 
     likely to have a Material Adverse Effect on the Company or the Parent, 
     respectively, or is likely to delay or impede the ability of either the 
     Company or the Parent, respectively, to consummate the transactions 
     contemplated by this Agreement or to fulfill their respective 
     obligations set forth herein.

          (c)  The Parent Companies and the Company agree to cooperate and use
     all reasonable efforts vigorously to contest and resist any action,
     including legislative, administrative or judicial action, and to have
     vacated, lifted, reversed or overturned any Order (whether temporary,
     preliminary or permanent) of any Court or Governmental Authority that is in
     effect and that restricts, prevents or prohibits the consummation of the
     Merger or any other transactions contemplated by this Agreement, including
     the vigorous pursuit of all available avenues of administrative and
     judicial appeal and all available legislative action.  Each of the Parent
     Companies and the Company also agree to take any and all actions, including
     the disposition of assets or the withdrawal from doing business in
     particular jurisdictions, required by any Court or Governmental Authority
     as a condition to the granting of any Authorization or Order necessary for
     the consummation of the Merger or as may be required to avoid, lift, vacate
     or reverse any legislative or judicial action which would otherwise cause
     any condition to the Closing not to be satisfied; PROVIDED, HOWEVER, that
     in no event shall either party take, or be required to take, any action
     that could reasonably be expected to have a Material Adverse Effect on the
     Combined Companies. 

          (d)  (i)  Each of the Company and the Parent shall give (or shall
          cause their respective Subsidiaries to give) any notices to third
          Persons, and use, and cause their respective Subsidiaries to use, all
          reasonable efforts to obtain any consents from third Persons
          (A) necessary, proper or advisable to consummate the transactions
          contemplated by this Agreement or to satisfy any of the conditions set
          forth in Article VIII, (B) otherwise required under any contracts,
          licenses, leases or other agreements in connection with the
          consummation of the transactions contemplated hereby or (C) required
          to prevent a Material Adverse Effect on the Company from occurring
          prior to or after the Effective Time or a Material Adverse Effect on
          the Parent from occurring after the Effective Time.

               (ii) If any party shall fail to obtain any consent from a third
          Person described in subsection (d)(i) above, such party shall use all
          reasonable efforts, and shall take any such actions reasonably
          requested by the other parties, to limit the adverse effect upon the
          Company and the Parent, their respective Subsidiaries, and their
          respective businesses resulting, or that could reasonably be expected
          to result after the Effective Time, from the failure to obtain such
          consent.
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -39-
<PAGE>

     SECTION 7.04   AFFILIATES; POOLING; TAX TREATMENT.

          (a)  The Company shall use all reasonable efforts to obtain from any
     Person who may be deemed to have become an Affiliate of the Company after
     the date of this Agreement and on or prior to the Closing Date a written
     agreement substantially in the form of Annex B hereto as soon as
     practicable after attaining such status.

          (b)  The Parent shall use all reasonable efforts to obtain from any
     Person who may be deemed to have become an Affiliate of the Parent after
     the date of this Agreement and on or prior to the Closing Date a written
     agreement substantially in the form of Annex C hereto as soon as
     practicable after attaining such status.

          (c)  The Parent Companies shall not be required to maintain the
     effectiveness of the Registration Statement for the purpose of resale by
     stockholders of the Company who may be Affiliates of the Company pursuant
     to Rule 145 under the Securities Act.

          (d)  Each party hereto shall use all reasonable efforts to cause the
     Merger to be treated for financial accounting purposes as a Pooling
     Transaction, and shall not take, and shall use all reasonable efforts to
     prevent any Affiliate of such party from taking, any actions that could
     prevent the Merger from being treated for financial accounting purposes as
     a Pooling Transaction.

          (e)  Each party hereto shall use all reasonable efforts to cause the
     Merger to qualify, and shall not take, and shall use all reasonable efforts
     to prevent any Affiliate of such party from taking, any actions that could
     prevent the Merger from qualifying, as a reorganization under the
     provisions of Section 368(a) of the Code.

     SECTION 7.05   PUBLIC ANNOUNCEMENTS.  The Parent and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation.

     SECTION 7.06   NYSE LISTING.  The Parent shall use all reasonable efforts
to cause the shares of the Parent Common Stock to be issued in the Merger to be
approved for listing (subject to official notice of issuance) on the NYSE prior
to the Effective Time. 

     SECTION 7.07   RIGHTS AGREEMENT; STATE TAKEOVER STATUTES.  The Company
shall take all action (including, if necessary, redeeming all of the outstanding
rights issued pursuant to the Company Rights Agreement or amending or
terminating the Company Rights Agreement) so that the execution, delivery and
performance of this Agreement and the consummation of the Merger and the other
transactions contemplated hereby do not and will not result in the grant of any
rights to any Person under the Company Rights Agreement or enable or require any
outstanding rights to be exercised, distributed or triggered.  The Company will
take all steps necessary to exempt the transactions contemplated by this
Agreement from Section 203 of the GCL.
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -40-
<PAGE>

     SECTION 7.08   COMFORT LETTERS.

          (a)  The Company shall use all reasonable efforts to cause Price
     Waterhouse LLP, the Company's independent accountants, to deliver a letter
     dated as of the date of the Joint Proxy Statement/Prospectus, and addressed
     to the Company and the Parent, in form and substance reasonably
     satisfactory to the Parent and customary in scope and substance for agreed
     upon procedures letters delivered by independent public accountants in
     connection with registration statements and proxy statements similar to the
     Registration Statement and the Joint Proxy Statement/Prospectus.

          (b)  The Parent shall use all reasonable efforts to cause Arthur
     Andersen LLP, the Parent's independent accountants, to deliver a letter
     dated as of the date of the Joint Proxy Statement/Prospectus, and addressed
     to the Parent and the Company, in form and substance reasonably
     satisfactory to the Company and customary in scope and substance for agreed
     upon procedures letters delivered by independent public accountants in
     connection with registration statements and proxy statements similar to the
     Registration Statement and the Joint Proxy Statement/Prospectus.

     SECTION 7.09   ASSUMPTION OF OBLIGATIONS TO ISSUE STOCK AND OBLIGATIONS OF
                    EMPLOYEE BENEFIT PLANS; EMPLOYEES.

          (a)  At the Effective Time, automatically and without any action on
     the part of the holder thereof, each outstanding Company Stock Option shall
     be assumed by the Parent and shall become an option to purchase that number
     of shares of the Parent Common Stock obtained by multiplying the number of
     shares of Company Common Stock issuable upon the exercise of such option by
     the Common Stock Exchange Ratio at an exercise price per share equal to the
     per share exercise price of such option divided by the Common Stock
     Exchange Ratio and otherwise upon the same terms and conditions as such
     outstanding option to purchase Company Common Stock; PROVIDED, HOWEVER,
     that in the case of any option to which Section 421 of the Internal Revenue
     Code applies by reason of the qualifications under Section 422 or 423 of
     such Code, the exercise price, the number of shares purchasable pursuant to
     such option and the terms and conditions of exercise of such option shall
     be determined in a manner that complies with Section 424(a) of the Code.

          (b)  On or prior to the Effective Time, the Company shall take or
     cause to be taken all such actions, reasonably satisfactory to the Parent,
     as may be necessary or desirable in order to authorize the transactions
     contemplated by subsection (a) of this Section.

          (c)  The Parent shall take all corporate actions necessary to reserve
     for issuance a sufficient number of shares of Parent Common Stock for
     delivery upon exercise of the Company Stock Options assumed by the Parent
     pursuant to Section 7.09(a) above and shares of Parent Common Stock
     otherwise to be issued under other Company Stock Plans.

          (d)  As promptly as practicable after the Effective Time, the Parent
     shall file one or more Registration Statements on Form S-8 (or any
     successor or other appropriate form) 
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -41-
<PAGE>

     with respect to the shares of Parent Common Stock subject to the Company 
     Stock Options or otherwise issuable under other Company Stock Plans and 
     shall use its reasonable efforts to maintain the effectiveness of such 
     registration statement or registration statements (and maintain the 
     current status of the prospectus or prospectuses contained therein) 
     for so long as such options remain outstanding and to comply with 
     applicable state securities and blue sky laws.

          (e)  Except as provided herein or as otherwise agreed to by the
     parties, each of the Company Stock Plans providing for the issuance or
     grant of Company Stock Options or Company Common Stock shall be assumed as
     of the Effective Time by the Parent with such amendments thereto as may be
     required to reflect the Merger.

          (f)  Provided that the Parent shall not be obligated with respect to
     any action taken by the Company or its Subsidiaries with respect to the
     Benefit Plans of the Company or its Subsidiaries in violation of the
     provisions of Section 6.02(a), the Parent hereby agrees to guarantee from
     and after the Effective Time and to cause the Surviving Corporation and
     each Subsidiary of the Surviving Corporation to honor and perform all
     obligations of the Surviving Corporation and each Subsidiary of the
     Surviving Corporation under all Benefit Plans of the Company and such
     Subsidiaries and under any agreement or arrangement implemented as provided
     in the Company's Disclosure Letter or as otherwise contemplated by this
     Agreement and the Company's Disclosure Letter.

          (g)  The Parent shall and shall cause the Surviving Corporation and
     each Subsidiary of the Surviving Corporation to take all corporate action
     necessary to:

               (i)  maintain with respect to eligible participants (as of the
          Effective Time) the Company's retiree medical plan, except to the
          extent that any modifications thereto are consistent with changes in
          the medical plans provided by the Parent and its subsidiaries for
          similarly situated active employees;

               (ii) maintain the "pension equalizer" contributions to the
          Company Retirement Savings Plan, the related nonqualified savings plan
          or a successor plan that would provide at least the same level of
          benefits as the "pension equalizer" arrangement, with respect to
          employees who are eligible participants as of the Effective Time,
          after taking into account any retirement benefits provided to such
          participants by any plans or programs of the Parent or any of its
          Subsidiaries after the Effective Time;

               (iii)     maintain the Company Executive Deferred Compensation
          Plan, except that no additional employee deferrals shall be made under
          such plan after the Effective Time and valuation with respect to stock
          deferrals existing at such time shall thereafter be based upon the
          Parent Common Stock;
                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -42-
<PAGE>

               (iv) maintain the Company's Executive Life Insurance Program,
          except that after the Effective Time no additional participants shall
          be covered by such program;

               (v)  maintain the Company's Supplemental Executive Retirement
          Plan with respect to employees that are eligible participants as of
          the Effective Time, but the offset under such plan shall take into
          account any employer provided retirement benefits under any plans or
          programs of the Parent or any of its Subsidiaries after the Effective
          Time;

               (vi) administer the Performance Stock Unit Program and the
          Incentive Stock Unit Plan of the Company in accordance with their
          terms, with such adjustments in the performance targets as may be
          necessary to reflect the Merger, but no new grants of awards shall be
          made under such plans; and

     The Company represents that true and complete copies of all of the plans
     and programs referred to in this Section 7.09(g) have been delivered to the
     Parent.

          (h)  Subject to Section 7.09(g), until the third anniversary of the
     Effective Time (the "Benefits Maintenance Period") the Parent shall and
     shall cause the Surviving Corporation and each Subsidiary of the Surviving
     Corporation to provide each employee of the Company or any of its
     Subsidiaries at the Effective Time ("Company Participants") with employee
     benefits and compensation after the Effective Time that are substantially
     comparable to similarly situated employees of the Parent and its
     Subsidiaries.  At the Effective Time, the Parent shall adopt the severance
     program described in Section 7.09(h) of the Company's Disclosure Letter and
     shall maintain such program for the period set forth in such description.

          (i)  If Company Participants are included in any benefit plan,
     including provision for vacation, of the Parent, the Surviving Corporation
     or their Subsidiaries, the Company Participants shall receive credit for
     service prior to the Effective Time with the Company and its Subsidiaries
     to the same extent such service was counted under similar Benefit Plans of
     the Company for purposes of determining eligibility to participate,
     vesting, eligibility for retirement and, with respect to vacation,
     disability and severance, benefit accrual.  If Company Participants or
     their dependents are included in any medical, dental or health plan (a
     "Successor Plan") other than the plan or plans they participated in at the
     Effective Time (a "Predecessor Plan") any such Successor Plan shall not
     include pre-existing condition exclusions, except to the extent such
     exclusions were applicable under the applicable Predecessor Plan and shall
     credit co-pays and deductibles to the same extent credited under the
     Predecessor Plan.

          (j)  Except as otherwise specifically set forth above, nothing
     contained herein shall be construed as requiring Parent to continue any
     specific Benefit Plan, or to continue the employment of any specific
     person.

                                       
                                       
                          AGREEMENT AND PLAN OF MERGER
                                      -43-

<PAGE>

     SECTION 7.10   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

          (a)  To the extent, if any, not provided by an existing right of
     indemnification or other agreement or policy, from and after the Effective
     Time, the Surviving Corporation shall, to the fullest extent permitted by
     applicable law, indemnify, defend and hold harmless each person who is now,
     or has been at any time prior to the date hereof, or who becomes prior to
     the Effective Time, an officer or director of the Company or any of its
     Subsidiaries (each an "Indemnified Party" and collectively, the
     "Indemnified Parties") against (i) all losses, expenses (including
     reasonable attorney's fees and expenses), claims, damages or liabilities
     or, subject to the proviso of the next succeeding sentence, amounts paid in
     settlement, arising out of actions or omissions occurring at or prior to,
     at or after the Effective Time (and whether asserted or claimed prior to,
     at or after the Effective Time) that are, in whole or in part, based on or
     arising out of the fact that such person is or was a director or officer of
     such party (the "Indemnified Liabilities"), and (ii) all Indemnified
     Liabilities to the extent they are based on or arise out of or pertain to
     the transactions contemplated by this Agreement.  In the event of any such
     loss, expense, claim, damage or liability arising before the Effective
     Time, (i) the Surviving Corporation shall pay the reasonable fees and
     expenses of counsel selected by the Indemnified Parties, which counsel
     shall be reasonably satisfactory to the Surviving Corporation, promptly
     after statements therefor are received and otherwise advance to such
     Indemnified Party upon request reimbursement of documented expenses
     reasonably incurred, in either case to the extent not prohibited by the
     GCL, (ii) the Parent and the Surviving Corporation will cooperate in the
     defense of any such matter and (iii) any determination required to be made
     with respect to whether an Indemnified Party's conduct complies with the
     standards set forth under the GCL and the certificate of incorporation or
     by-laws of the Surviving Corporation shall be made by independent counsel
     mutually acceptable to the Parent and the Indemnified Party; PROVIDED,
     HOWEVER, that the Parent and the Surviving Corporation shall not be liable
     for any settlement affected without their written consent (which consent
     shall not be unreasonably withheld).  The Indemnified Parties as a group
     may retain only one law firm with respect to each related matter except to
     the extent there is, in the opinion of counsel to an Indemnified Party,
     under applicable standards of professional conduct, a conflict on any
     significant issue between positions of such Indemnified Party and any other
     Indemnified Party or Indemnified Parties.

          (b)  The Parent agrees to guarantee unconditionally the performance of
     the Surviving Corporation's obligations pursuant to Section 7.10(a).

          (c)  For a period of six years after the Effective Time, the Surviving
     Corporation shall cause to be maintained in effect policies of directors
     and officers' liability insurance maintained by the Company for the benefit
     of those persons who are currently covered by such policies on terms no
     less favorable than the terms of such current insurance coverage; PROVIDED,
     HOWEVER, that the Surviving Corporation shall not be required to expend in
     any year an amount in excess of 200% of the annual aggregate premiums
     currently paid by the Company for such insurance; and PROVIDED, FURTHER,
     that if the annual premiums of such insurance coverage exceed such amount,
     the Surviving Corporation shall be obligated to 

                          AGREEMENT AND PLAN OF MERGER
                                     -44-
<PAGE>

     obtain a policy with the best coverage available, in the reasonable 
     judgment of the Board of Directors of the Parent, for a cost not 
     exceeding such amount.

          (d)  If the Parent or any of its successors or assigns (i)
     consolidates with or merges into any other person or entity and shall not
     be the continuing or surviving corporation or entity of such consolidation
     or merger or (ii) transfers all of substantially all of its properties and
     assets to any person or entity, then and in either such case, proper
     provisions shall be made so that the successors and assigns of the Parent
     shall assume the obligations set forth in this Section 7.10.

          (e)  To the fullest extent permitted by law, from and after the
     Effective Time, all rights to indemnification as of the date hereof in
     favor of the employees, agents, directors and officers of the Company and
     its Subsidiaries with respect to their activities as such prior to the
     Effective Time, as provided in their respective certificates of
     incorporation and by-laws in effect on the date thereof, or otherwise in
     effect on the date hereof, shall survive the Merger and shall continue in
     full force and effect for a period of not less than six years from the
     Effective Time.

          (f)  The provisions of this Section 7.10 are intended to be for the
     benefit of, and shall be enforceable by, each Indemnified Party, his or her
     heirs and his or her representatives.

     SECTION 7.11   NEWCO.  Prior to the Effective Time, Newco shall not conduct
any business or make any investments other than as specifically contemplated by
this Agreement and will not have any assets (other than the minimum amount of
cash required to be paid to Newco for the valid issuance of its stock to the
Parent). 

     SECTION 7.12   EVENT NOTICES.  From and after the date of this Agreement
until the Effective Time, each party hereto shall promptly notify the other
party hereto of the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any condition to the obligations
of the latter party to effect the Merger and the other transactions contemplated
by this Agreement not to be satisfied.  No delivery of any notice pursuant to
this Section 7.12 shall cure any breach of any representation or warranty of the
party giving such notice contained in this Agreement or otherwise limit or
affect the remedies available hereunder to the party receiving such notice.

     SECTION 7.13   PARENT BOARD OF DIRECTORS; COMMITTEES.

          (a)  The Parent's Board of Directors will take such action as may be
     necessary to cause the number of directors comprising the Board of
     Directors of the Parent at the Effective Time to be 14 persons, nine of
     whom shall be current members of the Board of Directors of the Parent
     including Richard B. Cheney and five of whom shall be current members of
     the Board of Directors of the Company including William B. Bradford.  The
     specific members of the Parent's Board of Directors will be chosen by a
     committee 

                          AGREEMENT AND PLAN OF MERGER
                                     -45-
<PAGE>

     consisting of Richard B. Cheney, William E. Bradford and the current 
     chairman or the Nominating Committee of each of the Parent and the
     Company.

          (b)  At or promptly after the Closing, the Parent's Board of Directors
     will take such action as may be necessary so that one or more of such
     designees of the Company will be added to each committee of the Parent's
     Board of Directors on an approximate proportional basis.

     SECTION 7.14   TRANSITION MANAGEMENT.  As soon as practicable after the
date of this Agreement, the parties shall create a special transition management
task force (the "Task Force"), which shall be comprised of William E. Bradford,
Richard B. Cheney, David J. Lesar and Donald C. Vaughn.  The Task Force shall
examine various alternatives regarding the manner in which to best organize the
business of the Combined Companies after the Effective Time.

     SECTION 7.15   EMPLOYMENT CONTRACTS.  The Parent shall, as of or prior to
the Effective Time, enter into employment contracts with William E. Bradford and
Donald C. Vaughn on terms reasonably acceptable to the parties pursuant to which
William E. Bradford shall hold the position of Chairman of the Board of
Directors of the Parent and Donald C. Vaughn shall hold the office of Vice
Chairman of the Parent and at the Effective Time each of Messrs. Bradford and
Vaughn shall be appointed to the Parent's Executive Committee, a non-board
committee comprised of executive officers of the Parent, which after the
Effective Time shall initially consist of such persons and Messrs. Cheney and
Lesar.

     SECTION 7.16   WAIVER BY COMPANY JOINT VENTURE PARTNERS.  The Company shall
not amend or modify the written waivers it has received from each of the Company
Joint Venture Partners of any and all rights such partners may have to purchase
any interest of the Company in any of the Company Joint Ventures that arise as a
result of the execution of this Agreement or the consummation of any of the
transactions contemplated hereby.

     SECTION 7.17   TRANSFER TAXES.  The Company and the Parent shall cooperate
in the preparation, execution and filing of all returns, questionnaires,
applications or other documents regarding any real property transfer or gains,
sales, use, transfer and stamp taxes, any transfer, recording, registration and
other fees and any similar taxes that become payable in connection with the
transactions contemplated by this Agreement ("Transfer Taxes").  The Company
shall pay or cause to be paid any such Transfer Taxes.

                                  ARTICLE VIII

                               CLOSING CONDITIONS

     SECTION 8.01   CONDITIONS TO OBLIGATIONS OF EACH PARTY UNDER THIS
AGREEMENT.  The respective obligations of each party to effect the Merger and
the other transactions contemplated hereby shall be subject to the satisfaction
at or prior to the Closing of the following conditions, any or all of which may
be waived by the parties hereto, in whole or in part, to the extent permitted by
applicable Law:

                          AGREEMENT AND PLAN OF MERGER
                                     -46-
<PAGE>

          (a)  EFFECTIVENESS OF THE REGISTRATION STATEMENT.  The Registration
     Statement shall have been declared effective by the Commission under the
     Securities Act, and the pro forma financial statements contained in the
     Registration Statement at the effective date thereof shall reflect the
     Merger for financial accounting purposes as a Pooling Transaction.  No stop
     order suspending the effectiveness of the Registration Statement shall have
     been issued by the Commission and no proceedings for that purpose shall
     have been initiated by the Commission.

          (b)  STOCKHOLDER APPROVAL.  This Agreement and the Merger shall have
     been approved and adopted by the requisite vote of the stockholders of the
     Company as required by the GCL.  The Charter Amendment and the Share
     Issuance shall have been approved and adopted by the requisite vote of the
     stockholders of the Parent as required by the GCL and the rules of the
     NYSE.

          (c)  NO ORDER.  No Court or Governmental Authority shall have enacted,
     issued, promulgated, enforced or entered any Law, Regulation or Order
     (whether temporary, preliminary or permanent) that is in effect and has the
     effect of making the Merger illegal or otherwise prohibiting consummation
     of the Merger.

          (d)  HSR ACT.  The waiting period under the HSR Act applicable to the
     Merger shall have expired or been terminated.

          (e)  FOREIGN GOVERNMENTAL AUTHORITIES.  The applicable waiting period
     under any competition Laws, Regulations and Orders of foreign Governmental
     Authorities, as set forth in the Parent's Disclosure Letter and the
     Company's Disclosure Letter, shall have expired or been terminated.

          (f)  POOLING OF INTERESTS.  The Parent and the Company shall have been
     advised in writing by Arthur Andersen LLP on the date upon which the
     Effective Time is to occur that, in reliance in part on the concurrent
     opinion of Price Waterhouse LLP or its successor that the Company is a
     "poolable entity," the Merger should, for financial accounting purposes, be
     treated as a Pooling Transaction.

          (g)  The shares of Parent Common Stock to be issued in the Merger
     shall have been listed, subject to official notice of issuance, on the
     NYSE.

     SECTION 8.02   ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE PARENT
COMPANIES.  The obligations of the Parent Companies to effect the Merger and the
other transactions contemplated hereby shall be subject to the satisfaction at
or prior to the Closing of the following conditions, any or all of which may be
waived by the Parent Companies, in whole or in part, to the extent permitted by
applicable Law:

          (a)  REPRESENTATIONS AND WARRANTIES.  Each of the representations and
     warranties of the Company contained in this Agreement that is qualified as
     to materiality shall be true and correct, and each of such representations
     and warranties that is not so qualified shall be 

                          AGREEMENT AND PLAN OF MERGER
                                     -47-
<PAGE>

     true and correct in all material respects, as of the date of this Agreement
     and as of the Closing Date as though made again on and as of the Closing 
     Date. The Parent Companies shall have received a certificate of the Chief 
     Executive Officer and the Chief Financial Officer of the Company, dated 
     the Closing date, to such effect.

          (b)  AGREEMENTS AND COVENANTS.  The Company shall have performed or
     complied in all material respects with all agreements and covenants
     required by this Agreement to be performed or complied with by it on or
     prior to the Closing Date.  The Parent Companies shall have received a
     certificate of the President and the Chief Executive Officer of the
     Company, dated the Closing date, to such effect.

          (c)  TAX OPINION.  The Parent shall have received the opinion dated as
     of the Closing Date of Vinson & Elkins L.L.P. to the effect that (i) the
     Merger will constitute a reorganization under section 368(a) of the Code,
     (ii) the Parent, the Company and Newco will each be a party to that
     reorganization, and (iii) no gain or loss will be recognized by the Parent,
     the Company or Newco by reason of the Merger.  In rendering such opinion,
     Vinson & Elkins L.L.P. shall receive and may rely upon representations
     contained in certificates of the Company and the Parent substantially in
     the form of Annexes D and E hereto.

     SECTION 8.03   ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY.  The
obligations of the Company to effect the Merger and the other transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing of the following conditions, any or all of which may be waived by the
Company, in whole or in part, to the extent permitted by applicable Law:

          (a)  REPRESENTATIONS AND WARRANTIES.  Each of the representations and
     warranties of the Parent contained in this Agreement that is qualified as
     to materiality shall be true and correct, and each of such representations
     and warranties that is not so qualified shall be true and correct in all
     material respects, as of the date of this Agreement and as of the Closing
     Date as though made again on and as of the Closing Date. The Company shall
     have received a certificate of the Chairman of the Board, the President or
     any Vice President and the Chief Financial Officer of each of the Parent
     Companies, dated the Closing date, to such effect.

          (b)  AGREEMENTS AND COVENANTS.  The Parent Companies shall have
     performed or complied in all material respects with all agreements and
     covenants required by this Agreement to be performed or complied with by
     them on or prior to the Closing Date.  The Company shall have received a
     certificate of the Chairman of the Board, the President or any Vice
     President and the Chief Financial Officer of each of the Parent Companies,
     dated the Closing Date, to such effect.

          (c)  TAX OPINION.  The Company shall have received the opinion dated
     as of the Closing Date of Weil, Gotshal & Manges LLP to the effect that
     (i) the Merger will constitute a reorganization under section 368(a) of the
     Code, (ii) the Parent, the Company and Newco will each be a party to that
     reorganization, and (iii) no gain or loss will be recognized by the

                          AGREEMENT AND PLAN OF MERGER
                                     -48-
<PAGE>

     stockholders of the Company upon the receipt of shares of the Parent Common
     Stock in exchange for shares of Company Common Stock pursuant to the Merger
     except with respect to any cash received in lieu of fractional share
     interests.  In rendering such opinion, Weil, Gotshal & Manges LLP shall
     receive and may rely upon the representations contained in certificates of
     the Company and the Parent substantially in the form of Annexes D and E
     hereto.

                                   ARTICLE IX

                       TERMINATION, AMENDMENT AND WAIVER

     SECTION 9.01   TERMINATION.  This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of this Agreement
and the Merger by the stockholders of the Company and before or after approval
of the Charter Amendment and the Share Issuance by the stockholders of the
Parent:

          (a)  by mutual consent of the Parent and the Company;

          (b)  by the Parent, upon a breach of any representation, warranty,
     covenant or agreement on the part of the Company set forth in this
     Agreement or if any representation or warranty of the Company shall have
     become untrue, in either case such that the conditions set forth in
     Section 8.02(a) or Section 8.02(b) would not be satisfied and such breach
     or untruth would result in a Material Adverse Effect on the Company (a
     "Terminating Company Breach"); PROVIDED that, if such Terminating Company
     Breach is curable by the Company through the exercise of its reasonable
     efforts and for so long as the Company continues to exercise such
     reasonable efforts, the Parent may not terminate this Agreement under this
     Section 9.01(b);

          (c)  by the Company, upon a breach of any representation, warranty,
     covenant or agreement on the part of the Parent Companies set forth in this
     Agreement or if any representation or warranty of the Parent Companies
     shall have become untrue, in either case, such that the conditions set
     forth in Section 8.03(a) or Section 8.03(b) would not be satisfied and such
     breach or untruth would result in a Material Adverse Effect on the Parent
     (a "Terminating Parent Breach"); PROVIDED that, if such Terminating Parent
     Breach is curable by the Parent Companies through the exercise of their
     reasonable efforts and for so long as the Parent Companies continue to
     exercise such reasonable efforts, the Company may not terminate this
     Agreement under this Section 9.01(c);

          (d)  by either the Parent or the Company, if there shall be any final
     and nonappealable Order that prevents the consummation of the Merger,
     unless the party relying on such Order has not complied with its
     obligations under Section 7.03;

          (e)  by either the Parent or the Company, if the Merger shall not have
     been consummated before December 31, 1998; PROVIDED, HOWEVER, that this
     Agreement may be extended by written notice of either the Parent or the
     Company to a date not later than 

                          AGREEMENT AND PLAN OF MERGER
                                     -49-
<PAGE>

     March 31, 1999, if the Merger shall not have been consummated as a result
     of the Company or the Parent Companies having failed by December 31, 1998 
     to receive all required Authorizations and Orders with respect to the 
     Merger or as a result of the entering of an Order by a Court or 
     Governmental Authority; and PROVIDED, FURTHER, that, prior to March 31, 
     1999, no party shall be entitled to terminate this Agreement pursuant to 
     this Section 9.01(e) if such party is in Material breach of any 
     representation, warranty, covenant or agreement on the part of such party
     set forth in this Agreement;

          (f)  by either the Parent or the Company, if this Agreement shall fail
     to receive the Required Company Vote by the stockholders of the Company at
     the Company Stockholders' Meeting;
          
          (g)  by either the Parent or the Company, if the Charter Amendment and
     the Share Issuance shall fail to receive the Required Parent Vote by the
     stockholders of the Parent at the Parent Stockholders' Meeting;

          (h)  by the Company, at any time prior to receipt of the Required
     Company Vote, upon 72 hours prior written notice to the Parent, if (i) the
     Board of Directors of the Company shall have concluded in good faith based
     on advice of outside counsel that such action is necessary to act in a
     manner consistent with its fiduciary duties under applicable law and
     (ii) the Parent does not make, within 72 hours of receipt of the Company's
     written notification of its intention to terminate this Agreement, an offer
     that the Board of Directors of the Company determines, in good faith after
     consultation with its financial advisors, is at least as favorable, from a
     financial point of view, to the stockholders of the Company as any Superior
     Proposal considered by the Board of Directors in making its determination
     under clause (i).  The Company agrees (x) that it will not enter into a
     binding agreement referred to in clause (ii) above until at least 72 hours
     after it has provided the notice to the Parent required thereby and (y) to
     notify the Parent promptly if its intention to enter into a written
     agreement referred to in its notification shall change at any time after
     giving such notification;

          (i)  by the Parent, at any time prior to receipt of the Required
     Parent Vote, upon 72 hours prior written notice to the Company, if (i) the
     Board of Directors of the Parent shall have concluded in good faith based
     on advice of outside counsel that such action is necessary to act in a
     manner consistent with its fiduciary duties under applicable law and
     (ii) the Company does not make, within 72 hours of receipt of the Parent's
     written notification of its intention to terminate this Agreement, an offer
     that the Board of Directors of the Parent determines, in good faith after
     consultation with its financial advisors, is at least as favorable, from a
     financial point of view, to the stockholders of the Parent as any Superior
     Proposal considered by the Board of Directors in making its determination
     under clause (i).  The Parent agrees (x) that it will not enter into a
     binding agreement referred to in clause (ii) above until at least 72 hours
     after it has provided the notice to the Company required thereby and (y) to
     notify the Company promptly if its intention to enter into a written
     agreement referred to in its notification shall change at any time after
     giving such notification; or

                          AGREEMENT AND PLAN OF MERGER
                                     -50-
<PAGE>

          (j)  by the Parent, upon two Business Days' prior written notice to
     the Company, if the Board of Directors of the Company (A) shall withdraw or
     modify in any manner adverse to the Parent the Board's approval or
     recommendation of this Agreement and the Merger, (B) shall approve or
     recommend any Superior Proposal or (C) shall resolve to take any of the
     actions specified in clause (A) or (B).

          (k)  by the Company, upon two Business Days' prior written notice to
     the Parent, if the Board of Directors of the Parent (A) shall withdraw or
     modify in any manner adverse to the Company the Board's approval or
     recommendation of the Charter Amendment and the Share Issuance, (B) shall
     approve or recommend any Superior Proposal or (C) shall resolve to take any
     of the actions specified in clause (A) or (B).

     The right of any party hereto to terminate this Agreement pursuant to this
Section 9.01 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
representatives or agents, whether prior to or after the execution of this
Agreement.

     SECTION 9.02   EFFECT OF TERMINATION.  Except as provided in Section 9.05
or Section 10.01 of this Agreement, in the event of the termination of this
Agreement pursuant to Section 9.01, this Agreement shall forthwith become void,
there shall be no liability on the part of the Parent Companies or the Company
or any of their respective officers or directors to the other and all rights and
obligations of any party hereto shall cease, except that nothing herein shall
relieve any party from liability for any misrepresentation or breach of any
covenant or agreement under this Agreement. 

     SECTION 9.03   AMENDMENT.  This Agreement may be amended by the parties
hereto by action authorized by their respective Boards of Directors at any time
prior to the Effective Time; PROVIDED, HOWEVER, that, after approval of the
Merger by the stockholders of the Company, or approval of the Charter Amendment
and Share Issuance by the stockholders of the Parent, no amendment may be made
that would reduce the amount or change the type of consideration into which each
share of Company Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger or that would otherwise require the approval of the
stockholders of the Company or the Parent under the GCL.  This Agreement may not
be amended except by an instrument in writing signed by the parties hereto.

     SECTION 9.04   WAIVER.  At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance by the other party
with any of the agreements or conditions contained herein.  Any such extension
or waiver shall be valid only if set forth in an instrument in writing signed by
the party or parties to be bound thereby.  For purposes of this Section 9.04,
the Parent Companies shall be deemed to be one party.

                          AGREEMENT AND PLAN OF MERGER
                                     -51-
<PAGE>

     SECTION 9.05   FEES, EXPENSES AND OTHER PAYMENTS.

          (a)  Except as provided in this Section 9.05, all Expenses incurred by
     the parties hereto shall be borne solely and entirely by the party which
     has incurred such Expenses; PROVIDED, HOWEVER, that the allocable share of
     the Parent Companies as a group and the Company for all Expenses related to
     printing, filing and mailing the Registration Statement, the Joint Proxy
     Statement and the Joint Proxy Statement/Prospectus and all Commission and
     other regulatory filing fees incurred in connection with the Registration
     Statement, the Joint Proxy Statement and the Joint Proxy 
     Statement/Prospectus shall be one-half each; and PROVIDED, FURTHER, 
     that the Parent may, at its option, but subject to Section 7.04(e), pay 
     any Expenses of the Company that are solely and directly related to the 
     Merger.

          (b)  If this Agreement is terminated by the Parent pursuant to Section
     9.01(j) (change of recommendation), then the Company shall pay to the
     Parent a termination fee equal to $50 million.
          
          (c)  If this Agreement is terminated by the Company pursuant to
     Section 9.01(k) (change of recommendation), then the Parent shall pay to
     the Company a termination fee equal to $50 million.
          
          (d)  If (i) this Agreement is terminated pursuant to (A) Section
     9.01(b) (breach), (B) Section 9.01(h) (fiduciary out), (C) Section 9.01(f)
     (failure to obtain stockholder approval), or (D) Section 9.01(j) (change of
     recommendation), (ii) at the time of such termination (or in the case of
     clause (i)(C) above, prior to the Company Stockholders' Meeting), there
     shall have been an Acquisition Proposal involving the Company or any of its
     Subsidiaries that, at the time of such termination (or such meeting, as the
     case may be), shall not have been (x) rejected by the Company and its Board
     of Directors or (y) withdrawn by the Person making such Acquisition
     Proposal and (iii) within twelve months of any such termination, the
     Company or any of its Subsidiaries accepts a written offer or enters into a
     written agreement to consummate an Acquisition Proposal with such Person or
     any of its Affiliates and (iv) the Company or such Subsidiary is thereafter
     acquired, through merger, consolidation, share exchange, sale of assets 
     or otherwise, by such Person or any of its Affiliates (a "Company
     Acquisition"), then the Company (jointly and severally with its
     Subsidiaries) shall at the closing (and as a condition of such closing) of
     such Company Acquisition or of such Acquisition Proposal, pay the Parent
     immediately a termination fee of $175 million.

          (e)  If (i) this Agreement is terminated pursuant to (A) Section
     9.01(c) (breach), (B) Section 9.01(i) (fiduciary out), (C) Section 9.01(g)
     (failure to obtain stockholder approval), or (D) Section 9.01(k) (change of
     recommendation), (ii) at the time of such termination (or in the case of
     clause (i)(C) above, prior to the Parent Stockholders' Meeting), there
     shall have been an Acquisition Proposal involving the Parent or any of its
     Subsidiaries that, at the time of such termination (or such meeting, as the
     case may be), shall not have been (x) rejected by the Parent and its Board
     of Directors or (y) withdrawn by the Person making such Acquisition
     Proposal and (iii) within twelve months of any such termination, 

                          AGREEMENT AND PLAN OF MERGER
                                     -52-
<PAGE>

     the Parent or any of its Subsidiaries accepts a written offer or enters 
     into a written agreement to consummate an Acquisition Proposal with such 
     Person or any of its Affiliates and (iv) the Parent or such Subsidiary is 
     thereafter acquired, through merger, consolidation, share exchange, sale of
     assets or otherwise, by such Person or any of its Affiliates (a "Parent
     Acquisition"), then the Parent (jointly and severally with its
     Subsidiaries) shall at the closing (and as a condition of such closing) of
     such Parent Acquisition or of such Acquisition Proposal, pay the Company
     immediately a termination fee of $175 million.

          (f)  If either party shall fail to pay the other party any fee or
     other amount due hereunder, the failing party shall pay the costs and
     expenses (including legal fees and expenses) of the other party in
     connection with any action, including the filing of any lawsuit or other
     legal action, taken to collect payment, together with interest on the
     amount of any unpaid fee at the publicly announced prime interest rate of
     Citibank N.A., in effect from time to time, from the date such fee or other
     payment was required to be paid until payment in full.

          (g)  Notwithstanding anything herein to the contrary, the aggregate
     amount payable to the Parent pursuant to Section 9.05 shall not exceed $175
     million exclusive of any amounts paid pursuant to Section 9.05(f).

          (h)  Notwithstanding anything herein to the contrary, the aggregate
     amount payable to the Company pursuant to Section 9.05 shall not exceed
     $175 million exclusive of any amounts paid pursuant to Section 9.05(f).

          (i)  Subject to the following sentences, the payments required by this
     Section 9.05 shall constitute liquidated damages in full and complete
     satisfaction of, and shall be the sole and exclusive remedy of the Parent
     or the Company, as the case may be, for, any loss, liability, damage or
     claim arising out of or in conjunction with the transactions contemplated
     by this Agreement, including any termination of this Agreement pursuant to
     Section 9.01 and shall not constitute a penalty.  Notwithstanding the
     foregoing sentence, if (i) this Agreement is terminated by the Parent as a
     result of a willful breach of any representation, warranty, covenant or
     agreement by the Company and no termination fee is required to be paid
     pursuant to Section 9.05(d), the Parent may pursue any remedies available
     to it at law or in equity and shall be entitled to recover such additional
     amounts as the Parent may be entitled to receive at law or in equity or
     (ii) this Agreement is terminated by the Company as a result of a willful
     breach of any representation, warranty, covenant or agreement by the Parent
     and no termination fee is required to be paid pursuant to Section 9.05(e),
     the Company may pursue any remedies available to it at law or in equity and
     shall be entitled to recover such additional amounts as the Parent may be
     entitled to receive at law or in equity.

                          AGREEMENT AND PLAN OF MERGER
                                     -53-
<PAGE>

                                   ARTICLE X

                               GENERAL PROVISIONS

     SECTION 10.01  EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

          (a)  Except as set forth in Section 10.01(b) of this Agreement, the
     representations, warranties, covenants and agreements of each party hereto
     shall remain operative and in full force and effect regardless of any
     investigation made by or on behalf of any other party hereto, any Person
     controlling any such party or any of their officers, directors,
     representatives or agents whether prior to or after the execution of this
     Agreement.

          (b)  The representations and warranties in this Agreement shall
     terminate at the Effective Time and the representations, warranties,
     covenants and agreements of each of the parties hereto shall terminate upon
     the termination of this Agreement pursuant to Section 9.01, except that the
     covenants and agreements set forth in Sections 6.05, 9.02 and 9.05 and in
     Article X hereof shall survive such termination of this Agreement. 

     SECTION 10.02  NOTICES.  All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
if delivered personally, mailed by registered or certified mail (postage
prepaid, return receipt requested) to the parties at the following addresses or
sent by electronic transmission to the telecopier number specified below:

          (a)  If to any of the Parent Companies, to:

               Halliburton Company
               3600 Lincoln Plaza
               500 North Akard
               Dallas, Texas  75201-3391
               Attention:  Lester L. Coleman
                           Executive Vice President 
                             and General Counsel
               Telecopier No.:  (214) 978-2658

          with a copy to:

               Vinson & Elkins L.L.P.
               First City Tower
               1001 Fannin    
               Houston, Texas  77002-6760
               Attention:  William E. Joor III
               Telecopier No.:  (713) 758-2346


                          AGREEMENT AND PLAN OF MERGER
                                     -54-
<PAGE>

          (b)  If to the Company, to:

               Dresser Industries, Inc.
               2001 Ross Avenue
               Dallas, Texas  75221
               Attention:  Clint Ables
                     Vice President and General Counsel
               Telecopier No.:  (214) 740-6904
               
          with a copy to:

               Weil, Gotshal & Manges LLP
               767 Fifth Avenue
               New York, New York  10153
               Attention:  Dennis J. Block
               Telecopier No.:  (212) 310-8007

or to such other address or telecopier number as any party may, from time to
time, designate in a written notice given in a like manner.  Notice given by
telecopier shall be deemed delivered on the day the sender receives telecopier
confirmation that such notice was received at the telecopier number of the
addressee.  Notice given by mail as set out above shall be deemed delivered
three days after the date the same is postmarked.
     
     SECTION 10.03  HEADINGS.  The headings contained in this Agreement are 
for reference purposes only and shall not affect in any way the meaning or 
interpretation of this Agreement.

     SECTION 10.04  SEVERABILITY.  If any term or other provision of this 
Agreement is invalid, illegal or incapable of being enforced by any rule of 
law or public policy, all other conditions and provisions of this Agreement 
shall nevertheless remain in full force and effect so long as the economic or 
legal substance of the transactions contemplated hereby is not affected in 
any manner materially adverse to any party.  Upon such determination that any 
term or other provision is invalid, illegal or incapable of being enforced, 
the parties hereto shall negotiate in good faith to modify this Agreement so 
as to effect the original intent of the parties as closely as possible in an 
acceptable manner to the end that transactions contemplated hereby are 
fulfilled to the extent possible.

     SECTION 10.05  ENTIRE AGREEMENT.  This Agreement (together with the 
Annexes, the Company's Disclosure Letter and the Parent's Disclosure Letter 
and the Stock Option Agreements) constitutes the entire agreement of the 
parties, and supersedes all prior agreements and undertakings, both written 
and oral, among the parties, with respect to the subject matter hereof 
(including the Confidentiality Agreement).

     SECTION 10.06  ASSIGNMENT.  This Agreement shall not be assigned by
operation of Law or otherwise.

                          AGREEMENT AND PLAN OF MERGER
                                     -55-
<PAGE>

     SECTION 10.07  PARTIES IN INTEREST.  This Agreement shall be binding 
upon and inure solely to the benefit of each party hereto, and nothing in 
this Agreement, express or implied, other than Section 7.09(f) (to the extent 
of and only with respect to the individuals named in Section 4.13 of the 
Company's Disclosure Letter in response to the representation and warranty 
set forth in Section 4.13(k) as parties to the severance agreements therein 
disclosed and their heirs and representatives) and Section 7.10 which is 
intended also to benefit the Indemnified Persons therein referenced, and 
their heirs and representatives, is intended to or shall confer upon any 
other Person any right, benefit or remedy of any nature whatsoever under or 
by reason of this Agreement. Notwithstanding the foregoing and any other 
provision of this Agreement, and in addition to any other required action of 
the Board of Directors of the Parent a majority of the directors (or their 
successors) serving on the Board of Directors of the Parent who are 
designated by the Company pursuant to Section 7.13 shall be entitled during 
the three year period commencing at the Effective Time (the "Three Year 
Period") to enforce the provisions of Sections 7.09 and 7.13 on behalf of the 
Company's officers, directors and employees, as the case may be.  Such 
directors' rights and remedies under the preceding sentence are cumulative 
and are in addition to any other rights and remedies that they may have at 
law or in equity, but in no event shall this Section 10.07 be deemed to 
impose any additional duties on any such directors.  The Parent shall pay, at 
the time they are incurred, all costs, fees and expenses of such directors 
incurred in connection with the assertion of any rights on behalf of the 
persons set forth above pursuant to this Section 10.07.

     SECTION 10.08  FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.  
No failure or delay on the part of any party hereto in the exercise of any 
right hereunder shall impair such right or be construed to be a waiver of, or 
acquiescence in, any breach of any representation, warranty, covenant or 
agreement herein, nor shall any single or partial exercise of any such right 
preclude other or further exercise thereof or of any other right.  All rights 
and remedies existing under this Agreement are cumulative with, and not 
exclusive of, any rights or remedies otherwise available.

     SECTION 10.09  GOVERNING LAW.  This Agreement shall be governed by, and 
construed in accordance with, the Laws of the State of Delaware, regardless 
of the Laws that might otherwise govern under applicable principles of 
conflicts of law; PROVIDED, HOWEVER, that any matter involving the internal 
corporate affairs of any party hereto shall be governed by the provisions of 
the GCL.

     SECTION 10.10  SPECIFIC PERFORMANCE.  The parties hereby acknowledge and 
agree that the failure of any party to this Agreement to perform its 
agreements and covenants hereunder, including its failure to take all actions 
as are necessary on its part to the consummation of the Merger, will cause 
irreparable injury to the other parties to this Agreement for which damages, 
even if available, will not be an adequate remedy.  Accordingly, each of the 
parties hereto hereby consents to the granting of equitable relief (including 
specific performance and injunctive relief) by any court of competent 
jurisdiction to enforce any party's obligations hereunder.  The parties 
further agree to waive any requirement for the securing or posting of any 
bond in connection with the obtaining of any such equitable relief and that 
this Section is without prejudice to any other rights that the parties hereto 
may have for any failure to perform this Agreement.

     SECTION 10.11  COUNTERPARTS.  This Agreement may be executed in multiple 
counterparts, and by the different parties hereto in separate counterparts, 
each of which when 

                          AGREEMENT AND PLAN OF MERGER
                                     -56-
<PAGE>

executed shall be deemed to be an original but all of which taken together 
shall constitute one and the same agreement.











                          AGREEMENT AND PLAN OF MERGER
                                     -57-
<PAGE>

 
    IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement 
to be executed as of the date first written above by their respective 
officers thereunto duly authorized.

                                   HALLIBURTON COMPANY


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


                                   HALLIBURTON N.C., INC.


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

                                   DRESSER INDUSTRIES, INC.


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




                          AGREEMENT AND PLAN OF MERGER
                                     -58-
<PAGE>

                                                                       ANNEX A



                           SCHEDULE OF DEFINED TERMS

     The following terms when used in the Agreement shall have the meanings 
set forth below unless the context shall otherwise require:

     "Acquisition Proposal" shall mean any proposal or offer with respect to 
a merger, consolidation, share exchange, business combination, 
reorganization, recapitalization, liquidation, dissolution or similar 
transaction involving, or any purchase or sale of all or any significant 
portion of the assets or 30% or more of the Equity Securities of, the Company 
or the Parent, as applicable, or any Significant Subsidiary of the Company or 
the Parent, as applicable, that, in any case, could be reasonably expected to 
interfere with the consummation of the Merger or the other transactions 
contemplated by this Agreement.

     "Affiliate" shall, with respect to any specified Person, mean any other 
Person that controls, is controlled by or is under common control with the 
specified Person.

     "Agreement" shall mean the Agreement and Plan of Merger made and entered 
into as of February 25, 1998 among the Parent, Newco and the Company, 
including any amendments thereto and each Annex (including this Annex A) and 
Schedule thereto (including the Parent's Disclosure Letter and the Company's 
Disclosure Letter).

     "Authorization" shall mean any and all permits, licenses, 
authorizations, orders, certificates, registrations or other approvals 
granted by any Governmental Authority.

     "Benefit Plans" shall mean, with respect to a specified Person, any 
employee pension benefit plan (whether or not insured), as defined in Section 
3(2) of ERISA, any employee welfare benefit plan (whether or not insured) as 
defined in Section 3(1) of ERISA, any plans that would be employee pension 
benefit plans or employee welfare benefit plans if they were subject to 
ERISA, such as foreign plans and plans for directors, any stock bonus, stock 
ownership, stock option, stock purchase, stock appreciation rights, phantom 
stock, severance, employment, change-in-control, deferred compensation and 
any bonus or incentive compensation plan, agreement, program or policy 
(whether qualified or nonqualified, written or oral) sponsored, maintained, 
or contributed to by the specified Person or any of its Subsidiaries for the 
benefit of any of the present or former directors, officers, employees, 
agents, consultants or other similar representatives providing services to or 
for the specified Person or any of its Subsidiaries in connection with such 
services or any such plans which have been so sponsored, maintained or 
contributed to within six years prior to the date of this Agreement; 
PROVIDED, HOWEVER, that such term shall not include (a) routine employment 
policies and procedures developed and applied in the ordinary course of 
business and consistent with past practice, including wage, vacation, holiday 
and sick or other leave policies, (b) workers compensation insurance and (c) 
directors and officers liability insurance.

     "Benefits Maintenance Period" shall have the meaning ascribed to such 
term in Section 7.09(h).
     
     "Business Day" means any day other than a day on which banks in the 
State of Texas are authorized or obligated to be closed;

<PAGE>

     "Certificate of Merger" shall have the meaning ascribed to such term in
Section 2.02.

     "Charter Amendment" shall mean an amendment to the Restated Certificate 
of Incorporation of the Parent to increase the number of authorized shares of 
Parent Common Stock to be issued in the Merger.

     "Closing" shall mean a meeting, which shall be held in accordance with 
Section 3.03, of representatives of the parties to the Agreement at which, 
among other things, all documents deemed necessary by the parties to the 
Agreement to evidence the fulfillment or waiver of all conditions precedent 
to the consummation of the transactions contemplated by the Agreement are 
executed and delivered.

     "Closing Date" shall mean the date of the Closing as determined pursuant 
to Section 3.03.
     
     "Code" shall mean the Internal Revenue Code of 1986, as amended, and the 
rules and regulations promulgated thereunder.

     "Combined Companies" shall mean the Parent, the Surviving Corporation 
and their Subsidiaries after giving effect to the Merger.

     "Commission" shall mean the Securities and Exchange Commission.

     "Common Stock Exchange Ratio" shall mean the ratio of conversion of 
Company Common Stock into Parent Common Stock pursuant to the Merger as 
provided in Section 3.01(a).

     "Company Acquisition" shall have the meaning ascribed to such term in 
Section 9.05(d).

     "Company Annual Report" shall mean the Annual Report on Form 10-K of the 
Company for the year ended October 31, 1997 filed with the Commission.

     "Company Benefit Plans" shall mean Benefit Plans with respect to the 
Company and its Subsidiaries.

     "Company Common Stock" shall mean the common stock, par value $0.25 per 
share, of the Company.

     "Company Joint Venture Partners" shall mean the partners or participants 
in the Company Joint Ventures other than the Company.

     "Company Joint Ventures" shall mean Dresser-Rand Company, a partnership, 
and Ingersoll-Dresser Pump Company, a partnership.

     "Company Participants" shall have the meaning ascribed to such term in 
Section 7.09(h).

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-2
<PAGE>

     "Company Stock Option Agreement" shall mean that certain Stock Option 
Agreement of even date herewith between the Company (as grantor) and the 
Parent (as grantee).

     "Company Stock Options" shall mean stock options granted pursuant to the 
Company Stock Plans.

     "Company Stock Plans" shall mean the plans described in Section 4.03(b) 
of the Company's Disclosure Letter.

     "Company Stockholders' Meeting" shall have the meaning ascribed to such 
term in Section 7.01(a).

     "Company's Audited Consolidated Financial Statements" shall mean the 
consolidated balance sheets of the Company and its Subsidiaries as of October 
31, 1996 and 1997 and the related consolidated and combined statements of 
operations and cash flows for the fiscal years ended October 31, 1995, 1996 
and 1997, together with the notes thereto, all as audited by Price Waterhouse 
LLP, independent accountants, under their report with respect thereto dated 
November 26, 1997 and included in the Company Annual Report.

     "Company's Consolidated Balance Sheet" shall mean the consolidated 
balance sheet of the  Company as of October 31, 1997 included in the 
Company's Audited Consolidated Financial Statements.

     "Company's Disclosure Letter" shall mean a letter of even date herewith 
delivered by the Company to the Parent Companies concurrently with the 
execution of the Agreement, which, among other things, shall identify 
exceptions to the Company's representations and warranties contained in 
Article IV by specific section and subsection references.

     "Company's Representatives" shall have the meaning ascribed to such term 
in Section 6.05.

     "Company's Rights Agreement" shall mean that certain Rights Agreement 
dated as of August 16, 1990 between the Company and Bank of New York as 
successor to Harris Trust Company of New York, as rights agent.

     "Competing Transaction" shall mean any merger, consolidation, share 
exchange, business combination or similar transaction involving the specified 
Person or any of its Subsidiaries or the acquisition in any manner, directly 
or indirectly, of a Material equity interest in any voting securities of, or 
a substantial portion of the assets of, the specified Person or any of its 
Significant Subsidiaries, other than the transactions contemplated by this 
Agreement.

     "Confidentiality Agreement" shall mean that certain confidentiality 
agreement between the Parent and the Company dated February 2, 1998.  

     "Constituent Corporations" shall mean the Company and Newco.

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-3
<PAGE>

     "control" (including the terms "controlled," "controlled by" and "under 
common control with") means (except where another definition is expressly 
indicated) the possession, directly or indirectly or as trustee or executor, 
of the power to direct or cause the direction of the management or policies 
of a Person, whether through the ownership of stock or as trustee or 
executor, by contract or credit arrangement or otherwise.

     "Court" shall mean any court or arbitration tribunal of the United 
States, any foreign country or any domestic or foreign state, and any 
political subdivision thereof, and shall include the European Court of 
Justice.

     "Current Company Benefit Plans" shall mean Benefit Plans that are 
sponsored, maintained or contributed to by the Company or any of its 
Subsidiaries as of the date of this Agreement.

     "Current Parent Benefit Plans" shall mean Benefit Plans that are 
sponsored, maintained or contributed to by the Parent or any of its 
Subsidiaries as of the date of this Agreement.

     "Effective Time" shall mean the date and time of the completion of the 
filing of the Certificate of Merger with the Secretary of State of the State 
of Delaware in accordance with Section 2.02.

     "Environmental Law or Laws" shall mean any and all laws, statutes, 
ordinances, rules, regulations, or orders of any Governmental Authority 
pertaining to health or the environment currently in effect and applicable to 
a specified Person and its Subsidiaries, including the Clean Air Act, as 
amended, the Comprehensive Environmental, Response, Compensation, and 
Liability Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution 
Control Act, as amended, the Occupational Safety and Health Act of 1970, as 
amended, the Resource Conservation and Recovery Act of 1976 ("RCRA"), as 
amended, the Safe Drinking Water Act, as amended, the Toxic Substances 
Control Act, as amended, the Hazardous & Solid Waste Amendments Act of 1984, 
as amended, the Superfund Amendments and Reauthorization Act of 1986, as 
amended, the Hazardous Materials Transportation Act, as amended, the Oil 
Pollution Act of 1990, as amended ("OPA"), any state or local Laws 
implementing the foregoing federal Laws, and all other environmental 
conservation or protection Laws.  For purposes of the Agreement, the terms 
"hazardous substance" and "release" have the meanings specified in CERCLA; 
PROVIDED, HOWEVER, that, to the extent the Laws of the state or locality in 
which the property is located establish a meaning for "hazardous substance" 
or "release" that is broader than that specified in either CERCLA, such 
broader meaning shall apply, and the term "hazardous substance" shall include 
all dehydration and treating wastes, waste (or spilled) oil, and waste (or 
spilled) petroleum products, and (to the extent in excess of background 
levels) radioactive material, even if such are specifically exempt from 
classification as hazardous substances pursuant to CERCLA or RCRA or the 
analogous statutes of any jurisdiction applicable to the specified Person or 
its Subsidiaries or any of their respective properties or assets.

     "Equity Securities" shall mean, with respect to a specified Person, any 
shares of capital stock of, or other equity interests in, or any securities 
that are convertible into or exchangeable for any shares of capital stock of, 
or other equity interests in, or any options, warrants or rights of any kind 
to acquire any shares of capital stock of, or other equity interests in, such 
Person.

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-4
<PAGE>

     "ERISA" shall mean the Employee Retirement Income Security Act of 1974, 
as amended, and the Regulations promulgated thereunder.
     
     "Exchange Act" shall mean the Securities Exchange Act of 1934, as 
amended, and the Regulations promulgated thereunder.

     "Exchange Agent" shall mean ChaseMellon Shareholder Services, L.L.C.

     "Exchange Fund" shall mean the fund of Parent Common Stock, cash in lieu 
of fractional share interests and dividends and distributions, if any, with 
respect to such shares of Parent Common Stock established at the Exchange 
Agent pursuant to Section 3.02(a).

     "executive officer" shall mean each "officer," as such term is defined 
in Rule 16a-1(f) of the Commission, of the specified Person.

     "Expenses" shall mean all reasonable out-of-pocket expenses (including 
all reasonable fees and expenses of counsel, accountants, investment bankers, 
experts and consultants to a party hereto and its Affiliates) incurred by a 
party or on its behalf in connection with or related to the authorization, 
preparation, negotiation, execution and performance of this Agreement, the 
preparation, printing, filing and mailing of the Registration Statement, the 
Joint Proxy Statement/Prospectus and the Joint Proxy Statement, the 
solicitation of stockholder approvals and all other matters related to the 
consummation of the transactions contemplated hereby.
     
     "GAAP" shall mean accounting principles generally accepted in the United 
States as in effect from time to time consistently applied by a specified 
Person.

     "GCL" shall mean the General Corporation Law of the State of Delaware.

     "Governmental Authority" shall mean any governmental agency or authority 
(other than a Court) of the United States, any foreign country, or any 
domestic or foreign state, and any political subdivision thereof, and shall 
include any multinational authority having governmental or quasi-governmental 
powers.

     "HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 
1976, as amended, and the rules and regulations promulgated thereunder.
     
     "IRS" shall mean the Internal Revenue Service.

     "Joint Proxy Statement/Prospectus" shall have the meaning ascribed to 
such term in Section 7.02(a).

     "Joint Proxy Statement" shall have the meaning ascribed to such term in 
Section 7.02(a).

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-5
<PAGE>

     "Knowledge" shall mean, with respect to either the Company or the 
Parent, the actual knowledge of the chief executive officer, the chief 
operating officer, the chief financial officer or the general counsel of such 
party.

     "Law" shall mean all laws, statutes and ordinances of the United States, 
any state of the United States, any foreign country, any foreign state and 
any political subdivision thereof, including all decisions of Courts having 
the effect of law in each such jurisdiction.
     
     "Lien" shall mean any mortgage, pledge, security interest, adverse 
claim, encumbrance, lien or charge of any kind (including any agreement to 
give any of the foregoing), any conditional sale or other title retention 
agreement, any lease in the nature thereof or the filing of or agreement to 
give any financing statement under the Laws of any jurisdiction.
          
     "Material" shall mean material to the (a) consolidated business, 
condition (financial and other), results of operations, properties or 
prospects of a specified Person and its Subsidiaries, if any, taken as a 
whole or (b) to the specified Person's ability to perform its obligations 
under this Agreement or fulfill the conditions to Closing; PROVIDED, HOWEVER, 
that, as used in this definition the word "material" shall have the meaning 
accorded thereto pursuant to Section 11 of the Securities Act.

     "Material Adverse Effect" shall mean any change or effect that would be 
material and adverse (a) to the consolidated business, condition (financial 
or otherwise), results of operations, properties or prospects of a specified 
Person and its Subsidiaries, if any, taken as a whole, except for such 
changes or effects resulting from changes in general economic, regulatory or 
political conditions or changes that affect generally the energy services and 
related construction and engineering industry or (b) to the specified 
Person's ability to perform its obligations under this Agreement or fulfill 
the conditions to Closing; PROVIDED, HOWEVER, that, as used in this 
definition the word "material" shall have the meaning accorded thereto 
pursuant to Section 11 of the Securities Act.

     "Merger" shall mean the merger of Newco with an into the Company as 
provided in Article II of this Agreement.

     "Newco" shall mean Halliburton N.C., Inc., a Delaware corporation and a 
wholly owned Subsidiary of the Parent.

     "Noncompete Agreement" shall mean any agreement or arrangement that 
materially restricts or limits the specified Person's ability to engage or 
participate in any line of business that is Material to such specified Person.

     "NYSE" shall mean the New York Stock Exchange, Inc.

     "Order" shall mean any judgment, order or decree of any Court or 
Governmental Authority, federal, foreign, state or local, of competent 
jurisdiction.

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-6
<PAGE>

     "PBGC" shall mean the Pension Benefit Guaranty Corporation.

     "Parent Acquisition" shall have the meaning ascribed to such term in
Section 9.05(e).

     "Parent Annual Report" shall mean the Annual Report on Form 10-K of the 
Parent for the year ended December 31, 1997 filed with the Commission.

     "Parent Benefit Plans" shall mean Benefit Plans with respect to the 
Parent and its Subsidiaries.

     "Parent Common Stock" shall mean the common stock, par value $2.50 per 
share, of the Parent.

     "Parent Stock Option Agreement" shall mean that certain Stock Option 
Agreement of even date herewith between the Parent (as grantor) and the 
Company (as grantee).

     "Parent Restricted Stock" shall mean the Parent Common Stock issued in 
restricted stock awards pursuant to the Parent Stock Plans.

     "Parent Stock Options" shall mean stock options granted pursuant to the 
Parent Stock Plans.

     "Parent Stock Plans" shall mean the plans described in Section 5.03(b) 
of the Parent's Disclosure Letter.

     "Parent Stockholders' Meeting" shall have the meaning ascribed to such 
term in Section 7.01(b).

     "Parent's Audited Consolidated Financial Statements" shall mean the 
consolidated balance sheets of the Parent and its Subsidiaries as of December 
31, 1997 and December 31, 1996 and the related consolidated statements of 
operations and cash flows for the fiscal years ended December 31, 1995, 1996 
and 1997, together with the notes thereto, all as audited by Arthur Andersen 
LLP, independent accountants, under their report with respect thereto dated 
January 22, 1998 and included in the Parent Annual Report.

     "Parent's Consolidated Balance Sheet" shall mean the consolidated 
balance sheet of the Parent as of December 31, 1997 included in the Parent's 
Audited Consolidated Financial Statements.

     "Parent's Disclosure Letter" shall mean a letter of even date herewith 
delivered by the Parent to the Company with the execution of the Agreement, 
which, among other things, shall identify exceptions to the Parent's 
representations and warranties contained in Article V by specific section and 
subsection references.

     "Parent's Representatives" shall have the meaning ascribed to such term 
in Section 6.05.

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-7
<PAGE>

     "Parent's Rights Agreement" shall mean the Restated Rights Agreement 
dated December 1, 1996 between the Parent and ChaseMellon Shareholder 
Services, L.L.C., as Rights Agent.

     "Person" shall mean (i) an individual, partnership, limited liability 
company, corporation, joint stock company, trust, estate, joint venture, 
association or unincorporated organization, or any other form of business or 
professional entity, but shall not include a Court or Governmental Authority, 
or (2) any "person" for purposes of Section 13(d)(3) of the Exchange Act.
     
     "Pooling Transaction" shall mean a business combination that is treated 
for financial accounting purposes as a "pooling of interests" in accordance 
with GAAP and the Regulations of the Commission.

     "Predecessor Plan" shall have the meaning ascribed to such term in 
Section 7.09(i).

     "Registration Statement" shall have the meaning ascribed to such term in 
Section 7.02(a).

     "Regulation" shall mean any rule or regulation of any Governmental 
Authority having the effect of Law or of any rule or regulation of any 
self-regulatory organization, such as the NYSE.

     "Reports" shall mean, with respect to a specified Person, all reports, 
registrations, filings and other documents and instruments required to be 
filed by the specified Person or any of its Subsidiaries with any 
Governmental Authority (other than the Commission).

     "Representatives" shall mean, collectively, the Company's 
Representatives and the Parent's Representatives.

     "Required Parent Vote" shall have the meaning ascribed to such term in 
Section 7.01(b).

     "Required Company Vote" shall have the meaning ascribed to such term in 
Section 7.01(a).

     "SEC Reports" shall mean (1) all Annual Reports on Form 10-K, (2) all 
Quarterly Reports on Form 10-Q, (3) all proxy statements relating to meetings 
of stockholders (whether annual or special), (4) all Current Reports on Form 
8-K and (5) all other reports, schedules, registration statements or other 
documents required to be filed during a specified period by a specified 
Person with the Commission pursuant to the Securities Act or the Exchange Act.
     
     "Securities Act" shall mean the Securities Act of 1933, as amended, and 
the rules and regulations promulgated thereunder.
          
     "Share Issuance" shall mean the issuance of shares of the Parent Common 
Stock to be issued in the Merger.

     "Significant Subsidiary" means any Subsidiary of the Company or the 
Parent, as the case may be, that constitutes a significant subsidiary of such 
party as such term is defined in Rule 1-02 of Regulation S-X of the 
Commission.

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-8
<PAGE>

     "Stock Option Agreements" shall mean the Company Stock Option Agreement 
and the Parent Stock Option Agreement.

     A "Subsidiary" of a specified Person shall be any corporation, 
partnership, limited liability company, joint venture or other legal entity 
of which the specified Person (either alone or through or together with any 
other Subsidiary) owns, directly or indirectly, 50% or more of the stock or 
other equity or partnership interests the holders of which are generally 
entitled to vote for the election of the board of directors or other 
governing body of such corporation or other legal entity or of which the 
specified Person controls the management.

     "Successor Plan" shall have the meaning ascribed to such term in Section 
7.09(i).

     "Superior Proposal" means a bona fide Acquisition Proposal that the 
Board of Directors of the specified Person determines in its good faith 
judgment (after consultation with its financial advisers and legal counsel) 
(i) would result in a transaction that is more favorable to the specified 
Person's stockholders, from a financial point of view, than the transactions 
contemplated by this Agreement and (ii) is reasonably capable of being 
completed; PROVIDED, HOWEVER, that, for the purposes of this definition, the 
term "Acquisition Proposal" shall have the meaning ascribed to it herein 
except that the reference therein to 30% shall be deemed to be a reference to 
50% and the proposal or offer therein described shall be deemed only to refer 
to a transaction involving the Company or the assets of the Company 
(including the shares of the Subsidiaries of the Company), taken as a whole, 
rather than any transaction relating to any of the Subsidiaries of the 
Company alone.

     "Surviving Corporation" shall mean the Company as the corporation 
surviving the Merger.
     
     "Tax Returns" shall have the meaning ascribed to such term in Section 
4.14(a) of the Agreement.
     
     "Taxes" shall mean all taxes, charges, imposts, tariffs, fees, levies or 
other similar assessments or liabilities, including income taxes, ad valorem 
taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or with 
respect to gross receipts, premiums, real property, personal property, 
windfall profits, sales, use, transfers, licensing, employment, payroll and 
franchises imposed by or under any Law; and such terms shall include any 
interest, fines, penalties, assessments or additions to tax resulting from, 
attributable to or incurred in connection with any such tax or any contest or 
dispute thereof.

     "Terminated Company Benefit Plans" shall mean Benefit Plans that were 
sponsored, maintained or contributed to by the Company or any of its 
Subsidiaries within six years prior to the date of this Agreement but which 
have been terminated prior to the date of this Agreement.

     "Terminated Parent Benefit Plans" shall mean Benefit Plans that were 
sponsored, maintained, or contributed to by the Parent or any of its 
Subsidiaries within six years prior to the date of this Agreement but which 
have been terminated prior to the date of this Agreement.

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-9
<PAGE>

     "Terminating Company Breach" shall have the meaning ascribed to such 
term in Section 9.01(b).

     "Terminating Parent Breach" shall have the meaning ascribed to such term 
in Section 9.10(c).

     "Transfer Taxes" shall have the meaning ascribed to such term in Section 
7.17.

 






                          AGREEMENT AND PLAN OF MERGER
                                  ANNEX A-10
<PAGE>


                                                                        ANNEX B
                                            Dresser Industries, Inc. Affiliates


                            AFFILIATE'S AGREEMENT

                                    [Date]


Halliburton Company
3600 Lincoln Plaza
500 North Akard
Dallas, Texas  75201-3391

Ladies and Gentlemen:

     The undersigned has been advised that, as of the date hereof, the 
undersigned may be deemed to be an "affiliate" of Dresser Industries, Inc., a 
Delaware corporation (the "Company"), as that term is defined for purposes of 
paragraphs (c) and (d) of Rule 145 of the Regulations of the Commission under 
the Securities Act.

     Pursuant to the terms and subject to the conditions of that certain 
Agreement and Plan of Merger by and among Halliburton Company, a Delaware 
corporation (the "Parent"), Halliburton N.C., Inc., a newly formed Delaware 
corporation and a wholly owned Subsidiary of the Parent ("Newco"), and the 
Company dated as of February 25, 1998 (the "Merger Agreement"), providing 
for, among other things, the merger of Newco with and into the Company (the 
"Merger"), the undersigned will be entitled to receive shares of Parent 
Common Stock in exchange for shares of Company Common Stock owned by the 
undersigned at the Effective Time of the Merger as determined pursuant to the 
Merger Agreement. Capitalized terms used but not defined herein are defined 
in Annex A to the Merger Agreement and are used herein with the same meanings 
as ascribed to them therein.
     
     The undersigned understands that the Merger will be treated for 
financial accounting purposes as a "pooling of interests" in accordance with 
generally accepted accounting principles and that the staff of the Commission 
has issued certain guidelines that should be followed to ensure the 
application of pooling of interests accounting to the transaction.
     
     In consideration of the agreements contained herein, the Parent's 
reliance on this letter in connection with the consummation of the Merger and 
for other good and valuable consideration, the receipt and sufficiency of 
which are hereby acknowledged, the undersigned hereby represents, warrants 
and agrees that the undersigned will not, without the consent of the Parent, 
make any sale, gift, transfer or other disposition (including deposit into a 
margin account with a brokerage firm) of 

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX B-1
<PAGE>

(i) Company Common Stock during the period (the "Restricted Period") from the 
Commencement Date (as defined below) until the earlier of the Effective Time 
and the termination of the Merger Agreement (which period, if the Merger is 
consummated, will be greater than thirty (30) days), (ii) Parent Common Stock 
received by the undersigned pursuant to the Merger or otherwise owned by the 
undersigned at any time during the Restricted Period or thereafter until such 
time as financial statements that include at least thirty (30) days of 
combined operations of the Company and the Parent after the Merger shall have 
been publicly reported, unless the undersigned shall have delivered to the 
Parent, prior to any such sale, gift, transfer or other disposition, a 
written opinion from Arthur Andersen LLP, independent public accountants for 
the Parent, or a written no-action letter from the accounting staff of the 
Commission, in either case in form and substance reasonably satisfactory to 
the Parent, to the effect that such sale, transfer or other disposition will 
not cause the Merger not to be treated as a "pooling of interests" for 
financial accounting purposes in accordance with generally accepted 
accounting principles and the Regulations of the Commission or (iii) the 
Parent Common Stock received by the undersigned pursuant to the Merger in 
violation of the Securities Act or the Regulations thereunder.  For purposes 
of this agreement, "Commencement Date" shall mean the date of receipt by the 
undersigned of prior written notice from the Parent advising the undersigned 
of the commencement of the Restricted Period on a day that is at least 45 
days prior to the Closing Date as estimated in good faith by the Parent.  The 
undersigned has been advised that the offering, sale and delivery of the 
shares of Parent Common Stock pursuant to the Merger will have been 
registered with the Commission under the Securities Act on a Registration 
Statement on Form S-4.  The undersigned has also been advised, however, that, 
since the undersigned may be deemed to be an Affiliate of the Company at the 
time the Merger is submitted for a vote of the stockholders of the Company, 
the Parent Common Stock received by the undersigned pursuant to the Merger 
can be sold by the undersigned only (i) pursuant to an effective registration 
statement under the Securities Act, (ii) in conformity with the volume and 
other limitations of Rule 145 promulgated by the Commission under the 
Securities Act or (iii) in reliance upon an exemption from registration that 
is available under the Securities Act.

     The undersigned also understands that instructions will be given to the 
transfer agent for the Parent Common Stock with respect to the Parent Common 
Stock to be received by the undersigned pursuant to the Merger and that there 
will be placed on the certificates representing such shares of Parent Common 
Stock, or any substitutions therefor, a legend stating in substance as 
follows:

     "These shares were issued in a transaction to which Rule 145
     promulgated under the Securities Act of 1933, as amended, applies. 
     These shares may only be transferred in accordance with the terms of
     such Rule and an Affiliate's Agreement between the original holder of
     such shares and Halliburton Company, a copy of which agreement is on
     file at the principal offices of Halliburton Company."

It is understood and agreed that the legend set forth above shall be removed 
upon surrender of certificates bearing such legend by delivery of substitute 
certificates without such legend if the undersigned shall have delivered to 
the Parent an opinion of counsel, in form and substance reasonably 
satisfactory to the Parent, to the effect that (i) the sale or disposition of 
the shares represented by the surrendered certificates may be effected 
without registration of the offering, sale and delivery of such shares under 
the Securities Act and (ii) the shares to be so transferred may be 

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX B-2
<PAGE>

publicly offered, sold and delivered by the transferee thereof without 
compliance with the registration provisions of the Securities Act.

     By its execution hereof, the Parent agrees that it will, as long as the 
undersigned owns any shares of Parent Common Stock to be received by the 
undersigned pursuant to the Merger that are subject to the restrictions on 
sale, transfer or other disposition herein set forth, take all reasonable 
efforts to make timely filings with the Commission of all reports required to 
be filed by it pursuant to the Exchange Act and will promptly furnish upon 
written request of the undersigned a written statement confirming that such 
reports have been so timely filed.

     If you are in agreement with the foregoing, please so indicate by 
signing below and returning a copy of this letter to the undersigned, at 
which time this letter shall become a binding agreement between us.

                                   Very truly yours,


                                   By:
                                       -------------------------------
                                   Name:
                                   Title:
                                   Date:
                                   Address:

ACCEPTED this ___ day 
of __________, 199__

HALLIBURTON COMPANY


By:
    -------------------------------
     Name:
     Title:




                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX B-3
<PAGE>


                                                                        ANNEX C
                                                 Halliburton Company Affiliates


                                AFFILIATE'S AGREEMENT

                                        [Date]


Halliburton Company
3600 Lincoln Plaza
500 North Akard
Dallas, Texas   75201-3391

Ladies and Gentlemen:

     The undersigned has been advised that, as of the date hereof, the 
undersigned may be deemed to be an "affiliate" of Halliburton Company, a 
Delaware corporation (the "Parent"), as that term is defined in the 
Regulations of the Commission under the Securities Act.

     The undertakings contained in this Affiliate's Agreement are being given 
by the undersigned in connection with that certain Agreement and Plan of 
Merger by and among the Parent, Halliburton N.C., Inc., a newly formed 
Delaware corporation and a wholly owned Subsidiary of the Parent ("Newco"), 
and Dresser Industries, Inc., a Delaware Corporation (the "Company") dated as 
of February 25, 1998 (the "Merger Agreement"), providing for, among other 
things, the merger of Newco with and into the Company (the "Merger").  
Capitalized terms used but not defined herein are defined in Annex A to the 
Merger Agreement and are used herein with the same meanings as ascribed to 
them therein.
     
     The undersigned understands that the Merger will be treated for 
financial accounting purposes as a "pooling of interests" in accordance with 
generally accepted accounting principles and that the staff of the Commission 
has issued certain guidelines that should be followed to ensure the 
application of pooling of interests accounting to the transaction.
     
     In consideration of the agreements contained herein, the Parent's 
reliance on this letter in connection with the consummation of the Merger and 
for other good and valuable consideration, the receipt and sufficiency of 
which are hereby acknowledged, the undersigned hereby represents, warrants 
and agrees that the undersigned will not, without the consent of the Parent, 
make any sale, gift, transfer or other disposition (including deposit into a 
margin account with a brokerage firm) of (i) Company Common Stock during the 
period (the "Restricted Period") from the Commencement Date (as defined 
below) until the earlier of the Effective Time and the termination of the 
Merger Agreement (which period, if the Merger is consummated, will be greater 
than thirty (30) days) or (ii) Parent Common Stock owned by the undersigned 
at any time during the Restricted Period or 

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX C-1
<PAGE>

thereafter until such time as financial statements that include at least 
thirty (30) days of combined operations of the Company and the Parent after 
the Merger shall have been publicly reported, unless the undersigned shall 
have delivered to the Parent, prior to any such sale, gift, transfer or other 
disposition, a written opinion from Arthur Andersen LLP, independent public 
accountants for the Parent, or a written no-action letter from the accounting 
staff of the Commission, in either case in form and substance reasonably 
satisfactory to the Parent, to the effect that such sale, transfer or other 
disposition will not cause the Merger not to be treated as a "pooling of 
interests" for financial accounting purposes in accordance with generally 
accepted accounting principles and the Regulations of the Commission.  For 
purposes of this agreement, "Commencement Date" shall mean the date of 
receipt by the undersigned of prior written notice from the Parent advising 
the undersigned of the commencement of the Restricted Period on a day that is 
at least 45 days prior to the Closing Date as estimated in good faith by the 
Parent.  
     
     If you are in agreement with the foregoing, please so indicate by 
signing below and returning a copy of this letter to the undersigned, at 
which time this letter shall become a binding agreement between us.

                                   Very truly yours,


                                   By: 
                                       -----------------------------
                                       Name:
                                       Title:
                                       Date:
                                       Address:

ACCEPTED this ___ day
of __________, 199__


HALLIBURTON COMPANY


By:
    -----------------------------
    Name:
    Title:






                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX C-2