As Filed with the Securities and Exchange Commission on June 28, 1994
Registration No. 33-53077
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BAROID CORPORATION
DRESSER INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware - Baroid 2899 76-0319642 - Baroid
Delaware - Dresser 35 75-0813641 - Dresser
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorpora- Classification Indentification No.)
tion or organization) Industrial
Code Number)
2001 Ross Avenue Rebecca R. Morris
Dallas, Texas 75201 Vice President -
(214) 740-6000 Corporate Counsel
(Address, including zip and Secretary
code, and telephone 2001 Ross Avenue
number, including area Dallas, Texas 75201
code, of Registrant's (214) 740-6000
principal executive (Name, address, zip code,
offices) telephone number, including
area code of agent for
service)
Approximate date of commencement of proposed sale to the public:
As soon as possible after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. _______
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH <PAGE>
SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. <PAGE>
<PAGE>
DRESSER INDUSTRIES, INC.
CROSS REFERENCE SHEET
Pursuant to Item 501 (b) of Regulation S-K
Item Number to Form S-4
Location in Consent
Solicitation Statement/Prospectus
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus Outside From Cover Page;
Cross Reference Sheet
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front Cover Page;
Outside Back Cover Page
3. Risk Factors, Ratio of Earnings
to Fixed Charges and Other
Information Summary; Selected
Consolidated Financial
Information; Ratio of
Earnings to Fixed Charges;
The Companies
4. Terms of the Transaction Summary; The Proposed
Amendment; Description of
the Guarantee; The
Solicitation; Federal
Income Tax Consequences
5. Pro Forma Financial Information*
6. Material Contacts with the Company
Being Acquired *
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters * <PAGE>
<PAGE>
Item Number to Form S-4
Location in Consent
Solicitation Statement/Prospectus
8. Interest of Named Experts and Counsel *
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities *
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3
Registrants Available Information;
Incorporation
of Certain Documents by
Reference; Selected
Consolidated Financial
Information; Ratio
of Earnings to Fixed
Charges; Capitalization
of Dresser
11. Incorporation of Certain
Information by Reference Available Information;
Incorporation of
Certain Documents by
Reference
12. Information with Respect to
S-2 or S-3 Registrants *
13. Incorporation of Certain
Information by Reference *
14. Information with Respect to
Registrants other than
S-2 or S-3 Registrants *
* Item is omitted because not applicable. <PAGE>
<PAGE>
Item Number to Form S-4
Location in Consent
Solicitation Statement/Prospectus
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information with Respect to S-3
Companies *
16. Information with Respect to S-2 or
S-3 Companies *
17. Information with Respect to Companies other
than S-2 or S-3 Companies *
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or
Authorizations are to be
Solicited Summary; Incorporation of
Certain Information
by Reference; The
Solicitation
19. Information if Proxies, Consent or
Authorizations are not to be
Solicited or in an Exchange Offer *
__________________
* Item is omitted because not applicable. <PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENTS. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JUNE 28, 1994
CONSENT SOLICITATION STATEMENT/PROSPECTUS
BAROID CORPORATION
Solicitation of Consents to Amendment of the Indenture
Governing its 8% Senior Notes Due 2003
(CUSIP No. 068277AA0)
and Prospectus
DRESSER INDUSTRIES, INC.
Prospectus
Baroid Corporation ("Baroid") hereby solicits (the "Solicitation") the
consent ("Consent") of registered holders of its 8% Senior Notes due 2003
(the "Notes") as of ___________________, 1994 (the "Record Date") to an
amendment (the "Proposed Amendment") to the Indenture (the "Indenture")
dated as of April 22, 1993 between Baroid and Texas Commerce Bank National
Association (the "Trustee"), pursuant to which the Notes were issued. The
purpose of the Solicitation and the Proposed Amendment is to amend or
eliminate substantially all the principal protective covenants contained in
the Indenture to enable Baroid to be operated without the restrictions of
such covenants as a wholly owned subsidiary of Dresser Industries, Inc.
("Dresser"). On January 21, 1994 (the "Merger Effective Date"), BCD
Acquisition Corporation, a wholly owned subsidiary of Dresser, was merged
with and into Baroid (the "Merger"), the outstanding shares of common stock
of Baroid, $.10 par value per share, were converted to shares of common
stock, $.25 par value per share, of Dresser; and Baroid became a wholly
owned subsidiary of Dresser.
IN THE EVENT THE PROPOSED AMENDMENT IS ADOPTED, (I) DRESSER WILL FULLY
AND UNCONDITIONALLY GUARANTEE (THE "GUARANTEE") THE DUE AND PUNCTUAL
PAYMENT OF THE PRINCIPAL OF AND INTEREST ON THE NOTES AS AMENDED BY THE
PROPOSED AMENDMENT (THE "AMENDED NOTES") AND (II) BAROID WILL PAY TO
EACH HOLDER OF NOTES AS OF THE RECORD DATE WHO DELIVERS A VALID CONSENT
IN FAVOR OF THE <PAGE>
PROPOSED AMENDMENT PRIOR TO THE EXPIRATION DATE (AS DEFINED BELOW) AND DOES
NOT REVOKE SUCH CONSENT PRIOR TO THE EFFECTIVE TIME (AS DEFINED BELOW) A
CONSENT FEE IN AN AMOUNT EQUAL TO $1.00 FOR EACH $1,000 PRINCIPAL AMOUNT OF
NOTES (THE "CONSENT FEE"). SEE THE SOLICITATION -- CONSENT FEE.
Dresser has less than $10 million of secured indebtedness consisting of
capitalized leases and industrial revenue bonds. All other indebtedness of
approximately $342 million is unsecured and, therefore, has equal ranking to
the Guarantee. Dresser's 6.25% Notes restrict it from issuing secured debt
without also securing existing Dresser noteholders pari passu. The proposed
modification of Section 3.08 of the Baroid Indenture will have the same
restrictions as now apply to Dresser. Neither the Guarantee nor the
Indenture will restrict Dresser's ability to create indebtedness ranking
senior to the Guarantee. Covenants under Dresser's 6.25% Notes are similar
to Section 3.08.
This Consent Solicitation Statement/Prospectus is being furnished to
registered holders of Notes as of the Record Date in connection with the
Solicitation. This Consent Solicitation Statement/Prospectus constitutes
(i) a Prospectus of Dresser with respect to the Guarantee to be issued in
the event the Proposed Amendment is effected, (ii) a Prospectus of Baroid
with respect to any deemed issuance of securities to the extent the Amended
Notes are deemed to be "new securities" after giving effect to the
transactions herein, and (iii) the Solicitation Statement of Baroid with
respect to the Solicitation.
THE SECURITIES OFFERED PURSUANT TO THIS CONSENT SOLICITATION
STATEMENT/PROSPECTUS HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS CONSENT SOLICITATION
STATEMENT/PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
________________, 1994
(Cover page continued) <PAGE>
(Continuation of cover page)
The Solicitation is being made upon the terms and is subject to the
conditions in this Consent Solicitation Statement/Prospectus and the
accompanying form of Consent. See "The Solicitation." Adoption of the
Proposed Amendment requires the Consents of the registered holders as of the
Record Date of at least a majority (the "Requisite Consents") in aggregate
outstanding principal amount of Notes. Pursuant to the terms of the
Indenture, Notes owned by Baroid or any "Affiliate" (as defined in the
Indenture) of Baroid are deemed not to be outstanding for purposes of
determining whether the Requisite Consents have been obtained. Only the
persons in whose names the Notes are registered as of the Record Date in the
registry maintained by the Trustee under the Indenture, or persons who hold
valid proxies from such registered holders, will be eligible to consent to
the Proposed Amendment. FOR PURPOSES OF THIS CONSENT SOLICITATION
STATEMENT/PROSPECTUS, THE TERM "RECORD HOLDER" OR "REGISTERED HOLDER" SHALL
BE DEEMED TO INCLUDE THE PARTICIPANTS (THE "DTC PARTICIPANTS") THROUGH WHICH
A BENEFICIAL OWNER'S NOTES ARE HELD IN THE DEPOSITORY TRUST COMPANY ("DTC").
SEE "THE SOLICITATION -- CONSENT PROCEDURES."
If Baroid delivers the Requisite Consents to the Trustee and the
Proposed Amendment is to be effected, Dresser, Baroid and the Trustee will
execute a supplemental indenture (the "Supplemental Indenture") effecting
the Proposed Amendment and the Guarantee, whereupon the Proposed Amendment
will be binding upon and the Guarantee will inure to the benefit of each
holder of the Notes, whether or not such holder delivered a Consent. See
"The Proposed Amendment" and "Description of Guarantee."
THE SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON
__________________________________ , 1994, UNLESS EXTENDED FOR A SPECIFIED
PERIOD OR ON A DAILY BASIS UNTIL THE REQUISITE CONSENTS HAVE BEEN RECEIVED
(THE "EXPIRATION DATE"). SEE "THE SOLICITATION -- EXPIRATION DATE;
EXTENSION; AMENDMENTS." HOLDERS AS OF THE RECORD DATE MAY REVOKE THEIR
CONSENTS AT ANY TIME UP TO, BUT SUCH CONSENTS WILL BECOME IRREVOCABLE UPON,
THE EXECUTION OF THE SUPPLEMENTAL INDENTURE BY BAROID, DRESSER AND THE
TRUSTEE (THE "EFFECTIVE TIME"), WHICH WILL NOT BE PRIOR TO THE EXPIRATION
DATE. SEE "THE SOLICITATION -- REVOCATION OF CONSENTS."
Holders who consent to the Proposed Amendment will be deemed to have
waived any defaults and their consequences under the Indenture or Notes. As
of the date of this Consent Solicitation Statement/Prospectus, there were no
uncured defaults under the Indenture. <PAGE>
THE OFFER OF SECURITIES HEREUNDER IS NOT BEING MADE TO, AND BAROID WILL
NOT SOLICIT CONSENTS FROM, HOLDERS OF NOTES IN ANY JURISDICTION IN WHICH THE
OFFER OF THE SECURITIES OR THE SOLICITATION OR THE ACCEPTANCE THEREOF WOULD
NOT BE IN COMPLIANCE WITH THE APPLICABLE SECURITIES OR BLUE SKY LAWS.
The Solicitation Agent is: LEHMAN BROTHERS INC.
The Information Agent is: D. F. KING & CO., INC.
Questions and requests for assistance may be directed to D. F. King &
Co., Inc., the Information Agent, or to Lehman Brothers Inc., the
Solicitation Agent, at any of their respective addresses and telephone
numbers set forth on the last page of this Consent Solicitation
Statement/Prospectus. Additional copies of this Consent Solicitation
Statement/Prospectus and the Consent may be obtained from the Information
Agent. <PAGE>
<PAGE>
AVAILABLE INFORMATION
Dresser and Baroid are subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements, and other information may be inspected and copied or obtained by
mail upon the payment of the Commission's prescribed rates at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following
Regional Offices of the Commission: Northwest Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven World Trade
Center, New York, New York 10048. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. In addition, reports, proxy statements and other information filed
by Dresser can be inspected at the offices of the New York Stock Exchange,
Inc. (the "NYSE"), 20 Broad Street, New York, New York 10005, on which
exchange Dresser's common stock and the Notes are listed.
Upon consummation of the Solicitation and the execution of the
Supplemental Indenture, Baroid will cease to be subject to the information
and the reporting requirements of the Exchange Act. Dresser expects to
continue to make its Exchange Act periodic report filings. Any financial
statements provided in such filings made by Dresser will include financial
information of Baroid, presented on a consolidated basis.
Dresser and Baroid have filed with the Commission a Registration
Statement on Form S-4 (together with all amendments, supplements, and
exhibits thereto, referred to herein as the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect
to the Guarantee and Amended Notes offered hereby. This Consent Solicitation
Statement/Prospectus, which forms a part of the Registration Statement, does
not contain all the information set forth in the Registration Statement and
the exhibits thereto, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. The Registration Statement and
any amendments hereto, including exhibits filed as a part thereof, are
available for inspection and copying as set forth above. Statements
contained in this Consent Solicitation Statement/Prospectus or in any
document incorporated in this Consent Solicitation Statment/Prospectus by
reference as to the contents of any contract, agreement or other document
referred to herein are not necessarily complete and in each instance
reference is made to the copy of such contract, agreement or other document
filed as an exhibit to the Registration Statement or such document, each
such statement being qualified in all respects by such reference. <PAGE>
No person has been authorized to give any information or to make any
representation other than those contained or incorporated by reference in
this Consent Solicitation Statement/Prospectus in connection with the
offering of securities described herein and, if given or made, such
information or representation should not be relied upon as having been
authorized by Dresser or Baroid or any other person. This Consent
Solicitation Statement/Prospectus does not constitute an offer to sell, or
the solicitation of an offer to purchase, any securities in any jurisdiction
in which, or to any person to whom, it is unlawful to make such offer or
solicitation. Neither the delivery of this Consent Solicitation
Statement/Prospectus nor any distribution of the securities described herein
shall, under any circumstances, create any implication that there has been
no change in the affairs of Dresser and Baroid since the date hereof or that
the information set forth or incorporated by reference herein is correct as
of any time subsequent to its date.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Consent Solicitation Statement/Prospectus incorporates certain
documents by reference which are not presented herein or delivered herewith.
These documents (other than exhibits to such documents unless such exhibits
are specifically incorporated by reference) are available to any person,
including any beneficial owner, upon request from, Rebecca R. Morris, Vice
President - Corporate Counsel and Secretary, Dresser Industries, Inc., 2001
Ross Ave., Dallas, Texas 75201, telephone number (214) 740-6000. In order
to ensure timely delivery of these documents, any request should be made by
________________________________________ , 1994.
The following documents, which have been filed with the Commission are
hereby incorporated herein by reference:
1) Dresser's Annual Report on Form 10-K for its fiscal year ended
October 31, 1993 (Commission File No. 1-4003).
2) Dresser's Quarterly Report on Form 10-Q for the period ended
January 31, 1994.
3) Dresser's Quarterly Report on form 10-q for the period ended
April 30, 1994, as amended by Amendment No.1 to Quarterly
Report on Form 10-Q/A dated June 24, 1994.
4) Dresser's Current Reports on Form 8-K dated December 9, 1993,
December 29, 1993 and January 28, 1994.
5) Dresser's Current Report on Form 8-K dated January 21, 1994, as
amended by Amendment No. 1 to such Current Report on Form 8-K/A
dated March 10, 1994.
6) Baroid's Annual Report on Form 10-K for its fiscal year ended
December 31, 1993 (Commission File No. 1-10624).
7) Baroid's Quarterly Report on Form 10-Q for the period ended
April 30, 1994, as amended by Amendment No.1 to Quarterly Report
on Form 10-Q/A dated June 15, 1994.
8) Baroid's Current Reports on Form 8-K dated January 14, 1994,
January 18, 1994 and March 30, 1994.
9) Baroid's final prospectus dated April 16, 1993, filed pursuant
to Rule 424(b) under the Securities Act.
All documents and reports filed by Dresser and Baroid pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the Solicitation shall be deemed
to be incorporated by reference herein and to be a part hereof from the
respective dates of filing of such documents or reports. All information
appearing in this Consent Solicitation Statement/Prospectus or in any
document incorporated herein by reference is not necessarily complete and is
qualified in its entirety by the information and financial statements
(including notes thereto) appearing in the documents incorporated herein by
reference and should be read together with such information and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Consent Solicitation Statement/Prospectus to
the extent that a statement contained herein (or in any subsequently filed
document which also is or is deemed to be incorporated by reference herein)
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part hereof, except as so
modified or superseded. <PAGE>
<PAGE>
SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements and notes thereto contained elsewhere
or incorporated by reference in this Consent Solicitation
Statement/Prospectus. See "Incorporation of Certain Documents by
Reference."
The Companies
Dresser, together with its subsidiaries, is a global supplier serving
the total hydrocarbon energy stream, both upstream and downstream.
Dresser's highly engineered and integrated products and technical services
are primarily utilized in oil and gas drilling, production and transmission;
gas distribution and power generation; gas processing; petroleum refining
and marketing; and petrochemical production. Baroid is a wholly owned
subsidiary of Dresser. Baroid was recently acquired by Dresser pursuant to
an Agreement and Plan of Merger dated as of September 7, 1993, which was
approved by the stockholders of both Baroid and Dresser in separate meetings
on January 19, 1994. Baroid is a worldwide provider of specialized products
and services to the oil and gas industry.
Dresser and Baroid's principal executive offices are located at 2001
Ross Avenue, Dallas, Texas 75201 and their telephone number is (214) 740-
6000.
The Solicitation
Baroid is soliciting the Consents of registered holders of the Notes
as of the Record Date to the Proposed Amendment. The purpose of the
Solicitation and the Proposed Amendment is to eliminate or amend certain
restrictive covenants contained in the Indenture to enable Dresser to
operate Baroid as a wholly owned subsidiary without the restrictions and
limitations contained in such covenants.
IN THE EVENT THE PROPOSED AMENDMENT IS EFFECTED, (I) DRESSER WILL
FULLY AND UNCONDITIONALLY GUARANTEE THE DUE AND PUNCTUAL PAYMENT OF THE
PRINCIPAL OF AND INTEREST ON THE AMENDED NOTES AND (II) BAROID WILL PAY A
CONSENT FEE TO EACH REGISTERED HOLDER OF NOTES, AS OF THE RECORD DATE, WHO
DELIVERS A VALID CONSENT IN FAVOR OF THE PROPOSED AMENDMENT PRIOR TO THE
EXPIRATION DATE AND DOES NOT REVOKE SUCH CONSENT PRIOR TO THE EFFECTIVE TIME
IN AN AMOUNT IN CASH EQUAL TO $1.00 FOR EACH $1,000 PRINCIPAL AMOUNT OF
NOTES.<PAGE>
Holders as of the Record Date who fail to deliver valid Consents
who revoke their Consent prior to the Effective Time will not receive a
Consent Fee. See "The Solicitation -- Consent Fee."
<PAGE>
PURPOSES AND EFFECTS OF THE SOLICITATION AND GUARANTEE OFFER
The Solicitation is intended to increase Dresser's flexibility to
operate Baroid as a wholly owned subsidiary by (1) eliminating the
Limitation on Debt in Section 3.08 of the Indenture, the Limitation on
Restricted Payments in Section 3.09, the Limitation on Liens in Section 3.10
and the Limitation on Transactions with Affiliates in Section 3.11; (2)
modifying the reporting requirements in Section 3.07, the Limitations on
Sale-Leaseback Transactions in Section 3.15, the Limitation on Merger and
Sale of Assets in Sections 4.01 and 4.02, the Events of Default and
Acceleration in Sections 5.01 and 5.02, in each case to conform to the less
restrictive provisions in the indenture dated as of June 1, 1993 between
Dresser and NationsBank of Texas, N. A. governing Dresser's outstanding
notes; (3) adding the guarantee to the Indenture and a Restriction on
Creation of Secured Debt and (4) making certain other changes in the
Indenture of a technical or conforming nature. To encourage holders of
Notes to participate in the Solicitation, DRESSER WILL FULLY AND
UNCONDITIONALLY GUARANTEE THE AMENDED NOTES PURSUANT TO THE GUARANTEE AND
BAROID will pay the Consent Fee as discussed above. See "The Proposed
Amendment."
The Notes were issued on April 22, 1993. At that time, the Notes were
rated BB+, Ba1 and BBB- by Standard and Poor's Corporation ("S&P"), Moody's
Investors Service, Inc. ("Moody's") and Duff & Phelps Credit Rating Co.
("D&P"), respectively. On September 7, 1993, Dresser announced that it had
entered into an agreement to acquire Baroid. The Merger was completed on
January 21, 1994. On January 19, 1994, S&P raised its rating on the Notes
from BB+ to A- and removed the Notes from creditwatch. S&P indicated that
the revised rating reflected the credit quality and outlook of Dresser,
which "intends to guarantee Baroid's debt." On February 16, 1994, Moody's
placed its Ba1 rating of the Notes on review for possible upgrading pending
the outcome of this Consent Solicitation. On September 7, 1993, D&P placed
its BBB- rating on the Notes on "Ratings Watch - Favorable" based upon the
future assumption by Dresser of Baroid's obligations. THE NOTES ARE NOT
CURRENTLY GUARANTEED BY DRESSER.
Upon receipt of the Requisite Consents and execution and delivery of
the Supplemental Indenture, the Proposed Amendment will become effective,
and each Note will be deemed amended thereby and will be governed by the
Indenture as amended by the Supplemental Indenture. Thereafter, all current
holders of the Notes, including non-consenting holders, and all subsequent
holders of Notes will be bound by the Proposed Amendment and will have the
benefit of the Guarantee. <PAGE>
REQUISITE CONSENTS
Adoption of the Proposed Amendment requires the receipt of the
Requisite Consents, consisting of the Consent of the registered holders of
Notes, as of the Record Date, of a majority in aggregate principal amount of
the Notes outstanding and not owned by Baroid or any of its Affiliates. As
of the date of this Consent Solicitation Statement/Prospectus, $150,000,000
of Notes were outstanding and none were held by Baroid or its Affiliates.
The failure of a holder of Notes to deliver a Consent (including any
failures resulting from broker non-votes) will have the same effect as if
such holder had voted "Against" the Proposed Amendment. See "The
Solicitation -- Requisite Consents."
<PAGE>
EXPIRATION DATE AND EFFECTIVE TIME; EXTENSIONS
The term "Expiration Date" means 5:00 p.m., New York time, on
___________________, 1994, unless Baroid, in its sole discretion, extends
the period during which the Solicitation is open, in which event the term
"Expiration Date" means the latest time and date to which the Solicitation
is so extended. Baroid reserves the right to extend the Solicitation at any
time, whether or not the Requisite Consents have been received, by giving
oral or written notice to the Trustee no later than 9:00 a.m., New York
time, on the next business day after the previously announced Expiration
Date. Any such extension will be followed as promptly as practicable by
notice thereof by press release or other public announcement (or by written
notice to the registered holders of the Notes as of the Record Date). Such
announcement or notice may state that Baroid is extending the Solicitation
for a specified period of time or on a daily basis until 5:00 p.m., New York
time, on the date on which the Requisite Consents have been received.
Consents will be irrevocable at the Effective Time (the time that
Dresser, Baroid and the Trustee execute the Supplemental Indenture, which
will not be prior to the Expiration Date). See "The Solicitation--
Revocation of Consents." Subject to the satisfaction of certain conditions
(see "The Solicitation--Conditions of the Solicitation"), promptly after the
Expiration Date, Dresser, Baroid and the Trustee will execute the
Supplemental Indenture, which will be effective upon its execution.
Thereafter, all current holders of the Notes, including non-consenting
holders, and all subsequent holders of the Notes will be bound by the
Proposed Amendment and will have the benefit of the Guarantee. See "The
Proposed Amendment" and "Description of the Guarantee."
CONSENT FEE
Registered holders of Notes as of the Record Date whose properly
executed Consents are received prior to the Expiration Date and not revoked
prior to the Effective Time will be eligible to receive the Consent Fee.
The Consent Fee will be $1.00 in cash for each $1,000 in principal amount of
Notes with respect to which a Consent is received and not revoked prior to
the Effective Time. ONLY HOLDERS OF NOTES AS OF THE RECORD DATE WHO TIMELY
CONSENT WITHOUT REVOCATION TO THE PROPOSED AMENDMENT WILL BE ELIGIBLE TO
RECEIVE THE CONSENT FEE. ANY SUBSEQUENT TRANSFEREES OF such holders and any
holders of Notes as of the Record Date who do not timely consent to the
Proposed Amendment (and their transferees) will not be eligible to receive
the Consent Fee even though the Proposed Amendment, if approved through the
receipt of the Requisite Consents, will be binding on them. In the event the
Requisite Consents are obtained and the Proposed Amendment is effected, all
holders of Notes, whether or not they delivered Consents, will receive the
benefit of the Guarantee. <PAGE>
Baroid's obligation to pay the Consent Fee is contingent upon receipt
of the Requisite Consents, the execution of the Supplemental Indenture and
effectiveness of the Proposed Amendment.
CONSENT PROCEDURES
Only those persons who are registered holders of the Notes as of the
Record Date may execute and deliver a Consent. A beneficial owner of Notes
who is not the registered holder of such Notes (e.g., a beneficial holder
whose Notes are registered in the name of a nominee such as a bank or a
brokerage firm) must arrange for the registered holder either (i) to execute
a Consent and deliver it either to the Information Agent on such beneficial
owner's behalf or to such beneficial owner for forwarding to the Information
Agent by such beneficial owner or (ii) to forward a duly executed proxy from
the registered holder authorizing the beneficial holder to execute and
deliver a Consent with respect to the Notes on behalf of such registered
holder. A form of proxy that may be used for such purpose is included in
the Consent. For purposes of this Consent Solicitation
Statement/Prospectus, (i) the term "record holder" or "registered holder"
shall be deemed to include DTC Participants and (ii) DTC has authorized DTC
Participants to execute Consents as if they were registered holders.
Giving a Consent will not affect a registered holder's right to sell
or transfer the Notes. All Consents received and not revoked prior to the
Effective Time will be effective notwithstanding a record transfer of such
Notes subsequent to the Record Date, unless the registered holder of such
Notes as of the Record Date revokes such Consent prior to the Effective Time
by following the procedures set forth under "Revocation of Consents" below.
HOLDERS OF NOTES AS OF THE RECORD DATE WHO WISH TO CONSENT SHOULD
MAIL, HAND DELIVER, SEND BY OVERNIGHT COURIER OR FACSIMILE (CONFIRMED BY THE
EFFECTIVE TIME BY PHYSICAL DELIVERY) THEIR PROPERLY COMPLETED AND EXECUTED
CONSENTS TO THE INFORMATION AGENT AT THE ADDRESS SET FORTH ON THE BACK COVER
PAGE HEREOF AND ON THE CONSENT IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH
HEREIN AND THEREIN. CONSENTS SHOULD BE DELIVERED TO THE INFORMATION AGENT,
NOT TO DRESSER, BAROID OR THE TRUSTEE. HOWEVER, BAROID RESERVES THE RIGHT
TO ACCEPT ANY CONSENT RECEIVED BY DRESSER, BAROID OR THE TRUSTEE.
UPON EXECUTION OF THE SUPPLEMENTAL INDENTURE BAROID WILL PROVIDE FOR
THE EXCHANGE OF NOTES FOR AMENDED NOTES ENDORSED WITH THE GUARANTEE.
REGISTERED HOLDERS SHOULD NOT TENDER OR DELIVER NOTES AT THIS TIME. <PAGE>
The registered ownership of Notes as of the Record Date shall be
proved by the Trustee, as registrar of the Notes. All questions as to the
validity, form, eligibility (including time of receipt) regarding the
Consent procedures will be determined by Baroid in its sole discretion,
which determination will be conclusive and binding subject only to such
final review as may be prescribed by the Trustee concerning proof of
execution and of ownership. Baroid reserves the right to reject any or all
Consents that are not in proper form or the acceptance of which could, in
the opinion of Baroid or its counsel, be unlawful. None of Dresser or
Baroid or any of their affiliates, the Solicitation Agent, the Information
Agent, the Trustee or any other person shall be under any duty to give any
notification of any defects or irregularities in connection with deliveries
of particular Consents, nor shall any of them incur any liability for
failure to give such notification.
Revocation of Consents
Prior to the Effective Time and notwithstanding any transfer of the
Notes to which such Consent relates, any registered holder of Notes as of
the Record Date may revoke any Consent given as to its Notes or any portion
of such Notes (in integral multiples of $1,000). A registered holder of
Notes as of the Record Date desiring to revoke a Consent must, prior to the
Effective Time, deliver to the Information Agent at the address set forth on
the back cover page of this Consent Solicitation Statement/Prospectus and on
the Consent a written revocation of such Consent (which may be in the form
of a subsequent Consent marked with a specification, i.e., "For" or
"Against," different from that set forth on the Consent as to which the
revocation is being given) containing the name of such registered holder,
the serial numbers of the Notes to which such revocation relates, the
principal amount of Notes to which such revocation relates and the signature
of such registered holder. See "The Solicitation--Revocation of Consents."
Conditions of the Solicitation
Consents will be irrevocable at the Effective Time, which will not be
prior to the Expiration Date. Subject to the satisfaction of certain
conditions described below, promptly after the Expiration Date, the Trustee,
Baroid and Dresser will execute the Supplemental Indenture, which will be
effective upon its execution. Execution of the Supplemental Indenture is
conditioned upon (i) the receipt of the Requisite Consents and (ii) at the
election of Baroid, the absence of any law or regulation which would, and
the absence of any injunction or action or other proceeding (pending or
threatened) which (in the case of any action or proceeding, if adversely
determined) would, make unlawful or invalid or enjoin the implementation of
the Proposed Amendment, the entering into of the Supplemental Indenture or <PAGE>
the payment of the Consent Fees or question the legality or validity
thereof. The Solicitation may be abandoned by Baroid at any time prior to
the execution of the Supplemental Indenture, for any reason, in which case
all Consents will be voided, the Guarantee will not be issued and the
Consent Fee will not be paid.
FEDERAL INCOME TAX CONSEQUENCES
Dresser and Baroid intend to take the position that the adoption of
the Proposed Amendment and the Guarantee and the payment of the Consent Fee
will not result in a deemed exchange of the Notes for federal income tax
purposes. In that event, except for the payment of the Consent Fee, the
transactions contemplated by the Consent Solicitation would not result in
any federal income tax consequences to a holder of the Notes. Dresser and
Baroid further intend to treat the Consent Fee as a fee paid to holders that
grant Consents pursuant to the Consent Solicitation. Consistent with that
treatment, a holder would recognize ordinary income equal to the amount of
cash received.
Should the adoption of the Proposed Amendment and the Guarantee and
the payment of the Consent Fee be deemed an exchange of the Notes for
federal income tax purposes, then the Notes would be deemed exchanged for
New Notes. If the Notes and the New Notes constitute securities (the
determination of "security" status is generally made by reference to the
original term of the debt, with debt instruments with an initial term of
ten years or more being treated as securities, and debt instruments with
initial terms of less than five years generally not being treated as
securities) of Baroid for federal income tax purposes, then a holder would
recognize no gain or loss (except as noted below) as a result of the
transaction contemplated by the Consent Solicitation. If the Notes or the
New Notes were not considered securities of Baroid for federal income tax
purposes, a holder would recognize gain or loss in the amount equal to the
difference between the "issue price" (the trading price on the date of the
deemed exchange) of the New Notes and the holder's adjusted tax basis in
the Note deemed exchanged. Furthermore, if holders were treated as
exchanging their Notes for New Notes for federal tax purposes, the Consent
Fee may be treated as additional consideration received in such exchange
or possibly as original issue discount on the New Notes.
Because of the absence of final Treasury Regulations, no opinion
is expressed by Weil, Gotshal & Manges, counsel to Dresser and Baroid, as
to whether the Proposed Amendment and the Guarantee and the payment of the
Consent Fee result in a deemed exchange for federal tax purposes. In
addition, because of the lack of direct authority concerning the issue,
no opinion is expressed as to the federal income tax consequences of the
receipt of the Consent Fee. Further, no ruling has been requested from
the Internal Revenue Service regarding the tax consequences of the
Proposed Amendment and the Guarantee and payment of the Consent Fee.
For a summary of the material United States Federal Income Tax
Consequences to holders of the Notes of the Proposed Amendment and the
Guarantee, see "Certain Federal Income Tax Consequences."
SOLICITATION AGENT; INFORMATION AGENT
Baroid and Dresser have retained Lehman Brothers Inc. as Solicitation
Agent in connection with the Solicitation. The Solicitation Agent will
solicit Consents, will attempt to respond to inquiries of holders of Notes
and will receive a customary fee for such services. Baroid and Dresser have
agreed to indemnify the Solicitation Agent against certain liabilities and
expenses, including liabilities under the securities laws in connection with
the Solicitation.
Baroid has retained D. F. King & Co., Inc. as Information Agent in
connection with the Solicitation. The Information Agent will solicit
Consents, will be responsible for collecting Consents and will receive a
customary fee for such services.
Requests for additional copies of this Consent Solicitation
Statement/Prospectus or the form of Consent may be directed to the
Information Agent at its address and telephone numbers set forth on the last
page of this Consent Solicitation Statement/Prospectus.
CURRENT MARKET FOR THE NOTES
The Notes are currently listed on the NYSE but there is a limited
amount of trading in the Notes. There can be no assurance that a more
active market will develop or that the price of the Notes will equal or
exceed the original public offering price. Prices for the Notes will be
determined in the marketplace and may be influenced by many factors, <PAGE>
including the breadth and liquidity of their market, investor perception of
the financial condition and business prospects of Dresser, Baroid, the oil
and gas industry in general, the level of interest rates and general market
conditions.
<PAGE>
INTRODUCTION
This Consent Solicitation Statement/Prospectus constitutes (i) a
Prospectus of Dresser with respect to the Guarantee to be issued in the
event the Proposed Amendment is effected, (ii) a Prospectus of Baroid with
respect to any deemed issuance of securities to the extent the Amended Notes
are deemed to be "new securities" after giving effect to the transactions
herein and (iii) the Solicitation Statement of Baroid with respect to the
Solicitation. This Consent Solicitation Statement/Prospectus is first being
mailed on or about __________________________, 1994 to registered holders of
the Notes as of the Record Date.
THE COMPANIES
Dresser
Dresser, together with its subsidiaries, is a global supplier serving
the total hydrocarbon energy stream, both upstream and downstream.
Dresser's highly engineered and integrated products and technical services
are primarily utilized in oil and gas drilling, production and transmission;
gas distribution and power generation; gas processing; petroleum refining
and marketing; and petrochemical production. Dresser's operations are
divided into three industry segments: Oilfield Services; Hydrocarbon
Processing Industry; and Engineering Services.
Oilfield Services. This segment supplies products and services
essential to oil and gas exploration, drilling and production. These
products and services include drilling fluid systems, rock bits, production
tools, pipe coating and resource exploration services.
Hydrocarbon Processing Industry. This segment designs, manufactures
and markets highly engineered products and systems for energy producers,
transporters, processors, distributors and users throughout the world.
Products and systems of this segment include compressors, turbines,
electrical generator systems, pumps, power systems, measurement and control
devices, and gasoline dispensing systems.
Engineering Services. Dresser's wholly owned subsidiary, The
M.W. Kellogg Company, provides engineering, construction and related
services, primarily to the hydrocarbon processing industries.
Dresser's principal executive offices are located at 2001 Ross Ave.,
Dallas, Texas 75201 and its telephone number is (214) 740-6000. <PAGE>
Baroid
Baroid is a worldwide provider of specialized products and services to
the oil and gas industry. Baroid became a wholly owned subsidiary of
Dresser on January 21, 1994, as a result of the merger of BCD Acquisition
Corporation, a wholly owned subsidiary of Dresser, with and into Baroid.
Baroid's operations are conducted principally through subsidiaries as
follows:
Drilling Fluids. Baroid Drilling Fluids Inc., a worldwide integrated
producer and distributor of drilling fluids, provides specially formulated
fluids used in the drilling process to lubricate and cool the drill bit,
seal porous well formations, remove rock cuttings and control downhole
pressure.
Drilling Services and Products. Sperry-Sun Drilling Services Inc.
rents specialized steering and measurement-while-drilling tools provides
directional drilling services for oil and gas wells throughout the world.
DB Stratabit, Inc., provides diamond drill bits and coring products and
services to the oil and gas industry worldwide.
Offshore Services. Sub Sea International Inc., acquired by Baroid in
January 1993, provides diving and underwater engineering services to the
oil and gas industry to inspect, construct, maintain and repair offshore
drilling rigs and platforms, underwater pipelines and other offshore oil and
gas facilities, as well as designs, manufactures and deploys unmanned,
remotely operated vehicles often used to perform such engineering services.
Sub Sea also provides pipeline installation services, burial and inspection
and maintenance and repair work on platforms in offshore oil and gas fields.
Baroid's principal executive offices are located at 2001 Ross Ave.,
Dallas, Texas 75201 and its telephone number is (214) 740-6000.
<PAGE>
THE PROPOSED AMENDMENT
The Proposed Amendment would (1) eliminate the Limitation on Debt in
Section 3.08 of the Indenture, the Limitation on Restricted Payments in
Section 3.09, the Limitation on Liens in Section 3.10 and the Limitation on
Transactions with Affiliates in Section 3.11; (2) modify the Limitations on
Sale-Leaseback Transactions in Section 3.15, the Limitation on Merger and
Sale of Assets in Sections 4.01 and 4.02, the reporting requirements in
Section 3.07, the Events of Default and Acceleration in Sections 5.01 and
5.02, in each case to conform to the less restrictive provisions in the
indenture governing Dresser's outstanding notes; (3) add the Guarantee to <PAGE>
the Indenture (See "The Description of the Guarantee") and a Restriction
on Creation of Secured Debt; and (4) make certain other changes in the
Indenture of a technical or conforming nature. The text of the preceding
Sections, including the amended language for Sections to be modified is
attached to this Consent Solicitation Statement/Prospectus as Appendix I.
In the event the Proposed Amendment is effected, Dresser will fully and
unconditionally guarantee the due and punctual payment of the principal of
and interest on the Amended Notes. The text of the Guarantee, which will
be set forth in the Supplemental Indenture, is attached to this Consent
Solicitation Statement/Prospectus as Appendix II.
THE FOLLOWING STATEMENTS, UNLESS THE CONTEXT OTHERWISE REQUIRES, ARE
SUMMARIES OF THE SUBSTANCE OR GENERAL EFFECT OF CERTAIN PROVISIONS OF THE
INDENTURE, OR THE PROPOSED AMENDMENT, AND ARE QUALIFIED IN THEIR ENTIRETY
BY REFERENCE TO THE INDENTURE AND THE PROPOSED AMENDMENT.
Unless otherwise defined, capitalized terms used in the following
descriptions of current Indenture provisions are used as defined in the
Indenture and capitalized terms used in the following descriptions of
proposed Indenture provisions are used as defined in the Supplemental
Indenture.
Covenant Relating to Commission Reports
Current Provision
Section 3.07 of the Indenture currently requires that Baroid file with
the Trustee and provide Holders, within five days after filing them with the
Commission, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that Baroid is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act. In the event that Baroid is not required to file information,
documents or reports pursuant to either of Section 13 or 15(d) of the
Exchange Act, Baroid is nonetheless required to file with the Commission, in
accordance with such rules and regulations as are prescribed by the
Commission, and provide the Trustee and Holders copies of the supplementary
and periodic information, documents and reports that may be required
pursuant to Section 13 of the Exchange Act, with respect to a security
listed and registered. Baroid also shall comply with the other provisions
of TIA Section 314(a).
Proposed Amendment.
If the Requisite Consents are obtained, the covenant relating to <PAGE>
providing Commission reports will be amended to delete the second sentence
thereof and to obligate Dresser (not Baroid) to provide, within 15 days
after it files them with the Commission, to the Trustee reports, documents
and other information required to be filed by Dresser with the Commission.
Neither Dresser nor Baroid will be obligated to provide such reports,
documents or other information to the Holders of the Amended Notes.
Covenants Relating to Limitation on Debt, Limitation on Restricted
Payments and Limitation on Liens
Current Provisions
Section 3.08 of the Indenture currently prohibits Baroid and its
Subsidiaries from, directly or indirectly, incurring any Debt unless the
Consolidated Interest Coverage Ratio determined on the date of incurrence of
such Debt exceeds 2.75 to 1, except that the Indenture currently permits the
incurrence of certain specified Debt, including (i) Debt under the Baroid
Credit Agreement, (ii) Debt incurred in connection with one or more letters
of credit issued pursuant to certain specified obligations and subject to
certain amount limitations, (iii) Debt evidenced by the Notes, (iv) certain
Debt of a Person existing at the time such Person is merged with or into or
consolidated with Baroid or a Subsidiary, (v) Debt of a Subsidiary of Baroid
existing at the time such Subsidiary became a Subsidiary of Baroid and not
incurred as a result of such Subsidiary becoming a Subsidiary, (vi) Debt of
Baroid or any Subsidiary in respect of (A) purchase money obligations
incurred to finance the acquisition of Property acquired in the ordinary
course of business of Baroid and its Subsidiaries, provided that such
purchase money obligation is Non-Recourse Indebtedness not exceeding the
amount of property acquired thereby, and such property is useful in the
business conducted by Baroid and its Subsidiaries and (B) Capitalized Lease
Obligations, provided that such Capitalized Lease Obligation is Non-Recourse
Indebtedness and such plant and equipment is useful in the business, and
(vii) certain other specified Debt, including Debt in an amount of up to $50
million.
Section 3.09 of the Indenture currently prohibits Baroid from,
directly or indirectly, making or permitting any Subsidiary from making, any
Restricted Payment, if, after giving effect thereto (including the pro forma
effect of the proposed Restricted Payment on the Consolidated Interest
Coverage Ratio for purposes of clause (ii) Section 3.09 of the Indenture):
(i) a Default or Event of Default shall have occurred and be continuing;
(ii) Baroid would not be able to incur at least $1.00 of additional Debt
pursuant to paragraph (a) of Section 3.08, and (iii) the aggregate amount of
all Restricted Payments made by Baroid and the Subsidiaries shall exceed a
specified amount. <PAGE>
Section 3.10 of the Indenture currently prohibits Baroid and its
Subsidiaries from, directly or indirectly, (a) creating, assuming or
allowing to exist any Lien on property (including stock) owned by Baroid or
its Subsidiaries or any income or profits from that property owned as of the
date of the Indenture or thereafter acquired, or (b) assigning a right to
receive income or profits from that property other than for (i) Liens
existing as of the Issue Date; (ii) Liens securing Debt of Baroid, provided
that the Securities are secured equally or senior to such liens; and (iii)
Permitted Liens.
Proposed Amendment.
If the Requisite Consents are obtained the covenants in Sections 3.08,
3.09 and 3.10 will be deleted in their entirety and a new covenant
restricting the incurrence of secured debt will be inserted instead. Such
new covenant will provide that Baroid will not, and will not cause or permit
its Subsidiaries to, create, incur, assume or guarantee any Secured Debt
without first equally and ratably securing the Amended Notes to such Secured
Debt; provided that such covenant will not apply to Secured Debt which is
secured by (i) certain Security Interests granted to secure payment of the
cost of acquisition, construction, development or improvement of property,
(ii) any Security Interest on property at the time of its acquisition by
Baroid or a Subsidiary, which Security Interest secures the obligations
assumed by Baroid or a Subsidiary or on the property of a corporation or
other entity at the time it is merged into Baroid or a Subsidiary (other
than any Security Interests created in contemplation of the acquisition of
such property or the consummation of such merger), (iii) Security Interests
arising from any conditional sales agreements or title retention agreements
with respect to property acquired by Baroid or a Subsidiary and (iv)
Security Interests securing Indebtedness of a Subsidiary owing to Baroid or
to another Subsidiary. In addition, such permitted Secured Debt will
include any extension, renewal or refunding, in whole or in part, of Secured
Debt permitted at the time of the original incurrence thereof.
In addition, Baroid and its Subsidiaries will be permitted to create,
incur, assume or guarantee Secured Debt, without equally and ratably
securing the Amended Notes, if immediately thereafter the sum of (i) the
aggregate principal amount of all Secured Debt outstanding (excluding
Secured Debt permitted as provided under the immediately preceding
paragraph) and (ii) all Attributable Debt in respect of Sale and Leaseback
Transactions as of the date of determination would not exceed 5% of
Consolidated Net Tangible Assets.
Covenant Relating to Limitation on Transactions with Affiliates
Current Provisions
Section 3.11 of the Indenture currently prohibits Baroid and its
Subsidiaries from directly or indirectly entering into or permitting to
exist any transaction or series of related transactions (including the
purchase, sale, exchange or lease of Property, the making of any Investment,
the giving of any guarantee or the rendering or receiving of any service)
with any Affiliate of Baroid, except for any transaction or series of
related transactions in the ordinary course of business of Baroid, which
involve a dollar amount that is less than 3% of the consolidated revenues
of <PAGE>
Baroid and its Subsidiaries for the prior fiscal year, unless (i) such
transaction or series of related transactions is on terms no less favorable
to Baroid than those that could be obtained by Baroid or such Subsidiary, as
the case may be, in a comparable transaction made on any arm's-length basis
with a Person who is not such an affiliate and (ii) with respect to any
transaction or series of related transactions that has a Fair Market Value
equal to, or in excess of $5,000,000, either (A) the transaction or series
of related transactions is approved by a majority of the Independent
directors of the Board of Directors or (B) the transaction or series of
related transactions was contemplated in the business plan approved by a
majority of the Independent directors of the Board of Directors or was
approved by Officers of Baroid within the scope of their grant of authority
approved by a majority of the Independent directors of the Board of
Directors.
Proposed Amendment
If the Requisite Consents are obtained, the Covenant relating to
Limitation on Transactions with Affiliates will be deleted in its entirety. <PAGE>
Covenant Relating to Limitation on Sale-Leaseback Transactions
Current Provisions
Section 3.15 of the Indenture currently prohibits Baroid and its
Subsidiaries from directly or indirectly entering into, assuming,
guaranteeing or otherwise becoming liable with respect to any Sale-Leaseback
Transaction unless (i) Baroid or such Subsidiary would be permitted under
Section 3.08 to incur Debt in an aggregate principal amount equal to or
exceeding the value of the Sale-Leaseback Transaction or (ii) the net
proceeds from such transaction are at least equal to the Fair Market Value
of such Property being transferred and Baroid or such Subsidiary applies or
commits to apply within 60 days an amount equal to the Net Available
Proceeds of sale pursuant to the Sale-Leaseback Transaction to (A) the
repayment of Company Debt that is Pari Passu with the Securities or, if no
such Debt is outstanding or repayable, in lieu thereof, other Company or
Subsidiary Debt or (B) the investment by Baroid in the primary line of
business of Baroid and its Subsidiaries.
Proposed Amendment
If the Requisite Consents are obtained, the covenant relating to
Limitation on Sale-Leaseback Transactions will be deleted in its entirety
and a new covenant inserted instead. Such new covenant will provide that
Baroid will not, and will not permit its Subsidiaries to, enter into any
Sale and Leaseback Transaction unless (a) Baroid or the Subsidiary would be
entitled to incur Secured Debt pursuant to the new Section 3.08 (with
certain exceptions) in an amount equal to the Attributable Debt in respect
to such Sale and Leaseback Transaction without equally and ratably securing
the Securities as provided in Section 3.08 or (b) (i) Baroid notifies the
Trustee, (ii) the net proceeds of the transfer are at least equal to the
fair value of the transferred property and (iii) Baroid or such Subsidiary
shall apply (or shall have committed to apply) within one year of the
transaction an amount equal to the net proceeds of the transaction to the
optional redemption or repayment of Funded Debt, if any. If Baroid or the
Subsidiary shall have committed to apply the amount, Baroid or the
Subsidiary must so apply the amount within 18 months after the transaction.
Covenant Relating to Merger Involving Baroid
Current Provisions
Sections 4.01 and 4.02 of the Indenture currently prohibit Baroid from
entering into any transaction or series of transactions in order to
consolidate or merge with or into any Person or in order to sell, assign, <PAGE>
transfer or lease or otherwise dispose of all or substantially all of its
Properties as an entirety to any Person or permit any Person to merge with
or into Baroid unless: (i) (A) Baroid shall be the continuing Person after
such transaction, or (B) the Person (if other than Baroid) formed by such
consolidation or into which Baroid is merged or to which the Properties of
Baroid are transferred substantially as an entirety (the "surviving entity")
is a corporation organized and existing under the laws of the United States,
and state thereof or the District of Columbia; (ii) (A) the surviving entity
(if other than Baroid) unconditionally assumes by supplemental indenture,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
all the obligations of Baroid under the Notes and the Indenture, (B) the
surviving entity meets the Legal Requirements applicable to the Notes and
the Indenture at the time of such transaction and (C) the Indenture remains
in full force and effect; (iii) immediately before and immediately after
giving effect to such transaction or series of transactions on a pro forma
basis, no Default or Event of Default shall have occurred and be continuing
and Baroid (or the surviving entity if Baroid is not the continuing obligor
under the Indenture), giving effect to such transaction, could incur at
least $1.00 of additional Debt (assuming a market rate of interest with
respect to such additional Debt) under Section 3.08 (a); and (iv)
immediately after giving effect to such transaction or series of
transactions on a pro forma basis, including any Debt incurred or
anticipated to be incurred in connection with such transaction or series of
transactions, the Consolidated Net Worth of Baroid (or the surviving entity
if Baroid is not the continuing obligor under the Indenture) is at least
equal to the Consolidated Net Worth of Baroid immediately before such
transaction. Upon any such consolidation, merger, sale, assignment or
transfer, the successor corporation will be substituted for Baroid under the
Indenture. The successor corporation may then exercise every power and
right of Baroid under the Indenture, and Baroid will be released from all of
its liabilities and obligations in respect of the Notes and Indenture.
Proposed Amendment
If the Requisite Consents are obtained, the covenants relating to
permissible mergers involving Baroid will be deleted in its entirety and a
new covenant inserted instead. Such new covenant will provide that Baroid
will not consolidate or merge into or sell, assign, transfer or lease all or
substantially all of its assets to another person unless (i) the person is a
corporation organized under the laws of the United States of America or any
state thereof, (ii) the person assumes by supplemental indenture all the
obligations of Baroid relating to the Amended Notes and Indenture and (iii)
immediately after the transaction no Default exists. Upon any such
consolidation, merger, sale, assignment or transfer, the successor
corporation will be substituted for Baroid under the Indenture. The <PAGE>
successor corporation may then exercise every power and right of Baroid
under the Indenture, and Baroid will be released from all of its liabilities
and obligations in respect of the Amended Notes and Indenture. In the event
Baroid leases all or substantially all of the assets, the lessee corporation
will be successor to Baroid and may exercise every power and right of Baroid
under the Indenture, but Baroid will not be released from its obligations to
pay the principal of and premium, if any, and interest, if any, on the
Amended Notes. In no event would such consolidation, merger, sale,
assignment or transfer effect the Guarantee of the Notes.
Covenants Relating to Events of Default and Acceleration
Current Provisions
Sections 5.01 and 5.02 of the Indenture currently define Events of
Default and remedies in respect thereof. An Event of Default occurs if (i)
Baroid defaults on the interest payment on any Security and the default
continues for 30 days; (ii) Baroid defaults on the payment of principal or
premium, if any, on any Security when the same is due at Stated Maturity,
upon acceleration, upon exercise by the Holder of a repurchase option upon a
Change of Control or otherwise; (iii) Baroid fails to observe, perform or
comply with any agreements or covenants in, or provisions of, the Securities
or the Indenture and the default continues for 60 days after Baroid receives
notice of Default from the Trustee or the holders of 25% in principal amount
of the Securities; (iv) Baroid or any of its Subsidiaries fails to make
payment of principal, premium, or interest on any Debt when due or such Debt
is accelerated because of a default, and the aggregate principal amount of
such Debt with respect to such failure to pay or acceleration exceeds
$5,000,000 or its foreign currency equivalent; (v) one or more judgments,
orders or decrees in an aggregate amount in excess of $10,000,000 (net of
any written acknowledgement of insurance coverage) are rendered against
Baroid or any of its Subsidiaries (excepting judgments or orders that relate
to Baroid's ordinary course of business in foreign jurisdictions, from a
foreign court and realizable upon Property of Baroid or its Subsidiaries
with an aggregate of value of less than $10,000,000), and not discharged and
a period of 60 days elapses during which there is no stay of enforcement in
effect; (vi) Baroid fails to comply with the covenant regarding when Baroid
may merge; (vii) Baroid or a Significant Subsidiary commences certain
actions under Bankruptcy Law or for the relief of debtors; or (viii) a court
of competent jurisdiction enters an order or decree under Bankruptcy Law
that is for relief against Baroid or any of its Significant Subsidiaries in
an involuntary case in bankruptcy, appoints a Custodian for all or
substantially all of the Property of Baroid or any of its Significant
Subsidiaries or orders the winding up or liquidation of Baroid or any of its
Significant Subsidiaries, and, in each case, the order or decree remains <PAGE>
unstayed and in effect for 60 days. The Trustee, within 90 days after the
occurrence of any continuing Default within its knowledge, will give notice
to Securityholders, provided however, that with the exception of a Default
in the payment of principal or interest, the Trustee may withhold such
notice as long as it determines in good faith such withholding to be in the
best interests of Securityholders. Baroid must deliver within 30 days after
the occurrence thereof written notice of an event which would become an
Event of Default under (iii) above its status and the action to be taken in
respect thereto. If an Event of Default, other than one with respect to
(vii) or (viii) above, occurs and is continuing, the Trustee or the Holders
of at least 25% in principal amount of the Securities may declare the
principal of and accrued interest on the Securities to be immediately due
and payable. If an Event of Default occurs under (vii) or (viii) above and
is continuing, the principal of and interest on all the Securities shall
ipso facto become immediately due and payable without further action by the
Trustee or Securityholders. With certain exceptions, the Holders of a
majority in principal amount of the Securities may by notice to the Trustee
rescind an acceleration and waive any existing Default.
Proposed Amendment
If the Requisite Consents are obtained, the covenants relating to
Events of Default and Acceleration will be amended and replaced in their
entirety. Such new covenants will provide that an Event of Default will
occur if (i) Baroid defaults on the interest payment on any Security and the
default continues for 30 days; (ii) Baroid defaults on the payment of
principal or premium, if any, on any Security when the same is due at Stated
Maturity, upon acceleration, upon exercise by the Holder of a repurchase
option upon a Change of Control or otherwise; (iii) Baroid fails to comply
with any agreements relating to the Securities or the Indenture and the
default continues for 90 days after Baroid receives notice of default from
the Trustee or the holders of 25% in principal amount of the Securities;
(iv) there occurs a default under any indebtedness then existing or
thereafter created for money owed by Baroid or any Restricted Subsidiary
with a principal amount then outstanding in excess of $25,000,000 and such
indebtedness is accelerated and such acceleration is not rescinded or
annulled; (v) Baroid or a Material Subsidiary commences certain actions
under Bankruptcy Law or for the relief of debtors; or (vi) a court of
competent jurisdiction enters an order or decree under Bankruptcy Law that
is for relief against Baroid or any of its Material Subsidiaries in an
involuntary case, appoints a Custodian for all or substantially all of the
Property of Baroid or any of its Material Subsidiaries or order the winding
up or liquidation of Baroid or any of its Material Subsidiaries, and the
order or decree remains unstayed and in effect for 90 days. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least
25% <PAGE>
in principal amount of the Securities may declare the principal of and
accrued interest on the Securities to be immediately due and payable. With
certain exceptions, the Holders of a majority in principal amount of the
Securities may by notice to the Trustee and Baroid rescind an acceleration
and waive any existing Default.
Other Provisions of the Indenture.
Certain other provisions of the Indenture may be amended to make
technical and conforming changes resulting from the Proposed Amendment.
<PAGE>
DESCRIPTION OF THE GUARANTEE
The text of the Guarantee, which will be set forth in the Supplemental
Indenture, is attached to this Consent Solicitation Statement/Prospectus as
Annex II. Dresser reserves the right, however, to amend, modify or
otherwise supplement the text of the Guarantee so long as any such
amendment, modification or supplement does not have an adverse effect on the
holders of the Amended Notes.
The Guarantee will be a direct unsecured, unsubordinated, full and
unconditional guarantee by Dresser of the due and punctual payment of the
principal of, premium, if any, and interest on the Amended Notes. The
Guarantee will rank equally in right of payment with all direct, unsecured
and unsubordinated indebtedness (including guarantees of the indebtedness of
others) of Dresser. At January 31, 1994, Dresser on a consolidated, pooled
basis, had approximately $583 million aggregate principal amount (including
the Notes) of such indebtedness outstanding. See "Capitalization of
Dresser."
Dresser has less than $10 million of secured indebtedness consisting
of capitalized leases and industrial revenue bonds. All other indebtedness
of approximately $342 million is unsecured and, therefore, has equal ranking
to the Guarantee. Dresser's 6.25% Notes restrict it from issuing secured
debt without also securing existing Dresser noteholders pari passu. The
proposed modification of Section 3.08 of the Baroid Indenture will have the
same restrictions as now apply to Dresser. Neither the Guarantee nor the
Indenture will restrict Dresser's ability to create indebtedness ranking
senior to the Guarantee. Covenants under Dresser's 6.25% Notes are similar
to Section 3.08.
As of January 31, 1994, Dresser guaranteed repayment of $12 million of
other obligations of its subsidiaries. None of the guarantees has cross-
default provisions. Dresser's 6.25% Notes have a cross-default provision
for default constituted by the failure to make payment on any indebtedness
of Dresser or of a Restricted Subsidiary of principal amounts greater than
$25 million when due and payable after the expiration of any applicable
grace period with respect thereto or which results in such indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or
annulled, which would accelerate the repayment of the 6.25% Notes.
As of the date of this Consent Solicitation Statement/Prospectus, the
senior long-term indebtedness of Dresser was rated A-, A-1 and A+ by <PAGE>
Standard & Poor's Corporation, Moody's Investors Service, Inc. and Duff &
Phelps Credit Rating Co., respectively. Neither the Guarantee nor the
Indenture will restrict Dresser's ability to incur secured or unsecured
indebtedness or to engage in any other transaction that could cause such
ratings to be reduced.
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
Dresser (including Baroid)
The following table sets forth selected consolidated financial information
for Dresser, which has been derived from Dresser's Consolidated Financial
Statements.
On January 21, 1994, a wholly-owned subsidiary of Dresser merged with
Baroid, as a result of which, each outstanding share of Baroid common stock
was exchanged for 0.40 shares of Dresser common stock and Baroid became a
wholly-owned subsidiary of Dresser. The Merger has been accounted for as a
pooling-of-interests.
The following selected financial information has been restated on a pooling-
of-interests basis as if the Merger had been in effect during the periods
presented. This information should be read in conjunction with the
Supplemental Consolidated Financial Statements contained in Dresser's
Current Report on Form 8-K dated January 21, 1994, as amended by Dresser's
Form 8-K/A dated March 10, 1994, and the Consolidated Condensed Financial
Statements contained in Dresser's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1994, which are incorporated herein by reference.
See "Incorporation of Certain Documents by Reference."
<TABLE>
<CAPTION>
Years Ended October 31,
1993 1992 1991 1990 1989
(In millions, except per share items)
<S> <C> <C> <C> <C> <C>
Net sales and
service revenues $5,043.8 $4,551.8 $4,681.1 $4,310.9 $3,761.8
Earnings from continuing
operations before
non-recurring and
extraordinary items 204.7 142.2 161.6 164.7 155.8
Litigation (settlement)
and recoveries (41.0) - - - -
Restructuring charges (35.5) (50.0) (24.0) - -
Earnings from continuing
operations before
extraordinary items 128.2 92.2 137.6 164.7 155.8
Per share .74 .54 .80 .97 .98
Cash dividends declared 100.0 96.0 95.5 85.5 70.0
Per share .60 .60 .60 .53 .45
Total assets
(at end of period) 4,370.7 3,833.3 3,804.7 3,790.2 3,391.8 <PAGE>
Long-term debt
(at end of period) 486.7 142.5 262.0 379.1 281.5
Total shareholders'
investment (at end of
period) 1,213.8 1,240.2 2,066.8 2,087.9 1,782.6
<PAGE>
</TABLE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
Dresser (including Baroid) (continued)
Six Months Ended
April 30,
1994 1993
(In millions of dollars,
except per share items)
Sales and service
revenues $2,636.0 $2,370.5
Earnings from continuing
operations before
non-recurring and
extraordinary items 92.2 77.4
Gains on sales of
interests in Western
Atlas and M-I Drilling
Fluids 148.3 -
Litigation (settlement)
and recoveries 5.6 (40.9)
Restructuring charges - (4.3)
Earnings from continuing
operations before
extraordinary items 246.1 32.2
Per share 1.41 .19
Cash dividends declared 55.1 49.5
Per share .32 .30
Total assets
(at end of period) 4,123.5 4,163.4
Long-term debt
(at end of period) 459.9 491.1
Total shareholders'
investment (at end of
period) 1,425.6 1,199.6 <PAGE>
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
Baroid
The following table sets forth selected consolidated financial information
for Baroid, which has been derived from Baroid's consolidated financial
statements.
On March 30, 1994, Baroid changed the end of its fiscal year from December
31 to October 31.
This information should be read in conjunction with the consolidated
financial statements contained in Baroid's Annual Report on Form 10-K for
the year ended December 31, 1993, Baroid's final prospectus dated April 16,
1993, filed pursuant to Rule 424(b) under the Securities Act and Baroid's
Quarterly Report on Form 10-Q for the quarter ended April 30, 1994, as
amended by Baroid's Form 10-Q/A dated June 15, 1994, which are incorporated
herein by reference. See "Incorporation of Certain Documents by Reference."
<TABLE>
Years Ended December 31,
1993 1992 1991 1990 1989
(In millions of dollars, except per share items)
<CAPTION>
<S> <C> <C> <C> <C> <C>
Sales and service
revenues 846.2 754.8 710.8 578.9 415.2
Earnings from continuing
operations before
extraordinary items 11.1 22.3 5.6 25.4 11.4
Per common share .12 .24 .06 .30 .19
Cash dividends declared 18.5 14.9 14.9 14.2 9.2
Per common share .20 .20 .20 .20 .15
Total assets 761.1 664.9 714.3 685.4 513.2
Long-term debt 183.1 118.0 169.7 151.9 43.3
Total shareholders'
investment 281.5 290.8 305.6 324.2 174.3
</TABLE>
Six Months Ended
April 30,
1994 1993
In millions of dollars,
except per share items) <PAGE>
Sales and service
revenues 437.0 379.6
Earnings from continuing
operations before
extraordinary items
and accounting changes 21.9 10.0
Cash dividends declared 4.6 8.4
Per common share .05 .10
Total assets 758.2 685.5
Long-term debt 151.7 175.5
Total shareholders'
investment 289.5 293.6
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratio of earnings to fixed
charges for Dresser and Baroid for the periods indicated. In the case of
Dresser, such financial information has been restated to reflect the Merger,
accounted for as a pooling-of-interests. For the purpose of computing such
ratio for both Dresser and Baroid, (i) earnings have been calculated by
adding fixed charges to pre-tax income and then deducting the Company's
share of the undistributed earnings in less than 50% owned affiliates; and
(ii) fixed charges comprise total interest (including any capitalized
interest), any amortization and debt expense, any premiums on redemption of
debentures, and a portion of rentals deemed to represent an interest factor.
Dresser (including Baroid)
<TABLE>
Six
Months
Ended
April 30, Years Ended October 31,
<CAPTION>
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
13.28 4.23 2.72 3.55 4.33 3.47
</TABLE>
Pretax income for the six months ended April 30, 1994, includes the gain on
sale of Dresser's 29.5% interest in Western Atlas International, Inc. of
$275.7 million. If this gain had been excluded from pretax income, the
Ratio of Earnings to Fixed Charges would have been 5.74.
Baroid
<TABLE>
Six
Months
Ended
April 30, Years Ended December 31,
<CAPTION>
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
4.21 2.76 2.93 1.78 4.24 2.97 <PAGE>
</TABLE>
CAPITALIZATION OF DRESSER
The following table sets forth the consolidated short-term debt and
capitalization of Dresser at April 30, 1994. This table should be read in
conjunction with the Consolidated Condensed Financial Statements contained
in Dresser's Quarterly Report on Form 10-Q for the quarter ended April 30,
1994, incorporated by reference herein. See "Incorporation of Certain
Documents by Reference."
April 30,
1994
(in million)
Short-Term Debt
Notes payable $ 40.7
Current maturities of long-term debt 1.5
Total short-term debt $ 42.2
Long-Term Debt
Notes, 6 1/4%, due 2000 $ 300.0
Senior Notes, 8%, due 2003
Face value $ 150.0
Discount (1.0) 149.0
Other 12.4
461.4
Current Maturities (1.5)
Total long-term debt 459.9
Shareholders' Investment
Common shares, $.25 par value; 400 million
authorized and 175.5 million issued 43.9
Capital in excess of par value 374.2
Retained earnings 1,142.0
Cumulative translation adjustments (116.6)
Pension liability adjustment (13.8)
1,429.7
Treasury shares, .2 million shares at cost (4.1)
Total shareholders' investment 1,425.6
Total Capitalization $1,885.5 <PAGE>
THE SOLICITATION
General
Consents will become irrevocable at the Effective Time, the time that
Baroid, Dresser and the Trustee execute the Supplemental Indenture, which
will not be prior to the Expiration Date. Subject to the satisfaction of
certain conditions (see "Conditions of the Solicitation" below), promptly
after the Expiration Date the Trustee, Baroid and Dresser will execute the
Supplemental Indenture, which will be effective upon its execution.
Thereafter, all current holders of the Amended Notes, including non-
consenting holders, and all subsequent holders of Amended Notes will be
bound by the Proposed Amendment and will have the benefit of the Guarantee.
If the Solicitation is terminated for any reason before the Effective Time,
the Consents will be voided, the Guarantee will not be issued, and the
Proposed Amendment will not be effected and the Consent Fee will not be
paid.
The Consents are being solicited by Baroid. Baroid recommends that
all holders of Notes as of the Record Date consent to the Proposed
Amendment. All costs of the Solicitation will be paid by Baroid. In
addition to the use of the mail, Consents may be solicited by officers and
other employees of Baroid or Dresser, without any additional remuneration,
in person, or by telephone, telegraph or facsimile transmission. Baroid has
retained Lehman Brothers Inc. (the "Solicitation Agent") and D. F. King &
Co., Inc. (the "Information Agent") to aid in the solicitation of Consents,
including soliciting Consents from brokerage firms, banks, nominees,
custodians and fiduciaries.
Consent Fee
If the Requisite Consents to the adoption of the Proposed Amendment
are obtained and the Supplemental Indenture becomes effective, Baroid will
pay to each holder of Notes as of the Record Date (other than Baroid or an
Affiliate of Baroid) who delivers a valid Consent in favor of the Proposed
Amendment prior to the Expiration Date and does not revoke such Consent
prior to the Effective Time a Consent Fee in the amount of $1.00 in cash for
each $1,000 in principal amount of Notes with respect to which such Consent
was received and not revoked. No accrued interest will be paid on the <PAGE>
Consent Fee. Baroid reserves the right to determine whether Notes are held
or may be held by Baroid or Affiliates of Baroid. Any such determination by
Baroid shall be final and binding upon all parties.
Notwithstanding any subsequent transfer of its Notes, any registered
holder of Notes as of the Record Date whose properly executed Consents have
been received prior to the Expiration Date and not revoked prior to the
Effective Time will be eligible to receive the Consent Fee. Holders, as of
the Record Date, who deliver Consents after the Expiration Date will not be
entitled to receive the Consent Fee, even though the Supplemental Indenture,
if it becomes effective, will be binding on them. Beneficial owners of
Notes whose Notes are registered, as of the Record Date, in the name of a
broker, dealer, commercial bank, trust company or nominee should contact
such broker or nominee promptly and instruct such person, as registered
holder of such Notes, to execute and then deliver the Consent on behalf of
the beneficial owner in order to receive the Consent Fee.
Baroid's obligation to pay the Consent Fee is contingent upon receipt
of the Requisite Consents, the execution of the Supplemental Indenture and
effectiveness of the Proposed Amendment. The Consent Fee will be paid as
soon as possible after the satisfaction of such conditions to the respective
holders of Notes entitled to receive the Consent Fee as such holders appear
on the record books of the Trustee as of the Record Date. <PAGE>
Requisite Consents
Adoption of the Proposed Amendment requires the receipt, without
revocation, of the Requisite Consents, consisting of the Consents of the
registered holders of Notes as of the Record Date of a majority in aggregate
principal amount of the Notes outstanding and not owned by Baroid or any of
its Affiliates. As of the date of the Consent Solicitation
Statement/Prospectus, $150,000,000 aggregate principal amount of the Notes
was so outstanding and none were held by Baroid or its Affiliates.
The failure of a holder of the Notes to deliver a Consent (including
any failures resulting from broker non-votes) will have the same effect as
if such holder had voted "Against" the Proposed Amendment.
Expiration Date; Extensions; Amendment
The Term "Expiration Date" means 5:00 p.m., New York time, on
____________________ , 1994, unless Baroid, in its sole discretion,
extends the period during which the Solicitation is open, in which event
the term "Expiration Date" means the latest time and date to which the
Solicitation is so extended. Baroid reserves the right to extend the
Solicitation at any time and from time to time, whether or not the Requisite
Consents have been received, by giving oral or written notice to the Trustee
no later than 9:00 a.m., New York time, on the next business day after the
previously announced Expiration Date. Any such extension will be followed
as promptly as practicable by notice thereof by press release or other
public announcement (or by written notice to the registered holders of the
Notes as of the Record Date). Such announcement or notice may state that
Baroid is extending the Solicitation for a specified period of time or on a
daily basis until 5:00 p.m., New York time, on the date on which the
Requisite Consents have been received.
Baroid expressly reserves the right for any reason (i) to terminate
the Solicitation at any time prior to the execution of the Supplemental
Indenture (whether or not the Requisite Consents have been received) by
giving oral or written notice of such termination to the Trustee and (ii)
not to extend the Solicitation beyond the Expiration Date whether or not the
Requisite Consents have been received by such date. Any such action by
Baroid will be followed as promptly as practicable by notice thereof by <PAGE>
press release or other public announcement (or by written notice to the
holders of Notes as of the Record Date).
Failure to Obtain Requisite Consents
In the event the Requisite Consents are not obtained and the
Solicitation is terminated, the Guarantee will not be issued, the Consent
Fee will not be paid and the Proposed Amendment will not be effected.
Consent Procedures
This Consent Solicitation Statement/Prospectus is being sent on or
about ___________________ , 1994 to all registered holders of Notes as of
the Record Date.
Only those persons who are registered holders of the Notes as of the
Record Date may execute and deliver a Consent. A beneficial owner of Notes
who is not the registered holder as of the Record Date of such Notes (e.g.,
a beneficial holder whose Notes are registered in the name of a nominee such
as a bank or a brokerage firm) must arrange for the registered holder either
(i) to execute a Consent and deliver it either to the Information Agent on
such beneficial owner's behalf or to such beneficial owner for forwarding to
the Information Agent by such beneficial owner or (ii) to forward a duly
executed proxy from the registered holder authorizing the beneficial holder
to execute and deliver a Consent with respect to the Notes on behalf of such
registered holder. A form of proxy that may be used for such purpose is
included in the form of Consent. For purposes of this Consent Solicitation
Statement/Prospectus, (i) the term "record holder" or "registered holder"
shall be deemed to include DTC participants and (ii) DTC has authorized DTC
Participants to execute Consents as if they were registered holders.
Giving a Consent will not affect a registered holder's right to sell
or transfer the Notes. All Consents received prior to the Expiration Date
and not revoked prior to the Effective Time will be effective
notwithstanding a record transfer of such Notes subsequent to the Record
Date, unless the registered holder of such Notes as of the Record Date
revokes such Consent prior to the Effective Time by following the procedures
set forth under "Revocation of Consents" below. <PAGE>
HOLDERS OF NOTES AS OF THE RECORD DATE WHO WISH TO CONSENT SHOULD
MAIL, HAND DELIVER, SEND BY OVERNIGHT COURIER OR FACSIMILE (CONFIRMED BY THE
EFFECTIVE TIME BY PHYSICAL DELIVERY) THEIR PROPERLY COMPLETED AND EXECUTED
CONSENTS TO THE INFORMATION AGENT AT THE ADDRESS SET FORTH ON THE BACK COVER
PAGE HEREOF AND ON THE CONSENT IN ACCORDANCE WITH THE INSTRUCTIONS SET FORTH
HEREIN AND THEREIN. CONSENTS SHOULD BE DELIVERED TO THE INFORMATION AGENT,
NOT TO DRESSER, BAROID OR THE TRUSTEE. HOWEVER, BAROID RESERVES THE RIGHT
TO ACCEPT ANY CONSENT RECEIVED BY DRESSER, BAROID OR THE TRUSTEE.
UPON EXECUTION OF THE SUPPLEMENTAL INDENTURE BAROID WILL PROVIDE FOR
THE EXCHANGE OF NOTES FOR AMENDED NOTES ENDORSED WITH THE GUARANTEE.
REGISTERED HOLDERS SHOULD NOT TENDER OR DELIVER NOTES AT THIS TIME.
All Consents that are properly completed, signed and delivered to the
Information Agent, and not revoked prior to the Effective Time, will be
given effect in accordance with the specifications thereof. Holders who
desire to consent to the Proposed Amendment should mark the "For" box on,
and complete, sign and date, the Consent included herewith and mail,
deliver, send by overnight courier or facsimile (confirmed by the Effective
Time by physical delivery) the signed consent to the Information Agent at
the address listed on the back cover page of this Consent Solicitation
Statement/Prospectus and on the Consent, all in accordance with the
instructions contained herein and therein. If none of the boxes on the
Consent are marked, but the consent is otherwise properly completed and
signed, the registered holder will be deemed to have consented to the
Proposed Amendment.
Consents by the registered holder(s) of Notes as of the Record Date
must be executed in exactly the same manner as such registered holder(s)
name(s) appear(s) on the Notes. If Notes to which a Consent relates are
held of record by two or more joint holders, all such holders must sign the
Consent. If a Consent is signed by a trustee, partner, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such person must so
indicate when signing and must submit with the Consent form appropriate
evidence of authority to execute the Consent. In addition, if a Consent
relates to less than the total principal amount of Notes registered in the
name of such registered holder, the registered holder must list the serial <PAGE>
numbers and principal amount of Notes registered in the name of such holder
to which the Consent relates. If Notes are registered in different names,
separate Consents must be executed covering each form of registration. If a
Consent is executed by a person other than the registered holder, then it
must be accompanied by the proxy set forth on the form of Consent duly
executed by the registered holder.
The registered ownership of a Note as of the Record Date shall be
proved by the Trustee, as registrar of the Notes. All questions as to the
validity, form, eligibility (including time of receipt) regarding the
Consent procedures will be determined by Baroid in its sole discretion,
which determination will be conclusive and binding subject only to such
final review as may be prescribed by the Trustee concerning proof of
execution and of ownership. Baroid reserves the right to reject any or all
Consents that are not in proper form or the acceptance of which could, in
the opinion of Baroid or its counsel, be unlawful. Baroid also reserves the
right, subject to such final review as the Trustee prescribes for proof of
execution and ownership, to waive any defects or irregularities in
connection with deliveries of particular Consents. Unless waived, any
defects or irregularities in connection with deliveries of Consents must be
cured within such time as Baroid determines. None of Dresser or Baroid or
any of their affiliates, the Solicitation Agent, the Information Agent, the
Trustee or any other person shall be under any duty to give any notification
of any such defects or irregularities or waiver, nor shall any of them incur
any liability for failure to give such notification. Deliveries of Consents
will not be deemed to have been made until any irregularities or defects
therein have been cured or waived. Baroid's interpretations of the terms
and conditions of this Solicitation shall be conclusive and binding.
Revocation of Consents
Each properly completed and executed Consent will be counted,
notwithstanding any transfer of the Notes to which such Consent relates,
unless the procedure for revoking Consents described below has been
followed.
Prior to the Effective Time, any registered holder of Notes as of the
Record Date may revoke any Consent given as to its Notes or any portion of
such Notes (in integral multiples of $1,000). A registered holder of Notes
desiring to revoke a Consent must, prior to the Effective Time, deliver to <PAGE>
the Information Agent at the address set forth on the back cover page of
this Consent Solicitation Statement/Prospectus and on the Consent a written
revocation of such Consent (which may be in the form of a subsequent
Consent marked with a specification, i.e., "For" or "Ag
set forth on the Consent as to which the revocation is being given)
containing the name of such registered holder, the serial numbers of the
Notes to which such revocation relates, the principal amount of Notes to
which such revocation relates and the signature of such registered holder.
The revocation must be executed by such registered holder in the same
manner as the registered holder's name appears on the Consent to which the
revocation relates. If a revocation is signed by a trustee, partner,
executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative
capacity, such person must so indicate when signing and must submit with the
revocation appropriate evidence of authority to execute the revocation. A
revocation of the Consent shall be effective only as to the Notes listed on
the revocation and only if such revocation complies with the provisions of
this Consent Solicitation Statement/Prospectus. Only a registered holder of
Notes as of the Record Date as reflected in the register of the Trustee is
entitled to revoke a Consent previously given. A beneficial owner of Notes
who is not the registered holder as of the Record Date of such Notes must
arrange with the registered holder to execute and deliver to the Information
Agent on such beneficial owner's behalf, or to such beneficial owner for
forwarding to the Information Agent by such beneficial owner, either (i) a
revocation of any consent already given with respect to such Notes or (ii) a
duly executed proxy from the registered holder authorizing such beneficial
holder to act on behalf of the registered holder as to such Consent.
A revocation of a Consent may only be rescinded by the execution and
delivery of a new Consent, in accordance with the procedures herein
described by the holder who delivered such revocation.
Baroid reserves the right to contest the validity of any revocation
and all questions as to validity (including time of receipt) of any
revocation will be determined by Baroid in its sole discretion, which
determination will be conclusive and binding subject only to such final
review as may be prescribed by the Trustee concerning proof of execution and
ownership. None of Baroid, Dresser, any of their affiliates, the <PAGE>
Solicitation Agent, the Information Agent, the Trustee or any other person
will be under any duty to give notification of any defects or irregularities
with respect to any revocation nor shall any of them incur any liability for
failure to give such notification.
Conditions of the Solicitation
Consents will become irrevocable at the Effective Time, which will not
be prior to the Expiration Date. Subject to the satisfaction of certain
conditions described below, promptly after the Expiration Date, the Trustee,
Baroid and Dresser will execute the Supplemental Indenture, which will be
effective upon its execution. Execution of the Supplemental Indenture is
conditioned upon (i) the receipt of the Requisite Consents and (ii) at the
election of Baroid, the absence of any law or regulation which would, and
the absence of any injunction or action or other proceeding (pending or
threatened) which (in the case of any action or proceeding, if adversely
determined) would, make unlawful or invalid or enjoin the implementation of
the Proposed Amendment, the entering into of the Supplemental Indenture or
the payment of the Consent Fee or question the legality or validity thereof.
The Solicitation may be abandoned by Baroid at any time prior to the
execution of the Supplemental Indenture, for any reason, in which case
Consents will be voided, no Consent Fee will be paid and the Guarantee will
not be issued.
Solicitation Agent and Information Agent
Baroid and Dresser have retained Lehman Brothers Inc. as Solicitation
Agent in connection with the Solicitation. The Solicitation Agent will
solicit Consents, will attempt to respond to inquiries of holders of Notes
and will receive a customary fee for such services and reimbursement for
reasonable out-of-pocket expenses. Baroid and Dresser have agreed to
indemnify the Solicitation Agent against certain liabilities and expenses,
including liabilities under the securities laws in connection with the
Solicitation.
Baroid has retained D. F. King & Co., Inc. as Information Agent in
connection with the Solicitation. The Information Agent will solicit
Consents, will be responsible for collecting Consents and will receive a
customary fee for such services and reimbursement for reasonable out-of- <PAGE>
pocket expenses.
Fees and expenses for these activities of the Solicitation Agent and
Information Agent are currently expected to be approximately $500,000.
Requests for additional copies of this Consent Solicitation
Statement/Prospectus or the form of Consent may be directed to the
Information Agent at its address and telephone number set forth on the last
page of this Consent Solicitation Statement/Prospectus.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Weil, Gotshal & Manges (a partnership including
professional corporations), counsel to Dresser and Baroid, the following
summary accurately describes, in all material respects, the material federal
income tax consequences of the Consent Solicitation. Because of the absence
of final Treasury regulations, however, no opinion is expressed as whether
the Proposed Amendment and the Guarantee and the payment of the Consent Fee
result in a deemed exchange for federal income tax purposes. Further,
because of the lack of direct authority concerning the issue, no opinion is
expressed as to the federal income tax consequence of the receipt of the
fee. A copy of the opinion is attached as an exhibit to the Registration
Statement.
The following summary of the material federal income tax consequences
of the Consent Solicitation is for general information only. It is based
upon provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the applicable Treasury regulations promulgated and proposed
thereunder, judicial authority and current administrative rulings and
practice, all of which are subject to change, possibly on a retroactive
basis. Furthermore, no rulings have been requested from the Internal
Revenue Service as to the Consent Solicitation. This discussion does not
purport to address all aspects of federal income taxation that may be
relevant to particular holders in light of their individual circumstances or
to certain types of holders subject to special treatment under the Code (for
example, insurance companies, tax-exempt organizations, financial
institutions, dealers in securities, foreign corporations and nonresident
alien individuals), nor does it discuss any aspect of state, local or
foreign taxation or estate and gift tax considerations. This discussion <PAGE>
assumes that the Notes are held as capital assets (as defined in the Code)
by the holder thereof.
This summary is based in part on certain proposed regulations
addressing the treatment of modifications of debt instruments (the "Proposed
Regulations"). The Proposed Regulations are proposed to be effective for
debt instruments occurring after their issuance in final form; accordingly,
by their terms they will not apply to the Consent Solicitation, although
they are indicative of the position of the Internal Revenue Service with
regard to their subject matter. In any event, prior to their issuance in
temporary or final form, the Proposed Regulations have no binding effect
and may be withdrawn or revised at any time on a retroactive basis, which
could change the consequences described below. No assurance can be given
that the treatment of the Consent Solicitation described below will be
accepted by the Internal Revenue Service.
Consequences of the Consent Solicitation
Although the issue is not free from doubt, Dresser and Baroid intend
to take the position that the adoption of the Proposed Amendment and the
Guarantee and the payment of the Consent Fee will not constitute
significant modifications of the terms of the Notes, and therefore will not
result in a deemed exchange of the Notes for federal income tax purposes.
Under the Proposed Regulations, a modification of a debt instrument that
changes the annual yield of the debt instrument will constitute a
significant modification at the date of such modification if the annual
yield of the debt instrument after the modification, measured from the date
of the agreement to the final maturity date, varies from the annual yield on
the original unmodified debt instrument by more than 0.25 percent.
Calculation of such yield is to take into account both accrued and unpaid
interest at such date and any payment, such as the Consent Fee, given as
consideration for the modification. Based on the Proposed Regulations,
payment of the Consent Fee should not result in a significant modification
of the terms of the Notes for federal income tax purposes. Further, under
the Proposed Regulations, the addition of a guarantee is not a significant
modification unless the guarantor is, in substance, substituted as the
obligor on the debt instrument and is intended to circumvent the rule that
treats a change in obligor of a recourse debt instrument (other than a
change in obligor in connection with certain reorganizations) as a <PAGE>
significant modification. Dresser and Baroid intend to take the position
that the Guarantee and the adoption of the Proposed Amendment does not
result in a significant modification of the terms of the Notes for federal
income tax purposes. In that event, except as set forth below with respect
to the Consent Fee, the transactions contemplated by the Consent
Solicitation should not result in any federal income tax consequences to a
holder of Notes.
If the transactions contemplated by the Consent Solicitation were to
constitute a significant modification of the Notes for federal income tax
purposes, then the Notes would be deemed exchanged for new notes (the "New
Notes") for federal income tax purposes. If the Notes and the New Notes
constitute securities of Baroid for federal income tax purposes (the
determination of "security" status generally being made by reference to the
original term of the debt instrument, with debt instruments with initial
terms of ten years or more generally being treated as securities and debt
instruments with initial terms of less than five years generally not being
treated as securities), then a holder would recognize no gain (except to
the extent of the amount of the Consent Fee, if such amount is treated as
additional consideration for the Notes as discussed below) or loss as a
result of the transactions contemplated by the Consent Solicitation. If the
Notes or the New Notes were not to constitute securities of Baroid for
federal income tax purposes, a holder would recognize gain or loss in an
amount equal to the difference between the "issue price" of the New Notes
(plus the amount of the Consent Fee, if such amount is treated as additional
consideration for the Notes as discussed below) and the holder s adjusted
tax basis in the Notes deemed exchanged therefor. Such gain or loss
generally would be capital gain or loss and would be long-term capital gain
or loss if the holder's holding period of the Notes exceeded one year. A
holder's initial tax basis in the New Notes would be their "issue price" and
a holder's holding period for the New Notes would begin on the day after
the deemed exchange. The "issue price" of the New Notes would equal the
trading price on the date of the deemed exchange. In each case, depending
on the issue price of the New Notes, a holder might be required to include
original issue discount in gross income for federal income tax purposes in
advance of the receipt of cash in respect thereof.
<PAGE>
Consequences of Receipt of Consent Fee
There is no direct authority concerning the federal income tax
consequences of the receipt of the Consent Fee. Dresser and Baroid intend
to treat the Consent Fee for federal income tax purposes as a fee paid to
holders that grant consents pursuant to the Consent Solicitation.
Accordingly, Dresser and Baroid generally would be required to provide
information statements to consenting holders and to the Internal Revenue
Service reporting the payment of the Consent Fee. If such treatment is
respected, a holder would recognize ordinary income equal to the amount of
cash received. Alternative federal income tax treatments of the Consent Fee
may be applicable. If, as discussed above, holders were treated as
exchanging their Notes for New Notes for federal income tax purposes, the
Consent Fee may be treated as additional consideration received in such
exchange or possibly as original issue discount on the New Notes.
Alternatively, a consenting holder may be treated as transferring a portion
of its rights under the Notes in exchange for the Consent Fee, in which case
such holder should be permitted to reduce its adjusted tax basis in its
Notes (to the extent thereof) by the amount of the Consent Fee. Any such
basis reduction would cause a consenting holder to recognize additional gain
(or smaller loss) on a sale or disposition of the Notes.
Backup Withholding
Noteholders other than certain exempt recipients (such as
corporations) may be subject to backup withholding at the rate of 31% with
respect to the Consent Fee received by a holder pursuant to the Consent
Solicitation unless the holder complies with certain certification and
identification requirements. Accordingly, to prevent backup withholding,
each holder of Notes who consents to the Proposed Amendments must either (i)
complete the Substitute Form W-9, certifying (under penalties of perjury)
that the taxpayer identification number (which, in the case of a holder of
Notes who is an individual, is such holder's social security number and,
for other entities, its taxpayer identification number) provided is correct
(or that such holder is awaiting assignment of a taxpayer identification
number) and that either (a) the holder has not been notified by the
Internal Revenue Service that such holder is subject to backup withholding
as a result of a failure to report interest or dividends or (b) the Internal
Revenue Service has notified the holder that such holder is no longer
subject to backup withholding or, in the alternative (ii) provide an
adequate basis for an exemption from backup withholding. If backup <PAGE>
withholding results in an overpayment of taxes, a refund or credit may be
obtained, provided the required information is furnished to the Internal
Revenue Service.
Withholding for Non-U.S. Holders
Although it is not entirely clear that such tax is applicable to the
Consent Fee, U. S. Federal withholding tax will be withheld from a Consent
Fee paid to a non-United States person (within the meaning of the Code) at a
30% rate unless (i) such non-United States person is engaged in the conduct
of a trade or business in the United States to which the receipt of the
Consent Fee is effectively connected and provides a properly executed IRS
Form 4224 or (ii) a tax treaty between the United States and the country of
residence of the non-United States person eliminates or reduces the
withholding on other income and such non-United States person provides a
properly executed IRS Form 1001.
THE FOREGOING SUMMARY IS INCLUDED HEREIN SOLELY FOR GENERAL
INFORMATION ONLY. HOLDERS OF NOTES SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE SPECIFIC CONSEQUENCES TO THEM OF THE CONSENT SOLICITATION
INCLUDING THE APPLICABILITY OF STATE, LOCAL, FOREIGN INCOME AND OTHER TAX
LAWS.
LEGAL OPINION
Rebecca R. Morris, Vice President - Corporate Counsel and Secretary of
Dresser, is passing upon the legality of the Guarantee for Dresser and the
legality of the Amended Notes. Ms. Morris owns 3,960 shares of Dresser
Common Stock. In addition, certain legal matters are being passed upon in
connection with the Solicitation by Weil, Gotshal & Manges (a partnership
including professional corporations), 767 Fifth Avenue, New York, New York
10153.
EXPERTS
The consolidated financial statements of Dresser and Dresser-Rand
Company, included in Dresser's Annual Report on Form 10-K for its fiscal
year ended October 31, 1993, and the supplemental consolidated financial
statements of Dresser and its subsidiaries included in Dresser's Current <PAGE>
Report on Form 8-K dated January 21, 1994, as amended by Dresser's Form 8-
K/A dated March 10, 1994, have been incorporated by reference in this
Consent Solicitation Statement/Prospectus in reliance on the reports of
Price Waterhouse, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
The consolidated financial statements of Baroid Corporation and
Subsidiaries appearing in Baroid Corporation's Annual Report (Form 10-K) at
December 31, 1993 and 1992, and for each of the two years in the period
ended December 31, 1993, incorporated by reference in this Consent
Solicitation Statement/Prospectus and Registration Statement, have been
audited by Ernst & Young, independent auditors, as set forth in their
reports included therein which, as to the year 1992, is based in part on the
report of Arthur Andersen & Co. The year ended December 31, 1991 was
audited by Coopers & Lybrand, independent auditors, as set forth in their
respective report thereon appearing elsewhere therein. Such consolidated
financial statements are incorporated by reference in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing.
The supplemental consolidated financial statements of Baroid
Corporation and Subsidiaries appearing in Baroid Corporation's Registration
Statement (Form S-3 No. 33-60174) have been audited by Ernst & Young,
independent auditors, as set forth in their report included therein and
incorporated herein by reference, and are based in part on the reports of
Arthur Andersen & Co. and Coopers & Lybrand, independent auditors. Such
supplemental consolidated financial statements are incorporated herein by
reference in reliance upon such reports given upon the authority of such
firms as experts in accounting and auditing. <PAGE>
APPENDIX I
PROPOSED AMENDMENTS TO THE INDENTURE
GOVERNING THE 8% SENIOR NOTES DUE 2003
OF BAROID CORPORATION
The Proposed Amendments to the Indenture are shown below together with
the corresponding provisions of the Indenture, as currently in effect.
Section 3.07 of the Indenture as currently in effect
SECTION 3.07 SEC Reports. The Company shall file with the Trustee
and provide Holders, within five days after filing them with the SEC, copies
of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may by
rules and regulations prescribe) that the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the event
that the Company is not required to file information, documents or reports
pursuant to either of Section 13 or 15(d) of the Exchange Act, the Company
shall nonetheless file with the SEC, in accordance with such rules and
regulations as are prescribed by the SEC, and provide the Trustee and
Holders copies of the supplementary and periodic information, documents and
reports that may be required pursuant to Section 13 of the Exchange Act,
with respect to a security listed and registered. The Company also shall
comply with the other provisions of TIA Section 314(a).
Section 3.07 of the Indenture as proposed to be amended
SECTION 3.07 SEC Reports. Guarantor shall furnish to the Trustee,
within 15 days after it files them with the SEC, copies of the annual
reports and of the information, documents, and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that Guarantor is required to file with the SEC
pursuant to Section 13 or 15(d) of the Exchange Act. The Company and the
Guarantor also shall comply with the other provisions of TIA
Section 314(a).
Sections 3.08, 3.09 and 3.10 of the Indenture as currently in effect
SECTION 3.08 Limitation on Debt. (a) The Company shall not, and <PAGE>
shall not permit any Subsidiary, directly or indirectly, to incur any Debt
unless the Consolidated Interest Coverage Ratio determined on the date of
incurrence of such Debt exceeds 2.75 to 1.
(b) Notwithstanding the foregoing, the Company and the Subsidiaries
may incur any or all of the following, each of which is given independent
effect:
(i) Debt under the Baroid Credit Agreement (or under any Refinancing
Agreement pertaining thereto), including any guarantees thereof, in
the aggregate principal amount of the commitments thereunder,
determined as of the Issue Date, after the application of the proceeds
of the Securities in accordance with the Underwriting Agreement;
(ii) Debt incurred in connection with one or more letters of credit
issued pursuant to (A) self-insurance obligations (other than
workmen's compensation obligations), the aggregate face or stated
amount of which, together with the aggregate amount of any related
reimbursement obligations (without duplication) does not exceed (x)
$20,000,000 at any time outstanding for all such letters of credit,
whether now existing as issued or renewed after the Issue Date in the
case of the Company s self-insurance obligations and (y) $16,000,000
at any time outstanding for all such letters of credit issued on the
Issue Date for the benefit of NL Industries, Inc., or Tremont
Corporation pursuant to an obligation of the Company set forth in the
Company Indemnification Agreement among the Company, Tremont
Corporation and NL Insurance, Ltd., dated September 26, 1990, which
$16,000,000 amount shall be automatically reduced by the corresponding
amount as such obligations are satisfied or terminated, and (B)
workmen's compensation obligations that do not exceed $1,000,000 in
aggregate principal amount at any time outstanding;
(iii) Debt evidenced by the Securities;
(iv) Debt of a Person existing at the time such Person is merged with
or into or consolidated with the Company or a Subsidiary (and not
incurred in anticipation of such transaction), provided that the
consolidated assets of such Person exceed the consolidated Debt of
such Person on the date of acquisition; <PAGE>
(v) Debt of a Subsidiary of the Company existing at the time such
Subsidiary became a Subsidiary of the Company and not incurred as a
result of (or in connection with or in anticipation of) such
Subsidiary becoming a Subsidiary of the Company; provided that such
Debt does not become an obligation of, and is not guaranteed by, the
Company or any of its other Subsidiaries;
(vi) Debt of the Company or any Subsidiary in respect of (A) purchase
money obligations incurred to finance the acquisition of Property
acquired in the ordinary course of business of the Company and its
Subsidiaries, provided that any such purchase money obligation is
Non-Recourse Indebtedness that does not exceed the amount of the
addition to property, plant and equipment acquired thereby, in
accordance with GAAP, and such property, plant and equipment is useful
in the business conducted by the Company and its Subsidiaries and (B)
Capitalized Lease Obligations, provided that such Capitalized Lease
Obligations are Non-Recourse Indebtedness and such property, plant and
equipment is useful in the business conducted by the Company and its
Subsidiaries;
(vii) Debt arising from agreements providing for indemnification,
adjustment of purchase price or similar obligations, or from
guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Company or any Subsidiary pursuant to
such agreements, in any case incurred in connection with the
disposition of any business, Property or Subsidiary of the Company or
such Subsidiary, other than guarantees of obligations incurred by any
Person acquiring all or any portion of such business, Property or
Subsidiary for the purpose of financing such acquisition;
(viii) Debt incurred in the ordinary course of business in
respect of performance bonds and surety bonds;
(ix) Debt under currency hedging agreements and Interest Swap
Obligations of the Company or any Subsidiary to the extent that such
currency hedging agreements or Interest Swap Obligations are related
to payment obligations on Debt otherwise permitted to be incurred
under this Section 3.08; <PAGE>
(x) Debt incurred in the ordinary course of business of any
Subsidiary to the Company or to any other Subsidiary of the Company or
any subordinated Debt of the Company to any Subsidiary;
(xi) Debt of the Company and any Subsidiary remaining outstanding
immediately after the issuance of the Securities and the application
of the proceeds thereof in accordance with the Underwriting Agreement;
(xii) Debt incurred in connection with a prepayment of the Securities
pursuant to a Change of Control in an aggregate principal amount not
to exceed the aggregate prepayment price of such Securities, provided
that such Debt has (A) an Average Life to Stated Maturity equal to or
greater than the remaining Average Life to Stated Maturity of the
Securities and (B) a Stated Maturity that is no earlier than the
Stated Maturity of the Securities;
(xiii) Debt issued in exchange for, or the proceeds of which are
used to renew, extend, substitute, refinance or replace (collectively,
"refinance") any Debt incurred pursuant to clauses (i) through (vii),
(xi) and (xii) of this Section 3.08; provided that, unless such
refinanced Debt is for the purpose of and satisfies clauses (viii) or
(x) above, then (A) the maximum principal amount of such refinanced
Debt shall not exceed the original principal amount or the original
committed amount of the Debt being refinanced unless the amount which
exceeds the original principal amount or the original committed amount
of the Debt being refinanced complies with the provisions of this
covenant, (B) the Average Life to Stated Maturity of any refinanced
Debt that has an Average Life to Stated Maturity greater than the
Securities shall not be refinanced to an Average Life to Stated
Maturity less than the Securities; (C) the Stated Maturity of any
refinanced Debt that has a Stated Maturity after the Stated Maturity
of the Securities shall not be refinanced to a Stated Maturity date
prior to the Stated Maturity of the Securities; and (D) the refinanced
Debt shall not rank, in right of payment with respect to the
Securities, prior to the Debt being refinanced; and
(xiv) other Debt of the Company or any Subsidiary in an amount not to
exceed an aggregate of $50,000,000 at any one time outstanding. <PAGE>
SECTION 3.09 Limitation on Restricted Payments. (a) The Company
shall not, and shall not permit any Subsidiary to, directly or indirectly,
make any Restricted Payment, if, after giving effect thereto (including the
pro forma effect of the proposed Restricted Payment on the Consolidated
Interest Coverage Ratio for purposes of clause (ii) of this Section 3.09):
(i) a Default or Event of Default shall have occurred and be
continuing;
(ii) the Company would not be able to incur at least $1.00 of
additional Debt pursuant to paragraph (a) of Section 3.08; and
(iii) the aggregate amount of all Restricted Payments made by
the Company and the Subsidiaries (if in any such case not made
in cash, then the Fair Market Value of any such payment used
therefor shall be determined by the Board of Directors of the
Company, whose determination shall be conclusive and evidenced
by a Board Resolution), including such proposed Restricted
Payment, from and after the date of this Indenture, shall exceed
the sum of:
(A) $60,000,000;
(B) plus 50% of Consolidated Net Income accrued for the
period (taken as one accounting period) commencing on the
date of the Indenture to and including the fiscal quarter
ended immediately prior to the date of such Restricted
Payment (or, in the event Consolidated Net Income for such
period is a deficit, then minus 100% of such deficit);
(C) plus 100% of the aggregate net proceeds (including
the Fair Market Value of Property other than cash, as
determined by the Board of Directors) received by the
Company from the issuance or sale (other than to any
Subsidiary or Affiliate of the Company or any employee
stock ownership plan of the Company or any of its
Subsidiaries) of its Qualified Capital Stock from and
after the Issue Date.
(b) The provisions of paragraph (a) of this Section 3.09 shall not <PAGE>
prohibit:
(i) the payment of any dividend within 60 days after the date
of its declaration if such dividend could have been paid on the
date of its declaration in compliance with the foregoing
provisions; provided that at the time of payment of such
dividend no other Default shall have occurred and be continuing
(or result therefrom);
(ii) the acquisition, redemption, repurchase or retirement of
any Redeemable Stock or Debt of the Company in exchange for
Capital Stock of the Company that is not Redeemable Stock and is
not exchangeable for or convertible into Redeemable Stock or
Debt of the Company or any of its Subsidiaries; and
(iii) the acquisition by the Company or a Subsidiary of the
outstanding stock of a Subsidiary held by minority holders who
are not Affiliates of the Company or of the outstanding stock of
a Minority-Owned Corporation held by holders who are not
Affiliates of the Company, provided that at the time of such
payment (A) no Default or Event of Default shall have occurred
and be continuing and (B) such acquisition is made in the
ordinary course of business of the Company and its Subsidiaries.
The full amount of any Restricted Payments pursuant to clause (i) but
not pursuant to clauses (ii) and (iii) of paragraph (b) of this Section 3.09
shall be included in the calculation of the aggregate amount of the
Restricted Payments referred to in paragraph (a) of this Section 3.09.
SECTION 3.10. Limitation on Liens. The Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, (a) create,
incur, assume or suffer to exist any Lien on or with respect to any of the
Property (including, without limitation, Capital Stock) owned by it, in
either case, or any income or profits therefrom, whether owned on the date
of this Indenture or thereafter acquired, or (b) assign any right to receive
income or profits from any of the Property or Capital Stock owned by it, in
either case other than:
(i) Liens existing as of the Issue Date, provided, however,
that Liens with respect to the Company's currently existing $250 <PAGE>
million credit facility shall be released on the Issue Date
(except as permitted in the definition of Permitted Liens);
(ii) Liens securing Debt of the Company, provided that (A) in
the case of any such Debt that is Pari Passu with the
Securities, the Securities are secured by Liens equal and
ratable to such Liens and (B) in the case of any such Debt that
is subordinate or junior in right of payment to the Securities,
the Securities are secured by Liens that are senior to such
Liens; and
(iii) Permitted Liens.
Sections 3.08, 3.09 and 3.10 of the Indenture as proposed to be amended
Sections 3.08, 3.09 and 3.10 will be deleted in their entirety and
replaced by new Section 3.08.
SECTION 3.08 Restriction on Creation of Secured Debt. After the
date hereof, the Company will not at any time create, incur, assume or
guarantee, and will not cause or permit a Restricted Subsidiary to create,
incur, assume or guarantee, any Secured Debt (including the creation of
Secured Debt by the securing of existing indebtedness) without first making
effective provision (and the Company covenants that in such case it will
first make or cause to be made effective provision) whereby the Securities
then outstanding (together with any other indebtedness of the Company or
such Restricted Subsidiary then entitled to be so secured) shall be secured
equally and ratably with (or prior to) any and all other obligations and
indebtedness thereby secured, for so long as any such other obligations and
indebtedness shall be so secured; provided, however, that the foregoing
covenants shall not be applicable to Secured Debt secured solely by one or
more of the following Security Interests:
(a) Any Security Interest upon any property which consists solely of
one or more parcels of real property, manufacturing plants, warehouses
or office buildings and of fixtures and equipment located on or at
such parcels, plants, warehouses or buildings and which is acquired,
constructed, developed or improved by the Company or a Restricted
Subsidiary after the date hereof, which Security Interest is created <PAGE>
prior to or contemporaneously with, or within 120 days after, (i) in
the case of the acquisition of such property, the completion of such
acquisition and (ii) in the case of the construction, development or
improvement of such property, the later to occur of the completion of
such construction, development or improvement or the commencement of
operation, use or commercial production (exclusive of test and start-
up periods) of the property, which Security Interest secures or
provides for the payment of all or any part of the acquisition cost of
such property or the cost of construction, development or improvement
thereof, as the case may be;
(b) Any Security Interest on property existing at the time of the
acquisition thereof by the Company or a Restricted Subsidiary, which
Security Interest secures obligations assumed by the Company or a
Restricted Subsidiary;
(c) Any Security Interest existing on the property of a corporation
or firm at the time such corporation or firm is merged into or
consolidated with the Company or a Restricted Subsidiary;
(d) Any conditional sales agreement or other title retention
agreement with respect to any property acquired by the Company or a
Restricted Subsidiary;
(e) Any Security Interest to secure indebtedness of a Restricted
Subsidiary to the Company or to another Restricted Subsidiary; or
(f) Any extension, renewal or refunding (or successive extensions,
renewals or refundings) in whole or in part of any Secured Debt
secured by any Security Interest referred to in the foregoing
subparagraphs (a) through (e), inclusive; provided, however, that the
principal amount of the Secured Debt secured thereby shall not exceed
the principal amount outstanding immediately prior to such extension,
renewal or refunding and that the Security Interest securing such
Secured Debt shall be limited to the property which, immediately prior
to such extension, renewal, or refunding, secured such Secured Debt
and additions to such property.
Notwithstanding subparagraphs (b) and (c) above, the creation, <PAGE>
incurrence, assumption or guarantee of any Secured Debt described therein
shall not be permitted (i) if such Secured Debt was created, incurred,
assumed or guaranteed in contemplation of the event or transaction referred
to in said subparagraphs or (ii) if the Security Interest securing such
Secured Debt attaches to or affects property owned by the Company or a
Restricted Subsidiary prior to the event or transaction referred to in said
subparagraphs.
Notwithstanding anything to the contrary in this Section 3.08, the
Company and any one or more Restricted Subsidiaries may create, incur,
assume or guarantee Secured Debt if immediately thereafter the sum of (i)
the aggregate principal amount of all Secured Debt outstanding as of the
date of determination (excluding Secured Debt permitted to be created,
incurred, assumed or guaranteed pursuant to subparagraphs (a) through (f),
inclusive, above) and (ii) all Attributable Debt in respect of Sale and
Leaseback Transactions as of the date of determination would not exceed 5%
of Consolidated Net Tangible Assets.
Section 3.11 of the Indenture as currently in effect
SECTION 3.11. Limitation on Transactions with Affiliates. The
Company shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, enter into or permit to exist any transaction or series of
related transactions (including the purchase, sale, exchange or lease of
Property, the making of any Investment, the giving of any guarantee or the
rendering or receiving of any service) with any Affiliate of the Company,
except for any transaction or series of related transactions in the ordinary
course of business of the Company, which involve a dollar amount that is
less than 3% of the consolidated revenues of the Company and its
Subsidiaries for the prior fiscal year, unless (i) such transaction or
series of related transactions is on terms no less favorable to the Company
than those that could be obtained by the Company or such Subsidiary, as the
case may be, in a comparable transaction made on an arm's-length basis with
a Person who is not such an Affiliate and (ii) with respect to any
transaction or series of related transactions that has a Fair Market Value
equal to, or in excess of, $5,000,000, either (A) the transaction or series
of related transactions is approved by a majority of the Independent
directors of the Board of Directors or (B) in the case of Minority-Owned
Corporations the transaction or series of related transactions was <PAGE>
contemplated in the business plan approved by a majority of the Independent
directors of the Board of Directors or was approved by Officers of the
Company within the scope of their grant of authority approved by a majority
of the Independent directors of the Board of Directors.
Section 3.11 of the Indenture as proposed to be amended
Section 3.11 will be deleted in its entirety.
Section 3.15 of the Indenture as currently in effect
SECTION 3.15 Limitation on Sale-Leaseback Transactions. The Company
will not, and will not permit any Subsidiary to, directly or indirectly,
enter into, assume, guarantee or otherwise become liable with respect to any
Sale-Leaseback Transaction unless (i) the Company or such Subsidiary would
be permitted under Section 3.08 to incur Debt in an aggregate principal
amount equal to or exceeding the value of the Sale-Leaseback Transaction or
(ii) the net proceeds from such transaction are at least equal to the Fair
Market Value of such Property being transferred and the Company or such
Subsidiary applies or commits to apply within 60 days an amount equal to the
Net Available Proceeds of sale pursuant to the Sale-Leaseback Transaction to
(A) the repayment of Company Debt that is Pari Passu with the Securities or,
if no such Debt is outstanding or repayable, in lieu thereof, other Company
or Subsidiary Debt or (B) the investment by the Company in the primary lines
of business of the Company and its Subsidiaries.
Section 3.15 of the Indenture as proposed to be amended
SECTION 3.11 Limitation on Sale and Leaseback Transactions. After
the date hereof, the Company will not, and will not permit any Restricted
Subsidiary to, enter into any Sale and Leaseback Transaction, unless (a) the
Company or such Restricted Subsidiary would be entitled to incur Secured
Debt pursuant to Section 3.08 (other than by reason of the provisions of
subparagraphs (a) through (f), inclusive, of said Section) in an amount
equal to the Attributable Debt in respect of such Sale and Leaseback
Transaction without equally and ratably securing the Securities as provided
in said Section or (b) each of the following conditions is satisfied: (i)
the Company shall promptly give notice of such sale or transfer to the
Trustee; (ii) the net proceeds of such sale or transfer are at least equal <PAGE>
to the fair value (as determined in good faith by a Board Resolution, a copy
of which has been delivered by the Company to the Trustee) of the property
which is the subject of such sale or transfer; and (iii) the Company or a
Restricted Subsidiary shall apply, within one year after the effective date
of such sale or transfer, or shall have committed within one year after such
effective date to apply, an amount at least equal to the net proceeds of the
sale or transfer of the property which is the subject of such sale or
transfer to the repayment of other Funded Debt owing by the Company or any
Restricted Subsidiary which is not subordinate and junior in right of
payment to the Securities; provided, however, that if pursuant to clause (b)
above the Company commits to apply an amount at least equal to the net
proceeds of a sale or transfer to the repayment of other Funded Debt, such
commitment shall be made in a written instrument delivered by the Company to
the Trustee and shall require the Company to so apply said amount within 18
months after the effective date of such sale or transfer, and it shall
constitute a breach of the provisions of this Section 3.11 if the Company
shall fail so to apply said amount in satisfaction of such commitment.
Sections 4.01 and 4.02 of the Indenture as currently in effect
SECTION 4.01 When the Company May Merge, etc. (a) The Company shall
not enter into any transaction or series of transactions in order to
consolidate or merge with or into any Person or in order to sell, assign,
transfer or lease or otherwise dispose of all or substantially all of its
Properties as an entirety to any Person or permit any Person to merge with
or into the Company unless:
(i) (A) the Company shall be the continuing Person after such
transaction, or (B) the Person (if other than the Company) formed by
such consolidation or into which the Company is merged or to which the
Properties of the Company are transferred substantially as an entirety
(the "surviving entity") is a corporation organized and existing under
the laws of the United States, any state thereof or the District of
Columbia;
(ii) (A) the surviving entity (if other than the Company)
unconditionally assumes by supplemental indenture, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture, <PAGE>
(B) the surviving entity meets the Legal Requirements applicable to
the Securities and this Indenture at the time of such transaction and
(C) the Indenture remains in full force and effect;
(iii) immediately before and immediately after giving effect to
such transaction or series of transactions on a pro forma basis, no
Default or Event of Default shall have occurred and be continuing and
the Company (or the surviving entity if the Company is not the
continuing obligor under the Indenture), giving effect to such
transaction, could incur at least $1.00 of additional Debt (assuming a
market rate of interest with respect to such additional Debt) under
Section 3.08(a); and
(iv) immediately after giving effect to such transaction or
series of transactions on a pro forma basis, including any Debt
incurred or anticipated to be incurred in connection with such
transaction or series of transactions, the Consolidated Net Worth of
the Company (or the surviving entity if the Company is not the
continuing obligor under the Indenture) is at least equal to the
Consolidated Net Worth of the Company immediately before such
transaction.
SECTION 4.02. Successor Corporation Substituted. Upon any
consolidation or merger or any transfer, sale, lease or other disposition of
all or substantially all of the assets of the Company pursuant to and in
accordance with Section 4.01, if the Company is not the surviving entity,
the surviving entity shall succeed to, and be substituted for, and may
exercise every right and power of the Company under this Indenture with the
same effect as if such Person (the "Successor") had been named herein as the
Company. When such a Successor assumes pursuant to Section 4.01 all of the
obligations of the Company under the Securities and this Indenture, the
applicable predecessor shall be released from the obligations so assumed.
Sections 4.01 and 4.02 of the Indenture as proposed to be amended
SECTION 4.01 When the Company May Merge, etc. The Company shall not
consolidate or merge into, or sell, assign, transfer or lease all or
substantially all of its assets to, any person unless: <PAGE>
(1) the person is a corporation organized and existing under the
laws of the United States of America or any State thereof or the
District of Columbia;
(2) the person assumes by supplemental indenture all the obligations
of the Company under the Securities and this Indenture;
(3) immediately after the transaction no Default shall exist; and
(4) an Officers' Certificate and Opinion of Counsel have been
delivered to the Trustee to the effect that the conditions set forth
in the preceding clauses (1) through (3) above have been met.
The corporation formed by or resulting from any such consolidation or
merger, or which shall have received all or substantially all of such
assets, shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as a party hereto, and thereafter,
except in the case of a lease of all or substantially all of such assets,
the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities.
Sections 5.01 and 5.02 of the Indenture as currently in effect
SECTION 5.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Security
when the same becomes due and payable and the Default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal or premium,
if any, on any Security when the same becomes due and payable at
Stated Maturity, upon acceleration, upon exercise by the Holder of the
repurchase option upon a Change of Control, upon declaration or
otherwise;
(3) the Company fails to observe, perform or comply with any of its
agreements or covenants in, or provisions of, the Securities or this
Indenture and such failure to observe, perform or comply continues for
60 days after receipt by the Company of notice of the Default from the <PAGE>
Trustee or from Holders of at least 25% in principal amount of the
Securities;
(4) the Company or any of its Subsidiaries fails, after any
applicable grace period, to make any payment of principal of, premium
in respect of, or interest on, any Debt when due, or any Debt of the
Company or any of its Subsidiaries is accelerated because of a default
and, in either case, the aggregate principal amount of such Debt with
respect to which any such failure to pay or acceleration has occurred
exceeds $5,000,000 or its foreign currency equivalent;
(5) one or more judgments, orders or decrees in an aggregate amount
in excess of $10,000,000 (net of applicable insurance coverage which
is acknowledged in writing by the insurer) are rendered against the
Company or any of its Subsidiaries (excluding any judgments or orders
that (i) relate to the Company's ordinary course of business in
foreign countries, (ii) are from a court of foreign jurisdiction and
(iii) are realizable upon Property with an aggregate value of less
than $10,000,000 of the Company, any of its Subsidiaries or
Minority-Owned Corporations) and are not discharged and either there
is any period of 60 days during which a stay of enforcement of such
judgments, orders or decrees, by reason of a pending appeal or
otherwise, is not in effect;
(6) the Company fails to comply with its obligations under Section
4.01;
(7) the Company or any of its Significant Subsidiaries pursuant to
or within the meaning of Title 11 of the United States Code or any
similar Federal or state law for the relief of debtors or affecting
creditors' rights (collectively, "Bankruptcy Law")
(i) commences a voluntary case or any other action or
proceeding,
(ii) consents by answer or otherwise to the commencement
against it of an involuntary case or any other action or
proceeding,<PAGE>
(iii) seeks or consents to the appointment of a receiver,
trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law (collectively, a "Custodian") of it or
for all or substantially all of its Property,
(iv) makes a general assignment for the benefit of its
creditors,
(v) admits in writing its inability to pay its Debts as the
same become due, or
(vi) takes corporate action for the purpose of effecting any of
the foregoing
(or takes any comparable action under any foreign laws relating to
insolvency);
(8) A court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries in an involuntary case in bankruptcy or
any other action or proceeding for any other relief,
(ii) appoints a Custodian of the Company or any of its
Significant Subsidiaries or for all or substantially all of the
Property of the Company or any of its Significant Subsidiaries,
or
(iii) orders the winding up or liquidation of the Company or any
of its Significant Subsidiaries,
(or any similar relief is granted under any foreign laws) and in each
case the order or decree remains unstayed and in effect for 60 days,
or any dismissal, stay, rescission or termination ceases to remain in
effect.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or <PAGE>
is effected by operation of law or pursuant to any judgment, order or decree
of any court or any order, rule or regulation of any other Governmental
Authority.
The Trustee, within 90 days after the occurrence of any continuing
Default that is known to the Trustee, will give notice thereof to the
Securityholders; provided, however, that, except in the case of a Default in
payment of principal of or interest on the Securities, the Trustee may
withhold such notice as long as it in good faith determines that such
withholding is in the interest of the Securityholders.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate
of any event which with the giving of notice and the lapse of time would
become an Event of Default under clause (3), its status and what action the
Company is taking or proposes to take with respect thereto.
SECTION 5.02 Acceleration. If an Event of Default (other than an
Event of Default specified in clause (7) or (8) of Section 5.01 with respect
to the Company or any of its Significant Subsidiaries) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least
25% in principal amount of the Securities by notice to the Company and the
Trustee, may declare the principal of and accrued interest on all the
Securities to be due and payable. Upon such a declaration, such principal
and interest shall be due and payable immediately. If an Event of Default
specified in clause (7) or (8) of Section 5.01 with respect to the Company
or any of its Significant Subsidiaries occurs, the principal of and interest
on all the Securities shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or
any Securityholders. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may (i) rescind an acceleration and its
consequences if the rescission would not conflict with any judgment, order
or decree and if all existing Events of Default have been cured or waived
(except nonpayment of principal or interest that has become due solely
because of acceleration) and (ii) waive an existing Default and its
consequences except a Default in the payment of the principal of or interest
on a Security or a Default in respect of a provision that cannot be amended
without the consent of each Holder affected, as described in Section 8.02.
No such rescission shall affect any subsequent Default or impair any right <PAGE>
consequent thereto.
Sections 5.01 and 5.02 of the Indenture as proposed to be amended
SECTION 5.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any
Security when the same becomes due and payable, which Default
continues for a period of 30 days;
(2) the Company defaults in the payment of the principal or
premium, if any, on any Security when the same becomes due and payable
at Stated Maturity, upon acceleration, upon exercise by the Holder of
the repurchase option upon a Change of Control, upon declaration or
otherwise;
(3) the Company fails to comply with any of its other
agreements with respect to Securities or this Indenture, which Default
continues for a period of 90 days after notice of such Default is
given to the Company by the Trustee or the Holders of at least 25% in
principal amount of the Securities;
(4) there occurs a default under any bond, indenture, note or
other evidence of indebtedness for money borrowed by the Company or
any Restricted Subsidiary or under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the
Company or any Restricted Subsidiary (including this Indenture) with
a principal amount then outstanding in excess of $25,000,000, whether
such indebtedness exists now or shall hereafter be created, which
default shall constitute a failure to pay any portion of the principal
of such indebtedness when due and payable after the expiration of any
applicable grace period with respect thereto or results in such
indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having
been rescinded or annulled;
(5) the Company or any Material Subsidiary pursuant to or
within the meaning of any Bankruptcy Law: <PAGE>
(a) commences a voluntary case;
(b) consents to the entry of an order for relief against
it in an involuntary case;
(c) consents to the appointment of a Custodian for it or
for all or substantially all of its property; or
(d) makes a general assignment for the benefit of its
creditors; or
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any Material
Subsidiary in an involuntary case;
(b) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of the property
of the Company or such Material Subsidiary; or
(c) orders the liquidation of the Company or any
Material Subsidiary, and the order or decree remains
unstayed and in effect for 90 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
SECTION 5.02. Acceleration. If an Event of Default with respect to
the Securities (other than an Event of Default specified in clause (5) or
(6) of Section 5.01 with respect to the Company or any Material Subsidiary)
occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to
the Company and the Trustee, may declare the principal of and accrued
interest on all the Securities to be due and payable immediately. Upon such
declaration, the principal (or specified amount) of and accrued interest on
all the Securities shall be due and payable immediately. If an Event of <PAGE>
Default specified in clause (5) or (6) of Section 5.01 with respect to the
Company or any of its Material Subsidiaries occurs, the principal of and
interest on all the Securities shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the
Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee and the Company may (i)
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
with respect to the Securities have been cured or waived (except nonpayment
of principal or interest that has become due solely because of the
acceleration) and (ii) waive an existing Default and its consequences except
a Default in respect of a provision that cannot be amended without the
consent of each Holder affected, as described in Section 8.02. No such
recision shall affect any subsequent Default or impair any right consequent
thereto.
Proposed Article 10 to the Indenture
A new Article 10, Guarantee of the Securities, is proposed to be added
to the Indenture. See Appendix II.
Section 9.02 of the Indenture as proposed to be amended
Section 9.02 of the Indenture will be amended to include a
notification address for Dresser and to revise the notification address for
Baroid, as follows:
SECTION 9.02. Notices. Any notice or communication shall be in
writing and delivered in Person or mailed by first-class mail addressed as
follows: <PAGE>
if to the Company:
Baroid Corporation
2001 Ross Avenue
Dallas, Texas 75201
Attention: Treasurer
if to the Trustee:
Texas Commerce Bank National Association
600 Travis
8th Floor
Houston, Texas 77002
Attention: Corporate Trust Department
if to the Guarantor:
Dresser Industries, Inc.
2001 Ross Avenue
Dallas, Texas 75201
Attention: Treasurer
Each party by notice to the others may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears
on the registration books of the Registrar and shall be sufficiently given
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
Certain Definitions 1.04 in the Indenture as currently in effect
"Affiliate" means, with respect to any Person, any other Person which
directly or indirectly through one or more intermediaries controls, or is <PAGE>
controlled by, or is under common control with, such Person. As used in
this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession,
directly or indirectly through intermediaries, of the power to direct or
cause the direction of the management and policies of a Person (whether
through the ownership of voting securities or partnership, equity or other
ownership interests, by contract or otherwise). Notwithstanding the
foregoing, no individual shall be deemed to be an Affiliate of a Person
solely by reason of his or her being an officer or director (or Person
performing an equivalent function) of such Person, and neither the Company
nor any of its Subsidiaries shall be deemed to be Affiliates of each other,
as long as no Affiliate (other than a Subsidiary or Minority Owned
Corporation) of the Company owns, directly or indirectly (except through
such Affiliate's ownership of its interest in the Company) any interest in
such Subsidiary.
"Asset Sale" means the sale or other disposition of any property,
plant or equipment of the Company or its consolidated Subsidiaries
(including pursuant to any Sale-Leaseback Transaction) that is not sold or
otherwise disposed of in the ordinary course of business and the sale or
other disposition of any Capital Stock of any Person.
"Average Life" means, as of the date of determination, with respect to
any Debt, the quotient obtained by dividing (i) the sum of the products of
the numbers of years from the date of determination to the dates of each
successive scheduled principal payment of such Debt multiplied by the amount
of such principal payment by (ii) the sum of all such principal payments.
"Capitalized Lease Obligations" of a Person means any obligation that
is required to be classified and accounted for as a capital lease on the
face of a balance sheet of such Person prepared in accordance with GAAP; the
amount of such obligation shall be the capitalized amount thereof,
determined in accordance with GAAP; and the Stated Maturity thereof shall be
the date of the last payment of rent or other amount due under such lease
prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Consolidated EBITDA" means, with respect to any period, the sum for
such period of Consolidated Net Income, plus, to the extent reflected in the <PAGE>
Company's consolidated income statement for the period for which
Consolidated Net Income is determined, without duplication, (i) Consolidated
Interest Expense, (ii) income tax expense, (iii) depreciation expense, (iv)
amortization expense and (v) any charge related to any premium or penalty
paid in connection with redeeming, repurchasing or retiring any Debt prior
to its Stated Maturity, all as determined on a consolidated basis for the
Company and its consolidated Subsidiaries in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, for any Transaction
Date, the ratio of (i) the aggregate amount of Consolidated EBITDA of the
Company and its consolidated Subsidiaries for the Reference Period to (ii)
the aggregate amount of Consolidated Interest Expense for the fiscal quarter
in which such Transaction Date occurs and to be accrued during the three
fiscal quarters immediately subsequent thereto (based on the pro forma
amount of Debt of the Company and its consolidated Subsidiaries projected by
the Company to be outstanding on such Transaction Date), assuming for the
purposes of this projection the continuation of market interest rates
prevailing on the Transaction Date and assuming base interest rates in
respect of floating interest rate obligations equal to the base interest
rates on such obligations in effect as of such Transaction Date; provided
that the interest rate used to calculate Consolidated Interest Expense shall
be adjusted for all or any portion of such four-quarter period to reflect
the effects of any Interest Swap Obligation to which the Company or any of
its Subsidiaries is a party; provided further that any Consolidated Interest
Expense with respect to Debt incurred or retired by the Company or any of
its Subsidiaries during the fiscal quarter in which such Transaction Date
occurs shall be calculated as if such Debt were so incurred or retired on
the first day of the fiscal quarter in which such Transaction Date occurs;
and provided further that if the transaction giving rise to the need to
calculate the Consolidated Interest Coverage Ratio would have the effect of
increasing or decreasing Consolidated EBITDA in the future, Consolidated
EBITDA shall be calculated on a pro forma basis as if such transaction had
occurred on the first day of the four fiscal quarters referred to in clause
(i) of this definition, and, during the same four fiscal quarters, (A) if
the Company or any of its Subsidiaries shall have engaged in any Asset Sale,
Consolidated EBITDA for such period shall be reduced by an amount equal to
the Consolidated EBITDA (if positive) or increased by an amount equal to the
Consolidated EBITDA (if negative) directly attributable in accordance with
GAAP to the assets that are the subject of such Asset Sale for such period <PAGE>
calculated on a pro forma basis as if such Asset Sale and any related
retirement of Debt had occurred on the first day of such period or (B) if
the Company or any of its Subsidiaries shall have acquired any material
Property out of the ordinary course of business, Consolidated EBITDA shall
be calculated on a pro forma basis to reflect the effects of acquiring such
Property as if such acquisition and any related financing had occurred on
the first day of such period.
"Consolidated Interest Expense" means, for the Company and its
consolidated Subsidiaries for any period, (i) the sum of, without
duplication, (A) the aggregate amount of interest expense with respect to
Debt recognized by the Company and its consolidated Subsidiaries, determined
on a consolidated basis in accordance with GAAP, (B) to the extent any Debt
of any Person is guaranteed by the Company or any Subsidiary, the aggregate
amount of interest paid or accrued by such other Person during such period
attributable to any such Debt, (C) Preferred Stock dividends in respect of
Preferred Stock of the Company or any Subsidiary held by Persons other than
the Company or a Subsidiary thereof and (D) the interest portion of any
deferred payment obligation, and less (ii) to the extent included in (i)
above, amortization or write-off during such period of deferred financing
costs of the Company and any Subsidiary during such period, together with
any charge related to any premium or penalty paid in connection with
redeeming, repurchasing or retiring any Debt prior to its Stated Maturity
(all the amounts described in (i) and (ii) above determined in accordance
with GAAP).
"Consolidated Net Income" means, for any period, the aggregate net
income (or net loss, as the case may be) of the Company and its consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP;
provided, however, that there shall be excluded from such consolidated
Net Income, without duplication:
(i) gains and losses resulting from any Asset Sale or from the
treatment of reserves related thereto (except any gains or losses
associated with the negotiated contract value of assets lost in the
ordinary course of the Company's drilling services and products
business as reflected in the Company's financial statements in
accordance with GAAP); <PAGE>
(ii) items classified as extraordinary (other than any tax
benefit of the utilization of net operating loss carry forwards or
alternative minimum tax credits);
(iii) the income or loss of any Person other than the Company or
a Subsidiary of the Company, except that (A) the Company's equity in
the net income of any such Person for such period shall be included in
such Consolidated Net Income to the extent of the aggregate amount of
cash dividends or other distributions actually paid by such Person
during such period out of funds legally available therefor and
recognized by the Company or a Subsidiary as a dividend or other
distribution and (B) the Company's equity in a net loss of any such
Person for such period shall be included in determining such
Consolidated Net Income;
(iv) the income or loss of any other Person (except to the
extent includable under clause (iii) above) accrued or attributable to
any period prior to the date (A) such Person becomes a Subsidiary of
the Company or any of its Subsidiaries, (B) such Person is merged into
or consolidated with the Company or any of its Subsidiaries or (C) any
of such Person's Subsidiaries or such Person's Property (or a portion
thereof) is acquired by the Company or any of its Subsidiaries;
(v) any non-cash charge resulting from the application of
Statement of Financial Accounting Standards No. 106 ("SFAS 106") to
the extent such non-cash charge exceeds the cash payments for benefits
covered by SFAS 106 for the relevant period;
(vi) the net income of any Subsidiary of the Company or any of
its Subsidiaries to the extent that the declaration of dividends or
similar distributions by that Subsidiary of that income is not at the
time permitted, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order,
statute, law, rule or Legal Requirements applicable to that Subsidiary
or to its stockholders;
(vii) any net income of any Person acquired by the Company or
any of its Subsidiaries in a pooling of interests transaction for any
period prior to the date of such acquisition; and <PAGE>
(viii) the cumulative effect of a change in accounting
principles.
"Consolidated Net Operating Cash Flow" means, for any period, the
Consolidated Net Income of the Company and its Subsidiaries for such period,
increased by (i) the sum of (A) Consolidated Interest Expense of the Company
for such period, (B) consolidated income tax expense of the Company and its
Subsidiaries (other than income tax expense attributable to Asset Sales),
(C) consolidated depreciation expense of the Company and its Subsidiaries,
(D) consolidated amortization expense of the Company and its Subsidiaries,
(E) other non-cash items reducing such Consolidated Net Income, minus
non-cash items increasing such Consolidated Net Income, and reduced by (ii)
any revenues received or accrued by the Company or any of its Subsidiaries
from any Person (other than the Company or any of its Subsidiaries) in
respect of any Investment (all of the amounts in (i) and (ii) above
determined in accordance with GAAP).
"Consolidated Net Tangible Assets" means the net assets (including
cash and cash equivalents) of the Company and its Subsidiaries determined on
a consolidated basis in accordance with GAAP, minus intangible assets
(including organization costs, patents, trademarks, copyrights, franchises,
licenses, research and development costs and goodwill, but excluding any
cash equivalents that may be deemed to be intangible assets).
"Consolidated Net Worth" of any Person as of any date of determination
means the total of the amounts that would be shown on the balance sheet of
such Person and its consolidated Subsidiaries, determined on a consolidated
basis in accordance with GAAP, as of such date, as (i) the par or stated
value of all outstanding Capital Stock of such Person, plus (ii) paid-in
capital or capital surplus relating to such Capital Stock, plus (iii) any
retained earnings or earned surplus, minus (A) any accumulated deficit,
minus (B) any amounts attributable to Disqualified Stock.
"Debt" of any Person means, without duplication:
(i) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of
which such Person is responsible or liable; <PAGE>
(ii) all Capitalized Lease Obligations of such Person;
(iii) all obligations of such Person issued or assumed as the
deferred purchase price of Property, all conditional sale obligations
of such Person and all obligations under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course
of business in accordance with customary trade practices);
(iv) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or similar
credit transaction (other than obligations with respect to letters of
credit securing obligations (other than obligations described in
clauses (i) through (iii) above) entered into in the ordinary course
of business of such Person to the extent such letters of credit are
not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third Business Day following receipt by
such Person of a demand for reimbursement following payment on the
letter of credit);
(v) the principal amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock;
(vi) all obligations of such Person in respect of the
"Agreement Value" (as defined in the Code of Standard Wording,
Assumptions and Provisions for Swaps of the Interest Swaps Dealers
Association, Inc.) of the Interest Swap Obligations, or such similar
valuation set forth in any Interest Swap Obligations;
(vii) all obligations of the type referred to in clauses (i)
through (vi) of other Persons, together with all dividends of other
Persons, for the payment of which, in either case, such Person is
responsible or liable as obligor, guarantor or otherwise; and
(viii) all obligations of the type referred to in clauses
(i) through (vii) of other Persons secured by any Lien on, or in
respect of which there is recourse to, any Property of the Person
whose Debt is determined hereunder (whether or not such obligation is
assumed by such Person), the amount of such obligation being deemed to <PAGE>
be the lesser of the value of such Property or the amount of the
obligation so secured or in respect of which there is such recourse.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
(ii) is convertible into or exchangeable or exercisable for Debt or
Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part, in each case on or prior to the first
anniversary of the Stated Maturity of the Securities.
"incur," with respect to any Debt, means, directly or indirectly,
issue, create, assume, guarantee, incur or otherwise become liable for such
Debt; provided, however, that any Debt of a Person existing at the time such
Person becomes a Subsidiary (whether by merger, consolidation, acquisition
or otherwise) shall be deemed to be incurred by such Subsidiary at the time
it becomes a Subsidiary; "incurrence" has a correlative meaning.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any interest rate swap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to provide interest rate
protection.
"Investment" in any Person means, directly, or indirectly, (i) (A) any
advance, loan or capital contribution to, (B) the purchase of any stock,
bonds, notes, debentures or other securities of or (C) the acquisition, by
purchase or otherwise, of all or substantially all of the business or assets
or stock or other evidence of beneficial ownership of, any Person or (ii)
any Capital Contribution or any other Investment in any Person, provided,
however, that the term "Investment" shall not include extensions of trade
credit on commercially reasonable terms in accordance with normal trade
practices.
"Lien" means any mortgage, pledge, lien, charge, adverse claim
affecting title, deed of trust, security interest, option or other agreement
to sell or any other similar encumbrance (including any agreement to give
any of the foregoing). For purposes of this Indenture, a Person shall be <PAGE>
deemed to own subject to a Lien any Property that it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
agreement, Capitalized Lease Obligation, Sale/Leaseback Transaction or other
title retention agreement (including any lease in the nature thereof)
relating to such Property.
"Net Available Proceeds" means, with respect to any Sale-Leaseback
Transaction entered into by the Company or any Subsidiary, the aggregate net
proceeds received by the Company or such Subsidiary from such Sale-Leaseback
Transaction after payment of expenses, fees, taxes, commissions and similar
amounts incurred in connection therewith, whether such proceeds are in cash
or in Property (valued at the Fair Market Value thereof at the time of
receipt).
"Non-Recourse Indebtedness" means Debt or other obligations secured by
a Lien on Property to the extent that the liability for such Debt or other
obligations is limited to the security of the Property without liability on
the part of the Company or any Subsidiary (other than the Subsidiary that
holds title to such Property) for any deficiency.
"Pari Passu," as applied to the ranking of any Debt of a Person in
relation to other Debt of such Person, means that each such Debt either (i)
is not subordinate or junior in right of payment to any Debt or (ii) is
subordinate or junior in right of payment to the same Debt as is the other,
and is so subordinate or junior to the same extent, and is not subordinate
or junior in right of payment to each other or to any Debt as to which the
other is not so subordinate or junior.
"Permitted Liens" means, with respect to any Person,
(i) Liens securing Debt under the Baroid Credit Agreement (or
any Refinancing Agreement) in respect of liabilities for letters of
credit, which liabilities (consisting of the undrawn face amount of
such letters of credit and the unpaid amount of reimbursement
obligations in respect of drawings on such letters of credit) do not
exceed $50,000,000, provided that such Debt is permitted by clause (i)
of Section 3.08(b);
(ii) Liens securing letters of credit issued pursuant to <PAGE>
self-insurance obligations in accordance with clause (ii) of Section
3.08(b);
(iii) Liens securing Debt under Capitalized Lease Obligations
and/or purchase money indebtedness; provided that (A) the principal
amount of such Debt incurred in any such transaction does not, at the
time such Debt is incurred, exceed 100% of the purchase price of the
Property acquired in connection with such Capitalized Lease Obligation
or purchase money indebtedness and (B) no Property of the Company
(other than the Property acquired in connection with such Capitalized
Lease Obligation or purchase money indebtedness) is subject to any
Lien securing such Debt;
(iv) Liens on Property of a Person existing at the time such
Person is merged with or into or consolidated with the Company or a
Subsidiary (and not incurred in anticipation of such transaction);
provided that such Liens do not extend to or cover any Property of the
Company or any Subsidiary (other than the Property acquired in the
merger or consolidation);
(v) Liens on Property existing at the time of the acquisition
thereof (and not incurred in anticipation of such transaction);
provided that such Liens do not extend to or cover any Property of the
Company or any Subsidiary (other than the Property acquired in the
acquisition);
(vi) Liens on the Property of a Subsidiary of the Company
existing at the time such Subsidiary became a Subsidiary of the
Company and not incurred as a result of (or in connection with or in
anticipation of) such Subsidiary becoming a Subsidiary of the Company,
provided that such Liens do not extend to or cover any Property of the
Company or any of its other Subsidiaries (other than the Property so
acquired);
(vii) any Lien on the accounts receivable, inventory, general
intangibles and proceeds therefrom of the Company and its Subsidiaries
securing Debt (and related payment and performance obligations) under
any currency hedging agreements and Interest Swap Obligations; <PAGE>
(viii) any Lien arising by reason of (A) any judgment, decree or
order of any court, so long as such Lien is being contested in good
faith and any appropriate legal proceedings which may have been duly
initiated for the review of such judgment, decree or order shall not
have been finally terminated or the period within which such
proceedings may be initiated shall not have expired, (B) taxes that
are not yet delinquent or that are being contested in good faith, (C)
security for payment of workers' compensation or other similar
insurance, (D) security for the performance of tenders, contracts
(other than contracts for the payment of borrowed money) or leases,
(E) deposits to secure public or statutory obligations, or in lieu of
surety or appeal bonds entered into in the ordinary course of
business, (F) operation of law in favor of carriers, warehousemen,
landlords, mechanics, materialmen, laborers, employees, suppliers or
similar Persons, incurred in the ordinary course of business for sums
that are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings that suspend the collection
thereof, and (G) security for surety, appeal, reclamation, performance
or other similar bonds;
(ix) easements, reservations, licenses, rights-of-way, zoning
restrictions and covenants, conditions and restrictions and other
similar encumbrances or title defects that, in the aggregate, do not
materially detract from the use of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(x) leases and subleases of Property that do not interfere with
the ordinary conduct of the business of the Company or any of its
Subsidiaries, and that are made on customary and usual terms
applicable to similar Properties;
(xi) Liens for property taxes for Property that the Company or
any Subsidiary has determined to abandon, provided that (A) if the
book value of such Property as of the time of such proposed
abandonment exceeds $500,000, the Board of Directors of the Company or
such Subsidiary, as the case may be, shall have determined that the
Fair Market Value of such Property as of the date of determination
does not exceed the then-outstanding amount of the property tax for <PAGE>
such Property and (B) the sole recourse for such tax, assessment,
charge or levy is to such Property;
(xii) Liens securing Debt or other obligations of the Company or
Subsidiary not in excess of $5,000,000 in the aggregate;
(xiii) Liens to secure any Debt that renews, extends,
substitutes, replaces or refinances ("refinance," "refinanced" or
"refinancing") other Debt incurred in compliance with the terms of the
Indenture, provided that (A) the Debt being refinanced shall have been
secured by a Lien for Debt that is permitted by this definition of
Permitted Liens; (B) the refinancing does not result in an increase in
the aggregate original principal amount or the original committed
amount of the Debt being so refinanced unless the increase complies
with the provisions of Section 3.08(a); (C) except with respect to
Liens described under clause (ii) of this definition of Permitted
Liens, the Property covered by such Liens shall include only the
Property that secured the Debt being so refinanced; (D) refinanced
Debt shall not rank, in right of payment with respect to the
Securities, prior to the Debt being refinanced; and (E) the Lien on
the refinanced Debt does not secure an amount in excess of the
original amount permitted under this definition of Permitted Liens.
"Preferred Stock," as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus the
premium, if any (including premium payable pursuant to Section 3.14),
payable on the Security which is due or overdue or is to become due at the
relevant time.
"Qualified Capital Stock" means Capital Stock not constituting
Disqualified Stock.
"Redeemable Capital Stock" means, with respect to any Person, any <PAGE>
Capital Stock of such person that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or
upon the happening of any event, matures or may mature or is or may become
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or is exchangeable for Debt, or is redeemable at the option of the holder
thereof, in whole or in part, on or prior to the Stated Maturity of the
Securities.
"Reference Period," with respect to any Transaction Date, means the
period of four consecutive fiscal quarters ending with the last full fiscal
quarter for which financial information is available immediately preceding
the Transaction Date.
"Refinancing Agreement" means any credit agreement or other agreement
pursuant to which the Company renews, extends, substitutes, refinances or
replaces at any time all or any portion of the borrowings under the Baroid
Credit Agreement or another Refinancing Agreement.
"Restricted Payment" means any of the following: any declaration or
payment of any dividend on, or distribution on or in respect of, or
purchase, redemption, acquisition or retirement for value, of any Capital
Stock of the Company or any Affiliate of the Company, other than any
dividend or distribution payable solely in Qualified Capital Stock (other
than Redeemable Capital Stock) of the Company or such Affiliate, as the case
may be.
"Sale-Leaseback Transaction" means an arrangement relating to Property
owned as of the date of this Indenture or thereafter acquired whereby the
Company or any of its Subsidiaries transfers such Property to a Person and
leases it back from such Person.
"Significant Subsidiary" means each Subsidiary of the Company that (i)
during the most recent four consecutive fiscal quarters of the Company for
which financial information thereof is available accounted for more than 10%
of the Consolidated Net Operating Cash Flow of the Company or (ii) is the
owner, directly or indirectly, of more than 10% of the Consolidated Net
Tangible Assets of the Company.
"Transaction Date" means, for any test or ratio, the date of the <PAGE>
transaction giving rise to the requirement to determine such test or ratio.
"Voting Stock" means securities of any class or classes of a Person,
the holders of which are ordinarily, in the absence of contingencies,
entitled to vote for corporate directors (or Persons performing equivalent
functions).
Certain Definitions 1.04 in the Indenture as proposed to be amended
"Affiliate" means any person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the Company.
"Consolidated Net Tangible Assets" means the total amount of assets
which would be included on a consolidated balance sheet of the Guarantor and
its subsidiaries (whether such subsidiaries are corporations or partnerships
or other entities not organized as corporations) under generally accepted
accounting principles (less applicable reserves and other properly
deductible items) after deducting therefrom:
(a) all short-term liabilities and liability items, except for
(i) liabilities and liability items payable by their terms more than
one year from the date of determination (or renewable or extendible at
the option of the obligor for a period ending more than one year after
such date) and (ii) liabilities in respect of retiree benefits other
than pensions for which the Guarantor is required to accrue pursuant
to Statement of Financial Accounting Standards No. 106; and
(b) all goodwill, trade names, trademarks, patents,
unamortized debt discount, unamortized expense incurred in the
issuance of debt and other intangible assets.
Certain Definitions in the Indenture to be deleted in their entirety
"Asset Sale"; "Average Life"; "Capital Contribution"; "Capitalized
Lease Obligations"; "Consolidated EBITDA"; "Consolidated Interest Coverage
Ratio"; "Consolidated Interest Expense"; "Consolidated Net Income";
"Consolidated Net Operating Cash Flow"; "Consolidated Net Worth"; "Debt";
"Disqualified Stock"; "incur"; "Interest Swap Obligations"; "Investment";
"Lien"; "Net Available Proceeds"; "Non-Recourse Indebtedness"; "Pari Passu"; <PAGE>
"Permitted Liens"; "Qualified Capital Stock"; "Redeemable Capital Stock";
"Restricted Payment"; "Significant Subsidiary"; and "Transaction Date."
New Definitions Proposed to be Added to the Indenture
"Attributable Debt" means, in respect of a Sale and Leaseback
Transaction, the present value (discounted at the weighted average effective
interest rate per annum of the outstanding Securities of all series,
compounded semiannually) of the obligation of the lessee for rental payments
during the remaining term of the lease entered into in connection with such
transaction, including any period for which such lease has been extended or
may, at the option of the lessor, be extended or, if earlier, until the
earliest date on which the lessee may terminate such lease upon payment of a
penalty (in which case for purposes of this definition the obligation of the
lessee for rental payments shall include such penalty), after excluding all
amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water and utility rates and similar charges.
Notwithstanding the foregoing, there shall not be deemed to be any
"Attributable Debt" in respect of a Sale and Leaseback Transaction if the
Company is authorized to enter into such transaction pursuant to clause (b)
of Section 3.11.
"Funded Debt" means all indebtedness or obligations which by its terms
is payable more than 12 months after the date of determination (or which is
renewable or extendible at the option of the obligor on such indebtedness to
a date more than 12 months after the date of determination) which should
under generally accepted accounting principles be shown as a liability on
the consolidated financial statements of the Company and its consolidated
subsidiaries.
"Guarantee" means any guarantee of the Guarantor of the Securities
pursuant to Article 10, whether or not such guarantee is endorsed on the
Securities.
"Guarantor" means the party named as such above until a successor
replaces it pursuant to the applicable provisions of this Indenture, and
thereafter shall mean the successor.
"Material Subsidiary" means any consolidated subsidiary of the Company <PAGE>
(whether a corporation or a partnership or other entity not organized as a
corporation) if such consolidated subsidiary would be deemed a
"significant subsidiary" under the rules and regulations promulgated by
by the Securities and Exchange Commission under the Securities Act.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption, pursuant to a sinking fund
or otherwise.
"Principal" of a Security means the principal of the Security, plus
the premium, if any, on the Security. In determining whether the Holders of
the requisite principal amount of any series of Original Issue Discount
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the principal amount of any Original Issue
Discount Security for such purposes shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon a declaration of acceleration of the Stated Maturity thereof pursuant
to Section 5.02.
"Restricted Subsidiary" means any Subsidiary existing as of the date
hereof or any corporation that is the successor to such a Subsidiary;
provided, however, that the term "Restricted Subsidiary" shall not include
any Subsidiary the primary business of which is to provide insurance to the
Company or its Affiliates.
"Sale and Leaseback Transaction" means any sale or transfer made by
the Company or one or more Restricted Subsidiaries (except a sale or
transfer made to the Company or one or more Restricted Subsidiaries) of any
property which (in the case of a property which is a manufacturing plant,
warehouse, or office building) has been in operation, use, or commercial
production (exclusive of test and start-up periods) by the Company or any
Restricted Subsidiary for more than 120 days prior to such sale or transfer
or which (in the case of a case or a property which is a parcel of real
property other than a manufacturing plant, warehouse or office building) has
been owned by the Company or any Restricted Subsidiary for more than 120
days prior to such sale or transfer, if such sale or transfer is made with
the intention of leasing, or as part of an arrangement involving the lease,
of such property to the Company or a Restricted Subsidiary, except (a) a <PAGE>
lease for a period not exceeding 60 months (exclusive of any renewal options
granted thereunder to the Company or any Restricted Subsidiary), made with
the intention that the use of the leased property by the Company or such
Restricted Subsidiary will be discontinued on or before the expiration of
such period and (b) a lease that secures or relates to obligations issued by
the United States of America or any state, territory or possession of the
United States of America, or any political subdivision of any of the
foregoing, or of the District of Columbia, in connection with the financing
of the cost of construction or acquisition of such property or a part
thereof.
"Secured Debt" means (i) any indebtedness for money borrowed by, or
evidenced by a note or other similar instrument of, the Company or a
Restricted Subsidiary, (ii) any other indebtedness of the Company or
Restricted Subsidiary on which by the terms of such indebtedness interest is
paid or payable, including obligations evidenced or secured by leases,
installment sales agreements or other instruments, or (iii) any indebtedness
or obligations of others of a type referred to in clause (i) or (ii) above
that are guaranteed, directly or indirectly, by the Company or any
Restricted Subsidiary, which in any such case is secured by (a) a Security
Interest in any property of the Company or any Restricted Subsidiary or
portion thereof or (b) a Security Interest in any shares of stock owned
directly or indirectly by the Company or a Restricted Subsidiary in a
corporation or in equity interests owned by the Company or a Restricted
Subsidiary in a partnership or other entity not organized as a corporation
or in the rights of the Company or any Restricted Subsidiary in respect of
indebtedness for money borrowed by a corporation, partnership or other
entity in which the Company or a Restricted Subsidiary has an equity
interest. The securing in the foregoing manner of any indebtedness which
immediately prior thereto was not Secured Debt shall be deemed to be the
creation of Secured Debt at the time such security is given. The amount of
Secured Debt at any time outstanding shall be the maximum aggregate amount
then owing thereon by the Company and its Restricted Subsidiaries.
"Security Interest" means any mortgage, pledge, lien, encumbrance or
other security interest which secures payment or performance of an
obligation. <PAGE>
APPENDIX II
ARTICLE 10
GUARANTEE OF SECURITIES
SECTION 10.01 Guarantee. The Guarantor for consideration received
unconditionally and irrevocably guarantees to each Securityholder (i) the
due and punctual payment of the principal of and interest on such Security
when and as the same shall become due and payable, whether at Stated
Maturity, as a result of redemption, upon exercise by the Holder of the
repurchase option upon a Change of Control, by acceleration or otherwise;
(ii) the due and punctual payment of interest on overdue principal of and
interest on the Securities, to the extent lawful; (iii) the due and punctual
performance of all other obligations under this Indenture to the
Securityholders or the Trustee in accordance with the terms of such Security
and of this Indenture, and (iv) in the case of any extension of time of
payment or renewal of any securities or any such other obligations, that the
same will be promptly paid in full when due or performed in accordance with
the terms of the extension or renewal, at Stated Maturity, at redemption,
upon exercise by the Holder of the repurchase option upon a Change of
Control, by acceleration or otherwise, to be paid by such Guarantor. In all
respects, the Guarantor hereby agrees that its obligations hereunder shall
be absolute and unconditional, irrespective of, and shall be unaffected by,
an invalidity, irregularity or unenforceability of any such Security or any
other Article of this Indenture, any failure to enforce or exercise, or
delay in enforcing or exercising, any right, power or privilege or any of
the other provisions of such Security or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, by
the Securityholders or the Trustee, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or
guarantor. This Guarantee is a guarantee of payment and not of collection.
The Guarantor waives diligence, presentment, filing of claims with a court
in the event of merger or bankruptcy of the Company, any right to require a
proceeding or demand first against the Company, the benefit of discussion,
protest or notice with respect to any such Security or the indebtedness
represented thereby and all other demands whatsoever, and covenants that
this Guarantee will not be discharged as to any Security except by payment
in full of the amount of principal thereof and interest thereon and as <PAGE>
provided by this Indenture. The Guarantor further agrees that, as between
Guarantor, on the one hand, and the Securityholders and the Trustee, on the
other hand, (i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 5 hereof for the purposes of this
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed
hereby, and (ii) in the event of any acceleration of such obligations as
provided in Article 5 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for the
purpose of this Guarantee. In addition, without limiting the foregoing
provisions, upon the effectiveness of an acceleration under Article 5, the
Trustee shall promptly make a demand for payment on the Securities under the
Guarantee provided for in this Article 10 and not discharged; provided that
the failure by the Trustee to make any such demand shall not impair or
otherwise effect the obligations of the Guarantor.
The Guarantee set forth in this Section 10.01 shall not be valid or
become obligatory for any purpose with respect to any Security unless the
certificate of authentication shall have been signed by the Trustee.
The obligations of Guarantor pursuant to this Guarantee shall continue
to be effective or automatically reinstated, as the case may be, if at any
time payment of obligations under this Indenture is rescinded or otherwise
must be restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or the Guarantor or for any
reason, all as though such payment had not been made.
The Guarantor shall be subrogated to all rights of the Securityholder
and the Trustees under the Securities Act of the Indenture as amended by the
Indenture; provided that the Guarantor shall not be entitled to any payments
arising out of such subrogation right until the principal of and interest on
all Securities shall have been irrevocably paid in full in accordance with
the terms of such Securities and the Guarantee.
The Trustee and, to the extent available under this Indenture, each
Securityholder shall have the right, power and authority to do all things,
including instituting or appearing in any suit or proceeding, not
inconsistent with the express provisions of this Guarantee, which it deems <PAGE>
necessary or advisable to enforce the provisions of this Guarantee. Each
and every default to which this Guarantee applies shall give rise to a
separate cause of action hereunder, and separate suits may be brought
hereunder as each cause of action arises. No remedy conferred upon or
reserved to the Trustee and/or each Securityholder is intended to be
exclusive of any other remedy or remedies, but each and every remedy shall
be cumulative and shall be in addition to every other remedy given under
this Guarantee either now or hereafter existing at law or in equity.
SECTION 10.02 Obligations of Guarantor Unconditional. Nothing
contained in this Article 10 or elsewhere in this Indenture or in any
Security is intended to or shall impair, as between Guarantor and the
Securityholders and the Trustee, the obligation of Guarantor, which is
absolute and unconditional, to pay to the Securityholders and the Trustee
the principal of and interest on the Securities as and when the same shall
become due and payable in accordance with the provisions of this Guarantee,
nor shall anything herein or therein prevent the Trustee or any
Securityholder from exercising all remedies otherwise permitted by
applicable law upon an Event of Default under this Indenture.
SECTION 10.03 Execution of Guarantee. To evidence its guarantee to
the Securityholders and the Trustee, the Guarantor hereby agrees to execute
a notation relating to the guarantee on each Security authenticated and made
available for delivery by the Trustee. The Guarantor hereby agrees that its
Guarantee set forth in Section 10.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a notation of such
Guarantee. <PAGE>
BAROID CORPORATION
Solicitation of Consents
to Indenture Amendment
and Prospectus
DRESSER INDUSTRIES, INC.
Prospectus
Questions concerning the terms of the Solicitation should be directed
to the Solicitation Agent at the telephone number set forth below.
Deliveries of Consents should be made to the Information Agent at the
address or facsimile number set forth below (facsimiles should be confirmed
by physical delivery). Requests for additional copies of this Consent
Solicitation Statement/Prospectus or the Consent should be directed to the
Information Agent at the telephone number and address set forth below.
The Solicitation Agent is: The Information Agent is:
Lehman Brothers Inc. D. F. King & Co., Inc.
American Express Tower 77 Water Street
World Financial Center 20th Floor
New York, New York 10285-0900 New York, New York 10005
Attn: Steven Delaney Attn: John Bibas
(212) 528-7581 (212) 493-6925
or or
Call Toll-Free 1-800-438-3242 Call Toll-Free 1-800-669-5550
Facsimile: (212) 809-8839
<PAGE>
TABLE OF CONTENTS
Page Page
Available Information i Capitalization of Dresser 20
Incorporation of Certain The Solicitation 21
Documents by Reference ii Certain Federal Income Tax Consequences 25
Summary 1 Legal Opinion 28
Introduction 8 Experts 28
The Companies 8 Appendix I AI-1
The Proposed Amendment 9 Appendix II AII-1
Description of The Guarantee 15
Selected Consolidated Financial
Information 16
Ratio of Earnings to Fixed
Charges 19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Pursuant to Section 145 of the Delaware General Corporation Law
("DGCL"), a corporation may indemnify any person who is or was a party or is
threatened to be made a party to any action, suit, or proceeding (other than
an action by or in the right of the corporation) by reason of the fact that
he is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement, actually and reasonably incurred by
him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful. In
an action by or in the right of the corporation, the corporation may
indemnify any such person against expenses actually and reasonably incurred
by him in connection with the defense or settlement of such action if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, except that no
indemnification shall be made in respect of any claim or issue as to which
such person is adjudged to be liable to the corporation unless and only to
the extent that the Delaware Court of Chancery or the court in which such
action was brought shall determine that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses, which the
court shall deem proper. Indemnification, unless ordered by the court, shall
be made by the corporation only as authorized in the specific case upon a
determination that indemnification of such person is proper in the
circumstances because he has met the applicable standard of conduct. Such
determination is made (1) by the board of directors by a majority vote of a
quorum consisting of disinterested directors, or (2) by independent legal
counsel in a written opinion, or (3) by the stockholders. To the extent that
a director, officer, employee or agent of a corporation has been successful
on the merits or otherwise in defense of any such matter, Section 145 <PAGE>
requires that the corporation indemnify him against expenses actually and
reasonably incurred by him in his defense. Further, expenses may be paid by
the corporation in advance of final disposition of the matter upon receipt
of an undertaking by or on behalf of such director, officer, employee or
agent to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified. Such indemnification and advancement of
expenses is not deemed exclusive of any other right to which a director or
officer might be entitled under any by-law, agreement, vote of stockholders
or disinterested directors or otherwise. Section 145 also empowers a
corporation to purchase and maintain insurance on behalf of any person who
might be indemnified thereunder whether or not the corporation would have
the power to indemnify him against such liability under such Section.
Dresser's Restated Certificate of Incorporation, as amended, provides
for indemnification of certain persons including directors and officers to
the fullest extent permitted under Section 145 of the DGCL.
Insurance is maintained by Dresser covering certain expenses,
liability or losses which may be incurred by any person by reason of his
being a director or officer of the Company or a subsidiary corporation,
partnership, joint venture, trust or other enterprise. <PAGE>
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits
*1.1 Form of Solicitation Agreement between Dresser, Baroid and
Lehman Brothers.
2.1 Agreement and Plan of Merger dated September 7, 1993, among
Dresser, BCD Acquisition Corporation and Baroid. (Incorporated
by reference to Exhibit 2.1 to Dresser's Registration Statement
on Form S-4, Registration No. 33-50563).
4.1 Form of Indenture, dated as of June 1, 1993, between Dresser and
NationsBank of Texas, N.A., as Trustee, for unsecured
debentures, notes and other evidences of indebtedness.
(Incorporated by reference to Exhibit 4.1 to Dresser's
Registration Statement on Form S-3, Registration No. 33-59562).
4.2 Form of Indenture between Baroid and Texas Commerce Bank
National Association as Trustee governing Senior Notes due 2003,
including form of Note. (Incorporated by reference to Exhibit
4.01 to the Registration Statement on Form S-3 of Baroid,
Registration No. 33-60174).
**4.3 Form of Supplemental Indenture between Dresser, Baroid and Texas
Commerce Bank National Association.
*5.1 Opinion of Rebecca R. Morris as to legality of securities being
registered, including consent.
**8.1 Opinion of Weil, Gotshal & Manges with respect to tax matters,
including consent.
**12.1 Computation of Ratio of Earnings to Fixed Charges.
*23.1 Consent of Price Waterhouse.
*23.2 Consent of Ernst & Young. <PAGE>
*23.3 Consent of Arthur Andersen & Co.
*23.4 Consent of Coopers & Lybrand.
*23.5 Consent of Rebecca R. Morris is included in Exhibit 5.1.
** 23.6 Consent of Weil, Gotshal & Manges is included in Exhibit 8.1.
**24.1 Powers of Attorney. <PAGE>
(a) Exhibits (continued)
*25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 on Form T-1.#
**99.1 Form of Consent including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9.
**99.2 Form of Letters to Brokers and Clients and Letter of
Instructions.
_____________
* Filed herewith.
** Previously filed.
# Bound separately as required by Item 601(b)(25) only in conforming paper
copies of this Registration Statement.
(b) Financial Statement Schedules
Not Applicable.
(c) Reports, Opinions or Appraisals
Not applicable.
Item 22. Undertakings
(a) The undersigned registrant hereby undrtakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prespectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8, and the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from resignation by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, as amended
(the "Securities Act"), each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be <PAGE>
deemed to be the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is part of this registration statement, by
any person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of the applicable
form.
(d) The Registrant hereby undertakes that every prospectus (i) that
is filed pursuant to the paragraph immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities Act,
and is used in connection with an offering of securities subject to
Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that,
for purposes of determining any liability under the Securities Act, each
such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(e) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed by the Securities Act and will be governed by the <PAGE>
final adjudication of such issue.
(f) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one
business day of receipt of such request, and to send the incorporated
documents by first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date of
this Registration Statement through the date of responding to the request.
(g) The undersigned Registrant hereby undertakes to supply by means
of a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective. <PAGE>
SIGNATURES
The Registrant
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-4 and has duly caused this Pre-
Effective Amendment No.2 to Registration Statement on Form S-4 (Registration
No. 33-53077) to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Dallas, State of Texas, on the 28th day of June,
1994.
DRESSER INDUSTRIES, INC.
By: /s/ George H. Juetten
George H. Juetten,
Vice President - Controller
BAROID CORPORATION
By: /s/ George H. Juetten
George H. Juetten,
Vice President <PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 2 to Registration Statement on Form S-4
(Registration No. 33-53077) has been signed by the following persons in the
capacities of Dresser and as of the date indicated.
Signature Title Date
* JOHN J. MURPHY Chairman of the Board June 28, 1994
John J. Murphy (Principal Executive
Officer)
* B. D. ST. JOHN Vice Chairman (Principal June 28, 1994
B. D. St. John Financial Officer)
/s/ GEORGE H. JUETTEN Vice President-Controller June 28, 1994
George H. Juetten (Principal Accounting
Officer)
* WILLIAM E. BRADFORD Director June 28, 1994
William E. Bradford
* SAMUEL B. CASEY, JR. Director June 28, 1994
Samuel B. Casey, Jr.
* LAWRENCE S. EAGLEBURGER Director June 28, 1994
Lawrence S. Eagleburger
* RAWLES FULGHAM Director June 28, 1994
Rawles Fulgham
* JOHN A. GAVIN Director June 28, 1994
John A. Gavin
* RAY L. HUNT Director June 28, 1994
Ray L. Hunt
* J. LANDIS MARTIN Director June 28, 1994
J. Landis Martin <PAGE>
* LIONEL H. OLMER Director June 28, 1994
Lionel H. Olmer
* JAY A. PRECOURT Director June 28, 1994
Jay A. Precourt
* A. KENNETH PYE Director June 28, 1994
A. Kenneth Pye
* RICHARD W. VIESER Director June 28, 1994
Richard W. Vieser
*BY: /s/ STANLEY E. MCGLOTHLIN
Stanley E. McGlothlin
(Attorney-in-Fact) <PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No.2 to Registration Statement on Form S-4 (Registration
No. 33-53077) has been signed by the following persons in the capacities of
Baroid and as of the date indicated.
Signature Title Date
* JOHN J. MURPHY Chairman of the Board June 28, 1994
John J. Murphy (Principal Executive
Officer)
* B. D. ST. JOHN Vice Chairman (Principal June 28, 1994
B. D. St. John Financial Officer)
/s/ GEORGE H. JUETTEN Vice President (Principal June 28, 1994
George H. Juetten Accounting Officer)
William E. Bradford Director June , 1994
* JAMES L. BRYAN Director June 28, 1994
James L. Bryan
*BY:/s/ STANLEY E. MCGLOTHLIN
Stanley E. McGlothlin
(Attorney-in-Fact) <PAGE>
EXHIBIT INDEX
*1.1 Form of Solicitation Agreement between Dresser, Baroid and
Lehman Brothers.
2.1 Agreement and Plan of Merger dated September 7, 1993, among
Dresser, BCD Acquisition Corporation and Baroid. (Incorporated
by reference to Exhibit 2.1 to Dresser s Registration Statement
on Form S-4, Registration No. 33-50563).
4.1 Form of Indenture, dated as of June 1, 1993, between Dresser and
NationsBank of Texas, N.A., as Trustee, for unsecured
debentures, notes and other evidences of indebtedness.
(Incorporated by reference to Exhibit 4.1 to Dresser s
Registration Statement on Form S-3, Registration No. 33-59562).
4.2 Form of Indenture between Baroid and Texas Commerce Bank
National Association as Trustee governing Senior Notes due 2003,
including form of Note. (Incorporated by reference to Exhibit
4.01 to the Registration Statement on Form S-3 of Baroid,
Registration No. 33-60174).
**4.3 Form of Supplemental Indenture between Dresser, Baroid and Texas
Commerce Bank National Association.
**5.1 Opinion of Rebecca R. Morris as to legality of securities being
registered, including consent.
**8.1 Opinion of Weil, Gotshal & Manges with respect to tax matters,
including consent.
**12.1 Computation of Ratio of Earnings to Fixed Charges.
*23.1 Consent of Price Waterhouse.
*23.2 Consent of Ernst & Young.
*23.3 Consent of Arthur Andersen & Co. <PAGE>
*23.4 Consent of Coopers & Lybrand.
*23.5 Consent of Rebecca R. Morris is included in Exhibit 5.1.
**23.6 Consent of Weil, Gotshal & Manges is included in Exhibit 8.1.
**24.1 Powers of Attorney.
*25.1 Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 on Form T-1.#
**99.1 Form of Consent including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9.
**99.2 Form of Letters to Brokers and Clients and Letter of
Instruction.
________________________
* Filed herewith.
** Previously filed.
# Bound separately as required by Item 601(b)(25) only in
conforming paper copies of this Registration Statement. <PAGE>
Exhibit 1.1
SOLICITATION AGENT AGREEMENT
July __, 1994
Lehman Brothers Inc.
American Express Tower
World Financial Center
New York, New York 10285-0900
Ladies and Gentlemen:
1. The Transaction. Baroid Corporation, a Delaware
corporation ("Baroid"), plans to solicit (the "Solicitation")
the consents ("Consents") of registered holders of its 8% Senior
Notes, due 2003 (the "Notes") as of a record date to be
established in accordance with the Indenture referred to below
(the "Record Date") to an amendment (the "Proposed Amendment")
to the Indenture dated as of April 22, 1993 (the "Indenture"),
between Baroid and Texas Commerce Bank National Association, as
trustee (the "Trustee"). The purpose of the Solicitation and
the Proposed Amendment is to amend or eliminate certain
covenants contained in the Indenture, which changes are desired
as a result of the merger (the "Merger"), effective as of
January 21, 1994, of BCD Acquisition Corporation, a wholly owned
subsidiary of Dresser Industries, Inc. ("Dresser"), with and
into Baroid. Baroid intends to effect the Proposed Amendment to
the extent that Baroid receives without revocation and delivers
to the Trustee the Consents of the registered holders of Notes,
as of the Record Date, of at least a majority in aggregate
principal amount of the Notes outstanding and not owned by
Baroid or any of its affiliates (collectively the "Requisite
Consents").
If Baroid delivers to the Trustee the Requisite
Consents and the Proposed Amendment is to be effected, Dresser
will fully and unconditionally guarantee (the "Guarantee") the
due and punctual payment of the principal of and interest on the
Notes, as amended by the Proposed Amendment (the "Amended
Notes"). The Proposed Amendment and the Guarantee, if effected,
will be contained in a supplement to the Indenture (the
"Supplemental Indenture") executed by Dresser, Baroid and the
Trustee. The Solicitation of Consents, the execution of the
Supplemental Indenture and the issuance of the Guarantee
pursuant thereto are hereinafter collectively referred to as the
"Transaction".
2. Registration Statement, Prospectus and Offering
Materials. Dresser and Baroid have heretofore prepared and
filed with the Securities and Exchange Commission (the
"Commission"), under the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated
thereunder (collectively, the "Securities Act"), a registration
statement on Form S-4 covering the Solicitation of Consents, the
Proposed Amendment, the registration of the Guarantee to be
issued pursuant to the Transaction and the Amended Notes,
including the related preliminary consent solicitation
statement/prospectus, and has prepared and proposes to file,
prior to the effective date of such registration statement, an<PAGE>
2
amendment to such registration statement, including a final
consent solicitation statement/ prospectus. The various parts
of such registration statement, including the exhibits thereto
and any documents incorporated by reference therein, each as
amended at the time such part became effective (including any
post-effective amendments), are hereinafter collectively called
the "Registration Statement". The final consent solicitation
statement/prospectus included in the Registration Statement,
including any documents incorporated therein by reference, is
hereinafter referred to as the "Prospectus", except that if the
final prospectus (including any supplements thereto) furnished
to Lehman Brothers Inc. ("Lehman Brothers") for use in
connection with the Solicitation of Consents differs from the
prospectus on file at the Commission at the time of
effectiveness (whether or not such prospectus is required to be
filed pursuant to Rule 424(b)), the term "Prospectus" shall
refer to the final prospectus furnished to Lehman Brothers for
such use (including any supplements thereto). The term
"Prospectus" also includes letters to beneficial owners of Notes
and the form of consent filed as exhibits to the Registration
Statement. The Prospectus and the letters from Dresser and
Baroid to securities dealers, commercial banks, trust companies
and other nominees and any other offering materials and
information that Dresser or Baroid may use or prepare, or
expressly approve or authorize for use in connection with the
Transaction are collectively hereinafter referred to as the
"Offering Materials". As used in this Agreement, "Closing Date"
shall mean the latter of (i) the date on which the Requisite
Consents are delivered to the Trustee and (ii) the date on which
the Supplemental Indenture is executed and delivered by the
parties thereto.
3. Agreement to Act as Solicitation Agent.
(a) Dresser and Baroid hereby authorize Lehman
Brothers to act as solicitation agent (in such capacity, the
"Solicitation Agent") in connection with the Transaction, and,
on the basis of the representations and warranties and
agreements of Dresser and Baroid herein contained and, subject
to and in accordance with the terms and conditions hereof, of
the Fee Letter referred to in Section 4 and of the Registration
Statement and the Offering Materials, Lehman Brothers agrees to
act as Solicitation Agent and to use its best efforts to solicit
Consents, and agrees to otherwise assist in the Transaction.
Lehman Brothers shall not be subject to any liability to Dresser
or Baroid (or any of Dresser's other affiliates) for any act or
omission on the part of any broker or dealer in securities
(other than itself) or any bank or trust company or any other
person, and Lehman Brothers shall not be liable to Dresser or
Baroid for its own acts or omissions in performing its
obligations as Solicitation Agent hereunder, except for any
losses, claims, damages, liabilities and expenses determined in
a final judgment by a court of competent jurisdiction to have
resulted from any such acts or omissions undertaken or omitted
to be taken by Lehman Brothers through its gross negligence or
willful misconduct. In soliciting Consents, Lehman Brothers, as<PAGE>
3
Solicitation Agent, shall not be deemed to be acting as the
agent of Dresser or Baroid for any other purpose except as
described herein, or as the agent of any broker, dealer, bank or
trust company, and no broker, dealer, bank or trust company
shall be deemed to be acting as Lehman Brothers' agent.
(b) As soon as practicable after the Registration
Statement becomes effective under the Securities Act, Dresser
and Baroid shall distribute, by mailing, or causing to be mailed
on their behalf, copies of the Prospectus and such of the other
Offering Materials as is required to each holder of record of
the Notes (a "Holder" and, collectively, the "Holders") (the
date of the commencement of such distribution being hereinafter
referred to as the "Commencement Date").
(c) Dresser and Baroid shall furnish Lehman Brothers,
or cause the transfer agents or registrars for the Notes (the
"Transfer Agents and Registrars") or The Depository Trust
Company ("DTC") to furnish Lehman Brothers, as soon as
practicable after the date hereof (to the extent not previously
furnished), with cards or lists or copies thereof showing the
names of persons who were the holders of record or, to the
extent available to Dresser and Baroid, the beneficial owners of
the Notes as of a recent date, together with their addresses,
and the principal amount of the Notes, held by them.
Additionally, Dresser and Baroid shall use their best efforts to
advise, or to cause the Transfer Agents and Registrars and DTC
to advise, Lehman Brothers of any transfers of record by the
beneficial owners of the Notes from time to time during the term
of this Agreement as requested by Lehman Brothers. Lehman
Brothers agrees to use such information only in connection with
the Transaction and not to furnish such information to any other
person except in connection with the Transaction.
(d) Dresser and Baroid authorize Lehman Brothers to
use the Offering Materials to solicit Consents for such period
of time as any Offering Materials are required by law to be
delivered in connection therewith, and Lehman Brothers agrees
not to provide any information to Holders in connection with the
Transaction other than the Offering Materials. Lehman Brothers
further agrees, in connection with the Transaction, not to make
any representations to Holders, the substance of which is not
contained in the Offering Materials. Lehman Brothers shall not
have any obligation to cause any Offering Materials to be
transmitted generally to the Holders; provided, however, that
Lehman Brothers shall deliver a Prospectus to Holders as
required by law.
(e) Dresser and Baroid authorize Lehman Brothers to
communicate with any information agent retained by Baroid (the
"Information Agent") with respect to matters relating to the
Transaction.
(f) Dresser and Baroid agree that any reference to
Lehman Brothers in the Registration Statement, any Offering
Materials or in any newspaper announcement or press release or<PAGE>
4
other document or communication is subject to the prior approval
of Lehman Brothers. Lehman Brothers hereby approves the
references to it in the preliminary prospectus and will approve
substantially similar references to it in the final Prospectus.
(g) As soon as practicable after the date hereof,
Dresser and Baroid shall prepare, at their own expense, a form
of a newspaper announcement in respect of the Solicitation and
deliver such form of newspaper announcement to Lehman Brothers
promptly following its preparation.
(h) Except as required by applicable law, any advice
or information to be provided by Lehman Brothers under this
Agreement shall not be disclosed publicly or made available to
third parties without the prior approval of Lehman Brothers, and
accordingly, such advice or information shall not be relied upon
by any person or entity other than Baroid and Dresser.
4. Compensation and Expenses. (a) Dresser and
Baroid jointly and severally agree to pay Lehman Brothers, as
compensation for the services rendered by Lehman Brothers
hereunder as Solicitation Agent in connection with the
Transaction, the fees provided for in the separate letter
agreement, dated as at March 1, 1994, between Dresser and Lehman
Brothers (the "Engagement Letter") on the terms and conditions
set forth therein.
(b) Dresser and Baroid jointly and severally agree to
reimburse Lehman Brothers for (i) any expenses incurred by
Lehman Brothers on behalf of them (such as costs of advertising)
consistent with prior discussions between Dresser and Lehman
Brothers, and (ii) any other reasonable costs and expenses
incident to the Transaction (including, without limitation, the
reasonable fees, disbursement and expenses of counsel to Lehman
Brothers) incurred by Lehman Brothers in connection with its
services as Solicitation Agent hereunder; provided that Lehman
Brothers will notify Dresser promptly after Lehman Brothers
becomes aware that such expenses pursuant to this clause (b)(ii)
exceed $75,000.
5. Certain Covenants of Dresser and Baroid. Each of
Dresser and Baroid covenants with Lehman Brothers as follows:
(a) Dresser and Baroid will notify Lehman Brothers
immediately, and, if requested by Lehman Brothers, confirm such
notice in writing, (i) when the Registration Statement,
including any post-effective amendment thereto, shall have
become effective under the Securities Act or any supplement to
the Prospectus or any amended Prospectus shall have been filed,
(ii) of the receipt by it (or by any of its officers,
representatives or attorneys) of any request of the Commission
or any other governmental agency or authority to amend the
Registration Statement or amend or supplement any Offering
Materials or for additional information with respect thereto,
(iii) of receipt (whether written or oral) by it (or by any of
its officers, representatives or attorneys) of any other<PAGE>
5
relevant communication from the Commission relating to the
Registration Statement or any Offering Materials, including,
without limitation, any stop order suspending the effectiveness
of the Registration Statement or of any order suspending or
preventing the use of any Offering Materials. If at any time
the Commission shall issue any order suspending the
effectiveness of the Registration Statement, Dresser and Baroid
shall make every reasonable effort to obtain the withdrawal of
such order as promptly as practicable.
(b) Dresser and Baroid shall advise Lehman Brothers
as promptly as is reasonably practicable, and shall confirm such
advice in writing if requested by Lehman Brothers, of the
suspension of the solicitation of Consents, the Proposed
Amendment or the qualification of the Guarantee and the Amended
Notes for offering in any jurisdiction or of the institution or
threat of any proceedings for any such purposes or if they
determine not to proceed with the Solicitation.
(c) Dresser and Baroid have furnished or will furnish
to each of Lehman Brothers and its counsel, without charge, one
copy of the Registration Statement as originally filed and of
all amendments thereto, copies of all exhibits and documents
filed therewith, and signed copies of all consents and
certificates of experts.
(d) Dresser and Baroid will comply in all material
respects with the Securities Act, the Securities Exchange Act of
1934, as amended, and the applicable rules and regulations
promulgated thereunder (the "Exchange Act"), the Trust Indenture
Act of 1939, as amended, and the applicable rules and
regulations promulgated thereunder (the "Trust Indenture Act")
and the rules and regulations of the New York Stock Exchange in
connection with the Registration Statement, the Offering
Materials, the Transaction and the transactions contemplated
hereby and thereby. If at any time when a Prospectus is
required by the Securities Act to be delivered in connection
with the Transaction, any event shall occur or condition exist
as a result of which it shall be necessary for Dresser or Baroid
to amend the Registration Statement or amend or supplement the
Prospectus or any other Offering Materials in order that the
Prospectus or such other Offering Materials will not include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the
time it is delivered to a Holder, or if it shall be necessary at
any such time to amend the Registration Statement or amend or
supplement the Prospectus or any other Offering Materials in
order to comply with the requirements of the Securities Act or
the Exchange Act, Dresser and Baroid shall promptly prepare,
furnish copies to Lehman Brothers and file with the Commission,
such amendment or supplement as may be necessary to correct such
untrue statement or omission or to make the Registration
Statement or the Prospectus or such other Offering Materials
comply with such requirements.<PAGE>
6
(e) Dresser and Baroid will deliver to Lehman
Brothers, without charge, as soon as the Registration Statement
shall have become effective and thereafter from time to time as
requested during the period when a Prospectus is required by the
Securities Act to be delivered in connection with the
Transaction, such number of copies of the Prospectus and the
other Offering Materials (as supplemented or amended) as Lehman
Brothers may reasonably request.
(f) Dresser and Baroid shall use their reasonable
efforts to qualify the Solicitation of Consents, the Proposed
Amendments, the Guarantee and the Amended Notes for issuance
under the state securities or blue sky laws of such
jurisdictions as are reasonably necessary for the consummation
of the Transaction and shall use their reasonable efforts to
comply promptly with such laws so as to permit the continued
qualification of the Guarantee and the continuation of the
Transaction in such jurisdictions for such time as may be
necessary to conduct the Transaction; provided, however, that in
connection therewith neither Dresser nor Baroid shall be
obligated to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified
or to file a general consent to service of process in any
jurisdiction or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise
so subject.
(g) If the Guarantee is issued pursuant to the
Transaction, Dresser agrees to make generally available to its
security holders as soon as practicable an earnings statement
that will satisfy the provisions of Section 11(a) of the
Securities Act (including Rule 158 thereunder) covering a
twelve-month period beginning not later than the first day of
Dresser's fiscal quarter next following the effective date of
the Registration Statement.
(h) Dresser and Baroid jointly and severally agree to
pay all costs and expenses incurred in connection with the
performance of their obligations in connection with this
Agreement and the Transaction including, without limitation, (i)
the fees, disbursements and expenses of counsel to Dresser and
Baroid, counsel to Dresser's and Baroid's accountants, (ii) all
expenses in connection with the qualification of the
Solicitation of Consents, the Proposed Amendments, the Guarantee
and the Amended Notes for issuance under state securities or
blue sky laws as provided herein, (iii) the costs of preparing,
printing, filing and distributing the Registration Statement and
the Offering Materials, including, without limitation, any
newspaper announcement in respect of the Solicitation, (iv) the
fees and expenses of the Transfer Agents and Registrars, the
Trustee and the Information Agent, (v) all other costs and
expenses incident to the Transaction incurred by Dresser and
Baroid and (vi) in accordance with Section 4(b) hereof, the
costs and expenses incurred by Lehman Brothers.<PAGE>
7
(i) Dresser and Baroid shall advise or cause the
Information Agent to advise Lehman Brothers from day to day
during the period of, and promptly after the expiration of, the
Transaction, as to all names and addresses of Holders who have
delivered Consents or who have revoked Consents, and the
aggregate principal amount of Notes for which Consents have been
received or revoked during the immediately preceding day,
indicating the aggregate principal amount of Notes for which
Consents have been verified as to proper form, rejected or being
precessed and as to such other information as Lehman Brothers
may reasonably request; and will notify Lehman Brothers, not
later than 5:00 P.M., New York City time, on the first business
day following the Expiration Date (as defined in the Offering
Materials), of the aggregate principal amount of Notes for which
Consents have been received or revoked, indicating the aggregate
principal amount of Notes for which Consents have been verified
as to proper form, rejected or being processed.
(j) Dresser and Baroid shall promptly give Lehman
Brothers notice of any change in the Expiration Date or the
Effective Time (as such terms are defined in the Offering
Materials) of the Transaction.
(k) Dresser and Baroid will promptly file any report
or other document required to be filed by either of them with
the Commission pursuant to Section 13 or 14 of the Exchange Act
during the period of time referred to in Section 5(d) hereof.
Dresser and Baroid shall deliver to Lehman Brothers, without
charge, such number of copies of such report or other document
as Lehman Brothers may reasonably request.
6. Representations and Warranties of Dresser and
Baroid. Dresser and Baroid jointly and severally represent and
warrant to Lehman Brothers that:
(a) On the effective date of the Registration
Statement and on the Closing Date, (i) the Registration
Statement and the Prospectus and any amendments or supplements
thereto will comply in all material respects with the
requirements of the Securities Act and the Trust Indenture Act;
(ii) neither the Registration Statement nor any amendment
thereto (on its effective date) will contain an untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading; and (iii) neither the Prospectus nor the other
Offering Materials and any amendments or supplements thereto
will include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this
representation and warranty does not apply to statements or
omissions made in reliance upon and in conformity with
information furnished in writing to Dresser and Baroid by Lehman
Brothers expressly for use in the Registration Statement or
Prospectus or the other Offering Materials.<PAGE>
8
(b) Each document or portion thereof incorporated by
reference in the Prospectus complied when filed with the
Commission in all material respects with the provisions of the
Exchange Act, and each document, if any, hereafter filed under
the Exchange Act and so incorporated by reference in the
Prospectus will comply when so filed in all material respects
with the requirements of such Exchange Act.
(c) Each of Price Waterhouse, Ernst & Young and
Coopers & Lybrand, each of whom have reported upon the audited
financial statements and schedules included or incorporated by
reference in the Registration Statement, are independent public
accountants as required by the Securities Act.
(d) This Agreement has been duly authorized, executed
and delivered by Dresser and Baroid.
(e) The consolidated financial statements and the
related notes of Dresser and Baroid included or incorporated by
reference in the Registration Statement and the Prospectus
present fairly in accordance with generally accepted accounting
principles the consolidated financial position of Dresser and
Baroid as of the dates indicated and the consolidated results of
operations and cash flows of Dresser and Baroid for the periods
specified. Such financial statements have been prepared in
conformity with generally accepted accounting principles applied
on a consistent basis throughout the periods involved, except as
otherwise noted therein and subject, in the case of any interim
statements, to normal year-end audit adjustments. The financial
statement schedules, if any, included in the Registration
Statement and the Prospectus present fairly in accordance with
generally accepted accounting principles the information
required to be stated therein. The selected financial data
included in the Registration Statement and the Prospectus
present fairly in accordance with generally accepted accounting
principles the information shown therein and have been compiled
on a basis consistent with that of the audited financial
statements included or incorporated by reference in the
Registration Statement and the Prospectus.
(f) The Supplemental Indenture has been duly
authorized and, as of the Closing Date, will have been duly
executed and delivered by Dresser, Baroid and the Trustee, will
have been duly qualified under the Trust Indenture Act and will
constitute a valid and binding obligation of Dresser and Baroid,
enforceable against Dresser and Baroid in accordance with its
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law.)
(g) The Guarantee has been duly authorized by
Dresser. When the Supplemental Indenture is executed and
delivered by Dresser, Baroid and the Trustee at the Closing<PAGE>
9
Date, the Guarantee will constitute a valid and binding
obligation of Dresser enforceable against Dresser in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws
affecting enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(h) The Amended Notes are in a form contemplated by
the Indenture, as amended by the Supplemental Indenture, and
have been duly authorized by Baroid, and when issued in
accordance with the Indenture, as amended by Supplemental
Indenture, will be legal, valid and binding obligations of
Baroid enforceable against Baroid in accordance with their terms
and entitled to the benefits of the Indenture, as amended by the
Supplemental Indenture, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law).
(i) The Guarantee, the Amended Notes and the
Supplemental Indenture conform in all material respects to the
descriptions thereof contained in the Registration Statement and
the Prospectus.
(j) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as described therein or contemplated thereby,
there has not been any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business
prospects of Dresser and its consolidated subsidiaries, taken as
a whole, whether or not arising in the ordinary course of
business.
(k) The execution and delivery of this Agreement and
the Supplemental Indenture, the issuance of the Guarantee, the
Transaction and the consummation by Dresser and Baroid of the
transactions contemplated in this Agreement and in the
Registration Statement and the Offering Materials and compliance
by Dresser and Baroid with the terms of this Agreement have been
duly authorized by all necessary corporate action on the part of
Dresser and Baroid and do not and will not result in a breach of
any of the terms and provisions of, or constitute a default
under, any indenture, deed of trust or other agreement or
instrument to which Baroid or Dresser is a party or by which
each of them or any of them is bound, or Dresser's or Baroid's
Articles or Certificate of Incorporation or By-Laws, or, to the
best of their knowledge, any order, rule or regulation
applicable to Dresser or Baroid of any court, federal or state
regulatory body, administrative agency or other governmental
body having jurisdiction over Dresser or Baroid or any of their
respective properties.<PAGE>
10
7. Indemnification and Contribution. (a) Dresser
and Baroid jointly and severally agree to indemnify Lehman
Brothers and its affiliates and their respective directors,
officers, employees, agents and controlling persons from and
against any and all losses, claims, damages and liabilities,
joint or several, to which such indemnified party may become
subject under any applicable federal or state law, or otherwise,
and will reimburse such indemnified party immediately for all
expenses (including reasonable counsel fees and expenses) in
connection with the investigation of, preparation for or defense
of any pending or threatened claim or any action or proceeding
arising therefrom, whether or not such indemnified party is a
party, (A) arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement or the Offering Materials, or arising out
of or based upon the omission or alleged omission to state in
any such document 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 or (B) related to or arising out of the Transaction
or the engagement of Lehman Brothers pursuant to, and the
performance by Lehman Brothers of the services contemplated by,
this Agreement. Dresser and Baroid will not be liable under
clause (B) of the foregoing indemnification provision to the
extent that any loss, claim, damage or liability is found in a
final judgment by a court of competent jurisdiction to have
resulted from Lehman Brothers' gross negligence or willful
misconduct.
Dresser and Baroid shall not, however, be liable to
any indemnified party for any loss, claim, damage or liability
under this Section 7(a) to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission
made in the Registration Statement or the Offering Materials in
reliance upon and in conformity with information furnished in
writing to Dresser or Baroid by Lehman Brothers expressly for
use in the Registration Statement or the Offering Materials.
(b) Lehman Brothers agrees to indemnify Dresser and
Baroid and their directors, their respective officers and
controlling persons from and against any and all losses, claims,
damages and liabilities arising out of or based upon any untrue
statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Offering
Materials, or arising out of or based upon the omission or
alleged omission to state in any such document 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, which untrue statement or
omission or alleged untrue statement or omission was made in the
Registration Statement or the Offering Materials in reliance
upon information furnished in writing to Dresser or Baroid by
Lehman Brothers expressly for use in the Registration Statement
or the Offering Materials.<PAGE>
11
(c) If the indemnification provided for in Section
7(a) or 7(b) is for any reason held unenforceable or unavailable
as to an indemnified party, although otherwise applicable in
accordance with its terms, the indemnifying party, on the one
hand, and the indemnified party, on the other hand, shall
contribute to such loss, claim, damage or liability, as
incurred, (i) in such proportion as is appropriate to reflect
the relative benefits to Dresser and Baroid on the one hand, and
Lehman Brothers on the other hand, in connection with the
transactions to which such indemnification or reimbursement
relates, or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative faults of Dresser and
Baroid on the one hand, and Lehman Brothers on the other hand,
as well as any other equitable considerations; provided,
however, that in no event shall the amount to be contributed by
Lehman Brothers pursuant to this Section 7(c) exceed the amount
of the fees actually received by Lehman Brothers hereunder. The
foregoing indemnity and contribution agreements shall be in
addition to any rights that any indemnified party may have at
common law or otherwise. No investigation or failure to
investigate by an indemnified party shall impair the foregoing
indemnification and contribution agreement or any rights an
indemnified party may have.
(d) In the event Lehman Brothers or its affiliates or
their respective directors, officers, employees, agents or
controlling persons appears as a witness in any action brought
by or on behalf of or against Dresser or Baroid in which such
person is not named as defendant, Dresser and Baroid jointly and
severally agree to reimburse Lehman Brothers for all reasonable
expenses incurred by it in connection with such person's
appearing and preparing to appear as such a witness, including,
without limitation, the fees and disbursements of its legal
counsel.
(e) Dresser and Baroid agree to notify Lehman
Brothers promptly of the assertion against either of them or any
of their affiliates of any claim or the commencement of any
action or proceeding relating to a transaction contemplated by
this Agreement, and Lehman Brothers agrees to notify Dresser and
Baroid promptly after receipt of notice of any claim or the
commencement of any action or proceeding against Lehman Brothers
or any of its affiliates or their respective directors,
officers, employees, agents or controlling persons relating to a
transaction contemplated by this Agreement. No indemnifying
party hereunder shall be liable, in connection with any single
or series of related actions, for the reasonable fees and
expenses of more than one firm of attorneys (and, if necessary,
one local firm of attorneys). No indemnifying party shall
effect, without the prior written consent of the indemnified
party, any settlement of any pending or threatened proceeding
unless such settlement includes an explicit and unconditional
release from the party bringing such proceeding of all
indemnified parties.<PAGE>
12
8. Conditions to Lehman Brothers' Obligations. The
obligations of Lehman Brothers hereunder shall at all times be
subject to the accuracy of the representations and warranties of
Dresser and Baroid contained herein or in certificates of any
officer thereof delivered pursuant to the provisions hereof, to
the performance in all material respects by Dresser and Baroid
of their obligations hereunder to be performed, and the
following additional conditions:
(a) The Registration Statement shall have become
effective; and at or prior to the Commencement Date and the
Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted or shall be pending,
or, to Lehman Brothers' knowledge or the knowledge of Dresser or
Baroid, shall be contemplated or threatened by the Commission
and there shall not have been any material legal action or other
administrative proceeding instituted or threatened against
Dresser, Baroid or against Lehman Brothers relating to Lehman
Brothers acting in its capacity as Solicitation Agent with
respect to the Transaction and any request made to Dresser or
Baroid on the part of the Commission for additional information
with respect to the Registration Statement or the Prospectus
shall have been complied with;
(b) On the Closing Date, Lehman Brothers shall have
received, from Rebecca R. Morris, Vice President-Corporate
Counsel and Secretary of Dresser and Vice President of Baroid,
opinions which shall be reasonably satisfactory in form and
substance to Lehman Brothers. Additionally, Lehman Brothers
shall have received such opinions of Simpson Thacher & Bartlett,
counsel to Lehman Brothers, as and when Lehman Brothers may
reasonably require.
(c) On the Closing Date, Lehman Brothers shall have
received "comfort" letters, addressed to Lehman Brothers and
dated as of such date, from Price Waterhouse and Ernst & Young,
independent public accountants for Dresser and Baroid,
respectively, in form and substance reasonably satisfactory to
Lehman Brothers.
(d) On the Closing Date, there shall have been
delivered to Lehman Brothers certificates of a vice president
and chief financial officer of Dresser and a vice president and
chief financial officer of Baroid, dated as of the date of
delivery, (i) evidencing compliance with, and stating that, the
representations and warranties set forth in Section 6 hereof are
accurate on such date; (ii) Dresser and Baroid have duly
performed, in all material respects, all obligations required to
be performed by them pursuant to the terms of this Agreement;
and (iii) the Registration Statement has become effective, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for the purpose has
been initiated or, to the knowledge of Dresser or Baroid,
respectively, threatened by the Commission and all requests for<PAGE>
13
additional information on the part of the Commission have been
complied with or otherwise satisfied.
(e) All corporate proceedings taken in accordance
with the Transaction, including, without limitation, the
authorization and issuance of the Guarantee and the
authorization, execution and delivery of the Supplemental
Indenture, shall be in form and substance reasonably
satisfactory to Lehman Brothers and its counsel, and such
counsel shall have been furnished with all such documents,
certificates and opinions as they may reasonably request for the
purpose of enabling them to pass upon the matters referred to in
subsection (b) of this Section 8.
(f) The Fee Letter shall have been executed and
delivered by the parties hereto.
Lehman Brothers, as Solicitation Agent, shall have a
reasonable period of time after discovering or being informed of
a breach in any of the foregoing conditions to elect whether to
continue to act as Solicitation Agent.
9. Termination.
(a) This Agreement shall terminate upon the
earliest to occur of (i) the Closing Date, (ii) December 31,
1994, (iii) the tenth day following the date on which one party
hereto gives written notice to the other parties hereto that
this Agreement is terminated, (iv) immediately upon receipt by
Lehman Brothers of written notice from Baroid stating that
Baroid, in its sole judgement, has decided not to proceed with
the Solicitation, and (v) following the material breach by
Lehman Brothers of its obligations as Solicitation Agent
hereunder, immediately upon receipt by Lehman Brothers of
written notice from Dresser or Baroid specifying the grounds for
such termination (the earliest to occur of clauses (i), (ii),
(iii), (iv) and (v) being referred to as the "Termination
Date"); provided that Lehman Brothers shall be entitled to any
fees then due to it at the time of such termination or
expiration and to its full fee pursuant to Section 2(b) of the
Engagement Letter if Lehman Brother's services hereunder are
terminated by Dresser or Baroid and if any solicitation of
consents to amend the terms of the Notes (or any tender or
exchange offer with similar purpose or effect) is consummated
within one year of such termination.
(b) Notwithstanding termination of this Agreement
pursuant to Section 9(a) or following the resignation of Lehman
Brothers as Solicitation Agent if the conditions in Section 8
are not satisfied, Sections 3(f), 4, 5(h) and 7 shall survive
any termination of this Agreement.
10. Notices. All communications given hereunder
shall be, except as otherwise provided, delivered at, or mailed
or telegraphed to the following addresses: (a) if to Dresser or
Baroid, at 2001 Ross Avenue, Dallas, Texas 75201, attention: <PAGE>
14
Paul Willey, (b), if to Lehman Brothers, at World Financial
Center, 200 Vesey Street, New York, New York 10285, attention:
Steven Delaney with a copy to Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, New York 10017-3909, attention:
Robert E. Spatt, Esq. Any notice under Section 7 or 9 hereof
may be made by telex or telephone, but if so made, shall be
subsequently confirmed in writing.
11. Survival of Certain Provisions. The
representations, warranties, indemnities and agreements of
Dresser and Baroid will remain operative and in full force and
effect regardless of any investigation made by or on behalf of
Dresser, Baroid or Lehman Brothers or any affiliate or
controlling person and will survive the consummation of the
Transaction.
12. Governing Law; Submission to Jurisdiction;
Service of Process. The terms of this Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York, applicable to contracts executed in and to be
performed in that State. Dresser, Baroid and Lehman Brothers
hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of New York
and of the United States District Courts located in the City of
New York for any lawsuits, actions or other proceedings arising
out of or relating to this Agreement and agree not to commence
any such lawsuit, action or other proceeding except in such
courts. Dresser and Baroid further agree that service of any
process, summons, notice or document by mail to such party's
address set forth in Section 10 shall be effective service of
process for any lawsuit, action or other proceeding brought
against such party in any such court. Dresser, Baroid and
Lehman Brothers hereby irrevocably and unconditionally waive any
objection to the laying of venue of any lawsuit, action, or
other proceeding arising out of or relating to this Agreement in
the courts of the State of New York or the United States
District Courts located in the City of New York, and hereby
further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any lawsuit, action or
other proceeding brought in any such court has been brought in
an inconvenient forum. Any right to trial by jury with respect
to any lawsuit, claim or other proceeding arising out of or
relating to this Agreement or the services to be rendered by
Lehman Brothers hereunder is expressly and irrevocably waived.
13. Severability. If any term or provision of this
Agreement or the application thereof shall, in any jurisdiction
and to any extent, be invalid or unenforceable, such term or
provision shall be ineffective as to such jurisdiction solely to
the extent of such invalidity or unenforceability without
rendering invalid or unenforceable any remaining terms or
provisions hereof or affecting the validity or enforceability of
such term or provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any
provision of law that renders any term or provision of this
Agreement invalid or unenforceable in any respect.<PAGE>
15
14. Counterparts. This Agreement may be executed in
one or more counterparts, and by different parties hereto on
separate counterparts, each of such counterparts, when so
executed and delivered, shall be deemed to be an original and
all of such counterparts, taken together, shall constitute one
and the same Agreement.
15. Successors. This Agreement is made solely for
the benefit of Lehman Brothers, Dresser and Baroid and, to the
extent expressed, the Indemnified Parties and their executors,
administrators, successors and assigns, and no other persons
shall acquire or have any right under or by virtue of this
Agreement.
If the foregoing is in accordance with your
understanding of our agreement, please sign and return to us a
counterpart hereof, whereupon this instrument will become a
binding agreement among Dresser, Baroid and Lehman Brothers in
accordance with its terms.
Very truly yours,
DRESSER INDUSTRIES, INC.
By:______________________
Name:
Title:
BAROID CORPORATION
By:______________________
Name:
Title:
Confirmed and accepted as
of the date first above written:
LEHMAN BROTHERS INC.
By:______________________
Name:
Title:<PAGE>
EXHIBIT 5.1
[DRESSER INDUSTRIES, INC. LETTERHEAD]
June 27, 1994
Dresser Industries, Inc.
2001 Ross Avenue
Dallas, Texas 75201
Baroid Corporation
2001 Ross Avenue
Dallas, Texas 75201
Re: Registration Statement on Form S-4
Dresser Industries, Inc. and Baroid Corporation
Gentlemen:
Reference is made to the Registration Statement on Form S-4, as
amended (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Act"), with respect to the solicitation
(the "Solicitation") by Baroid Corporation ("Baroid") of
consents of registered holders of Baroid's 8% Senior Notes due
2003 (the "Notes") to an amendment (the "Proposed Amendment")
to the Indenture (the "Indenture") dated as of April 22, 1993
between Baroid and Texas Commerce Bank National Association
(the "Trustee"), pursuant to which the Notes were issued, and
the preparation and execution of a supplemental indenture (the
"Supplemental Indenture") effecting the Proposed Amendment and
a guarantee (the "Guarantee") by Dresser Industries, Inc.
("Dresser") of the Notes as amended by the Proposed Amendment
(the "Amended Notes"). As Vice President - Corporate Counsel
of Dresser and Vice President of Baroid I have examined such
corporate records, certificates and other documents and
questions of law as I deem necessary or appropriate to this
opinion. In such examination, I have assumed the genuineness
of all signatures, the authenticity of all documents submitted
to me as originals, the conformity to original documents of
documents submitted to me as certified or photostatic copies
and the authenticity of the originals of such latter documents.
Based on the foregoing, I am of the opinion that:
(a) Dresser and Baroid have each been duly
incorporated and are validly existing in good
standing under the laws of the State of
Delaware; and
(b) When the Registration Statement has become
effective, the Requisite Consents (as defined in
the Registration Statement) have been delivered
and the Supplemental Indenture has been executed
by Baroid, Dresser and the Trustee, the Amended
Notes will be legally issued and will constitute<PAGE>
Dresser Industries, Inc.
Baroid Corporation
Registration Statement
June 27, 1994
Page 2
the valid and legally binding obligation of Baroid in
accordance with their terms and the Guarantee will
constitute a legally binding obligation of Dresser
(subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or
other similar laws relating to or affecting
creditors' rights and remedies generally in effect
from time to time and to general principles of equity
as they relate to enforcement and remedies)
regardless of whether enforcement is sought in a
proceeding at law or in equity.
The opinions herein are limited to the laws of the State
of Texas, and I do not express any opinion concerning any laws
other than the laws of the State of Texas, the corporate laws
of the State of Delaware and the Federal laws of the United
States of America, and I express no opinion as to the effect on
the matters covered by this opinion of the laws of any other
jurisdiction.
I hereby consent to the filing of this opinion as Exhibit
5.1 to said Registration Statement and to the use of my name
under the caption "Legal Opinion" in the Prospectus contained
therein.
Very truly yours,
/s/ Rebecca R. Morris
Rebecca R. Morris<PAGE>
Exibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Pre-Effective Amendment No. 2 to the
Registration Statement on Form S-4 of Dresser Industries, Inc. of our
report dated December 9, 1993, relating to the consolidated financial
statements of Dresser Industries, Inc., which appears on page 22 of
Dresser Industries, Inc.'s Annual Report on Form 10-K for the year ended
October 31, 1993; our report dated November 12, 1992 relating to the
consolidated financial statements of Dresser-Rand Company, which appears
on page 3 of the consolidated financial statements of Dresser-Rand Company
in such Annual Report on Form 10-K; and our report on the Dresser-
Rand Financial Statement Schedules, which appears on page 19 of the
consolidated financial statements of Dresser-Rand Company in such
Annual Report on Form 10-K. We also consent to the incorporation by
reference of our report dated February 9, 1994 on the supplemental
consolidated financial statements of Dresser Industries, Inc., which
appears on page F-11 of Amendment No. 1 on Form 8-K/A to Dresser's Current
Report on Form 8-K dated January 21, 1994. We also consent to the
reference to us under the heading "Experts" in such Prospectus.
/s/PRICE WATERHOUSE
Price Waterhouse
Dallas, Texas
June 27, 1994<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption
"Experts" in the Pre-Effective Amendment No. 2 to the Registration
Statement (Form S-4 No. 33-53077) and related Prospectus of Dresser
Industries, Inc. and to the incorporation by referenced therein of
our reports (i) dated January 21, 1994, with respect to the
consolidated financial statements and schedules of Baroid
Corporation and Subsidiaries included in its Annual Report
(Form 10-K) for the year ended December 31, 1993, filed with the
Securities Exchange Commission, and (ii) dated March 1, 1993, with
respect to the supplemental consolidated financial statements of
Baroid Corporation and Subsidiaries included in its Registration
Statement (Form S-3 No. 33-60174) and related Prospectus, filed
with the Securities and Exchange Commission.
/s/ERNST & YOUNG
Ernst & Young
Houston, Texas
June 27, 1994 <PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Sub Sea International Inc.
As independent public accountants, we hereby consent to the use of
our reports included herein or made a part of this Pre-Effective
Amendment No. 2 to the registration statement No. 33-53077
of Dresser Industries, Inc. on Form S-4 and to the reference to our
firm under the heading "Experts" in the registration statement.
/s/ARTHUR ANDERSEN & CO.
Arthur Andersen & Co.
New Orleans, Louisiana
June 27, 1994 <PAGE>
Exibit 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Consent Solicitation
Statement/Prospectus on Form S-4 of Dresser Industries, Inc. Baroid
Corporation of our report dated March 3, 1992 on our audits of the
financial statements and financial statement schedules of Baroid Corpoation
and Subsidiaries as of December 31, 1991 and 1990 and for the years ended
December 31, 1991 and 1990. We also consent to the reference to our
firm under the caption "Experts."
/s/Coopers & Lybrand
Coopers & Lybrand
Houston, Texas
June 27, 1994<PAGE>
<PAGE>
********************************************************************************
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE
ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2) ________ [Not Applicable.]
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
Not applicable
(Jurisdiction of incorporation or organization
if not a U.S. national bank)
74-0800980
(I.R.S. Employer Identification No.)
712 Main Street, Houston, Texas 77002
(Address of principal executive offices) (Zip code)
Carol Kirkland, 712 Main Street, 26th Floor,
Houston, Texas 77002, (713) 546-2449
(Name, address and telephone number of agent for service)
Baroid Corporation
Dresser Industries, Inc. (Guarantor)
(Exact name of obligor as specified in its charter)
Delaware 76-0319642
Delaware (Guarantor) 75-0813641 (Guarantor)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2001 Ross Avenue
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
8% Senior Notes Due 2003
(Title of the indenture securities)
*******************************************************************************
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee--
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington, D. C.
Federal Deposit Insurance Corporation,
Washington, D. C.
The Board of Governors of the Federal Reserve System, Washington,
D. C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
As of June 9, 1994
No such affiliation exists.
See Note, Page 9 hereof.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
Furnish the following information as to each class of voting
securities of the trustee.
As of June 9, 1994
2
<PAGE>
<TABLE>
<CAPTION>
================================================================================
Column A Column B
Title of Class Amount Outstanding
<S> <C>
/1/Texas Commerce Bank National Association 5,000,000
Common Stock
================================================================================
</TABLE>
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following
information:
As of June 9, 1994
(c) Title of the securities outstanding under each such other
indenture.
Texas Commerce Bank National Association is not a trustee
under another indenture under which any other securities, or
certificates of interest or participation in any other
securities, of the obligor are outstanding.
(d) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of Section
310(b)(1) of the Act arises as a result of the trusteeship under
any such other indenture, including a statement as to how the
indenture securities will rank as compared with the securities
issued under such other indenture.
Not applicable.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH OBLIGOR
OR UNDERWRITERS.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter
- - ---------
/1/ Texas Commerce Bancshares, Inc., a registered bank holding company, owns
all of such shares, except for directors' qualifying shares.
3
<PAGE>
for the obligor, identify each such person having any such connection and
state the nature of each such connection.
As of June 9, 1994
No such relationship exists.
See Note, Page 9 hereof.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner and
executive officer of the obligor.
As of June 9, 1994
Based upon an examination of the books and records of the
trustee, inquiries made by the trustee and information furnished
to the trustee by the obligor, voting securities of the trustee,
owned beneficially, directly or indirectly, by the obligor and
its directors, partners and executive officers, taken as a group,
do not exceed 1% of the outstanding voting securities of the
trustee.
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and each
director, partner, and executive officer of each such underwriter.
As of June 9, 1994
No single underwriter, its directors, partners and executive
officers, taken as a group, owned beneficially, directly or
indirectly, in excess of 1% of the outstanding voting securities
of the trustee.
See Note, Page 9 hereof.
4
<PAGE>
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in
default by the trustee.
As of June 9, 1994
No such securities were so owned or held.
See Note, Page 9 hereof.
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the obligor,
furnish the following information as to each class of securities of such
underwriter any of which are so owned or held by the trustee.
As of June 9, 1994
The trustee did not so own or hold in excess of 1% of any class
of security outstanding of any such person.
See Note, Page 9 hereof.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the knowledge
of the trustee (1) owns 10% or more of the voting securities of the obligor
or (2) is an affiliate, other than a subsidiary, of the obligor, furnish
the following information as to the voting securities of such person.
As of June 9, 1994
No such securities were so owned or held.
See Note, Page 9 hereof.
5
<PAGE>
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A
PERSON OWNING 50% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the knowledge of
the trustee, owns 50% or more of the voting securities of the obligor,
furnish the following information as to each class of securities of such
person any of which are so owned or held by the trustee.
As of June 9, 1994
No such securities were so owned or held.
See Note, Page 9 hereof.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
Except as noted in the instructions to the Form T-1, if the obligor is
indebted to the trustee, furnish the following information: nature of
indebtedness, amount outstanding and date due.
As of June 9, 1994
<TABLE>
<CAPTION>
Nature of Amount Date
Indebtedness Outstanding Due
- - --------------------- ----------- ----
<S> <C> <C>
Letter of Credit
(Guarantor) $5,000,000 N/A
</TABLE>
See Note, Page 9 hereof.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(e) State whether there is or has been a default with respect to the
securities under this indenture. Explain the nature of any such
default.
As of June 9, 1994
No such default exists or has existed.
6
<PAGE>
(f) If the trustee is a trustee under another indenture under which
any other securities, or certificates of interest or
participation in any other securities, of the obligor are
outstanding, or is trustee for more than one outstanding series
of securities under the indenture, state whether there has been a
default under any such indenture or series, identify the
indenture or series affected, and explain the nature of any such
default.
As of June 9, 1994
Texas Commerce Bank National Association is not a trustee
under another indenture under which any other securities, or
certificates of interest or participation in any other
securities, of the obligor are outstanding and, as of June 9,
1994, Texas Commerce Bank National Association is not a trustee
for more than one outstanding series of securities under the
indenture.
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
As of June 9, 1994
No such affiliation exists.
See Note, Page 9 hereof.
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of
eligibility.
/*/ 1. A copy of the articles of association of the trustee as
now in effect.
/**/ 2. A copy of the certificate of authority of the trustee
to commence business.
7
<PAGE>
/**/ 3. A copy of the certificate of authorization of the trustee to
exercise corporate trust powers issued by the Board of Governors
of the Federal Reserve System under date of January 21, 1948.
4. A copy of the existing bylaws of the trustee.
5. A copy of each indenture referred to in Item 4, if the
obligor is in default. Not Applicable.
6. The consent of the United States institutional trustees
required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
8. A copy of any order pursuant to which the foreign
trustee is authorized to act as sole trustee under indentures
qualified or to be qualified under the Act. Not applicable.
9. Foreign trustees are required to file a consent to
service of process on Form F-X. Not applicable.
- - ------------------------
/ */ Incorporated by reference to Exhibit bearing the same Exhibit
number submitted with the Form T-1 of Texas Commerce Bank
National Association with respect to File No. 33-51417.
/**/ Incorporated by reference to Exhibit bearing the same Exhibit
number submitted with the Form T-1 of Texas National Bank of
Commerce of Houston with respect to File No. 2-24599.
[Remainder of Page Intentionally Left Blank]
8
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the
trustee, Texas Commerce Bank National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Houston, and State of Texas, on the 9th day of June, 1994.
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
(Trustee)
By: (Signature of Susan Sult appears here)
Name: Susan Sult
Title: Assistant Vice President
and Trust Officer
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligor within
three years prior to the date of filing this statement or will be the
underwriters for the indenture securities, or are owners of 10% or more of
the voting securities of the obligor, or are owners of 50% or more of the
voting securities of the obligor or are affiliates, and the amounts and
percentages of such securities, if any, owned by each of the foregoing,
respectively, are based upon information furnished to the trustee by the
obligor and the underwriter. While the trustee has no reason to doubt the
accuracy of any such information, it cannot accept any responsibility
therefor. Accordingly, the trustee disclaims responsibility as to the
accuracy and completeness of the information received from the obligor and
the underwriter relating to the answers to items 2, 5, 7, 8, 9, 10, 11, 12
and 14.
Inasmuch as this statement is filed prior to the final determination
of all underwriters of the indenture securities, the answers to items 5, 7,
9 and 14 are based on incomplete information, but may be considered as
correct unless additional information is furnished by amendment.
9
<PAGE>
Exhibit 4
BYLAWS OF
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
__________
SECTION 1: MEETINGS OF SHAREHOLDERS
SECTION 1.1. ANNUAL MEETINGS. The annual meeting of the shareholders of
the Association for the election of directors and for the transaction of such
other business as properly may come before such meeting, shall be held at the
principal banking office of the Association in Houston, Texas, or such other
place authorized by the Board of Directors ("Board"), at 10:30 a.m. on the
Wednesday before the third Tuesday in January or as soon thereafter as
practicable if, for any reason, the meeting cannot be held at such time or on
such date. The Chairman of the Board (hereinafter "Chairman") and the Secretary
of the Association shall act as Chairman and Secretary, respectively, of the
meeting.
SECTION 1.2. SPECIAL MEETINGS. Special meetings of the shareholders of
the Association may be called by the Chairman or upon the direction of a
majority of the Board.
SECTION 1.3. NOTICE. Unless otherwise provided by law or by the Articles
of Association, a notice of the time, place and purpose of every annual and
special meeting of the shareholders shall be given by first class mail, postage
prepaid, mailed at least ten days prior to the date of such meeting to each
shareholder of record at the shareholder's address as shown on the books of the
Association.
SECTION 1.4. PROXIES. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of the Association shall act as proxy. Proxies shall be valid only for the
meeting specified therein and any adjournments thereof.
SECTION 1.5. VOTING RIGHTS. Except as otherwise provided by law or these
Bylaws, each shareholder shall be entitled to one vote for each share of stock
held, and a majority of votes cast shall decide each matter submitted for a
vote.
SECTION 1.6 RECORD DATE. The record date for determining those
shareholders who shall have the right to receive notice of and to vote at
meetings of shareholders shall be set by the Board or, if the Board fails to set
such date, by the Chairman. The record date shall be not less than ten and not
more than fifty days prior to the date of the meeting.
<PAGE>
SECTION 2: DIRECTORS
SECTION 2.1. NUMBER. Unless applicable law shall permit a greater number,
the Board of the Association shall consist of such persons, not less than five
nor more than twenty-five, as from time to time shall be fixed and determined by
a majority of the full Board or by resolution of a majority of the outstanding
shares of stock of the Association at the annual or any special meeting of the
shareholders.
SECTION 2.2. TERM. The directors of the Association shall hold office
until the annual meeting of shareholders next following their election and until
their successors have been elected and qualified unless removed according to the
provisions of the Articles of Association or these Bylaws.
SECTION 2.3. VACANCIES. Any vacancies occurring in the Board for any
reason may, subject to the provisions of Section 2.1. hereof, be filled by a
vote of a majority of the remaining directors, and any director so appointed
shall hold office until the next annual meeting of shareholders or until a
successor is elected.
SECTION 2.4. ANNUAL MEETINGS. Following the annual meeting of the
shareholders, the Chairman or the Secretary of the meeting shall notify the
directors-elect of their election, and they shall meet promptly for the purposes
of electing officers of the Association for the ensuing year and for the
transaction of such organizational and other business as properly may come
before the meeting.
SECTION 2.5. REGULAR MEETINGS. Regular meetings of the Board shall be
held without notice at 10:30 a.m. on the Wednesday before the third Tuesday of
each January, April, July and October. Regular meetings of the Board also shall
be held each June and December on such date and at such time as the Chairman
may prescribe, with notice of such meetings to be given to each member of the
Board by telegram, letter, telephone, telecopy or in person. Such meetings
shall be held at the principal office of the Association. If any regular
meeting of the Board shall fall upon a holiday, the meeting shall be held at the
time and place specified in this Section on the next banking business day unless
some other date shall be designated by a majority of the Board. A special
meeting may be held in lieu of a regular meeting in any given calendar month.
SECTION 2.6. SPECIAL MEETINGS. Special meetings of the Board may be
called either by the Chairman, or in his absence, by the President, or in his
absence, by any of the Vice Chairmen of the Board, or at the request of three or
more directors. Each member of the Board shall be given notice by telegram,
letter, telephone, telecopy or in person stating the time, place and purpose of
each such meeting.
SECTION 2.7. QUORUM. For the transaction of business, a quorum of the
Board shall consist of not less than a majority of the entire Board then in
office. If, at the time fixed for any meeting, a quorum is not present, the
directors in attendance may adjourn the meeting from time to time until a quorum
is obtained. The majority of those directors present and voting at any meeting
of the Board shall decide each matter considered.
2
<PAGE>
SECTION 2.8. ADVISORY DIRECTORS. The Board may appoint such advisory
directors as it may deem appropriate, each of whom shall hold office until the
next annual meeting of the directors following their elections. The advisory
directors of the Association shall have the right to attend the meetings of the
Board held each January, April, July and October and to advise with the Board
concerning the affairs of the Association, but advisory directors shall not have
the right to vote.
SECTION 2.9. RETIREMENT OF DIRECTORS. No person shall be elected to
serve as a director or an advisory director of the Association who has attained
68 years of age at the time of such election except in accordance with this
Section. Notwithstanding the foregoing, any director or advisory director of
the Association who, at the time of the adoption of these Bylaws, is not
eligible under the foregoing provision to be elected to such office may be
elected to serve in such capacity for one additional term. Any director or
advisory director of the Association who, during his or her term of office,
ceases to be eligible under the foregoing provision to be elected to such office
may continue to serve the remainder of his or her term of office until the next
annual meeting of shareholders.
SECTION 3: OFFICERS
SECTION 3.1. CHAIRMAN. There shall be a Chairman, as designated by the
Board. The Chairman shall preside at all meetings of the Board. The Chairman
shall preside at all meetings of the Loan and Discount Committee at which the
Chairman is present, unless the Chairman shall elect to delegate this duty and
responsibility to another officer. The Chairman shall have supervision over and
exercise general executive and administrative powers relating to all of the
operations and business of the Association. The Chairman shall from time to
time assign all officers of this Association their respective powers, duties and
responsibilities and shall have and exercise such other powers and duties as
from time to time may be conferred upon the Chairman or assigned to the Chairman
of the Board.
SECTION 3.2. PRESIDENT. The President shall be a member of the Board.
The President shall have and may exercise any and all other powers and duties
pertaining by law, regulation or practice to the office of president or imposed
by these Bylaws. The President shall perform such executive and administrative
duties as may be assigned to the President by the Board, and in the case of the
absence or inability of the Chairman to act, the President shall perform the
duties of the Chairman during such absence or inability.
SECTION 3.3. VICE CHAIRMAN. The Board may appoint one or more of its
directors as Vice Chairmen. During the absence of the Chairman and the
President, the Vice Chairmen, in the order of their seniority as Vice Chairmen,
shall preside at the meetings of the Board. Each Vice Chairman shall perform
such executive and administrative duties as may be assigned to such Vice
Chairman by the Chairman.
3
<PAGE>
SECTION 3.4. EXECUTIVE TRUST OFFICER. There shall be an Executive Trust
Officer of the Association, appointed by the Board, whose duties shall be to
manage, supervise and direct all of the activities of the Trust Department. The
Board may appoint other trust officers as it may deem appropriate with such
duties as may be designated by the Board or by the Executive Trust Officer.
SECTION 3.5. SECRETARY AND ASSISTANT SECRETARIES. The Board shall appoint
a Secretary, or other designated officer, who shall be secretary of the Board
and of the Association and shall keep accurate minutes of all meetings. The
Secretary shall attend to the giving of all notices required by these Bylaws;
shall be custodian of the corporate seal, records, documents and papers of the
Association; shall have and may exercise any and all other powers and duties
pertaining by law, regulation or practice, to the office of secretary or
cashier, or imposed by these Bylaws; and also shall perform such duties as may
be assigned from time to time by the Board or the Chairman. The Board may
appoint one or more Assistant Secretaries and/or a Cashier, and each of the
Assistant Secretaries and Cashier so appointed shall have the same authority
provided by these Bylaws to the Secretary and such other duties as may be
assigned by the Board or the Chairman.
SECTION 3.6. OTHER OFFICERS. The Board may appoint one or more Executive
Vice Presidents, one or more Senior Vice Presidents, one or more Vice
Presidents, and such other officers with such titles as may from time to time be
deemed appropriate for the transaction of the business of the Association. Each
such officer shall have such duties as from time to time may be assigned to such
officer by the Chairman.
SECTION 3.7. TERM OF OFFICE. The Chairman, the Vice Chairmen and the
President shall hold their offices for the current year for which the Board, of
which they are members or advisory members, was elected unless they shall
resign, become disqualified or be removed. Such officers may be removed by the
Board with or without cause. Any vacancy occurring in such offices shall be
filled by the Board. All other persons shall hold the offices to which they are
elected subject to removal by the Chairman or by the Board.
SECTION 3.8. RECORDS OF THE ASSOCIATION. The Secretary shall be
responsible for the minute books of the Association, the organizational papers
of the Association, the Articles of Association, the returns of elections, the
Bylaws, the proceedings of regular and special meetings of the Board and of the
shareholders and the reports of the committees of the Board. The minutes of
each meeting shall be signed by either the Secretary or an Assistant Secretary
or the person acting in such capacity in the absence of the Secretary or an
Assistant Secretary and approved by the officer presiding at such meeting.
4
<PAGE>
SECTION 4: COMMITTEES
SECTION 4.1. BOARD COMMITTEES. Each year at its annual organizational
meeting and at such other times as it deems necessary, the Board shall appoint
such committees, consisting of directors and/or advisory directors, as it deems
appropriate, specifying the authority and responsibilities of each such
committee. Such committees shall include at least an Examining and Audit
Committee, a Trust Audit Committee, a Trust Committee and a Nominating Committee
and any other committee required by law. Any advisory director appointed to a
committee shall have the right to attend meetings of the committee and to advise
the committee but shall not have the right to vote.
SECTION 4.2. MANAGEMENT COMMITTEES. Not less than annually the Chairman
shall appointment a Loan and Discount Committee and such other management
committees and subcommittees, comprised of officers and/or employees of the
Association, as the Chairman deems appropriate, and those committees shall have
such powers and responsibilities, not inconsistent with these Bylaws or any
resolution of the Board, as the Chairman may specify.
SECTION 4.3. MINUTES. Each committee shall keep minutes of its meetings,
which shall be filed with the Secretary or an Assistant Secretary.
SECTION 4.4. QUORUM. At least half of the members of a committee shall be
required to constitute a quorum for the transaction of such committee's business
unless a greater number shall be specifically required in the case of a Board
committee by resolution or in the case of a management committee by the
Chairman.
SECTION 5: STOCK
SECTION 5.1. TRANSFER OF SHARES. The capital stock of the Association
shall be transferable on the stock certificate books of the Association, and all
such transfers shall be recorded therein.
SECTION 5.2. CERTIFICATES REPRESENTING SHARES. Certificates representing
shares of capital stock of the Association shall be in the form approved by the
Board and shall be signed manually or by facsimile signature by the Chairman,
the President, any Vice Chairman, Executive Vice President or Senior Vice
President, and by the Secretary, an Assistant Secretary, or the Cashier. In
case any officer who has signed or whose facsimile signature has been placed
upon the form of certificate shall have ceased to be such officer before such
certificate is issued, such certificate may be issued with the same effect as if
the officer were such officer at the date of issuance.
5
<PAGE>
SECTION 6: SEAL
The seal of this Association shall be in such form as may be from time to
time prescribed by the Board. Each of the Secretary, the Assistant Secretaries
and such officers of the Association as the Board may direct shall have
authority to affix the corporate seal of this Association to any document
requiring such seal and to attest the same.
SECTION 7: EXECUTION OF INSTRUMENTS
All agreements, indentures, mortgages, deeds, conveyances, transfers,
certificates, declarations, receipts, discharges, releases, satisfactions,
settlements, petitions, schedules, accounts, affidavits, bonds, checks, drafts,
undertakings, proxies and other instruments or documents may be signed,
executed, acknowledged, verified, delivered or accepted in the name of and on
behalf of the Association by such officers as the Board may from time to time
direct or, if the Board has not directed, then by such officers as the Chairman
from time to time directs. The provisions of this Section 7 are supplementary
to any other provision of these Bylaws.
SECTION 8: BANKING HOURS
Except as otherwise provided by law, the Association shall be open for
business on such days of the week and during such hours as the Chairman or his
designee may direct.
SECTION 9: INDEMNIFICATION
The Association shall indemnify and advance expenses to all directors,
advisory directors, officers, employees and agents of the Association, and to
all persons who are or were serving at the request of the Association as a
director, advisory director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another corporation, association,
partnership, joint venture, sole proprietorship, trust, employee benefit plan or
other enterprise to the maximum extent allowed by the Texas Business Corporation
Act or other applicable state law, Federal banking law and/or regulations.
SECTION 10: AMENDMENTS TO BYLAWS
These Bylaws may be amended, altered or repealed at any meeting of the
Board by a vote of a majority of the full Board. In addition, the Association's
shareholders may repeal, alter or amend these Bylaws even though the Bylaws also
may be amended or repealed by the Board.
6
<PAGE>
Exhibit 6
Securities & Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is trustee under an Indenture dated as of April 22,
1993, as the same may be supplemented from time to time by supplemental
indentures thereto, between Baroid Corporation and Texas Commerce Bank
National Association, as Trustee, entered into in connection with the
issuance of its 8% Senior Notes Due 2003.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities &
Exchange Commission upon its request therefor.
Very truly yours,
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION
By: (Signature of Susan Sult appears here)
Name: Susan Sult
Title: Assistant Vice President
and Trust Officer
<PAGE>
Exhibit 7
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-1
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Consolidated Report of Income
for the period January 1, 1994-March 31, 1994
All Report of Income schedules are to be reported on a calendar year-to-date basis in thousands of dollars.
Schedule RI--Income Statement
<S> <C> <C> <C>
__________
| I480 | (-
____________ ________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
_______________________________________________________________________________________________ ____________________
1. Interest income: | ////////////////// |
a. Interest and fee income on loans: | ////////////////// |
(1) In domestic offices: | ////////////////// |
(a) Loans secured by real estate ................................................... | 4011 44,587 | 1.a.(1)(a)
(b) Loans to depository institutions ............................................... | 4019 275 | 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers ............ | 4024 1,184 | 1.a.(1)(c)
(d) Commercial and industrial loans ................................................ | 4012 55,697 | 1.a.(1)(d)
(e) Acceptances of other banks ..................................................... | 4026 0 | 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures: | ////////////////// |
(1) Credit cards and related plans ............................................. | 4054 2,989 | 1.a.(1)(f)(1)
(2) Other ...................................................................... | 4055 22,697 | 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions ......................... | 4056 3,809 | 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political | ////////////////// |
subdivisions in the U.S.: | ////////////////// |
(1) Taxable obligations ........................................................ | 4503 0 | 1.a.(1)(h)(1)
(2) Tax-exempt obligations ..................................................... | 4504 1,380 | 1.a.(1)(h)(2)
(i) All other loans in domestic offices ............................................ | 4058 20,023 | 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ...................... | 4059 2,947 | 1.a.(2)
b. Income from lease financing receivables: | ////////////////// |
(1) Taxable leases ..................................................................... | 4505 4,158 | 1.b.(1)
(2) Tax-exempt leases .................................................................. | 4307 0 | 1.b.(2)
c. Interest income on balances due from depository institutions:(1) | ////////////////// |
(1) In domestic offices ................................................................ | 4105 0 | 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ...................... | 4106 42 | 1.c.(2)
d. Interest and dividend income on securities: | ////////////////// |
(1) U.S. Treasury securities and U.S. Government agency and corporation obligations .... | 4027 45,428 | 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.: | ////////////////// |
(a) Taxable securities ............................................................. | 4506 9 | 1.d.(2)(a)
(b) Tax-exempt securities .......................................................... | 4507 95 | 1.d.(2)(b)
(3) Other domestic debt securities ..................................................... | 3657 4,389 | 1.d.(3)
(4) Foreign debt securities ............................................................ | 3658 21 | 1.d.(4)
(5) Equity securities (including investments in mutual funds) .......................... | 3659 678 | 1.d.(5)
e. Interest income from assets held in trading accounts ................................... | 4069 154 | 1.e.
______________________
____________
(1) Includes interest income on time certificates of deposit not held in trading accounts.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-2
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI--Continued
<S> <C> <C> <C> <C> <C>
________________
Dollar Amounts in Thousands | Year-to-date |
___________________________________________________________________________________ ______________
1. Interest income (continued) | RIAD Bil Mil Thou |
f. Interest income on federal funds sold and securities purchased | ////////////////// |
under agreements to resell in domestic offices of the bank and of | ////////////////// |
its Edge and Agreement subsidiaries, and in IBFs .................... | 4020 37,956 | 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ | 4107 248,518 | 1.g.
2. Interest expense: | ////////////////// |
a. Interest on deposits: | ////////////////// |
(1) Interest on deposits in domestic offices: | ////////////////// |
(a) Transaction accounts (NOW accounts, ATS accounts, and | ////////////////// |
telephone and preauthorized transfer accounts) .............. | 4508 6,913 | 2.a.(1)(a)
(b) Nontransaction accounts: | ////////////////// |
(1) Money market deposit accounts (MMDAs) ................... | 4509 6,976 | 2.a.(1)(b)(1)
(2) Other savings deposits .................................. | 4511 17,138 | 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more ........ | 4174 5,490 | 2.a.(1)(b)(3)
(4) All other time deposits ................................. | 4512 22,631 | 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement | ////////////////// |
subsidiaries, and IBFs .......................................... | 4172 3,025 | 2.a.(2)
b. Expense of federal funds purchased and securities sold under | ////////////////// |
agreements to repurchase in domestic offices of the bank and of | ////////////////// |
its Edge and Agreement subsidiaries, and in IBFs .................... | 4180 6,777 | 2.b.
c. Interest on demand notes issued to the U.S. Treasury and on | ////////////////// |
other borrowed money ................................................ | 4185 6,281 | 2.c.
d. Interest on mortgage indebtedness and obligations under | ////////////////// |
capitalized leases .................................................. | 4072 903 | 2.d.
e. Interest on subordinated notes and debentures ....................... | 4200 6,547 | 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... | 4073 82,681 | 2.f.
___________________________
3. Net interest income (item 1.g minus 2.f) ............................... | ////////////////// | RIAD 4074 | 165,837 | 3.
___________________________
4. Provisions: | ////////////////// |
___________________________
a. Provision for loan and lease losses ................................. | ////////////////// | RIAD 4230 | (6,961)| 4.a.
b. Provision for allocated transfer risk ............................... | ////////////////// | RIAD 4243 | (2,290)| 4.b.
___________________________
5. Noninterest income: | ////////////////// |
a. Income from fiduciary activities .................................... | 4070 32,863 | 5.a.
b. Service charges on deposit accounts in domestic offices ............. | 4080 37,450 | 5.b.
c. Trading gains (losses) and fees from foreign exchange transactions .. | 4075 2,955 | 5.c.
d. Other foreign transaction gains (losses) ............................ | 4076 62 | 5.d.
e. Gains (losses) and fees from assets held in trading accounts ........ | 4077 2,836 | 5.e.
f. Other noninterest income: | ////////////////// |
(1) Other fee income ................................................ | 5407 23,816 | 5.f.(1)
(2) All other noninterest income* ................................... | 5408 11,870 | 5.f.(2)
___________________________
g. Total noninterest income (sum of items 5.a through 5.f) ............. | ////////////////// | RIAD 4079 | 111,852 | 5.g.
6. a. Realized gains (losses) on held-to-maturity securities .............. | ////////////////// | RIAD 3521 | 0 | 6.a.
b. Realized gains (losses) on available-for-sale securities ............ | ////////////////// | RIAD 3196 | 0 | 6.b.
___________________________
7. Noninterest expense: | ////////////////// |
a. Salaries and employee benefits ...................................... | 4135 99,141 | 7.a.
b. Expenses of premises and fixed assets (net of rental income) | ////////////////// |
(excluding salaries and employee benefits and mortgage interest) .... | 4217 28,496 | 7.b.
c. Other noninterest expense* .......................................... | 4092 69,400 | 7.c.
___________________________
d. Total noninterest expense (sum of items 7.a through 7.c) ............ | ////////////////// | RIAD 4093 | 197,037 | 7.d.
___________________________
8. Income (loss) before income taxes and extraordinary items and other | ////////////////// |
___________________________
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d)| ////////////////// | RIAD 4301 | 89,903 | 8.
9. Applicable income taxes (on item 8) .................................... | ////////////////// | RIAD 4302 | 32,380 | 9.
___________________________
10. Income (loss) before extraordinary items and other adjustments | ////////////////// |
___________________________
(item 8 minus 9) ....................................................... | ////////////////// | RIAD 4300 | 57,523 | 10.
_________________________________________________
____________
*Describe on Schedule RI-E--Explanations.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-3
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI--Continued
<S> <C> <C> <C>
________________
| Year-to-date |
______ ______________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
___________________________________________________________________________ ____________________
11. Extraordinary items and other adjustments: | ////////////////// |
a. Extraordinary items and other adjustments, gross of income taxes* . | 4310 0 | 11.a.
b. Applicable income taxes (on item 11.a)* ........................... | 4315 0 | 11.b.
c. Extraordinary items and other adjustments, net of income taxes | ////////////////// |
___________________________
(item 11.a minus 11.b) ............................................ | ////////////////// | RIAD 4320 | 0 | 11.c.
12. Net income (loss) (sum of items 10 and 11.c) ......................... | ////////////////// | RIAD 4340 | 57,523 | 12.
_________________________________________________
________________
Memoranda | Year-to-date |
______ ______________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
______________________________________________________________________________________________________ ____________________
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after | ////////////////// |
August 7, 1986, that is not deductible for federal income tax purposes .......................... | 4513 150 | M.1.
2. Fee income from the sale and servicing of mutual funds and annuities in domestic offices | ////////////////// |
(included in Schedule RI, item 5.g) ............................................................. | 8431 2,524 | M.2.
3. Estimated foreign tax credit included in applicable income taxes, items 9 and 11.b above ........ | 4309 0 | M.3.
4. To be completed only by banks with $1 billion or more in total assets: | ////////////////// |
Taxable equivalent adjustment to "Income (loss) before income taxes and extraordinary | ////////////////// |
items and other adjustments" (item 8 above) ..................................................... | 1244 0 | M.4.
5. Number of full-time equivalent employees on payroll at end of current period (round to | //// Number |
nearest whole number) ........................................................................... | 4150 9,490 | M.5.
______________________
Schedule RI-A--Changes in Equity Capital
Indicate decreases and losses in parentheses. __________
| I483 | (-
____________ ________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
______________________________________________________________________________________________________ ____________________
1. Total equity capital originally reported in the December 31, 1993, Reports of Condition | ////////////////// |
and Income ...................................................................................... | 3215 1,694,783 | 1.
2. Equity capital adjustments from amended Reports of Income, net* ................................. | 3216 0 | 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) ............................ | 3217 1,694,783 | 3.
4. Net income (loss) (must equal Schedule RI, item 12) ............................................. | 4340 57,523 | 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net .............................. | 4346 0 | 5.
6. Changes incident to business combinations, net .................................................. | 4356 0 | 6.
7. LESS: Cash dividends declared on preferred stock ................................................ | 4470 0 | 7.
8. LESS: Cash dividends declared on common stock ................................................... | 4460 0 | 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions | ////////////////// |
for this schedule) .............................................................................. | 4411 0 | 9.
10. Corrections of material accounting errors from prior years* (see instructions for this schedule) | 4412 0 | 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities ................ | 8433 (20,272)| 11.
12. Foreign currency translation adjustments ........................................................ | 4414 0 | 12.
13. Other transactions with parent holding company* (not included in items 5, 7, or 8 above) ........ | 4415 4,772 | 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal Schedule RC, | ////////////////// |
item 28) ........................................................................................ | 3210 1,736,806 | 14.
______________________
____________
*Describe on Schedule RI-E--Explanations.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-4
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI-B--Charge-offs and Recoveries and Changes
in Allowance for Loan and Lease Losses
Part I. Charge-offs and Recoveries on Loans and Leases
Part I excludes charge-offs and recoveries through
the allocated transfer risk reserve.
<S> <C> <C> <C> <C>
__________
| I486 | (-
_________________________________ ________
| (Column A) | (Column B) |
| Charge-offs | Recoveries |
____________________ ____________________
| calendar year-to-date |
_________________________________________
Dollar Amounts in Thousands | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
______________________________________________________________________________ ____________________ ____________________
1. Loans secured by real estate: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ......................................... | 4651 630 | 4661 3,494 | 1.a.
b. To non-U.S. addressees (domicile) ..................................... | 4652 0 | 4662 0 | 1.b.
2. Loans to depository institutions and acceptances of other banks: | ////////////////// | ////////////////// |
a. To U.S. banks and other U.S. depository institutions .................. | 4653 0 | 4663 0 | 2.a.
b. To foreign banks ...................................................... | 4654 0 | 4664 0 | 2.b.
3. Loans to finance agricultural production and other loans to farmers ...... | 4655 0 | 4665 0 | 3.
4. Commercial and industrial loans: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ......................................... | 4645 1,319 | 4617 3,244 | 4.a.
b. To non-U.S. addressees (domicile) ..................................... | 4646 0 | 4618 0 | 4.b.
5. Loans to individuals for household, family, and other personal | ////////////////// | ////////////////// |
expenditures: | ////////////////// | ////////////////// |
a. Credit cards and related plans ........................................ | 4656 817 | 4666 73 | 5.a.
b. Other (includes single payment, installment, and all student loans) ... | 4657 3,519 | 4667 1,232 | 5.b.
6. Loans to foreign governments and official institutions ................... | 4643 0 | 4627 642 | 6.
7. All other loans .......................................................... | 4644 210 | 4628 8 | 7.
8. Lease financing receivables: | ////////////////// | ////////////////// |
a. Of U.S. addressees (domicile) ......................................... | 4658 0 | 4668 0 | 8.a.
b. Of non-U.S. addressees (domicile) ..................................... | 4659 0 | 4669 2,001 | 8.b.
9. Total (sum of items 1 through 8) ......................................... | 4635 6,495 | 4605 10,694 | 9.
___________________________________________
___________________________________________
| Cumulative | Cumulative |
| Charge-offs | Recoveries |
| Jan. 1, 1986 | Jan. 1, 1986 |
Memoranda | through | through |
Dollar Amounts in Thousands | Dec. 31, 1989 | Report Date |
______________________________________________________________________________ ____________________ ____________________
To be completed by national banks only. | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
____________________ ____________________
1. Charge-offs and recoveries of Special-Category Loans, as defined for this | ////////////////// | ////////////////// |
Call Report by the Comptroller of the Currency ........................... | ////////////////// | 4784 13,370 | M.1.
___________________________________________
___________________________________________
| (Column A) | (Column B) |
Memorandum items 2 and 3 are to be completed by all banks. | Charge-offs | Recoveries |
____________________ ____________________
2. Loans to finance commercial real estate, construction, and land | calendar year-to-date |
_________________________________________
development activities (not secured by real estate) included in | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
____________________ ____________________
Schedule RI-B, part I, items 4 and 7, above .............................. | 5409 6 | 5410 151 | M.2.
3. Loans secured by real estate in domestic offices (included in | ////////////////// | ////////////////// |
Schedule RI-B, part I, item 1, above): | ////////////////// | ////////////////// |
a. Construction and land development ..................................... | 3582 0 | 3583 0 | M.3.a.
b. Secured by farmland ................................................... | 3584 0 | 3585 0 | M.3.b.
c. Secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(1) Revolving, open-end loans secured by 1-4 family residential | ////////////////// | ////////////////// |
properties and extended under lines of credit ..................... | 5411 0 | 5412 0 | M.3.c.(1)
(2) All other loans secured by 1-4 family residential properties ...... | 5413 66 | 5414 51 | M.3.c.(2)
d. Secured by multifamily (5 or more) residential properties ............. | 3588 0 | 3589 0 | M.3.d.
e. Secured by nonfarm nonresidential properties .......................... | 3590 564 | 3591 3,443 | M.3.e.
___________________________________________
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-5
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI-B--Continued
Part II. Changes in Allowance for Loan and
Lease Losses and in Allocated
Transfer Risk Reserve
<S> <C> <C> <C> <C> <C>
___________________________________________
| (Column A) | (Column B) |
| Allowance for | Allocated |
| Loan and Lease | Transfer Risk |
| Losses | Reserve |
____________________ ____________________
Dollar Amounts in Thousands | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
______________________________________________________________________________ ____________________ ____________________
1. Balance originally reported in the December 31, 1993, Reports of | ////////////////// | ////////////////// |
Condition and Income ..................................................... | 3124 324,608 | 3131 2,290 | 1.
2. Recoveries (column A must equal part I, item 9, column B above) .......... | 4605 10,694 | 3132 0 | 2.
3. LESS: Charge-offs (column A must equal part I, item 9, column A above) ... | 4635 6,495 | 3133 0 | 3.
4. Provision (column A must equal Schedule RI, item 4.a; column B must | ////////////////// | ////////////////// |
equal Schedule RI, item 4.b) ............................................. | 4230 (6,961)| 4243 (2,290)| 4.
5. Adjustments* (see instructions for this schedule) ........................ | 4815 0 | 3134 0 | 5.
6. Balance end of current period (sum of items 1 through 5) (column A must | ////////////////// | ////////////////// |
equal Schedule RC, item 4.b; column B must equal Schedule RC, | ////////////////// | ////////////////// |
item 4.c) ................................................................ | 3123 321,846 | 3128 0 | 6.
___________________________________________
____________
*Describe on Schedule RI-E--Explanations.
Schedule RI-C--Applicable Income Taxes by Taxing Authority
Schedule RI-C is to be reported with the December Report of Income.
__________
| I489 | (-
____________ ________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
___________________________________________________________________________________________________ ____________________
1. Federal ....................................................................................... | 4780 N/A | 1.
2. State and local................................................................................ | 4790 N/A | 2.
3. Foreign ....................................................................................... | 4795 N/A | 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b) ............ | 4770 N/A | 4.
____________________________
5. Deferred portion of item 4 ........................................ | RIAD 4772 | N/A | ////////////////// | 5.
__________________________________________________
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-6
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI-D--Income from International Operations
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs where international operations
account for more than 10 percent of total revenues, total assets, or net income.
Part I. Estimated Income from International Operations
<S> <C> <C> <C>
__________
| I492 | (-
______ ________
| Year-to-date |
______ ______________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
_________________________________________________________________________________________________ ____________________
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries, | ////////////////// |
and IBFs: | ////////////////// |
a. Interest income booked ................................................................... | 4837 N/A | 1.a.
b. Interest expense booked .................................................................. | 4838 N/A | 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and IBFs | ////////////////// |
(item 1.a minus 1.b) ..................................................................... | 4839 N/A | 1.c.
2. Adjustments for booking location of international operations: | ////////////////// |
a. Net interest income attributable to international operations booked at domestic offices .. | 4840 N/A | 2.a.
b. Net interest income attributable to domestic business booked at foreign offices .......... | 4841 N/A | 2.b.
c. Net booking location adjustment (item 2.a minus 2.b) ..................................... | 4842 N/A | 2.c.
3. Noninterest income and expense attributable to international operations: | ////////////////// |
a. Noninterest income attributable to international operations .............................. | 4097 N/A | 3.a.
b. Provision for loan and lease losses attributable to international operations ............. | 4235 N/A | 3.b.
c. Other noninterest expense attributable to international operations ....................... | 4239 N/A | 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a | ////////////////// |
minus 3.b and 3.c) ....................................................................... | 4843 N/A | 3.d.
4. Estimated pretax income attributable to international operations before capital allocation | ////////////////// |
adjustment (sum of items 1.c, 2.c, and 3.d) ................................................. | 4844 N/A | 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect | ////////////////// |
the effects of equity capital on overall bank funding costs ................................. | 4845 N/A | 5.
6. Estimated pretax income attributable to international operations after capital allocation | ////////////////// |
adjustment (sum of items 4 and 5) ........................................................... | 4846 N/A | 6.
7. Income taxes attributable to income from international operations as estimated in item 6 .... | 4797 N/A | 7.
8. Estimated net income attributable to international operations (item 6 minus 7) .............. | 4341 N/A | 8.
______________________
Memoranda ______________________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
_________________________________________________________________________________________________ ____________________
1. Intracompany interest income included in item 1.a above ..................................... | 4847 N/A | M.1.
2. Intracompany interest expense included in item 1.b above .................................... | 4848 N/A | M.2.
______________________
Part II. Supplementary Details on Income from International Operations Required
by the Departments of Commerce and Treasury for Purposes of the U.S.
International Accounts and the U.S. National Income and Product Accounts
________________
| Year-to-date |
______ ______________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
_________________________________________________________________________________________________ ____________________
1. Interest income booked at IBFs .............................................................. | 4849 N/A | 1.
2. Interest expense booked at IBFs ............................................................. | 4850 N/A | 2.
3. Noninterest income attributable to international operations booked at domestic offices | ////////////////// |
(excluding IBFs): | ////////////////// |
a. Gains (losses) and extraordinary items ................................................... | 5491 N/A | 3.a.
b. Fees and other noninterest income ........................................................ | 5492 N/A | 3.b.
4. Provision for loan and lease losses attributable to international operations booked at | ////////////////// |
domestic offices (excluding IBFs) ........................................................... | 4852 N/A | 4.
5. Other noninterest expense attributable to international operations booked at domestic offices | ////////////////// |
(excluding IBFs) ............................................................................ | 4853 N/A | 5.
--------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-7
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI-E--Explanations
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.
Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and other adjustments in Schedule RI, and all
significant items of other noninterest income and other noninterest expense in Schedule RI. (See instructions for details.)
<S> <C> <C> <C>
__________
| I495 | (-
______ ________
| Year-to-date |
______ ______________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
__________________________________________________________________________________________________ ____________________
1. All other noninterest income (from Schedule RI, item 5.f.(2)) | ////////////////// |
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): | ////////////////// |
a. Net gains on other real estate owned ..................................................... | 5415 1,682 | 1.a.
b. Net gains on sales of loans .............................................................. | 5416 0 | 1.b.
c. Net gains on sales of premises and fixed assets .......................................... | 5417 0 | 1.c.
Itemize and describe the three largest other amounts that exceed 10% of | ////////////////// |
Schedule RI, item 5.f.(2): | ////////////////// |
_____________
d. | TEXT 4461 |______________________________________________________________________________| 4461 5,958 | 1.d.
___________ Recognition of Revaluation Gains on Futures Contr.
e. | TEXT 4462 |______________________________________________________________________________| 4462 | 1.e.
___________
f. | TEXT 4463 |______________________________________________________________________________| 4463 | 1.f.
_____________
2. Other noninterest expense (from Schedule RI, item 7.c): | ////////////////// |
a. Amortization expense of intangible assets ................................................ | 4531 14,563 | 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c: | ////////////////// |
b. Net losses on other real estate owned .................................................... | 5418 0 | 2.b.
c. Net losses on sales of loans ............................................................. | 5419 0 | 2.c.
d. Net losses on sales of premises and fixed assets ......................................... | 5420 0 | 2.d.
Itemize and describe the three largest other amounts that exceed 10% of | ////////////////// |
Schedule RI, item 7.c: | ////////////////// |
_____________
e. | TEXT 4464 |______________________________________________________________________________| 4464 8,928 | 2.e.
___________ FDIC Assessment
f. | TEXT 4467 |______________________________________________________________________________| 4467 | 2.f.
___________
g. | TEXT 4468 |______________________________________________________________________________| 4468 | 2.g.
_____________
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and | ////////////////// |
applicable income tax effect (from Schedule RI, item 11.b) (itemize and describe | ////////////////// |
all extraordinary items and other adjustments): | ////////////////// |
_____________
a. (1) | TEXT 4469 |__________________________________________________________________________| 4469 | 3.a.(1)
_____________
(2) Applicable income tax effect | RIAD 4486 | | ////////////////// | 3.a.(2)
_____________ ____________________________
b. (1) | TEXT 4487 |__________________________________________________________________________| 4487 | 3.b.(1)
_____________
(2) Applicable income tax effect | RIAD 4488 | | ////////////////// | 3.b.(2)
_____________ ____________________________
c. (1) | TEXT 4489 |__________________________________________________________________________| 4489 | 3.c.(1)
_____________
(2) Applicable income tax effect | RIAD 4491 | | ////////////////// | 3.c.(2)
____________________________
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, | ////////////////// |
item 2) (itemize and describe all adjustments): | ////////////////// |
_____________
a. | TEXT 4492 |______________________________________________________________________________| 4492 | 4.a.
___________
b. | TEXT 4493 |______________________________________________________________________________| 4493 | 4.b.
_____________
5. Cumulative effect of changes in accounting principles from prior years (from | ////////////////// |
Schedule RI-A, item 9) (itemize and describe all changes in accounting principles): | ////////////////// |
_____________
a. | TEXT 4494 |______________________________________________________________________________| 4494 | 5.a.
___________
b. | TEXT 4495 |______________________________________________________________________________| 4495 | 5.b.
_____________
6. Corrections of material accounting errors from prior years (from Schedule RI-A, | ////////////////// |
item 10) (itemize and describe all corrections): | ////////////////// |
_____________
a. | TEXT 4496 |______________________________________________________________________________| 4496 | 6.a.
___________
b. | TEXT 4497 |______________________________________________________________________________| 4497 | 6.b.
_____________
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RI-8
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RI-E--Continued
<S> <C> <C> <C>
________________
| Year-to-date |
----------------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
__________________________________________________________________________________________________ ____________________
7. Other transactions with parent holding company (from Schedule RI-A, item 13) | ////////////////// |
(itemize and describe all such transactions): | ////////////////// |
_____________
a. | TEXT 4498 |______________________________________________________________________________| 4498 4,772 | 7.a.
___________ Capital Contribution from Parent Company
b. | TEXT 4499 |______________________________________________________________________________| 4499 | 7.b.
_____________
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, | ////////////////// |
item 5) (itemize and describe all adjustments): | ////////////////// |
_____________
a. | TEXT 4521 |______________________________________________________________________________| 4521 | 8.a.
___________
b. | TEXT 4522 |______________________________________________________________________________| 4522 | 8.b.
_____________ ---------------------
9. Other explanations (the space below is provided for the bank to briefly describe, | I498 | I499 | (-
______________________
at its option, any other significant items affecting the Report of Income):
___
No comment | | (RIAD 4769)
___
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-1
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise indicated,
report the amount outstanding as of the last business day of the quarter.
Schedule RC--Balance Sheet
__________
| C400 | (-
____________ ________
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
_________________________________________________________________________________________________ ____________________
<S> <C> <C> <C>
ASSETS | ////////////////// |
1. Cash and balances due from depository institutions (from Schedule RC-A): | ////////////////// |
a. Noninterest-bearing balances and currency and coin(1) ................................... | 0081 2,226,052 | 1.a.
b. Interest-bearing balances(2) ............................................................ | 0071 5,011 | 1.b.
2. Securities: | ////////////////// |
a. Held-to-maturity securities (from Schedule RC-B, column A) .............................. | 1754 1,387,130 | 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ............................ | 1773 1,450,550 | 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices | ////////////////// |
of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | ////////////////// |
a. Federal funds sold ...................................................................... | 0276 5,039,125 | 3.a.
b. Securities purchased under agreements to resell ......................................... | 0277 53,401 | 3.b.
4. Loans and lease financing receivables: ____________________________| ////////////////// |
a. Loans and leases, net of unearned income (from Schedule RC-C) | RCFD 2122 | 9,491,851 | ////////////////// | 4.a.
b. LESS: Allowance for loan and lease losses ................... | RCFD 3123 | 321,846 | ////////////////// | 4.b.
c. LESS: Allocated transfer risk reserve ....................... | RCFD 3128 | 0 | ////////////////// | 4.c.
____________________________
d. Loans and leases, net of unearned income, | ////////////////// |
allowance, and reserve (item 4.a minus 4.b and 4.c) ..................................... | 2125 9,170,005 | 4.d.
5. Assets held in trading accounts ............................................................ | 3545 29,598 | 5.
6. Premises and fixed assets (including capitalized leases) ................................... | 2145 527,190 | 6.
7. Other real estate owned (from Schedule RC-M) ............................................... | 2150 116,633 | 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) ... | 2130 0 | 8.
9. Customers' liability to this bank on acceptances outstanding ............................... | 2155 11,337 | 9.
10. Intangible assets (from Schedule RC-M) ..................................................... | 2143 468,036 | 10.
11. Other assets (from Schedule RC-F) .......................................................... | 2160 335,486 | 11.
12. Total assets (sum of items 1 through 11) ................................................... | 2170 20,819,554 | 12.
______________________
____________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-2
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
0 3 2 6 3
Schedule RC--Continued
<S> <C> <C> <C> <C> <C>
___________________________
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
_______________________________________________________________________________________________ _________________________
LIABILITIES | /////////////////////// |
13. Deposits: | /////////////////////// |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) ..... | RCON 2200 15,912,977 | 13.a.
____________________________
(1) Noninterest-bearing(1) ................................ | RCON 6631 6,101,901 | /////////////////////// | 13.a.(1)
(2) Interest-bearing ...................................... | RCON 6636 9,811,076 | /////////////////////// | 13.a.(2)
____________________________
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, | /////////////////////// |
part II) .............................................................................. | RCFN 2200 520,262 | 13.b.
____________________________
(1) Noninterest-bearing ................................... | RCFN 6631 0 | /////////////////////// | 13.b.(1)
(2) Interest-bearing ...................................... | RCFN 6636 520,262 | /////////////////////// | 13.b.(2)
____________________________
14. Federal funds purchased and securities sold under agreements to repurchase in domestic | /////////////////////// |
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | /////////////////////// |
a. Federal funds purchased ............................................................... | RCFD 0278 582,523 | 14.a.
b. Securities sold under agreements to repurchase ........................................ | RCFD 0279 249,489 | 14.b.
15. a. Demand notes issued to the U.S. Treasury .............................................. | RCON 2840 1,099,965 | 15.a.
b. Trading liabilities ................................................................... | RCFD 3548 19,711 | 15.b.
16. Other borrowed money: | /////////////////////// |
a. With original maturity of one year or less ............................................ | RCFD 2332 33,265 | 16.a.
b. With original maturity of more than one year .......................................... | RCFD 2333 40,915 | 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ........................... | RCFD 2910 27,079 | 17.
18. Bank's liability on acceptances executed and outstanding ................................. | RCFD 2920 11,337 | 18.
19. Subordinated notes and debentures ........................................................ | RCFD 3200 345,000 | 19.
20. Other liabilities (from Schedule RC-G) ................................................... | RCFD 2930 240,225 | 20.
21. Total liabilities (sum of items 13 through 20) ........................................... | RCFD 2948 19,082,748 | 21.
| /////////////////////// |
22. Limited-life preferred stock and related surplus ......................................... | RCFD 3282 0 | 22.
EQUITY CAPITAL | /////////////////////// |
23. Perpetual preferred stock and related surplus ............................................ | RCFD 3838 0 | 23.
24. Common stock ............................................................................. | RCFD 3230 612,893 | 24.
25. Surplus (exclude all surplus related to preferred stock).................................. | RCFD 3839 817,138 | 25.
26. a. Undivided profits and capital reserves ................................................ | RCFD 3632 280,057 | 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ................ | RCFD 8434 26,718 | 26.b.
27. Cumulative foreign currency translation adjustments ...................................... | RCFD 3284 0 | 27.
28. Total equity capital (sum of items 23 through 27) ........................................ | RCFD 3210 1,736,806 | 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, | /////////////////////// |
and 28) .................................................................................. | RCFD 3300 20,819,554 | 29.
___________________________
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the
most comprehensive level of auditing work performed for the bank by independent external Number
__________________
auditors as of any date during 1993 ............................................................... | RCFD 6724 2 | M.1.
__________________
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
____________
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-3
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
0 3 2 6 3
Schedule RC-A--Cash and Balances Due From Depository Institutions
Exclude assets held in trading accounts.
<S> <C> <C> <C>
-----------
| C405 | (-
_________________________________ ________
| (Column A) | (Column B) |
| Consolidated | Domestic |
| Bank | Offices |
-------------------------------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
_____________________________________________________________________________ ____________________ ____________________
1. Cash items in process of collection, unposted debits, and currency and | ////////////////// | ////////////////// |
coin .................................................................... | 0022 1,555,014 | ////////////////// | 1.
a. Cash items in process of collection and unposted debits .............. | ////////////////// | 0020 1,248,133 | 1.a.
b. Currency and coin .................................................... | ////////////////// | 0080 306,881 | 1.b.
2. Balances due from depository institutions in the U.S. ................... | ////////////////// | 0082 132,472 | 2.
a. U.S. branches and agencies of foreign banks (including their IBFs) ... | 0083 63 | ////////////////// | 2.a.
b. Other commercial banks in the U.S. and other depository institutions | ////////////////// | ////////////////// |
in the U.S. (including their IBFs) ................................... | 0085 132,409 | ////////////////// | 2.b.
3. Balances due from banks in foreign countries and foreign central banks .. | ////////////////// | 0070 10,802 | 3.
a. Foreign branches of other U.S. banks ................................. | 0073 938 | ////////////////// | 3.a.
b. Other banks in foreign countries and foreign central banks ........... | 0074 9,889 | ////////////////// | 3.b.
4. Balances due from Federal Reserve Banks ................................. | 0090 532,750 | 0090 532,750 | 4.
5. Total (sum of items 1 through 4) (total of column A must equal | ////////////////// | ////////////////// |
Schedule RC, sum of items 1.a and 1.b) .................................. | 0010 2,231,063 | 0010 2,231,038 | 5.
___________________________________________
______________________
Memorandum Dollar Amounts in Thousands RCOW Bil Mil Thou
__________________________________________________________________________________________________ ____________________
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2, | ////////////////// |
column B above) .............................................................................. | 0050 132,472 | M.1.
______________________
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-4
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-B--Securities
Exclude assets held in trading accounts.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
__________
| C410 | (-
___________________________________________________________________________ ________
| Held-to-maturity | Available-for-sale |
_________________________________________ _________________________________________
| (Column A) | (Column B) | (Column C) | (Column D) |
| Amortized Cost | Fair Value | Amortized Cost | Fair Value(1) |
____________________ ____________________ ____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
______________________________________ ____________________ ____________________ ____________________ ____________________
1. U.S. Treasury securities ......... | 0211 0 | 0213 0 | 1286 378,278 | 1287 374,489 | 1.
2. U.S. Government agency | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and corporation obligations | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(exclude mortgage-backed | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities): | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Issued by U.S. Govern- | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
ment agencies(2) .............. | 1289 0 | 1290 0 | 1291 0 | 1293 0 | 2.a.
b. Issued by U.S. | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
Government-sponsored | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
agencies(3) ................... | 1294 1,999 | 1295 2,002 | 1297 0 | 1298 0 | 2.b.
3. Securities issued by states | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and political subdivisions | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
in the U.S.: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. General obligations ........... | 1676 439 | 1677 437 | 1678 0 | 1679 0 | 3.a.
b. Revenue obligations ........... | 1681 185 | 1686 269 | 1690 0 | 1691 0 | 3.b.
c. Industrial development | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and similar obligations ....... | 1694 0 | 1695 0 | 1696 0 | 1697 0 | 3.c.
4. Mortgage-backed | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities (MBS): | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Pass-through securities: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(1) Guaranteed by | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
GNMA ...................... | 1698 0 | 1699 0 | 1701 710,443 | 1702 755,340 | 4.a.(1)
(2) Issued by FNMA | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and FHLMC ................. | 1703 618,941 | 1705 618,357 | 1706 264,861 | 1707 263,794 | 4.a.(2)
(3) Privately-issued .......... | 1709 0 | 1710 0 | 1711 0 | 1713 0 | 4.a.(3)
b. CMOs and REMICs: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(1) Issued by FNMA | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and FHLMC ................. | 1714 474,462 | 1715 453,454 | 1716 0 | 1717 0 | 4.b.(1)
(2) Privately-issued | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and collateralized | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
by MBS issued or | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
guaranteed by | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
FNMA, FHLMC, or | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
GNMA ...................... | 1718 5,672 | 1719 5,745 | 1731 14,496 | 1732 14,169 | 4.b.(2)
(3) All other privately- | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
issued .................... | 1733 0 | 1734 0 | 1735 0 | 1736 0 | 4.b.(3)
5. Other debt securities: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Other domestic debt | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities .................... | 1737 284,170 | 1738 283,973 | 1739 0 | 1741 0 | 5.a.
b. Foreign debt | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities .................... | 1742 1,262 | 1743 1,250 | 1744 0 | 1746 0 | 5.b.
_____________________________________________________________________________________
_____________
(1) Includes equity securities without readily determinable fair values at historical cost in item 6.c, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates," U.S. Maritime Administration obligations, and
Export-Import Bank participation certificates.
(3) Includes obligations (other than pass-through securities, CMOs, and REMICs) issued by the Farm Credit System, the Federal Home
Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Financing
Corporation, Resolution Funding Corporation, the Student Loan Marketing Association, and the Tennessee Valley Authority.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-5
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-B--Continued
<S> <C> <C> <C> <C> <C>
_____________________________________________________________________________________
| Held-to-maturity | Available-for-sale |
_________________________________________ _________________________________________
| (Column A) | (Column B) | (Column C) | (Column D) |
| Amortized Cost | Fair Value | Amortized Cost | Fair Value(1) |
____________________ ____________________ ____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
____________________________________ ____________________ ____________________ ____________________ ____________________
6. Equity securities: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Investments in mutual | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
funds ....................... | ////////////////// | ////////////////// | 1747 0 | 1748 0 | 6.a.
b. Other equity securities | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
with readily determin- | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
able fair values ............ | ////////////////// | ////////////////// | 1749 0 | 1751 0 | 6.b.
c. All other equity | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities(1) ............... | ////////////////// | ////////////////// | 1752 42,758 | 1753 42,758 | 6.c.
7. Total (sum of items 1 | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
through 6) (total of | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
column A must equal | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
Schedule RC, item 2.a) | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(total of column D must | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
equal Schedule RC, | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
item 2.b) ...................... | 1754 1,387,130 | 1771 1,365,487 | 1772 1,410,836 | 1773 1,450,550 | 7.
_____________________________________________________________________________________
___________
Memoranda | C412 | (-
___________ _________
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
___________________________________________________________________________________________________ ____________________
1. Pledged securities(2) ......................................................................... | 0416 1,962,069 | M.1.
2. Maturity and repricing data for debt securities(2)(3)(4) (excluding those in nonaccrual status):| ////////////////// |
a. Fixed rate debt securities with a remaining maturity of: | ////////////////// |
(1) Three months or less ................................................................... | 0343 2,351 | M.2.a.(1)
(2) Over three months through 12 months .................................................... | 0344 105,373 | M.2.a.(2)
(3) Over one year through five years ....................................................... | 0345 939,838 | M.2.a.(3)
(4) Over five years ........................................................................ | 0346 1,727,454 | M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through 2.a.(4)) ..... | 0347 2,775,016 | M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of: | ////////////////// |
(1) Quarterly or more frequently ........................................................... | 4544 18,615 | M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ | 4545 1,262 | M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually ................. | 4551 0 | M.2.b.(3)
(4) Less frequently than every five years .................................................. | 4552 0 | M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4)) .. | 4553 19,877 | M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total debt | ////////////////// |
securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus nonaccrual | ////////////////// |
debt securities included in Schedule RC-N, item 9, column C) ............................... | 0393 2,794,893 | M.2.c.
3. Not applicable | ////////////////// |
4. Held-to-maturity debt securities restructured and in compliance with modified terms (included | ////////////////// |
in Schedule RC-B, items 3 through 5, column A, above) ......................................... | 5365 0 | M.4.
5. Not applicable | ////////////////// |
6. Floating rate debt securities with a remaining maturity of one year or less(2) (included in | ////////////////// |
Memorandum item 2.b.(5) above) ................................................................ | 5519 0 | M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or | ////////////////// |
trading securities during the calendar year-to-date ........................................... | 1778 0 | M.7.
______________________
_____________
(1) Includes equity securities without readily determinable fair values at historical cost in item 6.c, column D.
(2) Includes held-to-maturity securities at amortized cost and available-for-sale securities at fair value.
(3) Exclude equity securities, e.g., investments in mutual funds, Federal Reserve stock, common stock, and preferred stock.
(4) Memorandum item 2 is not applicable to savings banks that must complete supplemental Schedule RC-J.
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-6
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-C--Loans and Lease Financing Receivables
Part I. Loans and Leases
<S> <C> <C> <C> <C> <C>
Do not deduct the allowance for loan and lease losses from amounts __________
reported in this schedule. Report total loans and leases, net of unearned | C415 | (-
_________________________________ ________
income. Exclude assets held in trading accounts. | (Column A) | (Column B) |
| Consolidated | Domestic |
| Bank | Offices |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
_____________________________________________________________________________ ____________________ ____________________
1. Loans secured by real estate ........................................... | 1410 2,125,469 | ////////////////// | 1.
a. Construction and land development ................................... | ////////////////// | 1415 330,635 | 1.a.
b. Secured by farmland (including farm residential and other | ////////////////// | ////////////////// |
improvements) ....................................................... | ////////////////// | 1420 23,379 | 1.b.
c. Secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(1) Revolving, open-end loans secured by 1-4 family residential | ////////////////// | ////////////////// |
properties and extended under lines of credit ................... | ////////////////// | 1797 0 | 1.c.(1)
(2) All other loans secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(a) Secured by first liens ...................................... | ////////////////// | 5367 509,515 | 1.c.(2)(a)
(b) Secured by junior liens ..................................... | ////////////////// | 5368 159,141 | 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties ........... | ////////////////// | 1460 109,675 | 1.d.
e. Secured by nonfarm nonresidential properties ........................ | ////////////////// | 1480 993,124 | 1.e.
2. Loans to depository institutions: | ////////////////// | ////////////////// |
a. To commercial banks in the U.S. ..................................... | ////////////////// | 1505 8,036 | 2.a.
(1) To U.S. branches and agencies of foreign banks .................. | 1506 6,256 | ////////////////// | 2.a.(1)
(2) To other commercial banks in the U.S. ........................... | 1507 6,580 | ////////////////// | 2.a.(2)
b. To other depository institutions in the U.S. ........................ | 1517 741 | 1517 741 | 2.b.
c. To banks in foreign countries ....................................... | ////////////////// | 1510 20,009 | 2.c.
(1) To foreign branches of other U.S. banks ......................... | 1513 0 | ////////////////// | 2.c.(1)
(2) To other banks in foreign countries ............................. | 1516 50,838 | ////////////////// | 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers .... | 1590 85,972 | 1590 85,972 | 3.
4. Commercial and industrial loans: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ....................................... | 1763 3,948,669 | 1763 3,896,650 | 4.a.
b. To non-U.S. addressees (domicile) ................................... | 1764 132,342 | 1764 34,382 | 4.b.
5. Acceptances of other banks: | ////////////////// | ////////////////// |
a. Of U.S. banks ....................................................... | 1756 0 | 1756 0 | 5.a.
b. Of foreign banks .................................................... | 1757 0 | 1757 0 | 5.b.
6. Loans to individuals for household, family, and other personal | ////////////////// | ////////////////// |
expenditures (i.e., consumer loans) (includes purchased paper) ......... | ////////////////// | 1975 1,325,047 | 6.
a. Credit cards and related plans (includes check credit and other | ////////////////// | ////////////////// |
revolving credit plans) ............................................. | 2008 97,154 | ////////////////// | 6.a.
b. Other (includes single payment, installment, and all student loans) . | 2011 1,228,043 | ////////////////// | 6.b.
7. Loans to foreign governments and official institutions (including | ////////////////// | ////////////////// |
foreign central banks) ................................................. | 2081 227,142 | 2081 220,755 | 7.
8. Obligations (other than securities and leases) of states and political | ////////////////// | ////////////////// |
subdivisions in the U.S. (includes nonrated industrial development | ////////////////// | ////////////////// |
obligations) ........................................................... | 2107 77,572 | 2107 77,572 | 8.
9. Other loans ............................................................ | 1563 1,294,625 | ////////////////// | 9.
a. Loans for purchasing or carrying securities (secured and unsecured) . | ////////////////// | 1545 220,641 | 9.a.
b. All other loans (exclude consumer loans) ............................ | ////////////////// | 1564 1,073,984 | 9.b.
10. Lease financing receivables (net of unearned income) ................... | ////////////////// | 2165 210,448 | 10.
a. Of U.S. addressees (domicile) ....................................... | 2182 166,277 | ////////////////// | 10.a.
b. Of non-U.S. addressees (domicile) ................................... | 2183 44,171 | ////////////////// | 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above ........ | 2123 0 | 2123 0 | 11.
12. Total loans and leases, net of unearned income (sum of items 1 through | ////////////////// | ////////////////// |
10 minus item 11) (total of column A must equal Schedule RC, item 4.a) . | 2122 9,491,851 | 2122 9,299,706 | 12.
___________________________________________
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-7
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-C--Continued
Part I. Continued
<S> <C> <C> <C>
___________________________________________
| (Column A) | (Column B) |
| Consolidated | Domestic |
Memoranda | Bank | Offices |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
_____________________________________________________________________________ ____________________ ____________________
1. Commercial paper included in Schedule RC-C, part I, above .............. | 1496 0 | 1496 0 | M.1.
2. Loans and leases restructured and in compliance with modified terms | ////////////////// | ////////////////// |
(included in Schedule RC-C, part I, above): | ////////////////// | ////////////////// |
a. Loans secured by real estate: | ////////////////// | ////////////////// |
_____________________
(1) To U.S. addressees (domicile) ................................... | 1687 0 | M.2.a.(1)
(2) To non-U.S. addressees (domicile) ............................... | 1689 0 | M.2.a.(2)
b. Loans to finance agricultural production and other loans to farmers . | 1613 0 | M.2.b.
c. Commercial and industrial loans: | ////////////////// |
(1) To U.S. addressees (domicile) ................................... | 1758 0 | M.2.c.(1)
(2) To non-U.S. addressees (domicile)................................ | 1759 0 | M.2.c.(2)
d. All other loans (exclude loans to individuals for household, | ////////////////// |
family, and other personal expenditures) ............................ | 1615 219,755 | M.2.d.
e. Lease financing receivables: | ////////////////// |
(1) Of U.S. addressees (domicile) ................................... | 1789 0 | M.2.e.(1)
(2) Of non-U.S. addressees (domicile) ............................... | 1790 0 | M.2.e.(2)
f. Total (sum of Memorandum items 2.a through 2.e) ..................... | 1616 219,755 | M.2.f.
3. Maturity and repricing data for loans and leases(1) (excluding those | ////////////////// |
in nonaccrual status): | ////////////////// |
a. Fixed rate loans and leases with a remaining maturity of: | ////////////////// |
(1) Three months or less ............................................ | 0348 275,486 | M.3.a.(1)
(2) Over three months through 12 months ............................. | 0349 317,540 | M.3.a.(2)
(3) Over one year through five years ................................ | 0356 1,436,508 | M.3.a.(3)
(4) Over five years ................................................. | 0357 1,013,693 | M.3.a.(4)
(5) Total fixed rate loans and leases (sum of | ////////////////// |
Memorandum items 3.a.(1) through 3.a.(4)) ....................... | 0358 3,043,227 | M.3.a.(5)
b. Floating rate loans with a repricing frequency of: | ////////////////// |
(1) Quarterly or more frequently .................................... | 4554 4,138,879 | M.3.b.(1)
(2) Annually or more frequently, but less frequently than quarterly . | 4555 1,533,292 | M.3.b.(2)
(3) Every five years or more frequently, but less frequently than | ////////////////// |
annually ........................................................ | 4561 546,951 | M.3.b.(3)
(4) Less frequently than every five years ........................... | 4564 68,614 | M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1) | ////////////////// |
through 3.b.(4)) ................................................ | 4567 6,287,736 | M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and 3.b.(5)) | ////////////////// |
(must equal the sum of total loans and leases, net, from | ////////////////// |
Schedule RC-C, part I, item 12, plus unearned income from | ////////////////// |
Schedule RC-C, part I, item 11, minus total nonaccrual loans and | ////////////////// |
leases from Schedule RC-N, sum of items 1 through 8, column C) ...... | 1479 9,330,963 | M.3.c.
4. Loans to finance commercial real estate, construction, and land | ////////////////// |
development activities (not secured by real estate) included in | ////////////////// |
Schedule RC-C, part I, items 4 and 9, column A, page RC-6(2) ........... | 2746 229,935 | M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, above)| 5369 217,729 | M.5.
6. Adjustable rate closed-end loans secured by first liens on 1-4 family | ////////////////// |_____________________
residential properties (included in Schedule RC-C, part I, item | ////////////////// | RCON Bil Mil Thou |
____________________
1.c.(2)(a), column B, page RC-6) ....................................... | ////////////////// | 5370 19,359 | M.6.
___________________________________________
_____________
(1) Memorandum item 3 is not applicable to savings banks that must complete supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in Schedule RC-C, part I, item 1, column A.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-8
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-D--Trading Assets and Liabilities
Schedule RC-D is to be completed only by banks with $1 billion or more in total assets or with $2 billion or more in par/notional
amount of interest rate, foreign exchange rate, and other commodity and equity contracts (as reported in Schedule RC-L, items 11,
12, and 13).
<S> <C> <C> <C>
------------------------------------------------
| C420 | (-
_________________ ________
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
__________________________________________________________________________________________________ _________________________
ASSETS | /////////////////////// |
1. U.S. Treasury securities in domestic offices ................................................ | RCON 3531 1,698 | 1.
2. U.S. Government agency and corporation obligations in domestic offices (exclude mortgage- | /////////////////////// |
backed securities) .......................................................................... | RCON 3532 578 | 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices ...... | RCON 3533 3,592 | 3.
4. Mortgage-backed securities in domestic offices: | /////////////////////// |
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA ..................... | RCON 3534 0 | 4.a.
b. CMOs and REMICs issued by FNMA or FHLMC .................................................. | RCON 3535 0 | 4.b.
c. All other ................................................................................ | RCON 3536 0 | 4.c.
5. Other debt securities in domestic offices ................................................... | RCON 3537 0 | 5.
6. Certificates of deposit in domestic offices ................................................. | RCON 3538 152 | 6.
7. Commercial paper in domestic offices ........................................................ | RCON 3539 0 | 7.
8. Bankers acceptances in domestic offices ..................................................... | RCON 3540 0 | 8.
9. Other trading assets in domestic offices .................................................... | RCON 3541 5 | 9.
10. Trading assets in foreign offices ........................................................... | RCFN 3542 0 | 10.
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity | /////////////////////// |
contracts: | /////////////////////// |
a. In domestic offices ...................................................................... | RCON 3543 23,137 | 11.a.
b. In foreign offices ....................................................................... | RCFN 3544 436 | 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5) ........... | RCFD 3545 29,598 | 12.
___________________________
___________________________
| ///////// Bil Mil Thou |
LIABILITIES _________________________
13. Liability for short positions ............................................................... | RCFD 3546 68 | 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity | /////////////////////// |
contracts ................................................................................... | RCFD 3547 19,643 | 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b) ...... | RCFD 3548 19,711 | 15.
___________________________
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-9
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-E--Deposit Liabilities
Part I. Deposits in Domestic Offices
<S> <C> <C> <C>
__________
| C425 | (-
______________________________________________________ ________
| | Nontransaction |
| Transaction Accounts | Accounts |
_________________________________________ ____________________
| (Column A) | (Column B) | (Column C) |
| Total transaction | Memo: Total | Total |
| accounts (including| demand deposits | nontransaction |
| total demand | (included in | accounts |
| deposits) | column A) | (including MMDAs) |
____________________ ____________________ ____________________
Dollar Amounts in Thousands | RCON Bil Mil Thou | RCON Bil Mil Thou | RCON Bil Mil Thou |
__________________________________________________________ ____________________ ____________________ ____________________
Deposits of: | ////////////////// | ////////////////// | ////////////////// |
1. Individuals, partnerships, and corporations .......... | 2201 7,149,998 | 2240 5,225,007 | 2346 7,931,355 | 1.
2. U.S. Government ...................................... | 2202 52,293 | 2280 52,293 | 2520 187 | 2.
3. States and political subdivisions in the U.S. ........ | 2203 239,405 | 2290 86,920 | 2530 91,311 | 3.
4. Commercial banks in the U.S. ......................... | 2206 254,413 | 2310 254,413 | ////////////////// | 4.
a. U.S. branches and agencies of foreign banks ....... | ////////////////// | ////////////////// | 2347 0 | 4.a.
b. Other commercial banks in the U.S. ................ | ////////////////// | ////////////////// | 2348 224 | 4.b.
5. Other depository institutions in the U.S. ............ | 2207 22,826 | 2312 22,826 | 2349 0 | 5.
6. Banks in foreign countries ........................... | 2213 37,501 | 2320 37,501 | ////////////////// | 6.
a. Foreign branches of other U.S. banks .............. | ////////////////// | ////////////////// | 2367 0 | 6.a.
b. Other banks in foreign countries .................. | ////////////////// | ////////////////// | 2373 0 | 6.b.
7. Foreign governments and official institutions | ////////////////// | ////////////////// | ////////////////// |
(including foreign central banks) .................... | 2216 1,582 | 2300 1,582 | 2377 0 | 7.
8. Certified and official checks ........................ | 2330 131,882 | 2330 131,882 | ////////////////// | 8.
9. Total (sum of items 1 through 8) (sum of | ////////////////// | ////////////////// | ////////////////// |
columns A and C must equal Schedule RC, | ////////////////// | ////////////////// | ////////////////// |
item 13.a) ........................................... | 2215 7,889,900 | 2210 5,812,424 | 2385 8,023,077 | 9.
________________________________________________________________
______________________
Memoranda Dollar Amounts in Thousands | RCON Bil Mil Thou |
____________________________________________________________________________________________________ ____________________
1. Selected components of total deposits (i.e., sum of item 9, columns A and C): | ////////////////// |
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts ......................... | 6835 871,112 | M.1.a.
b. Total brokered deposits ..................................................................... | 2365 0 | M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above): | ////////////////// |
(1) Issued in denominations of less than $100,000 ........................................... | 2343 0 | M.1.c.(1)
(2) Issued either in denominations of $100,000 or in denominations greater than $100,000 | ////////////////// |
and participated out by the broker in shares of $100,000 or less ........................ | 2344 0 | M.1.c.(2)
d. Total deposits denominated in foreign currencies ............................................ | 3776 243 | M.1.d.
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S. | ////////////////// |
reported in item 3 above which are secured or collateralized as required under state law) ... | 5590 304,095 | M.1.e.
2. Components of total nontransaction accounts (sum of Memoranda items 2.a through 2.d must | ////////////////// |
equal item 9, column C above): | ////////////////// |
a. Savings deposits: | ////////////////// |
(1) Money market deposit accounts (MMDAs) ................................................... | 6810 1,428,509 | M.2.a.(1)
(2) Other savings deposits (excludes MMDAs) ................................................. | 0352 3,038,808 | M.2.a.(2)
b. Total time deposits of less than $100,000 ................................................... | 6648 2,649,411 | M.2.b.
c. Time certificates of deposit of $100,000 or more ............................................ | 6645 874,370 | M.2.c.
d. Open-account time deposits of $100,000 or more .............................................. | 6646 31,979 | M.2.d.
3. All NOW accounts (included in column A above) .................................................. | 2398 2,077,476 | M.3.
______________________
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-10
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-E--Continued
Part I. Continued
<S> <C> <C> <C>
Memoranda (continued)
_________________________________________________________________________________________________________________________________
| Deposit Totals for FDIC Insurance Assessments(1) ______________________ |
| Dollar Amounts in Thousands | RCON Bil Mil Thou | |
__________________________________________________________________________________________________ ____________________
| 4. Total deposits in domestic offices (sum of item 9, column A and item 9, column C) |/////////////////// | |
| (must equal Schedule RC, item 13.a) ......................................................... | 2200 15,912,977 | M.4. |
| | ////////////////// | |
| a. Total demand deposits (must equal item 9, column B) ...................................... | 2210 5,812,424 | M.4.a.|
| b. Total time and savings deposits(2) (must equal item 9, column A plus item 9, column C | ////////////////// | |
| minus item 9, column B) .................................................................. | 2350 10,100,553 | M.4.b.|
______________________
| ____________ |
| (1) An amended Certified Statement should be submitted to the FDIC if the deposit totals reported in this item are amended |
| after the semiannual Certified Statement originally covering this report date has been filed with the FDIC. |
| (2) For FDIC insurance assessment purposes, "total time and savings deposits" consists of nontransaction accounts and all |
| transaction accounts other than demand deposits. |
| |
_________________________________________________________________________________________________________________________________
______________________
Dollar Amounts in Thousands | RCON Bil Mil Thou |
___________________________________________________________________________________________________ ____________________
5. Time deposits of less than $100,000 and open-account time deposits of $100,000 or more | ////////////////// |
(included in Memorandum items 2.b and 2.d above) with a remaining maturity or repricing | ////////////////// |
frequency of:(1) | ////////////////// |
a. Three months or less ....................................................................... | 0359 317,398 | M.5.a.
b. Over three months through 12 months (but not over 12 months) ............................... | 3644 1,536,217 | M.5.b.
6. Maturity and repricing data for time certificates of deposit of $100,000 or more:(1) | ////////////////// |
a. Fixed rate time certificates of deposit of $100,000 or more with a remaining maturity of: | ////////////////// |
(1) Three months or less ................................................................... | 2761 57,926 | M.6.a.(1)
(2) Over three months through 12 months .................................................... | 2762 691,670 | M.6.a.(2)
(3) Over one year through five years ....................................................... | 2763 110,361 | M.6.a.(3)
(4) Over five years ........................................................................ | 2765 1,859 | M.6.a.(4)
(5) Total fixed rate time certificates of deposit of $100,000 or more (sum of | ////////////////// |
Memorandum items 6.a.(1) through 6.a.(4)) .............................................. | 2767 861,816 | M.6.a.(5)
b. Floating rate time certificates of deposit of $100,000 or more with a repricing frequency of:| ////////////////// |
(1) Quarterly or more frequently ........................................................... | 4568 12,554 | M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ | 4569 0 | M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually ................. | 4571 0 | M.6.b.(3)
(4) Less frequently than every five years .................................................. | 4572 0 | M.6.b.(4)
(5) Total floating rate time certificates of deposit of $100,000 or more (sum of | ////////////////// |
Memorandum items 6.b.(1) through 6.b.(4)) .............................................. | 4573 12,554 | M.6.b.(5)
c. Total time certificates of deposit of $100,000 or more (sum of Memorandum items 6.a.(5) | ////////////////// |
and 6.b.(5)) (must equal Memorandum item 2.c. above) ....................................... | 6645 874,370 | M.6.c.
______________________
_____________
(1) Memorandum items 5 and 6 are not applicable to savings banks that must complete supplemental Schedule RC-J.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-11
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-E--Continued
Part II. Deposits in Foreign Offices (including Edge and
Agreement subsidiaries and IBFs)
<S> <C> <C> <C>
____________________
Dollar Amounts in Thousands | RCFN Bil Mil Thou |
___________________________________________________________________________________________________ ____________________
Deposits of: | ////////////////// |
1. Individuals, partnerships, and corporations ................................................... | 2621 520,262 | 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks) ................................ | 2623 0 | 2.
3. Foreign banks (including U.S. branches and | ////////////////// |
agencies of foreign banks, including their IBFs) .............................................. | 2625 0 | 3.
4. Foreign governments and official institutions (including foreign central banks) ............... | 2650 0 | 4.
5. Certified and official checks ................................................................. | 2330 0 | 5.
6. All other deposits ............................................................................ | 2668 0 | 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b) .......................... | 2200 520,262 | 7.
______________________
Schedule RC-F--Other Assets
__________
| C430 | (-
_________________ ________
Dollar Amounts in Thousands | ////////// Bil Mil Thou |
__________________________________________________________________________________________________ _________________________
1. Income earned, not collected on loans ........................................................ | RCFD 2164 51,995 | 1.
2. Net deferred tax assets(1) ................................................................... | RCFD 2148 35,800 | 2.
3. Excess residential mortgage servicing fees receivable ........................................ | RCFD 5371 0 | 3.
4. Other (itemize amounts that exceed 25% of this item) ......................................... | RCFD 2168 247,691 | 4.
_____________ ___________________________
a. | TEXT 3549 |____________________________________________________| RCFD 3549 | | /////////////////////// | 4.a.
___________
b. | TEXT 3550 |____________________________________________________| RCFD 3550 | | /////////////////////// | 4.b.
___________
c. | TEXT 3551 |____________________________________________________| RCFD 3551 | | /////////////////////// | 4.c.
_____________
___________________________
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11) ........................... | RCFD 2160 335,486 | 5.
___________________________
Memorandum ___________________________
Dollar Amounts in Thousands | ////////// Bil Mil Thou |
__________________________________________________________________________________________________ _________________________
1. Deferred tax assets disallowed for regulatory capital purposes ............................... | RCFD 5610 0 | M.1.
___________________________
Schedule RC-G--Other Liabilities
__________
| C435 | (-
_________________ ________
Dollar Amounts in Thousands | ////////// Bil Mil Thou |
__________________________________________________________________________________________________ _________________________
1. a. Interest accrued and unpaid on deposits in domestic offices(2) ............................ | RCON 3645 21,441 | 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable) ................. | RCFD 3646 200,638 | 1.b.
2. Net deferred tax liabilities(1) .............................................................. | RCFD 3049 631 | 2.
3. Minority interest in consolidated subsidiaries ............................................... | RCFD 3000 0 | 3.
4. Other (itemize amounts that exceed 25% of this item) ......................................... | RCFD 2938 17,515 | 4.
_____________ ___________________________
a. | TEXT 3552 |____________________________________________________| RCFD 3552 | | /////////////////////// | 4.a.
___________ Trading Security Purchase Fails 7,404
b. | TEXT 3553 |____________________________________________________| RCFD 3553 | | /////////////////////// | 4.b.
___________
c. | TEXT 3554 |____________________________________________________| RCFD 3554 | | /////////////////////// | 4.c.
_____________
___________________________
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) ........................... | RCFD 2930 240,225 | 5.
___________________________
____________
(1) See discussion of deferred income taxes in Glossary entry on "income taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-12
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-H--Selected Balance Sheet Items for Domestic Offices
<S> <C> <C> <C>
________
| C440 | (-
____________ ________
| Domestic Offices |
____________________
Dollar Amounts in Thousands | RCON Bil Mil Thou |
_____________________________________________________________________________________________________ ____________________
1. Customers' liability to this bank on acceptances outstanding .................................... | 2155 11,337 | 1.
2. Bank's liability on acceptances executed and outstanding ........................................ | 2920 11,337 | 2.
3. Federal funds sold and securities purchased under agreements to resell .......................... | 1350 5,092,526 | 3.
4. Federal funds purchased and securities sold under agreements to repurchase ...................... | 2800 832,012 | 4.
5. Other borrowed money ............................................................................ | 2850 74,180 | 5.
EITHER | ////////////////// |
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs ..................... | 2163 N/A | 6.
OR | ////////////////// |
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs ....................... | 2941 326,679 | 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries, and IBFs) . | 2192 20,624,790 | 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries, and IBFs)| 3129 18,561,305 | 9.
______________________
Items 10-17 include held-to-maturity and available-for-sale securities in domestic offices. ______________________
| RCON Bil Mil Thou |
____________________
10. U.S. Treasury securities ....................................................................... | 1779 374,489 | 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed | ////////////////// |
securities) .................................................................................... | 1785 1,999 | 11.
12. Securities issued by states and political subdivisions in the U.S. ............................. | 1786 624 | 12.
13. Mortgage-backed securities: | ////////////////// |
a. Pass-through securities: | ////////////////// |
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ............................................ | 1787 1,638,075 | 13.a.(1)
(2) Privately-issued ........................................................................ | 1869 0 | 13.a.(2)
b. CMOs and REMICs: | ////////////////// |
(1) Issued by FNMA and FHLMC ................................................................ | 1877 474,462 | 13.b.(1)
(2) Privately-issued ........................................................................ | 2253 19,841 | 13.b.(2)
14. Other domestic debt securities ................................................................. | 3159 284,170 | 14.
15. Foreign debt securities ........................................................................ | 3160 1,262 | 15.
16. Equity securities: | ////////////////// |
a. Investments in mutual funds ................................................................. | 3161 0 | 16.a.
b. Other equity securities with readily determinable fair values ............................... | 3162 0 | 16.b.
c. All other equity securities ................................................................. | 3169 42,758 | 16.c.
17. Total held-to-maturity and available-for-sale securities (sum of items 10 through 16) .......... | 3170 2,837,680 | 17.
______________________
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
______________________
Dollar Amounts in Thousands | RCON Bil Mil Thou |
_____________________________________________________________________________________________________ ____________________
EITHER | ////////////////// |
1. Net due from the IBF of the domestic offices of the reporting bank .............................. | 3051 N/A | M.1.
OR | ////////////////// |
2. Net due to the IBF of the domestic offices of the reporting bank ................................ | 3059 N/A | M.2.
______________________
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-13
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-I--Selected Assets and Liabilities of IBFs
To be completed only by banks with IBFs and other "foreign" offices.
<S> <C> <C> <C>
__________
| C445 | (-
____________ ________
Dollar Amounts in Thousands | RCFN Bil Mil Thou |
_____________________________________________________________________________________________________ ____________________
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12) .................. | 2133 N/A | 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I, item 12, | ////////////////// |
column A) ...................................................................................... | 2076 N/A | 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4, column A) ..... | 2077 N/A | 3.
4. Total IBF liabilities (component of Schedule RC, item 21) ...................................... | 2898 N/A | 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E, | ////////////////// |
part II, items 2 and 3) ........................................................................ | 2379 N/A | 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6) ...... | 2381 N/A | 6.
Schedule RC-K--Quarterly Averages (1)
__________
| C455 | (-
_________________ ________
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
_______________________________________________________________________________________________ _________________________
ASSETS | /////////////////////// |
1. Interest-bearing balances due from depository institutions ............................... | RCFD 3381 5,023 | 1.
2. U.S. Treasury securities and U.S. Government agency and corporation obligations(2) ....... | RCFD 3382 2,370,243 | 2.
3. Securities issued by states and political subdivisions in the U.S.(2) .................... | RCFD 3383 858 | 3.
4. a. Other debt securities(2) .............................................................. | RCFD 3647 326,907 | 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock) . | RCFD 3648 42,758 | 4.b.
5. Federal funds sold and securities purchased under agreements to resell in domestic offices | /////////////////////// |
of the bank and of its Edge and Agreement subsidiaries, and in IBFs ...................... | RCFD 3365 4,548,613 | 5.
6. Loans: | /////////////////////// |
a. Loans in domestic offices: | /////////////////////// |
(1) Total loans ....................................................................... | RCON 3360 9,257,125 | 6.a.(1)
(2) Loans secured by real estate ...................................................... | RCON 3385 2,128,867 | 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers ............... | RCON 3386 82,319 | 6.a.(3)
(4) Commercial and industrial loans ................................................... | RCON 3387 3,845,630 | 6.a.(4)
(5) Loans to individuals for household, family, and other personal expenditures ....... | RCON 3388 1,313,432 | 6.a.(5)
(6) Obligations (other than securities and leases) of states and political subdivisions | /////////////////////// |
in the U.S. ....................................................................... | RCON 3389 77,602 | 6.a.(6)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs ............. | RCFN 3360 210,137 | 6.b.
7. Assets held in trading accounts .......................................................... | RCFD 3401 25,272 | 7.
8. Lease financing receivables (net of unearned income) ..................................... | RCFD 3484 211,507 | 8.
9. Total assets ............................................................................. | RCFD 3368 20,338,866 | 9.
LIABILITIES | /////////////////////// |
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts, | /////////////////////// |
and telephone and preauthorized transfer accounts) (exclude demand deposits) ............. | RCON 3485 2,072,129 | 10.
11. Nontransaction accounts in domestic offices: | /////////////////////// |
a. Money market deposit accounts (MMDAs) ................................................. | RCON 3486 1,564,129 | 11.a.
b. Other savings deposits ................................................................ | RCON 3487 3,004,535 | 11.b.
c. Time certificates of deposit of $100,000 or more ...................................... | RCON 3345 892,488 | 11.c.
d. All other time deposits ............................................................... | RCON 3469 2,716,608 | 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs .. | RCFN 3404 434,660 | 12.
13. Federal funds purchased and securities sold under agreements to repurchase in domestic | /////////////////////// |
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs .............. | RCFD 3353 890,384 | 13.
14. Other borrowed money ..................................................................... | RCFD 3355 78,485 | 14.
___________________________
_____________
(1) For all items, banks have the option of reporting either (1) an average of daily figures for the quarter, or
(2) an average of weekly figures (i.e., the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized cost.
(3) Quarterly averages for all equity securities should be based on historical cost.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-14
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-L--Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L. Some of the amounts
reported in Schedule RC-L are regarded as volume indicators and not necessarily as measures of risk.
<S> <C> <C> <C>
__________
| C460 | (-
____________ ________
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
____________________________________________________________________________________________________ ____________________
1. Unused commitments: | ////////////////// |
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home | ////////////////// |
equity lines ............................................................................... | 3814 0 | 1.a.
b. Credit card lines .......................................................................... | 3815 0 | 1.b.
c. Commercial real estate, construction, and land development: | ////////////////// |
(1) Commitments to fund loans secured by real estate ....................................... | 3816 163,579 | 1.c.(1)
(2) Commitments to fund loans not secured by real estate ................................... | 6550 125,082 | 1.c.(2)
d. Securities underwriting .................................................................... | 3817 0 | 1.d.
e. Other unused commitments ................................................................... | 3818 6,619,488 | 1.e.
2. Financial standby letters of credit and foreign office guarantees ............................. | 3819 1,055,311 | 2.
___________________________
a. Amount of financial standby letters of credit conveyed to others | RCFD 3820 | 70,825 | ////////////////// | 2.a.
___________________________
3. Performance standby letters of credit and foreign office guarantees ........................... | 3821 105,917 | 3.
a. Amount of performance standby letters of credit conveyed to | ////////////////// |
___________________________
others .......................................................... | RCFD 3822 | 5,529 | ////////////////// | 3.a.
___________________________
4. Commercial and similar letters of credit ...................................................... | 3411 196,686 | 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by | ////////////////// |
the reporting bank ............................................................................ | 3428 0 | 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting | ////////////////// |
(nonaccepting) bank ........................................................................... | 3429 0 | 6.
7. Securities borrowed ........................................................................... | 3432 0 | 7.
8. Securities lent (including customers' securities lent where the customer is indemnified | ////////////////// |
against loss by the reporting bank) ........................................................... | 3433 9,299 | 8.
9. Mortgages transferred (i.e., sold or swapped) with recourse that have been treated as sold | ////////////////// |
for Call Report purposes: | ////////////////// |
a. FNMA and FHLMC residential mortgage loan pools: | ////////////////// |
(1) Outstanding principal balance of mortgages transferred as of the report date ........... | 3650 0 | 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................... | 3651 0 | 9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools: | ////////////////// |
(1) Outstanding principal balance of mortgages transferred as of the report date ........... | 3652 0 | 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................... | 3653 0 | 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools: | ////////////////// |
(1) Outstanding principal balance of mortgages transferred as of the report date ........... | 3654 0 | 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................... | 3655 0 | 9.c.(2)
10. When-issued securities: | ////////////////// |
a. Gross commitments to purchase .............................................................. | 3434 44,280 | 10.a.
b. Gross commitments to sell .................................................................. | 3435 43,065 | 10.b.
11. Interest rate contracts (exclude when-issued securities): | ////////////////// |
a. Notional value of interest rate swaps ...................................................... | 3450 5,194,929 | 11.a.
b. Futures and forward contracts .............................................................. | 3823 1,160,095 | 11.b.
c. Option contracts (e.g., options on Treasuries): | ////////////////// |
(1) Written option contracts ............................................................... | 3824 348,059 | 11.c.(1)
(2) Purchased option contracts ............................................................. | 3825 348,059 | 11.c.(2)
12. Foreign exchange rate contracts: | ////////////////// |
a. Notional value of exchange swaps (e.g., cross-currency swaps) .............................. | 3826 0 | 12.a.
b. Commitments to purchase foreign currencies and U.S. dollar exchange (spot, forward, | ////////////////// |
and futures) ............................................................................... | 3415 1,053,707 | 12.b.
c. Option contracts (e.g., options on foreign currency): | ////////////////// |
(1) Written option contracts ............................................................... | 3827 14,874 | 12.c.(1)
(2) Purchased option contracts ............................................................. | 3828 14,874 | 12.c.(2)
______________________
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-15
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-L--Continued
<S> <C> <C> <C>
__________
| C461 | (-
____________ ________
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
____________________________________________________________________________________________________ ____________________
13. Contracts on other commodities and equities: | ////////////////// |
a. Notional value of other swaps (e.g., oil swaps) ............................................ | 3829 38,523 | 13.a.
b. Futures and forward contracts (e.g., stock index and commodity--precious metals, | ////////////////// |
wheat, cotton, livestock--contracts) ....................................................... | 3830 0 | 13.b.
c. Option contracts (e.g., options on commodities, individual stocks and stock indexes): | ////////////////// |
(1) Written option contracts ............................................................... | 3831 0 | 13.c.(1)
(2) Purchased option contracts ............................................................. | 3832 0 | 13.c.(2)
14. All other off-balance sheet liabilities (itemize and describe each component of this item | ////////////////// |
over 25% of Schedule RC, item 28, "Total equity capital") ..................................... | 3430 0 | 14.
| ////////////////// |
_____________ __________________________
a. | TEXT 3555 |______________________________________________________| RCFD 3555 | | ////////////////// | 14.a.
___________
b. | TEXT 3556 |______________________________________________________| RCFD 3556 | | ////////////////// | 14.b.
___________
c. | TEXT 3557 |______________________________________________________| RCFD 3557 | | ////////////////// | 14.c.
_____________
d. | TEXT 3558 |______________________________________________________| RCFD 3558 | | ////////////////// | 14.d.
_____________ __________________________
15. All other off-balance sheet assets (itemize and describe each component of this item | ////////////////// |
over 25% of Schedule RC, item 28, "Total equity capital") ..................................... | 5591 0 | 15.
| ////////////////// |
_____________ __________________________
a. | TEXT 5592 |______________________________________________________| RCFD 5592 | | ////////////////// | 15.a.
___________
b. | TEXT 5593 |______________________________________________________| RCFD 5593 | | ////////////////// | 15.b.
___________
c. | TEXT 5594 |______________________________________________________| RCFD 5594 | | ////////////////// | 15.c.
_____________
d. | TEXT 5595 |______________________________________________________| RCFD 5595 | | ////////////////// | 15.d.
_____________ ________________________________________________
Memoranda
______________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
____________________________________________________________________________________________________ ____________________
1. Not applicable | ////////////////// |
2. Not applicable | ////////////////// |
3. Unused commitments with an original maturity exceeding one year that are reported in | ////////////////// |
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments | ////////////////// |
that are fee paid or otherwise legally binding) ............................................... | 3833 4,446,672 | M.3.
a. Participations in commitments with an original maturity | ////////////////// |
___________________________
exceeding one year conveyed to others ........................... | RCFD 3834 | 110,742 | ////////////////// | M.3.a.
___________________________
4. To be completed only by banks with $1 billion or more in total assets: | ////////////////// |
Standby letters of credit and foreign office guarantees (both financial and performance) issued | ////////////////// |
to non-U.S. addressees (domicile) included in Schedule RC-L, items 2 and 3, above ............. | 3377 37,668 | M.4.
5. To be completed for the September report only: | ////////////////// |
Installment loans to individuals for household, family, and other personal expenditures that | ////////////////// |
have been securitized and sold without recourse (with servicing retained), amounts | ////////////////// |
outstanding by type of loan: | ////////////////// |
a. Loans to purchase private passenger automobiles ............................................ | 2741 N/A | M.5.a.
b. Credit cards and related plans ............................................................. | 2742 N/A | M.5.b.
c. All other consumer installment credit (including mobile home loans) ........................ | 2743 N/A | M.5.c.
______________________
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-16
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-M--Memoranda
__________
| C465 | (-
____________ ________
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
______________________________________________________________________________________________________ ____________________
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal | ////////////////// |
shareholders, and their related interests as of the report date: | ////////////////// |
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal | ////////////////// |
shareholders, and their related interests ..................................................... | 6164 65,899 | 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount of all | ////////////////// |
extensions of credit by the reporting bank (including extensions of credit to | ////////////////// |
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number | ////////////////// |
____________________________
of total capital as defined for this purpose in agency regulations. | RCFD 6165 | 49 | ////////////////// | 1.b.
____________________________
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches | ////////////////// |
and agencies of foreign banks(1) (included in Schedule RC, items 3.a and 3.b) .................... | 3405 0 | 2.
3. Not applicable. | ////////////////// |
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others | ////////////////// |
(include both retained servicing and purchased servicing): | ////////////////// |
a. Mortgages serviced under a GNMA contract ...................................................... | 5500 0 | 4.a.
b. Mortgages serviced under a FHLMC contract: | ////////////////// |
(1) Serviced with recourse to servicer ........................................................ | 5501 0 | 4.b.(1)
(2) Serviced without recourse to servicer ..................................................... | 5502 0 | 4.b.(2)
c. Mortgages serviced under a FNMA contract: | ////////////////// |
(1) Serviced under a regular option contract .................................................. | 5503 0 | 4.c.(1)
(2) Serviced under a special option contract .................................................. | 5504 0 | 4.c.(2)
d. Mortgages serviced under other servicing contracts ............................................ | 5505 0 | 4.d.
5. To be completed only by banks with $1 billion or more in total assets: | ////////////////// |
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must | ////////////////// |
equal Schedule RC, item 9): | ////////////////// |
a. U.S. addressees (domicile) .................................................................... | 2103 5,316 | 5.a.
b. Non-U.S. addressees (domicile) ................................................................ | 2104 6,021 | 5.b.
6. Intangible assets: | ////////////////// |
a. Mortgage servicing rights ..................................................................... | 3164 4,536 | 6.a.
b. Other identifiable intangible assets: | ////////////////// |
(1) Purchased credit card relationships ....................................................... | 5506 0 | 6.b.(1)
(2) All other identifiable intangible assets .................................................. | 5507 186,473 | 6.b.(2)
c. Goodwill ...................................................................................... | 3163 277,027 | 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10) ........................ | 2143 468,036 | 6.d.
e. Intangible assets that have been grandfathered for regulatory capital purposes ................ | 6442 0 | 6.e.
______________________
YES NO
______________________
7. Does your bank have any mandatory convertible debt that is part of your Tier 2 capital? .......... | 6167 |///| X | 7.
____________________
If yes, complete items 7.a through 7.e: | RCFD Bil Mil Thou |
____________________
a. Total equity contract notes, gross ............................................................ | 3290 N/A | 7.a.
b. Common or perpetual preferred stock dedicated to redeem the above notes ....................... | 3291 N/A | 7.b.
c. Total equity commitment notes, gross .......................................................... | 3293 N/A | 7.c.
d. Common or perpetual preferred stock dedicated to redeem the above notes ....................... | 3294 N/A | 7.d.
e. Total (item 7.a minus 7.b plus 7.c minus 7.d) ................................................. | 3295 N/A | 7.e.
______________________
_____________
(1) Do not report federal funds sold and securities purchased under agreements to resell with other
commercial banks in the U.S. in this item.
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-17
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-M--Continued
___________________________
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
_____________________________________________________________________________________________ _________________________
<S> <C> <C> <C>
8. a. Other real estate owned: | /////////////////////// |
(1) Direct and indirect investments in real estate ventures ......................... | RCFD 5372 0 | 8.a.(1)
(2) All other real estate owned: | /////////////////////// |
(a) Construction and land development in domestic offices ....................... | RCON 5508 44,357 | 8.a.(2)(a)
(b) Farmland in domestic offices ................................................ | RCON 5509 2,968 | 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices ....................... | RCON 5510 1,137 | 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices .......... | RCON 5511 419 | 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices ....................... | RCON 5512 67,752 | 8.a.(2)(e)
(f) In foreign offices .......................................................... | RCFN 5513 0 | 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7) ....... | RCFD 2150 116,633 | 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies: | /////////////////////// |
(1) Direct and indirect investments in real estate ventures ......................... | RCFD 5374 0 | 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies ... | RCFD 5375 0 | 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8) ....... | RCFD 2130 0 | 8.b.(3)
c. Total assets of unconsolidated subsidiaries and associated companies ................ | RCFD 5376 0 | 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC, | /////////////////////// |
item 23, "Perpetual preferred stock and related surplus" ............................... | RCFD 3778 0 | 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include | /////////////////////// |
proprietary, private label, and third party mutual funds): | /////////////////////// |
a. Money market funds .................................................................. | RCON 6441 5,584,978 | 10.a.
b. Equity securities funds ............................................................. | RCON 8427 0 | 10.b.
c. Debt securities funds ............................................................... | RCON 8428 0 | 10.c.
d. Other mutual funds .................................................................. | RCON 8429 0 | 10.d.
e. Annuities ........................................................................... | RCON 8430 0 | 10.e.
___________________________
_________________________________________________________________________________________________________________________________
| |
______________________
|Memorandum Dollar Amounts in Thousands | RCFD Bil Mil Thou | |
_________________________________________________________________________________________________ ____________________
|1. Interbank holdings of capital instruments (to be completed for the December report only): | ////////////////// | |
| a. Reciprocal holdings of banking organizations' capital instruments ........................ | 3836 N/A | M.1.a. |
| b. Nonreciprocal holdings of banking organizations' capital instruments ..................... | 3837 N/A | M.1.b. |
______________________
| |
_________________________________________________________________________________________________________________________________
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-18
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-N--Past Due and Nonaccrual Loans, Leases,
and Other Assets
The FFIEC regards the information reported in
all of Memorandum item 1, in items 1 through 10,
column A, and in Memorandum items 2 through 4, __________
column A, as confidential. | C470 | (-
________________________________ ________
(Column B) | (Column C) |
Past due 90 | Nonaccrual |
days or more | |
and still | |
accruing | |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
______________________________________________________ ____________________ ____________________
<S> <C> <C>
1. Loans secured by real estate: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ................ | 1246 42,737 | 1247 100,408 | 1.a.
b. To non-U.S. addressees (domicile) ............ | 1249 0 | 1250 0 | 1.b.
2. Loans to depository institutions and | ////////////////// | ////////////////// |
acceptances of other banks: | ////////////////// | ////////////////// |
a. To U.S. banks and other U.S. depository | ////////////////// | ////////////////// |
institutions ................................. | 5378 0 | 5379 0 | 2.a.
b. To foreign banks ............................. | 5381 0 | 5382 0 | 2.b.
3. Loans to finance agricultural production and | ////////////////// | ////////////////// |
other loans to farmers .......................... | 1597 1,208 | 1583 7,093 | 3.
4. Commercial and industrial loans: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ................ | 1252 6,671 | 1253 42,324 | 4.a.
b. To non-U.S. addressees (domicile) ............ | 1255 0 | 1256 1,494 | 4.b.
5. Loans to individuals for household, family, and | ////////////////// | ////////////////// |
other personal expenditures: | ////////////////// | ///////////////// |
a. Credit cards and related plans ............... | 5384 169 | 5385 0 | 5.a.
b. Other (includes single payment, installment, | ////////////////// | ////////////////// |
and all student loans) ....................... | 5387 18,275 | 5388 1,137 | 5.b.
6. Loans to foreign governments and official | ////////////////// | ////////////////// |
institutions .................................... | 5390 0 | 5391 0 | 6.
7. All other loans ................................. | 5460 3,120 | 5461 7,932 | 7.
8. Lease financing receivables: | ////////////////// | ////////////////// |
a. Of U.S. addressees (domicile) ................ | 1258 0 | 1259 500 | 8.a.
b. Of non-U.S. addressees (domicile) ............ | 1272 0 | 1791 0 | 8.b.
9. Debt securities and other assets (exclude other | ////////////////// | ////////////////// |
real estate owned and other repossessed assets) . | 3506 0 | 3507 29 | 9.
___________________________________________________
====================================================================================================================================
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed portions of past due and nonaccrual loans and
leases. Report in item 10 below certain guaranteed loans and leases that have already been included in the amounts reported in
items 1 through 8.
___________________________________________
10. Loans and leases reported in items 1 | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
through 8 above which are wholly or partially ____________________ ____________________
guaranteed by the U.S. Government ............... | ////////////////// | ////////////////// |
| 5613 51,631 | 5614 92,556 | 10.
a. Guaranteed portion of loans and leases | ////////////////// | ////////////////// |
included in item 10 above .................... | 5616 49,312 | 5617 85,493 | 10.a.
___________________________________________
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-19
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-N--Continued
__________
| C473 | (-
_________________________________ ________
| (Column B) | (Column C) |
| Past due 90 | Nonaccrual |
| days or more | |
| and still | |
Memoranda | accruing | |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
______________________________________________________ ____________________ ____________________
<S> <C> <C>
1. Restructured loans and leases included in | ////////////////// | ////////////////// |
Schedule RC-N, items 1 through 8, above ......... | ////////////////// | ////////////////// | M.1.
2. Loans to finance commercial real estate, | ////////////////// | ////////////////// |
construction, and land development activities | ////////////////// | ////////////////// |
(not secured by real estate) included in | ////////////////// | ////////////////// |
Schedule RC-N, items 4 and 7, above ............. | 6559 1,092 | 6560 597 | M.2.
____________________ ____________________
3. Loans secured by real estate in domestic offices | RCON Bil Mil Thou | RCON Bil Mil Thou |
____________________ ____________________
(included in Schedule RC-N, item 1, above): | ////////////////// | ////////////////// |
a. Construction and land development ............ | 2769 2,100 | 3492 23,120 | M.3.a.
b. Secured by farmland .......................... | 3494 0 | 3495 1,001 | M.3.b.
c. Secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(1) Revolving, open-end loans secured by | ////////////////// | ////////////////// |
1-4 family residential properties and | ////////////////// | ////////////////// |
extended under lines of credit ........... | 5399 0 | 5400 0 | M.3.c.(1)
(2) All other loans secured by 1-4 family | ////////////////// | ////////////////// |
residential properties ................... | 5402 4,925 | 5403 9,994 | M.3.c.(2)
d. Secured by multifamily (5 or more) | ////////////////// | ////////////////// |
residential properties ....................... | 3500 516 | 3501 6,233 | M.3.d.
e. Secured by nonfarm nonresidential properties . | 3503 35,196 | 3504 60,060 | M.3.e.
___________________________________________
______________________
| (Column B) |
| Past due 90 |
| days or more |
____________________
| RCFD Bil Mil Thou |
____________________
4. Interest rate, foreign exchange rate, and other | ////////////////// |
commodity and equity contracts: | ////////////////// |
a. Book value of amounts carried as assets ...... | 3528 0 | M.4.a.
b. Replacement cost of contracts with a | ////////////////// |
positive replacement cost .................... | 3530 0 | M.4.b.
______________________
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-20
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-O--Other Data for Deposit Insurance Assessments
An amended Certified Statement should be submitted to the FDIC if the amounts reported in items 1
through 10 of this schedule are amended after the semiannual Certified Statement originally covering __________
this report date has been filed with the FDIC. | C475 | (-
____________ ________
Dollar Amounts in Thousands | RCON Bil Mil Thou |
___________________________________________________________________________________________________ ____________________
<S> <C> <C>
1. Unposted debits (see instructions): | ////////////////// |
a. Actual amount of all unposted debits ...................................................... | 0030 N/A | 1.a.
OR | ////////////////// |
b. Separate amount of unposted debits: | ////////////////// |
(1) Actual amount of unposted debits to demand deposits ................................... | 0031 0 | 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1) ...................... | 0032 0 | 1.b.(2)
2. Unposted credits (see instructions): | ////////////////// |
a. Actual amount of all unposted credits ..................................................... | 3510 N/A | 2.a.
OR | ////////////////// |
b. Separate amount of unposted credits: | ////////////////// |
(1) Actual amount of unposted credits to demand deposits .................................. | 3512 0 | 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1) ..................... | 3514 0 | 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total | ////////////////// |
deposits in domestic offices) ................................................................ | 3520 0 | 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in | ////////////////// |
Puerto Rico and U.S. territories and possessions (not included in total deposits): | ////////////////// |
a. Demand deposits of consolidated subsidiaries .............................................. | 2211 3,261 | 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries ................................. | 2351 16 | 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries ...................... | 5514 0 | 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions: | ////////////////// |
a. Demand deposits in insured branches (included in Schedule RC-E, Part II) .................. | 2229 0 | 5.a.
b. Time and savings deposits(1) in insured branches (included in Schedule RC-E, Part II) ..... | 2383 0 | 5.b.
c. Interest accrued and unpaid on deposits in insured branches | ////////////////// |
(included in Schedule RC-G, item 1.b) ..................................................... | 5515 0 | 5.c.
______________________
______________________
Item 6 is not applicable to state nonmember banks that have not been authorized by the | ////////////////// |
Federal Reserve to act as pass-through correspondents. | ////////////////// |
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on | ////////////////// |
behalf of its respondent depository institutions that are also reflected as deposit liabilities| ////////////////// |
of the reporting bank: | ////////////////// |
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, | ////////////////// |
Memorandum item 4.a) ...................................................................... | 2314 1,595 | 6.a.
b. Amount reflected in time and savings deposits(1) (included in Schedule RC-E, Part I, | ////////////////// |
Memorandum item 4.b) ...................................................................... | 2315 0 | 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1) | ////////////////// |
a. Unamortized premiums ...................................................................... | 5516 14,090 | 7.a.
b. Unamortized discounts ..................................................................... | 5517 0 | 7.b.
______________________
_______________________________________________________________________________________________________________________________
| |
|8. To be completed by banks with "Oakar deposits." |
______________________
| Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of | ////////////////// | |
| the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s)) .... | 5518 N/A | 8. |
______________________
| |
_______________________________________________________________________________________________________________________________
______________________
9. Deposits in lifeline accounts ................................................................ | 5596 ///////////// | 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total | ////////////////// |
deposits in domestic offices) ................................................................ | 8432 0 | 10.
______________________
______________
(1) For FDIC insurance assessment purposes, "time and savings deposits" consists of nontransaction
accounts and all transaction accounts other than demand deposits.
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-21
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-O--Continued
Memoranda (to be completed each quarter except as noted)
______________________
Dollar Amounts in Thousands | RCON Bil Mil Thou |
__________________________________________________________________________________________________ ____________________
<S> <C>
1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and 1.b.(1) | ////////////////// |
must equal Schedule RC, item 13.a): | ////////////////// |
a. Deposit accounts of $100,000 or less: | ////////////////// |
(1) Amount of deposit accounts of $100,000 or less ........................................ | 2702 9,005,521 | M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (to be Number | ////////////////// |
___________________________
completed for the June report only) ........................ | RCON 3779 | N/A | ////////////////// | M.1.a.(2)
___________________________
b. Deposit accounts of more than $100,000: | ////////////////// |
(1) Amount of deposit accounts of more than $100,000 ........... Number | 2710 6,907,456 | M.1.b.(1)
___________________________
(2) Number of deposit accounts of more than $100,000 ........... | RCON 2722 | 16,315 | ////////////////// | M.1.b.(2)
_________________________________________________
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the number of
deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2) above by
$100,000 and subtracting the result from the amount of deposit accounts of more than
$100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your bank has a method or procedure for YES NO
______________________
determining a better estimate of uninsured deposits than the estimate described above ..... | 6861| |///| | M.2.a.
____________________
X
b. If the box marked YES has been checked, report the estimate of uninsured deposits | RCON Bil Mil Thou |
____________________
determined by using your bank's method or procedure ....................................... | 5597 N/A | M.2.b.
______________________
_____________________________________________________________________________________________________________________________
| C477 | (-
Person to whom questions about the Reports of Condition and Income should be directed: __________
Karen Gatenby, Vice President (713) 216-5263
___________________________________________________________________________________ ______________________________________
Name and Title (TEXT 8901) Area code and phone number (TEXT 8902)
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-22
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-R--Risk-Based Capital
This schedule must be completed by all banks as follows: Banks that reported total assets of $1 billion or more in Schedule RC,
item 12, for June 30, 1993, must complete items 2 through 9 and Memorandum item 1. Banks with assets of less than
$1 billion must complete items 1 through 3 below or Schedule RC-R in its entirety, depending on their response to item 1 below.
____________
| C480 | (-
1. Test for determining the extent to which Schedule RC-R must be completed. To be completed _____ __________
only by banks with total assets of less than $1 billion. Indicate in the appropriate | YES NO |
box at the right whether the bank has total capital greater than or equal to eight percent __________ _______________
of adjusted total assets ............................................................... | RCFD 6056 | |////| | 1.
_____________________________
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government
agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for loan
and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked
NO has been checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than eight
percent or that the bank is not in compliance with the risk-based capital guidelines.
___________________________________________
| (Column A) | (Column B) |
|Subordinated Debt(1)| Other |
| and Intermediate | Limited- |
Items 2 and 3 are to be completed by all banks. | Term Preferred | Life Capital |
| Stock | Instruments |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
______________________________________________________________________________ ____________________ ____________________
<S> <C> <C>
2. Subordinated debt(1) and other limited-life capital instruments (original | ////////////////// | ////////////////// |
weighted average maturity of at least five years) with a remaining | ////////////////// | ////////////////// |
maturity of: | ////////////////// | ////////////////// |
a. One year or less ...................................................... | 3780 0 | 3786 0 | 2.a.
b. Over one year through two years ....................................... | 3781 0 | 3787 0 | 2.b.
c. Over two years through three years .................................... | 3782 0 | 3788 0 | 2.c.
d. Over three years through four years ................................... | 3783 0 | 3789 0 | 2.d.
e. Over four years through five years .................................... | 3784 7,000 | 3790 0 | 2.e.
f. Over five years ....................................................... | 3785 338,000 | 3791 0 | 2.f.
___________________________________________
______________________
3. Total qualifying capital (i.e., Tier 1 and Tier 2 capital) allowable under the risk-based | RCFD Bil Mil Thou |
____________________
capital guidelines ............................................................................ | 3792 1,769,070 | 3.
______________________
___________________________________________
| (Column A) | (Column B) |
Items 4-9 and Memorandum item 1 are to be completed | Assets | Credit Equiv- |
by banks that answered NO to item 1 above and | Recorded | alent Amount |
by banks with total assets of $1 billion or more. | on the | of Off-Balance |
| Balance Sheet | Sheet Items(2) |
____________________ ____________________
4. Assets and credit equivalent amounts of off-balance sheet items assigned | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
____________________ ____________________
to the Zero percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet: | ////////////////// | ////////////////// |
(1) Securities issued by, other claims on, and claims unconditionally | ////////////////// | ////////////////// |
guaranteed by, the U.S. Government and its agencies and other | ////////////////// | ////////////////// |
OECD central governments .......................................... | 3794 1,090,419 | ////////////////// | 4.a.(1)
(2) All other ......................................................... | 3795 905,541 | ////////////////// | 4.a.(2)
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3796 49,582 | 4.b.
___________________________________________
______________
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.e, "Total."
(2) Do not report in column B the risk-weighted amount of assets reported in column A.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-23
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Schedule RC-R--Continued
___________________________________________
| (Column A) | (Column B) |
| Assets | Credit Equiv- |
| Recorded | alent Amount |
| on the | of Off-Balance |
| Balance Sheet | Sheet Items(1) |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
______________________________________________________________________________ ____________________ ____________________
<S> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items | ////////////////// | ////////////////// |
assigned to the 20 percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet: | ////////////////// | ////////////////// |
(1) Claims conditionally guaranteed by the U.S. Government and its | ////////////////// | ////////////////// |
agencies and other OECD central governments ........................| 3798 862,697 | ////////////////// | 5.a.(1)
(2) Claims collateralized by securities issued by the U.S. Govern- | ////////////////// | ////////////////// |
ment and its agencies and other OECD central governments; by | ////////////////// | ////////////////// |
securities issued by U.S. Government-sponsored agencies; and | ////////////////// | ////////////////// |
by cash on deposit .................................................| 3799 193,153 | ////////////////// | 5.a.(2)
(3) All other ..........................................................| 3800 8,023,912 | ////////////////// | 5.a.(3)
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3801 359,217 | 5.b.
6. Assets and credit equivalent amounts of off-balance sheet items | ////////////////// | ////////////////// |
assigned to the 50 percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet .................................. | 3802 503,446 | ////////////////// | 6.a.
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3803 34,104 | 6.b.
7. Assets and credit equivalent amounts of off-balance sheet items | ////////////////// | ////////////////// |
assigned to the 100 percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet .................................. | 3804 9,535,514 | ////////////////// | 7.a.
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3805 3,118,778 | 7.b.
8. On-balance sheet asset values excluded from the calculation of the | ////////////////// | ////////////////// |
risk-based capital ratio(2) .............................................. | 3806 26,718 | ////////////////// | 8.
9. Total assets recorded on the balance sheet (sum of | ////////////////// | ////////////////// |
items 4.a, 5.a, 6.a, 7.a, and 8, column A)(must equal Schedule RC, | ////////////////// | ////////////////// |
item 12 plus items 4.b and 4.c) .......................................... | 3807 21,141,400 | ////////////////// | 9.
___________________________________________
___________________________________________
| (Column A) | (Column B) |
| Notional | Replacement |
| Principal | Cost |
Memorandum | Value | (Market Value) |
____________________ ____________________
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
______________________________________________________________________________ ____________________ ____________________
1. Notional principal value and replacement cost of interest rate and | ////////////////// | ////////////////// |
foreign exchange rate contracts (in column B, report only those | ////////////////// | ////////////////// |
contracts with a positive replacement cost): | ////////////////// | ////////////////// |
a. Interest rate contracts (exclude futures contracts) ................... | ////////////////// | 3808 148,176 | M.1.a.
(1) With a remaining maturity of one year or less ..................... | 3809 1,863,473 | ////////////////// | M.1.a.(1)
(2) With a remaining maturity of over one year ........................ | 3810 4,922,413 | ////////////////// | M.1.a.(2)
b. Foreign exchange rate contracts (exclude contracts with an original | ////////////////// | ////////////////// |
maturity of 14 days or less and futures contracts) .................... | ////////////////// | 3811 5,621 | M.1.b.
(1) With a remaining maturity of one year or less ..................... | 3812 294,879 | ////////////////// | M.1.b.(1)
(2) With a remaining maturity of over one year ........................ | 3813 1,602 | ////////////////// | M.1.b.(2)
___________________________________________
______________
(1) Do not report in column B the risk-weighted amount of assets reported in column A.
(2) Until a final rule on the regulatory capital treatment of net unrealized holding gains (losses) on available-for-sale
securities that is applicable to the reporting bank has taken effect, a bank that has adopted FASB Statement No. 115 should
include the difference between the fair value and the amortized cost of its available-for-sale securities in item 8 and report
the amortized cost of these securities in items 4 through 7 above. Item 8 also includes on-balance sheet asset values (or
portions thereof) of off-balance sheet interest rate, foreign exchange rate, and commodity contracts and those contracts (e.g.,
futures contracts) not subject to risk-based capital. Exclude from item 8 margin accounts and accrued receivables as well as
any portion of the allowance for loan and lease losses in excess of the amount that may be included in Tier 2 capital.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926 FFIEC 031
Address: P.O. Box 2558 Page RC-24
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
Optional Narrative Statement Concerning the Amounts
Reported in the Reports of Condition and Income
at close of business on March 31, 1994
<S> <C> <C>
Texas Commerce Bank National Association Houston Texas
_______________________________________________________________ __________________________________, ___________________________
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, sub- the truncated statement will appear as the bank's statement
mit a brief narrative statement on the amounts reported in both on agency computerized records and in computer-file
the Reports of Condition and Income. This optional statement releases to the public.
will be made available to the public, along with the publicly
available data in the Reports of Condition and Income, in re- All information furnished by the bank in the narrative state-
sponse to any request for individual bank report data. How- ment must be accurate and not misleading. Appropriate ef-
ever, the information reported in column A and in all of forts shall be taken by the submitting bank to ensure the
Memorandum item 1 of Schedule RC-N is regarded as confidential statement's accuracy. The statement must be signed, in the
and will not be released to the public. BANKS CHOOSING TO space provided below, by a senior officer of the bank who
SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE thereby attests to its accuracy.
STATEMENT DOES NOT CONTAIN THE NAMES OR OTHER
IDENTIFICATIONS OF INDIVIDUAL BANK CUSTOMERS, REFERENCES If, subsequent to the original submission, material changes
TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN are submitted for the data reported in the Reports of Condi-
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE tion and Income, the existing narrative statement will be
NOT WILLING TO HAVE MADE PUBLIC OR THAT WOULD deleted from the files, and from disclosure; the bank, at its
COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing option, may replace it with a statement, under signature, ap-
not to make a statement may check the "No comment" box below propriate to the amended data.
and should make no entries of any kind in the space provided
for the narrative statement; i.e., DO NOT enter in this space The optional narrative statement will appear in agency
such phrases as "No statement," "Not applicable," "N/A," records and in release to the public exactly as submitted (or
"No comment," and "None." amended as described in the preceding paragraph) by the
management of the bank (except for the truncation of state-
ments exceeding the 750-character limit described above).
THE STATEMENT WILL NOT BE EDITED OR SCREENED IN ANY
The optional statement must be entered on this sheet. The WAY BY THE SUPERVISORY AGENCIES FOR ACCURACY OR
statement should not exceed 100 words. Further, regardless RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT
of the number of words, the statement must not exceed 750 SIGNIFY THAT ANY FEDERAL SUPERVISORY AGENCY HAS
characters, including punctuation, indentation, and standard VERIFIED OR CONFIRMED THE ACCURACY OF THE INFORMATION
spacing between words and sentences. If any submission CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL
should exceed 750 characters, as defined, it will be truncated APPEAR ON ANY PUBLIC RELEASE OF THE OPTIONAL STATEMENT
at 750 characters with no notice to the submitting bank and SUBMITTED BY THE MANAGEMENT OF THE REPORTING BANK.
_________________________________________________________________________________________________________________________________
No comment |X| (RCON 6979) | C471 | C472 |(-
___ ___________________
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
Signature of Kenneth L. Tilton appears here April 27, 1994
_____________________________________________ ________________________________
Signature of Executive Officer of Bank Date of Signature
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: Texas Commerce Bank National Association Call Date: 3/31/94 ST-BK: 48-3926
Address: P.O. Box 2558
City, State Zip: Houston, TX 77252-2558
FDIC Certificate No.: |0|3|2|6|3|
___________
<S> <C>
THIS PAGE IS TO BE COMPLETED BY ALL BANKS
- - ----------------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS OF BANK | OMB No. For OCC: 1557-0081
| OMB No. For FDIC: 3064-0052
| OMB No. For Federal Reserve: 7100-0036
| Expiration Date: 2/28/95
|
PLACE LABEL HERE | SPECIAL REPORT
| (Dollar Amounts in Thousands)
|
__________________________________________________________________
| CLOSE OF BUSINESS | FDIC Certificate Number | |
| DATE | | C-700 | (-
| | |0|3|2|6|3| | |
3/31/94
__________________________________________________________________________________________________________________________________
LOANS TO EXECUTIVE OFFICERS (Complete as of each Call Report Date)
- - ----------------------------------------------------------------------------------------------------------------------------------
The following information is required by Public Laws 90-44 and 102-242, but does not constitute a part of the Report of Condition.
With each Report of Condition, these Laws require all banks to furnish a report of all loans or other extensions of credit to their
executive officers made since the date of the previous Report of Condition. Data regarding individual loans or other extensions of
credit are not required. If no such loans or other extensions of credit were made during the period, insert "none" against subitem
(a). (Exclude the first $5,000 of indebtedness of each executive officer under bank credit card plan.) See Sections 215.2 and 215.3
of Title 12 of the Code of Federal Regulations (Federal Reserve Board Regulation O) for the definitions of "executive officer" and
"extension of credit," respectively. Exclude loans and other extensions of credit to directors and principal shareholders who are
not executive officers.
- - ----------------------------------------------------------------------------------------------------------------------------------
_____________________________
a. Number of loans made to executive officers since the previous Call Report date .............. | RCFD 3561 | 3 a.
____________________________
b. Total dollar amount of above loans (in thousands of dollars) ................................ | RCFD 3562 | 26 b.
_____________________________
c. Range of interest charged on above loans _______________________________________________________
(example: 9 3/4% = 9.75) .......................................... | RCFD 7701 | 7.65 | % to | RCFD 7702 | 18.00 | % c.
_______________________________________________________
__________________________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________________________
SIGNATURE AND TITLE OF OFFICER AUTHORIZED TO SIGN REPORT | DATE (Month, Day, Year)
|
|
|
Kenneth L. Tilton, EVP Controller April 27, 1994
__________________________________________________________________________________________________________________________________
NAME AND TITLE OF PERSON TO WHOM INQUIRIES MAY BE DIRECTED (TEXT 8903) | AREA CODE/PHONE NUMBER (TEXT 8904)
|
Karen Gatenby, Vice President | (713) 216-5263
|
__________________________________________________________________________________________________________________________________
FDIC 8040/53 (12-92)
</TABLE>
35
