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                                                                   Exhibit 10.13

                      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:

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

     .    First Benefit Pay-Out Date (third year)--Participant receives one
          third of the value of his outstanding account.
     .    Second Benefit Pay-Out Date (fourth year)--He receives one half of the
          remaining value of his outstanding account.
     .    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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