As Filed with the Securities and Exchange Commission on June 20, 1994
Registration No. 33-53077
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO.1
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 20, 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 periods ended
January 31, 1994 and April 30, 1994.
3) Dresser's Current Reports on Form 8-K dated December 9, 1993,
December 29, 1993 and January 28, 1994.
4) 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.
5) Baroid's Annual Report on Form 10-K for its fiscal year ended
December 31, 1993 (Commission File No. 1-10624).
6) 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 dated June 15, 1994.
7) Baroid's Current Reports on Form 8-K dated January 14, 1994,
January 18, 1994 and March 30, 1994.
8) 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.
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
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 19
Incorporation of Certain The Solicitation 20
Documents by Reference ii Certain Federal Income Tax Consequences 24
Summary 1 Legal Opinion 27
Introduction 7 Experts 27
The Companies 7 Appendix I AI-1
The Proposed Amendment 8 Appendix II AII-1
Description of The Guarantee 14
Selected Consolidated Financial
Information 15
Ratio of Earnings to Fixed
Charges 18 <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 Power of Attorney for Mr. St. John is attached with this Pre-
Effective Amendment. <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.
** To be filed by amendment.
*** 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 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.
(b) 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.
(c) 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.
(d) 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.
(e) 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.
(f) 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.1 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 17th 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. 1 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 17, 1994
John J. Murphy (Principal Executive
Officer)
* B. D. ST. JOHN Vice Chairman (Principal June 17, 1994
B. D. St. John Financial Officer)
/s/ GEORGE H. JUETTEN Vice President-Controller June 17, 1994
George H. Juetten (Principal Accounting
Officer)
* WILLIAM E. BRADFORD Director June 17, 1994
William E. Bradford
* SAMUEL B. CASEY, JR. Director June 17, 1994
Samuel B. Casey, Jr.
* LAWRENCE S. EAGLEBURGER Director June 17, 1994
Lawrence S. Eagleburger
* RAWLES FULGHAM Director June 17, 1994
Rawles Fulgham
* JOHN A. GAVIN Director June 17, 1994
John A. Gavin
* RAY L. HUNT Director June 17, 1994
Ray L. Hunt
* J. LANDIS MARTIN Director June 17, 1994
J. Landis Martin <PAGE>
* LIONEL H. OLMER Director June 17, 1994
Lionel H. Olmer
* JAY A. PRECOURT Director June 17, 1994
Jay A. Precourt
* A. KENNETH PYE Director June 17, 1994
A. Kenneth Pye
* RICHARD W. VIESER Director June 17, 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. 1 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 17, 1994
John J. Murphy (Principal Executive
Officer)
* B. D. ST. JOHN Vice Chairman (Principal June 17, 1994
B. D. St. John Financial Officer)
/s/ GEORGE H. JUETTEN Vice President (Principal June 17, 1994
George H. Juetten Accounting Officer)
William E. Bradford Director June , 1994
* JAMES L. BRYAN Director June 17, 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 Power of Attorney for Mr. St. John is attached with this Pre-
Effective Amendment.
**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.
** To be filed by amendment.
*** Previously filed.
# Bound separately as required by Item 601(b)(25) only in
conforming paper copies of this Registration Statement. <PAGE>
[WEIL, GOTSHAL & MANGES LETTERHEAD]
June 15, 1994
Dresser Industries, Inc.
2001 Ross Avenue
Dallas, Texas 75201
Gentlemen:
You have requested our opinion regarding certain federal income tax
consequences of the Consent Solicitation with respect to the 8% Senior
Notes of Baroid Corporation ("Baroid").
In formulating our opinion as to the matters certified, we have examined
such documents as we have deemed appropriate, including the Registration
Statement of Dresser Industries, Inc. ("Dresser") and Baroid on Form S-4
(Registration No. 33-53077) dated April 11, 1994, filed with the Securities
and Exchange Commission pursuant to the Securities Act of 1933, as amended
to the date hereof (such Registration Statement as so amended being referred to
hereinafter as the "Registration Statement"). Also, we have obtained such
additional information as we have deemed relevant and necessary through
consultation with various officers and representatives of Dresser and Baroid.
The terms of the Consent Solicitation, which are set forth in the
Registration Statement, are incorporated herein by reference. Based upon
the terms of the Consent Solicitation as set forth Registration Statement,
it is our opinion that the discussion set forth under the heading "Certain
Federal Income Tax Consequences" in the Registration Statement accurately
describes, in all material respects, the material federal income
tax consequences of the adoption of the Proposed Amendment and the
Guarantee and the payment of the Consent Fee. Because of the absence of
final Treasury Regulations, however, no opinion is expressed as to 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
Consent Fee. <PAGE>
The foregoing opinion is based on current provisions of the Internal
Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder (including proposed Treasury Regulations), published pronouncements
of the Internal Revenue Service, and case law, any of which may be changed at
any time with retroactive effect. No opinion is expressed on any matters
other than those specifically referred to herein.
We hereby consent to your filing this opinion as an exhibit to the
Registration Statement and to the reference to our firm therein.
Very truly yours,
/s/ Weil, Gotshal & Manges <PAGE>
EXHIBIT 12.1
PAGE 1 OF 2
<TABLE>
DRESSER INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS EXCEPT FOR RATIO)
<CAPTION>
Six Months
Ended
April 30, Years Ended October 31,
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Earnings
Income from
Continuing
Operations before
Income Taxes
and Minority
Interest 459.1 267.9 178.7 256.3 280.2 215.0
Less: Share of
Pretax Income of
less than 50%
owned Major
Joint Ventures (8.6) (39.3) (37.4) (32.7) (25.3)(16.3)
Less: Share of
Net Earnings of
Other 50% and Less
Owned Affiliates (8.1) (13.9) (11.1) (7.6) (2.9) (3.1)
Add: Share of Pretax
Income of Other 50%
Owned
Affiliates (1) 6.9 10.1 12.4 7.5 6.0 5.4
Add: Fixed Charges
(see below) 36.6 69.5 83.1 87.5 77.5 81.4
Total Earnings 485.9 294.3 225.7 311.0 335.5 282.4<PAGE>
Fixed Charges
Interest Expense 23.6 43.9 47.0 58.8 52.0 53.5
Debt Expense
Amortization .2 .- .1 .1 .1 .1
Premium on
Redemption of
Debentures .- .- 9.8 .- .- .-
Interest Factor of
Rental Expense (2). 12.8 25.6 22.7 25.6 22.2 21.6
Share of Dresser-Rand
Company Fixed
Charges(3) Incl. Incl.
Interest
Expense Above Above .8 .8 .9 4.0
Interest
Factor of
Rental
Expense (2) .- .- 2.7 2.2 2.3 2.2
Total Fixed
Charges 36.6 69.5 83.1 87.5 77.5 81.4
Ratio of Earnings
to Fixed
Charges (4) 13.28 4.23 2.72 3.55 4.33 3.47
</TABLE>
(1) Distributed earnings of less than 50% owned affiliates are not
material.
(2) Interest factor of rental expense is estimated at one-third of rental
expense, which Management believes to be a reasonable approximation.
(3) The Company owned 50% of Dresser-Rand Company from its inception as
of January 1, 1987 through September 30, 1992. Effective October 1,
1992 the Company acquired an additional 1% ownership.
(4) 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. <PAGE>
EXHIBIT 12.1
PAGE 2 OF 2
<TABLE>
BAROID CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(MILLIONS OF DOLLARS EXCEPT FOR RATIO)
<CAPTION>
Six
Months
ended
April 30, Years Ended December 31,
1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Earnings
Income from
Continuing
Operations
before Income
Taxes and
Minority
Interest 32.23 28.3 35.3 16.9 43.9 18.2
Less: Undistributed
Earnings of Joint
Ventures (3.1) 2.5 (.8) (.3) 1.2 .3
Add: Fixed Charges
(see below) 9.1 17.5 17.9 21.2 13.9 9.4
Total Earnings 38.3 48.3 52.4 37.8 59.0 27.9
Fixed Charges
Interest Expense 8.7 16.8 17.3 20.2 13.2 8.7
Interest Factor of
Rental Expense .4 .7 .6 1.0 .7 .7
Total Fixed Charges 9.1 17.5 17.9 21.2 13.9 9.4<PAGE>
Ratio of Earnings
to Fixed
Charges 4.21 2.76 2.93 1.78 4.24 2.97
/TABLE
<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. 1 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 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 14, 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. 1 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 17, 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. 1 to the registration statement 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 17, 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 16, 1994<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director and/
or officer of DRESSER INDUSTRIES, INC., a Delaware corporation (the
"Company"), hereby constitutes and appoints REBECCA MORRIS and STANLEY
E. MCGLOTHLIN and each or either of them, his true and lawful attorney-
in-fact and agent, with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and capacities, to
sign, execute and file with the Securities and Exchange Commission
a Registration Statement on Form S-4 under the Securities Act
of 1933, as amended, and any amendments thereto with all exhibits,
and any and all documents required to be filed with respect thereto,
relating to the issuance of the Company's Guarantee of $150,000,000
in principal amount of Baroid Corporation 8% Senior Notes due 2003, the
amendment of such Senior Notes pursuant to the Proposed Amendment, and
the Solicitation of Consents in connection with the Proposed Amendment
(as defined in the Registration Statement), granting unto said attorneys-
in-fact and agents, and each or either of them, full power and authority
to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-
in-fact and agents, and each or either of them, or substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned Director and/or officer
of the Company has hereunto set his hand this 26th day of March, 1994.
/s/ B. D. ST. JOHN
B. D. St. John
Vice Chairman and Director <PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned Director
and/or officer of BAROID CORPORATION, a Delaware corporation (the
"Company"), hereby constitutes and appoints REBECCA MORRIS and STANLEY E.
MCGLOTHLIN and each or either of them, his true and lawful attorney-
in-fact and agent, with full power of substitution and re-substitution,
for him and in his name, place and stead, in any and all capacities, to
sign, execute and file with the Securities and Exchange Commission
a Registration Statement on Form S-4 under the Securities Act of 1933,
as amended, and any amendments thereto with all exhibits, and any and
all documents required to be filed with respect thereto, relating to
the issuance of Dresser Industries, Inc.'s Guarantee of $150,000,000
in principal amount of the Company's 8% Senior Notes due 2003, the
amendment of such Senior Notes pursuant to the Proposed Amendment, and
the Solicitation of Consents in connection with the Proposed Amendment
(as defined in the Registration Statement), granting unto said
attorneys-in-fact and agents, and each or either of them, full power
and authority to do and perform each and every act and thing requisite
and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, and each or either of them, or
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
IN WITNESS WHEREOF, the undersigned Director and/or officer of
the Company has hereunto set his hand this 4th day of April, 1994.
/s/ B. D. ST. JOHN
B. D. St. John
Vice Chairman and Director <PAGE>
Exhibit 99.1
CONSENT
To: D. F. King & Co., Inc., as Information Agent
77 Water Street
20th Floor
New York, New York 10005
(212) 269-5550
or
Call Toll Free 1-800-669-5550
Fax (212) 809-8839
Consents should not be delivered to any person other than the above named
Information Agent. Registered holders should not tender or deliver notes
at this time.
This Solicitation is made by Baroid Corporation ("Baroid"). The
Solicitation is made only to Holders of the 8% Senior Notes, due 2003 (the
"Notes") of Baroid as described in the accompanying Consent Solicitation
Statement/Prospectus dated ______________, 1994 (the "Solicitation
Statement"). The term "Holder" as used herein shall mean (i) any person
in whose name Notes are registered, on _________________, 1994 (the
"Record Date"), in the register maintained by Texas Commerce Bank National
Association, as Trustee and Registrar under the Indenture (the "Trustee"),
(ii) a beneficial owner who has arranged for the registered Holder to
execute a Consent and deliver it either to the Information Agent by such
beneficial owner's behalf or to such beneficial owner for forwarding to
the Information Agent on such beneficial owner or (iii) a beneficial owner
of Notes who has obtained a duly executed proxy substantially in the form
set forth in this Consent which authorizes such person (or any person
claiming authority by or through such other person) to execute and deliver
a Consent with respect to the Notes on behalf of such registered Holder.
Capitalized terms used but not defined herein have the meanings given to
them in the Solicitation Statement. The terms of the Solicitation set
forth in the Solicitation Statement under "The Solicitation," as well as
the instructions on the reverse of this Consent are hereby incorporated
herein by reference and form part of the terms and conditions of this
Consent. <PAGE>
BENEFICIAL OWNERS OF NOTES WHO ARE NOT REGISTERED HOLDERS AND WHO
WANT TO CONSENT TO THE AMENDMENT MUST:
(1) INSTRUCT THE REGISTERED HOLDER OF THEIR NOTES TO EXECUTE A
CONSENT AND DELIVER THAT CONSENT TO THE INFORMATION AGENT AS
INDICATED, OR
(2) OBTAIN AN EXECUTED PROXY FROM THE REGISTERED HOLDER AND
DELIVER THAT PROXY TOGETHER WITH THE EXECUTED CONSENT TO THE
INFORMATION AGENT
THE DEPOSITORY TRUST COMPANY ("DTC"), AS REGISTERED HOLDER, HAS
GRANTED AUTHORITY TO DTC PARTICIPANTS HOLDING NOTES OF BAROID TO
EXECUTE THE CONSENT AS IF THEY WERE A REGISTERED OWNER. SEE
INSTRUCTION 3 ON THE REVERSE OF THIS CONSENT.
By execution hereof, the undersigned acknowledges receipt of the
Solicitation Statement. The undersigned hereby takes the action with
respect to the Proposed Amendment described below and in the Solicitation
Statement. The undersigned hereby represents and warrants that the
undersigned has full power and authority to give the Consent contained
herein. The undersigned will, upon request, execute and deliver any
additional documents deemed by Baroid to be necessary or desirable to
perfect the undersigned's Consent or evidence such power and authority.
Please indicate by marking the appropriate box below whether you
wish to vote FOR the Proposed Amendment or AGAINST the Proposed Amendment.
If none of the boxes is marked, but this Consent is otherwise properly
completed and signed, you will be deemed to have voted "FOR" the Proposed
Amendment. Please sign your name and date below to evidence your vote on
the Proposed Amendment and to evidence the appointment of the Information
Agent as your agent and attorney-in-fact in connection with this Consent.
The undersigned acknowledges that it must comply with the other provisions
of this Consent, and complete the other information required herein, to
validly consent to the Proposed Amendment.
The Proposed Amendment would, as described more fully in the Solicitation
Statement:
(1) delete Sections 3.08, 3.09, 3.10, 3.11 and 3.11 from the
Indenture;
(2) amend provisions contained in Sections 3.07, 3.15, 4.01, 402,
5.01 and 5.02; and <PAGE>
(3) add a new Section 3.08 and a new Article 10 under which Dresser
Industries, Inc. would guarantee the principal of and interest on
the Notes.
FOR AGAINST
____ ____
The undersigned hereby irrevocably constitutes and appoints the
Information Agent its agent and attorney-in-fact (with full knowledge that
the Information Agent also acts as the agent of Baroid) with respect to
the Consent given hereby with full power of substitution to deliver this
Consent to Baroid or the Trustee. The Power of Attorney granted in this
paragraph shall be deemed irrevocable from and after the Effective Time
and coupled with an interest.
The undersigned understands that Consents delivered pursuant to any
of the procedures described under "Consent Procedures" in the Solicitation
Statement and in the instructions hereto will constitute a binding
agreement between the undersigned and Baroid upon the terms and subject to
the conditions of the Solicitation.
All authority conferred or agreed to be conferred by this Consent
shall survive the death, incapacity, dissolution or liquidation of the
undersigned and every obligation of the undersigned under this Consent
shall be binding upon the undersigned's heirs, personal representatives,
successors and assigns.
Unless otherwise specified in the table below, this Consent relates
to the total principal amount of Notes held of record by the undersigned.
The undersigned has listed on the table below the serial numbers and
principal amount of Notes for which this Consent is given. If the space
provided below is inadequate, list all such information on a separate
signed schedule and affix the schedule to this Consent. <PAGE>
<TABLE>
PLEASE COMPLETE THE FOLLOWING TABLE
Principal
Amount With
Respect to
Which
Consents
Are Given
(complete
only
Name(s) and if Consents
Address(es) of Serial Relate to
Registered Holder(s), Number(s)* Less
or Name and DTC if held in Aggregate than Entire
Participant Number certifica- Principal Aggregate
(if party holds as ted form) Amount of Principal
DTC Participant) Note(s)** Amount)**
<CAPTION>
<S> <C> <C> <C> <C>
__________________ ___________ $_________ $___________
__________
__________________ __________ ____________
__________
__________________ __________ ____________
__________
__________________ __________ ____________
__________
__________________ __________ ____________
Total Principal Amount __________
Consenting $_________ $___________
__________________
* Need not be completed by Holders whose Notes are held of record by
depositories.
** Unless otherwise indicated in the column labeled "Principal Amount
With Respect to Which Consents Are Given," the registered Holder
will be deemed to have consented in respect of the entire aggregate
principal amount represented by the Notes indicated in the column
labeled "Aggregate Principal Amount of Note(s)."
</TABLE>
THE UNDERSIGNED AUTHORIZES THE INFORMATION AGENT TO DELIVER THIS
CONSENT AND ANY PROXY DELIVERED IN CONNECTION HEREWITH TO BAROID AND THE
TRUSTEE AS EVIDENCE OF THE UNDERSIGNED'S CONSENT TO THE PROPOSED
AMENDMENT. <PAGE>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY
INSTRUCTIONS
To be completed ONLY if the
check for the Consent Payment is To be completed ONLY if the
to be issued in the name of check for the Consent Payment is
someone OTHER than the registered to be sent to an address OTHER
Holder(s) of the Notes. than the address of the registered
Holder or, if the box immediately
Issue check to: to the left is filled in, OTHER
than the address appearing
Name: ____________________________ therein.
(Please Print)
Deliver check to:
Address: _________________________
_________________________ Name: ____________________________
(Please Print)
_________________________
(Include Zip Code) Address:
____________________________
_________________________
(Tax Identification or Social ____________________________
Security Number) ____________________________
(Include Zip Code) <PAGE>
IMPORTANT -- READ CAREFULLY
Registered Holder(s) must execute this Consent exactly as their
name(s) appear(s) on the Notes. Authorized DTC Participant(s) must
execute this Consent exactly as their name(s) registered with DTC. If
Notes to which this Consent relates are held of record by two or more
joint registered Holders, all such Holders must sign this Consent. If
signature is by a trustee, executor, administrator, guardian, attorney-in-
fact, officer of a corporation, or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing and
must submit proper evidence satisfactory to Baroid of such person's
authority so to act.
SIGN HERE
_____________________________________________________________
_____________________________________________________________
Signature(s) of Owner(s)
Dated: _________________________________________________________
Name(s): _______________________________________________________
_______________________________________________________________
(Please Print)
Capacity: ______________________________________________________
Address: _______________________________________________________
(Include Zip Code)
Area Code and Telephone No. ( )_____________________________
Tax Identification or Social Security No. ____________________
<PAGE>
IMPORTANT TAX INFORMATION
Under current Federal income tax law, a Holder who receives a
Consent Payment from Baroid as consideration for such Holder's Accepted
Consent (as defined below) may be required by law to provide Baroid with
his or her correct taxpayer identification number (e.g., social security
number or employer identification number) on Substitute Form W-9. If <PAGE>
Baroid is not provided with the correct taxpayer identification number by
such Holder, that Holder may be subject to a $50 penalty imposed by the
Internal Revenue Service ("IRS"). In addition, delivery to such Holder of
the Consent Payment may be subject to backup withholding.
Exempt Holders (including, among others, all corporations) are not
subject to these backup withholding and reporting requirements. Holders
are urged to consult their own tax advisors to determine whether they are
exempt from these backup withholding and reporting requirements.
If backup withholding applies, Baroid is required to withhold 31
percent of any Consent Payment made to such Holder. Backup withholding is
not additional tax. Rather, the tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained.
Purpose of Substitute Form W-9
To prevent backup withholding, the Holder should notify Baroid of
his or her correct taxpayer identification number by completing the form
below certifying that the taxpayer identification number provided on
Substitute Form W-9 is correct (or that such Holder is awaiting a taxpayer
identification number) and that (1) the Holder has not been notified by
the IRS that he or she is subject to backup withholding as a result of
failure to report all interest or dividends, or (2) the IRS has notified
the Holder that he or she is no longer subject to backup withholding.
What Number to Report
The Holder is required to give Baroid the social security number or
employer identification number of the record owner of the Notes. <PAGE>
PAYER'S NAME: Baroid Corporation
SUBSTITUTE Part 1--Please provide your Social Security No. TIN in
the box at the right ____________ OR _______________
Form W-9 and certify by signing and Employer
dating below. Identification
Number
Department of the Part 2--Please check the box at the right
Treasury if you have applied for, and are awaiting receipt
of, your TIN ________
Internal
Revenue Service Certification--under penalties of perjury, I
certify that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding either
because I have not been notified by the IRS
that I am subject to backup withholding as
a result of a failure to report all interest
or dividends, or the IRS has that I am no
longer subject to backup withholding.
Payer's
Request for
Taxpayer Certification instructions--You must cross out item (2) above
Identification if you have been notified by the IRS that you are subject to
backup withholding because of underreporting interest or
dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup with-
holding you receive another notification from the IRS that
you are no longer subject to backup withholding, do not cross
out item (2).
SIGNATURE __________________________DATE_________________ <PAGE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY CONSENT PAYMENT MADE TO YOU.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office,
or (b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number
within sixty (60) days, 31% of all reportable payments made to me
thereafter will be withheld until I provide a number.
_____________________________ ______________________
Signature Date
<PAGE>
INSTRUCTIONS FOR HOLDERS
FORMING PART OF THE TERMS AND CONDITIONS OF THIS CONSENT
1. Delivery of this Consent. Subject to the terms and conditions
of the Solicitation, a properly completed and duly executed copy of this
Consent, a proxy (if applicable) substantially in the form set forth in
this Consent and any other documents required by this Consent must be
received by the Information Agent at its address or facsimile number
(faxes should be confirmed by physical delivery) set forth on the face of
this Consent prior to 5:00 P.M., New York time, on ____________________,
1994, unless extended (the "Expiration Date"). The method of delivery of
this Consent and all other required documents to the Information Agent is
at the election and risk of the Holder and, except as otherwise provided
below, delivery will be deemed made only when actually received by the
Information Agent. In all cases, sufficient time should be allowed to
assure timely delivery. Beneficial owners whose Notes are registered in
someone else's name (for example, in the name of The Depository Trust
Company ("DTC") or the owner's stockbroker) should ensure that the Consent
is forwarded to the Information Agent on a timely basis. NO CONSENT
SHOULD BE SENT TO ANY PERSON OTHER THAN THE INFORMATION AGENT.
2. Questions Regarding Validity, Form, Legality, etc. All
questions as to the validity, form, eligibility (including time of
receipt) and acceptance of Consents and revocations of Consents with
respect to the Notes will be resolved in the first instance by Baroid, <PAGE>
whose 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. Baroid reserves the absolute right to reject any
and 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 as to 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 Baroid, any of its
affiliates, the Information Agent, the Solicitation Agent, the Trustee or
any other person shall be under any duty to give any notification of such
defects, irregularities or waiver, nor shall any of them incur any
liability for failure to give such notification. Deliveries of such
Consents will not be deemed to be made until such irregularities or
defects have been cured or waived. Baroid's interpretation of the terms
and conditions of the Solicitation shall be conclusive and binding.
3. Holders Entitled to Consent. Only a registered Holder (or his
or her representative or attorney-in-fact acting pursuant to a valid
proxy) on the Record Date or a beneficial owner who has complied with the
procedures set forth in the next sentence may deliver a Consent. A
beneficial owner of a Note who is not the registered Holder of such Note
(e.g., a beneficial owner 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 proxy from the registered Holder
authorizing the beneficial owner to execute and deliver a Consent with
respect to the Notes on behalf of such registered Holder. A Consent by a
registered Holder is a continuing consent notwithstanding that registered
ownership of a Note is transferred after the date of this Consent unless
the registered Holder on the Record Date revokes such Consent prior to
execution of the Supplemental Indenture (the "Effective Time"). 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").
4. Signatures on this Consent; Proxies. If this Consent is
signed by the registered Holder(s) of the Notes with respect to which this <PAGE>
Consent is given, the signature(s) must correspond with the name(s) as
contained on the books of the note register maintained by the Trustee,
without any alteration or change whatsoever.
If any of the Notes with respect to which this Consent is given
hereby are owned of record by two or more joint owners, all such owners
must sign this Consent. If any Notes with respect to which this Consent
is given are held in different names, it will be necessary to complete,
sign and submit as many separate copies of this Consent and any necessary
accompanying documents as there are names in which Notes are held.
If this Consent is signed by a person other than the registered
Holder, this Consent must be accompanied by a duly executed proxy
substantially in the form set forth in this Consent from the registered
Holder.
If this Consent or any proxies are signed by trustees, partners,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity,
such persons should so indicate when signing and evidence satisfactory to
Baroid of their authority so to act must be submitted with this Consent.
5. Consent Payment Instructions. Upon the terms and subject to
the conditions set forth in this Consent and in the Solicitation
Statement, Baroid agrees to make a Consent Payment to each registered
Holder as of the Record Date who delivers to Baroid an Accepted Consent
(as defined below) to the adoption of the Proposed Amendment. The Consent
Payment will be made at the rate of $1.00 for each $1,000 principal amount
of Notes as to which an Accepted Consent is delivered. The Solicitation
will end on the Expiration Date. The Consent Payment will be made only
(a) to registered Holders as of the Record Date with respect to whose
Consents are received prior to the Expiration Date and not revoked prior
to the Effective Time, (b) in the event that the registered Holders of at
least a majority in aggregate principal amount of the Notes outstanding
and not owned by Baroid or any of its Affiliates deliver Accepted
Consents, and (c) in the event that the Supplemental Indenture is executed
thereby effecting the Proposed Amendment. Baroid reserves the right, in
its sole discretion, to extend the Expiration Date and to terminate the
Solicitation. Registered Holders whose Consents are not received prior to
the Expiration Date will NOT be entitled to a Consent Payment.
NOTWITHSTANDING ANY SUBSEQUENT TRANSFER OF NOTES, ONLY PERSONS WHO ARE
HOLDERS OF RECORD OF NOTES AS OF THE RECORD DATE AND WHO DELIVER AN
ACCEPTED CONSENT BY THE EXPIRATION DATE WILL RECEIVE A CONSENT PAYMENT. <PAGE>
The method of delivery of all documents, including fully executed Consent
forms, is at the election and risk of the Holder. An "Accepted Consent"
is a properly completed and executed Consent that is (a) timely received
by the Information Agent and not thereafter revoked as provided below and
in the Solicitation Statement and (b) accepted by Baroid in accordance
with the terms and subject to the conditions set forth in this Consent and
in the Solicitation Statement. Consent Payments will be made as soon as
possible after the satisfaction of all conditions thereto. Please
indicate on the face of this Consent to whom such payment should be made.
6. Revocation of Consent. Notwithstanding a subsequent transfer
of Notes, Consents may be revoked prior to the Effective Time only by the
Holder who submits a Consent. Any such person may revoke such Consent by
delivering written notice of such revocation to the Information Agent at
any time prior to the Effective Time. Thereafter, Consents will no longer
be revocable. To be valid, any such notice of revocation must indicate
the serial number or numbers of the Notes to which it relates and the
aggregate principal amount represented by such Notes and must be signed by
the registered Holder(s) in the same manner as the original Consent.
7. Waiver of Conditions. Baroid reserves the absolute right to
amend, waive or modify the terms of the Solicitation and the Proposed
Amendment, as more fully described in the Solicitation Statement.
8. Requests for Assistance or Additional Copies. Questions
relating to this Consent or the terms and conditions of the Solicitation
may be directed to the Solicitation Agent, whose address and telephone
number are set forth on the back page of the Solicitation Statement, or to
your broker, dealer, commercial bank or trust company. Questions
regarding the instructions for completion of the Consent and for
additional copies of the Solicitation Statement and this form of Consent
may be directed to the Information Agent, whose address and telephone
number are set forth on the face of this Consent.
<PAGE>
FORM OF PROXY WITH RESPECT TO THE SOLICITATION
The undersigned hereby irrevocably appoints *_______________________
as attorney and proxy of the undersigned, with full power of substitution,
to execute and deliver the Consent on which this form of proxy is set
forth with respect to the 8% Senior Notes, due 2003 (the "Notes") of
Baroid Corporation in accordance with the terms of the Solicitation <PAGE>
described in the Consent Solicitation Statement/Prospectus dated
__________, 1994, with all the power the undersigned would possess if
consenting personally. THIS PROXY IS IRREVOCABLE AND IS COUPLED WITH AN
INTEREST AND SHALL EXPIRE ON ____________, 1994. The aggregate principal
amount of (and other information regarding) Notes as to which this Proxy
given is set forth below.
Aggregate Principal Amount of Serial Number(s)
Note(s) (if held in certificate form)
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
If the Notes are owned by two or more persons, each should sign.
Executors, administrators, trustees, guardians and attorneys-in-fact
should add their titles. If a signer is a corporation, please give full
corporate name and have a duly authorized officer sign, stating title.
If a signer is a partnership, please sign in partnership name by a duly
authorized person.
Signature: _________________________
Name: ______________________________
Title: _____________________________
Dated: _____________________________
Signature: _________________________
Name: _____________________________
Title: ____________________________
Dated: _____________________________<PAGE>
____________________________________
*Insert name of beneficial owner]
<PAGE>
LETTER OF INSTRUCTIONS
WITH RESPECT TO DELIVERY OF CONSENTS
IN CONNECTION WITH THE SOLICITATION
[TO BE USED IF YOU WISH US TO (1) CONSENT ON YOUR BEHALF
OR (2) EXECUTE AND DELIVER TO YOU A PROXY SO THAT YOU
MAY DELIVER A CONSENT] [GRAY]
To:____________________________________________
[Fill in name of custodian holding securities]
The undersigned acknowledge(s) receipt of your letter and the enclosed
Consent Solicitation Statement/Prospectus dated _______, 1994 (the
"Solicitation Statement") and the Consent form in connection with the
solicitation by Baroid Corporation ("Baroid") of consents to the Proposed
Amendment (as defined in the Solicitation Statement) of the indenture
governing the 8% Senior Notes, due 2003 (the "Notes") of Baroid.
[CHECK ONE BOX]
_______ AUTHORIZATION TO CONSENT -- This will instruct you to deliver a
Consent (as defined in the Solicitation Statement) with respect
to the entire principal amount of Notes held by you for the
account of the undersigned, upon the terms an subject to the
conditions set forth in the Solicitation Statement.
[PLEASE COMPLETE THE FOLLOWING TABLE]
Principal amount
of Notes owned $
by account
_______ REQUEST FOR PROXY -- This will instruct you to execute and deliver
to the undersigned a proxy with respect to the entire principal
amount of Notes held by you for the account of the undersigned in
the form set forth on the Consent form so that the undersigned may
deliver a Consent.
SIGNATURE Name and Title(Please Print)
Dated:___________ ___, 1994
Address
Zip Code
<PAGE>
__________ __, 1994
To Our Clients:
Enclosed for your consideration are the Consent Solicitation
Statement/Prospectus dated ______________ _____, 1994 (the "Solicitation
Statement"), the Letter of Instructions and the Consent form relating to
the solicitation (the "Solicitation") by Baroid Corporation ("Baroid") of
consents (the "Consents") from the registered holders of Baroid's 8% Senior
Notes, due 2003 (the "Notes") as of ____________ ____, 1994 (the "Record
Date"), to the adoption of the Proposed Amendment (as defined in the
Solicitation Statement) to the indenture pursuant to which the Notes
have been issued.
As part of the consideration for the delivery of Consents (in
addition to the guarantee of the Notes to be made by Dresser Industries, Inc.
upon the effectiveness of the supplemental indenture), a payment (the "CONSENT
PAYMENT") will be made to each registered holder as of the Record Date whose
duly executed Consent is received in accordance with the terms and conditions
of the Solicitation Statement and not revoked prior to the Effective Time at a
rate of $1.00 for each $1,000 principal amount of Notes with respect to
which such Consent is delivered.
We are the registered holder of Notes for your account and a Consent
to the Proposed Amendment can only be given by us as the registered holder
and only if you so instruct us. The Consent form is furnished to you for
your information only and cannot be used by you to consent to the Proposed
Amendment with respect to your Notes unless we execute a proxy which
authorizes you to consent. We request that you execute and deliver to
us the Letter of Instructions (the Gray Form), indicating whether you wish
us to execute and deliver a Consent to the Proposed Amendment with respect
to your Notes or execute and deliver to you a proxy substantially in the
form set forth on the Consent form so that you can deliver a Consent
yourself to the Proposed Amendment.
If you wish to have us (i) deliver a Consent to the Proposed Amendment
with respect to your Notes or (ii) execute and deliver to you a proxy
substantially in the form set forth on the Consent form so that you may
deliver a Consent yourself, please so instruct us by completing, executing,
detaching and returning to us the Letter of Instructions attached hereto. If
you authorize us to consent to the Proposed Amendment, we will consent with
respect to ALL your Notes FOR the Proposed Amendment.
The enclosed Solicitation statement does not constitute a
solicitation of a consent in any jurisdiction in which, or from any person
from whom, it is unlawful to make such a solicitation.
THE SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME
ON _____ __, 1994, UNLESS EXTENDED.
<PAGE>
[LETTERHEAD OF LEHMAN BROTHERS]
__________ __, 1994
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by Baroid Corporation ("Baroid") as the
Solicitation Agent (the "Solicitation Agent") for the solicitation of Consents
referred to herein. Upon the terms and subject to the conditions set forth
in the Consent Solicitation Statement/Prospectus dated _____ __, 1994 (the
"Solicitation Statement"), Baroid is soliciting (the "Solicitation")
consents (the "Consents") from the registered holders of its 8% Senior
Notes, due 2003 (the "Notes") as of _______ __, 1994 (the "Record Date"),
to the adoption of the Proposed Amendment (as defined in the Solicitation
Statement) to the indenture pursuant to which the Notes have been issued.
As part of the consideration for the delivery of Consents (in addition
to the guarantee of the Notes to be made by Dresser Industries, Inc. upon
the effectiveness of the supplemental indenture), a payment (the "CONSENT
PAYMENT") will be made to each registered holder as of the Record Date
whose duly executed Consent is received in accordance with the terms and
conditions of the Solicitation Statement and not revoked prior to the
Effective Time at a rate of $1.00 for each $1,000 principal amount of
Notes with respect to which such Consent is delivered.
For your information and for forwarding to your clients for whom you
hold Notes held of record in your name or in the name of your nominee, we
are enclosing the following:
1. a Consent Solicitation Statement/Prospectus;
2. a Consent form (to be used in delivering the Consents), including
form of proxy (to be used if your client instructs you to deliver a
proxy to the client to enable the client to deliver a Consent)
[Yellow];
3. a form of letter which you may use for correspondence with your
clients;
4. a Letter of Instructions (to be used by your clients to instruct
you to deliver Consents as to their Notes or to deliver a proxy to
the client to enable the client to so consent) attached thereto
[Gray];
5. a return envelope addressed to the Information Agent; and
6. the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS
AS SOON AS POSSIBLE. THE SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK
TIME, ON _____ __, 1994 UNLESS THE SOLICITATION IS EXTENDED.
Baroid will not pay any fees or commissions to any broker or dealer
or other person, other than Lehman Brothers Inc., as the Solicitation
Agent, and D.F. King & Co., Inc. (the "Information Agent"), for
soliciting Consents. However, you will be reimbursed by Baroid for
customary mailing and handling expenses incurred by you in forwarding any
of the enclosed materials to your clients.
A DULY EXECUTED AND PROPERLY COMPLETED CONSENT AND ANY OTHER REQUIRED
DOCUMENTS SHOULD BE SENT TO THE INFORMATION AGENT, all in accordance with
the instructions set forth in the Consent and in the Solicitation
Statement. Any inquiries you may have with respect to the terms and
conditions of the Solicitation Statement should be addressed to the
Solicitation Agent and requests for additional copies of the above
documents or questions regarding the instructions for completion of
the Consent should be addressed to the Information Agent, at the respective
address or telephone number set forth for each on the back cover page
of the Solicitation Statement.
Very truly yours,
LEHMAN BROTHERS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY PERSON AS AN AGENT OR AFFILIATE OF BAROID OR THE SOLICITATION
AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS ON BEHALF
OF ANY OF THEM WITH RESPECT TO THE SOLICITATION, EXCEPT FOR STATEMENTS
EXPRESSLY MADE IN THE SOLICITATION STATEMENT AND THE CONSENT.
THE SOLICITATION WILL EXPIRE AT 5:00 P.M., NEW YORK TIME,
ON _____ __, 1994, UNLESS EXTENDED. <PAGE>
