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                                                                    Exhibit 10.8

                      SHORT TERM DEFERRED COMPENSATION PLAN

                                  INTRODUCTION

Dresser, Inc., has two programs which enable its employees to defer compensation
as an extension of the bonus incentive system.

1.       The regular Deferred Compensation Plan is for employees who earn $7,500
         or more incentive compensation in a fiscal year. This plan provides a
         method for the employee to defer payment of income tax on his deferred
         bonus until it is received after retirement or termination of
         employment with the company.
2.       The short Term Deferred Compensation Plan is designed to offer more
         flexibility in income panning to participants. Open to employees
         earning $5,000 or more incentive compensation in a fiscal year, the
         Plan is a 5-year program with three pay-out dates.

The purpose of this booklet is to describe briefly the major provisions of the
Short Term Deferred Compensation Plan and to answer questions most likely to be
asked by participants.

In the back of the booklet is a copy of the legal document under which the Plan
is administered. The document controls all actual payments under the Plan and
may be changed when appropriate for tax or other reasons by the Board of
Directors.

If, after reading this booklet, you have additional questions about the Plan,
please contact your Industrial Relations Manager or the Corporate Industrial
Relations Department.


                               INTENT OF THE PLAN

The Short Term Deferred Compensation Plan is designed to enable eligible
employees to defer incentive compensation under a 5-year program.




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The basic features of the Plan are these:

o     An individual's deferred compensation is converted into "unit stock" at a
      10 percent discount.
o     Cash benefits on the "unit stock" that are equivalent to dividends on
      Dresser Common Stock are paid annually.
o     The cash value of the "unit stock" is paid out on a three-payment schedule
      over the five year period.
o     The full market price of Dresser Common Stock is used to determine the
      value of the "unit stock" for pay-out purposes.


                                 WHO IS ELIGIBLE

All employees of the Company and its wholly-owned subsidiaries who receive
$5,000 or more in bonuses or incentive compensation in a fiscal year are
eligible to participate in the Short Term Deferred Compensation Plan. However,
an employee cannot participate in both the Short Term Plan and regular Deferred
Compensation Plan in the same fiscal year.


                              HOW THE PLAN OPERATES

$5,000 MINIMUM

An employee must defer at least $5,000 of incentive. A written request for the
amount to be deferred must be filed with the Industrial Relations Department by
October 15. A copy of the form which will be provided for this purpose is shown
on pages 8-9.

CONVERSION TO "UNIT STOCK"

On each Crediting Date, January 15, the dollar amount of the deferred
compensation is converted into full shares of "unit stock" and credited to the
individual's account. The price of the "unit stock" is 90 percent of the average
daily closing price of Dresser Common Stock during December, flowing the end of
the fiscal year. New York Stock Exchange prices are used.



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In converting the deferred compensation into "unit stock," any cash balance
remaining because it was less than the price of a full share will be paid back
to the employee on the next date on which a payment is made.

ANNUAL DIVIDEND EQUIVAQLENTS

Participants will receive an annual cash benefit on the shares of "unit stock"
in their account during the prior year that is equivalent to the dividends paid
on regular Dresser Common Stock. Payments will be made as soon as possible after
January 15.


                     DETERMINING BENEFITS AND PAY-OUT DATES

The value of the "unit stock" in the individual's account for pay-out purposes
is determined by the price of regular Dresser Common Stock. The average daily
closing price of stock in the December preceding the Benefit Pay-Out Date
(January 15) is multiplied by the number of shares of "unit stock" in the
individual's account to determine the value of his account. Cash benefit
pay-outs are subject to the normal with-holding taxes.

THREE BENEFIT PAY-OUT DATES

There are three Benefit Pay-Out Dates in the Short Term Plan: The third, fourth,
and fifth anniversaries of the original crediting date of the deferred
compensation. The pay-out schedule is as follows.

      o     First Benefit Pay-Out Date (third year)--Participant receives one
            third of the value of his outstanding account.
      o     Second Benefit Pay-Out Date (fourth year)--He receives one half of
            the remaining value of his outstanding account.
      o     Third Benefit Pay-Out Date (fifth year)--All of the remaining value
            of his account is paid to the participant.



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                               QUESTIONS & ANSWERS

Who Administers The Plan?

The Short Term Deferred Compensation Plan is administered by the same Committee
that is appointed by the Board of Directors to administer the regular Deferred
Compensation Plan.

If An Individual's Annual Incentive Compensation Is $7,500 Or More, Can He
Participate In Both The Short Term and Regular Deferred Compensation Plans?

Yes, but not in the same fiscal year. If an employee earns incentive
compensation totaling $7,500 or more in a fiscal year, he may elect to
participate in only one Plan in that given year. However, he may switch from one
plan to the other in subsequent years. The request form for selecting specific
options (page 8-9) will be provided annually to eligible participants in time to
meet the October 15 filing deadline.

Is There Any Risk Involved For The Individuals?

Because your deferred compensation is converted to "unit stock", you have no
guarantee that you will get back all of the bonus that is deferred. However, in
recognition of this risk, the "unit stock" is credited to your account at a 10
percent "discount" while the benefit pay-outs are made at "market value."
Additionally, of course, you receive cash benefits annually that are equivalent
to regular dividends paid on Dresser Common Stock.

What About Stock Splits And Stock Dividends?

If the company at any time declares a stock dividend, stock split, consolidation
of shares, or similar action affecting its Common Stock, the outstanding shares
of "unit stock" in an individual's account will be increased or decreased
correspondingly, just as though they were regular shares of Dresser Common
Stock.

What If The Employee Leaves Dresser?

If the individual's employment with the company is terminated for reasons other
than death, disability, or retirement, the pay-out will be made according to the
normal schedule-the third, fourth, and fifth anniversaries of the original
crediting date.



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However, the cash benefit payable after termination will be based upon the
dollar amount of the deferred bonus instead of the "unit stock." Dividend
equivalent payments also stop.

What If A Participant Dies, Retires, Or Is Disabled?

Benefits will be paid to the individual or his beneficiary according to the
regular schedule. At the discretion of the Committee and proof of financial
necessity by the individual to whom the benefit is payable, the entire balance
of the outstanding account may be paid on the first available benefit payment
date.

Can An Individual's Benefits Be Forfeited?

Yes. If a participant takes or permits some action or omission which results in
damage to the Company--unless it was done in good faith and without reasonable
cause to believe it was improper--the Committee may terminate all subsequent
benefits.


                      SHORT-TERM DEFERRED COMPENSATION PLAN

SECTION I. DEFINITIONS.

The following words and phrases when used herin shall, unless the context
clearly indicates otherwise, have the following meanings:

      1.01  "Benefit means the net, unforfeited amounts to be paid a
            Participant, his estate or his beneficiary.

      1.02  "Benefit Payment Date" means each of the dates for payment of
            Benefits accrued with respect to a Fiscal Year crediting of Unit
            Stock as a Contingent Allotment, as set forth in Section 5.02.

      1.03  "Board" means the Board of Directors of Dresser, Inc.

      1.04  "Committee" means the Committee designated by the Board pursuant to
            Section III hereof to administer the Plan

      1.05  "Company" means Dresser, Inc., and all its wholly-owned
            subsidiaries.

      1.06  "Crediting Date" for any contingent credit or Dividend Equivalent
            payment under the Plan shall be the January 15 next



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            following the end of the Fiscal Year for which the contingent credit
            is awarded or the Dividend Equivalent is computed.

      1.07  "Deferred Bonus" means that portion of an Employee's Incentive
            Compensation as shall be deferred under the terms and conditions of
            the Plan.

      1.08  "Disability" means such an absence of physical or mental powers in a
            Participant so as to render him incapable of competently performing
            his duties.

      1.09  "Dividend Equivalent" means the amount computed and paid each year
            that Incentive Compensation is deferred under this Plan, as limited
            and described in Section 5.01.

      1.10  "Employee" means any person employed by the Company, including an
            officer of the Company.

      1.11  "Fiscal Year" shall mean the fiscal year of the Company.

      1.12  "Incentive Compensation" means compensation awarded to an Employee
            at the end of a Fiscal Year, based upon profits, sales, or other
            performance throughout such year, which except for this Plan or the
            Dresser, Inc. Deferred Compensation Plan, would become payable in a
            lump sum in the following Fiscal Year or in annual installments
            beginning in the following Fiscal Year.

      1.13  "Participant" means an Employee who is contingently entitled to
            Benefits under the Plan.

      1.14  "Plan" means this Dresser, Inc., Short-Term Deferred Compensation
            Plan adopted by the Board on January 21, 1971, as amended from time
            to time.

      1.15  "Retirement" shall mean a severance of an Employee from the
            employment of the Company on or after his attaining age 65 or a
            severance whereby the Employee is granted Early Retirement under the
            terms of a retirement plan provided by the Company for the benefit
            of salaried employees.

      1.16  "Unit Price" means the price determined under Section 4.02(c).

      1.17  "Unit Stock" means shares of common stock of Dresser, Inc.


SECTION II. ADMINISTRATION.

      2.01  Appointment and Removal of Committee. The Plan shall be administered
            by a committee, which shall be the same



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            Committee (appointed by the Board) as administers the Dresser, Inc.
            Deferred Compensation Plan.

      2.02  Powers and Duties of Committee. The Committee shall have such powers
            and duties as are conferred on it by the Plan or the Board. The
            Committee shall adopt such rules and procedures for the conduct of
            its business and for the administration of the Plan as it deems
            advisable and shall have authority to take any and all action
            necessary to implement such rules and procedures. The Committee
            shall act at meetings by affirmative vote of a majority of the
            members of the Committee. Any action permitted to be taken at a
            meeting may be taken without a meeting if, prior to such action, a
            written consent to the action is signed by all members of the
            Committee and such written consent is filed with the minutes of
            proceedings of the committee. The construction and interpretation of
            the terms and provisions of the Plan by the Committee and
            determinations made by the Committee or the Board shall be final and
            conclusive.

      2.03  Expenses. All expenses of the administration of the Plan shall be
            borne by the Company.

SECTION III. PARTICIPATION.

      3.01  Eligibility. An Employee may elect to participate in this Plan with
            respect to any Fiscal Year for which his Inventive Compensation
            equals or exceeds $5,000 (or such other amount as may be determined
            by the Board from time to time, such determination to be effective,
            however, only with respect to Fiscal Years ending after such
            determination).

      3.02  Election. An eligible Employee shall become a Participant in the
            Plan with respect to a Fiscal Year by filing with the Committee on
            or before the 15th day of the last calendar month in such Fiscal
            Year a written election on a form prescribed by the Committee, which
            election shall specify the amount of Incentive Compensation to be
            deferred under this Plan and, if the Employee is also eligible to
            participate in the Company's Deferred Compensation Plan for such
            Fiscal Year, his election not to defer any Incentive Compensation
            under such Deferred Compensation Plan for the Fiscal Year involved.
            No deferral may be made under this Plan with respect to any Fiscal




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            Year in an amount less than $5,000 (or such other amount as may be
            determined by the Board from time to time, such determination to be
            effective, however, only with respect to Fiscal Years ending after
            such determination).

SECTION IV. CONTINGENT ALLOTMENTS

4.01  Contingent Allotment. The Contingent Allotment for a Participant with
      respect to any particular Fiscal Year will consist of the total credits in
      such Allotment from time to time, consisting of:

      (a)   Unit Stock shares contingently credited on the initial Crediting
            Date, under Section 4.02(a).

      (b)   Any unpaid cash balance remaining after conversions of Unit Stock,
            under Section 4.02(b), reduced by amounts paid under Section 5.02 or
            5.03 or forfeited under Section 6.03.

4.02  Computation of Contingent Unit Stock Allotments.

      (a)   Deferred Bonus. On each Crediting Date, the total number of full
            shares of Unit Stock the dollar amount of each Participant's
            Deferred Bonus in respect of the prior Fiscal Year would purchase at
            the Participant's Unit Price shall be credited to the Contingent
            Allotment of the Participant for such Fiscal Year.

      (b)   Less Than Full Shares. Any balance of a Participants Deferred Bonus
            not credited to his Contingent Allotment because it was less than
            the Unit Price of a full share of Unit Stock shall be paid to the
            Participant on the first subsequent Crediting Date or Benefit
            Payment Date as to which any other payment is due to the
            Participant.

      (c)   Unit Price. The Unit Price for a Participant on each Crediting Date
            shall be 90% of the average of the daily closing prices of the Unit
            Stock on the New York Stock Exchange for the calendar month
            immediately prior to such Crediting Date.

4.03  Corporate Changes. If the company at any time increases or decreases
      proportionately to all holders of shares of its common stock then
      outstanding, whether by stock dividend, stock split, consolidation of
      shares, or in any other manner the number of all of its outstanding shares
      of such common stock held by such holders, then each Contingent Allotment
      and each Unit Stock Benefit as determined in Section IV theretofore
      credited and unforfeited or unpaid shall be correspondingly increased or
      decreased with respect to the number of shares of such common stock
      represented thereby, In the event of the



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      merger or consolidation of the Company with or into another corporation or
      the sale of substantially all of the assets of the Company, the Board
      shall make an appropriate equitable adjustment to each Contingent
      Allotment.


SECTION V. BENEFITS.

5.01  Dividend Equivalents. As of each Crediting Date there shall be ascertained
      the total number of unpaid and unforteited shares of Unit Stock credited
      prior to such Crediting Date to each Participant in all of his Contingent
      Allotments. Then the total amount of cash dividends which would have been
      payable during the preceding calendar year on the shares of Unit Stock in
      all of his Contingent Allotments if the shares had been outstanding during
      the preceding calendar year shall be calculated. The amount so calculated
      shall be the Dividend Equivalent for each Participant for that Crediting
      Date and shall be paid to him in cash as soon as practicable after the
      Crediting Date if and only if the Participant was employed by the Company
      on that Crediting Date or such employment ceased on account of his Death,
      Disability, or Retirement. No Dividend Equivalents shall be paid as to
      Crediting Dates after a Participant terminates employment with the Company
      for any other reason.

5.02  Benefit Payment Dates. With respect to Unit Stock shares contingently
      credited on any particular Crediting Date there will be three Benefit
      Payment Dates, which will be the third, fourth and fifth anniversaries of
      the original Crediting Date. The value of a Contingent Allotment of Unit
      Stock for benefit payment purposes will be determined by reference to the
      average of the daily closing prices of Unit Stock on the New York Stock
      Exchange for the calendar month immediately prior to the applicable
      Benefit Payment Date. A Participant still employed by the Company on a
      Benefit Payment Date will receive a cash benefit (less required
      withholding taxes) equal to the following portion of the value of each
      Contingent Allotment unpaid and unforfeited as of that date:

         First Benefit Payment Date- One-third
         Second Benefit Payment Date- One-half
         Final Benefit Payment Date- All



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5.03  Terminations.

      (a)   If a participant's employment with the Company ceases prior to a
            Benefit Payment Date on account of his Death, Disability or
            Retirement, the Participant (or the person designated pursuant to
            Section 6.02, if he is deceased or incompetent) will receive
            benefits as thought he were then still employed by the Company.

      (b)   If and when employment with the Company ceases for any other reason,
            the cash benefit payable on each subsequent Benefit Payment Date
            with respect to any particular Contingent Allotment will be
            one-third of the net Deferred Bonus (said Bonus less any payment
            under Section 4.02(b)) that created that total Contingent Allotment,
            instead of an amount determined by the value of that Allotment.


SECTION VI. MISCELLANEOUS.

6.01  Death or Disability. In the event of the death or disability of a
      Participant while employed by the Company, the Committee may, in its sole
      discretion and upon proof of the financial necessity of the person or
      persons to whom Benefits are payable, pay the entire balance of all
      Contingent Allotments standing to the credit of such Participant at the
      first available Benefit Payment Date for such Allotment.

6.02  To Whom Payments are to be Made. Payments shall be made to the Participant
      if living. Unless otherwise requested in writing by the Participant, in
      the event of a Participant's death, payment will be made to the
      beneficiary designated by the Participant for the purpose of receiving
      life insurance benefits under the Company's group life insurance plan. In
      the event no beneficiary is designated by the Participant either in
      writing or for the purpose of receiving such life insurance benefits, or
      if the designated beneficiary does not survive the Participant, Benefits
      will be paid to his personal representatives or to the person appointed by
      Will to receive said Benefits. This provision does not affect the number
      of payments or the amount of each such payment, but only affects to whom
      payments are to be made.

6.03  Forfeiture. In the event a Participant has taken or allowed some action or
      omission resulting in damage or competitive injury to the Company then,
      unless such action or omission shall have been taken or allowed in good
      faith and without reasonable cause to believe that it was



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      improper or illegal, the Committee may terminate all subsequent payments
      of Dividend Equivalents to the Participant, and in addition, the Committee
      may terminate and forfeit all or any part of the Participant's Contingent
      Allotment hereunder a sit may deem appropriate.

6.04  Reserves. The Company shall be under no obligation to reserve, segregate
      or earmark and cash, stock or other property for the payment of any
      Benefits under this Plan. No Participant shall have any right whatsoever
      in any cash, stock or other property which may be set aside under the
      Plan.

6.05  Withholding. There shall be deducted from each payment of Benefits under
      the Plan (including Dividend Equivalents) any taxes required to be
      withheld by the Company in respect of such payment.

6.06  Plan not to Constitute Contract of Employment. Neither the adoption of
      this Plan nor its operation shall in any way affect the right of the
      Company to dismiss or discharge a Participant at any time, not give an
      employee a right to participate in the Company's Incentive Compensation
      Plan.

6.07  Nontransferability and Nonassignability. No rights under this Plan shall
      be assignable or transferable, or subject to encumbrances, pledge, or
      charge of any nature, except that a Participant may designate a
      beneficiary to receive Benefits upon his death as otherwise provided
      herein.

6.08  Amendment, Suspension or Termination. The Board may amend, suspend or
      terminate the Plan in whole or in part, except that no amendment,
      suspension or termination shall reduce any Benefits credited to the
      Participant prior to the date of such amendment, suspension, or
      termination or Benefits to be credited in the future based on amounts
      previously credited to the Participant.

6.09  Reliance Upon Information. The Board and the Committee may rely upon any
      information supplied to them by any officer of the Company, the Company's
      legal counsel or by the Company's independent public accountants in
      connection with the administration of the Plan, and shall not be liable
      for any decision or action in reliance theron. No Participant, or any
      person claiming through him shall have any right or interest in the Plan
      or any Benefits hereunder unless and until all the terms, conditions, and
      provisions of the Plan that affect such Participant or such other person
      shall have been complied with as specified herein. The Participant shall
      complete such forms and furnish such information as the Committee may
      require in the administration of the Plan.




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6.10  Joint Ventures. Notwithstanding anything else in this Plan to the
      contrary, any Participant whose employment with the Company is terminated
      by virtue of his transfer to employment by a joint venture or partnership
      in which the Company holds an ownership or profit interest of at least 25%
      shall not be eligible to defer under this Plan any bonus earned after such
      transfer of employment but he shall not be deemed to have terminated his
      employment with the Company until he ceases to be employed by such joint
      venture or partnership, provided, however, that no such Participant shall
      receive from the Plan less total benefit than if he were treated as having
      terminated his employment under Section 5.03(b) of this Plan as of
      February 20,1987.







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