SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT

                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                DATE OF REPORT (date of earliest event reported)

                                  JULY 1, 1996

                               Halliburton Company
             (Exact name of registrant as specified in its charter)

State or other                      Commission                IRS Employer
jurisdiction                        File Number               Identification
of incorporation                                              Number

Delaware                              1-3492                  No. 73-0271280

                               3600 Lincoln Plaza
                             500 North Akard Street
                            Dallas, Texas 75201-3391
                    (Address of principal executive offices)

                         Registrant's telephone number,
                       including area code - 214/978-2600






                               Page 1 of 104 pages
                       The Exhibit Index appears on Page 5



         INFORMATION TO BE INCLUDED IN REPORT

Item 5.  Other Events

         The registrant  may, at its option,  report under this item any events,
with respect to which information is not otherwise called for by this form, that
the registrant deems of importance to security holders.

         On July 1, 1996, registrant issued a press release entitled Halliburton
Announces Agreement to Acquire Landmark Graphics Corp.  pertaining,  among other
things,  to an  announcement  that  registrant  has  executed  and  delivered an
Agreement and Plan of Merger (the "Merger  Agreement") dated as of June 30, 1996
with Landmark Graphics Corporation  ("Landmark").  The Merger Agreement provides
for the merger of Landmark with a wholly owned  subsidiary of the registrant and
the conversion of each outstanding  share of common stock of Landmark into 0.574
of one share of common stock of registrant. The transaction,  which is valued at
about $557 million,  or approximately  $31.86 per share of Landmark common stock
based on the  closing  price per share of  registrant  common  stock on June 28,
1996,  will  result in the  issuance of  approximately  10.0  million  shares of
registrant's  common stock.  Approximately  124.8 million shares of registrant's
common stock will be outstanding after such issuance.

         The  proposed   merger  is  subject  to  the  approval  of   Landmark's
stockholders  and  Hart-Scott-Rodino  antitrust  clearance.  The merger  will be
structured as a pooling of interests and, for federal income tax purposes,  as a
tax-free exchange to Landmark shareholders.  The companies anticipate completion
of the acquisition during the fall of 1996.

         In addition to the Merger Agreement,  registrant  concurrently executed
and delivered a Stock Option  Agreement  dated as of June 30, 1996 with Landmark
pursuant to which the  registrant is entitled to purchase,  at a price of $31.86
per share, authorized but unissued common stock from Landmark in an amount equal
to up to 15% of the outstanding  common stock of Landmark upon the occurrence of
certain events.  The registrant also entered into a Voting Agreement dated as of
June 30, 1996 with two holders of an  aggregate  of  approximately  11.1% of the
outstanding  Landmark common stock pursuant to which such holders have agreed to
vote in favor of the Merger  Agreement  at the  meeting  of holders of  Landmark
common stock to be called to consider approval of the Merger Agreement.


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         Landmark will be operated as a  wholly-owned  subsidiary of registrant.
Following  the merger,  Robert P. Peebler will  continue as president  and chief
executive officer of Landmark.  Registrant and Landmark also announced that they
are  pursuing  an  alliance  with EDS to develop a  worldwide  distributed  data
management  capability that  integrates all information  associated with the oil
field lifecycle.

         The foregoing  summary is subject to the full text of the press release
with respect  thereto,  a copy of which is attached  hereto as Exhibit 20, which
exhibit is incorporated herein by reference.

Item 7.  Financial Statements and Exhibits

         List below the financial  statements,  pro forma financial  information
and exhibits, if any, filed as part of this report.

         (c)      Exhibits.

                  Exhibit  2(a) - Agreement  and Plan of Merger dated as of 
June 30,  1996 among  registrant, Halliburton  Acq. Company and Landmark  
Graphics Corporation.

                  Exhibit 2(b) - Stock Option  Agreement dated as of June 30, 
1996 between  registrant and Landmark Graphics Corporation.

                  Exhibit  2(c) - Voting  Agreement  dated  as of June 30,  1996
between registrant and S. Rutt Bridges and Barbara Ann Bridges.

                  Exhibit 20 - Press release dated July 1, 1996











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                       The Exhibit Index appears on Page 5





                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                            HALLIBURTON COMPANY




Date:    July 3, 1996                       By: /s/ Robert M. Kennedy
                                                 Robert M. Kennedy
                                                 Vice President - Legal



























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                       The Exhibit Index appears on Page 5



                                  EXHIBIT INDEX



Exhibit                                                     Sequentially
Number                     Description                      Numbered Page


    2(a)                  Agreement and Plan                 6 of 104
                          of Merger

    2(b)                  Stock Option Agreement             81 of 104

    2(c)                  Voting Agreement                   95 of 104

    20                    Press Release of                   101 of 104
                          July 1, 1996
                          Incorporated by Reference
























                               Page 5 of 104 pages
                       The Exhibit Index appears on Page 5




                          AGREEMENT AND PLAN OF MERGER


                                  By and Among


                              Halliburton Company,


                            Halliburton Acq. Company


                                       and


                          Landmark Graphics Corporation







                                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.........................................3
              ----------------------

                                   ARTICLE III
               CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES

SECTION 3.01  Merger Consideration; 
              --------------------- 
                Conversion and Cancellation of Securities....................3
                -----------------------------------------
SECTION 3.02  Exchange of Certificates.......................................4
              ------------------------
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........................7
              ---------------------------------------
SECTION 4.03  Capitalization.................................................7
              --------------
SECTION 4.04  Authorization of Agreement.....................................9
              --------------------------
SECTION 4.05  Approvals......................................................9
              ---------
SECTION 4.06  No Violation...................................................9
              ------------
SECTION 4.07  Reports.......................................................10
              -------
SECTION 4.08  No Material Adverse Effect; Conduct...........................11
              -----------------------------------
SECTION 4.09  Title to Properties...........................................11
              -------------------
SECTION 4.10  Certain Obligations...........................................12
              -------------------
SECTION 4.11  Permits; Compliance...........................................12
              -------------------
SECTION 4.12  Litigation; Compliance with Laws..............................12
              --------------------------------
SECTION 4.13  Employee Benefit Plans........................................13
              ----------------------


                          AGREEMENT AND PLAN OF MERGER
                                      -ii-





SECTION 4.14  Taxes.........................................................15
              -----
SECTION 4.15  Environmental Matters.........................................16
              ---------------------
SECTION 4.16  Intellectual Property.........................................16
              ---------------------
SECTION 4.17  Insurance.....................................................17
              ---------
SECTION 4.18  Pooling; Tax Matters..........................................17
              --------------------
SECTION 4.19  Affiliates....................................................18
              ----------
SECTION 4.20  Certain Business Practices....................................18
              --------------------------
SECTION 4.21  Opinion of Financial Advisor..................................18
              ----------------------------
SECTION 4.22  Brokers.......................................................19
              -------
SECTION 4.23  Acquiring Person..............................................19
              ----------------

                                    ARTICLE V
                   REPRESENTATIONS AND WARRANTIES OF ACQUIROR

SECTION 5.01 Organization and Qualification; Subsidiaries...................19
             --------------------------------------------
SECTION 5.02 Certificate of Incorporation and Bylaws........................19
             ---------------------------------------
SECTION 5.03 Capitalization.................................................20
             --------------
SECTION 5.04 Authorization of Agreement.....................................21
             --------------------------
SECTION 5.05 Approvals......................................................21
             ---------
SECTION 5.06 No Violation...................................................22
             ------------
SECTION 5.07 Reports........................................................22
             -------
SECTION 5.08 No Material Adverse Effect; Conduct............................23
             -----------------------------------
SECTION 5.09 Title to Properties............................................23
             -------------------
SECTION 5.10 Certain Obligations............................................23
             -------------------
SECTION 5.11 Permits; Compliance............................................24
             -------------------
SECTION 5.12 Litigation; Compliance with Laws...............................24
             --------------------------------
SECTION 5.13 Employee Benefit Plans.........................................24
             ----------------------
SECTION 5.14 Taxes..........................................................25
             -----
SECTION 5.15 Environmental Matters..........................................26
             ---------------------
SECTION 5.16 Pooling; Tax Matters...........................................26
             --------------------
SECTION 5.17 Affiliates.....................................................27
             ----------
SECTION 5.18 Brokers........................................................27
             -------
SECTION 5.19 Acquiring Person...............................................27
             ----------------
SECTION 5.20 Proposal to Acquire the Acquiror...............................27
             --------------------------------
SECTION 5.21 Certain Business Practices.....................................27
             --------------------------

                                   ARTICLE VI
                                    COVENANTS

SECTION 6.01 Affirmative Covenants..........................................28
             ---------------------
SECTION 6.02 Negative Covenants.............................................28
             ------------------
SECTION 6.03 No Solicitation................................................33
             ---------------


                          AGREEMENT AND PLAN OF MERGER
                                      -iii-





SECTION 6.04  Access and Information........................................34
              ----------------------
SECTION 6.05  Confidentiality Agreement.....................................35
              -------------------------

                                   ARTICLE VII
                              ADDITIONAL AGREEMENTS

SECTION 7.01  Meeting of Stockholders.......................................35
              -----------------------
SECTION 7.02  Registration Statement; Proxy Statements......................35
              ----------------------------------------
SECTION 7.03  Appropriate Action; Consents; Filings.........................37
              -------------------------------------
SECTION 7.04  Affiliates; Pooling; Tax Treatment............................39
              ----------------------------------
SECTION 7.05  Public Announcements..........................................39
              --------------------
SECTION 7.06  NYSE Listing..................................................39
              ------------
SECTION 7.07  Rights Agreement; State Takeover Statutes.....................40
              -----------------------------------------
SECTION 7.08  Comfort Letters...............................................40
              ---------------
SECTION 7.09  Assumption of Obligations to Issue Stock......................40
              ----------------------------------------
SECTION 7.10  Employee Benefit Plans........................................41
              ----------------------
SECTION 7.11  Indemnification of Directors and Officers.....................42
              -----------------------------------------
SECTION 7.12  Newco.........................................................43
              -----
SECTION 7.13  Event Notices.................................................43
              -------------
SECTION 7.14  Stratworks Divestiture........................................44
              ----------------------
SECTION 7.15  Change in Control Agreements..................................44
              ----------------------------

                                  ARTICLE VIII
                               CLOSING CONDITIONS

SECTION 8.01  Conditions to Obligations
              ------------------------- 
                of Each Party Under This Agreement..........................44
                ----------------------------------
SECTION 8.02  Additional Conditions to Obligations 
              ------------------------------------  
                of the Acquiror Companies...................................45
                -------------------------
SECTION 8.03  Additional Conditions to Obligations of the Company...........46
              ---------------------------------------------------

                                   ARTICLE IX
                        TERMINATION, AMENDMENT AND WAIVER

SECTION 9.01  Termination...................................................46
              -----------
SECTION 9.02  Effect of Termination.........................................48
              ---------------------
SECTION 9.03  Amendment.....................................................48
              ---------
SECTION 9.04  Waiver........................................................48
              ------
SECTION 9.05  Fees, Expenses and Other Payments.............................48
              ---------------------------------

                                    ARTICLE X
                               GENERAL PROVISIONS

SECTION 10.01 Effectiveness of Representations,
              --------------------------------- 
                Warranties and Agreements..................................50
                -------------------------


                          AGREEMENT AND PLAN OF MERGER
                                      -iv-





SECTION 10.02  Notices.....................................................50
               -------
SECTION 10.03  Headings....................................................52
               --------
SECTION 10.04  Severability................................................52
               ------------
SECTION 10.05  Entire Agreement............................................52
               ----------------
SECTION 10.06  Assignment..................................................52
               ----------
SECTION 10.07  Parties in Interest.........................................52
               -------------------
SECTION 10.08  Failure or Indulgence Not Waiver;  Remedies Cumulative......52
               ------------------------------------------------------
SECTION 10.09  Governing Law...............................................52
               -------------
SECTION 10.10  Counterparts................................................52
               ------------



                          AGREEMENT AND PLAN OF MERGER
                                       -v-





                                     ANNEXES


Annex A      Schedule of Defined Terms
Annex B      Affiliate's Agreement (Landmark Graphics Corporation Affiliates)
Annex C      Affiliate's Agreement (Halliburton Company Affiliates)




                          AGREEMENT AND PLAN OF MERGER
                                      -vi-





                          AGREEMENT AND PLAN OF MERGER


         THIS  AGREEMENT  AND PLAN OF  MERGER,  dated as of June 30,  1996 (this
"Agreement"),  is by and  among  Halliburton  Company,  a  Delaware  corporation
("Acquiror"),   Halliburton  Acq.   Company,   a  Delaware   corporation  and  a
wholly-owned   subsidiary   of  Acquiror   ("Newco"),   and  Landmark   Graphics
Corporation,  a Delaware corporation (the "Company"). The Acquiror and Newco are
sometimes referred to herein as the "Acquiror Companies."

                                    RECITALS:

         The Board of Directors of the Company has determined  that the business
combination  to be  effected  by means of the Merger is  consistent  with and in
furtherance  of the long-term  business  strategy of the Company and is fair to,
and in the best interests of, the Company and its  stockholders and has approved
and  adopted  this  Agreement  and  recommended  approval  and  adoption of this
Agreement by the stockholders of the Company.

         The Board of Directors of the Acquiror has determined that the business
combination  to be  effected  by means of the Merger is  consistent  with and in
furtherance of the long-term  business  strategy of the Acquiror and is fair to,
and in the best interests of, the Acquiror and its stockholders and has approved
and adopted this Agreement.

         Upon the terms and subject to the  conditions of this  Agreement and in
accordance  with the GCL,  the Company  will merge with and into Newco and Newco
will be the Surviving Corporation.

         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  Agreement and the Voting Agreement  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

                          AGREEMENT AND PLAN OF MERGER
                                       -1-





defined has the meaning  ascribed to it in accordance  with  generally  accepted
accounting principles as in effect from time to time: (c) "or" is not exclusive;
(d) "including"  means  "including,  without  limitation;"  and (e) words in the
singular include the plural and words in the plural include the singular.

                                   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,  the Company shall merge with and into Newco 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 each of the Constituent  Corporations shall
cease and Newco 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 Newco,  as in effect
immediately   prior  to  the  Effective  Time,   shall  be  the  certificate  of
incorporation and the bylaws of the Surviving Corporation,  except that from and
after the Effective Time Article I of the certificate of incorporation  shall be
and read in its entirety as follows:

                                    ARTICLE I

         The name of the corporation shall be "Landmark Graphics Corporation."

Prior to the Effective  Time,  the  certificate of  incorporation  and bylaws of
Newco shall be amended so as to contain provisions substantially similar in form
and substance to the  provisions  contained in Article IX of the  certificate of
incorporation and Section 6.10 of the bylaws of the Company, respectively.

                          AGREEMENT AND PLAN OF MERGER
                                       -2-





         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 Acquiror 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 issued and outstanding  immediately prior
         to the Effective Time  (excluding any Company Common Stock described in
         Section  3.01(c))  shall be  converted  into 0.574  shares of  Acquiror
         Common Stock.  Notwithstanding  the  foregoing,  if between the date of
         this  Agreement and the Effective  Time the  outstanding  shares of the
         Acquiror  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 Acquiror  Common Stock at the  Effective  Time,
         cease to be  outstanding  and  shall  automatically  be  cancelled  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 Acquiror  Common
         Stock  determined  pursuant to the Common Stock  Exchange Ratio and, if
         applicable,  the right to receive cash pursuant to Section 3.02(e). 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 Acquiror or any direct or indirect  wholly-owned  Subsidiary of the
         Acquiror  or of the Company  immediately  prior to the  Effective  Time
         shall be cancelled and extinguished without conversion thereof.


                          AGREEMENT AND PLAN OF MERGER
                                       -3-





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

         SECTION 3.02               Exchange of Certificates.

                  (a)  Exchange  Fund.  On the day of the  Effective  Time,  the
         Acquiror  shall  deposit,  or cause to be deposited,  with the Exchange
         Agent,  for the benefit of the former  holders of Company Common Stock,
         for exchange in accordance with this Article III,  through the Exchange
         Agent,  certificates  evidencing a number of shares of Acquiror  Common
         Stock  equal  to  the  product  of  the  Common  Stock  Exchange  Ratio
         multiplied  by the number of shares of Company  Common Stock issued and
         outstanding  immediately  prior to the Effective Time (exclusive of any
         such shares to be cancelled pursuant to Section 3.01(c)).  The Exchange
         Agent shall,  pursuant to irrevocable  instructions  from the Acquiror,
         deliver  Acquiror  Common  Stock,  together with any cash to be paid in
         lieu of  fractional  interests  in  shares  of  Acquiror  Common  Stock
         pursuant to Section 3.02(e) and any dividends or distributions  related
         thereto,  in exchange for certificates  theretofore  evidencing Company
         Common  Stock  surrendered  to the Exchange  Agent  pursuant to Section
         3.02(c).  Except as contemplated by Section 3.02(e),  the Exchange Fund
         shall not be used for any other purpose.

                  (b) Letter of Transmittal.  Promptly after the Effective Time,
         the  Acquiror  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 Acquiror Common Stock into which such shares of Company Common Stock
         were  converted  pursuant to the Merger,  together  with any cash to be
         paid in lieu of fractional interests in shares of Acquiror Common Stock
         pursuant to Section 3.02(e) and any dividends or distributions  related
         thereto.  If  shares  of  Acquiror  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
         the  Acquiror  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 Acquiror  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 Acquiror that
         such  tax has  been  paid  or is not  applicable.  Notwithstanding  the
         foregoing, neither the Exchange Agent nor any party

                          AGREEMENT AND PLAN OF MERGER
                                       -4-





         hereto shall be liable to any former holder of Company Common Stock for
         any Acquiror Common Stock,  cash in lieu of fractional  share interests
         or dividends or  distributions  thereon  delivered to a public official
         pursuant to any applicable escheat law.

                  (d)  Distributions  with  Respect  to  Unexchanged  Shares  of
         Company Common Stock. No dividends or other  distributions  declared or
         made with respect to Acquiror 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 escheat laws,  following surrender of any such
         certificate,  there shall be paid (i) to the holder of the certificates
         evidencing  whole  shares of Acquiror  Common  Stock issued in exchange
         therefor,  without interest,  (A) promptly,  the amount of dividends or
         other  distributions  with a  record  date  after  the  Effective  Time
         theretofore  paid with respect to such whole shares of Acquiror  Common
         Stock, and (B) 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 Acquiror  Common Stock and
         (ii) to the holder of any certificate that theretofore evidenced shares
         of Company Common Stock,  without interest,  promptly the amount of any
         cash  payable with  respect to a  fractional  share of Acquiror  Common
         Stock to which such holder is entitled pursuant to Section 3.02(e).

                  (e) No Fractional Shares.  Notwithstanding  anything herein to
         the contrary,  no certificates or scrip evidencing fractional shares of
         Acquiror  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
         will not entitle such holder to vote or to any rights of a  stockholder
         of the Acquiror.  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 Acquiror Common Stock pursuant to the
         Merger shall be paid cash, without any interest thereon, as hereinafter
         provided.  The Acquiror  shall instruct the Exchange Agent to determine
         the number of whole  shares and  fractional  shares of Acquiror  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  and fees of the Exchange Agent incurred in connection with
         such sales shall be paid by the Acquiror.

                  (f) Termination of Exchange Fund.  Any portion of the 
         Exchange Fund which remains unclaimed by the former holders of Company
         Common Stock for twelve months after the Effective Time shall be 
         delivered to the Acquiror, upon demand, and any former

                          AGREEMENT AND PLAN OF MERGER
                                       -5-





         holders of Company Common Stock who have not theretofore  complied with
         this  Article III shall  thereafter  look only to the  Acquiror for the
         Acquiror Common Stock and any cash to which they are entitled.

                  (g)  Withholding  of Tax.  The  Acquiror  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  Acquiror  (or any  affiliate  thereof)  is  required to
         deduct and withhold  with  respect to the making of such payment  under
         the Code, or any  provision of state,  local or foreign tax law. To the
         extent that  amounts are so withheld  by the  Acquiror,  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 Acquiror.

                  (h) Lost Certificates.  If any certificate  evidencing Company
         Common Stock shall have been lost, stolen or destroyed, upon the making
         of an affidavit of that fact by the Person claiming such certificate to
         be lost,  stolen or  destroyed  and, if required by the  Acquiror,  the
         posting  by such  Person of a bond,  in such  reasonable  amount as the
         Acquiror  may  direct,  as  indemnity  against  claims that may be made
         against it with respect to such  certificate,  the Exchange  Agent will
         issue in exchange for such lost,  stolen or destroyed  certificate  the
         Acquiror  Common Stock to which the holder may be entitled  pursuant to
         this  Article III,  any cash in lieu of  fractional  shares of Acquiror
         Common  Stock to which the holder  thereof may be entitled  pursuant to
         Section 3.02(e) and any dividends or other  distributions  to which the
         holder thereof may be entitled pursuant to Section 3.02(d).

         SECTION 3.03  Closing.  The Closing  shall take place at the offices of
Vinson & Elkins  L.L.P.,  1001  Fannin,  3600 First City Tower,  Houston,  Texas
77002-6760, at 10:00 a.m. on the second 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 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 Acquiror Companies
that:

         SECTION 4.01 Organization and Qualification; Subsidiaries. The Company
and each Subsidiary of the Company are legal entities duly organized, validly 
existing and in good standing

                          AGREEMENT AND PLAN OF MERGER
                                       -6-





under  the  Laws  of  their   respective   jurisdictions   of  incorporation  or
organization,  have all requisite  power and authority to own, lease and operate
their  respective  properties  and to carry on their business as it is 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 duly 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,  as of the date of this  Agreement,  a true and complete list of all
the Company's directly or indirectly owned  Subsidiaries,  together with (A) the
jurisdiction  of  incorporation  of each  Subsidiary  and the percentage of each
Subsidiary's  outstanding  capital stock or other equity  interests owned by the
Company or another  Subsidiary of the Company,  and (B) an indication of whether
each such Subsidiary is a "Significant  Subsidiary." Neither the Company nor any
of its Subsidiaries  owns an equity interest in any partnership or joint venture
arrangement or other business entity that is Material to the Company.

         SECTION 4.02 Certificate of Incorporation  and Bylaws.  The Company has
heretofore marked for  identification and furnished to the Acquiror complete and
correct  copies  of the  certificate  of  incorporation  and the  bylaws  or the
equivalent  organizational documents, in each case as amended or restated to the
date hereof,  of the Company and each of its  Subsidiaries.  Neither the Company
nor any of its  Subsidiaries  is in  violation of any of the  provisions  of its
certificate of incorporation or bylaws (or equivalent organizational documents).

         SECTION 4.03               Capitalization.

                  (a) The  authorized  capital stock of the Company  consists of
         (i) 50,000,000 shares of Company Common Stock of which, as of March 29,
         1996,  17,498,396 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  Company's
         certificate  of  incorporation  or bylaws or any agreement to which the
         Company is a party or is bound and (ii)  3,600,000  shares of Preferred
         Stock,  par value $1.00 per share, of which none is issued but of which
         500,000  shares have been  designated as Series A Junior  Participating
         Preferred  Stock.  As of June 30,  1996,  3,100,727  shares of  Company
         Common Stock were reserved for future issuance  pursuant to outstanding
         Company Stock  Options  granted  pursuant to the Company  Option Plans.
         Except as set forth in  Section  4.03(a)  of the  Company's  Disclosure
         Letter,  between  March  29,  1996 and the date of this  Agreement,  no
         shares of Company Common Stock have been issued by the Company.  Except
         as set forth in Section  4.03(a) of the  Company's  Disclosure  Letter,
         since March 29,  1996,  the Company has not granted any options for, or
         other rights to purchase, shares of Company Common Stock.

                  (b)  Except  as set  forth in  Section  4.03(a),  no shares of
         Common Stock are reserved for issuance,  and,  except for the Company's
         Rights Plan and Company Stock Options listed in Section  4.03(b) of the
         Company's Disclosure Letter, there are no contracts,

                          AGREEMENT AND PLAN OF MERGER
                                       -7-





         agreements,  commitments or arrangements  obligating the Company (i) to
         offer, sell, issue or grant any shares of, or any options,  warrants or
         rights of any kind to acquire any shares of, or any securities that are
         convertible  into or  exchangeable  for any shares of, capital stock of
         the Company, (ii) to redeem,  purchase or acquire, or offer to purchase
         or acquire,  any  outstanding  shares of, or any  outstanding  options,
         warrants  or  rights  of any kind to  acquire  any  shares  of,  or any
         outstanding  securities that are convertible  into or exchangeable  for
         any shares of,  capital stock of the Company or (iii) to grant any Lien
         on any shares of capital stock of the Company.

                  (c) The authorized,  issued and outstanding  capital stock of,
         or other equity  interests in, each of the Company's  Subsidiaries  and
         the names and  addresses of the holders of record of the capital  stock
         or other  equity  interests  of each such  Subsidiary  are set forth in
         Section 4.03(c) of the Company's Disclosure Letter. Except as set forth
         in the  Company's  Disclosure  Letter,  (i) the issued and  outstanding
         shares of capital  stock of, or other equity  interests in, each of the
         Subsidiaries of the Company that are owned by the Company or any 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 indicated
         as owned by the Company or one of its  Subsidiaries  in Section 4.03(c)
         of the Company's  Disclosure  Letter are owned (A)  beneficially as set
         forth  therein and (B) free and clear of all Liens;  (iii) no shares of
         capital stock of, or other equity  interests in, any  Subsidiary of the
         Company  are  reserved  for  issuance,  and  there  are  no  contracts,
         agreements,  commitments or arrangements  obligating the Company or any
         of its Subsidiaries (A) to offer, sell, issue, grant,  pledge,  dispose
         of or  encumber  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, or any
         securities that are convertible  into or exchangeable for any shares of
         capital stock of, or other equity interests in, any of the Subsidiaries
         of the  Company  or (B) to redeem,  purchase  or  acquire,  or offer to
         purchase or acquire,  any  outstanding  shares of capital  stock of, or
         other equity  interests  in, or any  outstanding  options,  warrants or
         rights of any kind to acquire  any shares of capital  stock of or other
         equity interest in, or any outstanding  securities that are convertible
         into or  exchangeable  for,  any shares of  capital  stock of, or other
         equity  interests in, any of the  Subsidiaries of the Company or (C) to
         grant any Lien on any outstanding  shares of capital stock of, or other
         equity interest in, any of the 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 as set forth in Section  4.03(d) of the  Company's
         Disclosure Letter and for the Company's Rights  Agreement,  the Company
         Stock Options  listed in Section  4.03(b) of the  Company's  Disclosure
         Letter  and the Stock  Option  Agreement,  there are no voting  trusts,
         proxies  or other  agreements,  commitments  or  understandings  of any
         character to which the Company or any of its Subsidiaries is a party or
         by which the Company or any of

                          AGREEMENT AND PLAN OF MERGER
                                       -8-





         its  Subsidiaries  is bound with respect to the voting of any shares of
         capital stock of the Company or any of its Subsidiaries or with respect
         to the registration of the offering,  sale or delivery of any shares of
         capital  stock of the  Company  or any of its  Subsidiaries  under  the
         Securities Act,  except in the case of any  Subsidiaries of the Company
         that are not  Significant  Subsidiaries  for any matters that could not
         reasonably  be  expected  to  have a  Material  Adverse  Effect  on the
         Company.

         SECTION 4.04 Authorization of Agreement.  The Company has all requisite
corporate  power and  authority to execute and deliver this  Agreement  and each
instrument required hereby to be executed and delivered by it at the Closing, 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 each instrument  required hereby to be executed and delivered
by it at the  Closing  and the  performance  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 GCL and the
Company's  certificate of incorporation).  This Agreement has been duly executed
and  delivered by the Company and  (assuming  due  authorization,  execution and
delivery  hereof by the other parties  hereto)  constitutes  a legal,  valid and
binding obligation of the Company, enforceable against the Company 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 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 the  Company's  Disclosure
Letter,  (f) the NASD,  (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 ability of the Company to perform its  obligations  under
this Agreement or to have a Material Adverse Effect on the Company, no filing or
registration  with, no waiting  period imposed by and no Permit or Order 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 any  instrument  required  hereby to be
executed and delivered by it at the Closing.

         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 Permits  and Orders of,  Governmental  Authorities
indicated  as required in Section 4.05 and receipt of the approval of the Merger
by the  stockholders  of the  Company 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 any instrument  required hereby
to be executed  and  delivered by it at the Closing 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

                          AGREEMENT AND PLAN OF MERGER
                                       -9-





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
that could not reasonably be expected to have a material adverse effect upon the
ability of the  Company to perform its  obligations  under this  Agreement  or a
Material  Adverse  Effect  on the  Company.  Prior  to  the  execution  of  this
Agreement,  the Board of Directors of the Company has 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
Plan.

         SECTION 4.07               Reports.

                  (a) Since June 30, 1993, the Company and its Subsidiaries have
         filed (i) all SEC Reports of the Company  required to be filed with the
         Commission  and (ii) all other  Reports of the  Company  required to be
         filed  with  any  other  Governmental   Authorities,   including  state
         securities  administrators,  except  where the failure to file any such
         Reports of the  Company  could not  reasonably  be  expected  to have a
         Material  Adverse  Effect on the  Company.  The Reports of the Company,
         including all those filed after the date of this Agreement and prior to
         the  Effective  Time,  (i) were  prepared in all  material  respects in
         accordance with the  requirements  of applicable Law  (including,  with
         respect to the SEC Reports of the Company,  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 of the
         Company,  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  Consolidated  Financial  Statements  and any
         consolidated financial statements of the Company (including any related
         notes  thereto)  contained in any SEC Reports of the Company filed 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 and (B), with respect to SEC Reports of the
         Company filed prior to the date of this Agreement,  as may be indicated
         in  the  notes  thereto)  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 (including,  in the
         case  of  any  unaudited  interim  financial   statements,   reasonable
         estimates of 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, which would be

                          AGREEMENT AND PLAN OF MERGER
                                      -10-





         required  to be  reflected,  reserved  for or  disclosed  under GAAP in
         consolidated  financial  statements of the Company (including the notes
         thereto)  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  Consolidated  Financial  Statements,   (ii)  liabilities  or
         obligations  incurred in the ordinary course of business of the Company
         since  March  31,  1996,  and  (iii)  liabilities  or  obligations  the
         incurrence of which is not prohibited by Section 6.02(a).

         SECTION 4.08          No Material Adverse Effect; Conduct.
                         
                  (a) Since March 31, 1996,  no event (other than any event that
         is directly  attributable to the prospect of consummation of the Merger
         or 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  disclosed in Section  4.08(b) of the  Company's
         Disclosure Letter, during the period from March 31, 1996 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
         (xi) of Section  6.02(a) or agreed in writing or otherwise  during such
         period  prior  to the  date of this  Agreement  to  engage  in any such
         conduct.

         SECTION  4.09 Title to  Properties.  The  Company or its  Subsidiaries,
individually  or  together,  have  indefeasible  title to all of the  properties
reflected in the Company's Consolidated Balance Sheet, other than any properties
reflected in the Company's Consolidated Balance Sheet that (i) have been sold or
otherwise disposed of since the date of the Company's Consolidated Balance Sheet
in the ordinary  course of business  consistent  with past  practice or (ii) are
not,  individually or in the aggregate,  Material to the Company, free and clear
of Liens,  other  than (x)  Liens the  existence  of which is  reflected  in the
Company's Consolidated Financial Statements,  (y) Permitted Encumbrances and (z)
Liens that,  individually or in the aggregate,  are not Material to the Company.
The Company or its  Subsidiaries,  individually  or  together,  hold under valid
lease  agreements  all real and personal  properties  reflected in the Company's
Consolidated  Balance Sheet as being held under capitalized leases, and all real
and personal property that is subject to the operating leases to which reference
is made in the notes to the Company's Audited Consolidated Financial Statements,
and enjoy  peaceful and  undisturbed  possession of such  properties  under such
leases,  other than (i) any  properties  as to which such leases have expired in
accordance with their terms without any liability of any party thereto since the
date of the Company's  Consolidated  Balance Sheet and (ii) any properties that,
individually or in the aggregate,  are not Material to the Company.  Neither the
Company nor any of its  Subsidiaries  has  received  any  written  notice of any
adverse  claim to the title to any  properties  owned by them or with respect to
any lease under which any properties are held

                          AGREEMENT AND PLAN OF MERGER
                                      -11-





by them, other than any claims that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect on the Company.

         SECTION  4.10  Certain  Obligations.  Section  4.10  of  the  Company's
Disclosure Letter contains a true and complete list of the Material Contracts of
the Company  and its  Subsidiaries.  Except as set forth 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 Material  Contract.  All Material  Contracts to which
the Company or any of its  Subsidiaries is a party are in full force and effect,
the Company or the Subsidiary of the Company that is a party to or bound by such
Material  Contract has performed its obligations  thereunder to date and, to the
Knowledge of the Company, each other party thereto has performed its obligations
thereunder to date, other than any failure of a Material  Contract to be in full
force and effect or any  nonperformance  thereof  that could not  reasonably  be
expected to have a Material Adverse Effect on the Company.

         SECTION 4.11 Permits;  Compliance. To the Knowledge of the Company, the
Company and its  Subsidiaries  have  obtained all Permits that are  necessary to
carry on their businesses as currently conducted, except for any such Permits 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
Permits 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, to the Knowledge of the Company, no suspension,  revocation or cancellation
thereof has been threatened and there is no action,  proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any of
such Permits,  except where the  suspension,  revocation or cancellation of such
Permits 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 or proceedings that (a) are set
forth in Section 4.12 or any other Section of the Company's Disclosure Letter or
(b),  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 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 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,  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.


                          AGREEMENT AND PLAN OF MERGER
                                      -12-





         SECTION 4.13               Employee Benefit Plans.

                  (a) Each Benefit Plan of the Company and its  Subsidiaries  is
         listed  in  Section  4.13(a)  of  the  Company's   Disclosure   Letter,
         including,  with  respect  to  Terminated  Benefit  Plans,  the date of
         termination. True and correct copies of each of the following have been
         made available to the Acquiror: (i) the most recent annual report (Form
         5500)  relating to each such  Current  Benefit Plan filed with the IRS,
         (ii) each such Current Benefit Plan, (iii) the trust agreement, if any,
         relating  to each  such  Current  Benefit  Plan,  (iv) the most  recent
         summary plan description for each such Current Benefit Plan for which a
         summary  plan  description  is required  by ERISA,  (v) the most recent
         actuarial  report or valuation  relating to each such  Current  Benefit
         Plan   subject  to  Title  IV  of  ERISA  and  (vi)  the  most   recent
         determination  letter,  if any,  issued by the IRS with  respect to any
         such Current Benefit Plan qualified under Section 401 of the Code.

                  (b)  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 Benefit Plans, or with
         respect to any such Benefit Plans,  under 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.

                  (c)  As to  any  such  Current  Benefit  Plan  intended  to be
         qualified  under  Section 401 of the Code,  such  Benefit Plan has been
         determined  by the IRS to  satisfy  in form  the  requirements  of such
         Section and there has been no  termination  or partial  termination  of
         such Benefit Plan within the meaning of Section 411(d)(3) of the Code.

                  (d) As to any such  Terminated  Benefit Plan  intended to have
         been qualified under Section 401 of the Code,  such Terminated  Benefit
         Plan  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 of such Benefit  Plans or
         their  assets  that could  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 of such Benefit Plans before the IRS, the  Department of
         Labor or the PBGC.

                  (g) All  contributions  required  to be made by the Company or
         the  Company's  Subsidiaries  to such Benefit  Plans  pursuant to their
         terms and provisions have been made timely.


                          AGREEMENT AND PLAN OF MERGER
                                      -13-





                  (h) As to any such Current Benefit Plan subject to Title IV of
         ERISA,  (i)  there  has been no event or  condition  which  presents  a
         material  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  within six years
         prior to date of this Agreement,  (iii) no reportable  event within the
         meaning of Section 4043 of ERISA (for which the disclosure requirements
         of  Regulation  section  2615.3  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.

                  (i)  Except as set forth in Section  4.13(i) of the  Company's
         Disclosure   Letter,   in  connection  with  the  consummation  of  the
         transactions  contemplated by this Agreement,  no payments have been or
         will be  made  under  any  such  Current  Benefit  Plans  or any of the
         programs,  agreements,  policies  or other  arrangements  described  in
         Section  4.13(k)  of the  Company's  Disclosure  Letter  which,  in the
         aggregate, would be nondeductible under Section 280G of the Code.

                  (j)  Except as set forth in Section  4.13(j) of the  Company's
         Disclosure Letter, 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  under,  any Current Benefit
         Plan or any of the programs, agreements, policies or other arrangements
         described in Section 4.13(k) of the Company's Disclosure Letter than it
         otherwise  would or (ii) create or give rise to any  additional  vested
         rights or service credits under any Current Benefit Plan or any of such
         programs, agreements, policies or other arrangements.

                  (k)  Except as set forth in Section  4.13(k) of the  Company's
         Disclosure Letter, neither the Company nor any of its Subsidiaries is a
         party to or is bound by any severance  agreement  (involving $50,000 or
         more),  program or policy.  True and correct  copies of all  employment
         agreements with officers of the Company and its  Subsidiaries,  and all
         vacation,  overtime and other compensation  policies of the Company and
         its  Subsidiaries  relating to their employees have been made available
         to the Acquiror.

                  (l)  Except as set forth in Section  4.13(l) of the  Company's
         Disclosure  Letter, no Benefit 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

                          AGREEMENT AND PLAN OF MERGER
                                      -14-





         Sections 601 through 608 of ERISA and Section  4980B of the Code.  Each
         Benefit Plan or other  arrangement  described in Section 4.13(l) of the
         Company's  Disclosure Letter may be unilaterally  amended or terminated
         in  its  entirety  without  liability  except  as to  benefits  accrued
         thereunder prior to such amendment or termination.

                  (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  or had an
         obligation to contribute, to a multiemployer plan within the meaning of
         Section 3(37) of ERISA.

                  (n)  Except as set forth in Section  4.13(n) of the  Company's
         Disclosure  Letter,  the  vacation  policies  of the  Company  and  its
         Subsidiaries  do not provide for  carryover  vacation from one calendar
         year to the next.

                  (o) No collective bargaining agreement to which the Company or
         any of its  Subsidiaries  is a party is currently in effect or is being
         negotiated  by the  Company  or any of its  Subsidiaries.  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
         that could  reasonably be expected to have a Material Adverse Effect on
         the Company.  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 unfair labor  practices  in  connection  with the  operation of the
         business of the Company and its  Subsidiaries,  and there is no pending
         or, to the  Knowledge  of the Company,  threatened  charge or complaint
         against the Company or any of its  Subsidiaries  by the National  Labor
         Relations  Board or any  comparable  agency of any state of the  United
         States.

                  SECTION 4.14              Taxes.

                  (a)  Except  for such  matters  as  could  not  reasonably  be
         expected to have a Material Adverse Effect on the Company,  (i) all 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,  (ii) all Taxes  that are due on or before  the
         Effective  Time  have been or will be  timely  paid in full,  (iii) 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 (iv) 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)  Except as set forth in Section  4.14(b) of the  Company's
         Disclosure  Letter, all Tax Returns have been audited by the applicable
         Governmental  Authority or the applicable  statute of  limitations  has
         expired for the period covered by such Tax Returns.

                  (c)  Except as set forth in Section 4.14(c) of the Company's 
         Disclosure Letter, there is not in force any extension of time with 
         respect to the due date for the filing of any

                          AGREEMENT AND PLAN OF MERGER
                                      -15-





         material  Tax Return or any waiver or  agreement  for any  extension of
         time for the assessment or payment of any material Tax due with respect
         to the period covered by any Tax Return.

                  (d)  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 with respect to any Tax Return,  that, in
         either case,  could  reasonably be expected to have a Material  Adverse
         Effect on the Company.

                  (e)  Except as set forth in Section  4.14(e) of the  Company's
         Disclosure Letter, none of the Company and its Subsidiaries, during the
         last ten  years,  has been a member  of an  affiliated  group  filing a
         consolidated  federal income Tax Return other than the affiliated group
         of which the Company is the common parent corporation.

         SECTION 4.15  Environmental  Matters.  Except for matters  disclosed 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,  (a) the  properties,  operations  and
activities  of the  Company  and its  Subsidiaries  are in  compliance  with all
applicable  Environmental  Laws;  (b) 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; (c) all Permits,  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;  (d) 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;  (e) to the Company's
knowledge, there has been no exposure (attributable to the action of the Company
or its  Subsidiaries)  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;  and (f) the Company and its
Subsidiaries  have made  available  to the  Acquiror  all  internal and external
environmental   audits  and  studies  and  all   correspondence  on  substantial
environmental  matters  (in each  case  relevant  to the  Company  or any of its
Subsidiaries) in the possession of the Company or its Subsidiaries.

         SECTION 4.16               Intellectual Property.

                  (a) The  Company or one or more of its  Subsidiaries  own,  or
         hold licenses  under or otherwise  have the right to use or sublicense,
         all  foreign  and  domestic   patents,   trademarks   (common  law  and
         registered), trademark registration applications, service marks (common
         law and  registered),  service mark  registration  applications,  trade
         names and copyrights,  copyright applications,  trade secrets, know-how
         and other  proprietary  information  (including  the  Software)  as are
         necessary  for the  conduct  of the  business  of the  Company  and its
         Subsidiaries as currently  conducted  except for any such  intellectual
         property  as to which the  failure  to own or hold  licenses  could not
         reasonably be expected to have a Material Adverse

                          AGREEMENT AND PLAN OF MERGER
                                      -16-





         Effect on the Company.  Neither the Company nor any of its Subsidiaries
         is  currently  in receipt of any  notice of  infringement  or notice of
         conflict with the asserted rights of others in any patents, trademarks,
         service marks,  trade names, trade secrets and copyrights owned or held
         by other  Persons,  except,  in each case,  for matters  that could not
         reasonably  be  expected  to  have a  Material  Adverse  Effect  on the
         Company.  Neither the  execution  and  delivery of this  Agreement  nor
         consummation of the  transactions  contemplated  hereby will violate or
         breach the terms of or cause any  cancellation of any material  license
         held by the  Company  or any of its  Subsidiaries  under,  any  patent,
         trademark, service mark, trade name, trade secret or copyright.

                  (b) The list of  components  contained  in the  definition  of
         Software is, in all material respects, a true,  accurate,  and complete
         list of the software applications with respect to which the Company has
         an ownership interest.  The Software,  and its use, licensing,  copying
         and/or distribution,  do not infringe or violate any copyrights,  trade
         secrets,  patents,  or other  proprietary  rights of any  third  party.
         Except as set forth in Section 4.12 of the Company's Disclosure Letter,
         no claim of infringement  of any patent,  copyright,  trade secret,  or
         other  proprietary  right is pending against the Company.  All security
         devices,  techniques,  and  applications  used by the  Company  and its
         Subsidiaries  and contained  within the Software can be identified  and
         disabled by the Company.  Section  4.16(b) of the Company's  Disclosure
         Letter sets forth material third party software marketed by the Company
         and/or embedded into the Software.

         SECTION 4.17 Insurance.  The Company 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  Company  and its
Subsidiaries  operate. To the Knowledge of the Company, all such policies are in
full force and effect and all premiums due thereon have been paid.  Section 4.17
of the Company's  Disclosure Letter sets forth a list, including the name of the
underwriter,  the risks insured,  coverage and related  limits and  deductibles,
expiration dates and significant  riders,  of the principal  insurance  policies
currently maintained by the Company and its Subsidiaries.

         SECTION 4.18  Pooling;  Tax Matters.  To the  Knowledge of the Company,
neither the Company  nor 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  generally
accepted  accounting  principles and the Regulations and  interpretations of the
Commission  or (b) the Merger  from  constituting  a  reorganization  within the
meaning of section 368(a) of the Code. Specifically:

                  (i) To the  Knowledge  of the  Company,  there  is no  plan or
         intention by any  stockholder of the Company who owns 5 percent or more
         of the Company  Common  Stock and there is no plan or  intention on the
         part of any of the  remaining  stockholders  of the  Company,  to sell,
         exchange or otherwise  dispose of a number of shares of Acquiror Common
         Stock to be received in the Merger that would  reduce the  ownership of
         Acquiror Common

                          AGREEMENT AND PLAN OF MERGER
                                      -17-





         Stock by the stockholders of the Company to a number of shares having a
         value,  as of the Effective  Time, of less than 50 percent of the value
         of all Company Common Stock  (including  shares of Company Common Stock
         sold for cash in lieu of  fractional  shares of Acquiror  Common Stock)
         outstanding immediately prior to the Effective Time.

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

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

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

                  (v) 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.

                  (vi) The  liabilities  of the Company  that will be assumed by
         the Surviving  Corporation in the Merger and any liability to which the
         assets to be transferred to the Surviving  Corporation are subject were
         incurred by the Company in the  ordinary  course of its  business.  The
         total amount of such liabilities does not equal or exceed the aggregate
         basis of the Company in the assets to be  transferred  to the Surviving
         Corporation in the Merger.

         SECTION  4.19  Affiliates.  Section  4.19 of the  Company's  Disclosure
Letter contains a true and complete list of all Persons who, to the Knowledge of
the Company,  may be deemed to be Affiliates  of the Company,  excluding all its
Subsidiaries but including all directors and executive officers of the Company.

         SECTION  4.20  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 (i)
used  any  funds  for  unlawful  contributions,  gifts,  entertainment  or other
unlawful payments relating to political activity, (ii) 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,  (iii)  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 (iv) 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 4.21 Opinion of Financial Advisor.  The Company has received 
the opinion of Morgan Stanley & Co. Incorporated on the date of this Agreement 
to the effect that the Common

                          AGREEMENT AND PLAN OF MERGER
                                      -18-





Stock Exchange Ratio is fair,  from a financial point of view, to the holders of
Company Common Stock.

         SECTION 4.22 Brokers.  No broker,  finder or  investment  banker (other
than Morgan Stanley & Co.  Incorporated) 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  Company.
Prior to the date of this  Agreement,  the  Company  has made  available  to the
Acquiror a complete and correct copy of all  agreements  between the Company and
Morgan Stanley & Co.  Incorporated  pursuant to which such firm will be entitled
to any payment relating to the transactions contemplated by this Agreement.

         SECTION 4.23 Acquiring Person. None of the Acquiror Companies is (a) an
"Acquiring  Person" as defined in the Company  Rights Plan or (b) will become an
"Acquiring  Person" as a result of any of the transactions  contemplated by this
Agreement.

                                    ARTICLE V

                   REPRESENTATIONS AND WARRANTIES OF ACQUIROR

         The  Acquiror  Companies  hereby  represent  and warrant to the Company
that:

         SECTION  5.01  Organization  and   Qualification;   Subsidiaries.   The
Acquiror,  Newco and each other  Subsidiary  of the Acquiror 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
power and authority to own, lease and operate their respective properties and to
carry on their business as it is 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 duly  qualified  and in good  standing,  that  could  not
reasonably  be  expected  to have a  Material  Adverse  Effect on the  Acquiror.
Section 5.01 of the Acquiror's  Disclosure  Letter sets forth, as of the date of
this Agreement, a true and complete list of all Significant  Subsidiaries of the
Acquiror,   together  with  the  jurisdiction  of  incorporation  of  each  such
Subsidiary  and the  percentage of each such  Subsidiary's  outstanding  capital
stock or other equity  interests owned by the Acquiror or another  Subsidiary of
the Acquiror.

         SECTION 5.02 Certificate of Incorporation and Bylaws.  The Acquiror has
heretofore marked for  identification  and furnished to the Company complete and
correct  copies  of the  certificate  of  incorporation  and the  bylaws  or the
equivalent  organizational documents, in each case as amended or restated to the
date hereof, of the Acquiror and each of its Significant  Subsidiaries.  None of
the Acquiror,  Newco or any of the  Acquiror's  Significant  Subsidiaries  is in
violation of any of the provisions of its certificate of incorporation or bylaws
(or equivalent organizational documents).


                          AGREEMENT AND PLAN OF MERGER
                                      -19-





         SECTION 5.03               Capitalization.

                  (a) The authorized  capital stock of the Acquiror  consists of
         (i)  200,000,000  shares of Acquiror  Common Stock of which as of March
         31, 1996: 114,787,914 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  Acquiror's
         certificate  of  incorporation  or bylaws or any agreement to which the
         Acquiror is a party or is bound, and (ii) 5,000,000 shares of Preferred
         Stock,  par value $1.00 per share, of which none is issued but of which
         2,000,000 shares have been designated as Series A Junior  Participating
         Preferred Stock. Between March 31, 1996 and the date of this Agreement,
         no shares of Acquiror  Common  Stock have been  issued by the  Acquiror
         except  pursuant to the exercise of outstanding  Acquiror Stock Options
         and  otherwise  to the  extent  set  forth in  Section  5.03(a)  of the
         Acquiror's Disclosure Letter. Except as set forth in Section 5.03(a) of
         the Acquiror's  Disclosure  Letter,  from March 31, 1996 to the date of
         this Agreement,  the Acquiror has not granted any options for, or other
         rights to purchase, shares of Acquiror Common Stock.

                  (b) Except as set forth in Section  5.03(b) of the  Acquiror's
         Disclosure  Letter, no shares of Acquiror Common Stock are reserved for
         issuance,  and,  except for the  Acquiror's  Rights Plan,  the Acquiror
         Stock Options listed in Section  5.03(b) of the  Acquiror's  Disclosure
         Letter  and the other  agreements  listed  in  Section  5.03(b)  of the
         Acquiror's  Disclosure  Letter,  there  are no  contracts,  agreements,
         commitments or arrangements obligating the Acquiror (i) to offer, sell,
         issue or grant any shares of, or any options, warrants or rights of any
         kind to acquire any shares of, or any securities  that are  convertible
         into or exchangeable  for any shares of, capital stock of the Acquiror,
         (ii) to redeem,  purchase or acquire,  or offer to purchase or acquire,
         any  outstanding  shares of, or any  outstanding  options,  warrants or
         rights  of any  kind to  acquire  any  shares  of,  or any  outstanding
         securities that are convertible into or exchangeable for any shares of,
         capital  stock of the Acquiror or (iii) to grant any Lien on any shares
         of capital stock of the Acquiror.

                  (c) Except as set forth in the Acquiror's  Disclosure  Letter,
         (i) all the issued and outstanding shares of capital stock of, or other
         equity  interests in, each  Subsidiary of the Acquiror are owned by the
         Acquiror 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  Person;  (ii) all such  issued and  outstanding
         shares,  or other equity  interests,  that are owned by the Acquiror 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
         Subsidiary of the Acquiror are reserved for issuance,  and there are no
         contracts,  agreements,  commitments  or  arrangements  obligating  the
         Acquiror or any of its Subsidiaries (A) to offer,  sell, issue,  grant,
         pledge, dispose of or encumber 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,
         or any securities  that are convertible  into or  exchangeable  for any
         shares of capital stock of, or other

                          AGREEMENT AND PLAN OF MERGER
                                      -20-





         equity  interests in, any of the Subsidiaries of the Acquiror or (B) to
         redeem,  purchase  or acquire,  or offer to  purchase  or acquire,  any
         outstanding  shares of capital stock of, or other equity  interests in,
         or any outstanding  options,  warrants or rights of any kind to acquire
         any  shares of capital  stock of or other  equity  interest  in, or any
         outstanding  securities that are convertible into or exchangeable  for,
         any shares of capital  stock of, or other equity  interests  in, any of
         the  Subsidiaries  of the  Acquiror  or (C) to  grant  any  Lien on any
         outstanding  shares of capital  stock of, or other equity  interest in,
         any of the  Subsidiaries  of the Acquiror;  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
         Acquiror.

                  (d) There are no voting trusts,  proxies or other  agreements,
         commitments or understandings of any character to which the Acquiror or
         any of its Significant Subsidiaries is a party or by which the Acquiror
         or any of its  Significant  Subsidiaries  is bound with  respect to the
         voting of any shares of  capital  stock of the  Acquiror  or any of its
         Significant Subsidiaries.

         SECTION 5.04 Authorization of Agreement. Each of the Acquiror and Newco
has all  requisite  corporate  power and  authority  to execute and deliver this
Agreement and each instrument required hereby to be executed and delivered by it
at the Closing,  to perform its  obligations  hereunder  and  thereunder  and to
consummate the transactions  contemplated  hereby. The execution and delivery by
the Acquiror and Newco of this Agreement and each instrument  required hereby to
be  executed  and  delivered  by the  Acquiror  or Newco at the  Closing and the
performance of their respective  obligations  hereunder and thereunder have been
duly  and  validly  authorized  by all  requisite  corporate  action  (including
stockholder  action) on the part of the Acquiror and Newco,  respectively.  This
Agreement  has been duly  executed  and  delivered by the Acquiror and Newco and
(assuming due  authorization,  execution and delivery  hereof by the other party
hereto)  constitutes a legal,  valid and binding  obligation of the Acquiror and
Newco,  enforceable against the Acquiror 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.

         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 the  Acquiror'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  ability  of the  Acquiror  or  Newco  to  perform  its
obligations  under this  Agreement or to have a Material  Adverse  Effect on the
Acquiror,  no filing or  registration  with, no waiting period imposed by and no
Permit  or Order of,  any  Governmental  Authority  is  required  under any Law,
Regulation  or Order  applicable to the Acquiror or Newco to permit the Acquiror
or Newco to  execute,  deliver  or  perform  this  Agreement  or any  instrument
required hereby to be executed and delivered by it at the Closing.


                          AGREEMENT AND PLAN OF MERGER
                                      -21-





         SECTION 5.06 No  Violation.  Except as set forth in Section 5.06 of the
Acquiror's   Disclosure  Letter,   assuming  effectuation  of  all  filings  and
registrations with,  termination or expiration of any applicable waiting periods
imposed by and receipt of all Permits  and Orders of,  Governmental  Authorities
indicated as required in Section 5.05, neither the execution and delivery by the
Acquiror or Newco of this  Agreement  or any  instrument  required  hereby to be
executed  and  delivered  by the  Acquiror  or  Newco  at the  Closing  nor  the
performance by the Acquiror or Newco of their respective  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 Acquiror or Newco,  (ii) the
certificate  of  incorporation  or bylaws of the  Acquiror or Newco or (iii) any
contract or  agreement  to which the  Acquiror 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  that  could not
reasonably be expected to have a material adverse effect upon the ability of the
Acquiror or Newco to perform its obligations  under this Agreement or a Material
Adverse Effect on the Acquiror.

         SECTION 5.07               Reports.

                  (a) Since  December 31,  1993,  the Acquiror has filed all SEC
         Reports of the Acquiror  required to be filed with the Commission.  The
         SEC Reports of the  Acquiror,  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 the applicable requirements of
         the  Securities  Act and the Exchange  Act, as the case may be, and the
         applicable Regulations of the Commission thereunder and (ii) 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 Acquiror's  Consolidated  Financial Statements and any
         consolidated  financial  statements  of  the  Acquiror  (including  any
         related  notes  thereto)  contained  in any SEC Reports of the Acquiror
         filed 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 and (B), with respect to SEC
         Reports of the Acquiror filed prior to the date of this  Agreement,  as
         may be  indicated  in the notes  thereto)  and (ii) fairly  present the
         consolidated financial position of the Acquiror and its Subsidiaries as
         of the respective dates thereof and the  consolidated  results of their
         operations and cash flows for the periods indicated (including,  in the
         case  of  any  unaudited  interim  financial   statements,   reasonable
         estimates of normal and recurring year-end adjustments).

                  (c) Except as set forth in the Acquiror's  Disclosure  Letter,
         there exist no  liabilities  or  obligations  of the  Acquiror  and its
         Subsidiaries  that  are  Material  to the  Acquiror,  whether  accrued,
         absolute,  contingent  or  threatened,  that  would be  required  to be
         reflected,

                          AGREEMENT AND PLAN OF MERGER
                                      -22-





         reserved  for  or  disclosed  under  GAAP  in  consolidated   financial
         statements  of the  Acquiror 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 Acquiror's  Consolidated Financial Statements,  (ii) liabilities or
         obligations incurred in the ordinary course of business of the Acquiror
         and its  Subsidiaries  since  March  31,  1996,  (iii)  liabilities  or
         obligations  the  incurrence  of which  is not  prohibited  by  Section
         6.02(b) and (iv)  liabilities or  obligations  that are not Material to
         the Acquiror.

         SECTION 5.08          No Material Adverse Effect; Conduct.
                             
                  (a) Since March 31, 1996,  no event (other than any event that
         is directly  attributable to the prospect of consummation of the Merger
         or is of general  application  to all or a  substantial  portion of the
         Acquiror's  industry and other than any event that is expressly subject
         to any other representation or warranty contained in Article V) has, to
         the Knowledge of the Acquiror,  occurred that, individually or together
         with other similar events,  could  reasonably be expected to constitute
         or cause a Material Adverse Effect on the Acquiror.

                  (b) Except as disclosed in the Acquiror's  Disclosure  Letter,
         during the period  from March 31,  1996 to the date of this  Agreement,
         neither the  Acquiror  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 (vii) of
         Section  6.02(b) or agreed in writing or  otherwise  during such period
         prior to the date of this Agreement to engage in any such conduct.

         SECTION 5.09 Title to  Properties.  The  Acquiror or its  Subsidiaries,
individually  or  together,  have  indefeasible  title to all of the  properties
reflected  in  the  Acquiror's   Consolidated  Balance  Sheet,  other  than  any
properties reflected in the Acquiror's  Consolidated Balance Sheet that (i) have
been sold or otherwise disposed of since the date of the Acquiror's Consolidated
Balance Sheet or (ii) are not, individually or in the aggregate, Material to the
Acquiror,  free and clear of Liens,  other than (x) Liens the existence of which
is reflected in the Acquiror's Consolidated Financial Statements,  (y) Permitted
Encumbrances  and (z) Liens  that,  individually  or in the  aggregate,  are not
Material to the  Acquiror.  The Acquiror or its  Subsidiaries,  individually  or
together,  hold under valid lease  agreements  all real and personal  properties
reflected  in the  Acquiror's  Consolidated  Balance  Sheet as being  held under
capitalized  leases,  and all real and personal  property that is subject to the
operating  leases  to which  reference  is made in the  notes to the  Acquiror's
Audited Consolidated  Financial  Statements,  and enjoy peaceful and undisturbed
possession of such properties  under such leases,  other than (i) any properties
as to which such leases have terminated in the ordinary course of business since
the date of the  Acquiror's  Consolidated  Balance Sheet and (ii) any properties
that, individually or in the aggregate, are not Material to the Acquiror.

         SECTION 5.10 Certain Obligations.  Except as set forth in Section 5.10
of the Acquiror's Disclosure Letter, all Material Contracts to which the 
Acquiror or any of its Subsidiaries

                          AGREEMENT AND PLAN OF MERGER
                                      -23-





is a party are in full force and effect,  the Acquiror or the  Subsidiary of the
Acquiror that is a party to or bound by such Material Contract has performed its
obligations thereunder to date and, to the Knowledge of the Acquiror, each other
party thereto has performed its obligations  thereunder to date,  other than any
failure  of any such  Material  Contract  to be in full  force and effect or any
nonperformance  thereof that could not reasonably be expected to have a Material
Adverse Effect on the Acquiror.

         SECTION 5.11 Permits; Compliance. To the Knowledge of the Acquiror, the
Acquiror and its  Subsidiaries  have  obtained all Permits that are necessary to
carry on their  businesses as currently  conducted,  except for any such Permits
that the failure to possess which,  individually or in the aggregate,  could not
reasonably be expected to have a Material  Adverse Effect on the Acquiror.  Such
Permits 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 Acquiror
and, to the Knowledge of the Acquiror, no suspension, revocation or cancellation
thereof has been threatened and there is no action,  proceeding or investigation
pending or threatened regarding suspension, revocation or cancellation of any of
such Permits,  except where the  suspension,  revocation or cancellation of such
Permits could not  reasonably be expected to have a Material  Adverse  Effect on
the Acquiror.

         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 Acquiror, threatened against the Acquiror or
any of its  Subsidiaries,  at law or in equity, in any Court or before or by any
Governmental  Authority,  except actions,  suits or proceedings that (a) are set
forth in Section 5.12 or any other Section of the Acquiror's  Disclosure  Letter
or (b), 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 Acquiror.  The Acquiror 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 Acquiror 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
Acquiror.

         SECTION 5.13               Employee Benefit Plans.

                  (a)  No  event  has  occurred  and,  to the  Knowledge  of the
         Acquiror,  there  exists  no  condition  or  set  of  circumstances  in
         connection with which the Acquiror or any of its Subsidiaries  could be
         subject to any  liability  under the terms of any Benefit  Plans of the
         Acquiror  or any of its  Subsidiaries  or,  with  respect  to any  such
         Benefit Plan,  under 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 Acquiror.

                  (b) As to any Current  Benefit  Plan  included in such Benefit
         Plans that is intended to be qualified  under  Section 401 of the Code,
         such Current Benefit Plan satisfies in form the

                          AGREEMENT AND PLAN OF MERGER
                                      -24-





         requirements  of such  Section  and  there has been no  termination  or
         partial  termination of such Current Benefit Plan within the meaning of
         Section 411(d)(3) of the Code.

                  (c) As to any Terminated Benefit Plan included in such Benefit
         Plans that is intended to have been qualified  under Section 401 of the
         Code, such Terminated  Benefit Plan received a favorable  determination
         letter from the IRS with respect to its termination.

                  (d) There are no actions,  suits or claims pending (other than
         routine  claims for  benefits)  or, to the  Knowledge of the  Acquiror,
         threatened  against,  or with respect to, any of such Benefit  Plans or
         their  assets  that could  reasonably  be  expected  to have a Material
         Adverse Effect on the Acquiror.

                  (e) As to any such Current Benefit Plan subject to Title IV of
         ERISA,  (i) there has been no event or  condition  which  presents  the
         material  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),  except as
         set forth in Section 5.13(e) of the Acquiror's  Disclosure  Letter,  no
         reportable event within the meaning of Section 4043 of ERISA (for which
         the disclosure requirements of Regulation section 2615.3 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.

                  (f)  Neither  the  Acquiror   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  or had an
         obligation to contribute, to a multiemployer plan within the meaning of
         Section 3(37) of ERISA.

         SECTION 5.14               Taxes.

                  (a)  Except  for such  matters  as  could  not  reasonably  be
         expected to have a Material Adverse Effect on the Acquiror, (i) all Tax
         Returns  that  are  required  to be  filed  by or with  respect  to the
         Acquiror or any of its  Subsidiaries  on or before the  Effective  Time
         have been or will be timely  filed,  (ii) all Taxes  that are due on or
         before  the  Effective  Time have been or will be timely  paid in full,
         (iii) all  withholding Tax  requirements  imposed on or with respect to
         the Acquiror or any of its Subsidiaries  have been or will be satisfied
         in full in all respects  and (iv) 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.


                          AGREEMENT AND PLAN OF MERGER
                                      -25-





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

         SECTION 5.15  Environmental  Matters.  Except for matters  disclosed in
Section 5.15 of the  Acquiror'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 Acquiror,  (a) the  properties,  operations and
activities  of the  Acquiror and its  Subsidiaries  are in  compliance  with all
applicable  Environmental  Laws; (b) the Acquiror and its  Subsidiaries  and the
properties and operations of the Acquiror and its  Subsidiaries  are not subject
to any  existing,  pending  or, to the  Knowledge  of the  Acquiror,  threatened
action,  suit,  investigation,  inquiry or  proceeding by or before any Court or
Governmental  Authority under any  Environmental  Law; (c) all Permits,  if any,
required  to be obtained  or filed by the  Acquiror  or any of its  Subsidiaries
under any  Environmental Law in connection with the business of the Acquiror and
its Subsidiaries have been obtained or filed and are valid and currently in full
force and  effect;  (d) there has been no  release of any  hazardous  substance,
pollutant  or  contaminant   into  the   environment  by  the  Acquiror  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 Acquiror and its Subsidiaries.

         SECTION 5.16  Pooling;  Tax Matters.  To the Knowledge of the Acquiror,
neither the Acquiror nor 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  generally
accepted  accounting  principles and the Regulations and  interpretations of the
Commission  or (b) the Merger  from  constituting  a  reorganization  within the
meaning of section 368(a) of the Code. Specifically:

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

                  (ii) The Acquiror  has no plan or  intention to (A)  liquidate
         the Surviving Corporation,  (B) merge the Surviving Corporation with or
         into another corporation, (C) sell or otherwise dispose of the stock of
         the   Surviving   Corporation,   (D)  cause  or  permit  the  Surviving
         Corporation to issue additional  shares of its capital stock that would
         result in the Acquiror's  losing control (within the meaning of section
         368(c) of the Code) of the Surviving  Corporation,  (E) 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 and  dispositions
         to a corporation controlled (within the

                          AGREEMENT AND PLAN OF MERGER
                                      -26-





         meaning of Section 368(c) of the Code) by the Surviving Corporation, or
         (F) reacquire any of the Acquiror Common Stock issued to the holders of
         Company Common Stock in the Merger.

                  (iii)  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.

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

                  (v) The  Acquiror  does not own,  nor has it owned  during the
         past five years, any shares of capital stock of the Company.

         SECTION  5.17  Affiliates.  Section 5.17 of the  Acquiror's  Disclosure
Letter contains a true and complete list of all Persons who, to the Knowledge of
the Acquiror, may be deemed to be Affiliates of the Acquiror,  excluding all its
Subsidiaries but including all directors and executive officers of the Acquiror.

         SECTION  5.18  Brokers.  Except  as set  forth in  Section  5.18 of the
Acquiror's Disclosure Letter, no broker, finder or investment banker (other than
Dillon, Read & Co., Inc.) 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 Acquiror.

         SECTION 5.19 Acquiring  Person.  Based on the  information set forth in
the  Company's  SEC Reports,  no holder of 5 percent 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  Acquiror's
Rights  Plan,  as a  result  of any of the  transactions  contemplated  by  this
Agreement.

         SECTION 5.20 Proposal to Acquire the Acquiror. There is not pending any
bona fide proposal received by the Acquiror regarding any merger,  consolidation
or  reorganization  of the  Acquiror  with any other Person as a result of which
less than a majority  of the  combined  voting  power of the  securities  of the
Person  surviving  such  transaction   would  be  held  immediately  after  such
transaction  by all the holders of Acquiror  Common Stock  immediately  prior to
such transaction and for which transaction financing, to the extent required, is
then committed.

         SECTION  5.21  Certain  Business  Practices.  As of the  date  of  this
Agreement,  neither the Acquiror or any of its  Subsidiaries  nor any  director,
officer,  employee or agent of the Acquiror or any of its  Subsidiaries  has (i)
used  any  funds  for  unlawful  contributions,  gifts,  entertainment  or other
unlawful payments relating to political activity, (ii) 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,

                          AGREEMENT AND PLAN OF MERGER
                                      -27-





(iii) 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 (iv) made any other unlawful payment, except
for any such  matters that could not  reasonably  be expected to have a Material
Adverse Effect on the Acquiror.

                                   ARTICLE VI

                                    COVENANTS

         SECTION  6.01  Affirmative  Covenants.  Each  of the  Company  and  the
Acquiror hereby covenants and agrees that,  prior to the Effective Time,  unless
otherwise  expressly  contem plated by this Agreement or consented to in writing
by the other, it will and will cause its Subsidiaries to:

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

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

                  (c)  maintain  and keep its  properties  and assets in as good
         repair and condition as at present,  ordinary  wear and tear  excepted,
         and maintain supplies and inventories in quantities consistent with its
         customary business practice; and

                  (d) 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 such party.

         SECTION 6.02               Negative Covenants.

                  (a) Except as set forth in Schedule  6.02(a) of the  Company's
         Disclosure  Letter,  the Company  covenants and agrees that,  except as
         expressly  contemplated by this Agreement or otherwise  consented to in
         writing  by the  Acquiror,  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) to increase the compensation payable to or to
                  become  payable to any director or executive  officer,  except
                  for increases in salary or wages payable or to become  payable
                  upon  promotion  to  an  office  having  greater   operational
                  responsibilities  or  otherwise  in  the  ordinary  course  of
                  business and consistent with

                          AGREEMENT AND PLAN OF MERGER
                                      -28-





                  past practice;  (B) to grant any severance or termination  pay
                  (other  than  pursuant to the normal  severance  policy of the
                  Company or its  Subsidiaries  as in effect on the date of this
                  Agreement) to, or enter into or amend in any material  respect
                  any employment or severance agreement, including any amendment
                  whatsoever to the  Employment  Agreement,  with, any director,
                  officer or employee, either individually or as part of a class
                  of similarly  situated  persons;  (C) to  establish,  adopt or
                  enter into any Benefit Plan or (D),  except as may be required
                  by applicable law and actions that are not  inconsistent  with
                  the provisions of Section 7.09 of this Agreement, to amend, or
                  to take any  other  actions  (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 a filing under  Section 13(d) or 14(d) of the
                  Exchange  Act with  respect to such party) with respect to any
                  of the Benefit Plans of such party;

                           (ii) to declare or to pay any dividend on, or to 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;

                           (iii) (A) to redeem, purchase or acquire, or to offer
                  to  purchase  or acquire,  any  outstanding  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  outstanding
                  options,  warrants or rights of any kind to acquire any shares
                  of capital stock of, or other equity interests in, 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 in exchange for capital contributions or loans to such
                  Subsidiary,  (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 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) to effect any reorganization or  recapitalization;  or (C)
                  to split,  combine or reclassify  any of the capital stock of,
                  or  other  equity  interests  in,  the  Company  or any of its
                  Subsidiaries  or to  issue  or to  authorize  or  propose  the
                  issuance of any other  securities in respect of, in lieu of or
                  in  substitution  for,  shares of such  capital  stock or such
                  equity interests,  other than intercompany transfers among the
                  Company  and  its  wholly-owned  Subsidiaries  or  among  such
                  wholly-owned Subsidiaries;


                          AGREEMENT AND PLAN OF MERGER
                                      -29-





                           (iv) (A) to offer, sell, issue or grant, or authorize
                  the  offering,  sale,  issuance  or  grant,  of any  shares of
                  capital stock of, or other equity interests in, any securities
                  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, 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 restricted  stock or stock bonus  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 or (3) any periodic
                  issuance of shares of Company Common Stock occurring  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,
                  (B),  except as set forth in Section  4.08(b) of the Company's
                  Disclosure  Letter, to amend or otherwise modify the terms (as
                  in effect on the date of this  Agreement)  of any  outstanding
                  options,  warrants  or rights the effect of which  shall be to
                  make such terms more favorable to the holders  thereof (except
                  as may be required by ERISA or other  applicable  law); (C) to
                  take any action to accelerate  the vesting of any  outstanding
                  Company Stock Options or (D) to grant any Lien with respect to
                  any shares of capital stock of, or other equity  interests in,
                  any Subsidiary of the Company;

                           (v)  except as set forth in  Section  4.08(b)  of the
                  Company's  Disclosure  Letter, to acquire or agree to acquire,
                  by merging or  consolidating  with,  by  purchasing  an equity
                  interest  in 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 the  purchase of assets from  suppliers or vendors in the
                  ordinary  course of business and consistent with past practice
                  and acquisitions of equity interests, assets and businesses in
                  an amount not to exceed $250,000 in the aggregate);

                           (vi)  except as set forth in  Section  4.08(b) of the
                  Company's  Disclosure  Letter,  to sell,  lease,  exchange  or
                  otherwise  dispose  of,  or to grant  any Lien  (other  than a
                  Permitted  Encumbrance)  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  acquired in an amount not to exceed
                  $250,000 in the aggregate;

                           (vii) to  adopt  any  amendments  to its  charter  or
                  bylaws or other organizational  documents that would alter the
                  terms of its capital stock or other

                          AGREEMENT AND PLAN OF MERGER
                                      -30-





                  equity  interests or would have a material  adverse  effect on
                  the ability of the Company to perform  its  obligations  under
                  this Agreement;

                           (viii) (A) to change any of its methods of accounting
                  in  effect at June 30,  1995,  except  as may be  required  to
                  comply with GAAP, (B) to make or rescind any election relating
                  to  Taxes  (other  than  any  election   which  must  be  made
                  periodically which is made consistent with past practice), (C)
                  to settle or compromise any claim, action,  suit,  litigation,
                  proceeding,  arbitration,  investigation, audit or controversy
                  relating  to Taxes  (except  where the cost to the Company and
                  its   Subsidiaries   of  such   settlements  or   compromises,
                  individually or in the aggregate, does not exceed $250,000) or
                  (D) to  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 ending June 30, 1995,  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;

                           (ix) to incur any  obligations  for borrowed money or
                  purchase  money   indebtedness   (other  than  purchase  money
                  indebtedness  as to which Liens may be granted as permitted by
                  Section 6.02(a)(vi)) that are Material to the Company, whether
                  or  not  evidenced  by a  note,  bond,  debenture  or  similar
                  instrument, except drawings under credit lines existing at the
                  date of this Agreement or otherwise in the ordinary  course of
                  business  consistent  with  past  practice  and  in  no  event
                  (including  purchase money  indebtedness as to which Liens may
                  be  granted  pursuant  to  Section  6.02(a)(vi))  in excess of
                  $250,000;

                           (x)  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;

                           (xi) enter into any Material  Contract with any third
                  Person  (other  than  customers  and  vendors in the  ordinary
                  course  of   business)   which   provides   for  an  exclusive
                  arrangement  with that third Person or is  substantially  more
                  restrictive  on the  Company  or any  of its  Subsidiaries  or
                  substantially  less  advantageous to the Company or any of its
                  Subsidiaries  than  Material  Contracts  existing  on the date
                  hereof; or

                           (xii) agree in writing or otherwise to do any of the
                  foregoing;

                  (b)  The  Acquiror   covenants  and  agrees  that,  except  as
         expressly  contemplated by this Agreement or 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:


                          AGREEMENT AND PLAN OF MERGER
                                      -31-





                           (i) to declare or to pay any  dividend on, or to make
                  any other  distribution in respect of,  outstanding  shares of
                  capital  stock,  except for (A)  dividends  by a  wholly-owned
                  Subsidiary of such party to such party or another wholly-owned
                  Subsidiary  of such  party,  (B) regular  quarterly  dividends
                  payable to holders of Acquiror Common Stock in the amounts per
                  share and at the  approximate  times paid during calendar year
                  1995 and (C) dividends  paid by partially  owned  subsidiaries
                  declared and paid in the ordinary course of business;

                           (ii) (A) to redeem,  purchase or acquire, or to offer
                  to  purchase  or acquire,  any  outstanding  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  outstanding
                  options,  warrants or rights of any kind to acquire any shares
                  of  capital  stock  of,  or other  equity  interests  in,  the
                  Acquiror or any of its  Subsidiaries  (other than (1) any such
                  acquisition  by  the  Acquiror  or  any  of  its  wholly-owned
                  Subsidiaries directly from any wholly-owned  Subsidiary of the
                  Acquiror in exchange  for  capital  contributions  or loans to
                  such Subsidiary, (2) any repurchase,  forfeiture or retirement
                  of shares of Acquiror  Common Stock or Acquiror  Stock Options
                  occurring  pursuant  to the terms (as in effect on the date of
                  this  Agreement) of any existing  Benefit Plan of the Acquiror
                  or any of its  Subsidiaries,  (3)  any  periodic  purchase  of
                  Acquiror  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  Benefit Plan of the Acquiror
                  or any of its Subsidiaries and (4) any redemption, purchase or
                  acquisition  by a  Subsidiary  that  could not  reasonably  be
                  expected to have a Material Adverse Effect on the Acquiror) or
                  (B) to effect any  reorganization  or  recapitalization  other
                  than any  reorganization  or  recapitalization  that could not
                  reasonably  be expected to have a material  adverse  effect on
                  the ability of the Acquiror to perform its  obligations  under
                  this Agreement;

                           (iii) to offer,  sell,  issue or grant,  or authorize
                  the  offering,  sale,  issuance  or  grant,  of any  shares of
                  capital stock of, or other equity interests in, any securities
                  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, the Acquiror
                  or any of its  Subsidiaries,  other than issuances of Acquiror
                  Common Stock (A) upon the exercise of Acquiror  Stock  Options
                  outstanding at the date of this  Agreement in accordance  with
                  the  terms   thereof  (as  in  effect  on  the  date  of  this
                  Agreement),  (B) upon the expiration of any restrictions  upon
                  issuance of any grant  existing at the date of this  Agreement
                  of restricted  stock or stock bonus  pursuant to the terms (as
                  in effect on the date of this  Agreement) of any Benefit Plans
                  of  the  Acquiror  or  any of  its  Subsidiaries,  or (C)  any
                  periodic  issuance  of  shares  of  Acquiror  Common  Stock or
                  Acquiror Stock Options  pursuant to the terms (as in effect on
                  the  date  of  this  Agreement)  of any  Benefit  Plan  of the
                  Acquiror  or any of its  Subsidiaries  or (D) any  issuance of
                  shares of Acquiror Common Stock for cash or in connection with
                  any acquisition of equity

                          AGREEMENT AND PLAN OF MERGER
                                      -32-





                  interests, assets or businesses and other than any such offer,
                  sale,  issuance or grant that could not reasonably be expected
                  to  have  a  Material  Adverse  Effect  on the  Acquiror  or a
                  material  adverse  effect on the  ability of the  Acquiror  to
                  perform its obligations under this Agreement;

                           (iv) to  acquire or agree to  acquire,  by merging or
                  consolidating  with, by purchasing an equity  interest in 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 the purchase of assets
                  from  suppliers or vendors in the ordinary  course of business
                  and consistent  with past practice and  acquisitions of equity
                  interests,  assets and businesses that could not reasonably be
                  expected to have a material  adverse  effect on the ability of
                  the Acquiror to perform its obligations under this Agreement);

                           (v) to sell, lease, exchange or otherwise dispose of,
                  or to grant any Lien (other than a Permitted Encumbrance) with
                  respect  to, any of the assets of the  Acquiror  or any of its
                  Subsidiaries  that are  Material to the  Acquiror,  except for
                  dispositions  of assets and inventories in the ordinary course
                  of business and consistent with past practice and dispositions
                  of assets and  incurrences  of Liens that could not reasonably
                  be expected to have a material  adverse  effect on the ability
                  of  the  Acquiror  to  perform  its  obligations   under  this
                  Agreement;

                           (vi) to adopt any amendments to its charter or bylaws
                  or other  organizational  documents that would alter the terms
                  of the Acquiror's Common Stock or could reasonably be expected
                  to  have a  material  adverse  effect  on the  ability  of the
                  Acquiror  or Newco  to  perform  its  obligations  under  this
                  Agreement;

                           (vii) to incur any  obligations for borrowed money or
                  purchase  money   indebtedness   (other  than  purchase  money
                  indebtedness  as to which Liens may be granted as permitted by
                  Section  6.02(b)(vi))  that  are  Material  to  the  Acquiror,
                  whether or not evidenced by a note, bond, debenture or similar
                  instrument, except drawings under credit lines existing at the
                  date of this Agreement,  obligations  incurred in the ordinary
                  course  of  business   consistent   with  past   practice  and
                  obligations  that could not  reasonably  be expected to have a
                  material  adverse  effect on the  ability of the  Acquiror  to
                  perform its obligations under this Agreement;

                           (viii) agree in writing or otherwise to do any of 
                  the foregoing;

         SECTION 6.03 No Solicitation. From the date of this Agreement until the
Effective Time or the  termination  of this Agreement  pursuant to Section 9.01,
the Company  agrees that it will not  initiate,  solicit or knowingly  encourage
(including by way of furnishing  nonpublic  information or assistance),  or take
any other action knowingly to facilitate, any inquiries or the making of any

                          AGREEMENT AND PLAN OF MERGER
                                      -33-





proposal  that  constitutes,  or may  reasonably  be  expected  to lead to,  any
Competing Transaction, or enter into discussions or negotiate with any Person in
furtherance of such inquiries or to obtain a Competing Transaction,  or agree to
or  endorse  any  Competing  Transaction,  or  authorize  or  permit  any of the
officers,  directors or employees of the Company or any of its  Subsidiaries  or
any  investment  banker,  financial  advisor,  attorney,   accountant  or  other
representative  retained by the Company or any of the Company's  Subsidiaries to
take any such action and, to the extent  permitted by contracts  existing at the
date of this  Agreement,  the Company shall promptly  notify the Acquiror of any
such inquiries and proposals  received by the Company or any of its Subsidiaries
or by any such  officer,  director,  investment  banker,  financial  advisor  or
attorney,  relating to any of such matters; provided,  however, that (i) nothing
contained  in this  Section  6.03 shall  prohibit  the Board of Directors of the
Company from (A)  furnishing  information  to, or entering into  discussions  or
negotiations  with,  any Persons in  connection  with an  unsolicited  bona fide
proposal in writing by such Person to acquire the Company  pursuant to a merger,
consolidation, share exchange, business combination or other similar transaction
or to acquire a  substantial  portion of the assets of the Company or any of its
Significant  Subsidiaries,  if,  and only to the  extent  that (1) the  Board of
Directors of the Company,  after considering the advice of outside legal counsel
to the  Company,  determines  in good faith that such action is required for the
Board of  Directors  of the  Company  to  comply  with its  fiduciary  duties to
stockholders  imposed by Law and (2) prior to furnishing such information to, or
entering into discussions or negotiations with, such Person the Company provides
written  notice to the Acquiror to the effect that it is furnishing  information
to, or entering into  discussions  or  negotiations  with,  such Person;  or (B)
complying  with Rule 14e-2  promulgated  under the Exchange Act with regard to a
Competing  Transaction  and (ii)  taking the actions  contemplated  by (i) above
under the  circumstances  described therein will not be deemed to be a breach of
this Agreement.

         SECTION 6.04               Access and Information.

                  (a)  Each  of  the   parties   shall,   and  shall  cause  its
         Subsidiaries  to,  (i)  afford  to the other  party  and its  officers,
         directors, employees,  accountants,  consultants, legal counsel, agents
         and  other  representatives   (collectively,   the   "Representatives")
         reasonable  access at reasonable  times upon reasonable prior notice to
         the  officers,   employees,  agents,  properties,   offices  and  other
         facilities  of such party and its  Subsidiaries  and to their books and
         records  and  (ii)  furnish   promptly  to  the  other  party  and  its
         Representatives such information  concerning the business,  properties,
         contracts,  records and  personnel  of such party and its  Subsidiaries
         (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) If this Agreement is terminated for any reason pursuant to
         Article IX hereof, a party that has received  information in accordance
         with Section  6.04(a),  within ten days after request therefor from the
         other  party,  shall  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 it and its  Representatives  pursuant to the  provisions  of Section
         6.04(a) and all internal memoranda, analyses, evaluations and other

                          AGREEMENT AND PLAN OF MERGER
                                      -34-





         similar material containing or reflecting any such information, in each
         case other than  information  available to the general  public  without
         restriction.

         SECTION 6.05 Confidentiality  Agreement. The parties shall comply with,
and shall cause their  respective  Representatives  to comply with, all of their
respective obligations under the Confidentiality Agreement.

                                   ARTICLE VII

                              ADDITIONAL AGREEMENTS

         SECTION 7.01 Meeting of Stockholders. 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 Acquiror in connection  therewith.  The Company shall use
all reasonable  efforts to solicit from  stockholders  of 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.

         SECTION 7.02     Registration Statement; Proxy Statements.

                  (a) As promptly as  practicable  after the  execution  of this
         Agreement,  the  Acquiror  Companies  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/prospectus  for  stockholders  of the Company  (the  "Company
         Proxy Statement/Prospectus"), in connection with the registration under
         the  Securities  Act of the  offering,  sale and  delivery  of Acquiror
         Common Stock to be issued in the Merger pursuant to this Agreement.  As
         promptly as  practicable  after the  execution of this  Agreement,  the
         Company  shall prepare and file with the  Commission a proxy  statement
         that will be the same as the Company Proxy Statement/Prospectus,  and a
         form  of  proxy,   in  connection   with  the  vote  of  the  Company's
         stockholders   with   respect  to  the  Merger  (such   Company   Proxy
         Statement/Prospectus,   together   with  any   amendments   thereof  or
         supplements  thereto,  in each case in the form or forms  mailed to the
         Company's stockholders,  being the "Company Proxy Statement").  Each of
         the Acquiror  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 Acquiror  Common  Stock in the Merger.
         Each of the  Acquiror  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.  As
         promptly as practicable  after the  Registration  Statement  shall have
         become

                          AGREEMENT AND PLAN OF MERGER
                                      -35-





         effective,  the Company shall mail the Company  Proxy  Statement to its
         stockholders  entitled  to  notice  of  and  to  vote  at  the  Company
         Stockholders'  Meeting.  The Company Proxy Statement shall,  subject to
         the exercise,  in good faith and with due care, by the Company's  Board
         of Directors of its fiduciary duty to the  stockholders of the Company,
         include the recommendation of the Company's Board of Directors in favor
         of the Merger.

                  (b) 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 Company Proxy  Statement to be sent to the  stockholders of the
         Company in connection with the Company Stockholders' Meeting shall not,
         at the date the Company Proxy Statement (or any supplement  thereto) is
         first mailed to stockholders,  at the time 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  Affiliates,  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 Company  Proxy  Statement,  the Company  shall
         promptly inform the Acquiror,  and the Company shall undertake to amend
         or supplement the Company Proxy  Statement  accordingly.  All documents
         that the  Company is  responsible  for filing  with the  Commission  in
         connection with the transactions contemplated herein shall comply as of
         the  time of  filing  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  information  supplied by the Acquiror  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.  The  information  supplied by the
         Acquiror  Companies for inclusion in the Company Proxy  Statement to be
         sent to the  stockholders of the Company in connection with the Company
         Stockholders'  Meeting  shall  not,  at  the  date  the  Company  Proxy
         Statement (or any supplement  thereto) is first mailed to stockholders,
         at the time 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 Acquiror or
         any of its Affiliates,  or to their  respective  officers or directors,
         should be  discovered  by the  Acquiror  that should be set forth in an
         amendment to the Registration  Statement or a supplement to the Company
         Proxy  Statement,  the Acquiror shall promptly inform the Company,  and
         the Acquiror shall undertake to amend or supplement the

                          AGREEMENT AND PLAN OF MERGER
                                      -36-





         Registration Statement or the prospectus contained therein accordingly.
         All documents that the Acquiror  Companies are  responsible  for filing
         with the Commission in connection  with the  transactions  contemplated
         hereby shall as of the time of filing 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
         or the  Company  Proxy  Statement  will be made by the  Acquiror or the
         Company  without the approval of the other party.  The Acquiror 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 Company Proxy
         Statement,  the suspension of the  qualification of the Acquiror 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 or the Company Proxy Statement,
         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 Acquiror shall each use all reasonable
         efforts (i) to take, or to cause to be taken,  all appropriate  action,
         and to do,  or to cause to be done,  all  things  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 Permits or Orders required
         to be obtained  or made by the  Acquiror 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 Acquiror) 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;  provided that the Acquiror 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 Acquiror 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
         Company Proxy  Statement or the  Registration  Statement) in connection
         with the transactions contemplated by this Agreement.


                          AGREEMENT AND PLAN OF MERGER
                                      -37-





                  (b) Each of the  Company  and the  Acquiror  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 actions, suits, claims,  investigations or proceedings commenced or
         threatened  in writing  against,  relating to or involving or otherwise
         affecting the Company,  the Acquiror or their  Subsidiaries that relate
         to the consummation of the Merger;  (iv) the occurrence of a default or
         event that, with notice or lapse of time or both, will become a default
         under any Material Contract of the Acquiror or Material Contract of the
         Company;  and  (v)  any  change  that is  reasonably  likely  to have a
         Material  Adverse Effect on the Company or the Acquiror or is likely to
         delay or impede the  ability of either the  Acquiror  or the Company to
         consummate  the  transactions  contemplated  by  this  Agreement  or to
         fulfill their respective obligations set forth herein.

                  (c) The Acquiror  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 Acquiror 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 Permit 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 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 an Material Adverse Effect on the
         Acquiror or the Company.

                           (d) (i) Each of the Company and  Acquiror  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,
                  (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 Acquiror 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

                          AGREEMENT AND PLAN OF MERGER
                                      -38-





                  adverse effect upon the Company and Acquiror, their respective
                  Subsidiaries,  and their respective businesses  resulting,  or
                  which  could  reasonably  be  expected  to  result  after  the
                  Effective Time, from the failure to obtain such consent.

         SECTION 7.04          Affiliates; Pooling; Tax Treatment.

                  (a) The Company shall use all reasonable  efforts to obtain an
         executed letter  agreement  substantially in the form of Annex B hereto
         from  (i) each  Person  identified  in  Section  4.19 of the  Company's
         Disclosure  Letter within 15 days  following the execution and delivery
         of this  Agreement  and (ii) from any  Person who may be deemed to have
         become an Affiliate of the Company after the date of this Agreement and
         prior to the Effective Time as soon as practicable after attaining such
         status.

                  (b) The Acquiror shall use all reasonable efforts to obtain an
         executed letter  agreement  substantially in the form of Annex C hereto
         from (i) each  Person  identified  in  Section  5.17 of the  Acquiror's
         Disclosure  Letter within 15 days  following the execution and delivery
         of this  Agreement  and (ii) from any  Person who may be deemed to have
         become an Affiliate of the  Acquiror  after the date of this  Agreement
         and prior to the Effective Time as soon as practicable  after attaining
         such status.

                  (c) The Acquiror  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
         which  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  which  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 Acquiror 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  Acquiror  shall  use all  reasonable
efforts to cause the shares of Acquiror  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. To the Knowledge of the

                          AGREEMENT AND PLAN OF MERGER
                                      -39-





Acquiror, there are no facts and circumstances that could reasonably be expected
to  preclude  the  Acquiror  Common  Stock to be issued in the Merger from being
approved for listing on the NYSE.

         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  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  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.

         SECTION 7.08               Comfort Letters.

                  (a) The  Company  shall use all  reasonable  efforts  to cause
         Price  Waterhouse  LLP to deliver a letter  dated as of the date of the
         Company Proxy Statement, and addressed to the Company and the Acquiror,
         in form and substance reasonably satisfactory to Acquiror 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 Company Proxy Statement.

                  (b) The  Acquiror  shall use all  reasonable  efforts to cause
         Arthur  Andersen  LLP to  deliver a letter  dated as of the date of the
         Company Proxy Statement, and addressed to the Acquiror 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 Company Proxy Statement.

         SECTION 7.09          Assumption of Obligations to Issue Stock.
                                  
                  (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 Surviving  Corporation  and become
         an option to purchase  that number of shares of Acquiror  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
         options 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.


                          AGREEMENT AND PLAN OF MERGER
                                      -40-





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

                  (c) The Acquiror shall take all corporate actions necessary to
         reserve for issuance a sufficient  number of shares of Acquiror  Common
         Stock for delivery upon  exercise of the Company Stock Options  assumed
         by Acquiror pursuant to Section 7.09(a) above.

                  (d) As promptly as practicable  after the Effective  Time, the
         Acquiror shall file one or more Registration Statements on Form S-8 (or
         any successor or other appropriate forms) with respect to the shares of
         Acquiror  Common Stock  subject to the Company  Stock Options 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  Option  Plans  providing  for the
         issuance or grant of Company  Stock  Options shall be assumed as of the
         Effective  Time  by the  Surviving  Corporation  with  such  amendments
         thereto as may be required to reflect the Merger.

         SECTION 7.10 Employee  Benefit  Plans.  Provided that the Company shall
not be  obligated  with  respect  to any  action  taken  by the  Company  or its
Subsidiaries  with respect to the Employee  Benefit  Plans of the Company or its
Subsidiaries  in violation of the  provisions of Section  6.02(a),  the Acquiror
hereby  agrees to  guarantee  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 all  employment
contracts  of the Company  listed on Section  4.10 of the  Company's  Disclosure
Letter, including,  except as amended by the Employment Agreement, the Change in
Control Agreements and the Restricted Stock Agreement,  including the provisions
of the Change in Control  Agreements  and the  Restricted  Stock  Agreement that
provide for the  acceleration of vesting  schedules  applicable to stock options
and restricted  stock awards granted  thereunder  upon the Effective Time (other
than the Company  Option Plans,  the Company Stock  Options  granted  thereunder
(other than those granted and  outstanding  on the date of this  Agreement)  and
incentive compensation plans of the Company and its Subsidiaries).  The Acquiror
shall cause the Surviving Corporation to maintain through December 31, 1997 (the
"Benefit  Continuation  Period"),  the  Benefit  Plans  of the  Company  and its
Subsidiaries  set forth in Section 4.13(a) of the Company's  Disclosure  Letter,
substantially as in effect  immediately  prior to the Effective Time (other than
the Company Option Plans,  the Company Stock Options granted  thereunder  (other
than those granted and  outstanding on the date of this Agreement) and incentive
compensation  plans of the  Company  and its  Subsidiaries).  From and after the
Effective Time,  including after the Benefit  Continuation  Period, the Acquiror
shall grant all  employees  of the Company and its  Subsidiaries  on the Closing
Date credit for all service (to the same extent as service  with the Acquiror or
any

                          AGREEMENT AND PLAN OF MERGER
                                      -41-





Subsidiary  of the  Acquiror is taken into  account  with  respect to  similarly
situated  employees of the Acquiror and the  Subsidiaries  of the Acquiror) with
the Company and any Subsidiary of the Company and their respective  predecessors
prior to the  Effective  Time under all  Benefit  Plans of the  Acquiror  or its
Subsidiaries  in which such employees shall become eligible to participate as if
such service with the Company or any  Subsidiary of the Company was service with
the Acquiror or any Subsidiary of the Acquiror, and, with respect to any medical
or dental benefit plan in which such employees  become  eligible to participate,
the   Acquiror   shall  waive  any   pre-existing   condition   exclusions   and
actively-at-work  requirements  (provided,  however,  that no such waiver  shall
apply  to a  pre-existing  condition  of  any  employee  of the  Company  or any
Subsidiary  of the Company  who was, as of the  Effective  Time,  excluded  from
participation  in a Benefit Plan by virtue of such  pre-existing  condition) and
provided that any covered  expenses  incurred on or before the Effective Time by
an employee or an employee's  covered  dependent shall be taken into account for
purposes  of  satisfying   applicable   deductible,   coinsurance   and  maximum
out-of-pocket  provisions  after the  Effective  Time to the same extent as such
expenses are taken into account for the benefit of similarly  situated employees
of the Acquiror and the Subsidiaries of the Acquiror.

         SECTION 7.11          Indemnification of Directors and Officers.
                              
                  (a) Until six years from the Effective  Time, the  certificate
         of incorporation  and bylaws of the Surviving  Corporation as in effect
         immediately  after the Effective Time shall not be amended to reduce or
         limit the  rights of  indemnity  afforded  to the  present  and  former
         directors  and officers of the Company  thereunder or as to the ability
         of the Company to indemnify such Persons,  or to hinder,  delay or make
         more  difficult the exercise of such rights of indemnity or the ability
         to indemnify.  The Surviving Corporation will at all times exercise the
         powers granted to it by its  certificate of  incorporation,  its bylaws
         and  applicable  law to  indemnify to the fullest  extent  possible the
         present and former  directors,  officers,  employees  and agents of the
         Company  against claims made against them arising from their service in
         such capacities prior to the Effective Time.

                  (b) If any claim or claims shall,  subsequent to the Effective
         Time and within six years  thereafter,  be made  against any present or
         former director,  officer, employee or agent of the Company based on or
         arising out of the services of such Person prior to the Effective  Time
         in the  capacity  of such Person as a  director,  officer,  employee or
         agent of the Company,  the  provisions of this  subsection  (a) of this
         Section  respecting the certificate of incorporation  and bylaws of the
         Surviving   Corporation  shall  continue  in  effect  until  the  final
         disposition of all such claims.

                  (c) The Acquiror  hereby  agrees after the  Effective  Time to
         guarantee  the payment of the Surviving  Corporation's  indemnification
         obligations  described in Section 7.11(a) up to an amount determined as
         of the Effective  Time equal to (i) the fair market value of any assets
         of the Surviving Corporation or any of its Subsidiaries  distributed to
         the  Acquiror  or any of its  Subsidiaries  (other  than the  Surviving
         Corporation  and its  Subsidiaries),  minus (ii) any liabilities of the
         Surviving  Corporation  or  any  of  its  Subsidiaries  assumed  by the
         Acquiror  or  any  of  its  Subsidiaries   (other  than  the  Surviving
         Corporation and its Subsidiaries), minus (iii) the fair market value of
         any assets of the Acquiror or any of its

                          AGREEMENT AND PLAN OF MERGER
                                      -42-





         Subsidiaries   (other   than   the   Surviving   Corporation   and  its
         Subsidiaries)  contributed  to the Surviving  Corporation or any of its
         Subsidiaries  and plus (iv) any  liabilities  of the Acquiror or any of
         its  Subsidiaries  (other  than  the  Surviving   Corporation  and  its
         Subsidiaries)  assumed  by  the  Surviving  Corporation  or  any of its
         Subsidiaries.

                  (d) Notwithstanding subsection (a), (b) or (c) of this Section
         7.11, the Acquiror and the Surviving Corporation shall be released from
         the obligations imposed by such subsection if the Acquiror shall assume
         the obligations of the Surviving Corporation thereunder by operation of
         Law or  otherwise.  Notwithstanding  anything  to the  contrary in this
         Section 7.11, neither the Acquiror nor the Surviving  Corporation shall
         be liable for any  settlement  effected  without its  written  consent,
         which shall not be unreasonably withheld.

                  (e) The Acquiror  shall cause to be maintained in effect until
         six years from the  Effective  Time the current  policies of directors'
         and  officers'  liability  insurance  maintained  by  the  Company  (or
         substitute policies providing at least the same coverage and limits and
         containing   terms  and  conditions   that  are  not  materially   less
         advantageous) with respect to claims arising from facts or events which
         occurred before the Effective Time; provided, however, that in no event
         shall the Acquiror or the Surviving  Corporation  be required to expend
         more  than 200  percent  of the  current  annual  premiums  paid by the
         Company for such insurance; provided, further, that, if the Acquiror or
         the Surviving  Corporation is unable to obtain insurance for any period
         for 200 percent of the current annual premiums,  then the obligation of
         the Acquiror and the Surviving  Corporation pursuant hereto shall be to
         obtain the best coverage  reasonably  available under the circumstances
         subject to the foregoing limitations on premiums.

                  (f) The provisions of this Section 7.11 are intended to be for
         the benefit of, and shall be  enforceable  by, each Person  entitled to
         indemnification  hereunder  and the heirs and  representatives  of such
         Person.

                  (g) The Acquiror shall not permit the Surviving Corporation to
         merge or  consolidate  with  any  other  Person  unless  the  Surviving
         Corporation shall ensure that the surviving or resulting entity assumes
         the  obligations  imposed by subsections  (a), (b), (c) and (e) of this
         Section.

         SECTION  7.12  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  Acquiror).  The  Acquiror  shall take all action  necessary to
cause Newco to perform its  obligations  under this  Agreement and to consummate
the Merger on the terms and conditions set forth in this Agreement.

         SECTION 7.13 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 (i) the occurrence or  nonoccurrence of any event the occurrence
or  nonoccurrence  of  which  would be  likely  to cause  any  condition  to the
obligations of such party to effect the Merger and the other transactions

                          AGREEMENT AND PLAN OF MERGER
                                      -43-





contemplated  by this Agreement not to be satisfied and (ii) the failure of such
party to  comply  with any  covenant  or  agreement  to be  complied  with by it
pursuant to this  Agreement  which would be likely to result in any condition to
the  obligations  of such 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  7.13 shall cure any breach of any  representation  or
warranty of such party  contained in this Agreement or otherwise limit or affect
the remedies available hereunder to the party receiving such notice.

         SECTION 7.14 Stratworks Divestiture. The Company shall divest itself on
or  prior  to  the  Closing  Date  of any  ownership  interest  in the  software
application   called   "Stratworks"   through  the  sale  thereof  to  a  Person
unaffiliated  with  either  the  Company  or the  Acquiror  on terms  reasonably
satisfactory to the Acquiror.

         SECTION 7.15 Change in Control Agreements. Prior to the Effective Time,
the Company  shall  agree,  and shall use all  reasonable  efforts to cause each
Person who is a party to one of the Change in Control  Agreements  to agree,  in
writing  that (a) for all purposes of such Change in Control  Agreements,  Newco
shall be  substituted  for the Company as the  successor to the Company,  except
that,  for  purposes of each of the Change in Control  Agreements,  a "Change in
Control"  shall be deemed to have  occurred  as a result of the  Merger,  (b) no
payments will be required  pursuant to Section 5 of any of the Change in Control
Agreements solely as a result of the Merger and (c) Section  4(b)(ii)(A) of each
of the Change in Control  Agreements will be amended and restated to read in its
entirety as follows: "Failure to elect or reelect the Executive to the office of
the Company which the Executive held immediately prior to a Change in Control;".
Such  agreements  shall be reasonably  satisfactory in form and substance to the
Acquiror.

                                  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 Effective Time 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:

                  (a)   Effectiveness   of  the  Registration   Statement.   The
         Registration  Statement  shall  have  been  declared  effective  by the
         Commission  under the  Securities  Act.  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.


                          AGREEMENT AND PLAN OF MERGER
                                      -44-





                  (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)  which is in
         effect  and  which  has the  effect of making  the  Merger  illegal  or
         otherwise prohibiting consummation of the Merger.

                  (d) HSR Act.  The applicable waiting period under the HSR Act
         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  Acquiror's  Disclosure
         Letter and the Company's  Disclosure Letter, shall have expired or been
         terminated.

                  (f) Pooling of  Interests.  The Acquiror and the Company shall
         have been advised in writing by Arthur Andersen LLP as of the date upon
         which the Effective Time is to occur to the effect that such firm knows
         of no reason why the Merger cannot be treated for financial  accounting
         purposes as a pooling of interests.

         SECTION  8.02  Additional  Conditions  to  Obligations  of the Acquiror
Companies.  The  obligations of the Acquiror  Companies to effect the Merger and
the other transactions  contemplated hereby shall be subject to the satisfaction
at or prior to the  Effective  Time of the following  conditions,  any or all of
which may be  waived  by the  Acquiror  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 shall be true and correct in all material  respects  (without
         duplication of any  materiality  exception  contained in any individual
         representation and warranty) as of the date of this Agreement and as of
         the  Effective  Time as though  made  again on and as of the  Effective
         Time. The Acquiror  Companies  shall have received a certificate of the
         President  and the Chief  Financial  Officer of the Company,  dated the
         date of the Effective Time, to such effect.

                  (b) Agreements and Covenants. The Company shall have performed
         or  complied  with  all  agreements  and  covenants  required  by  this
         Agreement  to be  performed  or complied  with by it on or prior to the
         Effective   Time.  The  Acquiror   Companies   shall  have  received  a
         certificate  of the  President and the Chief  Financial  Officer of the
         Company, dated the date of the Effective Time, to such effect.

                  (c) Tax Opinion.  The Acquiror shall have received the opinion
         dated on or prior to the effective date of the  Registration  Statement
         of  Vinson  &  Elkins  LLP to the  effect  that  (i)  the  Merger  will
         constitute a reorganization  under section 368(a) of the Code, (ii) the
         Acquiror,  the  Company  and  Newco  will  each  be  a  party  to  that
         reorganization,  and  (iii) no gain or loss will be  recognized  by the
         Acquiror, the Company or Newco by reason of the Merger.


                          AGREEMENT AND PLAN OF MERGER
                                      -45-





         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
Effective Time 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 Acquiror Companies  contained in
         this  Agreement  shall be true and  correct  in all  material  respects
         (without  duplication  of any  materiality  exception  contained in any
         individual  representation  and  warranty)  as  of  the  date  of  this
         Agreement and as of the  Effective  Time as though made again on and as
         of the Effective Time. The Company shall have received a certificate of
         the President and the Chief  Financial  Officer of each of the Acquiror
         Companies, dated the date of the Effective Time, to such effect.

                  (b)  Agreements and Covenants.  The Acquiror  Companies  shall
         have performed or complied with all  agreements and covenants  required
         by this  Agreement to be performed or complied with by them on or prior
         to the Effective Time. The Company shall have received a certificate of
         the President and the Chief  Financial  Officer of each of the Acquiror
         Companies, dated the date of the Effective Time, to such effect.

                  (c) Tax Opinion.  The Company  shall have received the opinion
         dated on or prior to the effective date of the  Registration  Statement
         of  Winstead  Sechrest & Minick  P.C. to the effect that (i) the Merger
         will constitute a reorganization under section 368(a) of the Code, (ii)
         the  Acquiror,  the  Company  and  Newco  will  each be a party to that
         reorganization,  and  (iii) no gain or loss will be  recognized  by the
         stockholders  of the  Company  upon the  receipt of shares of  Acquiror
         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.

                  (d)  Investment  Banker's  Opinion.  The  Company  shall  have
         received,  on the date of mailing of the Company Proxy Statement to the
         holders of Company Common Stock, a written  opinion from Morgan Stanley
         & Co.  Incorporated,  dated the date of such  mailing,  confirming  the
         opinion to which reference is made in Section 4.21.

                  (e) NYSE  Listing.  The shares of Acquiror  Common Stock to be
         issued  pursuant to the Merger  shall have been  approved  for listing,
         subject to official notice of issuance, on the NYSE.

                                   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:

                          AGREEMENT AND PLAN OF MERGER
                                      -46-





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

                  (b) by  the  Acquiror,  upon  a  breach  of  any  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  (a  "Terminating   Company
         Breach");  provided that, if such Terminating Company Breach is curable
         by the Company  through the exercise of  reasonable  efforts and for so
         long as the Company continues to exercise such reasonable efforts,  the
         Acquiror may not terminate this Agreement under this Section 9.01(b);

                  (c) by the  Company,  upon breach of any covenant or agreement
         on the part of the Acquiror  Companies set forth in this Agreement,  or
         if any  representation or warranty of the Acquiror 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  (a
         "Terminating  Acquiror  Breach");  provided  that, if such  Terminating
         Acquiror  Breach is  curable  by the  Acquiror  Companies  through  the
         exercise of their  reasonable  efforts and for so long as the  Acquiror
         Companies continue to exercise such reasonable efforts, the Company may
         not terminate this Agreement under this Section 9.01(c);

                  (d) by either  Acquiror or the Company,  if there shall be any
         Order which is final and  nonappealable  preventing 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 Acquiror or the Company, if the Merger shall not
         have been consummated before December 31, 1996; provided, however, that
         this Agreement may be extended by written notice of either  Acquiror or
         the Company to a date not later than  February 28, 1997,  if the Merger
         shall  not have been  consummated  as a result  of the  Company  or the
         Acquiror  Companies  having  failed by December 31, 1996 to receive all
         required  Permits and Orders with  respect to the Merger or as a result
         of the entering of an Order by a Court or Governmental Authority;

                  (f) by either Acquiror or the Company, if this Agreement shall
         fail to receive the  requisite  vote for  approval  and adoption by the
         stockholders of the Company at the Company Stockholders' Meeting;

                  (g) by the  Acquiror,  if (i) the  Board of  Directors  of the
         Company  withdraws,  modifies  or changes  its  recommendation  of this
         Agreement or the Merger in a manner materially  adverse to the Acquiror
         Companies  or shall have  resolved  to do any of the  foregoing  or the
         Board  of  Directors  of the  Company  shall  have  recommended  to the
         stockholders of the Company any Competing Transaction or resolved to do
         so; (ii) a tender offer or exchange offer for 50 percent or more of the
         outstanding  shares of Company  Common Stock is commenced and the Board
         of Directors of the Company,  within 10 Business Days after such tender
         offer or exchange  offer is so  commenced,  either  fails to  recommend
         against acceptance of such tender or exchange offer by its stockholders
         or takes

                          AGREEMENT AND PLAN OF MERGER
                                      -47-





         no position  with respect to the  acceptance of such tender or exchange
         offer by its  stockholders;  or (iii) any person  shall  have  acquired
         beneficial  ownership or the right to acquire beneficial  ownership of,
         or any  "group"  (as such term is defined  under  Section  13(d) of the
         Exchange Act and the Regulations  promulgated  thereunder),  shall have
         been  formed  which  beneficially  owns,  or has the  right to  acquire
         beneficial  ownership  of, 50 percent  or more of the then  outstanding
         shares of capital stock of the Company; or

                  (h) by the Company, if the Company accepts a Superior Proposal
         and makes the payment required  pursuant to Section  9.05(c)(i) of this
         Agreement  and pays the expenses  for which the Company is  responsible
         under Section 9.05(a) of this Agreement.

         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 Acquiror 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 breach of this Agreement.

         SECTION 9.03  Amendment.  This  Agreement may be amended by the parties
hereto by action taken by or on behalf of 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, no amendment may be made which
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.  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
Acquiror Companies shall be deemed to be one party.

         SECTION 9.05          Fees, Expenses and Other Payments.
                         
                  (a) Except as provided in Section  9.05(c) of this  Agreement,
         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 Acquiror Companies as a group
         and the Company for all Expenses related to printing, filing and

                          AGREEMENT AND PLAN OF MERGER
                                      -48-





         mailing the Registration  Statement and the Company Proxy Statement and
         all Commission and other regulatory  filing fees incurred in connection
         with the  Registration  Statement and the Company Proxy Statement shall
         be one-half each; and provided,  further, that the Acquiror may, at its
         option,  pay any  Expenses of the Company  that are solely and directly
         related to the Merger.

                           (b) (i) The Company  agrees  that,  if (A) either (1)
                  this Agreement is terminated  pursuant to Section 9.01(f) and,
                  after  the date of this  Agreement  and  prior to the  Company
                  Stockholders'   Meeting,  the  Company  shall  have  furnished
                  information  to, or entered into  discussions or  negotiations
                  with,  any  Person  with  respect to a  Competing  Transaction
                  involving the Company or any of its Subsidiaries and the Board
                  of  Directors  of the Company  shall not have  reaffirmed  its
                  favorable  recommendation  to its stockholders with respect to
                  the transactions contemplated by this Agreement by the time of
                  the Company Stockholders' Meeting; (2) the Acquiror terminates
                  this Agreement  pursuant to Section 9.01(g)(i) or 9.01(g)(ii);
                  (3) the Company  terminates this Agreement pursuant to Section
                  9.01(h);  or (4) within  twelve  months  after the date of the
                  termination of this Agreement,  any Person or "group" (as such
                  term is defined  under  Section  13(d) of the Exchange Act and
                  the  Regulations  promulgated  thereunder),   other  than  the
                  Acquiror, its Subsidiaries or Affiliates,  shall have acquired
                  beneficial  ownership,  by tender  offer or exchange  offer or
                  otherwise,  of 50 percent or more of the  outstanding  Company
                  Common Stock and (x) the value of the  consideration per share
                  received   by  the   stockholders   of  the  Company  in  such
                  transaction  shall have been  higher on a per share basis than
                  the  consideration  payable to the stockholders of the Company
                  under  this  Agreement  on a  per  share  basis  or  (y)  such
                  transaction   shall  be  on  more   favorable   terms  to  the
                  stockholders of the Company than the Merger;  then (B) in each
                  such case the Company shall pay to the Acquiror $18 million.

                           (ii) The Company  agrees  that,  if (A) the  Acquiror
                  shall terminate this Agreement pursuant to Section 9.01(b) and
                  such  termination  is the result of an  intentional or willful
                  breach   by   the   Company   of  any   agreement,   covenant,
                  representation  or  warranty  herein and (B) either (1) within
                  twelve  months after such  termination  of this  Agreement the
                  Company  shall  have  entered  into  a  definitive   agreement
                  providing  for a  Business  Combination  with  any  Person  or
                  "group" (as such term is defined  under  Section  13(d) of the
                  Exchange  Act and  the  Regulations  promulgated  thereunder),
                  other than Acquiror, its Subsidiaries or Affiliates,  to which
                  the Company shall have furnished information or with which the
                  Company  shall  have  had any  contacts  or  entered  into any
                  discussions or negotiations relating to a Business Combination
                  at any time during the period commencing eighteen months prior
                  to the date of this Agreement  through the date of termination
                  of this Agreement and contemplating the payment to the Company
                  or its  stockholders,  as the  case may be,  of  consideration
                  having a higher value in the aggregate than the  consideration
                  payable to the Company's  stockholders under this Agreement or
                  such  transaction  shall  be on more  favorable  terms  to the
                  stockholders  of the Company than the Merger and such Business
                  Combination is thereafter consummated or (2) within twelve

                          AGREEMENT AND PLAN OF MERGER
                                      -49-





                  months  after such  termination  of this  Agreement,  any such
                  Person or group shall have acquired beneficial  ownership,  by
                  tender offer or exchange offer or otherwise,  of 50 percent or
                  more of the  outstanding  Company Common Stock and as a result
                  the Company's  stockholders shall have received  consideration
                  having a higher  value per share  than the  consideration  per
                  share  payable  to  the  Company's   stockholders  under  this
                  Agreement or such transaction shall be on more favorable terms
                  to the  stockholders  of the Company than the Merger,  then in
                  such case the Company shall pay to the Acquiror $18 million.

                           (iii) For purposes of this Section 9.05(b), the value
                  of the consideration received by the Company's stockholders in
                  connection with a transaction  described in clause  (b)(i)(A),
                  (b)(ii)(B)(1)  or  (b)(ii)(B)(2) of this Section 9.05 shall be
                  determined as of the date the consideration becomes payable to
                  such stockholders,  and the value of the consideration payable
                  to such stockholders under this Agreement shall be $31.857 per
                  share.

                  (c) Any  payment  required  to be  made  pursuant  to  Section
         9.05(b) of this Agreement  shall be made to the Acquiror not later than
         two Business Days after delivery to the Company of notice of demand for
         payment,  and shall be made by wire transfer of  immediately  available
         funds to an account  designated by the Acquiror in the notice of demand
         for payment delivered pursuant to this Section 9.05(c).

                                    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  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,  warranties  and  agreements in this
         Agreement shall terminate at the Effective Time or upon the termination
         of this  Agreement  pursuant to Article IX, except that the  agreements
         set forth in Articles II and III and Sections 7.09, 7.10 and 7.11 shall
         survive the Effective Time and those set forth in Sections  6.05,  9.02
         and 9.05 and Article X hereof shall survive termination.

         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 upon receipt, 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:

                          AGREEMENT AND PLAN OF MERGER
                                      -50-





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

                           Halliburton Company
                           3600 Lincoln Plaza
                           500 North Akard Street
                           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

                  (b)      If to the Company, to:

                           Landmark Graphics Corporation
                           15150 Memorial Drive
                           Houston, Texas  77079-4304
                           Attention:  Patti Massaro, General Counsel
                                         and Corporate Secretary
                         Telecopier No.: (713) 560-1383

                  with a copy to:

                           Winstead Sechrest & Minick P.C.                      
                           5400 Renaissance Tower                               
                           1201 Elm Street                             
                           Dallas, Texas  75270                                 
                           Attention:  Robert E. Crawford, Jr.                 
                           Telecopier No.:  (214) 745-5390
  
                           Shearman & Sterling
                           599 Lexington Avenue
                           New York, New York  10022
                           Attention:  David W. Heleniak
                           Telecopier No.:  (212) 848-7179
                           
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.

                          AGREEMENT AND PLAN OF MERGER
                                      -51-






         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, the Acquiror's  Disclosure Letter and
the Confidentiality  Agreement) 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.

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

         SECTION 10.07 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto,  and,  other than pursuant
to Sections 7.09, 7.10 and 7.11 hereof,  nothing in this  Agreement,  express or
implied, 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.

         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 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 to, and not exclusive to, 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 Texas,  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 Counterparts.  This Agreement may be executed in multiple
counterparts, and by the different parties hereto in separate counterparts, each
of which when 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
                                      -52-





         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:___________________________
                                          Lester L. Coleman
                                          Executive Vice President 
                                            and General Counsel


                                       HALLIBURTON ACQ. COMPANY



                                       By:____________________________
                                          Lester L. Coleman
                                          President


                                       LANDMARK GRAPHICS CORPORATION



                                       By:____________________________
                                          Robert P. Peebler
                                          President and Chief Executive Officer



                          AGREEMENT AND PLAN OF MERGER
                                      -53-





                                                                       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:

         "Acquiror" shall mean Halliburton Company, a Delaware corporation,  and
its successors from time to time.

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

         "Acquiror  Companies"  shall have the meaning  ascribed to such term in
the first paragraph of this Agreement.

         "Acquiror's Audited Consolidated  Financial  Statements" shall mean the
consolidated  balance sheets of the Acquiror and its Subsidiaries as of December
31,  1994 and  December  31,  1995 and the related  consolidated  statements  of
operations and cash flows for the fiscal years ended December 31, 1993, 1994 and
1995,  together with the notes thereto,  all as audited by Arthur  Andersen LLP,
independent  accountants,  under their report with respect thereto dated January
23, 1996 and included in the Acquiror's  Annual Report on Form 10-K for the year
ended December 31, 1995 filed with the Commission.

         "Acquiror's  Consolidated  Balance  Sheet" shall mean the  consolidated
balance sheet of the Acquiror as of December 31, 1995 included in the Acquiror's
Audited Consolidated Financial Statements.

         "Acquiror's   Consolidated   Financial   Statements"   shall  mean  the
Acquiror's  Audited   Consolidated   Financial  Statements  and  the  Acquiror's
Unaudited Consolidated Financial Statements.

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

         "Acquiror's Unaudited Consolidated Financial Statements" shall mean the
unaudited  consolidated balance sheet of the Acquiror and its Subsidiaries as of
March 31, 1996 and the related  consolidated  statements of operations  and cash
flows for the fiscal quarters ended March 31, 1995 and March 31, 1996,  together
with the notes thereto, included in the Acquiror's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 filed with the Commission.

         "Acquiror's  Rights  Agreement"  shall  mean  the  Second  Amended  and
Restated Rights  Agreement dated December 15, 1995 between  Halliburton  Company
and Chemical Mellon Shareholder Services LLC, as Rights Agent.


                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-1





         "Acquiror  Option Plan" shall mean the  Halliburton  Company 1993 Stock
and Long-Term Incentive Plan.

         "Acquiror Stock Options" shall mean stock options  granted  pursuant to
the Acquiror Option Plan.

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

         "Agreement"  shall  mean  the  Agreement  and Plan of  Merger  made and
entered  into as of  June  30,  1996  among  Acquiror,  Newco  and the  Company,
including any  amendments  thereto and each Annex  (including  this Annex A) and
Schedule thereto  (including the Acquiror's  Disclosure Letter and the Company's
Disclosure Letter).

         "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 or other
stock plan  (whether  qualified  or  nonqualified),  and any bonus or  incentive
compensation  plan  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.

         "Business  Combination" shall mean (a) a merger,  consolidation,  share
exchange, business combination or similar transaction involving the Company; (b)
a sale, lease, exchange,  transfer or other disposition of 50 percent or more of
the assets of the Company and its  Subsidiaries,  taken as a whole,  in a single
transaction or series of  transactions;  or (c) the acquisition by a Person,  or
any "group" (as such term is defined under Section 13(d) of the Exchange Act and
the Regulations promulgated thereunder), of beneficial ownership or the right to
acquire  beneficial  ownership of 50 percent or more of the outstanding  Company
Common Stock, whether by tender offer or exchange offer or otherwise.

         "Business Day" means any day other than a day on which banks in the 
State of Texas are authorized or obligated to be closed;

         "Certificate of Merger" shall have the meaning ascribed to such term 
in Section 2.04.


                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-2





         "Change in Control  Agreements"  shall  mean  those  certain  Change in
Control  Agreements dated as of October 19, 1995 between the Company and certain
officers of the Company.

         "Closing" shall mean a meeting,  which shall be held in accordance with
Section 3.03, of all Persons interested in the transactions  contemplated by the
Agreement  at  which  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.

         "Commission" shall mean the Securities and Exchange Commission.

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

         "Company"  shall  mean  Landmark  Graphics   Corporation,   a  Delaware
corporation, and its successors from time to time.

         "Company Common Stock" shall mean the common stock, par value $0.05 per
share, of the Company.

         "Company  Option  Plans" shall mean the Landmark  Graphics  Corporation
1984  Incentive  Stock  Option  Plan,  the Landmark  Graphics  Corporation  1985
Incentive Stock Option Plan, the Landmark Graphics Corporation 1987 Nonqualified
Stock Option Plan, the Landmark Graphics  Corporation 1989 Flexible Stock Option
Plan,  the Landmark  Graphics  Corporation  Directors'  Stock  Option Plan,  the
Landmark  Graphics  Corporation  Consultants'  Stock Option  Plan,  the Landmark
Graphics  Corporation 1990 Employee Stock Option Plan and the Landmark  Graphics
Corporation 1994 Flexible Incentive Plan.

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

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

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

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


                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-3





         "Company's  Consolidated  Balance  Sheet"  shall mean the  consolidated
balance  sheet of the  Company as of June 30,  1995  included  in the  Company's
Audited Consolidated Financial Statements.

         "Company's Audited  Consolidated  Financial  Statements" shall mean the
consolidated  balance sheets of the Company and its  Subsidiaries as of June 30,
1994 and June 30, 1995 and the related  consolidated and combined  statements of
operations  and cash flows for the fiscal  years ended June 30,  1993,  1994 and
1995,  together with the notes thereto,  all as audited by Price Waterhouse LLP,
independent accountants,  under their report with respect thereto dated July 26,
1995 and  included in the  Company's  Annual  Report on Form 10-K for the fiscal
year ended June 30, 1995 filed with the Commission.

         "Company's  Consolidated Financial Statements" shall mean the Company's
Audited   Consolidated   Financial   Statements  and  the  Company's   Unaudited
Consolidated Financial Statements.

         "Company's Disclosure Letter" shall mean a letter of even date herewith
delivered  by the  Company  to the  Acquiror  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  Rights  Agreement" shall mean that certain Rights Agreement
dated as of September 1, 1995 between the Company and Chemical  Bank,  as Rights
Agent.

         "Company's Unaudited  Consolidated Financial Statements" shall mean the
unaudited  consolidated  balance sheet of the Company and its Subsidiaries as of
March 31, 1996 and the related  consolidated  statements of operations  and cash
flows for the three months  periods and nine months periods ended March 31, 1995
and March 31, 1996,  together with the notes thereto,  included in the Company's
Quarterly  Report on Form 10-Q for the  quarter  ended March 31, 1996 filed with
the Commission.

         "Competing  Transaction"  shall mean any merger,  consolidation,  share
exchange,  business combination or similar transaction  involving the Company 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  Company or any of its  Significant
Subsidiaries, other than the transactions contemplated by this Agreement.

         "Confidentiality  Agreement"  shall mean that  certain  confidentiality
agreement between the Acquiror and the Company dated June 18, 1996.

         "Constituent Corporations" shall mean the Company and Newco.

         "control" (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct

                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-4





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  Benefit  Plans" shall mean Benefit Plans that are  sponsored,
maintained,  or contributed to by a specified  Person 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.

         "Employment Agreement" shall mean that certain Executive Employment 
Agreement of even date herewith between the Company and Robert P. Peebler.

         "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
CERCLA,  such broader meaning shall apply within the  jurisdiction of such state
or locality,  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.

         "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.


                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-5





         "Exchange  Agent" shall mean a bank or trust company having a net worth
in excess of $100 million  designated  and  appointed  to act in the  capacities
required thereof under Section 3.02.

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

         "Expenses" shall mean all reasonable  out-of-pocket expenses (including
all 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 and the Company 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 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 or agency 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 Regulations promulgated thereunder.

         "IRS" shall mean the Internal Revenue Service.

         "Knowledge"  shall  mean,  with  respect to either  the  Company or the
Acquiror,  the actual  knowledge  (without  duty of  inquiry)  of any  executive
officer of such party.

         "Law" shall mean all laws, statutes,  ordinances and Regulations of the
United States,  any foreign  country,  or any domestic or foreign state, and any
political  subdivision  or agency  thereof,  including  all  decisions of Courts
having the effect of Law in each such jurisdiction.

         "Lien" shall mean any mortgage, pledge, security interest, 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 Uniform Commercial Code of any jurisdiction.

                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-6






         "Material" shall mean material to the condition  (financial and other),
results of operations or business of a specified Person and its Subsidiaries, if
any, taken as a whole;  provided,  however, that, as used in this definition the
word  "material"  shall have the meaning  accorded  thereto in Section 11 of the
Securities Act.

         "Material Adverse Effect" shall mean any change or effect that would be
material  and adverse to the  consolidated  business,  condition  (financial  or
other),  operations,  performance or properties  (but excluding any  outstanding
capital stock or other  securities) of a specified Person and its  Subsidiaries,
if any, taken as a whole;  provided,  however,  that, as used in this definition
the word "material" shall have the meaning accorded thereto in Section 11 of the
Securities Act.

         "Material  Contract"  shall  mean  each  contract,   lease,  indenture,
agreement,  arrangement or  understanding  to which a specified Person or any of
its  Subsidiaries is a party or to which any of the assets or operations of such
specified  Person or any of its  Subsidiaries  is subject that is of a type that
would be required to be included as an exhibit to a  registration  statement  on
Form S-1 pursuant,  in the case of the Company,  to Paragraph  (2), (4), (10) or
(14) of Item 601(b) and, in the case of the Acquiror,  to Paragraph  (10) (other
than clause (iii) thereof) of Item 601(b) of Regulation S-K under the Securities
Act if such a  registration  statement were to be filed by such Person under the
Securities Act on the date of determination. Notwithstanding the foregoing, such
term shall, in the case of the Company,  include any of the following contracts,
agreements or commitments, whether oral or written:

                  (1) Any collective bargaining agreement or other agreement 
         with any labor union;

                  (2) any  agreement,  contract  or  commitment  with any  other
         Person, other than any agency or representation entered in the ordinary
         course of business,  containing  any  covenant  limiting the freedom of
         such specified  Person or any of its Subsidiaries to engage in any line
         of business or to compete with any other Person;

                  (3) any partnership, joint venture or profit sharing agreement
         with any Person,  which  partnership,  joint venture or profit  sharing
         agreement  generated revenues during its most recently completed fiscal
         year of $100,000 or more;

                  (4)  any  employment  or  consulting  agreement,  contract  or
         commitment  between  the  Company  or any of its  Subsidiaries  and any
         employee,  officer or director thereof (i) having more than one year to
         run from the date hereof,  (ii)  providing  for an obligation to pay or
         accrue  compensation  of $100,000 or more per annum or (iii)  providing
         for the payment or accrual of any additional compensation upon a change
         in  control  of such  Person  or any of its  Subsidiaries  or upon  any
         termination of such employment or consulting  relationship  following a
         change in control of such Person or any of its Subsidiaries; and

                  (5) any  agency or  representation  agreement  with any Person
         which  is not  terminable  by the  Company  or one of its  Subsidiaries
         without penalty upon not more than one year's notice.

                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-7





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

         "NASD" shall mean the National Association of Securities Dealers, Inc.

         "Newco" shall mean Halliburton Acq. Company, a Delaware corporation 
and a wholly-owned Subsidiary of the Acquiror.

         "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.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation.

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

         "Permitted Encumbrances" shall mean the following:

                  (1)  liens  for  taxes,  assessments  and  other  governmental
         charges not delinquent or which are currently  being  contested in good
         faith by  appropriate  proceedings;  provided that, in the latter case,
         the specified Person or one of its Subsidiaries shall have set aside on
         its books adequate reserves with respect thereto;

                  (2) mechanics' and materialmen's liens not filed of record and
         similar  charges  not  delinquent  or which are filed of record but are
         being  contested  in good faith by  appropriate  proceedings;  provided
         that,  in  the  latter  case,  the  specified  Person  or  one  of  its
         Subsidiaries  shall have set aside on its books adequate  reserves with
         respect thereto;

                  (3) liens in respect of  judgments  or awards with  respect to
         which the  specified  Person or one of its  Subsidiaries  shall in good
         faith currently be prosecuting an appeal or other proceeding for review
         and with  respect to which such  Person or such  Subsidiary  shall have
         secured a stay of execution  pending such appeal or such proceeding for
         review;  provided that, such Person or such  Subsidiary  shall have set
         aside on its books adequate reserves with respect thereto;

                  (4) easements,  leases, reservations or other rights of others
         in, or minor defects and irregularities in title to, property or assets
         of a specified Person or any of its  Subsidiaries;  provided that, such
         easements, leases,  reservations,  rights, defects or irregularities do
         not  materially  impair  the use of such  property  or  assets  for the
         purposes for which they are held; and


                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-8





                  (5) any lien or  privilege  vested in any lessor,  licensor or
         permittor for rent or other obligations of a specified Person or any of
         its Subsidiaries  thereunder so long as the payment of such rent or the
         performance of such obligations is not delinquent.

         "Person"  shall  mean 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 Governmental Authority.

         "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.

         "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).

         "Restricted  Stock Agreement" shall mean that certain  Restricted Stock
Agreement listed on Item 29 of Section 4.10 of the Company's Disclosure Letter.

         "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 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 Regulations promulgated thereunder.

         "Significant  Subsidiary"  means  any  Subsidiary  of  the  Company  or
Acquiror, as the case may be, that would constitute a Significant  Subsidiary of
such party within the meaning of Rule 1-02 of Regulation S-X of the Commission.

         "Software"  shall mean the following  computer  applications  programs:
2DVIEW,  3D  Knowledge  Integrator  (3DKI),   3DVIEW,  Argus,  Aries,  Automate,
BatchZAP!,   Blitz,  CIMS,  Compass,   Continuity  Tool,  Contouring  Assistant,
DESKTOP-PVT,  DESKTOP-VIP,  DIMS, DUAL, DXF (AutoCAD),  EarthCube, EnerGIS, Fast
Track,  GeoLink,  GES, GMS, GRIDGENR,  Geo-data Works,  Jaguar,  LeaseMap,  LGR,
LogEdit, MIMIC+, MultiWell,  OASIIS, OpenWorks,  OpenWorks Development Kit, PAL,
PARALLEL VIP, PetroWorks,  PlotView,  PostStack,  POWAR, Profile, ProMAX, ProMAX
VSP, QUIK+,  QUIKDIG+,  QUIKWELL+,  RAYMAP+,  RAVE,  Resin-Plus,  RMS, SeisCube,
Seismic Data Check,  SeisTie,  SeisVision,  SeisWell,  SeisWorks,  SigmaView 2D,
SigmaView 3D, SIVA+, SuperSeisWorks, SurfCube, StrataModel SGM, StrataModel GTM,
StratWorks,  SynTool,  TDQ,  TOW  CS,  VESPA,  VIP-COMP,  VIP-CORE,  VIP-Encore,
VIP-THERM, VoxCube, Wellbore Manager, Wellplan, Z3D, Z-Cap, and Z-Map Plus.


                          AGREEMENT AND PLAN OF MERGER
                                    ANNEX A-9




         "Stock Option Agreement" shall mean that certain Stock Option Agreement
of even date herewith between the Acquiror and the Company.

         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 percent 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.

         "Superior  Proposal"  means a bona fide proposal made by a third Person
to acquire  the Company  pursuant  to a tender or exchange  offer for all of the
outstanding  capital  stock  of  the  Company,  a  merger,  a  sale  of  all  or
substantially  all of the Company's  assets or otherwise on terms that the Board
of Directors  of the Company  determines  in its good faith  judgment to be more
favorable to the  Company's  stockholders  than the Merger (based on the written
opinion,  with  only  customary  qualifications,  of the  Company's  independent
financial  advisor  that  the  value  of  the  consideration  to  the  Company's
stockholders   provided  for  in  such   proposal   exceeds  the  value  of  the
consideration to the Company's  stockholders provided for in the Merger) and for
which financing, to the extent required, is then committed or which, in the good
faith  judgment of the Board of Directors  of the Company  (based on the written
advice of the Company's independent financial advisor), is reasonably capable of
being obtained by such third Person.

         "Surviving Corporation" shall mean Newco as the corporation surviving 
the Merger.

         "Tax Returns"  shall mean all returns and reports of or with respect to
any Tax which are  required to be filed by or with respect to the Company or any
of its Subsidiaries.

         "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   Benefit   Plans"  shall  mean  Benefit  Plans  that  were
sponsored,  maintained,  or contributed  to by a specified  Person 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.

         "Voting  Agreement"  shall mean that certain  Voting  Agreement of even
date herewith between the Acquiror and S. Rutt Bridges and Barbara Ann Bridges.




VEHOU05:17945.1

                          AGREEMENT AND PLAN OF MERGER
                                   ANNEX A-10



                                                                        ANNEX B
                                       Landmark Graphics Corporation Affiliates


                              AFFILIATE'S AGREEMENT

                                     [Date]


Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
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 Landmark Graphics Corporation,
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  ("Acquiror"),  Halliburton  Acq.  Company,  a newly formed Delaware
corporation and a wholly-owned Subsidiary of Acquiror ("Newco"), and the Company
dated as of June 30, 1996 (the "Merger  Agreement"),  providing for, among other
things,  the  merger of the  Company  with and into Newco  (the  "Merger"),  the
undersigned  will be entitled  to receive  shares of  Acquiror  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 Acquiror'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 make any sale,  transfer or other  disposition of
(i)  Company  Common  Stock  during the period  from the date  hereof  until the
earlier of the Effective

                                     ANNEX B
                                       -1-





Time and the termination of the Merger Agreement (which period, if the Merger is
consummated,  will be greater than thirty (30) days), (ii) Acquiror Common Stock
received by the  undersigned  pursuant to the Merger or  otherwise  owned by the
undersigned until such time as financial statements that include at least thirty
(30) days of  combined  operations  of the Company  and the  Acquiror  after the
Merger shall have been  publicly  reported,  unless the  undersigned  shall have
delivered  to  the  Acquiror,   prior  to  any  such  sale,  transfer  or  other
disposition,  a written  opinion from Arthur  Andersen LLP,  independent  public
accountants for the Acquiror,  or a written no-action letter from the accounting
staff  of the  Commission,  in  either  case in form  and  substance  reasonably
satisfactory  to the Acquiror,  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)
Acquiror  Common  Stock  received by the  undersigned  pursuant to the Merger in
violation of the Securities Act or the Regulations  thereunder.  The undersigned
has been advised that the offering,  sale and delivery of the shares of Acquiror
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 Acquiror 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 Acquiror Common Stock with respect to the Acquiror 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 Acquiror 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
Acquiror an opinion of counsel, in form and substance reasonably satisfactory to
the  Acquiror,  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 publicly offered, sold and delivered
by the transferee thereof without compliance with the registration provisions of
the Securities Act.

         By its execution  hereof,  the Acquiror agrees that it will, as long as
the undersigned owns any Acquiror Common Stock to be received by the undersigned
pursuant to the Merger, take all

                                     ANNEX B
                                       -2-




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 __________, 1996

HALLIBURTON COMPANY


By:
         Name:
         Title:




VEHOU05:17948.1

                                     ANNEX B
                                       -3-


                                                                         ANNEX C
                                                  Halliburton Company Affiliates


                              AFFILIATE'S AGREEMENT

                                     [Date]


Halliburton Company
3600 Lincoln Plaza
500 North Akard Street
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  "Acquiror"),   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 Acquiror,  Halliburton Acq. Company, a newly formed Delaware
corporation and a wholly-owned  Subsidiary of Acquiror  ("Newco"),  and Landmark
Graphics  Corporation,  a Delaware  Corporation (the "Company") dated as of June
___, 1996 (the "Merger  Agreement"),  providing  for,  among other  things,  the
merger of the Company with and into Newco (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 Acquiror'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 make any sale,  transfer or other  disposition of
(i)  Company  Common  Stock  during the period  from the date  hereof  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) Acquiror Common Stock owned by the undersigned until such time as financial
statements that include at least thirty (30) days of combined operations of the

                                     ANNEX C
                                       -1-




Company and the  Acquiror  after the Merger shall have been  publicly  reported,
unless the undersigned  shall have delivered to the Acquiror,  prior to any such
sale, transfer or other disposition, a written opinion from Arthur Andersen LLP,
independent public  accountants for the Acquiror,  or a written no-action letter
from  the  accounting  staff  of the  Commission,  in  either  case in form  and
substance reasonably satisfactory to the Acquiror, 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.

         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 __________, 1996

HALLIBURTON COMPANY


By:__________________________
         Name:
         Title:



VEHOU05:17949.1

                                     ANNEX C
                                       -2-









                             STOCK OPTION AGREEMENT


         STOCK OPTION AGREEMENT (the "Agreement"), dated as of June 30, 1996, by
and  between  Landmark  Graphics   Corporation,   a  Delaware  corporation  (the
"Company"), and Halliburton Company, a Delaware corporation (the "Grantee").

                                    Recitals

         The  Grantee,  the Company and  Halliburton  Acq.  Company,  a Delaware
corporation and a wholly-owned  subsidiary of the Grantee  ("Newco")  propose to
enter into an  Agreement  and Plan of Merger  dated as of the date  hereof  (the
"Merger Agreement") providing for, among other things, the merger (the "Merger")
of the Company with and into Newco which shall be the surviving corporation.

         The Board of Directors of the Company has  recommended  the approval of
the Merger Agreement and the Merger by the holders of Company Common Stock.

         As a condition and  inducement to the  Grantee's  willingness  to enter
into the Merger Agreement, the Grantee has requested that the Company agree, and
the Company has agreed, to grant the Grantee the Option (as defined below).

         NOW,  THEREFORE,  in  consideration of the foregoing and the respective
representations,  warranties,  covenants and  agreements set forth herein and in
the Merger Agreement, the Company and the Grantee agree as follows:

                  1. Capitalized  Terms.  Capitalized terms used but not defined
         herein are defined in the Merger Agreement and are used herein with the
         same meanings as ascribed to them therein; provided,  however, that, as
         used in this  Agreement,  "Person" shall have the meaning  specified in
         Sections 3(a)(9) and 13(d)(3) of the Exchange Act.

                  2. Grant of Option.  Subject to the terms and  conditions  set
         forth herein,  the Company  hereby grants to the Grantee an irrevocable
         option (the  "Option") to purchase,  out of the authorized but unissued
         Company  Common  Stock,  a number of shares equal to up to 15.0% of the
         shares of Company  Common Stock  outstanding  as of the date hereof (as
         adjusted as set forth  herein)  (the  "Option  Shares"),  at a purchase
         price of $31.857 per Option Share (the "Exercise Price").

                  3. Term.  The Option shall be exercisable and shall remain in
         full force and effect until the earliest to occur of (i) the Effective
         Time, (ii) the first anniversary of the receipt by Grantee of written 
         notice from the Company of the occurrence of an Exercise 
                             STOCK OPTION AGREEMENT
                                       -1-





         Event (as  hereinafter  defined)  or (iii)  termination  of the  Merger
         Agreement  prior to the occurrence of an Exercise  Event, at which time
         the Option shall  terminate  and be of no further  force or effect (the
         "Term").  The rights and  obligations set forth in Sections 7, 8, 9 and
         10 shall not terminate when the right to exercise the Option terminates
         as set forth  herein,  but shall  extend to such time as is provided in
         those Sections.

                  4. Exercise of Option.

                           (a) The Grantee may exercise the Option,  in whole or
                  in part,  at any time and from  time to time  during  the Term
                  following the occurrence of an Exercise Event. Notwithstanding
                  the  expiration of the Term,  the Grantee shall be entitled to
                  purchase  those  Option  Shares  with  respect to which it has
                  exercised the Option in accordance with the terms hereof prior
                  to the expiration of the Term.

                           (b) As used herein, an "Exercise Event" shall mean 
                  any of the following events:

                                    (i) any Person  (other  than the  Grantee or
                           any  subsidiary of the Grantee)  shall have commenced
                           (as such  term is  defined  in Rule  14d-2  under the
                           Exchange  Act) or  shall  have  filed a  registration
                           statement  under the Securities Act with respect to a
                           tender offer or exchange offer to purchase any shares
                           of Company Common Stock such that, upon  consummation
                           of such offer,  such Person  would own or control 25%
                           or more of the then outstanding Company Common Stock;

                                    (ii) the  Company or any  subsidiary  of the
                           Company shall have authorized,  recommended, proposed
                           or publicly  announced  an  intention  to  authorize,
                           recommend or propose,  or entered  into, an agreement
                           with  any  Person  (other  than  the  Grantee  or any
                           subsidiary  of the  Grantee)  to (A) effect a merger,
                           consolidation,  share exchange or similar transaction
                           involving  the  Company  or any  of  its  Significant
                           Subsidiaries, (B) sell, lease or otherwise dispose of
                           assets   of   the   Company   or   its   subsidiaries
                           representing 15% or more of the  consolidated  assets
                           of the  Company  and its  subsidiaries  or (C) issue,
                           sell or  otherwise  dispose of  (including  by way of
                           merger, consolidation,  share exchange or any similar
                           transaction)   securities  (or  options,   rights  or
                           warrants to purchase, or securities  convertible into
                           or exchangeable  for, such  securities)  representing
                           15% or more of the voting power of the Company or any
                           of its Significant Subsidiaries;

                                    (iii) any Person  (other than the Grantee or
                           any Subsidiary of the Grantee or the Company or, in a
                           fiduciary  capacity,  any of its Subsidiaries)  shall
                           have,  subsequent  to the  date  of  this  Agreement,
                           acquired  beneficial   ownership  (as  such  term  is
                           defined in Rule 13d-3 under the Exchange Act)

                             STOCK OPTION AGREEMENT
                                       -2-





                           or the right to acquire  beneficial  ownership of, or
                           any  "Group"  (as  such  term is  defined  under  the
                           Exchange   Act)   shall   have  been   formed   which
                           beneficially   owns  or  has  the  right  to  acquire
                           beneficial  ownership  of,  25% or more  of the  then
                           outstanding Company Common Stock; or

                                    (iv) the  holders  of Company  Common  Stock
                           shall not have  approved the Merger  Agreement at the
                           meeting of such  stockholders held for the purpose of
                           voting on the Merger  Agreement or such meeting shall
                           not have been  called as required by the terms of the
                           Merger Agreement or shall have been canceled, in each
                           case after any Person  (other than the Grantee or any
                           subsidiary  of  the  Grantee)   shall  have  publicly
                           announced  a  proposal,   or  publicly  disclosed  an
                           intention  to  make  a  proposal,  to  engage  in any
                           transaction  described in clauses (i),  (ii) or (iii)
                           above, or the Company's Board of Directors shall have
                           withdrawn or modified in a manner materially  adverse
                           to the Grantee the  recommendation  of the  Company's
                           Board of  Directors  that the  holders of the Company
                           Common  Stock  approve the Merger  Agreement  and the
                           Merger.

                  (c) If the  Grantee  wishes to exercise  the Option,  it shall
         send a written  notice (the date of which being  herein  referred to as
         the "Notice  Date") to the Company  specifying  (i) the total number of
         Option Shares it intends to purchase pursuant to such exercise and (ii)
         a place and a date not earlier than three (3)  Business  Days nor later
         than fifteen (15) Business Days from the Notice Date for the closing of
         such purchase (the "Closing  Date");  provided,  however,  that, if the
         closing of the purchase and sale pursuant to the Option (the "Closing")
         cannot be consummated by reason of any  applicable  Law,  Regulation or
         Order,  the period of time that  otherwise  would run  pursuant to this
         sentence  shall run instead from the date on which such  restriction on
         consummation has expired or been terminated;  and,  provided,  further,
         that,  without  limiting the  foregoing,  if prior  notification  to or
         approval of any  Governmental  Authority is required in connection with
         such  purchase,  the Grantee  and,  if  applicable,  the Company  shall
         promptly file the required notice or application for approval and shall
         expeditiously  process the same (and the Company shall  cooperate  with
         the  Grantee in the filing of any such  notice or  application  and the
         obtaining of any such approval),  and the period of time that otherwise
         would run pursuant to this sentence  shall run instead from the date on
         which,  as the case may be, (i) any  required  notification  period has
         expired or been terminated or (ii) such approval has been obtained and,
         in either event, any requisite waiting period has passed.

                  (d)  Notwithstanding  Section  4(c),  in no  event  shall  any
         Closing Date be more than eighteen (18) months after the related Notice
         Date,  and, if the Closing Date shall not have occurred within eighteen
         (18) months after the related  Notice Date due to the failure to obtain
         any required approval of a Governmental Authority,  the exercise of the
         Option effected on the Notice Date shall be deemed to have expired.  If
         (i) the  Grantee  receives  official  notice  that an  approval  of any
         Governmental Authority required for the purchase of

                             STOCK OPTION AGREEMENT
                                       -3-





         Option  Shares  will not be issued or  granted  or (ii) a Closing  Date
         shall not have occurred  within  eighteen (18) months after the related
         Notice Date due to the failure to obtain any such required  approval of
         a Governmental Authority, the Grantee shall be entitled to exercise its
         right as set forth in Section 6 or to exercise the Option in connection
         with the  resale  of the  Company  Common  Stock  or  other  securities
         pursuant  to a  registration  statement  as  provided in Section 8. The
         provisions of this Section 4 and Section 5 shall apply with appropriate
         adjustments to any such exercise.

                  5.       Payment and Delivery of Certificates.

                           (a) On each Closing  Date,  the Grantee  shall pay to
                  the Company in immediately available funds by wire transfer to
                  a bank  account  designated  by the Company an amount equal to
                  the  Exercise  Price  multiplied  by the  Option  Shares to be
                  purchased on such Closing Date.

                           (b) At each Closing, simultaneously with the delivery
                  of  immediately  available  funds as provided in Section 5(a),
                  the  Company  shall  deliver to the Grantee a  certificate  or
                  certificates representing the Option Shares to be purchased at
                  such  Closing,  which  Option  Shares  shall be fully paid and
                  nonassessable  and free and clear of all  Liens,  and  Grantee
                  shall  deliver to the Company its written  agreement  that the
                  Grantee  will not offer to sell or  otherwise  dispose of such
                  Option Shares in violation of applicable Law or the provisions
                  of this Agreement.

                           (c)  Certificates  for the Option Shares delivered at
                  each Closing shall be endorsed with a restrictive legend which
                  shall read substantially as follows:

                           THE  TRANSFER  OF  THE  STOCK   REPRESENTED  BY  THIS
                           CERTIFICATE IS SUBJECT TO RESTRICTIONS  ARISING UNDER
                           THE SECURITIES ACT OF 1933, AS AMENDED,  AND PURSUANT
                           TO THE TERMS OF A STOCK OPTION  AGREEMENT DATED AS OF
                           JUNE  30,  1996.  A COPY  OF SUCH  AGREEMENT  WILL BE
                           PROVIDED  TO THE HOLDER  HEREOF  WITHOUT  CHARGE UPON
                           RECEIPT BY THE COMPANY OF A WRITTEN REQUEST THEREFOR.

                  A new certificate or  certificates  evidencing the same number
                  of shares of the  Company  Common  Stock will be issued to the
                  Grantee in lieu of the  certificate  bearing the above legend,
                  which new certificate  shall not bear such legend,  insofar as
                  it applies to the  Securities  Act, if the Grantee  shall have
                  delivered  to the Company a copy of a letter from the staff of
                  the Commission, or an opinion of counsel in form and substance
                  reasonably satisfactory to the Company and its counsel, to the
                  effect that such legend is not  required  for  purposes of the
                  Securities Act.


                             STOCK OPTION AGREEMENT
                                       -4-





                  6.       Adjustment Upon Changes in Capitalization, Etc.

                           (a) In the event of any change in the Company  Common
                  Stock by reason of a stock  dividend,  split-up,  combination,
                  recapitalization,  exchange of shares or similar  transaction,
                  the type and  number of shares or  securities  subject  to the
                  Option,  and the Exercise  Price  therefor,  shall be adjusted
                  appropriately,  and  proper  provision  shall  be  made in the
                  agreements  governing  such  transaction,  so that the Grantee
                  shall  receive upon  exercise of the Option the same class and
                  number of outstanding  shares or other  securities or property
                  that  Grantee  would have  received  in respect of the Company
                  Common  Stock if the  Option  had been  exercised  immediately
                  prior  to  such  event,  or  the  record  date  therefor,   as
                  applicable.  If any  additional  shares of the Company  Common
                  Stock are issued after the date of this Agreement  (other than
                  pursuant to an event  described in the first  sentence of this
                  Section  6(a)),  the Company shall give written notice thereof
                  to the Grantee and, at the Grantee's option exercisable within
                  ten (10)  Business  Days after the  Grantee's  receipt of such
                  notice,  the  number  of shares of the  Company  Common  Stock
                  subject to the Option  shall be adjusted  so that,  after such
                  issuance,  it  equals  15.0% of the  number  of  shares of the
                  Company  Common  Stock then  issued and  outstanding,  so that
                  shares issued  pursuant to the Option and shares  remaining to
                  be issued pursuant to the Option will, in the aggregate, equal
                  15% of the then  issued  and  outstanding  shares  of  Company
                  Common Stock; provided,  however, that the number of shares of
                  the Company  Common Stock  subject to the Option shall only be
                  increased  to  the  extent  the  Company  then  has  available
                  authorized but unissued and  unreserved  shares of the Company
                  Common Stock.

                           (b) If the Company  shall enter into an agreement (i)
                  to  consolidate  or  exchange  shares  with or merge  into any
                  Person, other than the Grantee or one of its subsidiaries, and
                  shall not be the continuing or surviving  corporation or other
                  Person of such  consolidation  or  merger,  (ii) to permit any
                  Person, other than the Grantee or one of its Subsidiaries,  to
                  merge into the Company and the Company shall be the continuing
                  or surviving corporation, but, in connection with such merger,
                  the then  outstanding  shares of Company Common Stock shall be
                  changed into or exchanged for stock or other securities of the
                  Company or any other Person or cash or any other property,  or
                  the shares of Company  Common  stock  outstanding  immediately
                  before such merger shall after such merger represent less than
                  50%  of  the  outstanding   common  shares  and  common  share
                  equivalents  of  the  Company  or  (iii)  to  sell,  lease  or
                  otherwise  transfer all or substantially  all of its assets to
                  any Person, other than the Grantee or one of its Subsidiaries,
                  then,  and in each such case,  the  agreement  governing  such
                  transaction  shall make proper  provisions  so that the Option
                  shall,  upon the consummation of any such transaction and upon
                  the terms and conditions set forth herein,  be converted into,
                  or exchanged  for, an option,  at the election of the Grantee,
                  of any of the following Persons (as designated by the Grantee)
                  (A) the Acquiring  Corporation (as hereinafter  defined),  (B)
                  any Person that controls the

                             STOCK OPTION AGREEMENT
                                       -5-





                  Acquiring Corporation or (C) in the case of a merger described
                  in clause (ii), the Company.

                           (c)  For  purposes  of  this  Section  6,  "Acquiring
                  Corporation" means (i) the continuing or surviving corporation
                  or other Person of a  consolidation,  share exchange or merger
                  with the Company (if other than the Company), (ii) the Company
                  in a merger  or share  exchange  in which the  Company  is the
                  continuing or surviving  corporation  and (iii) the transferee
                  of all or  substantially  all of  the  Company's  assets.  The
                  provisions  of  Sections  7, 8, 9, 10 and 11 shall  apply with
                  appropriate adjustments to any securities for which the Option
                  becomes exercisable pursuant to this Section 6.

                  7.       Repurchase at the Option of Grantee.

                           (a) Unless the Option shall have theretofore  expired
                  or been terminated in accordance with the terms hereof, at the
                  request of the Grantee  made at any time  commencing  upon the
                  first   occurrence  of  a  Repurchase  Event  (as  hereinafter
                  defined) and ending on the first anniversary thereof (the "Put
                  Period"),   the  Company  (or  any  successor  thereto)  shall
                  repurchase  from the  Grantee  (i) that  portion of the Option
                  that then remains  unexercised and (ii) all (but not less than
                  all) the  shares of  Company  Common  Stock  purchased  by the
                  Grantee  pursuant hereto and with respect to which the Grantee
                  then has beneficial  ownership.  The date on which the Grantee
                  exercises  its rights  under this  Section 7 is referred to as
                  the "Request Date." Such  repurchase  shall be at an aggregate
                  price (the "Section 7 Repurchase  Consideration") equal to the
                  sum of:

                                    (i) the  aggregate  exercise  price paid for
                           any shares of Company Common Stock acquired  pursuant
                           to the Option and with  respect to which the  Grantee
                           then has beneficial ownership;

                                    (ii) the excess,  if any, of the  Applicable
                           Price (as defined  below),  over the  Exercise  Price
                           (subject  to  adjustment  pursuant to Section 6) paid
                           (or,  in the case of Option  Shares  with  respect to
                           which the Option has been  exercised  but the Closing
                           Date has not  occurred,  payable)  by the Grantee for
                           each share of Company  Common  Stock with  respect to
                           which the Option has been  exercised and with respect
                           to which the Grantee then has  beneficial  ownership,
                           multiplied by the number of such shares; and

                                    (iii)  the  excess,   if  any,  of  (x)  the
                           Applicable  Price for each  share of  Company  Common
                           Stock  over  (y)  the  Exercise   Price  (subject  to
                           adjustment  pursuant to Section 6), multiplied by the
                           number of shares of Company Common Stock with respect
                           to which the Option has not been exercised.

                             STOCK OPTION AGREEMENT
                                       -6-







                           (b) If the Grantee  exercises  its rights  under this
                  Section 7, the Company  shall,  within ten (10)  Business Days
                  after  the  Request   Date,   pay  the  Section  7  Repurchase
                  Consideration  to the Grantee in immediately  available funds,
                  and the Grantee shall  surrender to the Company the Option and
                  the certificates evidencing the shares of Company Common Stock
                  purchased  thereunder  with  respect to which the Grantee then
                  has beneficial ownership, and the Grantee shall warrant to the
                  Company  that,  immediately  prior to the  repurchase  thereof
                  pursuant  to this  Section 7, the  Grantee had sole record and
                  beneficial  ownership of such shares and that such shares were
                  then held free and clear of all Liens.

                           (c) For purposes of this  Agreement,  the "Applicable
                  Price' means the highest of (i) the highest price per share at
                  which a tender or  exchange  offer has been made for shares of
                  Company  Common Stock after the date hereof and on or prior to
                  the Request  Date,  (ii) the price per share to be paid by any
                  third Person for shares of Company Common Stock,  in each case
                  pursuant  to an  agreement  for a  merger  or  other  business
                  combination  transaction  with the Company  entered into on or
                  prior to the Request Date, or (iii) the highest  closing sales
                  price per share of Company Common Stock quoted on the New York
                  Stock Exchange Composite Transactions or, if not so quoted, on
                  the New York Stock Exchange (or if Company Common Stock is not
                  quoted on the New York Stock  Exchange,  the highest bid price
                  per share as  quoted on The  NASDAQ  Stock  Market  or, if the
                  shares of Company Common Stock are not quoted thereon,  on the
                  principal  trading  market on which such  shares are traded as
                  reported  by  a  recognized  source)  during  the  sixty  (60)
                  Business Days preceding the Request Date. If the consideration
                  to be  offered,  paid or  received  pursuant  to either of the
                  foregoing clauses (i) or (ii) shall be other than in cash, the
                  value of such consideration  shall be determined in good faith
                  by an independent  nationally  recognized  investment  banking
                  firm selected by the Grantee and reasonably  acceptable to the
                  Company,  which  determination  shall  be  conclusive  for all
                  purposes of this Agreement.

                           (d) As used herein,  a  "Repurchase  Event" means the
                  occurrence  of  any  Exercise   Event   specified  in  Section
                  4(b)(ii), (iii) or (iv).

                           (e)  Notwithstanding any provision to the contrary in
                  this  Agreement,  the  Grantee  may not  exercise  its  rights
                  pursuant to this  Section 7 in a manner  that would  result in
                  the cash payment to the Grantee of an  aggregate  amount under
                  this Section 7 of more than $24 million, including the amount,
                  if any, of the Termination Fee paid to the Grantee pursuant to
                  Section 9.05 of the Merger Agreement;  provided, however, that
                  nothing in this sentence shall limit the Grantee's  ability to
                  exercise the Option in accordance with its terms.


                             STOCK OPTION AGREEMENT
                                       -7-





                  8.       Repurchase at the Option of The Company.

                           (a)  Unless  the   Grantee   shall  have   previously
                  exercised  its rights  under  Section 7, at the request of the
                  Company  during  the  six-month   period   commencing  at  the
                  expiration of the Put Period (the "Call Period"),  the Company
                  may repurchase from the Grantee, and the Grantee shall sell to
                  the Company, all (but not less than all) the shares of Company
                  Common Stock acquired by the Grantee  pursuant hereto and with
                  respect to which the Grantee has  beneficial  ownership at the
                  time of such  repurchase  at a price  per  share  equal to the
                  greater  of (A)  the  Current  Market  Price  (as  hereinafter
                  defined) or (B) the Exercise Price per share in respect of the
                  shares so  acquired  (such price  multiplied  by the number of
                  shares of Company Common Stock to be  repurchased  pursuant to
                  this Section 8 being  herein  called the "Section 8 Repurchase
                  Consideration");  provided,  however, that the Grantee, within
                  thirty  (30)  days  following  the  Company's  notice  of  its
                  intention to purchase  shares  pursuant to this Section 8, may
                  deliver an Offeror's  Notice  pursuant to Section 10, in which
                  case  the  provisions  of  Section  10 and not  those  of this
                  Section 8 shall  control  (unless  the sale to a third  Person
                  contemplated  thereby  is  not  consummated);   and  provided,
                  further,  that the Company's rights under this Section 8 shall
                  be   suspended   (and  the  Call  Period   shall  be  extended
                  accordingly)  during  any  period  when the  exercise  of such
                  rights  would  subject  the Grantee to  liability  pursuant to
                  Section 16(b) of the Exchange Act by reason of the issuance of
                  the Option,  any adjustment  pursuant to Section 6 hereof, the
                  Grantee's purchase of shares of Company Common Stock hereunder
                  or the  Grantee's  sale of shares  pursuant to Section 7, 8 or
                  10.

                           (b) If the Company  exercises  its rights  under this
                  Section 8 and the Grantee does not deliver an Offeror's Notice
                  or, having delivered an Offeror's Notice, the Grantee does not
                  sell  the  shares  to a third  Person  pursuant  thereto,  the
                  Company  shall,  within  ten  (10)  Business  Days  after  the
                  expiration  of the  Grantee's  rights to deliver an  Offeror's
                  Notice or to sell the shares subject to an Offeror's Notice to
                  a third Person, pay the Section 8 Repurchase  Consideration in
                  immediately  available  funds, and the Grantee shall surrender
                  to the Company  certificates  evidencing the shares of Company
                  Common  Stock  purchased  hereunder,  and  the  Grantee  shall
                  warrant  to  the  Company  that,   immediately  prior  to  the
                  repurchase thereof pursuant to this Section 8, the Grantee had
                  sole record and  beneficial  ownership of such shares and that
                  such shares were then held free and clear of all Liens.

                           (c) As used herein,  "Current Market Price" means the
                  average  closing sales price per share of Company Common Stock
                  quoted on the New York Stock Exchange Composite  Transactions,
                  or, if not so quoted,  on the New York Stock  Exchange  (or if
                  Company  Common  Stock is not  quoted  on the New  York  Stock
                  Exchange,  on The  NASDAQ  Stock  Market  or, if the shares of
                  Company Common Stock are not quoted thereon,  on the principal
                  trading market on which such shares

                             STOCK OPTION AGREEMENT
                                       -8-





                  are traded as  reported  by a  recognized  source) for the ten
                  (10) Business Days preceding the date of the Company's request
                  for repurchase pursuant to this Section 8.

                  9. Registration Rights. The Company shall, if requested by the
         Grantee  at any time and from time to time  within  three  years of the
         first  exercise  of  the  Option  (the   "Registration   Period"),   as
         expeditiously  as  practicable  prepare,  file  and  cause  to be  made
         effective up to two registration statements under the Securities Act if
         such  registration  is  necessary  or  desirable in order to permit the
         offering,  sale and  delivery  of any or all shares of  Company  Common
         Stock or other securities that have been acquired by or are issuable to
         the Grantee upon exercise of the Option in accordance with the intended
         method of sale or other disposition  stated by the Grantee,  including,
         at the sole discretion of the Company, a "shelf" registration statement
         under Rule 415 under the Securities Act or any successor provision, and
         the Company shall use all reasonable  efforts to qualify such shares or
         other securities  under any applicable  state securities laws.  Without
         the  Grantee's  prior  written  consent,  no  other  securities  may be
         included  in any  such  registration.  The  Grantee  agrees  to use all
         reasonable  efforts to cause, and to cause any underwriters of any sale
         or other disposition to cause, any sale or other  disposition  pursuant
         to such registration  statement to be effected on a widely  distributed
         basis so that upon  consummation  thereof no  purchaser  or  transferee
         shall  own  beneficially  more than 2% of the then  outstanding  voting
         power of the Company.  The Company shall use all reasonable  efforts to
         cause each such registration  statement to become effective,  to obtain
         all consents or waivers of other  parties  which are required  therefor
         and to keep such registration  statement  effective for such period not
         in excess of 180 days from the day such  registration  statement  first
         becomes effective as may be reasonably necessary to effect such sale or
         other  disposition.  The obligations of the Company hereunder to file a
         registration  statement  and  to  maintain  its  effectiveness  may  be
         suspended for one or more periods of time not exceeding sixty (60) days
         in the  aggregate if the Board of  Directors of the Company  shall have
         determined  in good faith that the filing of such  registration  or the
         maintenance of its effectiveness  would require disclosure of nonpublic
         information that would materially and adversely affect the Company. The
         expenses  associated  with  the  preparation  and  filing  of any  such
         registration  statement pursuant to this Section 9 and any sale covered
         thereby  (including  any fees  related to blue sky  qualifications  and
         filing  fees in  respect  of the  National  Association  of  Securities
         Dealers,  Inc.)  ("Registration  Expenses") shall be for the account of
         the  Company  except  for  underwriting  discounts  or  commissions  or
         brokers'  fees in respect to shares to be sold by the  Grantee  and the
         fees and  disbursements of the Grantee's  counsel;  provided,  however,
         that the  Company  shall not be  required  to pay for any  Registration
         Expenses with respect to such registration if the registration  request
         is  subsequently  withdrawn  at the request of the  Grantee  unless the
         Grantee  agrees to  forfeit  its  right to  request  one  registration;
         provided further,  however, that, if at the time of such withdrawal the
         Grantee  has  learned of a material  adverse  change in the  results of
         operations,  condition  (financial or other),  business or prospects of
         the  Company  from that known to the Grantee at the time of its request
         and has  withdrawn  the request with  reasonable  promptness  following
         disclosure by the Company of such

                             STOCK OPTION AGREEMENT
                                       -9-





         material adverse change,  then the Grantee shall not be required to pay
         any of such expenses and shall retain all  remaining  rights to request
         registration.  The Grantee  shall  provide all  information  reasonably
         requested by the Company for inclusion in any registration statement to
         be filed hereunder. If during the Registration Period the Company shall
         propose to register  under the  Securities  Act the offering,  sale and
         delivery  of Company  Common  Stock for cash for its own account or for
         any other  stockholder of the Company pursuant to a firm  underwriting,
         it shall,  in addition to the Company's  other  obligations  under this
         Section  9,  allow  the  Grantee  the  right  to  participate  in  such
         registration   provided   that   the   Grantee   participates   in  the
         underwriting;  provided,  however, that, if the managing underwriter of
         such  offering  advises the Company in writing  that in its opinion the
         number of shares of Company  Common  Stock  requested to be included in
         such  registration  exceeds  the  number  which  can be  sold  in  such
         offering,   the  Company  shall,  after  fully  including  therein  all
         securities to be sold by the Company,  include the shares  requested to
         be included  therein by Grantee pro rata (based on the number of shares
         intended  to be  included  therein)  with  the  shares  intended  to be
         included therein by Persons other than the Company.  In connection with
         any offering,  sale and delivery of Company  Common Stock pursuant to a
         registration statement effected pursuant to this Section 9, the Company
         and the Grantee  shall provide each other and each  underwriter  of the
         offering with  customary  representations,  warranties  and  covenants,
         including covenants of indemnification  and contribution.  For purposes
         of  determining  whether two requests have been made under this Section
         9, only requests  relating to a registration  statement that has become
         effective  under the  Securities  Act and pursuant to which the Grantee
         has disposed of all shares covered  thereby in the manner  contemplated
         therein shall be counted.

                  10. First Refusal.  At any time after the first  occurrence of
         an  Exercise  Event and prior to the  second  anniversary  of the first
         purchase of shares of Company Common Stock  pursuant to the Option,  if
         the Grantee shall desire to sell, assign, transfer or otherwise dispose
         of all or any of the shares of Company Common Stock or other securities
         acquired  by it  pursuant  to the  Option,  it shall  give the  Company
         written notice of the proposed  transaction  (an  "Offeror's  Notice"),
         identifying the proposed transferee, accompanied by a copy of a binding
         offer to  purchase  such  shares  or other  securities  signed  by such
         transferee and setting forth the terms of the proposed transactions. An
         Offeror's  Notice  shall  be  deemed  an offer  by the  Grantee  to the
         Company,  which may be accepted,  in whole but not in part,  within ten
         (10) Business Days of the receipt of such Offeror's Notice, on the same
         terms and  conditions  and at the same  price at which the  Grantee  is
         proposing  to  transfer  such  shares  or  other   securities  to  such
         transferee.  The purchase of any such shares or other securities by the
         Company  shall be settled  within ten (10) Business Days of the date of
         the acceptance of the offer and the purchase price shall be paid to the
         Grantee in immediately  available funds. In the event of the failure or
         refusal of the Company to purchase  all the shares or other  securities
         covered by an Offeror's Notice, the Grantee may, within sixty (60) days
         from the date of the Offeror's Notice, sell all, but not less than all,
         of such shares or other  securities  to the proposed  transferee  at no
         less than the price specified and on terms no more favorable than those
         set  forth  in  the  Offeror's  Notice;  provided,  however,  that  the
         provisions of this

                             STOCK OPTION AGREEMENT
                                      -10-





         sentence  shall not limit the rights the Grantee may otherwise  have if
         the Company has accepted the offer  contained in the  Offeror's  Notice
         and  wrongfully  refuses to  purchase  the  shares or other  securities
         subject thereto. The requirements of this Section 10 shall not apply to
         (a) any disposition as a result of which the proposed  transferee would
         own  beneficially  not more than 2% of the outstanding  voting power of
         the  Company,  (b) any  disposition  of Company  Common  Stock or other
         securities  by a Person to whom the  Grantee  has  assigned  its rights
         under the Option with the consent of the Company, (c) any sale by means
         of a public  offering  registered  under the  Securities Act or (d) any
         transfer to a  wholly-owned  Subsidiary  of the Grantee which agrees in
         writing to be bound by the terms hereof.

                  11.  Listing.  If  the  Company  Common  Stock  or  any  other
         securities  then  subject to the Option are then listed on the New York
         Stock Exchange,  the Company, upon the occurrence of an Exercise Event,
         will  promptly  file an  application  to list  on the  New  York  Stock
         Exchange  the shares of the Company  Common  Stock or other  securities
         then subject to the Option and will use all reasonable efforts to cause
         such listing application to be approved as promptly as practicable.

                  12.  Replacement of Agreement.  Upon receipt by the Company of
         evidence reasonably satisfactory to it of the loss, theft,  destruction
         or mutilation  of this  Agreement,  and (in the case of loss,  theft or
         destruction)  of  reasonably  satisfactory  indemnification,  and  upon
         surrender and cancellation of this Agreement, if mutilated, the Company
         will execute and deliver a new  Agreement  of like tenor and date.  Any
         such  new  Agreement   shall   constitute  an  additional   contractual
         obligation  of the  Company,  whether  or not the  Agreement  so  lost,
         stolen,  destroyed or  mutilated  shall at any time be  enforceable  by
         anyone.

                  13.      Miscellaneous.

                           (a)  Expenses.  Except as  otherwise  provided in the
                  Merger Agreement or in Sections 7, 8 and 9 hereof, each of the
                  parties  hereto  shall  bear and pay all  costs  and  expenses
                  incurred  by  it or on  its  behalf  in  connection  with  the
                  transactions   contemplated  hereunder,   including  fees  and
                  expenses of its own financial consultants, investment bankers,
                  accountants and counsel.

                           (b)  Waiver  and  Amendment.  Any  provision  of this
                  Agreement  may be  waived  at any  time by the  party  that is
                  entitled to the benefits of such provision. This Agreement may
                  not be modified,  amended, altered or supplemented except upon
                  the execution and delivery of a written agreement  executed by
                  the parties hereto.

                           (c) Entire  Agreement;  No Third  Party  Beneficiary;
                  Severability.  Except as  otherwise  set  forth in the  Merger
                  Agreement,  this Agreement (including the Merger Agreement and
                  the other  documents and  instruments  referred to herein) (i)
                  constitutes  the entire  agreement  and  supersedes  all prior
                  agreements and understandings,  both written and oral, between
                  the parties with respect to the subject

                             STOCK OPTION AGREEMENT
                                      -11-





                  matter  hereof  and (ii) is not  intended  to confer  upon any
                  Person  other than the  parties  hereto any rights or remedies
                  hereunder. If any term, provision,  covenant or restriction of
                  this Agreement is held by a court of competent jurisdiction to
                  be invalid, void or unenforceable, the remainder of the terms,
                  provisions, covenants and restrictions of this Agreement shall
                  remain  in  full  force  and  effect  and  shall  in no way be
                  affected, impaired or invalidated.

                           (d) Governing Law. This  Agreement  shall be governed
                  by, and construed in accordance with, the Laws of the State of
                  Texas,  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.

                           (e) Descriptive Headings.  The descriptive headings 
                  contained herein are for convenience or reference only and 
                  shall not affect in any way the meaning or interpretation of 
                  this Agreement.

                           (f)  Notices.  All notices  and other  communications
                  hereunder  shall be in  writing  and shall be deemed  given if
                  delivered personally, telecopied (with confirmation) or mailed
                  by registered or certified mail (return receipt  requested) to
                  the  parties  at the  following  addresses  (or at such  other
                  address for a party as shall be specified by like notice):

                  If to the Company to:

                           Landmark Graphics Corporation
                           15150 Memorial Drive
                           Houston, Texas  77079-4304
                           Attention:  Patti Massaro, General Counsel
                                              and Corporate Secretary
                           Telecopier No.:  (713) 560-1383

                  with a copy to:

                           Winstead Sechrest & Minick P.C.    
                           5400 Renaissance Tower             
                           1201 Elm Street                    
                           Dallas, Texas  75270                        
                           Attention:  Robert E. Crawford, Jr.         
                           Telecopier No.:  (214) 745-5390

                           Shearman & Sterling
                           599 Lexington Avenue
                           New York, New York 10022
                           Attention:  David W. Heleniak
                           Telecopier No.:  (212) 848-7179
                      
                             STOCK OPTION AGREEMENT
                                      -12-





                  If to Grantee to:

                           Halliburton Company
                           3600 Lincoln Plaza
                           500 North Akard Street
                           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.
                           2300 First City Tower
                           1001 Fannin Street
                           Houston, Texas  77002-6760
                           Attention:  William E. Joor III, Esq.
                           Telecopier No.:  (713) 615-5282

                           (g)  Counterparts.  This Agreement and any amendments
                  hereto  may be  executed  in two  counterparts,  each of which
                  shall be  considered  one and the  same  agreement  and  shall
                  become  effective when both  counterparts  have been signed by
                  each of the parties and delivered to the other party, it being
                  understood  that  both  parties  need  not  execute  the  same
                  counterpart.

                           (h) Assignment. Neither this Agreement nor any of the
                  rights, interests or obligations hereunder or under the Option
                  shall be assigned by either of the parties hereto  (whether by
                  operation  of law or  otherwise)  without  the  prior  written
                  consent of the other party, except that the Grantee may assign
                  this  Agreement to a  wholly-owned  Subsidiary of the Grantee;
                  provided,  however,  that no such  assignment  shall  have the
                  effect  of  releasing   the  Grantee   from  its   obligations
                  hereunder.  Subject to the preceding sentence,  this Agreement
                  shall  be  binding  upon,  inure  to  the  benefit  of  and be
                  enforceable by the parties and their respective successors and
                  assigns.

                           (i) Further Assurances.  In the event of any exercise
                  of the Option by the  Grantee,  the  Company  and the  Grantee
                  shall execute and deliver all other  documents and instruments
                  and take all other action that may be reasonably  necessary in
                  order to  consummate  the  transactions  provided  for by such
                  exercise.

                           (j) Specific Performance.  The parties hereto agree 
                  that this Agreement may be enforced by either party through 
                  specific performance, injunctive relief and other equitable 
                  relief.  Both parties further agree to waive any requirement 
                  for the securing or posting of any bond in connection with 
                  the obtaining of any such

                             STOCK OPTION AGREEMENT
                                      -13-




                  equitable relief and that this provision is without  prejudice
                  to any other  rights that the parties  hereto may have for any
                  failure to perform this Agreement.

         IN WITNESS WHEREOF,  the Company and the Grantee have caused this Stock
Option  Agreement  to be  signed by their  respective  officers  thereunto  duly
authorized, all as of the day and year first written above.

                                        LANDMARK GRAPHICS CORPORATION


                                        By:_______________________________
                                            Robert P. Peebler
                                            President, Chief Executive Officer
                                              and Chief Operating Officer


                                        HALLIBURTON COMPANY


                                        By:_______________________________
                                            Lester L. Coleman
                                            Executive Vice President 
                                              and General Counsel



VEHOU05:17946.1

                             STOCK OPTION AGREEMENT
                                      -14-




                                VOTING AGREEMENT


         VOTING  AGREEMENT  ("Agreement")  dated  as of June 30,  1996,  between
Halliburton  Company,  a  Delaware  corporation  (the  "Acquiror"),  and S. Rutt
Bridges  and  Barbara Ann  Bridges  (the  "Stockholders"),  holders of shares of
common stock,  par value $0.05 per share, of Landmark  Graphics  Corporation,  a
Delaware corporation (the "Company").

                                    RECITALS:

         The  Stockholders  beneficially  own an aggregate  of 1,971,263  shares
(together  with any  additional  shares  as to  which  beneficial  ownership  is
acquired by any member of the Stockholder  Group described  below,  the "Company
Shares") of common stock, par value $0.05 per share ("Company Common Stock"), of
the Company.

         The Acquiror is prepared to enter into an Agreement  and Plan of Merger
with the  Company  (the  "Merger  Agreement")  providing  for the  merger of the
Company  with  and  into a  wholly-owned  subsidiary  of the  Acquiror  and  the
conversion in such merger of each share of Company  Common Stock into the number
of shares of the Common  Stock,  par value $2.50 per share,  of the Acquiror set
forth in the Merger Agreement (the "Merger").

         To facilitate the Merger,  the  Stockholders  are willing to enter into
certain arrangements with respect to the Company Shares.

         NOW,  THEREFORE,  in consideration of the premises set forth above, the
mutual promises set forth below, and other good and valuable consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

1.       Stockholders' Support of the Merger.  From the date hereof until 
February 28, 1997, or, if earlier, termination of the Merger Agreement:

                  (a) Except as  contemplated by the Merger  Agreement,  neither
         the Stockholders nor any Person controlled by either Stockholder or any
         Affiliate  or  Associate  thereof,  other  than  the  Company  and  its
         subsidiaries (collectively, the "Stockholder Group"), will, directly or
         indirectly,  sell, transfer, pledge or otherwise dispose of, or grant a
         proxy with respect to, any Company  Shares to any Person other than any
         member of the  Stockholder  Group or the Acquiror or its  designee,  or
         grant an option with respect to any of the Company Shares or enter into
         any other  agreement or arrangement  with respect to any of the Company
         Shares.

                  (b) The Stockholders  agree that the  Stockholders  will vote,
         and will  cause  each  member  of the  Stockholder  Group to vote,  all
         Company Shares  beneficially  owned by such Persons (i) in favor of the
         Merger and (ii), subject to the provisions of paragraph (c) below,

                                VOTING AGREEMENT
                                       -1-





         against any combination  proposal or other matter that may interfere or
         be  inconsistent  with  the  Merger  (including  without  limitation  a
         Competing Transaction).

                  (c) The  Stockholders  agree that, if reasonably  requested by
         the Acquiror in order to facilitate the Merger, they will not, and they
         will cause each member of the Stockholder  Group not to, attend or vote
         any Company Shares  beneficially owned by any such Person at any annual
         or special  meeting of  stockholders  or execute any written consent of
         stockholders.

                  (d)  The   Stockholders   hereby  consent  to  the  Acquiror's
         announcement  in any press  release,  public filing,  advertisement  or
         other document, that the Stockholders have entered into this Agreement.

                  (e) To the extent  inconsistent  with the  provisions  of this
         Section 1, each member of the Stockholder  Group hereby revokes any and
         all proxies with respect to such member's  Company  Shares or any other
         voting securities of the Company.

         2.       Miscellaneous

                  (a) The  Stockholders,  on the one hand, and the Acquiror,  on
         the other, acknowledge and agree that irreparable damage would occur if
         any  of  the  provisions  of  this  Agreement  were  not  performed  in
         accordance with their specific terms or were otherwise breached.  It is
         accordingly  agreed  that the  parties  hereto  shall be entitled to an
         injunction or injunctions to prevent breaches of the provisions of this
         Agreement and to enforce  specifically the terms and provisions  hereof
         in  any  court  of  the  United  States  or any  state  thereof  having
         jurisdiction,  in addition  to any other  remedies to which they may be
         entitled at law or equity.

                  (b) Descriptive headings are for convenience only and shall 
         not control or affect the meaning or construction of any provision of 
         this Agreement.

                  (c) All notices, consents, requests,  instructions,  approvals
         and other  communications  provided for herein shall be validly  given,
         made or served, if in writing and delivered  personally,  by telecopier
         (subject to receipt of electronic  confirmation)  or sent by registered
         mail, postage prepaid:


                                VOTING AGREEMENT
                                       -2-





                  If to the Acquiror:

                           Halliburton Company
                           3600 Lincoln Plaza
                           500 North Akard Street
                           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

                  If to the Stockholders:

                           S. Rutt Bridges
                           34 Silver Fox Circle
                           Greenwood Village, Colorado  80121

                  and

                           Barbara Ann Bridges
                           4200 East Plum Court
                           Greenwood Village, Colorado  80121

         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.

                  (d) From and  after the  termination  of this  Agreement,  the
         covenants of the parties set forth herein shall be of no further  force
         or effect and the  parties  shall be under no further  obligation  with
         respect thereto.


                                VOTING AGREEMENT
                                       -3-





                  (e) Definitions.  For purposes of this Agreement, the 
         following terms shall have the following meanings:

                           (i) Affiliate.  "Affiliate" shall have the meaning 
                  ascribed to it in Rule 12b-2 of the General Rules and 
                  Regulations under the Exchange Act, as in effect on the date
                  hereof.

                           (ii) Associate.  "Associate" shall have the meaning 
                  ascribed to it in Rule 12b-2 of the General Rules and 
                  Regulations under the Exchange Act, as in effect on the date
                  hereof.

                           (iii)  Beneficial  Owner.  A person shall be deemed a
                  "beneficial  owner" of or to have  "beneficial  ownership"  of
                  Company Shares in accordance with the  interpretations  of the
                  term  "beneficial  ownership" as defined in Rule 13-d(3) under
                  the Exchange  Act, as in effect on the date  hereof,  provided
                  that a Person shall be deemed to be the  beneficial  owner of,
                  and to have beneficial  ownership of, Company Shares that such
                  Person  or any  Affiliate  of such  Person  has the  right  to
                  acquire (whether such right is exercisable immediately or only
                  after  the  passage  of  time)   pursuant  to  any  agreement,
                  arrangement   or   understanding   or  upon  the  exercise  of
                  conversion  rights,  exchange  rights,  warrant,   options  or
                  otherwise.

                           (iv) Exchange Act.  "Exchange Act" shall mean the 
                  Securities Exchange Act of 1934, as amended.

                           (v) Person.  A "Person" shall mean any individual, 
                  firm, corporation, partnership, trust, limited liability 
                  company or other entity.

                           (vi) Significant Subsidiary.  "Significant 
                  Subsidiary" shall have the meaning ascribed to it in
                  Rule 1-02 of SEC Regulation S-X as in effect on the date
                  hereof.

                  (g) Due Authorization;  No Conflicts.  The Stockholders hereby
         represent and warrant to the Acquiror as follows: The Stockholders have
         full power and  authority  to enter into this  Agreement;  neither  the
         execution or delivery of this  Agreement  nor the consum  mation of the
         transactions  contemplated herein will (a) conflict with or result in a
         breach,  default or  violation of (i) any of the terms,  provisions  or
         conditions of the certificate of  incorporation or bylaws of any member
         of the  Stockholder  Group  or (ii)  any  agreement,  proxy,  document,
         instrument,  judgment, decree, order, governmental permit, certificate,
         license,  law,  statute,  rule or regulation to which any member of the
         Stockholder  Group is a party or to which it is subject,  (b) result in
         the creation of any lien, charge or other encum brance on any shares of
         Company Common Stock or (c) require any member of the Stockholder Group
         to obtain the consent of any private nongovernmental third party; no

                                VOTING AGREEMENT
                                       -4-





         consent,   action,  approval  or  authorization  of,  or  registration,
         declaration or filing with, any  governmental  department,  commission,
         agency  or other  instrumentality  or any  other  person  or  entity is
         required to authorize, or is otherwise required in connection with, the
         execution  and  delivery of this  Agreement  (with the  exception of an
         Amended  Schedule 13D to be filed by the  Stockholders  pursuant to the
         Securities  Exchange  Act of 1934,  as  amended)  or the  Stockholders'
         performance  of  the  terms  of  this  Agreement  or  the  validity  or
         enforceability of this Agreement;  neither  Stockholder has any plan or
         intention to sell or otherwise dispose of any shares of Acquiror Common
         Stock to be received by the undersigned pursuant to the Merger.

                  (h)  Successors and Assigns.  This Agreement  shall be binding
         upon,  and  inure to the  benefit  of,  the  parties  hereto  and their
         respective heirs,  personal  representatives,  successors,  assigns and
         Affiliates,  but shall not be assignable by either party hereto without
         the prior written consent of the other party hereto.

                  (i)  Waiver.  No party may waive any of the terms or
         conditions of this Agreement except by a duly signed writing referring
         to the specific provision to be waived.

                  (j) Governing  Law. This  Agreement  shall be governed by, and
         construed  in  accordance  with,  the  laws  of  the  State  of  Texas,
         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 General  Corporation Law of the State
         of Delaware.

                  (k) Entire Agreement.  This Agreement constitutes the entire 
         agreement and supersedes all other and prior agreements and 
         understandings, both written and oral, among the parties hereto and 
         their Affiliates.

                  (l) Counterparts.  This Agreement may be executed in two or 
         more counterparts, each of which shall be deemed an original but all 
         of which shall constitute one and the same instrument.


                                VOTING AGREEMENT
                                       -5-




         IN WITNESS WHEREOF,  the Stockholders have each executed this Agreement
and the  Acquiror has caused this  Agreement to be duly  executed by an officer,
thereunto duly authorized, all as of the day and year first above written.

                                      HALLIBURTON COMPANY


                                      By:_________________________________
                                        Lester L. Coleman
                                        Executive Vice President 
                                          and General Counsel


                                      STOCKHOLDERS


                                      ____________________________________  
                                      S. Rutt Bridges

                                      ____________________________________  
                                      Barbara Ann Bridges




VEHOU05:17947.1

                                VOTING AGREEMENT
                                       -6-







FOR IMMEDIATE RELEASE

Contacts-  Guy T. Marcus   Denese Van Dyne   Virginia Brooks
           Halliburton     Landmark          EDS
           (214) 978-2691  (713) 560-1555    (214) 605-0463

HALLIBURTON ANNOUNCES AGREEMENT TO ACQUIRE LANDMARK GRAPHICS
                                      CORP.

     -  Halliburton  and Landmark  also to form  alliance  with EDS to deliver a
worldwide data management solution -

     DALLAS, Texas (July 1, 1996) -- Halliburton Company (NYSE-HAL) and Landmark
Graphics  Corp.  (NASDAQ-LMRK)  today jointly  announced that they have signed a
definitive agreement providing for the acquisition of Landmark by Halliburton in
a stock transaction  valued at about $557 million,  or approximately  $31.86 per
Landmark share, based on Halliburton's closing share price on June 28, 1996.

     Under terms of the  agreement,  Halliburton  will issue 0.574 of a share of
its common  stock for each  outstanding  share of  Landmark  common  stock.  The
acquisition will result in the issuance of approximately  10.0 million shares of
Halliburton  common stock.  Approximately  124.8 million  shares of  Halliburton
common stock will be outstanding after such issuance.

     The proposed  merger has received  unanimous  approval from the  respective
boards  of  directors  of  each  company,  but is  subject  to the  approval  of
Landmark's   stockholders  and   Hart-Scott-Rodino   antitrust  clearance.   For
accounting purposes the merger will be structured as a pooling of interests and,
for  federal   income  tax  purposes,   as  a  tax-free   exchange  to  Landmark
shareholders.  The companies anticipate completion of the acquisition during the
fall of 1996.

     Landmark will be a  wholly-owned  subsidiary of  Halliburton  Company,  and
operated as part of Halliburton's  Energy Services business  segment.  Following
the merger,  Robert P. Peebler,  Landmark president and chief executive officer,
will continue as president and chief executive officer of Landmark.

     At the same time, Halliburton and Landmark announced that they are pursuing
the  formation  of an  alliance  with EDS  (NYSE-EDS)  to  develop  a  worldwide
distributed   data   management   capability  that  integrates  all  information
associated with the oil field  lifecycle.  This alliance,  whose financial terms
were not disclosed, will be designed to combine the leadership of Halliburton in
oil field energy  services,  Landmark in  geoscience  and  engineering  software
systems and services, and EDS in global information services.

     Dick Cheney,  Halliburton chairman,  president and chief executive officer,
said, "The global  petroleum  industry is increasingly  seeking service partners
who not only deliver  solutions for today,  but also have the insight and vision
to anticipate  their future needs.  The acquisition of Landmark is strategic for
Halliburton  and will enable our combined  businesses  to deliver an  increasing
array of solutions to address needs of customers  while providing added value to
our shareholders.

     "While  there  will  be  significant   synergies   between  our  companies,
Halliburton  will operate  Landmark as a separate  subsidiary  to ensure that it
continues  to provide  innovative  software  and services to all segments of the
industry,  as well as  forming  alliances  with  other  companies.  With the EDS
alliance,   we  see  the  potential  to  produce  an  unprecedented  linkage  of
information between oil field locations and the offices of our customers."

     Bob Peebler said,  "Landmark is highly ambitious in its goal to provide the
most innovative and integrated information systems and professional services for
finding, producing and managing oil and gas reservoirs. We are delighted to join
forces with Halliburton not only to accelerate, but also to expand the scope and
range of solutions we deliver throughout the world."

     Les  Alberthal,  EDS chairman and chief  executive  officer,  said, "An EDS
alliance with  Halliburton  and Landmark has the potential to provide  customers
the strength of our combined talents and experience,  as well as the distinctive
capabilities  of each of our  companies.  As the  leader in  global  information
services,  EDS is applying its extensive expertise and infrastructure to reshape
the information environments of energy companies for much greater efficiency and
enhanced productivity."

     The  intent of the  alliance  will be to create an  information  management
environment  that  will  automate  and  integrate   petroleum   exploration  and
production  from  energy  company  offices  throughout  their oil  fields.  This
scalable  environment  will  have  the  potential  to  encompass   applications,
workflows,  processes  and data from  Halliburton,  Landmark and EDS. It will be
based on industry standards and open to any software  supplier,  service company
or energy company for widespread adoption.

     Halliburton  Company,  Landmark  Graphics  and EDS  had  fiscal  year  1995
revenues of $5.7 billion, $171 million and $12.4 billion, respectively.

     Halliburton  Company  is one  of the  world's  largest  diversified  energy
services, engineering, maintenance, and construction companies. Founded in 1919,
Halliburton  provides a broad range of energy services and products,  industrial
and marine engineering and construction services.

     Landmark  Graphics  Corporation  is  the  leading  supplier  of  integrated
exploration and production information systems and professional services for the
petroleum  industry.  Headquartered in Houston,  Landmark  customers  include 90
percent of the world's largest oil and gas companies.

     EDS is a leader in the global information services industry.  The company's
more  than  95,000  employees  specialize  in  applying  a range  of  ideas  and
technologies to help business and government  customers improve their economics,
products, services and customer relationships.


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