-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JYFavAtirwibS9hLQKLIFwEd+o5iY9rqYFf4itQuw/ZLt9H3zt95jL8SlPqcvRhh yE1RjrOzxF3KwO0/GklZDA== 0000912057-96-016683.txt : 19960809 0000912057-96-016683.hdr.sgml : 19960809 ACCESSION NUMBER: 0000912057-96-016683 CONFORMED SUBMISSION TYPE: 424B2 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960808 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRESSER INDUSTRIES INC /DE/ CENTRAL INDEX KEY: 0000030099 STANDARD INDUSTRIAL CLASSIFICATION: ENGINES & TURBINES [3510] IRS NUMBER: 750813641 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 424B2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-01303 FILM NUMBER: 96606122 BUSINESS ADDRESS: STREET 1: 2001 ROSS AVE CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2147406000 MAIL ADDRESS: STREET 1: P O BOX 718 CITY: DALLAS STATE: TX ZIP: 75221 424B2 1 424B2 Filed pursuant to Rule 424(b)(2) Registration No. 333-01303 PROSPECTUS SUPPLEMENT (To Prospectus Dated April 23, 1996) [LOGO] $300,000,000 DRESSER INDUSTRIES, INC. 7.60% DEBENTURES DUE 2096 The 7.60% Debentures Due 2096 (the "Debentures") of Dresser Industries, Inc. (the "Company") will mature on August 15, 2096. Interest on the Debentures is payable semi-annually on February 15 and August 15 of each year, commencing February 15, 1997. The Debentures are not redeemable prior to maturity and will not be entitled to any sinking fund. The Debentures will be represented by one or more Global Securities registered in the name of the nominee of The Depository Trust Company, which will act as the Depositary. Interests in the Debentures represented by Global Securities will be shown on, and transfers thereof will be effected only through, records maintained by the Depositary and its direct and indirect participants. Except as described herein, Debentures in definitive form will not be issued. Settlement will be made in immediately available funds. The Global Securities will trade in the Depositary's Same-Day Funds Settlement System until maturity, and secondary market trading activity in the Global Securities will therefore settle in immediately available funds. THESE SECURITIES 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 PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------------------- PRICE TO UNDERWRITING PROCEEDS TO PUBLIC(1) DISCOUNT COMPANY(1)(2) Per Debenture......................... 99.709% 1.125% 98.584% Total................................. $299,127,000 $3,375,000 $295,752,000 - --------------------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from August 9, 1996. (2) Before deducting expenses payable by the Company estimated at $250,000. The Debentures are offered subject to receipt and acceptance by the Underwriters, to prior sale and to the Underwriters' right to reject any order in whole or in part and to withdraw, cancel or modify the offer without notice. It is expected that delivery of the Debentures will be made through the facilities of The Depository Trust Company on or about August 9, 1996. SALOMON BROTHERS INC MORGAN STANLEY & CO. INCORPORATED The date of this Prospectus Supplement is August 6, 1996. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE DEBENTURES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. USE OF PROCEEDS The net proceeds from the sale of the Debentures are estimated to be approximately $295.5 million (after deducting underwriting discounts and estimated offering expenses to be paid by the Company). The Company intends to use the net proceeds from the sale of the Debentures offered hereby for the repayment of commercial paper and for general corporate purposes, including, without limitation, acquisitions and the repurchase from time to time of outstanding shares of the Company's common stock pursuant to the Company's common stock repurchase program. Between May 1, 1996 and July 31, 1996, the Company repurchased 4,068,000 shares of its common stock at an average cost of $28.76 per share (for total purchases of $117.0 million) pursuant to the Company's common stock repurchase program. The Company, under its current authorization to purchase up to $400 million of its outstanding shares of common stock, had repurchased approximately $200 million of its shares of common stock through July 31, 1996. The Company financed a portion of such common stock repurchases by issuing commercial paper. Commercial paper outstanding as of July 31, 1996 amounted to $242.0 million and had a weighted average interest rate of 5.45 percent per annum. Prior to such use, the net proceeds from the sale of the Debentures will be placed in temporary investments. S-2 CAPITALIZATION The following table sets forth the capitalization of the Company and its consolidated subsidiaries as of April 30, 1996, and as adjusted to give effect to the repurchases of the Company's common stock as described in "Use of Proceeds" above and the issuance of commercial paper in connection therewith through July 31, 1996, and to give effect to the issuance of the Debentures offered hereby.
APRIL 30, 1996 ------------------------ ACTUAL AS ADJUSTED ---------- ------------ (MILLIONS OF DOLLARS) Cash and cash equivalents.................................................... $ 198.0 $ 251.5 ---------- ------------ ---------- ------------ Short-term debt U.S. commercial paper (1).................................................. $ 208.0 $ -- Other-primarily foreign bank loans......................................... 98.2 98.2 ---------- ------------ Total short-term debt...................................................... $ 306.2 $ 98.2 ---------- ------------ ---------- ------------ Long-term debt including current portion Notes, 6.25% due 2000...................................................... $ 300.0 $ 300.0 Senior notes, 8% due 2003.................................................. 149.3 149.3 Debentures, 7.60% due 2096................................................. -- 300.0 Other...................................................................... 14.9 14.9 ---------- ------------ Total long-term debt including current portion............................. $ 464.2 $ 764.2 ---------- ------------ ---------- ------------ Shareholders' Equity......................................................... $ 1,722.8 $ 1,722.8 Less: Treasury shares, at cost (2)......................................... (106.1) (217.1) ---------- ------------ Total shareholders' equity................................................. $ 1,616.7 $ 1,505.7 ---------- ------------ ---------- ------------
- ------------------------ (1) The above adjusted U.S. commercial paper amount gives effect to the application of a portion of the net proceeds to repay U.S. commercial paper outstanding in the amount of $242.0 million as of July 31, 1996. (2) Between May 1, 1996 and July 31, 1996, the Company purchased 4,068,600 of its shares of common stock at a cost of $117.0 million. The impact of such purchases, net of Treasury shares issued for benefit plans, are reflected in the as adjusted Treasury shares amount. RATIO OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges for the Company for each of the five years in the period ended October 31, 1995 and for the six months ended April 30, 1996 are as follows:
SIX MONTHS YEAR ENDED OCTOBER 31, ENDED APRIL 30, ----------------------------------------------------- 1996 1995 1994 1993 1992 1991 ----------------- --------- --------- --------- --------- --------- Ratio of Earnings to Fixed Charges...................... 5.49 6.29 10.90* 4.77 2.96 4.08
- ------------------------ * Ratio of 6.43 excluding gain on the sale of Western Atlas International, Inc. For information regarding the method of computing such ratio, see "Ratio of Earnings to Fixed Charges" in the accompanying Prospectus. S-3 DESCRIPTION OF THE DEBENTURES THE FOLLOWING DESCRIPTION OF THE PARTICULAR TERMS OF THE DEBENTURES OFFERED HEREBY SUPPLEMENTS, AND TO THE EXTENT INCONSISTENT THEREWITH REPLACES, THE DESCRIPTION OF THE GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES SET FORTH IN THE PROSPECTUS, TO WHICH DESCRIPTION REFERENCE IS HEREBY MADE. THE STATEMENTS HEREIN DO NOT PURPORT TO BE COMPLETE. ALL SUCH STATEMENTS ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO THE ACCOMPANYING PROSPECTUS AND THE PROVISIONS OF THE INDENTURE, AS SUPPLEMENTED, THE FORMS OF WHICH HAVE BEEN OR WILL BE FILED ON OR BEFORE AUGUST 9, 1996 WITH THE SECURITIES AND EXCHANGE COMMISSION. GENERAL The Debentures will be limited to $300,000,000 aggregate principal amount and will mature on August 15, 2096. The Debentures will bear interest at the rate per annum shown on the cover of this Prospectus Supplement from August 9, 1996 or from the most recent Interest Payment Date to which interest has been paid or provided for, payable semiannually on February 15 and August 15 of each year, commencing February 15, 1997, to the persons in whose names Debentures are registered at the close of business on the February 1 or August 1, as the case may be, next preceding such Interest Payment Date. The principal of and interest on the Debentures is payable only in U.S. dollars. The Debentures are not redeemable prior to maturity and will not be entitled to any sinking fund. Settlement for the Debentures will be made in immediately available federal funds, and all secondary trading in the Debentures through The Depository Trust Company will settle in immediately available, federal funds. DEFEASANCE AND COVENANT DEFEASANCE Under certain circumstances, the Company will be deemed to have discharged the entire indebtedness on all of the outstanding Debentures by defeasance. See "Description of Debt Securities -- Defeasance of the Indenture and Debt Securities" in the accompanying Prospectus for a description of the terms and conditions of any such defeasance. On substantially the same terms and conditions, the Company may be relieved from the obligation to comply with certain covenants in the Indenture, including those described in the Prospectus under the heading "Description of Debt Securities -- Restrictions on Secured Debt", "-- Restrictions on Sale and Leaseback Transactions", and "-- Restrictions on Mergers, Consolidations and Transfers of Assets." (Sections 8.01, 8.02 and 8.03). UNDERWRITING Subject to the terms and conditions set forth in the underwriting agreement among the Company, Salomon Brothers Inc and Morgan Stanley & Co. Incorporated, as Underwriters (the "Underwriting Agreement"), the Company has agreed to sell to each of the Underwriters, and each of the Underwriters has severally agreed to purchase, the principal amount of Debentures set forth opposite its name below.
PRINCIPAL AMOUNT UNDERWRITER OF DEBENTURES - ------------------------------------------------------------------------------------- ----------------- Salomon Brothers Inc ................................................................ $ 150,000,000 Morgan Stanley & Co. Incorporated.................................................... 150,000,000 ----------------- Total.............................................................................. $ 300,000,000 ----------------- -----------------
In the Underwriting Agreement, the several Underwriters have agreed, subject to the terms and conditions set forth therein, to purchase all the Debentures offered hereby if any Debentures are purchased. In the event of default by any Underwriter, the Underwriting Agreement provides that, in certain circumstances, the Underwriting Agreement may be terminated. The Underwriters have advised the Company that they propose initially to offer the Debentures to the public at the public offering price set forth on the cover page of this Prospectus Supplement, and to certain dealers at such price less a concession of not more than 0.625% of the principal amount of the S-4 Debentures. The Underwriters may allow, and such dealers may reallow, a concession of not more than 0.250% of the principal amount of the Debentures to certain other dealers. After the initial public offering, the public offering price and concessions may be changed from time to time. The Debentures are a new issue of securities with no established trading market and will not be listed on any national securities exchange. The Company has been advised by the Underwriters that they intend to make a market in the Debentures, but they are not obligated to do so and may discontinue such market making at any time without notice. No assurance can be given as to the liquidity of, or trading markets for, the Debentures. The Company has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, or contribute to payments which the Underwriters may be required to make in respect thereof. LEGAL MATTERS The validity of the Debentures offered hereby will be passed upon by Rebecca R. Morris, Esq., Vice President -- Corporate Counsel and Secretary of the Company. Mrs. Morris beneficially owns 9,200 shares of the Company's common stock and holds options to purchase an additional 24,750 shares of such common stock and restrictive incentive stock awards covering 4,909 shares of such common stock. Certain legal matters in connection with the offering of the Debentures will be passed upon for the Underwriters by Cravath, Swaine & Moore, New York, New York. S-5 PROSPECTUS $500,000,000 DRESSER INDUSTRIES, INC. DEBT SECURITIES ------------------ Dresser Industries, Inc. (the "Company" or "Dresser") may offer from time to time unsecured debt securities (the "Debt Securities") consisting of debentures, notes or other evidences of indebtedness with an aggregate initial offering price not to exceed $500,000,000. The Debt Securities may be offered as separate series in amounts, at prices and on terms to be determined at the time of sale. The specific designation, aggregate principal amount, rate (or method of calculation) and time of payment of interest, if any, authorized denominations, maturity, ranking, any redemption terms, any listing on a securities exchange, the initial public offering price and other specific terms in connection with the offering and sale of the Debt Securities in respect of which this Prospectus is being delivered will be set forth in an applicable Prospectus Supplement. ------------------------ THESE SECURITIES 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 PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ------------------------ The Debt Securities will be sold either through underwriters, dealers or agents, or directly by the Company. The applicable Prospectus Supplement will set forth the names of any underwriters or agents involved in the sale of the Debt Securities in respect of which this Prospectus is being delivered, if any, the proposed amounts, if any, to be purchased by underwriters and the compensation, if any, of such underwriters or agents. This Prospectus may not be used to consummate sales of Debt Securities unless accompanied by a Prospectus Supplement. ------------------------ The date of this Prospectus is April 23, 1996. AVAILABLE INFORMATION The Company is 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 can be inspected and copied at the offices of the Commission, 450 5th Street, N.W., Washington, D.C. 20549, Room 1024; CITICORP Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621-2511; and Seven World Trade Center, New York, New York 10048. Copies of such material can also be obtained from the Public Reference Section of the Commission at 450 5th Street, N.W., Judiciary Plaza, Washington, D.C. 20549 at prescribed rates. Additionally, reports, proxy statements and other information concerning Dresser can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and at the offices of the Pacific Stock Exchange, Incorporated, 301 Pine Street, San Francisco, California 94014, on which Exchanges the Company's Common Stock is listed. The Company has filed with the Commission a registration statement on Form S-3 (together with all amendments, supplements, and exhibits thereto, referred to as the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Debt Securities offered hereby. This Prospectus, which forms a part of the Registration Statement, does not contain all the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is hereby made to the Registration Statement. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents, which have been filed by the Company with the Commission, are incorporated herein by reference: 1. The Company's Annual Report on Form 10-K for its fiscal year ended October 31, 1995; and 2. The Company's Quarterly Report on Form 10-Q for the period ended January 31, 1996. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering of the Debt Securities offered hereby shall be deemed to be incorporated by reference herein and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any other subsequently filed document which also is incorporated by reference herein) modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed to constitute a part hereof except as so modified or superseded. The Company will furnish without charge to each person to whom this Prospectus is delivered, upon written or oral request, a copy of any or all of the documents incorporated herein by reference (not including exhibits to such documents, unless such exhibits are specifically incorporated by reference in such documents). Requests should be addressed to: The Secretary, Dresser Industries, Inc., P. O. Box 718, Dallas, Texas 75221, (Telephone No. 214/740-6000). 2 THE COMPANY Dresser Industries, Inc., together with its subsidiaries (hereinafter "Dresser" or "Registrant" or the "Company"), is a supplier of highly engineered products, technical services and project management for hydrocarbon energy-related activities that are primarily utilized in oil and gas drilling, production and transmission; gas distribution; power generation; gas processing; petroleum refining and marketing; and petrochemical production. Demand for Dresser's products and services is generally determined by global demand for energy and oil and gas by-products. Dresser was incorporated under the laws of Delaware in 1956 as a successor to a Pennsylvania corporation organized in 1938 by the consolidation of S. R. Dresser Manufacturing Company and Clark Bros. Company. Both were carrying on businesses founded in 1880. Dresser's executive offices are located at 2001 Ross Avenue, Dallas, Texas 75201 (telephone number 214/740-6000). USE OF PROCEEDS Unless otherwise stated in the applicable Prospectus Supplement, the Company will use the net proceeds from the sale of Debt Securities for general corporate purposes, including acquisitions, the reduction of short-term and long-term borrowing, repurchase of Company securities and for other business opportunities. Any specific allocation of the net proceeds of an offering of Debt Securities will be described in the applicable Prospectus Supplement. The precise amount and timing of sales of the Debt Securities will be dependent on the Company's capital requirements, market conditions and the availability and cost of other funds to the Company. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the consolidated ratio of earnings to fixed charges for the Company for the periods indicated. For purposes of computing such ratio, earnings consist of income before (i) taxes, (ii) minority interests, (iii) extraordinary items, (iv) amortization of capitalized interest and (v) fixed charges (adjusted to exclude capitalized interest) and after adjustment for unremitted earnings of less than majority owned subsidiaries. Fixed charges consist of interest on all indebtedness, amortization and debt expense, discount and premium and a portion of rentals deemed to represent an interest factor.
3 MONTHS ENDED JANUARY 31 YEAR ENDED OCTOBER 31 - --------------------- ----------------------------------------------------- 1996 1995 1994 1993 1992 1991 - --------------------- --------- --------- --------- --------- --------- 4.90 6.29 10.90* 4.77 2.96 4.08
- ------------------------ * Ratio of 6.43 excluding gain on sale of Western Atlas International, Inc. DESCRIPTION OF DEBT SECURITIES The Debt Securities are to be issued under an Indenture (the "Indenture"), dated as of April 18, 1996 between the Company and Texas Commerce Bank National Association, as Trustee (the "Trustee"). A copy of the Indenture is filed as an exhibit to the Registration Statement. The following summaries of certain provisions of the Indenture do not purport to be complete, and are subject to and are qualified in their entirety by reference to all of the provisions of the Indenture, including the definitions of certain terms used therein. Wherever particular sections or defined terms of the Indenture are referred to, it is intended that such sections or defined terms shall be incorporated herein by reference in their entirety. Capitalized terms not defined herein shall have the meanings given to them in the Indenture. Further terms of the Debt Securities in respect of which this Prospectus is being delivered will be set forth in the applicable Prospectus Supplement. 3 GENERAL Debt Securities consisting of debentures, notes and other evidences of indebtedness ranking on a parity with all other unsecured and unsubordinated indebtedness of the Company may be issued from time to time in series under the Indenture. The Indenture does not limit the aggregate principal amount of Debt Securities or of any particular series of Debt Securities which may be issued thereunder. Reference is made to the applicable Prospectus Supplement for the following terms and other information with respect to the Debt Securities being offered hereby: (i) the title of such Debt Securities; (ii) any limit on the aggregate principal amount of such Debt Securities; (iii) the date or dates (or manner of determining the same) on which such Debt Securities will mature; (iv) the rate or rates (or manner of determining the same) at which such Debt Securities will bear interest, if any, and the date or dates from which such interest will accrue; (v) the dates (or manner of determining the same) on which such interest will be payable and the Regular Record Dates for such Interest Payment Dates; (vi) the place or places where the principal of and premium, if any, and interest, if any, on such Debt Securities will be payable; (vii) the obligation of the Company, if any, to redeem or purchase Debt Securities pursuant to any mandatory or optional sinking fund or analogous provisions; (viii) the date, if any, after which, and the price or prices at which, such Debt Securities are payable pursuant to any optional or mandatory redemption provisions; (ix) the denominations in which such Debt Securities will be issuable, if other than denominations of $1,000 and any integral multiple thereof; (x) whether such Debt Securities are to be issued as discounted Debt Securities; (xi) any "Events of Default" with respect to such Debt Securities in addition to those described herein; (xii) whether such Debt Securities are to be issued in whole or in part in the form of one or more global securities ("Global Securities") and, if so, the identity of the depositary, if any, for such Global Securities; and (xiii) the identity of any trustee, authenticating agent, paying agent or registrar with respect to such Debt Securities, if other than the Trustee; and (xiv) other specific terms of such Debt Securities. Unless otherwise indicated in the applicable Prospectus Supplement, principal of and premium, if any, and interest, if any, on the Debt Securities will be payable, and the transfer of the Debt Securities will be registrable, at the office or agency of the Trustee in Dallas, Texas or New York, New York, except that, at the option of the Company, interest may be paid by mailing a check to the person entitled thereto as it appears on the Security Register. (SECTIONS 2.03, 4.06 AND 10.11) No service charge will be made to any Holder for any transfer or exchange of Debt Securities, except that the Company may require payment of a sum sufficient to cover any tax or other governmental charge which may be imposed in relation thereto. (SECTION 2.06) Some or all of the Debt Securities may be issued as discounted Debt Securities (bearing no interest or bearing interest at a rate which at the time of issuance is below market rates) to be sold at a substantial discount below their stated principal amount. Federal income tax consequences and other special considerations applicable to any such discounted Debt Securities will be described in the applicable Prospectus Supplement. There are no covenants or provisions contained in the Indenture which may afford Holders of Debt Securities protection in the event of a restructuring or other highly leveraged transaction involving the Company. GLOBAL SECURITIES The Debt Securities of a series may be issued in whole or in part in the form of one or more Global Securities that will be deposited with or on behalf of a depositary located in the United States (a "Depositary") identified in the Prospectus Supplement relating to such series. (SECTIONS 1.01 AND 2.01) BOOK-ENTRY DEBT SECURITIES Unless otherwise indicated in the applicable Prospectus Supplement, Debt Securities which are to be represented by a Global Security to be deposited with or on behalf of a Depositary will be represented by a Global Security registered in the name of such Depositary or its nominee. Upon the issuance of a Global Security in registered form, the Depositary for such Global Security will credit, on its book-entry 4 registration and transfer system, the respective principal amounts of the Debt Securities represented by such Global Security to the accounts of institutions that have accounts with such Depositary or its nominee ("participants"). The accounts to be credited shall be designated by the underwriters or agents of such Debt Securities or by the Company, if such Debt Securities are offered and sold directly by the Company. Ownership of beneficial interests in such Global Securities will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests by participants in such Global Securities will be shown on, and the transfer of such ownership interests will be effected only through, records maintained by the Depositary or its nominee for such Global Security. Ownership of beneficial interests in Global Securities by persons that hold through participants will be shown on, and the transfer of such ownership interests within such participant will be effected only through records maintained by such participant. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in a Global Security. So long as the Depositary for a Global Security in registered form, or its nominee, is the registered owner of such Global Security, such Depositary or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by such Global Security for all purposes under the Indenture governing such Debt Securities. Except as set forth below, owners of beneficial interests in such Global Securities will not be entitled to have Debt Securities of the series represented by such Global Security registered in their names, will not receive or be entitled to receive physical delivery of Debt Securities of such series in definitive form and will not be considered the owners or holders thereof under the Indenture. Payment of principal of and premium, if any, and interest, if any, on Debt Securities registered in the name of or held by a Depositary or its nominee will be made to the Depositary or its nominee, as the case may be, as the registered owner or holder of the Global Security representing such Debt Securities. None of the Company, the Trustee, any Paying Agent or the Registrar for such Debt Securities will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security for such Debt Securities or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company expects that the Depositary for Debt Securities of a particular series, upon receipt of any payment of principal of and premium, if any, and interest, if any, on a Global Security, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Security as shown on the records of such Depositary. The Company also expects that payments by participants to owners of beneficial interests in such Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such participants. However, the Company has no control over the practices of the Depositary or the participants and there can be no assurance that these practices will not be changed. A Global Security may not be transferred except as a whole by the Depositary for such Global Security to a nominee of such Depositary or by a nominee of such Depositary to such Depositary or another nominee of such Depositary or by such Depositary or any such nominee to a successor of such Depositary or a nominee of such successor. If a Depositary for Debt Securities of a particular series is at any time unwilling or unable to continue as Depositary and a successor Depositary is not appointed by the Company within 90 days, the Company will issue Debt Securities in definitive registered form in exchange for the Global Security or Securities representing such Debt Securities. In addition, the Company may at any time and in its sole discretion determine not to have any Debt Securities represented by one or more Global Securities and, in such event, will issue Debt Securities in definitive registered form in exchange for the Global Securities representing such Debt Securities. In any such instance, an owner of a beneficial interest in a Global Security will be entitled to physical delivery in definitive form of Debt Securities of the series represented by such Global Security equal in principal amount to such beneficial interest and to have such Debt Securities registered in its name. (SECTION 2.10) 5 RESTRICTED SUBSIDIARIES The various restrictive provisions of the Indenture apply to the Company and its Restricted Subsidiaries. The term "Restricted Subsidiary" is defined under the Indenture to include any Subsidiary existing as of the date of the Indenture or any corporation that is the successor to such a Subsidiary. The term "Subsidiary" is defined under the Indenture to mean any corporation of which at least a majority of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of said corporation is at the time owned by the Company or by the Company and one or more Subsidiaries or by one or more Subsidiaries. (SECTION 1.01) As a result of the definitions of the terms "Restricted Subsidiary" and "Subsidiary" in the Indenture, the restrictive provisions of the Indenture will not apply to (i) any corporation coming into existence or acquired after the date of the Indenture or (ii) any partnership or other entity that is not organized as a corporation, in each case regardless of whether such corporation, partnership or other entity is controlled by the Company or whether the Company owns a majority of the outstanding capital stock of or other equity interests in such corporation, partnership or other entity. As of the date of this Prospectus, a material portion of the business of the Company is conducted through partnerships. RESTRICTIONS ON SECURED DEBT The Indenture provides that the Company will not, and will not cause or permit a Restricted Subsidiary to, create, incur, assume or guarantee any Secured Debt unless the Debt Securities will be secured equally and ratably with (or prior to) such Secured Debt, with certain exceptions. The foregoing restrictions do not prohibit the creation, incurrence, assumption or guarantee of Secured Debt which is secured by (i) certain Security Interests to secure payment of the cost of acquisition, construction, development or improvement of property, (ii) Security Interests on property at the time of its acquisition by the Company or a Restricted Subsidiary, which Security Interests secure obligations assumed by the Company or a Restricted Subsidiary, or on the property of a corporation or other entity at the time it is merged into the Company or a Restricted Subsidiary (other than any Security Interests created in contemplation of the acquisition of such property or the consummation of such a merger), (iii) Security Interests arising from conditional sales agreements or title retention agreements with respect to property acquired by the Company or a Restricted Subsidiary and (iv) Security Interests securing Indebtedness of a Restricted Subsidiary owing to the Company or to another Restricted Subsidiary. Additionally, such permitted Secured Debt includes any extension, renewal or refunding, in whole or in part, of Secured Debt permitted at the time of the original incurrence thereof. (SECTION 4.03) In addition to the foregoing, the Company and its Restricted Subsidiaries may create, incur, assume or guarantee Secured Debt, without equally and ratably securing the Debt Securities, if immediately thereafter the sum of (i) the aggregate principal amount of all Secured Debt outstanding (excluding Secured Debt permitted under clauses (i) through (iv) of the immediately preceding paragraph) and (ii) all Attributable Debt (as hereinafter defined) in respect of Sale and Leaseback Transactions (as hereinafter defined) as of the date of determination would not exceed 10% of Consolidated Net Tangible Assets. (SECTION 4.03) The term "Consolidated Net Tangible Assets" is defined under the Indenture to mean the total amount of assets which would be included on a consolidated balance sheet of the Company and its subsidiaries under generally accepted accounting principles (less applicable reserves and other properly deductible terms) after deducting therefrom: (i) all short-term liabilities, except for liabilities 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 liabilities in respect of retiree benefits other than pensions and postemployment benefits for which the Company is required to accrue pursuant to Statement of Financial Accounting Standards No. 106 and No. 112, respectively, and (ii) all goodwill, trade names, trademarks, patents, unamortized debt discount, unamortized expense incurred in the issuance of debt and other intangible assets. (SECTION 1.01) The term "Consolidated Net Tangible Assets" includes the assets of majority owned partnerships that do not constitute Restricted Subsidiaries. See "-- Restricted Subsidiaries." 6 The term "Secured Debt" is defined under the Indenture to include any indebtedness for borrowed money of, or upon which interest is payable by, the Company or any Restricted Subsidiary or any such indebtedness of others guaranteed by the Company or any Restricted Subsidiary which is secured by (i) a Security Interest in any property of the Company or any Restricted Subsidiary or (ii) a Security Interest in shares of stock owned 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 a 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 such indebtedness which immediately prior thereto was not Secured Debt shall be deemed to be the creation of Secured Debt at the time security is given. RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS The Indenture provides that the Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction, unless (i) the Company or such Restricted Subsidiary would be entitled to incur Secured Debt permitted by the Indenture (other than by reason of provisions described in clauses (i) through (iv) of the first paragraph under "-- Restrictions on Secured Debt") in an amount equal to the Attributable Debt in respect of such Sale and Leaseback Transaction without equally and ratably securing the Debt Securities or (ii) notice is promptly given to the Trustee of the Sale and Leaseback Transaction, fair value is received by the Company or a Restricted Subsidiary for the property sold (as determined in good faith pursuant to a Board Resolution delivered to the Trustee) and the Company or a Restricted Subsidiary applies or commits to apply an amount equal to the net proceeds of the property sold pursuant to the Sale and Leaseback Transaction to the redemption of Debt Securities of any series or the retirement of other Funded Debt of the Company or any Restricted Subsidiary not subordinate or junior in right of payment to the Debt Securities. In lieu of applying all or any part of such amount to the redemption of Debt Securities or the retirement of Funded Debt, the Company may deliver Debt Securities to the Trustee for cancellation and thereby reduce the amount to be applied to the redemption of Debt Securities or retirement of Funded Debt by an amount equal to the aggregate principal amount of Debt Securities delivered. (SECTION 4.04) The term "Attributable Debt" is defined under the Indenture to mean, in respect of a Sale and Leaseback Transaction, the present value (discounted at the weighted average effective interest rate per annum of the outstanding Debt Securities, of all series, compounded semi-annually) of the obligation of the lessee for rental payments during the remaining term of the lease included in 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 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. (SECTION 1.01) The term "Sale and Leaseback Transaction" is defined under the Indenture to include a sale or transfer made by the Company or a Restricted Subsidiary (except a sale or transfer made to the Company or another Restricted Subsidiary) of any property if such sale or transfer is made with the intention of leasing such property to the Company or a Restricted Subsidiary, except (i) a lease for a period not exceeding 60 months and (ii) a lease that secures or relates to certain governmental obligations issued in connection with the financing of the cost of construction or acquisition of such property. (SECTION 1.01) RESTRICTIONS ON MERGERS, CONSOLIDATIONS AND TRANSFERS OF ASSETS The Indenture provides that the Company 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 the Company relating to the Debt Securities and the Indenture and (iii) immediately after the transactions no Default exists. Upon any such consolidation, 7 merger, sale, assignment or transfer, the successor corporation will be substituted for the Company under the Indenture. The successor corporation may then exercise every power and right of the Company under the Indenture, and the Company will be released from all of its liabilities and obligations in respect of the Debt Securities and the Indenture. In the event the Company leases all or substantially all of its assets, the lessee corporation will be the successor to the Company and may exercise every power and right of the Company under the Indenture, but the Company will not be released from its obligations to pay the principal of and premium, if any, and interest, if any, on the Debt Securities. (SECTION 5.01) AMENDMENTS OF THE INDENTURE Amendments of the Indenture or the Debt Securities of any series may be made by the Company and the Trustee without the consent of the Holders of such Debt Securities (i) to cure any ambiguity, defect or inconsistency or to make such provisions with respect to matters or questions arising under the Indenture as may be necessary or desirable and not inconsistent with the Indenture or with any indenture supplemental thereto or any Board Resolution establishing any series of Debt Securities, provided that such amendment does not adversely affect the rights of the Holders thereof, (ii) to comply with the merger or sale of assets provision in the Indenture, (iii) to add additional covenants, (iv) to establish the form or terms of Debt Securities of any additional series, (v) to provide for the acceptance of appointment of a successor Trustee or (vi) to provide for the issuance of Debt Securities with interest coupons with respect to any such series or (vii) to provide for the exchange of Global Securities for Debt Securities issued in definitive form and to make all appropriate changes for such purpose. (SECTION 9.01) Amendments of the Indenture affecting the Debt Securities of any series or amendments of the Debt Securities themselves of such series may be made by the Company and the Trustee with the consent of the Holders of 66 2/3% in aggregate principal amount of the Debt Securities of such series, provided that, without the consent of each Holder affected, no such amendment shall be made which will (i) reduce the percentage in principal amount of the Debt Securities whose Holders must consent to an amendment, (ii) reduce the rate of or change the time for payment of interest on any Debt Security, (iii) reduce the principal of, change the Stated Maturity of, reduce the amount payable on redemption of or alter the requirements with respect to the mandatory redemption, if any, of any Debt Security, (iv) make any Debt Security payable in money other than that stated in such Debt Security or (v) make any change in the Indenture provisions with respect to waiver of existing Defaults, rights of Holders to receive payment and to bring suit for the enforcement of such rights, or the requirement of obtaining the written consent of each affected Holder to certain amendments of the Indenture or any Debt Security. (SECTION 9.02) EVENTS OF DEFAULT An "Event of Default" with respect to any series of Debt Securities is defined under the Indenture to include: (i) failure for 30 days to pay any interest on any Debt Security of such series when due, (ii) failure to pay the principal of and premium, if any, of any Debt Security of such series when due, (iii) failure for 90 days after receipt of notice to perform any other agreement of the Company with respect to Debt Securities of such series or the Indenture for the benefit of Debt Securities of such series, (iv) a default under any bond, indenture, note or other evidence of indebtedness for money borrowed by the Company or a 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 such indebtedness with a principal amount then outstanding in excess of $25,000,000, which default shall constitute a failure to pay any portion of the principal of such indebtedness when due or shall result in the acceleration of such indebtedness, (v) certain events of bankruptcy, insolvency or reorganization of the Company or a Material Subsidiary and (vi) any other event established as an event of default in accordance with the Indenture with respect to Debt Securities of such series. (SECTION 6.01) The term "Material Subsidiary" is defined under the Indenture to mean any consolidated subsidiary of the Company (whether a corporation or a partnership or other entity not organized as a corporation) if such consolidated subsidiary would be deemed as of the date of determination a "significant subsidiary" under the rules of the Securities and Exchange Commission. (SECTION 1.01) 8 The Indenture provides that the Trustee will, within 90 days after the occurrence of a Default in respect of any series of Debt Securities, give to the Holders of the Debt Securities of such series notice of all uncured and unwaived Defaults known to it; provided, however, that, except in the case of a Default in the payment of the principal of or any interest on any of the Debt Securities of such series, such Trustee may withhold such notice if it in good faith determines that the withholding of such notice is in the interest of the Holders of the Debt Securities of such series. (SECTION 7.05) If an Event of Default shall occur and be continuing with respect to any series of Debt Securities, the Trustee may proceed to protect and enforce its rights and those of the Holders of Debt Securities of such series. (SECTION 6.03) If any Event of Default shall occur and be continuing with respect to any series of Debt Securities, either the Trustee or the Holders of at least 25% in principal amount of the Debt Securities of such series may declare the principal of and accrued interest on all the Debt Securities of such series to be due and payable. The Holders of a majority in principal amount of the Debt Securities of such series may rescind an acceleration and its consequences, but only if all existing Events of Default with respect to the Debt Securities of such series have been cured or waived, except nonpayment of principal or interest that has become due solely because of the acceleration. (SECTION 6.02) The Holders of a majority in principal amount outstanding of the Debt Securities of such series may direct the Trustee as to the time, method and place of pursuing any remedy available to it or exercising any trust or power conferred on it with respect to the Debt Securities of such series and may waive any existing Default with respect to the Debt Securities of such series, except a Default in the payment of principal of or interest on any Debt Security of such series. (SECTIONS 6.04 AND 6.05) The Company is required to furnish to the Trustee annually a statement as to the absence of a Default. (SECTION 4.05) DEFEASANCE OF THE INDENTURE AND DEBT SECURITIES The Company may at any time satisfy its obligations with respect to payments of principal of and premium, if any, and interest, if any, on the Debt Securities of any series by irrevocably depositing in trust with the Trustee money or U.S. Government Obligations or a combination thereof sufficient to make such payments when due without reinvestment thereof. If such a deposit is sufficient to make all payments of (i) interest, if any, on the Debt Securities of such series prior to and on their redemption or maturity, as the case may be, and (ii) principal of and premium, if any, on the Debt Securities of such series when due upon redemption or at Stated Maturity, as the case may be, then all the obligations of the Company with respect to the Debt Securities of such series and the Indenture insofar as it relates to the Debt Securities of such series will be satisfied and discharged (except as otherwise provided in the Indenture). In the event of any such defeasance, Holders of the Debt Securities of such series would be able to look only to such trust fund for payment of principal of and premium, if any, and interest, if any, on the Debt Securities of such series until Stated Maturity or redemption. (SECTIONS 8.01, 8.02 AND 8.03) Such a Trust may only be established if, among other things, (i) the Company has obtained an opinion of legal counsel (which may be based on a ruling from, or published by, the Internal Revenue Service) to the effect that Holders of the Debt Securities of such series will not recognize income, gain or loss for federal income tax purposes as a result of such deposit, defeasance and discharge and will be subject to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such deposit, defeasance and discharge had not occurred and (ii) at that time, with respect to any series of Debt Securities then listed on The New York Stock Exchange, the rules of The New York Stock Exchange do not prohibit such deposit with the Trustee. (SECTION 8.02) ANNUAL REPORTS BY THE TRUSTEE To the extent required by the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), the Trustee shall, within 60 days after May 15 in each year, furnish to each Holder of Debt Securities an annual report that complies with Section 313 of the Trust Indenture Act. (SECTION 7.06) The Indenture does not require that the Company or the Trustee furnish any other reports, documents or information to the Holders of Debt Securities. 9 NOTICES AND COMMUNICATIONS Notices or communications to Holders of Debt Securities will be given by first-class mail or by overnight air courier to the addresses of such Holders as they appear in the Security Register. (SECTION 10.02) Holders of Debt Securities may communicate with other Holders with respect to their rights under the Indenture or the Debt Securities pursuant to the provisions of Section 312(b) of the Trust Indenture Act which require a trustee to provide security holders access to information regarding the addresses of other security holders in certain situations. (SECTION 10.03) GOVERNING LAW The Indenture and the Debt Securities will be governed by and construed in accordance with the laws of the State of Texas. (SECTION 10.13) INFORMATION CONCERNING THE TRUSTEE The Trustee under the Indenture is Texas Commerce Bank National Association. The Company maintains deposit accounts and banking relations with Texas Commerce Bank National Association. PLAN OF DISTRIBUTION The Company may sell the Debt Securities being offered hereby: (i) directly to purchasers, (ii) through agents, (iii) through underwriters, (iv) through dealers, or (v) through a combination of any such methods of sale. The distribution of the Debt Securities may be effected from time to time in one or more transactions either (i) at a fixed price or prices, which may be changed, (ii) at market prices prevailing at the time of sale; (iii) at prices related to such prevailing market prices; or (iv) at negotiated prices. Offers to purchase Debt Securities may be solicited directly by the Company or by agents designated by the Company from time to time. Any such agent, which may be deemed to be an underwriter, as that term is defined in the Securities Act, involved in the offer or sale of the Debt Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by the Company to such agent will be set forth, in the Prospectus Supplement or the Pricing Supplement. Unless otherwise indicated in the Prospectus Supplement or the Pricing Supplement, any such agent will be acting on a best efforts basis for the period of its appointment. Agents may be customers of, engaged in transactions with, or perform services for, the Company in the ordinary course of business. If an underwriter or underwriters are utilized in the sale, the Company will execute an underwriting agreement with such underwriter or underwriters at the time of sale to them and the names of the underwriters and the terms of the transactions will be set forth in the Prospectus Supplement, which will be used by the underwriters to make resales of the Debt Securities. If a dealer is utilized in the sale of the Debt Securities in respect of which this Prospectus is delivered, the Company will sell such Debt Securities to the dealer, as principal. The dealer may then resell such Debt Securities to the public at varying prices to be determined by such dealer at the time of resale. Underwriters, dealers, agents, and other persons may be entitled, under agreements which may be entered into with the Company, to indemnification against, or contribution with respect to, certain civil liabilities, including liabilities under the Securities Act. Underwriters and agents may engage in transactions with, or perform services for, the Company in the ordinary course of business. 10 LEGAL MATTERS The validity of the Debt Securities offered hereby will be passed upon by Rebecca R. Morris, Vice President -- Corporate Counsel and Secretary of the Company (who owns 9,200 shares of the Company's Common Stock and holds options to purchase an additional 24,750 shares of such common stock coupled with 4,909 restrictive incentive stock awards.). EXPERTS The consolidated financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K of Dresser Industries, Inc. and its subsidiaries for the year ended October 31, 1995 have been so incorporated in reliance on the report of Price Waterhouse LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. 11 NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ------------------------ TABLE OF CONTENTS
PAGE --------- PROSPECTUS SUPPLEMENT Use of Proceeds................................ S-2 Capitalization................................. S-3 Ratio of Earnings to Fixed Charges............. S-3 Description of the Debentures.................. S-4 Underwriting................................... S-4 Legal Matters.................................. S-5 PROSPECTUS Available Information.......................... 2 Incorporation of Certain Documents by Reference..................................... 2 The Company.................................... 3 Use of Proceeds................................ 3 Ratio of Earnings to Fixed Charges............. 3 Description of Debt Securities................. 3 Plan of Distribution........................... 10 Legal Matters.................................. 11 Experts........................................ 11
$300,000,000 DRESSER INDUSTRIES, INC. 7.60% DEBENTURES DUE 2096 [LOGO] SALOMON BROTHERS INC MORGAN STANLEY & CO. INCORPORATED PROSPECTUS SUPPLEMENT DATED AUGUST 6, 1996 -----END PRIVACY-ENHANCED MESSAGE-----