EXHIBIT 10.16
DESCRIPTION OF THE PLAN
GENERAL
The 1989 Director Retirement Plan ("Plan") was unanimously approved by the
disinterested (nonparticipating) members of the Board of Directors of Dresser on
August 17, 1989 and unanimously amended by such disinterested directors on July
15, 1993. The Plan has not been submitted to or acted upon by the shareholders
of Dresser.
The principal purposes of the Plan are to provide current compensation in
lieu of retirement benefits to those members of Dresser's Board of Directors who
are not also employees of Dresser, to assist Dresser in attracting and retaining
outside directors with experience and ability on a basis competitive with
industry practices, and to associate more fully the interests of such directors
with those of Dresser's shareholders.
The shares of Common Stock granted and delivered under the Plan shall be
treasury shares. The maximum number of shares to be issued under the Plan is
200,000.
The number and kind of shares issuable under the Plan, or which may be
awarded to any participant, shall be adjusted appropriately in the event of
stock dividends, stock splits, recapitalization, mergers, consolidations,
combinations or exchanges of shares or other similar corporate changes.
ELIGIBILITY
Directors of Dresser who are not employees of Dresser ("Eligible
Directors") are eligible to receive awards. Directors of Dresser who are also
employed by Dresser ("Employee Directors") are not eligible during the period of
such employment to receive any awards under the Plan.
Since the composition of Dresser's Board of Directors is subject to change,
it is impossible to determine the total number of participants in the plan or
the number of awards which may be granted. However, as of July 15, 1993, there
were nine Directors eligible for participation.
ADMINISTRATION
The Plan is administered by the Employee Directors. The Plan vests
authority in the Employee Directors to administer and interpret the Plan. The
costs and expenses of administering the Plan shall be borne by Dresser and not
charged against any award or to any participant.
The Employee Directors shall have authority to administer and interpret the
Plan and to adopt such rules, regulations, agreements, guidelines and
instruments for the administration
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of the Plan and for the conduct of its business as the Employee Directors deem
necessary or advisable. The Employee Directors' interpretations of the Plan,
and all actions taken and determinations made by the Employee Directors pursuant
to the powers vested in them hereunder, shall be by unanimous decision and shall
be conclusive and binding on all parties concerned, including Dresser, its
shareholders and any participant.
AWARDS
Awards under the Plan shall consist of grants of validly issued, fully paid
and nonassessable shares of Dresser Common Stock in each odd-numbered year
commencing in 1989. The number of shares of Dresser Common Stock to be granted
to a participant (the "Periodic Award") shall be determined by dividing (i) the
number which is equal to 60% of the result of multiplying the annual rate of
cash annual retainer payable by Dresser to such participant for such
participant's services as a director on August 1 following the end of the period
for which the award is made (which retainer amount was increased to $28,000 per
year effective August 1, 1993), times the quotient of the greater of 12 or the
number of months served by such director during the period divided by 12, by
(ii) the average of the high and low per share sale prices for Dresser Common
Stock on the New York Stock Exchange on the last trading day of the week prior
to the week in which the grant is to be made or the immediately preceding
trading day, and rounding the quotient thereof to the nearest whole number.
Awards shall be granted automatically in each odd-numbered year and the date of
grant of each award will be the date of the regularly scheduled meeting of
Dresser's Board of Directors next following August 1 of each such year. The
first Periodic Award was for the twelve months ended August 1, 1989, and each
subsequent Award shall be for the 24 months ended the immediately preceding
August 1.
RIGHTS AS SHAREHOLDER
A participant under the Plan shall have none of the rights of an owner of
Common Stock in respect of shares to be awarded, unless and until certificates
for such shares of Common Stock are issued to the participant.
No employee of Dresser shall have any claim or right to be granted an award
under the Plan.
ADDITIONAL PROVISIONS OF THE PLAN
DEATH, DISABILITY OR RETIREMENT
In the event of the death, disability or retirement of a participant prior
to the granting of a Periodic Award in respect of the 24 month period in which
such event occurred, an Award shall be granted in respect of such period to the
retired participant or his or her estate in an amount proportionate to the
participant's service during such period rounded to the nearest whole number of
years. Such Award shall be determined by dividing (i) the number
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which is equal to 60% of the total cash annual retainer payable by Dresser to
such participant for such participant's services as a director at the end of the
period of such participant's service by (ii) the average of the high and low per
share sale prices for Dresser Common Stock on the New York Stock Exchange on the
last trading day of the week prior to the week in which the grant is to be made
or the immediately preceding trading day, and rounding the quotient thereof to
the nearest whole number. If any participant shall cease to be a director for
any reason other than death, disability or retirement, his or her rights to any
Award in respect of the 24 months during which such cessation occurred shall
terminate.
WITHHOLDING TAXES
Dresser shall have the right to require the payment (through withholding
from the participant's retainer or otherwise) of any withholding taxes required
by federal, state, or local law in respect of any Periodic or other Award.
ASSIGNMENT OR TRANSFER
No rights to receive awards under the Plan shall be assignable or
transferable by a participant except by will or the laws of descent and
distribution.
FUNDING
The Plan shall be unfunded. Dresser shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any award under the Plan.
AMENDMENTS AND TERMINATIONS
The Employee Directors may at any time terminate or amend the Plan in whole
or in part (provided that the Plan shall not be amended more than once in any
period of six months), but no such action shall adversely affect any rights or
obligations with respect to any awards theretofore granted under the Plan.
Notwithstanding the foregoing, Employee Directors shall not have the power to
amend the Plan as to who is eligible for awards, the formula for calculating the
number of shares granted, and the date of grants.
EMPLOYEE DIRECTORS
The Plan is administered by the Employee Directors. The Employee Directors
are not eligible to participate in the Plan.
On July 15, 1993, the names and addresses of the Employee Directors were
as follows:
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NAMES ADDRESSES
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W. E. Bradford Dresser Industries, Inc.
P. O. Box 718
Dallas, Texas 75221
John J. Murphy Dresser Industries, Inc.
P. O. Box 718
Dallas, Texas 75221
B. D. St. John Dresser Industries, Inc.
P. O. Box 718
Dallas, Texas 75221
Each Employee Director serves, as a Director, at the pleasure of the
Shareholders of Dresser and, as an employee, at the pleasure of the Board of
Directors.
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