<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Dresser Industries, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
DRESSER INDUSTRIES, INC.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 21, 1996
---------------------
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Dresser Industries, Inc., a Delaware
corporation, will be held at the Pavilion at Trammell Crow Center, 2001 Ross
Avenue, Dallas, Texas on Thursday, March 21, 1996, at 10:00 a.m., for the
following purposes:
1. To elect thirteen Directors to serve for the ensuing year or until their
successors are elected and qualified.
2. To transact any other business as properly may come before the meeting
or any adjournment thereof.
Only shareholders of record at the close of business January 22, 1996, are
entitled to notice of and to vote at the meeting or any adjournment thereof.
We hope you will be represented at the meeting by signing and returning the
enclosed proxy card in the accompanying envelope as promptly as possible,
whether or not you expect to be present in person. Your vote is important -- as
is the vote of every shareholder -- and the Board of Directors of the Company
appreciates the cooperation of shareholders in directing proxies to vote at the
meeting.
By order of the Board of Directors
REBECCA R. MORRIS
VICE PRESIDENT -- CORPORATE COUNSEL
AND SECRETARY
February 8, 1996
<PAGE>
DRESSER INDUSTRIES, INC.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
FEBRUARY 8, 1996
------------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF SHAREHOLDERS
The enclosed proxy is solicited on behalf of the Board of Directors of
Dresser Industries, Inc. (the "Company"), for use at the Annual Meeting of
Shareholders to be held Thursday, March 21, 1996, at 10:00 a.m. at the Pavilion
at Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas and at any and all
adjournments of the meeting.
OUTSTANDING SHARES AND VOTING RIGHTS
The close of business January 22, 1996, is the record date for the
determination of shareholders entitled to notice of and to vote at the meeting.
At January 22, 1996, the Company had outstanding and entitled to vote at the
meeting 182,093,350 shares of Common Stock. Each share entitles the holder to
one vote.
Any shareholder giving a proxy for the meeting may revoke it prior to the
voting thereof on any matter (without affecting, however, any vote taken prior
to revocation) by written notice to the Secretary of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The Company knows of no person or group believed to own beneficially more
than 5% of any class of the Company's outstanding voting securities.
<PAGE>
The following table states the number of shares of Common Stock of the
Company owned by each current Director and nominee, each of the executive
officers named in the Summary Compensation Table, and by all Directors and
executive officers as a group as of January 4, 1996. The number of shares
beneficially owned by all Directors and executive officers as a group
represented less than 1% of the outstanding shares. Except as otherwise
indicated, each individual named has sole investment and voting power with
respect to the securities shown.
<TABLE>
<CAPTION>
NAMES NUMBER OF SHARES
- ------------------------------------------------------------- ------------------------------------
<S> <C> <C>
William E. Bradford.......................................... 118,380 (Note A)
James L. Bryan............................................... 100,377 (Note A)
Samuel B. Casey, Jr.......................................... 3,321
Lawrence S. Eagleburger...................................... 2,428
Sylvia A. Earle.............................................. 755
Rawles Fulgham............................................... 18,000
John Gavin................................................... 10,396
Ray L. Hunt.................................................. 150,843 (Note B)
J. Landis Martin............................................. 203,168
John J. Murphy............................................... 314,647 (Note A)
Lionel H. Olmer.............................................. 7,665 (Note D)
Jay A. Precourt.............................................. 4,624
Bill D. St. John............................................. 122,290 (Note A)
Donald C. Vaughn............................................. 88,485 (Note A)
Richard W. Vieser............................................ 16,850
All Directors, Nominees and executive officers as a group (23
persons).................................................... 1,507,343 (Notes A, C and D)
</TABLE>
The above information does not include contingent stock units credited to
accounts in the Company's Deferred Compensation Plan which are considered
beneficially owned "derivative securities" for purposes of Section 16 of the
Securities Exchange Act of 1934 but not considered beneficially owned for
purposes of this proxy statement. At January 15, 1996, a total of 48,168;
117,747; 116,100; and 41,198 stock units were credited to the accounts of
Messrs. Bradford, Murphy, St. John and Vaughn, respectively, and 420,128 stock
units were credited to the accounts of all executive officers as a group.
NOTE A: Shares shown include stock options issued under the Company's 1982
Stock Option Plan and 1992 Stock Compensation Plan which are exercisable on or
within sixty days after January 4, 1996 to purchase a number of shares of the
Company's Common Stock which together with related restricted incentive stock
awards under the 1989 Restricted Incentive
2
<PAGE>
Stock Plan and 1992 Stock Compensation Plan total 54,996, 90,147, 93,011,
52,563, and 78,635 for Messrs. Bradford, Bryan, Murphy, St. John and Vaughn,
respectively, and 677,694 for all Directors and executive officers as a group.
Under the Rules of the Securities and Exchange Commission, such shares are
considered to be beneficially owned for the purpose of this Proxy Statement. For
the purpose of calculating percentage ownership, such shares were also
considered to be outstanding.
NOTE B: Shares shown include 82,318 shares, in which Mr. Hunt disclaims
beneficial interest, owned by trusts for the benefit of his children. Mr. Hunt
and/or his wife serve as members of an advisory board or trustee for each trust.
NOTE C: Mr. Paul M. Bryant, Vice President -- Human Resources of the
Company, is Trustee of the Company's Stock Purchase Plan which, as of January
22, 1996, owned of record 908,229 shares of Common Stock of the Company. Mr.
Bryant disclaims any beneficial ownership of the shares held by him as Trustee
for the participants of the Stock Purchase Plan. Under terms of the Plan, the
Trustee has discretionary voting authority as to shares allocated to accounts of
Participants from whom he does not timely receive voting instructions.
NOTE D: Shares shown do not include 1,499 phantom stock units acquired
pursuant to Mr. Olmer's election to defer compensation awarded under the 1989
Director Retirement Plan.
ELECTION OF DIRECTORS
At the meeting, thirteen Directors are to be elected, each to hold office
for one year or until a successor is elected and qualified. Unless otherwise
instructed, it is intended that the shares represented by the enclosed proxy
will be voted for the election of the thirteen nominees named below. All
nominees were previously elected by the shareholders. The Board of Directors has
no reason to believe that any nominee will be unable to serve if elected. In the
event that any nominee shall become unavailable for election, it is intended
that such shares will be voted for the election of a substitute nominee selected
by the persons named in the enclosed proxy unless the Board should determine to
reduce the number of Directors pursuant to the By-Laws of the Company.
The affirmative vote of a plurality of the shares present in person or
represented by proxy at the meeting and entitled to vote is required for the
election of Directors. Votes will be tabulated by inspectors of election
appointed by the Company's Board of Directors. An abstention from voting will be
tabulated as a vote withheld on the election, and will be included in computing
the
3
<PAGE>
number of shares present for purposes of determining the presence of a quorum
for the shareholders meeting and whether nominees have received the vote of a
plurality of shares present at the meeting.
The following includes certain information concerning the nominees furnished
by them to the Company.
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE DURING PAST 5 YEARS AND ELECTED
NAME (AGE) OTHER INFORMATION DIRECTOR
- --------------------------------------- -------------------------------------------------------- -----------
<S> <C> <C>
William E. Bradford (61) Chief Executive Officer of the Company since November 1992
1995 and President since March 1992; Chief Operating
Officer, March 1992- November 1995; President and Chief
Executive Officer of Dresser-Rand Company, Corning, New
York, 51% joint venture partnership, February 1988 -
March 1992; Senior Vice President -- Operations of the
Company, March 1984 - March 1992. Director, Diamond
Shamrock, Inc. and Oryx Energy Company.
Samuel B. Casey, Jr. (68) Chairman of the Board, Dixon Ticonderoga Company, 1983
Maitland, Florida, manufacturer and marketer of writing
products, October 1985 until retirement February 1989.
Director, Dixon Ticonderoga Company; Global Industrial
Technologies, Inc. (formerly INDRESCO Inc.); and
Northbrook, Inc., a Division of JMB, Inc.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE DURING PAST 5 YEARS AND ELECTED
NAME (AGE) OTHER INFORMATION DIRECTOR
- --------------------------------------- -------------------------------------------------------- -----------
<S> <C> <C>
Lawrence S. Eagleburger (65) Senior Foreign Policy Advisor, Baker, Donelson, Bearman 1993
& Caldwell, Washington, D.C., law firm, since January
1993; United States Secretary of State, Department of
State, December 1992 - January 1993; Acting Secretary of
State, Department of State, August 1992 - December 1992;
Deputy Secretary of State, Department of State, February
1989 - August 1992; President, Kissinger Associates, New
York, New York, provider of strategic consulting
services to international companies, September 1984 -
January 1989. Director, Jefferson Bankshares; Phillips
Petroleum Company; Stimsonite; Universal Corporation;
Corning Corp.; COMSAT; and Virginia Fibre Corp.
Sylvia A. Earle, Ph.D. (60) Founder and Director, Deep Ocean Engineering, Inc., San 1995
Leandro, California, designer and manufacturer of
underwater equipment, since 1981, President, Chief
Executive Officer and Chairman 1988-1990; President,
Deep Ocean Exploration and Research, Inc., Oakland,
California, a consulting firm, since 1992; Chairman, Sea
Change Trust and the Caribbean Marine Research Center, a
non profit organization for scientific research,
Covington, Virginia, 1993-1995; Chief Scientist,
National Oceanic and Atmospheric Administration,
1990-1992, Advisor to the Administrator, 1992-1993.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE DURING PAST 5 YEARS AND ELECTED
NAME (AGE) OTHER INFORMATION DIRECTOR
- --------------------------------------- -------------------------------------------------------- -----------
<S> <C> <C>
Rawles Fulgham (68) Senior Advisor, Merrill Lynch & Co., Inc., Dallas, 1975
Texas, financial services, since September 1989;
Executive Director, Merrill Lynch Private Capital, Inc.,
Dallas, Texas, private financings, August 1982 -
September 1989. Director, BancTec, Inc.; Global
Industrial Technologies, Inc. (formerly INDRESCO Inc.);
NCH Corporation; and Republic Financial Services, Inc.
John A. Gavin (64) For more than five years, Chairman of the Board, 1986
President, and Chief Executive Officer, Gamma Services
International, Los Angeles, California, venture capital
& international consulting firm. Director, Atlantic
Richfield Company; Pinkerton, Inc.; International Wire
Holdings; and Hotchkis and Wiley, Mutual Funds.
Ray L. Hunt (52) For more than five years, Chairman of the Board and 1984
Chief Executive Officer, Hunt Oil Company, Dallas,
Texas, oil and gas exploration and development; Chairman
of the Board, Chief Executive Officer, and President,
Hunt Consolidated, Inc., Dallas, Texas; Chairman of the
Board, Chief Executive Officer and President, RRH
Corporation, Dallas, Texas.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE DURING PAST 5 YEARS AND ELECTED
NAME (AGE) OTHER INFORMATION DIRECTOR
- --------------------------------------- -------------------------------------------------------- -----------
<S> <C> <C>
J. Landis Martin (50) For more than five years, President and Chief Executive 1994
Officer of NL Industries, Inc., Houston, Texas, a
manufacturer and marketer of titanium dioxide pigments
and specialty chemicals; Chairman of the Board and Chief
Executive Officer of Baroid Corporation, Houston, Texas,
a wholly owned subsidiary of the Company effective
January 21, 1994 (and its predecessor) August 1990 -
January 1994; Chairman of Tremont Corporation, Denver,
Colorado, an integrated producer of titanium metals,
since August 1990, Chief Executive Officer since 1988
and President since 1987. Director, NL Industries, Inc.;
Tremont Corporation; and Apartment Investment and
Management Corporation (a real estate investment trust).
John J. Murphy (64) Chairman of the Board of the Company since August 1983; 1982
Chief Executive Officer, August 1983 - November 1995,
President, August 1982 - March 1992. Director, PepsiCo
Inc.; Kerr-McGee Corporation; and NationsBank
Corporation.
Lionel H. Olmer (61) Partner, Paul, Weiss, Rifkind, Wharton & Garrison, 1986
Washington, D.C., law firm, since June 1985. Under
Secretary of Commerce for International Trade, United
States Department of Commerce, 1981 - 1985.
Jay A. Precourt (58) For more than five years, Vice Chairman and Chief 1994
Executive Officer of Tejas Gas Corporation, Houston,
Texas, a natural gas pipeline company. Director,
Founders Funds, Inc.; and Tejas Gas Corporation.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE DURING PAST 5 YEARS AND ELECTED
NAME (AGE) OTHER INFORMATION DIRECTOR
- --------------------------------------- -------------------------------------------------------- -----------
<S> <C> <C>
Bill D. St. John (64) Vice Chairman of the Company since March 1992; Chief 1984
Financial Officer since October 1993; Executive Vice
President -- Administration of the Company, November
1982 - March 1992.
Richard W. Vieser (68) Chairman of the Board, President and Chief Executive 1989
Officer, FL Industries, Inc., Livingston, New Jersey,
electrical equipment and high efficiency industrial and
commercial heating and cooling equipment, June 1985
until retirement November 1989; Chairman of the Board,
President and Chief Executive Officer, Lear Siegler,
Inc., Livingston, New Jersey, March 1987 until
retirement November 1989; Chairman and Chief Executive
Officer, FL Aerospace Corp., Livingston, New Jersey,
September 1986 until retirement November 1989. Director,
Ceridian Corporation; Global Industrial Technologies,
Inc. (formerly INDRESCO Inc.); Sybron International;
Varian Associates, Inc.; and Berg Electronics &
International Wire Corp.
</TABLE>
ADDITIONAL INFORMATION RELATING TO THE BOARD OF DIRECTORS
The Company has standing Audit and Finance, Executive Compensation,
Executive and Nominating Committees of the Board of Directors. The Audit and
Finance Committee consists of Messrs. Fulgham (Chairman), Eagleburger, Olmer,
Precourt and Dr. Earle. The functions of the Committee, which held two meetings
during fiscal 1995, are to recommend to the Board of Directors independent
accountants, whose duty it is to audit the books and accounts of the Company and
its subsidiaries for the fiscal year for which they are appointed, and review
and approve the scope of the annual audit activities of the independent
accountants and the Company's internal accountants.
The Executive Compensation Committee is composed of Messrs. Casey
(Chairman), Gavin, Hunt, Martin and Vieser. The Committee, which held two
meetings during fiscal 1995, and acted
8
<PAGE>
on three occasions by unanimous written consent, reviews and recommends to the
Board salaries of officers, reviews the key employees of the Company and
recommends to the Board those to be granted options and related restricted
incentive stock awards under the Company's 1992 Stock Compensation Plan and
administers the Company's Stock Compensation, Stock Option and Restricted
Incentive Stock Plans, the Deferred Compensation Plans, the Performance Stock
Unit Plan for officers and headquarters staff, the Incentive Stock Unit Plan for
operating unit executives, the 1995 Executive Incentive Compensation Plan and
the Long Term Performance and Annual Incentive Plans for Selected Employees of
The M. W. Kellogg Company.
The Executive Committee, consisting of Messrs. Murphy (Chairman), Bradford,
Fulgham, Hunt and St. John, exercises, during the intervals between meetings of
the Board of Directors, all powers, except to the extent limited by law, of the
Board of Directors. The Executive Committee did not meet during fiscal 1995.
The Nominating Committee, consisting of Messrs. Hunt (Chairman), Casey,
Fulgham, Gavin, and Vieser, searches for and recommends candidates for election
as Director. It will also consider nominees recommended by shareholders for
election as Director. Any such recommendation, together with the nominee's
qualifications and consent to be considered as a nominee, should be sent to the
Secretary of the Company. The Nominating Committee held one meeting during
fiscal 1995.
During fiscal 1995, there were six meetings of the Board of Directors.
Attendance at the Board and Committee meetings averaged approximately 97% in
1995, and each member of the Board of Directors attended 80% or more of the
aggregate number of the meetings of the Board and of any Committee of which he
or she is a member. A Director who is an employee of the Company receives no
fees or remuneration, as such, for services as a member of the Board of
Directors or any Committee of the Board. During fiscal 1995, each Director of
the Company who was not an employee received an annual retainer equal to $28,000
($31,000 as of June 1, 1995) for Board membership, $2,500 for each Committee
membership, $1,000 for service as Chairman of a Committee and $1,250 for each
day on which one or more meetings of the Board of Directors or any Committee
thereof was attended. A fee of $350 was paid for meetings attended by telephone
conference. In addition, each non-employee Director may be paid a fee of $1,000
for each day engaged in Company business, other than attendance at meetings of
the Board of Directors or any Committee thereof, at the request of the Chairman
of the Board. Directors may elect to defer payment of all or a portion of the
foregoing fees through a deferred cash or common stock equivalence account.
In addition, the Company's 1989 Director Retirement Plan provides shares of
the Company's Common Stock in lieu of retirement benefits to members of the
Company's Board of
9
<PAGE>
Directors who are not also employees. Awards under the Plan consist of grants of
shares of the Company's Common Stock in August of each odd-numbered year
approximately equal in value to 60% of the annual retainer payable for services
as a Director at the end of the period for which the award is made. The Plan was
amended in July 1993 to allow Directors to elect to defer awards otherwise
payable under the Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the merger of BCD Acquisition Corporation, a wholly-owned
subsidiary of the Company, with Baroid Corporation, Mr. Martin received
$1,290,000 from Baroid under an advisory agreement among Baroid, Mr. Martin and
other Baroid executives, for services in connection with the merger; and,
pursuant to a severance agreement, $1,300,000 in cash, shares of Baroid valued
at approximately $616,000 in exchange for the difference in value between the
exercise price of Mr. Martin's unvested Baroid stock options and the January 20,
1994, average of the highest and lowest sales prices of Baroid Common Stock; and
certain other payments and a continuation of other benefits valued at
approximately $347,000 upon termination of his employment from Baroid. If any
amount paid to Mr. Martin under the advisory agreement subjects him to federal
income tax in respect of such amount, Baroid has agreed to provide a
commercially reasonable defense to Mr. Martin and to indemnify him for up to 70%
of the excise tax, interest and penalties, plus any federal income or excise
taxes imposed because of the indemnification.
Baroid has outstanding approximately $6.1 million and $9.1 million in
letters of credit under a bank facility which was established in connection with
certain insurance relationships of NL Industries, Inc. ("NL"), of which Mr.
Martin is a director and executive officer, and Tremont, respectively. NL and
Tremont are obligated to indemnify Dresser for any losses or expenses in respect
of these letters of credit.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995 the initial members of the Executive Compensation
Committee of the Company were Messrs. Casey (Chairman), Eagleburger, Fulgham,
Gavin, Hunt, Martin, Olmer, Precourt and Vieser. Current members are Messrs.
Casey (Chairman), Gavin, Hunt, Martin and Vieser. Business entities in which Mr.
Hunt and certain members of his immediate family own substantial interests have
in the past fiscal year made purchases from the Company in the ordinary course
of business and on the same basis as transactions with other customers of the
Company. The Company anticipates that similar transactions are likely to occur
in the future.
10
<PAGE>
OTHER MATTERS
The Board of Directors is not aware of any other matter to be presented for
action at the meeting. However, if any other matter is properly presented, it is
the intention of the persons named in the enclosed form of proxy to vote in
accordance with their judgment on such matter.
INFORMATION ON INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has unanimously reappointed the firm
of Price Waterhouse LLP as independent accountants for the 1996 fiscal year. A
representative of Price Waterhouse LLP will be present at the Annual Meeting to
answer appropriate questions from the shareholders and will be afforded an
opportunity to make any statement on behalf of Price Waterhouse LLP that he may
desire.
OTHER INFORMATION FURNISHED PURSUANT TO REGULATIONS
OF SECURITIES AND EXCHANGE COMMISSION
EXPENSE OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. In addition,
the Company will reimburse brokers or other persons holding stock in their names
or in the names of their nominees for charges and expenses in forwarding proxies
and proxy material to the beneficial owners. Solicitations may further be made
by officers and regular employees of the Company, without additional
compensation, by use of the mails, telephone, telegraph or by personal calls.
The Company has retained D.F. King & Co., Inc., New York, New York, to assist in
the solicitation at a cost of $10,000 (plus reasonable out-of-pocket expenses).
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1997 Annual Meeting of Shareholders of the
Company must be received no later than October 11, 1996, at the Company's
principal executive office, 2001 Ross Avenue, Dallas, Texas 75201, directed to
the attention of the Secretary.
EXECUTIVE COMPENSATION
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Executive Compensation Committee of the Board of Directors. The Committee is
comprised of five independent, non-employee directors. The Committee is
committed to a strong, positive link between business performance, strategic
goals, shareholder value, and total compensation programs.
11
<PAGE>
OVERALL EXECUTIVE COMPENSATION POLICY
Our compensation policy is designed to support the overall objective of
enhancing value for our shareholders by:
- Attracting, developing, rewarding, and retaining highly qualified and
productive individuals.
- Directly relating compensation to both Company and individual performance.
- Ensuring compensation levels that are externally competitive and
internally equitable.
- Encouraging executive stock ownership to enhance a mutuality of interest
with other shareholders.
The Committee considers all elements of compensation when determining
individual components of pay. The Committee relies in part on recommendations
from the Chairman of the Board regarding compensation levels for executive
officers excluding himself. Following is a description of the elements of
Dresser executive compensation and how each relates to the objectives and policy
outlined above.
BASE SALARY
The Committee reviews each executive officer's salary annually. In
determining appropriate salary levels, we consider level and scope of
responsibility, experience, a subjective evaluation of overall Company
performance, individual performance, internal equity, as well as pay practices
of other companies relating to executives of similar responsibility. No specific
weightings are assigned to these criteria.
By design, we strive to pay executives salaries in line with appropriate
competitive market levels. In defining the competitive market, we include
companies in the energy services industry as well as major equipment producers
with a median size comparable to the Company. These companies are representative
of those with whom the Company competes for executive talent, and as such are a
broader group of companies than those comprising the S & P Oil Well Equipment &
Services Index included in the Performance Graph. To provide an additional point
of reference, the Committee also reviews available survey data on general
industry practices. We review the size-adjusted median (50th percentile) of the
competitive market, which serves as a reference point in determining base salary
levels.
12
<PAGE>
We believe maximum performance can be encouraged through the use of
appropriate incentive programs. Incentive programs for executives are as
follows:
ANNUAL INCENTIVES
The annual incentive plan emphasizes a positive link between enhanced
shareholder value and incentive compensation. Incentive payments under the plan
are based solely on achievement of specified levels of Return on Equity (ROE).
The Committee believes incentive opportunities are commensurate with the
performance required to achieve increasingly higher levels of ROE. Performance
above a specified ROE threshold level is required before any incentives are
paid. For 1995, the level of ROE produced incentive payments amounting to 57% of
aggregate base salaries of senior executive officers.
Because ROE is used to measure performance, we believe total direct
compensation (base salary plus annual incentive) is positively correlated with
the performance of the Company. The named executives, as a group, excluding Mr.
Murphy whose compensation is discussed later, fall within the median base salary
and total direct compensation ranges of the competitive market.
LONG-TERM INCENTIVES
The Company's long-term compensation philosophy is that long-term incentives
should be related to improvement in long-term shareholder value, thereby
creating a mutuality of interest with shareholders. In furtherance of this
objective, the Company awards to its executive officers Performance Stock Units
and stock options usually coupled with restricted stock awards. The objective is
to provide a competitive total long-term incentive opportunity, utilizing the
market survey data previously described.
STOCK OPTIONS
Stock options encourage and reward effective management that results in
long-term corporate financial success, as measured by stock price appreciation.
The Stock Option Program is compatible with shareholder interests and
encourages executives to maintain a long term equity interest. Target stock
option grant levels are established subjectively based on assessment of each
executive's scope of responsibilities and level within the organization. Stock
holdings of the executive group resulting from option exercises are considered
when determining the size of the current awards. Since January 1993, Dresser has
emphasized premium options. At time of grant, two-thirds of the stock options
have an exercise price greater than the fair market value at grant date. Such
options are exercisable in three equal installments beginning six months after
date of grant. To encourage increased equity holdings, the Committee's current
guidelines call for stock option awards to be granted each January equal to the
number of options exercised in the preceding year if the executive who paid the
13
<PAGE>
exercise price in cash continues to hold at least one-half of the shares
received. If previously-owned shares are used to pay the exercise price, one
hundred percent of the shares must be held to be eligible for such grants. Under
terms of the Program, the Committee has full and sole authority to change the
guidelines for grant of stock options at any time subject only to the express
provisions of the Program.
RESTRICTED INCENTIVE STOCK AWARDS
To further encourage executive officers to exercise stock options and hold
the stock following exercise, stock option grants to executive officers usually
are made in tandem with restricted incentive stock awards. Recipients of
Restricted Incentive Stock awards are issued, upon exercise of the related
option, one share of restricted stock for every five-option shares exercised
which the Committee believes is an appropriate inducement for promoting enhanced
equity interest by executives. Provided the related option shares are held on
that date, restrictions on Restricted Incentive Stock lapse on the third
anniversary of the date of issue or, if earlier, upon termination of employment
by reason of death, disability or approved retirement. If the related option
shares are sold or otherwise transferred prior to lapse of restrictions, the
Restricted Incentive Stock is forfeited.
PERFORMANCE STOCK UNITS
This program is intended to reward executives when the Company attains
preset goals over a period of four years, thus encouraging and rewarding long
term planning and performance. Such awards are made every second year. The
objectives for the four-year periods ending October 31, 1995 and 1997 are to
achieve, respectively, an average of not less than 12.5% and 15% Return on
Equity. Performance Stock Unit Awards are based upon each individual executive's
responsibilities and level within the organization. Each unit has a maximum
value based on the value of the Company's Common Stock at the beginning of the
award cycle. Payment is made only if the objective is met and is correspondingly
reduced if the value of the Company's Common Stock is lower at the end than at
the beginning of the award cycle. In addition, earned awards are paid in
installments, 50% at the end of the cycle and 50% one year later, subject to
continued employment, except in cases of death, disability, or approved
termination of employment, in an effort to retain executives. For the four-year
cycle ended October 31, 1995, the performance criteria was not met, therefore no
payment was made.
In lieu of annual incentive and Performance Stock Unit awards referred to
above, one executive officer in 1995 participated in plans of The M.W. Kellogg
Company intended to encourage and reward enhanced net earnings. The annual
incentive plan provides for an award
14
<PAGE>
directly related to the level of net earnings of M.W. Kellogg as defined by the
plan. An additional amount directly related to net earnings is deferred. The
deferred award also is in lieu of normal pension plan benefits.
RATIONALE FOR CEO COMPENSATION
Mr. Murphy has been Chairman of the Board of Dresser since 1983. His
compensation package has been designed to encourage short and long-term
performance in line with the interests of our shareholders. The majority of his
compensation is at risk, in the form of performance bonuses, stock options,
restricted stock awards, and performance stock units.
Mr. Murphy's salary was increased $38,000 to $998,000 effective November 1,
1994, and is in the upper quartile of the competitive market. The factors which
the Committee considered in determining Mr. Murphy's base salary for fiscal 1995
were his scope of responsibility, experience and individual performance, a
subjective evaluation of overall Company performance, and pay practices of other
companies relating to executives of similar responsibility. No specific
weightings are assigned to these criteria. The annual incentive paid to Mr.
Murphy for fiscal year 1995, determined as explained above, was $568,860, which
was equivalent to 57% of his base salary. Mr. Murphy's total direct compensation
(base salary plus bonus) is in the upper quartile of the competitive market for
fiscal 1995.
In fiscal 1995, Mr. Murphy was granted options to purchase 14,087 shares of
common stock which is equivalent to the number of options exercised during the
previous calendar year.
POLICY REGARDING SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code generally limits the corporate
deduction to one million dollars for compensation paid to a person who on the
last day of fiscal years beginning on or after January 1, 1994 is either the
Chief Executive Officer or among the four most highly compensated officers other
than the Chief Executive Officer, except for qualified performance-based
compensation. Section 162(m) is applicable to Dresser for the Company's 1995
fiscal year which began November 1, 1994. The Stock Option Program, the
Performance Stock Unit Program, and the 1995 Executive Incentive Compensation
Plan are believed to qualify as performance-based under IRS rules. The M.W.
Kellogg Company Annual Incentive Plan and The M.W. Kellogg Company Long-Term
Performance Plan are based on performance measures of The M.W. Kellogg Company
but are not intended to qualify as performance-based under tax regulations.
15
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE
<TABLE>
<S> <C>
Samuel B. Casey J. Landis Martin
Lawrence S. Eagleburger Lionel H. Olmer
Rawles Fulgham Jay A. Precourt
John Gavin Richard W. Vieser
Ray L. Hunt
</TABLE>
The directors as listed above, were members of the Executive Compensation
Committee at the time the majority of substantive compensation decisions, as
described above, were made and do not reflect the composition of the committee
as of the end of the fiscal year.
The Board Compensation Committee Report on Executive Compensation shall not
be deemed incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the Securities Act of 1933
or the Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
16
<PAGE>
SUMMARY COMPENSATION TABLE
The following sets forth information concerning the compensation of John J.
Murphy, the Company's Chief Executive Officer at the end of the last completed
fiscal year, and each of the other four most highly compensated executive
officers of the Company at such date.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------------- -------------------------- ---------
OTHER ANNUAL RESTRICTED SECURITIES LONG TERM ALL OTHER
NAME AND COMPEN- STOCK UNDERLYING INCENTIVE COMPEN-
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SATION ($)(1) AWARDS ($)(2) OPTIONS (#) PAYOUTS($) SATION ($)(4)
(A) (B) (C) (D) (E) (F) (G) (H) (I)
- ----------------------- ---- ---------- ----------- ------------- ------------- ----------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John J. Murphy, 1995 $ 998,000 $ 568,860 $ -0- $ -0- 14,087 $ -0- $ 147,205
Chairman of the 1994 960,000 787,200 -0- 37,680 22,062 -0- -0-
Board 1993 925,000 545,750 -0- 33,663 131,000 272,258 -0-
Bill D. St. John, 1995 537,000 310,080 -0- -0- 6,900 -0- 82,053
Vice Chairman 1994 516,000 428,860 -0- 19,745 -0- -0- -0-
1993 494,667 376,180 -0- -0- 53,000 107,668 -0-
William E. Bradford, 1995 546,000 315,780 -0- 148,235 7,000 -0- 87,948
President and 1994 522,000 434,600 -0- 31,938 -0- -0- -0-
Chief Executive 1993 496,250 378,540 -0- -0- 13,000 -0- -0-
Officer
Donald C. Vaughn, 1995 365,404 508,722(3) -0- -0- -0- -0- 9
Executive Vice 1994 349,115 517,868(3) -0- -0- -0- -0- 11
President 1993 333,469 508,578(3) -0- -0- 55,000 -0- 11
James L. Bryan, 1995 309,000 177,840 -0- -0- -0- -0- 39,520
Senior Vice 1994 294,750 246,000 -0- -0- -0- -0- -0-
President -- 1993 272,583 164,610 -0- -0- 51,000 -0- -0-
Operations
</TABLE>
- ------------------
(1) Does not include the value of perquisites and other personal benefits
because the aggregate amount of such compensation, if any, does not exceed
the lesser of $50,000 or 10 percent of the total amount of annual salary and
bonus for any named individual.
(2) Since 1989 Restricted Incentive Stock ("RIS") Awards have been coupled with
most stock option grants to officers of the Company. Recipients of
Restricted Incentive Stock Awards are issued, upon the exercise of the
related option, one share of Restricted Incentive Stock for every five
option shares exercised. Provided the related option shares are held on that
date, restrictions on Restricted Incentive Stock lapse on the third
anniversary of the date of issue or, if earlier, upon termination of
employment by reason of death, disability or approved retirement. If the
related option shares are sold or otherwise transferred prior to lapse of
restrictions, the Restricted Incentive Stock is forfeited. Restricted stock
awards shown in the table represent Restricted Incentive Stock issued upon
exercise of related stock
17
<PAGE>
options and are valued at the market value (average of the high and low
trading price) of the Company's unrestricted stock on the New York Stock
Exchange on the date of issue. Dividend and voting rights of such stock are
the same as all other shares of the Company's outstanding Common Stock. At
the end of the last completed fiscal year, the number and value (at the
closing price of the Company's unrestricted stock as listed in the New York
Stock Exchange Composite Transactions on October 31, 1995, the last trading
day of the Company's fiscal year) of the aggregate restricted stock holdings
of the named individuals were 3,299 ($68,867), 1,320 ($27,555) and 7,845
($163,764) for Messrs. Murphy, St. John and Bradford, respectively.
(3) Includes $254,361, $258,934 and $254,289 for 1995, 1994 and 1993,
respectively, non-elective deferral under terms of an unfunded plan in lieu
of normal pension benefits which provides for vesting in one-third of the
award on each of the crediting date and the next two anniversaries thereof.
The plan generally provides for payment of vested benefits in a lump sum or
ten equal annual installments following retirement, death or termination of
employment. However, the Executive Compensation Committee has discretion to
distribute all or a portion of vested benefits in certain emergencies, to
fully vest all benefits upon death, disability and termination of employment
other than resignation or termination for cause, and all benefits may be
forfeited under certain circumstances, all as defined in the plan.
(4) Company contributions to qualified defined contribution retirement plans and
liabilities to related non-qualified plans.
18
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table shows all individual grants of stock options under the
Company's 1992 Stock Compensation Plan to the named executive officers of the
Company during the fiscal year ended October 31, 1995.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF STOCK
SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM (3)
OPTIONS TO EMPLOYEES IN EXERCISE OR BASE EXPIRATION ----------------------
NAME GRANTED (#)(1) FISCAL YEAR PRICE ($/SH)(2) DATE 5% 10%
(A) (B) (C) (D) (E) (F) (G)
- ------------------ --------------- ----------------- ------------------ ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
J. J. Murphy...... 4,695 .97 $ 19.3125 1/18/2005 $ 57,123 $ 144,169
4,696 .97 20.1500 1/18/2005 53,203 140,267
4,696 .97 21.0500 1/18/2005 48,976 136,040
B. D. St. John.... 2,300 .47 19.3125 1/18/2005 27,984 70,626
2,300 .47 20.1500 1/18/2005 26,058 68,700
2,300 .47 21.0500 1/18/2005 23,988 66,630
W. E. Bradford.... 2,333 .48 19.3125 1/18/2005 28,385 71,639
2,333 .48 20.1500 1/18/2005 26,431 69,685
2,334 .48 21.0500 1/18/2005 24,342 67,615
D. C. Vaughn...... -0-
J. L. Bryan....... -0-
</TABLE>
- ------------------------
(1) Stock options are shown at the price and in the sequence they first become
exercisable, respectively: July 20, 1995; January 19, 1996; and January 19,
1997. Terms of the Plan allow acceleration of exercisability of stock
options and lapse of restrictions on Restricted Incentive Stock in
circumstances described on page 23. Stock Options granted were coupled with
a total of 2,817, 1,380 and 1,400 Restricted Incentive Stock ("RIS") Awards
to Messrs. Murphy, St. John and Bradford, respectively. Recipients of RIS
Awards will be issued, upon the exercise of the related option, one share of
restricted stock for every five option shares exercised. Provisions for
lapse of restrictions are described in Note 2 to the Summary Compensation
Table. Guidelines currently used by the Executive Compensation Committee for
grant of subsequent options are described beginning on page 13.
(2) The initial exercise price of $19.3125 for the first tranche of options
granted in 1995 is the average of the high and low trading prices of the
Company's Common Stock prices on the
19
<PAGE>
New York Stock Exchange on the date of grant. The exercise price will
increase on each anniversary of such date by 7.86% of the option price in
effect during the immediate preceding year minus $.68, approximating 30-year
Treasury Bond yields (decreased by the Company dividend rate) at time of
grant.
(3) As required by rules of the Securities and Exchange Commission ("SEC"),
potential values stated are based on the prescribed assumption that the
Company's Common Stock will appreciate in value from the date of grant to
the end of the option term (ten years from the date of grant) at annualized
rates of 5% and 10% (total appreciation of 63% and 159%), respectively, and
therefore are not intended to forecast future appreciation, if any, in the
price of the Company's Common Stock. The total of all stock options granted
to employees, including executive officers, during fiscal 1995 was less than
0.27% of total shares outstanding during the year. Accordingly, the
potential realizable value of such options for all optionees under the
prescribed assumptions is less than 0.27% of the potential realizable value
of all shareholders for the same period under the same assumptions. As an
alternative to the assumed potential realizable values stated in Columns (f)
and (g), SEC rules would permit stating the present value of such options at
the date of grant. Methods of computing present value suggested by different
authorities can produce significantly different results. Moreover, since
stock options granted by the Company are not transferrable, there is no
objective criteria by which any computation of present value can be
verified. Consequently, the Company's management does not believe there is a
reliable method of computing the present value of such stock options.
20
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
The following table provides information concerning each option exercised
during the last fiscal year by each of the named executive officers and the
value of unexercised options held by such executive officers at the end of the
fiscal year.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN- THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR AT FISCAL YEAR
SHARES ACQUIRED VALUE END (#) END ($)(1)
NAME ON EXERCISE (#) REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
(A) (B) (C) (D) (E)
- -------------------------- --------------- ----------- ----------------------- -----------------------
<S> <C> <C> <C> <C>
J. J. Murphy.............. -0- $ -0- 224,990/ $ 313,364/
25,108 22,965
B. D. St. John............ -0- -0- 91,273/ 131,342/
8,800 10,959
W. E. Bradford............ 32,233 110,539 47,356/ 39,698/
20,186 22,800
D. C. Vaughn.............. -0- -0- 72,055/ 124,140/
2,652 2,366
J. L. Bryan............... -0- -0- 73,062/ 114,484/
2,254 2,085
</TABLE>
- ------------------------
(1) Values stated are based on the closing price of $20.875 per share of the
Company's Common Stock as listed in the New York Stock Exchange Composite
Transactions on October 31, 1995, the last trading day of the fiscal year.
21
<PAGE>
DRESSER RETIREMENT PLANS
The estimated total annual retirement benefits payable under defined benefit
pension plans in which Messrs. Murphy, St. John, Bradford and Bryan participate
are set forth below. The chart illustrates benefits accrued to October 31, 1995.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------------------------------
REMUNERATION* 10 15 20 25 30 35
- ------------------------- ----------- ----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 250,000................ $ 39,750 $ 64,750 $ 89,750 $ 114,750 $ 139,750 $ 164,750
300,000................ 47,700 77,700 107,700 137,700 167,700 197,700
450,000................ 71,550 116,550 161,550 206,550 251,550 296,550
600,000................ 95,400 155,400 215,400 275,400 335,400 395,400
750,000................ 119,250 194,250 269,250 344,250 419,250 494,250
900,000................ 143,100 233,100 323,100 413,100 503,100 593,100
1,050,000............... 166,950 271,950 376,950 481,950 586,950 691,950
1,200,000............... 190,800 310,800 430,800 550,800 670,800 790,800
1,350,000............... 214,650 349,650 484,650 619,650 754,650 889,650
1,500,000............... 238,500 388,500 538,500 688,500 838,500 988,500
1,800,000............... 286,200 466,200 646,200 826,200 1,006,200 1,186,200
1,900,000............... 302,100 492,100 682,100 872,100 1,062,100 1,252,100
2,000,000............... 318,000 518,000 718,000 918,000 1,118,000 1,318,000
</TABLE>
- ------------------------
* As of October 31, 1995, assuming attained age 65.
The gross amounts represented above include sums accrued under Dresser's
qualified and non-qualified defined benefit plans. However, amounts credited to
Dresser's qualified and non-qualified defined contribution plans will be paid
from those plans and thus represent deductions to the above gross amounts.
Likewise, applicable Social Security benefits, and "pension benefit equivalents"
credited under Dresser's deferred compensation plan, also represent deductions.
22
<PAGE>
Less than 10% of the amounts shown in columns (c) and (d) of the Summary
Compensation Table for each of the named individuals (except Mr. Vaughn who is
not a participant in the Company's defined benefit plans) is excluded in
determining benefits. Years of credited service used in determining benefits for
the individuals named in the Summary Compensation Table are as follows: Mr.
Murphy 35 years, Mr. St. John 35 years, Mr. Bradford 32.25 years, and Mr. Bryan
35 years. Benefits are computed as straight-life annuity amounts which may be
paid in various forms.
The covered compensation, years of credited service and estimated total
annual retirement benefits payable to Mr. Vaughn at age 65 under defined benefit
pension plans are set forth below. Covered compensation differs more than 10%
from amounts shown in columns (c) and (d) of the Summary Compensation Table
because the Plans were frozen several years ago.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
30 YEARS
OF
REMUNERATION SERVICE
- ----------------------------------------------------------------------------- ---------
<S> <C>
$230,000..................................................................... $ 67,513
</TABLE>
Benefits are computed as a straight-life annuity which may be paid in
various forms and is not subject to any deduction for Social Security or other
offset amounts.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
Pursuant to the 1992 Stock Compensation and 1982 Stock Option Plans, in the
case of an impending merger, reorganization, or liquidation of the Company, or
of a sale of substantially all of its business or property, the Board may at its
discretion and without shareholder approval, declare some or all outstanding
Options to be immediately exercisable in full (except for required abatements in
the case of combinations of Options), without regard for prescribed waiting
periods contained in said Options.
Pursuant to the 1992 Stock Compensation and 1989 Restricted Incentive Stock
Plans, in the event of a change in control of the Company without approval of
the majority of members of the Board of Directors in office immediately prior to
the event, all restrictions on outstanding Restricted Stock shall immediately
lapse if the related Option Shares have not been disposed of prior to such
change in control.
23
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16 of the Securities and Exchange Act of 1934 requires Directors,
executive officers and persons, if any, owning more than ten percent of a class
of the Company's equity securities to file with the Securities and Exchange
Commission ("SEC") and the New York Stock Exchange initial reports of ownership
and reports of changes in ownership of the Company's equity and derivative
securities.
Based solely upon a review of the copies of the forms furnished to the
Company, or written representations from certain reporting persons that no Forms
5 were required, the Company believes that during the fiscal 1995 year all
filing requirements applicable to its officers and Directors were met except one
report on Form 4 of Mr. Juetten, reflecting the exercise of a stock option under
a Company benefit plan was filed late.
PERFORMANCE GRAPH
The following Performance Graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates such information by reference, and shall not otherwise be deemed
filed under such Acts.
The graph compares the yearly percentage change in the cumulative total
shareholder return on the Company's Common Stock (as measured by dividing: (i)
the sum of: (A) the cumulative amount of dividends for the measurement period,
assuming dividend reinvestment and treating as a special dividend the
distribution on August 21, 1992 of one share of 25 CENTS par value common stock
of Global Industrial Technologies, Inc. (formerly INDRESCO Inc.) for each five
shares of the Company's issued and outstanding Common Stock held of record
August 7, 1992 and (B) the difference between the Company's share price at the
end and the beginning of the measurement period; by (ii) the share price at the
beginning of the measurement period) with the cumulative total return assuming
reinvestment of dividends of (A) the S&P 500 Index and (B) the S&P Oil Well
Equipment & Service Index.
24
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
DRESSER INDUSTRIES INC S&P 500 COMPOSITE OIL WELL EQUIPMENT & SERVICE
<S> <C> <C> <C>
1990 100 100 100
1991 117.80 133.50 110.03
1992 120.29 146.79 104.15
1993 139.47 168.72 109.99
1994 143.86 175.25 108.87
1995 145.79 221.58 113.50
</TABLE>
Prepared by Standard & Poor's Compustat, a division of McGraw-Hill, Inc.
The foregoing notice and proxy statement are sent by order of the Board of
Directors.
REBECCA R. MORRIS
VICE PRESIDENT -- CORPORATE COUNSEL
AND SECRETARY
February 8, 1996
25
<PAGE>
--------------------------------
--------------------------------
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD
MARCH 21, 1996
AND
PROXY STATEMENT
[LOGO]
DRESSER INDUSTRIES, INC.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
--------------------------------------
--------------------------------------
<PAGE>
[RECORD SHAREHOLDER CARD]
DRESSER INDUSTRIES, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WILLIAM E. BRADFORD, JOHN J. MURPHY AND BILL D. ST. JOHN, or any of them,
with power of substitution to each, are hereby authorized to represent the
undersigned at the Annual Meeting of Shareholders of Dresser Industries, Inc.,
to be held in the Pavilion at Trammell Crow Center, 2001 Ross Avenue, Dallas,
Texas, on March 21, 1996 at 10:00 a.m., and to vote the number of shares which
the undersigned would be entitled to vote if personally present on all matters
properly coming before the meeting or any adjournment thereof. The proxies are
authorized to vote in their discretion upon such other business as may properly
come before the Meeting and any and all adjournments thereof.
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION, JUST SIGN THE
REVERSE SIDE; NO BOXES NEED TO BE CHECKED.
THIS PROXY WILL BE VOTED AS YOU DIRECT; IN THE ABSENCE OF SUCH DIRECTION, IT
WILL BE VOTED "FOR" ALL NOMINEES.
(over)
<PAGE>
DRESSER INDUSTRIES, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" DIRECTORS.
1. ELECTION OF DIRECTORS:
Nominees: W. Bradford, S. Casey, L. Eagleburger, S. Earle, R. Fulgham, J. Gavin,
R. Hunt, L. Martin, J. Murphy, L. Olmer, J. Precourt, B. St. John and R. Vieser.
<TABLE>
<S> <C>
/ / FOR all nominees / / VOTE WITHHELD from all nominees
</TABLE>
To withhold authority to vote for one or more individual nominees, write the
nominee name(s) on the line below.
- --------------------------------------------------------------------------------
DATED ___________________ , 1996
________________________________
Signature
________________________________
Signature
Please sign your name as it
appears hereon. Joint owners
should each sign. Executors,
administrators, trustees, etc.,
should give full title as such.
If the signer is a corporation,
please sign full corporate name
by duly authorized officer.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE
