<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
----------------
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the
Securities Exchange Act of 1934)
----------------------
E. I. DU PONT DE NEMOURS AND COMPANY
(Name of Issuer)
E. I. DU PONT DE NEMOURS AND COMPANY
(Name of Person(s) Filing Statement)
COMMON STOCK
PAR VALUE $.30 PER SHARE
(Title of Class of Securities)
263534 10 9
(CUSIP Number of Class of Securities)
HOWARD R. RUDGE, ESQ.
E. I. DU PONT DE NEMOURS AND COMPANY
1007 MARKET STREET
WILMINGTON, DE 19898
(302) 774-1000
-Copy to-
LOU R. KLING, ESQ.
EILEEN NUGENT SIMON, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TEL: 212-735-3000
FAX: 212-735-2000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications on Behalf of
Person(s) Filing Statement)
JULY 14, 1999
(Date Tender Offer First Published, Sent
or Given to Security Holders)
<PAGE> 2
Calculation of Filing Fee
Transaction Valuation(1) Amount of Filing Fee
$646,080,000 $129,216
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)
(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid:
Form or Registration No.:
Filing party:
Date Filed:
- ---------
(1) This amount assumes the acquisition by E. I. du Pont de Nemours and
Company of 8,000,000 shares of the Company's common stock for $80.76
per share.
2
<PAGE> 3
This Schedule 13E-4 relates to an offer by E. I. du Pont de Nemours and
Company ("DuPont") to purchase up to 8,000,000 Shares of common stock, par value
of $.30 per share, of DuPont (the "DuPont Common Stock"), held by Non-United
States persons, upon terms and subject to the conditions stated in the Offer to
Purchase dated July 14, 1999 (the "Offer to Purchase") and the related Letter
of Transmittal (the "Letter of Transmittal" which, together with the Offer to
Purchase, constitute the "Cash Offer").
The Offer to Purchase and the Letter of Transmittal, copies
of which are attached hereto as Exhibits (a)(3) and (a)(5), are incorporated in
this document by reference.
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is E. I. du Pont de Nemours and Company, a
Delaware corporation, which has its principal executive offices at 1007 Market
Street, Wilmington, Delaware 19898.
(b) The information set forth in "Introduction," "Section 1. Number of
Shares; Proration" and "Section 9. Interests of Directors and Executive
Officers; Transactions and Arrangements Concerning the Shares" in the Offer to
Purchase is incorporated herein by reference.
(c) The information set forth in "Introduction" and "Section 7. Price
Range of Shares; Dividends" in the Offer to Purchase is incorporated herein by
reference.
(d) This statement is being filed by the issuer.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 10. Source and Amount of
Funds" in the Offer to Purchase is incorporated herein by reference.
3
<PAGE> 4
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth in "Introduction," "Section 8.
Background and Purpose of Offer; Certain Effects of the Offer," "Section 9.
Interests of Directors and Executive Officers; Transactions and Arrangements
Concerning the Shares," "Section 10. Source and Amount of Funds, and "Section
12. Effects of the Offer on the Market for Shares; Registration Under the
Exchange Act" in the Offer to Purchase is incorporated herein by reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Except as set forth in Schedule A to the Offer to Purchase
which is incorporated in this document by reference, no transaction with respect
to the shares of DuPont Common Stock was effected during the period of 40
business days prior to the date hereof by DuPont, or to DuPont's knowledge, its
directors or executive officers.
4
<PAGE> 5
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Neither DuPont nor, to the best of DuPont's knowledge, any of its
directors or executive officers is party to any contract, arrangement,
understanding or relationship relating, directly or indirectly, to the Cash
Offer with respect to any securities of DuPont required to be disclosed in this
document.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Introduction" and "Section 16. Fees and
Expenses" in the Offer to Purchase is incorporated herein by reference.
ITEM 7. FINANCIAL INFORMATION.
(a)-(b) "Section 11. Certain Information About the Company" in the
Offer to Purchase is incorporated herein by reference and DuPont's 1998 Annual
Report to Shareholders for the fiscal year ended December 31, 1998 and DuPont's
Quarterly Report on Form 10-Q/A for the First Quarter ended March 31, 1999 and
the financial statements included therein, which we have incorporated by
reference in the Offer to Purchase, are also incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) None.
5
<PAGE> 6
(b) The information set forth in the "Section 13. Certain Legal
Matters; Regulatory Approvals" in the Offer to Purchase is incorporated herein
by reference.
(c) Not applicable.
(d) None.
(e) Additional information with respect to the Cash Offer and related
matters is included throughout the Offer to Purchase and the Letter of
Transmittal, which are enclosed with this document as Exhibits (a)(3) and
(a)(5), respectively, and which are incorporated herein by reference. DuPont is
not aware of any jurisdiction where the making of the Offer is not in
compliance with applicable law. If DuPont becomes aware of any jurisdiction
where the making of the Offer is not in compliance with any valid applicable
law, DuPont currently intends to make a good faith effort to comply with such
law. If, after such good faith effort, DuPont cannot, or if DuPont otherwise
determines not to comply with such law or, in DuPont's sole judgment, it
becomes impracticable to do so, the Offer, at the discretion of DuPont, will
not be made to (nor will tenders be accepted from or on behalf of) the holders
of Shares residing in such jurisdiction.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<CAPTION>
<S> <C>
(a)(1) Press Release dated July 14, 1999.
(a)(2) European public notices dated July 13, 1999 and July 14, 1999.
(a)(3) Offer to Purchase dated July 14, 1999.
(a)(4) Letter from DuPont to stockholders.
(a)(5) Letter of Transmittal.
(a)(6) Notice of guaranteed delivery.
(a)(7) Letter from DuPont to Brokers, Dealers, Commercial Banks,
Trust Companies, Custodian Banks and other Nominees.
(a)(8) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies, Custodian Banks and other Nominees.
(a)(9) Letters from Trustees or Administrators of Non-U.S. DuPont
or DuPont affiliated company savings plans.
</TABLE>
6
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C>
(a)(10) Notices to Participants in a Blueprint brokerage account at
Merrill Lynch of DuPont.
(a)(11) Correspondence to all employees of DuPont.
(a)(12) Correspondence to all employees of Conoco.
(a)(13) Correspondence to selected Non-U.S. employees of DuPont.
(a)(14) Correspondence to U.K. employees of Conoco.
(a)(15) Supplemental Belgium Circular.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Consolidated Financial Statements as of and for the Year
Ended December 31, 1998 (audited, except for Quarterly
Financial Data and Five-Year Financial Review).
(g)(2) Consolidated Financial Statements as of and for the Three
Months Ended March 31, 1999 (unaudited).
</TABLE>
7
<PAGE> 8
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 14, 1999 E. I. du Pont de Nemours and Company
By /s/ Gary M. Pfeiffer
------------------------------------
Name: Gary M. Pfeiffer
Title: Senior Vice President and
Chief Financial Officer
8
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
(a)(1) Press Release July 14, 1999.
(a)(2) European public notices dated July 13, 1999 and
July 14, 1999.
(a)(3) Offer to Purchase dated July 14, 1999.
(a)(4) Letter from DuPont to stockholders.
(a)(5) Letter of Transmittal.
(a)(6) Notice of guaranteed delivery.
(a)(7) Letter from DuPont to Brokers, Dealers, Commercial Banks,
Trust Companies, Custodian Banks and other Nominees.
(a)(8) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies, Custodian Banks and other Nominees.
(a)(9) Letters from Trustees or Administrators of Non-U.S. DuPont
or DuPont affiliated company savings plans.
(a)(10) Notices to Participants in a Blueprint brokerage account at
Merrill Lynch of DuPont.
(a)(11) Correspondence to all employees of DuPont.
(a)(12) Correspondence to all employees of Conoco.
(a)(13) Correspondence to selected Non-U.S. employees of DuPont.
(a)(14) Correspondence to U.K. employees of Conoco.
(a)(15) Supplemental Belgium Circular.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Consolidated Financial Statements as of and for the Year
Ended December 31, 1998 (audited, except for Quarterly
Financial Data and Five-Year Financial Review).
(g)(2) Consolidated Financial Statements as of and for the Three
Months Ended March 31, 1999 (unaudited).
</TABLE>
<PAGE> 1
[DUPONT LOGO]
CORPORATE NEWS
Contact: Susan Gaffney
302-774-2698
Cathy Andriadis
302-774-4712
DUPONT COMMENCES CASH OFFER FOR DUPONT COMMON STOCK
WILMINGTON, Del., July 14 -- DuPont (NYSE:DD) today announced it is
commencing an offer to its shareholders who are non-United States persons to
sell some or all of their shares to DuPont for $80.76 for each share of DuPont
common stock up to a maximum of 8 million shares of DuPont common stock.
Only non-United States persons as defined in the Offer to Purchase are
eligible to participate in the cash offer. The cash offer will expire at 12:00
midnight New York City time on Aug. 10, 1999, unless extended.
This cash offer is being made in connection with an exchange offer in the
United States in which DuPont is offering shareholders the opportunity to
exchange DuPont common stock for shares of Conoco common stock owned by DuPont.
The exchange offer in the United States is being offered to DuPont shareholders
who are defined as United States persons in the Offering Circular-Prospectus.
DuPont has retained the services of D.F. King & Co., Inc., as Information
Agent to assist shareholders with the exchange offer and the cash offer.
Questions regarding the terms and conditions of the exchange offer or the cash
offer or information on tendering shares should be directed to D.F. King at
800-755-3105 (toll free) in the U.S. or 212-269-5550 (collect) outside the U.S.
DuPont is a science company, delivering science-based solutions that make
a difference in people's lives in food and nutrition; health care; apparel;
home and construction; electronics; and transportation. Founded in 1802, the
company operates in 65 countries and has 92,000 employees.
# # #
7/14/99
<PAGE> 1
[DUPONT LOGO]
COMMUNIQUE
E.I. du Pont de Nemours et Compagnie ("DuPont") va offrir de
racheter a ses actionnaires non americains tout ou partie de leurs titres DuPont
pour un prix par action de 80,76$. Cette offre de rachat en especes s'effectue
parallelement a une offre d'echange aux Etats Unis par laquelle DuPont propose a
ses actionnaires americains d'echanger leurs actions ordinaires de DuPont contre
des actions ordinaires de Categorie B de sa filiale Conoco Inc. ("Conoco"). En
raison de considerations propres a l'impot federal sur le revenu des Etats-Unis,
les personnes americaines ou "United States persons" ne seront pas admises a
participer a l'offre de rachat en especes et reciproquement, les personnes non
americaines ne pourront participer a l'offre d'echange.
Le prix de 80,76$ par action de l'offre de rachat en especes,
sans tenir compte d'une quelconque deduction pour retenues fiscales a la source
applicables, est egal a la valeur du nombre d'actions ordinaires Conoco de
Categorie B (en considerant la valeur de chacune de ces actions comme egale au
cours de cloture de l'action ordinaire Conoco de Categorie A le 8 juillet, 1999
juste avant la determination de la parite d'echange dans l'offre d'echange
correspondante), qui seront echangees contre une action DuPont dans l'offre
d'echange. Ce prix est superieur au cours des actions DuPont a la date du 8
juillet, 1999, qui etait de $68 5/8 par action. Dans la mesure ou le cours des
actions Conoco de classe B est susceptible d'etre different de celui des actions
Conoco de classe A, et compte tenu du fait que le cours des actions ordinaires
Conoco de classe A et des actions ordinaires DuPont est susceptible de fluctuer
pendant la duree de l'offre d'echange, la prime payable a l'occasion de l'offre
de rachat en especes pourrait s'averer superieure ou inferieure a celle payee a
l'occasion de l'offre d'echange.
Les actionnaires de DuPont ayant qualite pour participer a
l'offre de rachat en especes et souhaitant y prendre part devront se conformer a
une procedure specifique et, en s'adressant a l'etablissement depositaire de
leurs titres, faire transferer leurs actions DuPont a un intermediaire financier
situe aux Etats Unis. Les actionnaires de DuPont sont encourages a consulter
leurs conseillers fiscaux afin de determiner s'ils ont qualite pour participer a
l'offre de rachat en especes et les consequences fiscales de leur participation
a celle-ci.
Les actionnaires de DuPont souhaitant obtenir des informations
complementaires sur l'offre de rachat en especes decrite ci-dessus peuvent se
faire adresser des documents d'information en contactant D.F. King and Co.,
Inc., 77 Water Street, New York, New York 10005, tel. : (00)1.212.269.5550
(collect) ou Paribas, 3 rue d'Antin 75078 Paris Cedex 02, contact : Jean-Marie
Le Carpentier, tel. : 01.42.98.63.01, fax : 01.42.98.41.28.
13/7/99
[DUPONT LOGO]
E.I. du Pont de Nemours and Company ("DuPont") will be offering its
French and other non-U.S. shareholders the opportunity to sell some or all of
their shares to DuPont for $80.76 per share in cash. This cash offer is being
made substantially concurrently with an exchange offer in the United States in
which DuPont is offering its U.S. shareholders the opportunity to exchange
DuPont common stock for shares of Class B common stock of its subsidiary, Conoco
Inc. ("Conoco"). United States persons (for United States federal income tax
purposes) may not participate in the cash offer, while persons that are not
United States persons may not participate in the exchange offer.
The $80.76 purchase price per share in the cash offer, without
giving effect to any deduction for applicable withholding taxes, equals the
value of the number of shares of Conoco Class B common stock (treating the value
of each such share as equal to the closing sale price of Conoco Class A common
stock on July 8, 1999, immediately prior to the determination of the exchange
ratio in the corresponding exchange offer), that will be exchanged for one share
of DuPont stock in the exchange offer. The purchase price is greater than the
trading price of DuPont stock on July 8, 1999, which price per share was $68
5/8. Considering that the market price of the Conoco Class B Common Stock may
differ from the Class A Common Stock and because the market prices for Conoco
Class A common stock and DuPont common stock may fluctuate over the course of
the exchange offer, the premium payable in the cash offer may prove to be
greater or less than that paid in the exchange offer.
DuPont shareholders eligible to participate in the cash offer
will have to follow the rules for doing so and, using the services of the agent
holding their shares, cause their shares to be tendered to a financial
intermediary located in the United States. DuPont shareholders are urged to
consult their tax advisors regarding their eligibility to participate in
the cash offer and the tax consequences of such participation.
DuPont shareholders wishing to obtain more information on the
cash offer described above may request documents of information from D.F. King
and Co., Inc., 77 Water Street, New York, New York 1005, phone:
(00)1.212.269.5550 (collect) or Paribas, 3, rue d'Antin 75078 Paris Cedex 02,
contact: Jean-Marie Le Carpentier, phone: 01.42.98.63.01, fax: 01.42.98.41.28.
13/7/99
<PAGE> 2
Logo (DuPont)
E. I. DU PONT DE NEMOURS AND COMPANY
Wilmington, Delaware, USA
Ruckkaufangebot
E. I. du Pont de Nemours and Company ("DuPont") bietet ihren deutschen und allen
anderen Aktionaren, die sogenannte "Non-US-Persons" (wie im Angebotsmemorandum
definiert) sind, den Ruckkauf eigener Stammaktien im Nennbetrag von je USD 0,30
("DuPont-Aktien")
zum Preis von USD 80,76
je DuPont-Aktie
an. Nahezu zeitgleich wird den Aktionaren, die sogenannte "US-Persons" sind, der
Umtausch ihrer DuPont-Aktien in Class B-Stammaktien der Conoco Inc. ("Conoco")
angeboten. "US-Persons" konnen nicht an dem Ruckkauf teilnehmen, wahrend
"Non-US-Persons" von dem Aktienumtausch ausgeschlossen sind. Zweck des
Aktienumtauschs ist die Trennung von den verbliebenen Anteilen an der Conoco. Im
Oktober 1998 wurden bereits 191,5 Mio. Class A-Stammaktien offentlich angeboten
und zum Handel an der New Yorker Wertpapierborse zugelassen.
Der Ruckkaufpreis unterliegt der US-amerikanischen Quellensteuer in Hohe von
30%.
Das Ruckkaufangebot ist nicht von einer Mindestzahl von zum Ruckkauf angebotenen
Aktien abhangig und erlischt am 10. August 1999. Es gilt als angenommen, wenn
nach Ablauf der Angebotsfrist das Umtauschangebot (siehe oben) als angenommen
gilt. Das Ruckkaufangebot kann verlangert oder geandert werden.
DuPont wird hochstens 8.000.000 DuPont-Aktien zuruckkaufen. Sollten nach Ablauf
der Angebotsfrist mehr als 8.000.000 DuPont-Aktien zum Ruckkauf angemeldet sein
(Uberzeichnung), werden die zum Ruckkauf angemeldeten DuPont-Aktien in einem
anteiligen Verhaltnis zuruckgekauft. Inhaber von insgesamt weniger als 100
DuPont-Aktien (Odd-Lots), die alle in ihrem Bestand befindlichen DuPont-Aktien
zum Ruckkauf anmelden, sind von dieser Regelung ausgenommen.
Fur DuPont-Aktien, die in New York fur die Deutsche Borse Clearing AG ("Clearing
AG"), Frankfurt am Main, bei Depository Trust Company sammelverwahrt sind, gilt
folgendes:
Miteigentumer am Sammelbestand der Clearing AG konnen ihre DuPont-Aktien uber
ihre Depotbank
bei der Deutsche Bank AG in Frankfurt am Main
zum kostenfreien Ruckkauf durch DuPont
zum Preis von USD 80,76 (abzuglich 30% US-amerikanische Quellensteuer) je
DuPont-Aktie
<PAGE> 3
anmelden. Um im Falle einer Uberzeichnung des Ruckkaufangebots in den Genu(beta)
des bevorrechtigten Ruckkaufs zu gelangen, mussen Inhaber von insgesamt weniger
als 100 DuPont-Aktien (Odd-Lots), die alle in ihrem Bestand befindlichen
DuPont-Aktien zu Ruckkauf anmelden, eine Bestatigung abgeben, da(beta) sie
weniger als 100 DuPont-Aktien (Odd-Lots) halten und alle in ihren Bestand
befindlichen DuPont-Aktien zum Ruckkauf angemeldet haben.
Vorbehaltlich der Annahme des Ruckkaufangebots erhalten diejenigen
Miteigentumer, die ihre DuPont-Aktien zum Ruckkauf angemeldet haben, uber ihre
Depotbank gegen Abgabe der DuPont-Aktien die Betrage nach Eingang (zu gegebener
Zeit nach Ablauf der Angebotsfrist) zum jeweiligen Tageskurs in Deutscher Mark
bzw. EURO oder auf Wunsch in US-amerikanischen Dollars gutgeschrieben.
Die zum Umtausch angemeldeten DuPont-Aktien werden bis zur vollstandigen
Abwicklung des Ruckkaufangebots gesperrt gehalten.
Weitere Einzelheiten werden den Aktionaren uber ihre Depotbank mitgeteilt und
konnen au(beta)erdem einem englischsprachigen Angebotsmemorandum, das bei der
Deutsche Bank AG, U+I/Emissionsfolgegeschafte, 60262 Frankfurt am Main,
angefordert werden kann, entnommen werden.
Zusatzliche Informationen uber das Angebot konnen auch von dem "Managing
Information Agent" D.F. King & Co., Inc. in New York, NY, USA, unter der
Telefonnummer 001 (212) 269-5550 (R-Gesprach - collect call) eingeholt werden.
Frankfurt am Main, 14. Juli 1999
Im Auftrag der E. I. DU PONT DE NEMOURS AND COMPANY
Deutsche Bank
Aktiengesellschaft
<PAGE> 4
UNOFFICIAL NON-LITERAL TRANSLATION
Logo (DuPont)
E. I. DU PONT DE NEMOURS & COMPANY
Wilmington, Delaware, USA
Offer to Repurchase
E. I. du Pont de Nemours and Company ("DuPont") is offering its German and all
other shareholders who are so-called "Non-U.S.-Persons" (as defined in the Offer
Memorandum) the opportunity to sell their common stock with a par value
U.S.$0.30 ("DuPont Shares") to DuPont
for U.S.$ 80.76 in cash
per DuPont Share.
This cash offer will be made substantially concurrently with an exchange offer
being made in the United States to "U.S. Persons" in which DuPont is offering
its U.S. shareholders the opportunity to exchange DuPont Shares for shares of
Conoco Class B common stock of Conoco Inc. ("Conoco"). "U.S. Persons" may not
participate in the cash offer, while "Non-U.S. Persons" may not participate in
the exchange offer. The exchange offer is the mechanism by which DuPont will
dispose of its remaining ownership of Conoco. In October of 1998, Conoco
completed an initial public offering of 191.5 million shares of Conoco Class A
common stock that were admitted for trading on the New York Stock Exchange.
The repurchase price is subject to 30% U.S. withholding tax.
This offer to repurchase is not conditioned on any minimum number of shares
being tendered and expires on 10 August 1999. The repurchase offer shall be
effective if, after expiration of the offer period, the exchange offer has been
consummated (see above) and the other conditions set forth in the Offer to
Purchase are satisfied. The offer to repurchase can be extended or altered.
DuPont will repurchase no more than a total of 8,000,000 DuPont Shares. If,
after expiration of the offer period, more than 8,000,000 DuPont Shares have
been tendered for repurchase (over-subscription), then the tendered DuPont
Shares will be repurchased on a pro rata basis. Shareholders holding a total of
less than 100 DuPont Shares (Odd-Lots) and tendering all of their shares will
not be subject to proration.
DuPont Shares that are collectively deposited for Deutsche Borse Clearing AG
("Clearing AG"), Frankfurt am Main, at Depository Trust Company are subject to
the following:
1
<PAGE> 5
Joint shareholders of collectively deposited DuPont Shares at Clearing AG are
entitled to tender their DuPont Shares via their respective depositary banks
to Deutsche Bank AG in Frankfurt am Main
free of charge to be repurchased by DuPont
at a price of U.S.$ 80.76 (minus 30% U.S. withholding tax)
for each DuPont Share.
In case of oversubscription and in order to benefit from a preferred
repurchase, shareholders holding a total of less than 100 DuPont Shares
(Odd-Lots), and tendering all of their DuPont Shares for repurchase have to
confirm that they are not holding more than 100 DuPont Shares (Odd Lots) and
that they have tendered all of their DuPont Shares for repurchase.
Provided that the offer to repurchase is accepted, shareholders offering their
shares for repurchase shall be credited by their depositary banks the amounts
against the surrendered DuPont Shares (in due course after expiration of the
offering term) at the current exchange rate in German Marks, EURO or, upon
request, in U.S. Dollars.
DuPont Shares tendered for the repurchase will be blocked until the transaction
has been completed.
Further details will be communicated to the shareholders via their depositary
banks and, in addition, can also be found in the English Offer Memorandum which
is available at Deutsche Bank AG, U+I/Emissionsfolgegeschafte, 60262 Frankfurt
am Main.
Additional information for the offer can be obtained from D.F. King, the
Managing Information Agent, at 001 (212) 269-5550 (calling collect) in New York.
Frankfurt am Main, 14 July 1999
On behalf of E. I. DU PONT DE NEMOURS & COMPANY
Deutsche Bank
Aktiengesellschaft
2
<PAGE> 6
Administratie van aandelen
E. I. du Pont de Nemours and Company.
Volgens een bij ons ter inzage liggend bericht is de vennootschap voornemens tot
maximaal 8.000.000 van haar ultstaamde aandelen in te kopen voor een prijs van
US$ 80.76 per aandeel, in Contankopen. Bijoverschrijding van de aanmeldeingen
boven het maximale aantal in te kopen stukken zal een pro-rata reductie worden
toegapast. Dit aanbod geldt met betrekking tot door niet-V.S. ingezetenen of
belastingsplichtigen gehouden stukken. Certificaathouders die van het aanbod
gebruik wensen te maken, dienen hun stukken, met een schriftelijke opgave van
bank,- of gironummer, daartoe in te leveren ten kantore van ondergetekende,
ulterlijk op 4 augustus 1999, om 12.00 uur. Afrekening zal t.z.t. plaatsvinden
in guldens onder inhouding van usantieel royementsloon. Wij aanvaarden geen
aansprakelijkheld voor non-acceptatie, om ongeacht welke reden, van de door ons
aangeboden aandelen door de vennootschap. Aanvuliende informatie kan zonodig
worden ingewonnen bij D.F. King, de Managing Information Agent, onder collect
call nummer 001 212 269 5550.
Administratiekantoor voor Handel en Nijverheid B.V. Singel 540. 2e etage
(Interland), 1017 AZ Amsterdam. 14 juli 1999
TRANSLATION:
Further to a document that may be inspected at our office, the company intends
to repurchase for cash up to a maximum 8,000,000 of its outstanding shares at a
price of US$80.76 per share. If applications exceed the maximum number of
securities to be repurchased a pro rata reduction will be applied. This offer
applies with respect to securities held by non-U.S. resident or taxable persons.
Holders of depositary receipts who wish to accept the offer should deliver the
physical certificates, with written notice of their bank or giro account number,
to the office of the undersigned, at the latest by 12:00 noon on 4 August 1999.
Settlement will take place in due course in Netherlands guilders, after
subtraction of the usual cancellation fee. We do not accept responsibility for
non-acceptance by the company, for whatever reason, of shares tendered by us.
Additional information can, if required, be obtained from D.F. King, the
Managing Information Agent, under collect call number 001 212 269 5550.
Administratiekantoor voor Handel en Nijverheid B.V., Singel 540, 2nd Floor,
(Interland), 1017 AZ Amsterdam, 14 July 1999.
<PAGE> 7
[DUPONT LOGO]
OFFRE D'ACQUISITION
de
E.I. DU PONT DE NEMOURS AND COMPANY
pour
MAXIMUM 8'000'000 PROPRES ACTIONS ORDINAIRES de USD 0.30 nominal chacune
- --------------------------------------------------------------------------------
E.I. du Pont de Nemours & Company (ci-apres ((DuPont)) offre a ses actionnaires
indigenes et autres qui ne sont pas des United States Persons (ci-apres ((U.S.
Persons)), le rachat de propres actions au prix de USD 80.76 par action.
Simultanement, les actionnaires qui sont des U.S. Persons se voient offrir
l'echange de leurs actions ordinaires DuPont (ci-apres les ((actions DuPont))
en actions B de Conoco Inc. (ci-apres ((Conoco)). Les U.S. Persons ne peuvent
prendre part au rachat, alors que les actionnaires qui ne sont pas des U.S.
Persons sont exclus de l'echange d'actions. Le but de l'echange d'actions est la
separation de la participation restante a Conoco. En octobre 1998, 191.5
millions d'actions A Conoco ont ete publiquement offertes et admises au negoce
aux bourses americaines.
- --------------------------------------------------------------------------------
OFFRE L'offre d'acquisition porte sur un maximum de
8'000'000 actions DuPont.
PRIX D'ACHAT USD 80.76 NET PAR ACTION DUPONT DE USD 0.30 NOMINAL
SOUS DEDUCTION DE L'IMPOT ANTICIPE AMERICAIN U.S. DE
30%.
DuPont se reserve le droit de modifier le prix
d'achat.
Le prix d'achat se base sur la parite d'echange de
l'offre d'echange de DuPont ainsi que sur les cours
sous-jacents des actions DuPont et Conoco lors de la
fixation de la parite d'echange.
Le prix d'achat sera paye en francs suisses par les
banques depositaires pour les actions DuPont cotees a
SWX Swiss Exchange, inscrites au nom de SNOC Swiss
Nominee Company (ci-apres les((certificats suisses)).
La conversion en francs suisses des montants en USD
se fait par Credit Suisse First Boston, Zurich, au
moment du paiement.
L'evolution du cours des certificats suisses a SWX
Swiss Exchange se presente comme suit (en francs
suisses; les cours sont ajustees pour les
modifications de capital):
<TABLE>
<CAPTION>
------------------------------------------------------
1997 1998 1999*
------------------------------------------------------
<S> <C> <C> <C>
Maximum 107 125 116
Minimum 64 70 72
</TABLE>
Source: Datastream
* 1er janvier au 12 juillet 1999
DELAI DE L'OFFRE DU 14 JUILLET AU 10 AOUT 1999, 16H00 (HEURE SUISSE)
(EN SUISSE) DuPont se reserve le droit de prolonger le delai de
l'offre.
CONDITIONS/ L'offre d'acquisition est notamment liee a la
DROIT DE RETRAIT condition que l'offre d'echange de DuPont soit
executee. Cette offre d'echange est notamment liee a
la condition que dans le monde entier au moins
73'990'436 actions DuPont soient annoncees.
Les autres raisons pour un retrait de DuPont de
l'offre d'acquisition sont contenues dans le
prospectus de l'offre en anglais.
MODIFICATION DES DuPont a le droit de modifier en tout temps les
CONDITIONS DE conditions de l'offre. Apres une modification du
L'OFFRE PAR DUPONT prix d'achat, le delai de l'offre doit encore se
monter au minimum a 10 jours ouvrables americains, ce
qui fait que le delai de l'offre pourra eventuellement
etre prolonge.
DROIT DE RETRAIT L'acceptation de l'offre d'acquisition peut etre
DES ACTIONNAIRES revoquee en tout temps jusqu'a l'expiration du delai
DE DUPONT de l'offre par lettre recommandee.
La revocation doit parvenir avant l'expiration du
delai de l'offre a la banque aupres de laquelle les
certificats suisses sont conserves ou consignes.
REDUCTIONS Si a l'expiration du delai de l'offre plus de
8'000'000 actions DuPont devaient etre annoncees en
dehors des Etats-Unis, les actions DuPont offertes
seront acquises dans une relation proportionnelle. Les
rompus eventuels provenant d'une reduction seront
indemnises en especes et en francs suisses.
ACTIONNAIRES DETENANT Les actionnaires qui detiennent au total moins de 100
AU TOTAL MOINS DE actions DuPont et annoncent toutes les actions DuPont
100 ACTIONS DUPONT en leur possession sont exclus de la reglementation
susmentionnee sur les reductions. Leur offre sera
entierement admise.
INFORMATION/ GARDE EN DEPOT
ANNONCE Les deposants de certificats suisses seront informes
de l'offre d'acquisition par leur banque depositaire
et sont pries de suivre ses instructions.
GARDE A DOMICILE
Les detenteurs de certificats suisses qui gerent
eux-memes leurs titres et qui desirent accepter
l'offre d'acquisition de DuPont sont pries de dument
remplir et de signer le formulaire((Declaration
d'acceptation))et de le remettre avec les certificats
correspondants, NON ANNULES, jusqu'au 10 aout 1999,
16h00 (heure suisse), directement a leur banque ou a
un domicile d'acceptation et de paiement mentionne
ci-dessous.
BLOCAGE DES TITRES Les certificats suisses annonces et consignes seront
BLOQUES par la banque depositaire et ne peuvent plus
etre negocies.
PAIEMENT DU En cas de succes de l'offre d'acquisition, le paiement
PRIX D'ACHAT du prix d achat par les banques depositaires (sous
deduction de l'impot anticipe americain U.S. de 30%),
se fera des que possible en francs suisses apres la
fin du delai de l'offre pour les certificats suisses
annonces et consignes qui seront retenus dans le cadre
de l'offre d'acquisition.
FRAIS ET TAXES La vente de certificats suisses deposes aupres de
banques en Suisse se fait sans frais pendant le delai
de l'offre, cependant sous deduction de l'impot
anticipe americain U.S. de 30%.
Le timbre federal de negociation du lors de la vente
sera paye par DuPont.
CONSEQUENCES Le produit de rachat des actions DuPont par DuPont
FISCALES selon la presente offre d'acquisition sera soumis a
l'impot anticipe americain U.S. de 30% preleve sur
l'entier du produit de rachat.
Pour autant que les certificats suisses rachetes
appartiennent a sa FORTUNE PRIVEE, le contribuable
suisse realisera par la vente des titres a DuPont des
recettes exonerees d'impots sur le revenu selon la Loi
Federale sur l'Impot Direct (LID) ainsi que selon les
lois fiscales cantonales. Les contribuables suisses
pourront beneficier d'une reduction de l'impot
anticipe americain U.S. de 30% jusqu'a concurrence de
15% (par voie de remboursement) s'ils remplissent les
conditions prevues par la loi fiscale americaine et
par la Convention sur la double imposition entre les
USA et la Suisse. La legislation fiscale suisse ne
permet pas l'imputation de l'impot anticipe americain
U.S. preleve sur le produit du rachat des certificats
suisses par DuPont selon la presente offre
d'acquisition.
Des regles speciales pourront etre applicables aux
personnes domiciliees en Suisse mais ayant un statut
d'immigre americain.
Pour autant que les certificats suisses rachetes
appartiennent a la FORTUNE PROFESSIONNELLE d'un
contribuable suisse ou a une societe soumise a la
fiscalite suisse, les gains en capitaux realises par
le rachat des actions par DuPont seront imposables en
tant que revenu. Les personnes domiciliees en Suisse
et les societes soumises a la fiscalite suisse
pourront beneficier d'une reduction de l'impot
anticipe americain U.S. de 30% jusqu'a concurrence de
15% (par voie de remboursement) s'ils remplissent les
conditions selon la loi fiscale americaine et selon la
Convention sur la double imposition entre les USA et
la Suisse. Pour autant que les conditions de la
legislation fiscale suisse et de la Convention sur la
double imposition entre les USA et la Suisse soient
remplies, une imputation partielle ou complete de
l'impot anticipe americain U.S. pourra etre accordee.
Des regles speciales pourront etre applicables aux
societes soumises a un statut fiscal particulier.
COTATION DES Pour le moment il n'est pas prevu de supprimer la
CERTIFICATS SUISSES cotation des certificats suisses a SWX Swiss Exchange.
Si a l'issue de l'offre d'acquisition, le nombre des
certificats suisses restant en circulation dans le
public ne devait plus etre suffisant pour assurer un
negoce regulier, la suppression de la cotation des
certificats suisses a SWX Swiss Exchange sera
examinee.
RESTRICTIONS DE VENTE L'offre d'acquisition s'adresse exclusivement aux
actionnaires de DuPont qui ne sont PAS consideres
comme des U.S. Persons.
Une U.S. Person est definie comme suit a ce sujet:
- any individual who is a U.S. citizen or U.S.
resident (for U.S. federal income tax purposes);
- any corporation, partnership, limited liability
company or other entity created or organized in
the U.S. or under the law of the U.S. or of any
State within the U.S.;
- any estate which is subject to U.S. income tax on
all of its income (regardless of the source of
such income); and
- any trust if (i) a U.S. court is able to exercise
primary supervision over the administration of
the trust, and (ii) one or more U.S. persons have
the authority to control all substantial
decisions of the trust (including, without
limitation, any U.S. pension trust organized under
Section 401(a) of the Internal Revenue Code of
1986, as amended).
Cette annonce est un resume du prospectus de l'offre en anglais. Le prospectus
de l'offre en anglais faisant foi peut etre retire sans frais chez Credit Suisse
First Boston, Zurich, au numero de telephone 01 333 43 85 ou de telecopie 01 333
35 93.
Cette annonce se refere aux actions DuPont cotees chez SWX Swiss Exchange,
inscrites au nom de SNOC Swiss Nominee Company (certificats suisses). Pour le
deroulement de l'offre d'acquisition pour les actions originales DuPont
americaines, il faut suivre les indications de la banque depositaire.
Si le detenteur de certificats suisses est considere comme U.S. Person, il faut
prendre contact avec le Managing Information Agent de l'offre d'acquisition,
D.F. King & Co., Inc., New York (+1 812 269 55 50 - Collect Call) ou la banque
depositaire.
- --------------------------------------------------------------------------------
Le 14 juillet 1999 CREDIT SUISSE FIRST BOSTON
CREDIT SUISSE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Numero de valeur ISIN
---------------- ----
<S> <C> <C>
Action ordinaire DuPont (certificat suisse) 927 401 CH 000 927 401 7
</TABLE>
<PAGE> 8
[DUPONT LOGO]
Kaufangebot
der
E.I. du Pont de Nemours and Company
fur
maximal 8'000'000 eigene Stammaktien von je USD 0.30 Nennwert
- --------------------------------------------------------------------------------
E.I. du Pont de Nemours & Company (nachstehend (DuPont)) bietet seinen
inlandischen sowie allen ande-ren Aktionaren, die nicht United States Persons
(nachstehend ((U.S. Persons)) sind, den Ruckkauf eigener Aktien zum Preis von
USD 80.76 pro Aktie an. Zeitgleich wird den Aktionaren, die U.S. Persons sind,
der Tausch ihrer Stammaktien der DuPont (nachstehend (DuPont-Aktien)) in Class
B-Aktien der Conoco Inc. (nachstehend (Conoco)) angeboten. U.S. Persons konnen
nicht an dem Ruckkauf teilnehmen, wahrend Nicht-U.S. Persons von dem
Aktientausch ausgeschlossen sind. Zweck des Aktientauschs ist die Trennung von
den verbliebenen Anteilen an Conoco. Im Oktober 1998 wurden bereits 191.5 Mio.
Class A-Aktien der Conoco offentlich angeboten und zum Handel an
U.S.-amerikanischen Borsen zugelassen.
- --------------------------------------------------------------------------------
ANGEBOT Das Kaufangebot bezieht sich auf maximal 8'000'000
DuPont-Aktien.
KAUFPREIS USD 80.76 NETTO JE DUPONT-AKTIE VON USD 0.30 NENNWERT
ABZUGLICH U.S.-AMERIKANISCHER QUELLENSTEUER VON 30%.
DuPont behalt sich das Recht vor, den Kaufpreis zu
andern.
Der Kaufpreis basiert auf dem Umtauschverhaltnis des
Umtauschangebots der DuPont sowie den dafur
zugrundeliegenden Kurswerten der DuPont- und Conoco-
Aktien zum Zeitpunkt der Festlegung des
Umtauschverhaltnisses.
Der Kaufpreis fur die an der SWX Schweizer Borse
kotierten, auf den Namen der SNOC Swiss Nominee Company
eingetragenen DuPont-Aktien (nachstehend (Schweizer
Zertifikate)) wird uber die jeweiligen Depotbanken in
Schweizer Franken ausbezahlt. Die Umrechnung des auf
den DuPont-Aktien anfallenden USD-Kauf-preises in
Schweizer Franken erfolgt durch die Credit Suisse First
Boston, Zurich, zum Zeitpunkt der Auszahlung.
Die Kursentwicklung der Schweizer Zertifikate an der
SWX Schweizer Borse prasentiert sich wie folgt (in
CHF, Kurse sind bezuglich Kapitalveranderungen
adjustiert):
<TABLE>
<CAPTION>
------------------------------------------------------------
1997 1998 1999*
------------------------------------------------------------
<S> <C> <C> <C>
Hochst 107 125 116
Tiefst 64 70 72
</TABLE>
Quelle: Datastream
* 1. Januar bis 12. Juli 1999
ANGEBOTSFRIST VOM 14. JULI BIS 10. AUGUST 1999, 16.00 UHR (SCHWEIZER
(IN DER SCHWEIZ) ZEIT) DuPont behalt sich das Recht vor, die
Angebotsfrist zu verlangern.
BEDINGUNGEN/ Das Kaufangebot ist unter anderem an die Bedingung
RUCKTRITTSRECHT geknupft, dass das Umtauschangebot der DuPont vollzogen
wird. Dieses Umtauschangebot ist unter anderem an die
Bedingung geknupft, dass mindestens 73'990'436
DuPont-Aktien weltweit angedient werden.
Die weiteren Grunde fur einen Rucktritt der DuPont vom
Kaufangebot sind im englischen Angebotsprospekt
festgehalten.
ANDERUNGEN DER DuPont steht das Recht zu, die Angebotsbedingungen
ANGEBOTSBEDINGUNGEN jederzeit zu andern. Nach einer Anderung des
DURCH DUPONT Kaufpreises muss die Angebotsfrist noch mindestens 10
U.S.-amerikanische Werktage betragen, die
Angebotsfrist wird demnach evtl. verlangert.
RUCKTRITTSRECHT DES Die Annahme des Kaufangebots kann bis zum Ende der
DUPONT-AKTIONARS Angebotsfrist jederzeit mittels eingeschriebenem Brief
widerrufen werden.
Der Widerruf hat bis zum Ende der Angebotsfrist bei der
Bank einzutreffen, bei welcher die Schweizer
Zertifikate verwahrt bzw. hinterlegt worden sind.
KURZUNG Sollten nach dem Ende der Angebotsfrist mehr als
8'000'000 DuPont-Aktien ausserhalb der USA angedient
worden sein, werden die angedienten DuPont-Aktien in
einem anteiligen Verhaltnis zuruckgekauft. Allfallige
durch eine Kurzung entstehende Bruchteile werden in bar
und in Schweizer Franken abgegolten.
AKTIONARE MIT INS- Aktionare mit insgesamt weniger als 100 DuPont-Aktien,
GESAMT WENIGER ALS die alle in ihrem Eigentum befindenden DuPont-Aktien
100 DUPONT-AKTIEN andienen, sind von der obenerwahnten Kurzungsregelung
ausgenommen. Ihre Andienung wird voll berucksichtigt.
INFORMATION/ DEPONENTEN
ANMELDUNG Die Deponenten von Schweizer Zertifikaten werden durch
ihre Depotbank uber das Kaufangebot informiert und
werden gebeten, gemass den Instruktionen der Depot-
bank zu verfahren.
HEIMVERWAHRER
Die Heimverwahrer von Schweizer Zertifikaten, welche
das Kaufangebot der DuPont annehmen mochten, werden
gebeten, das Formular((Annahmeerklarung)), vollstan-
dig ausgefullt und unterzeichnet, zusammen mit dem/den
entsprechenden Zertifikat(en), NICHT ENTWERTET, bis
spatestens 10. August 1999, 16.00 Uhr (Schweizer
Zeit), direkt bei ihrer Bank oder einer der
untenerwahnten Annahme- und Zahlungsstellen
einzureichen.
TITELSPERRUNG Die zum Verkauf angemeldeten und hinterlegten Schweizer
Zertifikate werden durch die Depotbanken GESPERRT und
konnen nicht mehr gehandelt werden.
AUSZAHLUNG Bei erfolgreichem Kaufangebot erfolgt die Auszahlung
DES KAUFPREISES des Kaufpreises (abzuglich U.S.-amerikanischer
Quellensteuer von 30%) fur die angemeldeten und
hinterlegten Schweizer Zertifikate, die im Rahmen des
Kaufangebots akzeptiert werden konnen, uber die
jeweiligen Depotbanken in Schweizer Franken so bald wie
moglich nach dem Ende der Angebotsfrist.
KOSTENREGELUNG Der Verkauf von Schweizer Zertifikaten, welche bei
UND ABGABEN Banken in der Schweiz deponiert sind, erfolgt wahrend
der Angebotsfrist ohne Spesen, jedoch unter Abzug der
U.S.-amerikanischen Quellensteuer von 30%.
Die beim Verkauf anfallenden eidgenossischen
Umsatzabgaben werden durch DuPont getragen.
STEUERFOLGEN Der gesamte Erlos aus dem Ruckkauf der DuPont-Aktien
gemass dem vorliegenden Kaufangebot unterliegt der
U.S.-amerikanischen Quellensteuer von 30%.
Soweit die zuruckgekauften Schweizer Zertifikate
Bestandteil des PRIVATVERMOGENS bilden, ist der Erlos
aus dem Ruckkauf der DuPont-Aktien durch DuPont fur
Schweizer Steuerpflichtige nach dem Bundesgesetz uber
die Direkte Bundessteuer (DBG) und den kantonalen
Steuergesetzen nicht steuerbar. Schweizer
Steuerpflichtige konnen eine Verringerung der
U.S.-amerikanischen Quellensteuer von 30% auf 15% (auf
dem Wege der Ruckerstattung) beantragen, soweit sie die
Bedingungen der U.S.-amerikanischen Steuergesetze und
des schweizerisch-amerikanischen
Doppelbesteuerungsabkommens erfullen. Das Schweizer
Steuerrecht gewahrt keine Anrechnung von
U.S.-amerikanischen Quellensteuern im Zusammenhang mit
den Einnahmen aus dem Ruckkauf der DuPont-Aktien durch
DuPont gemass vorliegendem Kaufangebot.
Besondere Bestimmungen konnen auf in der Schweiz
wohnhafte Personen mit einem U.S.-Einwanderungsstatus
zur Anwendung gelangen.
Soweit die Schweizer Zertifikate im GESCHAFTSVERMOGEN
eines Schweizer Steuerpflichtigen liegen oder dem
Vermogen einer dem Schweizer Steuerrecht unterste-
henden Unternehmung zuzurechnen sind, bilden
Kapitalgewinne, die durch den Ruckkauf der
DuPont-Aktien durch DuPont realisiert werden,
Bestandteil des steuerbaren Ertrages und unterstehen
der Ertragssteuer. Schweizer Steuerpflichtige und
Unternehmen konnen eine Verringerung der
U.S.-amerikanischen Quellensteuer von 30% auf 15% (auf
dem Wege der Ruckerstattung) beantragen, falls sie die
Bedingungen des U.S.-Steuerrechts und des
schweizerisch-amerikanischen Doppel-
besteuerungsabkommens erfullen. Eine vollstandige oder
teilweise Anrechnung der U.S.-amerikanischen
Quellensteuer kann unter dem
schweizerisch-amerikanischen Doppelbesteuerungsabkommen
gewahrt werden, falls die Bedingungen des schwei-
zerischen Steuerrechts und des
schweizerisch-amerikanischen Doppelbesteuerungs
abkommens erfullt sind.
Besondere Bestimmungen konnen fur Gesellschaften, die
unter einem besonderen Steuerstatus stehen, zur
Anwendung gelangen.
KOTIERUNG DER Zum gegenwartigen Zeitpunkt ist nicht beabsichtigt, die
SCHWEIZER ZERTIFIKATE Schweizer Zertifikate an der SWX Schweizer Borse zu
dekotieren.
Sollte im Anschluss an das Kaufangebot aufgrund der
Anzahl sich noch im Publikum befindenden Schweizer
Zertifikate ein regelmassiger Handel nicht mehr gewahr-
leistet sein, wird die Dekotierung der Schweizer
Zertifikate an der SWX Schweizer Borse gepruft.
VERKAUFSRESTRIKTION Das Kaufangebot richtet sich ausschliesslich an
Aktionare der DuPont, welche nicht als U.S. Person
gelten. Eine U.S. Person wird hierfur wie folgt
definiert:
- any individual who is a U.S. citizen or U.S.
resident (for U.S. federal income tax purposes);
- any corporation, partnership, limited liability
company or other entity created or organized in the
U.S. or under the law of the U.S. or of any State
within the U.S.;
- any estate which is subject to U.S. income tax on
all of its income (regardless of the source of such
income); and
- any trust if (i) a U.S. court is able to exercise
primary supervision over the admi- nistration of
the trust, and (ii) one or more U.S. persons have
the authority to con- trol all substantial
decisions of the trust (including, without
limitation, any U.S. pension trust organized under
Section 401(a) of the Internal Revenue Code of
1986, as amended).
Dieses Inserat stellt eine Zusammenfassung des englischen Angebotsprospekts dar.
Der massgebliche englische Angebotsprospekt kann bei der Credit Suisse First
Boston, Zurich, unter Telefon 01 333 43 85 bzw. Telefax 01 333 35 93 kostenlos
bezogen werden.
Dieses Inserat bezieht sich auf die an der SWX Schweizer Borse kotierten, auf
den Namen der SNOC Swiss Nominee Company eingetragenen DuPont-Aktien (Schweizer
Zertifikate). Fur den Ablauf des Kaufangebots fur U.S.-amerikanische
DuPont-Originalaktien sind die Hinweise der Depotbank zu beachten.
Sofern Inhaber von Schweizer Zertifikaten als U.S. Person gelten, ist der
Managing Information Agent des Kaufangebots, D.F. King & Co., Inc., New York (+1
812 269 55 50 - Collect Call) oder die Depotbank zu kontaktieren.
- --------------------------------------------------------------------------------
14. Juli 1999 CREDIT SUISSE FIRST BOSTON
CREDIT SUISSE
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Valorennummer ISIN
------------- ----
<S> <C> <C>
DuPont Stammaktien (Schweizer Zertifikate) 927 401 CH 000 927 401 7
</TABLE>
<PAGE> 9
NON-LITERAL TRANSLATION
Notice
Date of Publication 14 July 1999
(Neue Zurcher Zeitung, Finanz und Wirtschaft, Le Temps)
(DuPont Logo)
PURCHASE OFFER
by
E. I. DU PONT DE NEMOURS & COMPANY
for
UP TO 8,000,000 SHARES OF ITS COMMON STOCK of a par value of USD 0,30 each
E. I. du Pont de Nemours and Company ("DuPont") is offering its Swiss and other
non-U.S. shareholders the opportunity to sell some or all of their shares to
DuPont for $ 80.76 per share in cash. This cash offer will be made substantially
concurrently with an exchange offer being made in the United States in which
DuPont is offering its U.S. shareholders the opportunity to exchange DuPont
common stock for shares of Conoco Class B common stock. United States persons
(for United States federal income tax purposes) may not participate in the cash
offer, while non-U.S.-persons may not participate in the exchange offer. The
exchange offer is the mechanism by which DuPont will dispose of its remaining
ownership of Conoco Inc. In October of 1998, Conoco completed an initial public
offering of 191.5 million shares of Conoco Class A common stock.
OFFER The purchase offer is for a maximum of 8,000,000
DuPont Shares.
PURCHASE PRICE USD 80.76 PER DUPONT SHARE OF A PAR VALUE OF USD 0,30
LESS 30% U.S. WITHHOLDING TAX.
<PAGE> 10
DuPont reserves the right to change the
purchase price.
The purchase price is based on the exchange
ratio of the exchange offer by DuPont and the
underlying market price of the DuPont and
Conoco shares at the time of the fixing of
the exchange ratio.
The purchase price of the DuPont shares
listed on the SWX Swiss Exchange and held by
SNOC Swiss Nominee Company ("Swiss
Certificates") shall be paid out to the
certificate holders through the respective
depository banks in Swiss Francs after the
USD amount has been converted into Swiss
Francs by Credit Suisse First Boston, Zurich,
at the time of payment to participating
certificate holders.
The market price development of the Swiss
Certificates on the SWX Swiss Exchange is as
follows (in CHF, the quotes are adjusted for
capital developments):
<TABLE>
<CAPTION>
1997 1998 1999*
-------- ---- ---- ------
<S> <C> <C> <C>
High 107 125 116
Low 64 70 72
</TABLE>
(Source: Datastream)
* 1 January through 12 July 1999
OFFER PERIOD FROM 14 JULY TO 10 AUGUST 1999, 16:00
(SWISS TIME)
DuPont reserves the right to extend the offer
period.
CONDITIONS / RIGHT TO The purchase is subject to, among other
REVOKE conditions, the condition that the exchange
offer by DuPont is completed. This exchange
offer is - among other conditions - made
under the condition that at least 73,990,436
DuPont shares are tendered for exchange
worldwide.
Further conditions under which DuPont may not
consummate the offer are listed in the
English offer prospectus.
<PAGE> 11
AMENDMENTS OF THE OFFER DuPont shall have the right to amend the
CONDITIONS BY DUPONT offer conditions at any time. Upon an
amendment of the purchase price, the offer
period shall remain open at least ten U.S.
working days, i.e. if the offer has less than
ten U.S. working days until expiration, the
offer shall be extended accordingly.
RIGHT TO WITHDRAW OF Subject to following the instructions of the
DUPONT SHAREHOLDERS offer on a timely basis, the acceptance of
the purchase offer may be withdrawn any time
up to the end of the offer period.
A written withdrawal of the offer has to be
received by the bank holding the
corresponding Swiss certificates prior to the
expiration of the offering period.
PRORATION Should after the end of the offer period more
than 8,000,000 DuPont shares be tendered
outside the U.S. (oversubscription), the
tendered DuPont shares shall be purchased on
a pro rata basis.
Compensation for amounts arising from
fractional entitlements will be paid in cash
and in Swiss Francs.
SHAREHOLDERS HOLDING LESS Shareholders holding a total of less than 100
THAN 100 DUPONT SHARES DuPont shares (Odd Lots) and tendering all of
their shares will not be subject to
proration. Their tendering of shares will be
fully considered.
INFORMATION / NOTIFICATION DEPOSITORS
FOR TENDER The depositors of Swiss Certificates will be
informed of the purchase offer by the
depository banks and will be asked to proceed
in accordance with the instructions by the
depository banks.
HOLDERS OF PHYSICAL SHARES
Holders of physical Swiss certificates who
wish to accept the purchase offer of DuPont
are requested to ask to file the completed
and signed form "Declaration of Assignment"
together with the corresponding
certificate(s) - not cancelled - by 10 August
1999, 16:00 (Swiss time), either directly to
their bank or to any Acceptance and Payment
Agency.
<PAGE> 12
BLOCKING OF TRADE The Swiss Certificates tendered and deposited
will be blocked for trade by the depository
bank and may not be traded any longer.
PAYMENT OF PURCHASE Upon successful completion of the purchase
PRICE offer the purchase price (less 30% U.S.
withholding tax) shall be paid out as soon as
possible to the certificate holders through
the respective depository banks in Swiss
Francs.
CHARGES AND TAXES The sale of Swiss Certificates which are
deposited with banks in Switzerland shall be
effected free of charges during the offer
period. However, 30% U.S. withholding taxes
shall be deducted.
The Federal Transactional Taxes shall be
borne by DuPont.
TAX CONSEQUENCES The full proceeds of the purchase of DuPont
shares pursuant to the present purchase offer
are subject to U.S. withholding tax of 30%.
To the extent the Swiss Certificates tendered
are part of their PRIVATE ASSETS, for Swiss
taxpayers the proceeds of the purchase of
DuPont-shares by DuPont are not subject to
income taxation under the Code on Direct
Federal Taxes and the Cantonal tax laws.
Swiss taxpayers qualify for a reduction of
the U.S. withholding tax of 30% to 15% (by
way of tax refund) if they comply with the
formal requirements of the U.S. tax law and
the Swiss-U.S. double taxation treaty. Swiss
tax law does not grant tax reduction and/or
tax credits for the U.S. withholding tax on
the proceeds of the purchase of DuPont-shares
by DuPont under the present offer.
Special rules may apply to Swiss residents
with an U.S. immigration status.
To the extent the Shares are part of the
business assets of a Swiss taxpayer or belong
to a enterprise subject to Swiss taxation,
capital gains realized out of the purchase of
DuPont-shares by DuPont form part of the
taxable income. Swiss taxpayers and
enterprises subject to Swiss taxation qualify
for a reduction of the U.S. withholding tax
of 30% to 15% (by way of tax refund) if they
comply with the formal requirements of the
U.S. tax law and the Swiss-U.S. double
taxation treaty. Tax credit for the full or a
part of the U.S. withholding tax may be
obtained under the Swiss-U.S. double taxation
treaty, if and to the extent the requirements
of Swiss tax law and the Swiss-U.S. double
taxation treaty are complied with
<PAGE> 13
Special rules may apply to companies with a
special tax status.
DE-LISTING At present time, a de-listing of the Swiss
Certificates on the SWX Swiss Exchange is not
intended.
If, after completion of the purchase offer, a
regular trade in Swiss Certificates is no
longer possible, due to number of Swiss
Certificates outstanding, a de-listing of the
Swiss Certificates shall be taken into
consideration.
SALES RESTRICTIONS The purchase offer is solely directed to
shareholders of DuPont who do not qualify as
U.S. persons.
A U.S. person for these purposes is:
[In English also in German and French text of
the notice.]
- any individual who is a U.S. citizen or
U.S. resident (for U.S. federal income
tax purposes);
- any corporation, partnership, limited
liability company or other entity
created or organized in the U.S. or
under the law of the U.S. or of any
state of within the U.S.;
- any estate which is subject to U.S.
income tax on all of its income
(regardless of the source of such
income); and
- any trust (i) if a U.S. court is able to
exercise primary supervision over the
administration of the trust, and (ii)
one or more U.S. persons have the
authority to control all substantial
decisions of the trust (including,
without any limitation, any U.S. pension
trust organized under Section 401(a) of
the Internal Revenue Code of 1986, as
amended).
This notice is a summary of the English Offer Prospectus. The relevant English
Offer Prospectus may be obtained at Credit Suisse First Boston, Zurich, under
phone 01 333 43 85 or fax 01 333 43 93, free of charge.
This notice refers to the shares of Du Pont held by SNOC Swiss Nominee Company
and listed on the SWX Swiss Exchange ("Swiss Certificates"). To validly effect
the purchase offer for U.S. Du Pont shares the instructions by the depository
bank shall be observed.
If a holder of Swiss Certificates is a U.S. Person, he/she is urged to contact
the Managing Information Agent for the purchase offer, D.F. King & Co., Inc.,
New York, (+1 812 269 5550 - Collect Call) or the depository bank.
14 July 1999 Credit Suisse First Boston
Credit Suisse
Swiss Sec.No. ISIN
Shares of Common Stock of DuPont (Swiss Certificates)
927 401 CH 000 927 401 7
<PAGE> 14
E.I. DU PONT DE NEMOURS AND COMPANY
International Depositary Receipts
emis par B.O.I.C.
avec la garantie de la B.B.L.
OFFRE PUBLIQUE D'ACHAT D'ACTIONS PROPRES ("L'OFFRE") FAITE PAR
E.I. DU PONT DE NEMOURS AND COMPANY
("DUPONT") A SES ACTIONNAIRES
NON-AMERICAINS
Les detenteurs non-americains de certificats au porteur representant des actions
DuPont, emis par Belgian Overseas Issuing Corporation ("B.O.I.C.") pourront
recevoir, aux conditions precisees dans le prospectus, un montant en especes
equivalent a 80,76 USD brut par action DuPont, coupons n(degree) 280 a 300
attaches.
UN IMPOT FEDERAL AMERICAIN SUR LES REVENUS DE 30% (QUI PEUT ETRE RAMENE A 15%
S'IL EST FAIT APPEL A LA CONVENTION PREVENTIVE DE DOUBLE IMPOSITION PAR LE
DETENTEUR BELGE DE CERTIFICATS) SERA RETENU SUR LES MONTANTS BRUTS DISTRIBUES.
DES LORS, EN FONCTION DE L'EVOLUTION DU COURS DE L'ACTION DUPONT, LE MONTANT NET
A RECEVOIR RISQUE D'ETRE INFERIEUR AU COURS DE L'ACTION DUPONT EN BOURSE DE
BRUXELLES.
PAR AILLEURS, DUPONT N'A PAS L'INTENTION DE DEMANDER LA RADIATION DE L'ACTION
DUPONT DE LA BOURSE DE BRUXELLES APRES LA CLOTURE DE L'OFFRE.
L'Offre est ouverte du 14 juillet au 4 aout 1999. Les detenteurs non-americains
de certificats au porteur DuPont qui desirent participer a cette Offre sont
pries de deposer leurs formulaires d'acceptation aupres des guichets de la
B.B.L. au plus tard le 4 aout 1999 avant 16 heures.
Les investisseurs sont invites a prendre connaissance du prospectus americain
(<<offer to purchase>>) redige en langue anglaise, accompagne d'un complement de
prospectus, redige en francais et en neerlandais, et des bulletins
d'acceptation. Ces documents sont disponibles au siege de la B.B.L., Avenue
Marnix 24 a 1000 Bruxelles (Tel. 02/547.27.25), ou des informations
complementaires peuvent egalement etre obtenues.
<PAGE> 15
E.I. DU PONT DE NEMOURS AND COMPANY
International Depositary Receipts
uitgegeven door B.O.I.C.
met de waarborg van de BBL
OPENBAAR AANKOOPBOD OP EIGEN AANDELEN ("HET BOD") VOORGESTELD
DOOR E.I. DU PONT DE NEMOURS AND COMPANY ("DUPONT") AAN
HAAR NIET-AMERIKAANSE AANDEELHOUDERS
De niet-Amerikaanse houders van effecten aan toonder die DuPont aandelen
vertegenwoordigen, uitgegeven door Belgian Overseas Issuing Corporation
("B.O.I.C.") kunnen, aan de voorwaarden vermeld in de prospectus, een bedrag in
geld verkrijgen gelijk aan 80,76 USD bruto per DuPont aandeel, coupons nr 280
tot 300 aangehecht.
EEN AMERIKAANSE FEDERALE BELASTING OP INKOMSTEN VAN 30% (DIE TERRUGGEBRACHT KAN
WORDEN TOT 15% INDIEN EEN BEROEP WORDT GEDAAN OP DE CONVENTIE TER VOORKOMING
VAN DUBBELE BELASTINGSHEFFING NAAR DE BELGISCHE AANDEELHOUDER) ZAL GEIND WORDEN
OP DE BRUTO UITGEKEERDE BEDRAGEN. DAARUIT VOLGT DAT, IN FUNCTIE VAN DE EVOLUTIE
VAN DE KOERS VAN HET DUPONT AANDEEL OP DE BEURS VAN BRUSSEL, HET NETTO TE
VERKRIJGEN BEDRAG KLEINER ZOU KUNNEN ZIJN DAN DE KOERS VAN HET DUPONT AANDEEL OP
DE BEURS VAN BRUSSEL.
DUPONT HEEFT GEEN VOORNEMEN OM DE SCHRAPPING UIT DE NOTERING VAN HET DUPONT
AANDEEL VAN DE BEURS VAN BRUSSEL AAN TE VRAGEN NA AFSLUITING VAN HET BOD.
Het bod is geopend van 14 juli tot en met 4 augustus 1999. De niet-Amerikaanse
houders van effecten aan toonder DuPont die wensen deel te nemen aan dit Bod
worden verzocht hun aanvaardingsformulieren, ten laatste op 4 augustus 1999 voor
16u, in te dienen aan de loketten van de BBL.
De investeerders worden uitgenodigd kennis te nemen van de Amerikaanse
prospectus ("Offer to purchase") opgesteld in het Engels, vergezeld van een
prospectusbijvoegsel opgesteld in het Frans en in het Nederlands, en van de
aanvaardingsformulieren. Deze documenten zijn beschikbaar op de zetel van de BBL
(Marnixlaan 24, 1000 Brussel - Tel: 02 / 547.27.25), waar ook bijkomende
informatie kan verkregen worden.
<PAGE> 16
Translation
E.I. DU PONT DE NEMOURS AND COMPANY
International Depositary Receipts
issued by B.O.I.C.
with the guarantee of B.B.L.
CASH OFFER MADE BY E.I. DUPONT DE NEMOURS
AND COMPANY ("DUPONT")
TO ITS NON-U.S. SHAREHOLDERS
Non-U.S. holders of bearer certificates representing DuPont shares issued by
Belgian Overseas Issuing Corporation ("B.O.I.C.") are entitled, subject to the
conditions laid down in the offer to purchase, to sell their DuPont shares with
coupons n(degree) 280 to 300 attached, for 80.76 USD per share in cash.
UNITED STATES FEDERAL INCOME TAXES EQUAL TO 30% (THAT CAN BE REDUCED TO 15% BY
APPLICATION OF THE DOUBLE TAXATION TREATY BETWEEN BELGIUM AND THE UNITED STATES)
OF THE GROSS PROCEEDS WILL BE WITHHELD. DEPENDING ON THE FLUCTUATION OF THE
DUPONT STOCK, THE NET PROCEEDS MIGHT BE LOWER THAN THE TRADING PRICE OF THE
DUPONT STOCK ON THE BRUSSELS STOCK EXCHANGE.
DUPONT HAS NO INTENTION TO DELIST DUPONT STOCK FROM THE BRUSSELS STOCK EXCHANGE
AFTER THE CLOSING OF THE OFFER.
The Offer is open from 14 July to 4 August 1999. Non-U.S. holders of DuPont
bearer certificates who are willing to participate in the Offer are requested to
file their acceptation forms with BBL by 4 August 1999 before 4 p.m. at the
latest.
Investors are kindly requested to read the American offer to purchase in
English, supplemented by a wrapper in French and in Dutch, and acceptation
forms. Such documents are available at B.B.L., Avenue Marnix 24, 1000 Brussels
(Tel. 02/547.27.25), where additional information is also available.
<PAGE> 1
E. I. DU PONT DE NEMOURS AND COMPANY
OFFER TO PURCHASE FOR CASH
UP TO 8,000,000 SHARES OF ITS COMMON STOCK HELD BY NON-U.S. PERSONS
AT
$80.76 GROSS PER SHARE
THE CASH OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON AUGUST 10, 1999,
UNLESS THE OFFER IS EXTENDED.
THIS OFFER IS BEING MADE SOLELY TO NON-U.S. PERSONS (AS DEFINED HEREIN).
UNITED STATES FEDERAL INCOME TAX WITHHOLDING GENERALLY WILL
APPLY TO THE GROSS PROCEEDS OF THE OFFER TO BE RECEIVED BY NON-U.S. PERSONS.
------------------------
THIS CASH OFFER TO NON-U.S. PERSONS IS BEING MADE IN CONNECTION WITH AN EXCHANGE
OFFER, COMMENCED ON JULY 12, 1999, WHEREIN E. I. DU PONT DE NEMOURS AND
COMPANY IS OFFERING TO EXCHANGE SHARES OF CONOCO INC. STOCK FOR SHARES
OF DUPONT STOCK HELD BY U.S. PERSONS (AS DEFINED HEREIN). THIS CASH
OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THIS CASH OFFER IS, HOWEVER, SUBJECT TO CERTAIN
OTHER CONDITIONS, INCLUDING THE SUCCESSFUL COMPLETION OF
THE EXCHANGE OFFER. THE EXCHANGE OFFER IS OPEN ONLY TO
U.S. PERSONS. SEE SECTION 6.
------------------------
THIS CASH OFFER DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO PURCHASE, SHARES OF
CONOCO INC. STOCK.
IMPORTANT
Any stockholder who desires to tender all or any portion of such
stockholder's Shares (as defined herein) should either (i) unless an Agent's
Message (as defined herein) is utilized, complete and sign the Letter of
Transmittal (or manually signed facsimile copy thereof) in accordance with the
instructions in the Letter of Transmittal, have such stockholder's signature
thereon guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or a manually signed facsimile copy
thereof) and any other required documents to the Depositary (as defined herein)
and either deliver the certificates for such Shares to the Depositary or tender
such Shares pursuant to the procedures for book-entry transfer set forth in
Section 3 or (ii) request such stockholder's broker, dealer, commercial bank,
trust company, custodian bank or other nominee to effect the transaction for
such stockholder. Any stockholder whose Shares are registered in the name of a
broker, dealer, commercial bank, trust company, custodian bank or other nominee
must contact such broker, dealer, commercial bank, trust company, custodian bank
or other nominee to tender such Shares.
Any owner of Non-U.S. Depositary Receipts (as defined herein) who desires
to tender all or any portion of the Shares underlying such Non-U.S. Depositary
Receipts should either (i) request the issuer of such Non-U.S. Depositary
Receipts to effect the transaction for such owner or (ii) request such owner's
broker, dealer, commercial bank, trust company, custodian bank or other nominee
to effect the transaction for such owner. Any such owner whose Non-U.S.
Depositary Receipts are registered in the name of, or otherwise deposited with,
a broker, dealer, commercial bank, trust company, custodian bank or other
nominee must contact such person to tender the Shares underlying the Non-U.S.
Depositary Receipts.
A stockholder who desires to tender Shares and whose certificates
representing such Shares are not immediately available, or who cannot comply
with the procedures for book-entry transfer on a timely basis, or who cannot
deliver all required documents to the Depositary prior to the expiration of the
Offer, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3. Procedures for guaranteed delivery set forth in
Section 3 do not apply and may not be used with respect to Non-U.S. Depositary
Receipts. An owner of Non-U.S. Depositary Receipts should follow any applicable
instructions of the issuer thereof, or its broker or other relevant financial
intermediary, if such stockholder desires to tender Shares underlying Non-U.S.
Depositary Receipts.
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be directed to the Managing Information Agent at
its address and telephone numbers set forth on the back cover of this Offer to
Purchase or the relevant Non-U.S. Information Agent at its address listed on the
back cover. A stockholder also may contact brokers, dealers, commercial banks,
trust companies or custodian banks for assistance concerning the Offer.
------------------------
The Managing Information Agent for the Offer is:
D.F. KING & CO., INC.
The Non-U.S. Information Agents for the Offer are:
DEUTSCHE BANK AG CREDIT SUISSE FIRST BOSTON PARIBAS
ADMINISTRATIEKANTOOR VOOR HANDEL EN NIJVERHEID B.V.
B.O.I.C. (THE BELGIAN OVERSEAS ISSUING CORPORATION)
July 14, 1999
<PAGE> 2
SUMMARY
This general summary is provided for the convenience of the Company's
stockholders and is qualified in its entirety by reference to the full text and
more specific details of this Offer to Purchase.
Number of Shares to be
Purchased..................... 8,000,000 Shares (or such lesser number of
Shares as are validly tendered).
Purchase Price................ $80.76 per Share, without interest, less
applicable withholding taxes.
How to Tender Shares.......... Follow procedures in Section 3. Call the
Managing Information Agent or, where
applicable, the relevant Non-U.S. Information
Agent or consult your broker if you have
questions or need assistance. ONLY NON-U.S.
PERSONS (AS DEFINED IN "INTRODUCTION --
GENERAL") MAY ACCEPT THIS OFFER.
Proration; Odd-Lots........... If more than 8,000,000 Shares are validly
tendered and not properly withdrawn, the
Company will purchase Shares validly tendered
on a pro rata basis. Tendering stockholders
owning as of July 7, 1999 an aggregate of fewer
than 100 Shares, or participating owners of
Non-U.S. Depositary Receipts representing fewer
than 100 Shares as of July 7, 1999, will not be
subject to proration, provided that an
aggregate of fewer than 100 Shares or Non-U.S.
Depositary Receipts representing fewer than 100
Shares, respectively, continue to be
beneficially owned as of the Expiration Date.
Brokerage Commissions......... None for registered stockholders who tender
Shares directly to the Depositary. Stockholders
holding Shares or Non-U.S. Depositary Receipts
through their broker or bank are urged to
consult such institutions and owners of
Non-U.S. Depositary Receipts are urged to
consult the issuer thereof to determine whether
they charge any fees or transaction costs if
stockholders tender Shares, including Shares
underlying Non-U.S. Depositary Receipts,
through such institutions.
United States Federal Income
Tax Withholding............... The Depositary, in the case of registered
stockholders, and brokers, dealers, commercial
banks, trust companies, custodian banks or
other nominees in the case of stockholders
holding Shares through such institutions, will
be required to withhold United States federal
income taxes equal to 30% of the gross proceeds
of the Offer unless a reduced rate of
withholding is available pursuant to a tax
treaty or an exemption from withholding is
available because such gross proceeds are
effectively connected with the conduct of a
trade or business within the United States. The
withholding of United States federal income
taxes will also apply to owners of Non-U.S.
Depositary Receipts. Stockholders may be able
to obtain a refund of such withholding taxes.
See Sections 3 and 14 for more details.
Stock Transfer Tax............ None in the United States if payment of the
purchase price and delivery of any Shares not
purchased are made to the registered holder.
See Section 5. Without having made any
investigation with respect thereto, the Company
is not aware of any non-U.S. transfer taxes,
other than transactional taxes pursuant to the
laws of Belgium and Switzerland applicable to
purchases of B.O.I.C. Depositary Receipts and
Swiss Certificates, if payment of the
<PAGE> 3
purchase price and delivery of any Shares not
purchased are made to the registered holder.
The Company will pay all transactional taxes
pursuant to the laws of Belgium and Switzerland
applicable to the respective purchases of
B.O.I.C. Depositary Receipts and Swiss
Certificates pursuant to the Offer. In order
for the Company to pay such Belgian and Swiss
transactional taxes, stockholders who are
required to tender Shares using the Letter of
Transmittal are required to indicate on the
Letter of Transmittal that such transactional
taxes are payable on such Shares being
purchased pursuant to the Offer.
Expiration Date............... August 10, 1999, at 12:00 Midnight, New York
City time, unless extended by the Company.
Payment Date.................. As soon as practicable after the Expiration
Date.
Position of the Company and
its Directors................. Neither the Company nor its Board of Directors
makes any recommendation to any stockholder as
to whether to tender or refrain from tendering
Shares.
Withdrawal Rights............. Tendered Shares may be withdrawn at any time
until 12:00 Midnight, New York City time, on
August 10, 1999, unless the Offer is extended
by the Company, and, unless previously
purchased, after 12:00 Midnight, New York City
time, on September 3, 1999. Owners of Non-U.S.
Depositary Receipts should consult the issuer
of such securities or the relevant Non-U.S.
Information Agent, or their broker or other
financial intermediary, for instructions with
respect to their withdrawal rights. See Section
4.
Further Developments Regarding
the Offer..................... Call the Managing Information Agent, the
relevant Non-U.S. Information Agent or consult
your broker.
Depositary.................... First Chicago Trust Company of New York.
Managing Information Agent.... D.F. King & Co., Inc.
Non-U.S. Information Agents... Deutsche Bank AG, Credit Suisse First Boston,
Paribas, Administratiekantoor voor Handel en
Nijverheid B.V. and B.O.I.C. (the Belgian
Overseas Issuing Corporation).
<PAGE> 4
The Company has not authorized any person to make any recommendation on
behalf of the Company as to whether stockholders should tender or refrain from
tendering Shares pursuant to the Offer. The Company has not authorized any
person to give any information or to make any representation in connection with
the Offer on behalf of the Company other than those contained in this Offer to
Purchase or in the Letter of Transmittal. Do not rely on any such recommendation
or any such information or representation, if given or made, as having been
authorized by the Company.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
INTRODUCTION................................................ 1
THE OFFER................................................... 5
1. Number of Shares; Proration............................ 5
2. Tenders by Owners of Fewer Than 100 Shares............. 7
3. Procedure for Tendering Shares......................... 7
4. Withdrawal Rights...................................... 13
5. Purchase of Shares and Payment of Purchase Price....... 13
6. Certain Conditions of the Offer........................ 15
7. Price Range of Shares; Dividends....................... 16
8. Background and Purpose of the Offer; Certain Effects of
the Offer................................................. 17
9. Interests of Directors and Executive Officers;
Transactions and Arrangements
Concerning the Shares.................................. 18
10. Source and Amount of Funds............................. 19
11. Certain Information about the Company.................. 19
12. Effects of the Offer on the Market for Shares;
Registration Under the Exchange Act....................... 23
13. Certain Legal Matters; Regulatory Approvals............ 24
14. Certain Income Tax Consequences........................ 24
15. Extension of the Offer; Termination; Amendments........ 31
16. Fees and Expenses...................................... 31
17. Miscellaneous.......................................... 32
SCHEDULE I -- Certain Transactions Involving Shares......... S-1
</TABLE>
<PAGE> 5
TO THE HOLDERS OF SHARES OF COMMON STOCK
OF E. I. DU PONT DE NEMOURS AND COMPANY WHO ARE NON-U.S. PERSONS:
INTRODUCTION
GENERAL
E. I. du Pont de Nemours and Company, a Delaware corporation (the "Company"
or "DuPont"), hereby offers to purchase up to 8,000,000 shares of its common
stock, par value $.30 per share ("Shares"), at $80.76 per Share, in cash,
without interest, less applicable United States withholding taxes (such amount,
or any greater amount per Share as may be paid pursuant to the Offer less
applicable United States withholding taxes, being referred to herein as the
"Purchase Price"), upon the terms and subject to the conditions set forth in
this Offer to Purchase and the related Letter of Transmittal (which, as amended
from time to time, together constitute the "Offer").
The Shares being purchased in the Offer include shares of DuPont common
stock listed on the NYSE, Frankfurt, Dusseldorf, Paris, and Amsterdam exchanges
and DuPont common stock underlying Non-U.S. Depositary Receipts. The "Non-U.S.
Depositary Receipts" consist of: (1) the International Depositary Receipts
issued by B.O.I.C., the Belgian Overseas Issuing Corporation ("B.O.I.C.
Depositary Receipts") listed on the Brussels exchange, (2) the Swiss
certificates registered in the name of SNOC Swiss Nominee Company ("Swiss
Certificates") listed on the Swiss exchange and (3) the Netherlands Depositary
Receipts (certificaten) ("Netherlands Depositary Receipts") listed on the
Amsterdam exchange.
The Offer is open only to Non-U.S. Persons. For purposes of this Offer, a
"Non-U.S. Person" is any person (i.e., any individual, corporation, partnership,
limited liability company, estate, trust or other entity) who is not a U.S.
Person. A "U.S. Person," for these purposes, is:
- any individual who is a U.S. citizen or U.S. resident (for U.S. federal
income tax purposes);
- any corporation, partnership, limited liability company or other entity
created or organized in the U.S. or under the laws of the U.S. or of any
State within the U.S.;
- any estate which is subject to U.S. income tax on all of its income
(regardless of the source of such income); and
- any trust if (i) a U.S. court is able to exercise primary supervision
over the administration of the trust, and (ii) one or more U.S. persons
have the authority to control all substantial decisions of the trust
(including, without limitation, any U.S. pension trust organized under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the
"Code")).
STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THEIR STATUS AS A
NON-U.S. PERSON IN ORDER TO DETERMINE THEIR ELIGIBILITY TO PARTICIPATE IN THE
OFFER.
The Company will pay the Purchase Price for up to 8,000,000 Shares validly
tendered on or prior to the Expiration Date (as defined in Section 1) and not
properly withdrawn, upon the terms and subject to the conditions of the Offer
including the proration terms described below. As of the close of business on
June 30, 1999, there were approximately 1,129.5 million Shares outstanding. The
8,000,000 Shares that the Company is offering to purchase represent
approximately 0.7% of the Shares outstanding as of such date, without giving
effect to completion of the Exchange Offer (as defined below), and 0.8% of the
Shares estimated to be outstanding assuming the maximum number of Shares are
acquired by DuPont in the Exchange Offer. Based on the Company's estimate of the
relative numbers of U.S. and non-U.S. holders of Shares, the Company believes
that the percentage of Shares held by Non-U.S. Persons which it is offering to
purchase in the Offer is approximately the same percentage as the percentage of
Shares held by U.S. Persons which are eligible to be exchanged in the Exchange
Offer. The Company reserves the right, in its sole discretion and subject to
applicable law, to purchase more than 8,000,000 Shares pursuant to the Offer.
THE OFFER IS ONLY BEING MADE FOR SHARES. CERTIFICATES FOR NON-U.S.
DEPOSITARY RECEIPTS WILL NOT BE PURCHASED BY THE COMPANY PURSUANT TO THE OFFER.
HOWEVER, PROPERLY TENDERED SHARES UNDERLYING NON-U.S.
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DEPOSITARY RECEIPTS WILL BE PURCHASED BY THE COMPANY IN THE OFFER. ALL
REFERENCES IN THE OFFER TO PURCHASE TO "SHARES" SHALL, UNLESS THE CONTEXT
INDICATES OTHERWISE, INCLUDE SHARES UNDERLYING NON-U.S. DEPOSITARY RECEIPTS.
OWNERS OF NON-U.S. DEPOSITARY RECEIPTS SHOULD NOTE THAT THEY, OR THEIR BROKER OR
BANK OR OTHER FINANCIAL INTERMEDIARY WHERE SUCH NON-U.S. DEPOSITARY RECEIPTS ARE
REGISTERED OR OTHERWISE DEPOSITED, WILL BE ACTING THROUGH THE ISSUER OF SUCH
NON-U.S. DEPOSITARY RECEIPTS TO TENDER THE UNDERLYING SHARES. SEE "SECTION 3.
PROCEDURE FOR TENDERING SHARES".
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
SUCCESSFUL COMPLETION OF THE EXCHANGE OFFER (AS DEFINED BELOW), BEING SATISFIED
ON OR PRIOR TO THE EXPIRATION DATE. SEE SECTION 6.
Each stockholder who is a Non-U.S. Person may tender all, some or none of
its Shares. Owners of Non-U.S. Depositary Receipts may request the issuer
thereof to tender all, some or none of the Shares underlying such Non-U.S.
Depositary Receipts. If, on or before the Expiration Date, more than 8,000,000
Shares are validly tendered and not properly withdrawn (or such greater number
of Shares as the Company may elect to purchase), the Company will, upon the
terms and subject to the conditions of the Offer, purchase Shares first from all
Odd-Lot Owners (as defined in Section 2) who validly tender all their Shares and
then on a pro rata basis from all Non-U.S. Persons who validly tender Shares
(and do not properly withdraw them) on or prior to the Expiration Date. The
Company will return at its own expense all Shares not purchased pursuant to the
Offer, including Shares not purchased because of proration. Shares not tendered
or not purchased because of proration will, unless DuPont determines otherwise
or where local law requires otherwise, be returned by book-entry credit. Owners
of Non-U.S. Depositary Receipts should consult the issuer of such Non-U.S.
Depositary Receipts with respect to the return of certificates if Shares
underlying Non-U.S. Depositary Receipts are not tendered or not purchased in the
event of proration. The Purchase Price will be paid to the tendering stockholder
(or in the case of a participating owner of Non-U.S. Depositary Receipts, to the
issuer thereof for subsequent payment to such owner) in cash for all Shares
purchased. Tendering stockholders who have Shares registered in their own name
and who tender directly to the Depositary (as defined below) will not be
obligated to pay brokerage commissions, solicitation fees or, subject to
Instruction 7 of the Letter of Transmittal, U.S. stock transfer taxes on the
Company's purchase of Shares pursuant to the Offer. Stockholders holding Shares
through their broker or bank are urged to consult such institutions to determine
whether they charge any fees or transaction costs if stockholders tender Shares
through such institutions and not directly to the Depositary.
TENDERING STOCKHOLDERS, INCLUDING PARTICIPATING OWNERS OF NON-U.S.
DEPOSITARY RECEIPTS, WILL BE SUBJECT TO U.S. FEDERAL INCOME TAX WITHHOLDING
EQUAL TO 30% OF THE GROSS PROCEEDS PAYABLE PURSUANT TO THE OFFER UNLESS A
REDUCED RATE OF WITHHOLDING IS AVAILABLE PURSUANT TO A TAX TREATY OR AN
EXEMPTION FROM WITHHOLDING IS APPLICABLE BECAUSE SUCH GROSS PROCEEDS ARE
EFFECTIVELY CONNECTED WITH THE CONDUCT OF A TRADE OR BUSINESS WITHIN THE UNITED
STATES. A Non-U.S. Person may be eligible to obtain a refund from the United
States Internal Revenue Service (the "IRS") of all or a portion of any tax
withheld if such stockholder satisfies one or more of the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
tests described in Section 14 or is otherwise able to establish that no tax or a
reduced amount of tax is due. See Section 14 for a description of certain United
States federal income tax consequences of the Offer to Non-U.S. Persons. If a
tendering stockholder, including a participating owner of Non-U.S. Depositary
Receipts, is not subject to the withholding described above and such stockholder
fails to complete fully, sign and return to the Depositary or such stockholder's
broker or bank, the IRS Form W-8 Certificate of Foreign Status included with the
Letter of Transmittal, then such stockholder may be subject to required U.S.
federal income tax backup withholding of 31% of the gross proceeds paid to such
stockholder pursuant to the Offer. See Section 3. Such U.S. federal income tax
withholding or backup withholding does not refer to any transfer taxes or other
transactional taxes that may be applicable to Offer.
The Company will pay all reasonable and customary fees and expenses of
Deutsche Bank AG, Credit Suisse First Boston, B.O.I.C., the Administratiekantoor
voor Handel en Nijverheid B.V. and Paribas (collectively, the "Non-U.S.
Information Agents"), D.F. King & Co., Inc. (the "Managing Information Agent"
and, together with the Non-U.S. Information Agents, the "Information Agents")
and First Chicago Trust Company of New York (the "Depositary" or "First
Chicago") in connection with the Offer. See
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Section 16. First Chicago, the Depositary, is the entity which receives tendered
Shares in the Offer and should not be confused with the various depositaries or
other nominees which have issued Non-U.S. Depositary Receipts and to whom
participating owners of Non-U.S. Depositary Receipts, or their brokers, dealers,
commercial banks, trust companies or custodian banks, are required to deliver
their certificates in order to have the underlying Shares tendered in the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER. NONE OF THE COMPANY, ITS BOARD OF
DIRECTORS, THE INFORMATION AGENTS OR THE DEPOSITARY MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES.
For purposes of this Offer to Purchase, unless the context indicates
otherwise and except with respect to procedures for tendering and withdrawal,
Shares underlying Non-U.S. Depositary Receipts properly tendered to First
Chicago by an issuer thereof shall be deemed to have been tendered by the owner
of such Non-U.S. Depositary Receipts and any such Shares that are purchased by
the Company shall be deemed to have been purchased from such owner.
THE EXCHANGE OFFER
As part of DuPont's increased focus on its materials and life sciences
businesses, DuPont announced in May 1998 its intention to separate its oil and
gas business, operated by Conoco Inc. ("Conoco"), from its other businesses. On
July 12, 1999, DuPont commenced an exchange offer (as the same may be amended,
modified or extended, the "Exchange Offer") to exchange all of the 436.5 million
shares of Conoco Class B Common Stock ("Conoco Class B Stock") owned by it for
Shares at an exchange ratio of 2.95 shares of Conoco Class B Stock per Share.
The Exchange Offer is open only to holders of Shares who are U.S. Persons.
Participants in the Exchange Offer will receive shares of Conoco Class B Stock
on a tax-free basis. IF YOU ARE A NON-U.S. PERSON YOU MAY NOT PARTICIPATE IN THE
EXCHANGE OFFER; THE EXCHANGE OFFER IS OPEN ONLY TO U.S. PERSONS. INSTEAD, YOU
WILL BE ALLOWED TO PARTICIPATE IN THE OFFER FOR CASH GOVERNED BY THIS OFFER TO
PURCHASE AND RELATED LETTER OF TRANSMITTAL. Shares held in a DuPont Non-U.S.
Stock Ownership Plan (as defined below) shall be deemed to be held by Non-U.S.
Persons and Shares held in a DuPont or DuPont affiliated company stock ownership
plan based in the United States shall be deemed to be held by U.S. Persons for
purposes of determining whether such Shares may be tendered in this Offer or,
alternatively, the Exchange Offer.
If, in the Exchange Offer, fewer than all of the Conoco shares held by
DuPont are distributed, DuPont may distribute all or a portion of the balance of
its Conoco shares pro rata to all of its remaining stockholders, including
Non-U.S. Persons (i.e., a spin-off). Alternatively, DuPont may sell all or a
portion of any such remaining Conoco shares in a secondary offering that would
follow the Exchange Offer, otherwise dispose of such shares, or retain all or a
portion of such remaining shares.
After consummation of the Exchange Offer, except possibly to the limited
extent described above, DuPont will no longer own any of the outstanding stock
of Conoco. Accordingly, DuPont's balance sheet and income statement will no
longer reflect the assets and operations of Conoco and DuPont's total market
capitalization will decrease considerably.
* * * * *
We are sending this Offer to Purchase and the Letter of Transmittal to
persons believed to be Non-U.S. Persons having addresses outside the United
States who held Shares as of the close of business approximately five calendar
days prior to the date of commencement of the Offer. If you are a U.S. Person
and you have received this document, contact D.F. King & Co., Inc., the Managing
Information Agent, or your broker or nominee. We are also sending this Offer to
Purchase, via the relevant trustees or plan managers, to persons participating
in the DuPont (U.K.) Limited Share Ownership Plan, DuPont Pharmaceuticals
Limited Share Ownership Plan, DuPont Dow Elastomers Limited Share Ownership
Plan, the Conoco Stock Ownership Plan, the DuPont Single Company Pep (SCP), the
DuPont Individual Savings Account (ISA), the Conoco Individual Savings Account
(ISA), the DuPont Share Shop, the Conoco Share Shop, the Employee Stock
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<PAGE> 8
Ownership Plan -- Norske Conoco AS, the DuPont (Australia) Limited Employee
Shares Savings Plan, the DuPont (New Zealand) Limited Employee Shares Savings
Plan and the DuPont K.K. Employee Stock Ownership Plan (collectively, the
"DuPont Non-U.S. Stock Ownership Plans") whether or not those participants are
holders of record of Shares, and persons who, as of the fifth calendar day prior
to the commencement of the Offer, were not participants in a DuPont Non-U.S.
Stock Ownership Plan but were eligible to participate in such a plan. We will
also furnish this Offer to Purchase and related Letter of Transmittal to
brokers, banks and similar persons whose names or the names of whose nominees
appear on the stockholder list of DuPont or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares and Non-U.S. Depositary Receipts who
are Non-U.S. Persons with addresses outside the United States.
The Shares are listed on the New York Stock Exchange, Inc. (the "NYSE") and
traded on the NYSE under the symbol "DD" and the Frankfurt, Dusseldorf, Paris,
and Amsterdam exchanges, and Non-U.S. Depositary Receipts are listed on the
Amsterdam, Brussels and Swiss exchanges. On July 8, 1999, the last full trading
day on the NYSE prior to the setting of the exchange ratio applicable to the
Exchange Offer, the closing per Share sales price as reported on the NYSE
Composite Tape was $68.50. THE COMPANY URGES STOCKHOLDERS TO OBTAIN CURRENT
QUOTATIONS OF THE MARKET PRICE OF THE SHARES.
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THE OFFER
1. NUMBER OF SHARES; PRORATION.
Upon the terms and subject to the conditions of the Offer, the Company will
accept for payment (and thereby purchase) 8,000,000 Shares or such lesser number
of Shares as are validly tendered on or before the Expiration Date (and not
properly withdrawn in accordance with Section 4) at a cash price of $80.76 per
share, without interest, less applicable United States withholding taxes. The
term "Expiration Date" means 12:00 Midnight, New York City time, on August 10,
1999, unless and until the Company in its sole discretion shall have extended
the period of time during which the Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Company, shall expire. See Section 15 for a description of
the Company's right to extend the time during which the Offer is open and to
delay, terminate or amend the Offer. Each stockholder may tender all, some or
none of its Shares in the Offer. Owners of Non-U.S. Depositary Receipts may
request the issuer thereof to tender all, some or none of the Shares underlying
such Non-U.S. Depositary Receipts. If the Offer is oversubscribed, Shares
tendered on or prior to the Expiration Date will be eligible for proration. The
proration period also expires on the Expiration Date. ONLY SHARES TENDERED BY
NON-U.S. PERSONS WILL BE ACCEPTED FOR PAYMENT AND PURCHASED BY THE COMPANY
PURSUANT TO THE OFFER. BY TENDERING SHARES INTO THE OFFER (INCLUDING BY
INSTRUCTING AN ISSUER OF NON-U.S. DEPOSITARY RECEIPTS TO TENDER THE SHARES
UNDERLYING SUCH NON-U.S. DEPOSITARY RECEIPTS) THE BENEFICIAL OWNER OF SUCH
SHARES OR THE APPLICABLE NON-U.S. DEPOSITARY RECEIPTS SHALL BE DEEMED TO HAVE
REPRESENTED THAT IT IS A NON-U.S. PERSON.
THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS, INCLUDING
SUCCESSFUL COMPLETION OF THE EXCHANGE OFFER, BEING SATISFIED ON OR PRIOR TO THE
EXPIRATION DATE. THE COMPANY MAY ALSO TERMINATE THE OFFER IN CERTAIN
CIRCUMSTANCES. SEE SECTIONS 6 AND 15.
In accordance with regulations of the United States Securities and Exchange
Commission (the "Commission" or the "SEC"), the Company may purchase pursuant to
the Offer an additional amount of Shares not to exceed 2% of the outstanding
Shares without amending or extending the Offer. If (i) the Company increases or
decreases the price to be paid for Shares, the Company increases the number of
Shares being sought and such increase in the number of Shares being sought
exceeds 2% of the outstanding Shares, or the Company decreases the number of
Shares being sought and (ii) the Offer is scheduled to expire at any time
earlier than the expiration of a period ending on the tenth business day from,
and including, the date that notice of such increase or decrease is first
published, sent or given in the manner specified in Section 15, the Offer will
be extended until the expiration of such period of ten business days. For
purposes of the Offer, a "business day" means any day other than a Saturday,
Sunday or U.S. federal holiday and consists of the time period from 12:01 A.M.
through 12:00 Midnight, New York City time.
The Company will pay the Purchase Price for up to 8,000,000 Shares validly
tendered on or prior to the Expiration Date and not properly withdrawn, upon the
terms and subject to the conditions of the Offer. The Company may (subject to
Rule 13e-4(f)(5) under the United States Securities Exchange Act of 1934, as
amended (the "Exchange Act")) delay accepting or purchasing any Shares in order
to comply in whole or in part with any applicable law. For a description of the
Company's right to delay, terminate or amend the Offer, see Section 15. Under no
circumstances will interest be paid by the Company under the Offer, regardless
of any delay in purchasing the Shares.
All Shares not purchased pursuant to the Offer, including Shares not
purchased as a result of proration, will be returned at the Company's expense,
as promptly as practicable following the Expiration Date. The Company will hold
Shares accepted for purchase, at least initially, as treasury shares. Except
where local law requires otherwise, physical certificates representing Shares
not tendered or not purchased as a result of proration will not be returned.
Rather than issuing any physical certificates with respect to such Shares, the
Depositary will credit such Shares by book-entry. See Section 3 under the
caption "Return of Unpurchased Shares" for more information. Owners of Non-U.S.
Depositary Receipts are urged to consult the issuer of
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<PAGE> 10
such securities with respect to the return of certificates for such Non-U.S.
Depositary Receipts if Shares underlying such Non-U.S. Depositary Receipts are
not tendered or not purchased because of proration.
If the number of Shares validly tendered and not withdrawn on or prior to
the Expiration Date is less than or equal to 8,000,000 Shares (or such greater
number of Shares as the Company may elect to purchase pursuant to the Offer),
the Company will, upon the terms and subject to the conditions of the Offer,
purchase at the Purchase Price all Shares so tendered.
All financial amounts, numbers and sums of money designated herein are in
U.S. Dollars, unless otherwise indicated. The cash price in this Offer is based
on the exchange ratio in the Exchange Offer. In the event of any change in such
exchange ratio, the Company intends to change the cash price herein, as
described in Section 8.
Priority. Upon the terms and subject to the conditions of the Offer, in
the event that prior to the Expiration Date more than 8,000,000 Shares (or such
greater number of Shares as the Company may elect to purchase pursuant to the
Offer) are validly tendered and not withdrawn, the Company will purchase such
validly tendered Shares in the following order of priority:
(i) all Shares validly tendered and not withdrawn prior to the
Expiration Date by any Odd-Lot Owner (as defined in Section 2) who:
(1) tenders all Shares beneficially owned by such Odd-Lot Owner
(partial tenders will not qualify for this preference); and
(2) completes the box captioned "Odd-Lot Shares" on the Letter of
Transmittal and, if applicable, on the Notice of Guaranteed Delivery;
and
(ii) after purchase of all of the foregoing Shares, all other Shares
validly tendered and not withdrawn prior to the Expiration Date on a pro
rata basis.
Proration. In the event that proration of tendered Shares is required, the
Company will determine the final proration factor as promptly as practicable
after the Expiration Date. Proration for each stockholder tendering Shares
(other than Odd-Lot Owners) shall be based on the ratio of the number of Shares
tendered pursuant to this Offer by such stockholder to the total number of
Shares tendered pursuant to this Offer by all stockholders (other than Odd-Lot
Owners). This ratio will be applied to stockholders (other than Odd-Lot Owners)
tendering Shares to determine the number of Shares that will be purchased from
each such stockholder pursuant to the Offer. The number of Shares tendered into
or purchased pursuant to the Exchange Offer will not affect the foregoing
calculations. Although the Company does not expect to be able to announce the
final results of such proration until approximately five business days after the
Expiration Date, it will announce preliminary results of proration by press
release as promptly as practicable after the Expiration Date. Stockholders can
obtain such preliminary information from the Managing Information Agent and may
be able to obtain such information from their brokers.
Proration may result in fractional Shares being owned by you, other than in
certain jurisdictions where fractional shares cannot be maintained. See Section
3 under the caption "Return of Unpurchased Shares" for more information. Owners
of Non-U.S. Depositary Receipts should consult the issuer of such securities or
the relevant Non-U.S. Information Agent or their broker or other financial
intermediary with respect to the availability of physical certificates for such
Non-U.S. Depositary Receipts representing fractional shares and the treatment
and/or distribution of any cash in lieu of fractional Shares. In addition,
owners of B.O.I.C. Depositary Receipts are urged to consult B.O.I.C. with
respect to the availability of physical certificates if Shares underlying such
B.O.I.C. Depositary Receipt certificates not purchased in the Offer do not
represent whole multiples of the denomination of underlying Shares in which
certificates for B.O.I.C. Depositary Receipts may be issued.
The number of Shares that the Company purchases from a stockholder may
affect the tax consequences to such stockholder of the Offer and therefore may
be relevant to a stockholder's decision whether to tender Shares and, if so, how
many Shares to tender. Certain tax consequences of the Offer are discussed in
Section 14.
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We are sending this Offer to Purchase and the Letter of Transmittal to
persons believed to be Non-U.S. Persons having addresses outside the United
States who held Shares as of the close of business approximately five calendar
days prior to the date of commencement of the Offer. If you are a U.S. Person
and you have received this document, contact D.F. King & Co., Inc., the Managing
Information Agent, or your broker or nominee. We are also sending this Offer to
Purchase to persons participating in a DuPont Non-U.S. Stock Ownership Plan
whether or not those participants are holders of record of Shares, and persons
who, as of the fifth calendar day prior to the commencement of the Offer, were
not participants in a DuPont Non-U.S. Stock Ownership Plan but were eligible to
participate in such a plan. We will also furnish this Offer to Purchase and
related Letter of Transmittal to brokers, banks and similar persons whose names
or the names of whose nominees appear on the stockholder list of DuPont or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares and
Non-U.S. Depositary Receipts who are Non-U.S. Persons having addresses outside
the United States.
2. TENDERS BY OWNERS OF FEWER THAN 100 SHARES.
The Company, upon the terms and subject to the conditions of the Offer,
will accept for purchase, without proration, all Shares validly tendered and not
withdrawn on or prior to the Expiration Date by or on behalf of Non-U.S. Persons
who beneficially owned as of the close of business on July 7, 1999, and will
beneficially own as of the Expiration Date, an aggregate of fewer than 100
Shares, excluding participants in the DuPont Non-U.S. Stock Ownership Plans
("Odd-Lot Owners"). See Section 1. To avoid proration, however, an Odd-Lot Owner
must validly tender all such Shares that such Odd-Lot Owner beneficially owns;
partial tenders will not qualify for this preference. This preference is not
available to partial tenders or to owners of 100 or more Shares in the
aggregate, even if such owners have separate stock certificates for fewer than
100 such Shares. In addition, this preference is not available to participants
in the Company's employee benefit plans. Any Odd-Lot Owner wishing to tender all
such Shares beneficially owned by such stockholder pursuant to this Offer must
complete the box captioned "Odd-Lot Shares" in the Letter of Transmittal and, if
applicable, on the Notice of Guaranteed Delivery. See Section 3. Stockholders
owning an aggregate of less than 100 Shares whose Shares are purchased pursuant
to the Offer will avoid both the payment of brokerage commissions and applicable
odd lot discounts, if any, payable on a sale of their Shares in transactions on
a stock exchange. The foregoing provisions with respect to Odd-Lot Owners,
including the preference in the event of proration, apply to owners of Non-U.S.
Depositary Receipts the underlying Shares of which are less than 100, although
owners of Non-U.S. Depositary Receipts must follow the instruction of the issuer
thereof to have the underlying Shares tendered.
Because of the large number of Shares held in the names of brokers and
nominees, the Company is unable to estimate the number of Non-U.S. Persons who
were beneficial owners of fewer than 100 Shares or the aggregate number of
Shares they own.
The Company also reserves the right, but will not be obligated, to purchase
all Shares duly tendered by any stockholder who tendered any Shares beneficially
owned and who, as a result of proration, would then beneficially own an
aggregate of fewer than 100 Shares. If the Company exercises this right, it will
increase the number of Shares that it is offering to purchase in the Offer by
the number of Shares purchased through the exercise of such right. In this
event, purchases of such additional Shares will not be subject to proration.
3. PROCEDURE FOR TENDERING SHARES.
Proper Tender of Shares. For Shares to be validly tendered pursuant to the
Offer:
(i) the certificates for such Shares (or confirmation of receipt of such
Shares pursuant to the procedures for book-entry transfer set forth below),
together with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any required signature guarantees (or an
Agent's Message, in connection with a book-entry transfer), and any other
documents required by the Letter of Transmittal, must be received prior to 12:00
Midnight, New York City time, on the Expiration Date by the Depositary at the
applicable address set forth on the back cover of this Offer to Purchase; or
(ii) the tendering stockholder must comply with the guaranteed delivery
procedure set forth below.
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Persons participating in a DuPont Non-U.S. Stock Ownership Plan and
Non-U.S. Persons with a Blueprint brokerage account at Merrill Lynch may also
participate in the Offer and should follow the procedures set forth below under
the caption "Special Procedures for Participants in a DuPont Non-U.S. Stock
Ownership Plan or the Blueprint Brokerage Account at Merrill Lynch" to tender
their Shares. Stockholders who are both Non-U.S. Persons and participants in the
Dividend Reinvestment Plan of DuPont who wish to tender some or all of their
Shares in their plan accounts may do so by indication on the Letter of
Transmittal and by following the procedures outlined in this section. Dividend
Reinvestment Plan participants should also see instruction 5 of the Letter of
Transmittal.
If stockholders own Shares that are currently traded on the Frankfurt,
Dusseldorf, Paris or Amsterdam exchanges and which such stockholders wish to
tender, it is the Company's understanding that tenders by their brokers,
dealers, commercial banks, trust companies, custodian banks or nominees must be
made through Deutsche Bank AG (with respect to Shares listed on the Frankfurt
and Dusseldorf exchange), SICOVAM (with respect to Shares listed on the Paris
exchange) and ASAS (with respect to Shares listed on the Amsterdam exchange),
respectively. Such stockholders are urged to consult their brokers, dealers,
commercial banks, trust companies, custodian banks or other nominees for more
information.
If you hold Non-U.S. Depositary Receipts and you wish to have tendered any
of the Shares underlying such Non-U.S. Depositary Receipts, you should deliver,
or, if applicable, instruct your bank, broker or custodian bank or other
financial intermediary, to deliver your certificates as directed by the issuer
thereof of pursuant to instructions given with respect to such Non-U.S.
Depositary Receipts in order that the issuer thereof or, if applicable, an
affiliate of the issuer, may tender the appropriate number of underlying Shares.
Odd-Lot Owners who tender all Shares must complete the section entitled
"Odd-Lot Shares" on the Letter of Transmittal (or on the portion of the "To Our
Clients" letter to be returned to their broker, dealer, commercial bank, trust
company, custodian bank or other nominee) and, if applicable, on the Notice of
Guaranteed Delivery, in order to qualify for the preferential treatment
available to Odd-Lot Owners as set forth in Section 2. Odd-Lot Owners who own
Non-U.S. Depositary Receipts, the underlying shares of which are less than 100,
should follow the instructions provided by the issuer thereof in order to
qualify for such preferential treatment.
Signature Guarantees and Method of Delivery. No signature guarantee is
required on the Letter of Transmittal if (i) the Letter of Transmittal is signed
by the registered holder of the Shares (which term, for purposes of this
Section, includes any participant in The Depository Trust Company (the
"Book-Entry Transfer Facility") whose name appears on a security position
listing as the holder of the Shares) tendered therewith and payment and delivery
are to be made directly to such registered holder, or (ii) the Shares are
tendered for the account of a firm or other entity that is a member in good
standing of the Security Transfer Agent's Medallion Program (an "Eligible
Institution"). In this regard, see Section 5 for information with respect to
applicable stock transfer taxes. In all other cases, all signatures on the
Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instruction 1 of the Letter of Transmittal. If a certificate representing Shares
is registered in the name of a person other than the signer of a Letter of
Transmittal, or if payment is to be made, or Shares not purchased or tendered
are to be credited or returned, to a person other than the registered holder,
the certificate must be endorsed or accompanied by an appropriate stock power,
in either case signed exactly as the name of the registered holder appears on
the certificate, with the signature on the certificate or stock power guaranteed
by an Eligible Institution. In all cases, payment for Shares tendered and
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of certificates for such Shares (or a confirmation by
the Expiration Date of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility as described below), a
properly completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) and any other documents required by the Letter of
Transmittal.
Owners of Non-U.S. Depositary Receipts should consult the issuer thereof or
the relevant Non-U.S. Information Agent with respect to guarantees of signatures
in connection with the delivery of such Non-U.S. Depositary Receipts necessary
to tender underlying Shares.
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THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Book-Entry Delivery. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of the Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the Book-Entry Transfer Facility's procedure for such transfer. Even though
delivery of Shares may be effected through book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility, a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile thereof),
with any required signature guarantees, or an Agent's Message (as defined
below), and other required documents must, in any case, be transmitted to and
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date, or the guaranteed
delivery procedure set forth below must be followed. The confirmation of a
book-entry transfer of Shares into the Depositary's account at the Book-Entry
Transfer Facility as described above is referred to herein as a "Book-Entry
Confirmation." DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Company may enforce such agreement against the participant.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share certificates cannot be delivered to the
Depositary on or prior to the Expiration Date (or the procedures for book-entry
transfer cannot be completed by the Expiration Date) or time will not permit all
required documents to reach the Depositary on or prior to the Expiration Date,
such Shares may nevertheless be tendered provided that all of the following
conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) the Depositary receives (by hand, mail, overnight courier, telegram
or facsimile transmission), on or prior to the Expiration Date, a
properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form the Company has provided with this Offer to
Purchase, including (where required) a signature guarantee by an
Eligible Institution in the form set forth in such Notice of
Guaranteed Delivery; and
(iii) the certificates for all tendered Shares in proper form for transfer
(or confirmation of book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together
with a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) and any required signature
guarantees, or an Agent's Message in connection with a book-entry
transfer, or other documents required by the Letter of Transmittal,
are received by the Depositary no later than 5:00 p.m., New York City
time, on the third NYSE trading day on which banks are open for
business after the date of execution of such Notice of Guaranteed
Delivery.
The procedures described above with respect to guaranteed delivery do not
apply to Non-U.S. Depositary Receipts, because Non-U.S. Depositary Receipts
cannot be tendered to the Depositary. If Non-U.S. Depositary Receipts are not
immediately available, an owner thereof should follow any applicable
instructions of the issuer thereof, or their broker or other relevant financial
intermediary if such owner desires to tender Shares underlying Non-U.S.
Depositary Receipts.
Special Procedures for Participants in a DuPont Non-U.S. Stock Ownership
Plan or the Blueprint Brokerage Account at Merrill Lynch. All persons
participating in a DuPont Non-U.S. Stock Ownership Plan (i.e., a DuPont or a
DuPont affiliated company stock ownership plan based in the United Kingdom,
Norway, Australia, New Zealand or Japan) who wish to participate in the Offer
may instruct the plan's trustee to
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<PAGE> 14
tender eligible DuPont shares attributable to their plan accounts by following
the instructions included in the letter from the trustee or plan manager
representative sent to them. Shares held in a DuPont Non-U.S. Stock Ownership
Plan are deemed to be held by Non-U.S. Persons for purposes of the Offer and may
not be tendered in the Exchange Offer. Non-U.S. Persons who are account holders
in the Blueprint brokerage account who wish to participate in the Offer may
instruct Merrill Lynch to tender Shares attributable to their plan accounts by
notifying Merrill Lynch of the election as provided in the notice sent to
non-U.S. participants in the Blueprint brokerage account.
Holders of vested but unexercised options to purchase Shares may exercise
those options in accordance with the terms of the stock option plans of DuPont
and, if Shares resulting from such exercise are unrestricted, tender the Shares
received upon such exercise under the general instructions for tendering shares
discussed above.
Restricted Shares granted under DuPont's Stock Performance Plan or acquired
in connection with a stock option exercise resulting in the grant of reload
options are not eligible for this Offer.
NON-U.S. PERSONS WHO ARE ACCOUNT HOLDERS IN THE BLUEPRINT BROKERAGE ACCOUNT
AT MERRILL LYNCH AND PERSONS WHO ARE PARTICIPANTS IN A DUPONT NON-U.S. STOCK
OWNERSHIP PLAN (i.e., A DUPONT OR A DUPONT AFFILIATED COMPANY STOCK OWNERSHIP
PLAN BASED IN THE UNITED KINGDOM, NORWAY, AUSTRALIA, NEW ZEALAND OR JAPAN) MAY
NOT USE THE LETTER OF TRANSMITTAL TO DIRECT THE TENDER OF SHARES BUT MUST
INSTEAD FOLLOW THE SEPARATE ELECTION INSTRUCTIONS SENT TO THEM BY MERRILL LYNCH
(WITH RESPECT TO BLUEPRINT BROKERAGE ACCOUNT HOLDERS) OR THE TRUSTEE OR MANAGER
(WITH RESPECT TO PARTICIPANTS IN SUCH STOCK OWNERSHIP PLANS). SUCH ACCOUNT
HOLDERS IN THE BLUEPRINT BROKERAGE ACCOUNT AT MERRILL LYNCH AND SUCH
PARTICIPANTS IN SUCH STOCK OWNERSHIP PLANS ARE URGED TO READ THE MATERIALS SENT
TO THEM CAREFULLY.
Return of Unpurchased Shares. If any tendered Shares are not purchased as
a result of proration, or if less than all Shares evidenced by a certificate are
tendered, such unpurchased Shares (including, except in jurisdictions where
fractional Shares cannot be maintained, any fractional Shares resulting from
proration) will be credited to the appropriate account maintained (or, in the
case of a tender of certificates registered in the name of an owner who is not a
participant in the Book-Entry Transfer Facility, established by the Depositary)
at the Book-Entry Transfer Facility, except where local law requires otherwise,
in each case without expense to such stockholder.
With respect to certificated Shares not tendered because of a partial
tender or not purchased as a result of proration, promptly following the
crediting of such Shares to the book-entry accounts, a statement from the
Depositary evidencing such holdings will be mailed to the relevant owner of such
Shares, as well as general information on the book-entry form of ownership. You
are not required to maintain a book-entry account and you may obtain a stock
certificate for all or a portion of your Shares at no cost to you. Instructions
describing how you can obtain stock certificates will be included with the
statement mailed to you. With respect to any request for certificates, because
the Company will not issue certificates representing fractional Shares (and in
jurisdictions where fractional Shares cannot be maintained), the Company will
sell, or cause to be sold, fractional Shares for your account and transfer the
proceeds to you if you request certificates. Since the foregoing also applies to
Shares underlying Non-U.S. Depositary Receipts, owners of Non-U.S. Depositary
Receipts are urged to consult the issuer of such securities or the relevant
Non-U.S. Information Agent with respect to the return of certificates for such
Non-U.S. Depositary Receipts and the treatment and/or distribution of any cash
in lieu of fractional Shares if Shares underlying such Non-U.S. Depositary
Receipts are not purchased because of proration. The Company will not be
responsible and will not pay cash directly to any owner of a Non-U.S. Depositary
Receipt in respect of fractional Shares returned in respect of such securities
in the event of proration. In addition, owners of B.O.I.C. Depositary Receipts
are urged to consult B.O.I.C. with respect to the availability of certificates
if Shares underlying B.O.I.C Depositary Receipt certificates not purchased in
the Offer do not represent whole multiples of the denomination of underlying
Shares in which certificates for B.O.I.C. Depository Receipts may be issued.
Withholding on Amounts Payable to Non-U.S. Persons. Tendering
stockholders, including participating owners of Non-U.S. Depositary Receipts,
will be subject to U.S. federal income tax withholding equal to 30% of the gross
proceeds payable unless a reduced rate of withholding is available pursuant to a
tax treaty or an
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<PAGE> 15
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business within the United
States. In order to obtain a reduced rate of withholding pursuant to a tax
treaty, a Non-U.S. Person must deliver to the Depositary or such stockholder's
broker or bank prior to the payment date a properly completed and executed IRS
Form 1001 or other applicable form which may, in certain circumstances, consist
of a properly completed and executed IRS Form W-8 which includes such Non-U.S.
Person's address. Stockholders are urged to consult the Depositary or such
stockholder's broker or bank to determine whether such stockholder has
previously delivered a valid properly completed and executed IRS Form 1001 or
other applicable form and, if not, which form to file. In order to obtain an
exemption from withholding on the grounds that the gross proceeds paid pursuant
to the Offer are effectively connected with the conduct of a trade or business
within the United States, a Non-U.S. Person must deliver to the Depositary or
such stockholder's broker or bank prior to the payment date a properly completed
and executed IRS Form 4224 or other applicable form. A Non-U.S. Person may be
eligible to obtain a refund from the IRS of all or a portion of any tax withheld
if such stockholder satisfies one or more of the "complete redemption,"
"substantially disproportionate" or "not essentially equivalent to a dividend"
tests described in Section 14 or is otherwise able to establish that no tax or a
reduced amount of tax is due. Non-U.S. Persons are urged to consult their tax
advisors regarding the application of U.S. federal income tax withholding to the
Offer, including their eligibility for a withholding tax reduction or exemption,
their eligibility to obtain a refund of tax withheld and the procedures for
obtaining such refund. See Instruction 10 of the Letter of Transmittal.
U.S. Federal Income Tax Backup Withholding. If the tendering stockholder,
including a participating owner of Non-U.S. Depositary Receipts, is not subject
to the withholding described above and such stockholder fails to complete fully,
sign and return to the Depositary or such stockholder's broker or bank the IRS
Form W-8 Certificate of Foreign Status included with the Letter of Transmittal,
then such stockholder may be subject to required U.S. federal income tax backup
withholding of 31% of the gross proceeds paid to such stockholder pursuant to
the Offer. Most Non-U.S. Persons will not be subject to backup withholding
because they will be subject to the withholding described above. See Instruction
11 of the Letter of Transmittal. Each tendering stockholder who is exempt from
backup withholding should complete and sign the IRS Form W-8 Certificate of
Foreign Status included as part of the Letter of Transmittal so as to provide
the information and certification necessary to avoid backup withholding, unless
such stockholder otherwise establishes that the stockholder is not subject to
backup withholding. Backup withholding is not an additional tax; any amounts so
withheld may be credited against the U.S. federal income tax liability of the
stockholder subject to backup withholding.
Transfer Taxes. The Company will pay all U.S. stock transfer taxes, and
Belgian and Swiss transactional taxes, if any, payable on the transfer to it of
Shares purchased pursuant to the Offer; provided, however, that if payment of
the Purchase Price is to be made to, or (in the circumstances permitted by the
Offer) if unpurchased Shares are to be registered in the name of, any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person signing the Letter of Transmittal,
the amount of all stock transfer taxes, if any (whether imposed on the
registered holder or such other person), payable on account of the transfer to
such person will be deducted from the Purchase Price unless evidence
satisfactory to the Company of the payment of such taxes or exemption therefrom
is submitted. See Instruction 7 of the Letter of Transmittal. The Company does
not believe that any U.S. stock transfer taxes will be payable in connection
with the Offer, including by the Company, in the event the proviso in the second
preceding sentence is inapplicable. Without having made any investigation with
respect thereto, the Company is not aware of any non-U.S. transfer taxes, other
than transactional taxes pursuant to the laws of Belgium and Switzerland
applicable to purchases of B.O.I.C. Depositary Receipts and Swiss Certificates,
if payment of the purchase price and delivery of any Shares not purchased are
made to the registered holder. See Section 14. The Company will not pay Belgian
and Swiss transactional taxes unless stockholders who are required to tender
Shares using the Letter of Transmittal indicate on the Letter of Transmittal
that such transactional taxes are payable on such Shares being purchased
pursuant to the Offer. If any transfer or transactional taxes under laws of any
other jurisdiction outside the United States are applicable to purchases of
Shares in the Offer, the Company will not be obligated to pay such taxes,
although it reserves the right to do so in any particular case or instance.
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<PAGE> 16
Tendering Stockholder's Representation and Warranty; Company's Acceptance
Constitutes an Agreement. It is a violation of Rule 14e-4 promulgated under the
Exchange Act for a person acting alone or in concert with others, directly or
indirectly, to tender Shares for such person's own account unless at the time of
tender and at the Expiration Date such person has a "net long position" equal to
or greater than the amount tendered in (a) the Shares and will deliver or cause
to be delivered such Shares for the purpose of tender to the Company within the
period specified in the Offer, or (b) other securities immediately convertible
into, exercisable for or exchangeable into Shares ("Equivalent Securities") and,
upon the acceptance of such tender, will acquire such Shares by conversion,
exchange or exercise of such Equivalent Securities to the extent required by the
terms of the Offer and will deliver or cause to be delivered such Shares so
acquired for the purpose of tender to the Company within the period specified in
the Offer. Rule 14e-4 also provides a similar restriction applicable to the
tender or guarantee of a tender on behalf of another person. A tender of Shares
made pursuant to any method of delivery set forth herein will constitute the
tendering stockholder's representation and warranty to the Company that (a) such
stockholder has a "net long position" in Shares or Equivalent Securities being
tendered within the meaning of Rule 14e-4, (b) such tender of Shares complies
with Rule 14e-4 and (c) such stockholder is a "Non-U.S. Person" as such term is
defined in Section 1. By tendering Shares in the Offer (including by instructing
an issuer of Non-U.S. Depositary Receipts to tender the Shares underlying such
Non-U.S. Depositary Receipts), a stockholder is deemed to have represented that
such stockholder is a Non-U.S. Person. The Company's acceptance for payment of
Shares tendered pursuant to the Offer will constitute a binding agreement
between the tendering stockholder, including the owners of Non-U.S. Depositary
Receipts representing tendered Shares, and the Company upon the terms and
subject to the conditions of the Offer.
Determinations of Validity and Status as Non-U.S. Persons; Rejection of
Shares; Waiver of Defects; No Obligation to Give Notice of Defects. All
questions as to the number of Shares to be accepted, the price to be paid
therefor and the validity, form, eligibility (including time of receipt) and
acceptance for payment of any tender of Shares will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. The Company reserves the absolute right to reject any or all
tenders it determines not to be in proper form or the acceptance of or payment
for which may, in the opinion of the Company's counsel, be unlawful. The Company
also reserves the absolute right to waive any of the conditions of the Offer and
any defect or irregularity in the tender of any particular Shares or any
particular stockholder. The Company (i) will be entitled (but not obligated) to
rely on any stockholder's certification, representation or deemed representation
that it is a Non-U.S. Person, (ii) will have the right to request any additional
information from any record or beneficial owner of Shares, or any owner of
Non-U.S. Depositary Receipts, that the Company in its sole discretion determines
to so request including with respect to the status of such owner or of any of
its partners, stockholders, beneficiaries, principals, or participants as
Non-U.S. Persons or the tax impact on the Company of such person's tender of
Shares, including a tender of Shares underlying Non-U.S. Depositary Receipts, or
the applicability of transfer taxes to such Non-U.S. Person's participation in
the Offer and (iii) will have the right to reject any tender if it is not
satisfied in its sole discretion that the beneficial owner of tendered Shares or
Non-U.S. Depositary Receipts is a Non-U.S. Person. No tender of Shares will be
deemed to be properly made until all defects or irregularities have been cured
or waived. None of the Company, the Depositary, the Non-U.S. Information Agents,
the Managing Information Agent or any other person is or will be obligated to
give notice of any defects or irregularities in tenders, and none of them will
incur any liability for failure to give any such notice.
CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF
TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST
BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS
DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE
WILL NOT BE DEEMED TO BE VALIDLY TENDERED.
CERTIFICATES REPRESENTING NON-U.S. DEPOSITARY RECEIPTS DELIVERED TO THE
COMPANY OR THE DEPOSITARY WILL NOT BE DEEMED TO BE A VALID TENDER OF SHARES.
CERTIFICATES REPRESENTING NON-U.S. DEPOSITARY RECEIPTS MUST BE DELIVERED IN
ACCORDANCE WITH THE INSTRUCTIONS OF THE ISSUER THEREOF IN ORDER THAT THE SHARES
UNDERLYING SUCH NON-U.S. DEPOSITARY RECEIPTS CAN BE TENDERED TO THE DEPOSITARY.
OWNERS OF NON-U.S. DEPOSITARY RECEIPTS
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SHOULD CONTACT THE RELEVANT NON-U.S. INFORMATION AGENT, THE ISSUER OF THEIR
NON-U.S. DEPOSITARY RECEIPTS, OR THEIR BROKER OR OTHER FINANCIAL INTERMEDIARY
FOR MORE INFORMATION.
4. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 4, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn at any time on or prior to the Expiration Date and, unless accepted
for payment by the Company as provided in this Offer to Purchase, may also be
withdrawn after 12:00 Midnight, New York City time, on September 3, 1999.
For a withdrawal to be effective, the Depositary to which Shares were
tendered must receive (at its address set forth on the back cover of this Offer
to Purchase) a notice of withdrawal in written, telegraphic or facsimile
transmission form on a timely basis. Such notice of withdrawal must specify the
name of the person who tendered the Shares to be withdrawn, the number of Shares
tendered, the number of Shares to be withdrawn and the name of the registered
holder, if different from that of the person who tendered such Shares. If the
certificates have been delivered or otherwise identified to the Depositary,
then, prior to the release of such certificates, the tendering stockholder must
also submit the serial numbers shown on the particular certificates evidencing
the Shares and the signature on the notice of withdrawal must be guaranteed by
an Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedure for
book-entry transfer set forth in Section 3, the notice of withdrawal must
specify the name and the number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares and otherwise comply with the
procedures of such facility. All questions as to the form and validity,
including time of receipt, of notices of withdrawal will be determined by the
Company, in its sole discretion, which determination shall be final and binding
on all parties. None of the Company, the Depositary, the Information Agents or
any other person is or will be obligated to give any notice of any defects or
irregularities in any notice of withdrawal, and none of them will incur any
liability for failure to give any such notice. Withdrawals may not be rescinded,
and any Shares properly withdrawn will thereafter be deemed not tendered for
purposes of the Offer. However, withdrawn Shares may be re-tendered on or prior
to the Expiration Date by again following any of the procedures described in
Section 3.
Owners of Non-U.S. Depositary Receipts should consult the issuer of such
securities or the relevant Non-U.S. Information Agent, or their broker or other
financial intermediary, for instructions with respect to their withdrawal
rights.
If the Company extends the Offer, is delayed in its purchase of Shares or
is unable to purchase Shares pursuant to the Offer for any reason, then, without
prejudice to the Company's rights under the Offer, the Depositary may, subject
to applicable law, retain on behalf of the Company all tendered Shares, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in this Section 4.
Participants in a DuPont Non-U.S. Stock Ownership Plan and Non-U.S. Persons
having a Blueprint brokerage account at Merrill Lynch should disregard the
foregoing procedures with respect to Shares attributable to their individual
accounts in such plans and should follow the procedures for withdrawal, if any,
included in the applicable letter furnished to such participants.
5. PURCHASE OF SHARES AND PAYMENT OF PURCHASE PRICE.
The Company will, upon the terms and subject to the conditions of the
Offer, taking into account the number of Shares so tendered, accept for payment
and pay for (and thereby purchase) Shares validly tendered, and not properly
withdrawn, pursuant to the Offer as soon as practicable after the Expiration
Date. For purposes of the Offer, the Company will be deemed to have accepted for
payment (and therefore purchased), subject to proration, Shares that are validly
tendered and not properly withdrawn when, as and if it gives oral or written
notice to the Depositary of its acceptance of such Shares for payment pursuant
to the Offer. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made promptly (subject to possible delay in the
event of proration) but only after timely receipt by the Depositary of
certificates for Shares (or of a Book-Entry Confirmation by the Expiration Date
of such Shares into the
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<PAGE> 18
Depositary's account at the Book-Entry Transfer Facility), a properly completed
and duly executed Letter of Transmittal (or manually signed facsimile thereof),
or, in the case of a book-entry transfer, an Agent's Message and any other
required documents. All payments made by the Company will be made in U.S.
Dollars.
Payment for Shares purchased pursuant to the Offer will be made by
depositing the aggregate Purchase Price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from the Company and transmitting payment to the tendering stockholders.
Payments in respect of Shares underlying Non-U.S. Depositary Receipts will be
made to the issuer thereof for subsequent payment to the participating owner of
such Non-U.S. Depositary Receipts. In the event of proration, the Company will
determine the proration factor and pay for those tendered Shares accepted for
payment as soon as practicable after the Expiration Date. However, the Company
does not expect to be able to announce the final results of any such proration
until approximately five business days after the Expiration Date. Under no
circumstances will the Company pay interest on the Purchase Price including,
without limitation, by reason of any delay in making payment. All Shares not
tendered or not purchased as a result of proration will be credited to the
appropriate account maintained (or, in the case of a tender of certificates,
established by the Depositary) at the Book-Entry Transfer Facility, except where
local law requires otherwise, as promptly as practicable following the
Expiration Date without expense to the tendering stockholder. In addition, if
the Exchange Offer is not consummated or certain other events occur, the Company
may not be obligated to purchase Shares pursuant to the Offer. See Section 6.
The Company will hold Shares accepted for purchase, at least initially, as
treasury Shares.
The Company will pay all U.S. stock transfer taxes, and Belgian and Swiss
transactional taxes, if any, payable on the transfer to it of Shares purchased
pursuant to the Offer; provided, however, that if payment of the Purchase Price
is to be made to, or (in the circumstances permitted by the Offer) if
unpurchased Shares are to be registered in the name of, any person other than
the registered holder, or if tendered certificates are registered in the name of
any person other than the person signing the Letter of Transmittal, the amount
of all stock transfer taxes, if any (whether imposed on the registered holder or
such other person), payable on account of the transfer to such person will be
deducted from the Purchase Price unless evidence satisfactory to the Company of
the payment of such taxes or exemption therefrom is submitted prior to the
payment date. See Instruction 7 of the Letter of Transmittal. The Company does
not believe that any U.S. stock transfer taxes will be payable in connection
with the Offer, including by the Company, in the event the proviso in the second
preceding sentence is inapplicable. Without having made any investigation with
respect thereto, the Company is not aware of any non-U.S. transfer taxes, other
than transactional taxes pursuant to the laws of Belgium and Switzerland
applicable to purchases of B.O.I.C. Depositary Receipts and Swiss Certificates,
if payment of the purchase price and delivery of any Shares not purchased are
made to the registered holder. See Section 14. The Company will not pay any
Belgian and Swiss transactional taxes unless stockholders who are required to
tender Shares using the Letter of Transmittal indicate on the Letter of
Transmittal that such transactional taxes are payable on such Shares being
purchased pursuant to the Offer. If any transfer or transactional taxes under
laws of any other jurisdiction outside the United States are applicable to
purchases of Shares in the Offer, the Company will not be obligated to pay such
taxes, although it reserves the right to do so in any particular case or
instance.
Tendering stockholders, including participating owners of Non-U.S.
Depositary Receipts, will be subject to U.S. federal income tax withholding
equal to 30% of the gross proceeds payable pursuant to the Offer unless a
reduced rate of withholding is available pursuant to a tax treaty or an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business within the United
States. A Non-U.S. Person may be eligible to obtain a refund from the IRS of all
or a portion of any tax withheld if such stockholder satisfies one or more of
the "complete redemption," "substantially disproportionate" or "not essentially
equivalent to a dividend" tests described in Section 14 or is otherwise able to
establish that no tax or a reduced amount of tax is due. See Section 14 for a
description of certain United States federal income tax consequences of the
Offer to Non-U.S. Persons. If a tendering stockholder, including a participating
owner of Non-U.S. Depositary Receipts, is not subject to the withholding
described above and such stockholder fails to complete fully, sign and return to
the Depositary or such stockholder's
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<PAGE> 19
broker or bank, the IRS Form W-8 Certificate of Foreign Status included with the
Letter of Transmittal, then such stockholder may be subject to required U.S.
federal income tax backup withholding of 31% of the gross proceeds paid to such
stockholder or other payee pursuant to the Offer. See Section 3.
6. CERTAIN CONDITIONS OF THE OFFER.
The Offer is conditioned upon the consummation of the Exchange Offer (that
is, the acceptance for exchange of Shares pursuant to the Exchange Offer by the
Company) (the "Exchange Offer Condition") on or prior to the Expiration Date of
the Offer. The Exchange Offer itself is subject to various conditions, including
that at least 73,990,436 Shares are validly tendered (and not withdrawn)
pursuant thereto. In the Exchange Offer the Company reserved the right to waive
any and all conditions thereto. The Company also has broad rights to amend and
extend the Exchange Offer pursuant thereto. In addition, and notwithstanding any
other provision of the Offer, the Company shall not be required to accept for
payment, purchase or pay for any Shares tendered, and may terminate or amend the
Offer or may postpone the acceptance for payment of, or the purchase of and the
payment for Shares tendered, subject to Rule 13e-4(f) promulgated under the
Exchange Act, if at any time on or after August 6, 1999 and prior to the time of
payment for any such Shares (whether any Shares have theretofore been accepted
for payment, purchased or paid for pursuant to the Offer) the Exchange Offer
Condition is not met or if any of the following events shall have occurred (or
shall have been determined by the Company to have occurred) that, in the
Company's judgment in any such case and regardless of the circumstances giving
rise thereto (including any action or omission to act by the Company), makes it
inadvisable or impracticable to proceed with the Offer or with such acceptance
for payment or payment:
(1) (a) any action, proceeding or litigation seeking to enjoin, make
illegal or delay completion of the Offer or otherwise relating in any manner to
the Offer shall have been instituted, or threatened; (b) any order, stay,
judgment or decree shall have been issued by any court, government, governmental
authority or other regulatory or administrative authority and be in effect, or
any statute, rule, regulation, governmental order or injunction shall have been
proposed, enacted, enforced or deemed applicable to the Offer, any of which
would or might restrain, prohibit or delay completion of the Offer or impair the
contemplated benefits of the Offer to the Company; or (c) IRS shall have
notified the Company that the private letter ruling including the supplemental
ruling received by the Company with respect to the Exchange Offer has been
withdrawn or invalidated, in whole or in part, or the Company shall have
determined that any of the representations and assumptions underlying the ruling
or any portion of the ruling are not true and correct in all respects;
(2) any of the following shall have occurred and the adverse effect of such
occurrence shall, in the judgment of the Company, be continuing: (a) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market in the United
States; (b) any extraordinary or material adverse change in U.S. financial
markets generally, including, without limitation, a decline of at least twenty
percent in either the Dow Jones average of industrial stocks or the Standard &
Poor's 500 Index from July 8, 1999; (c) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States; (d) any
limitation, whether or not mandatory, by any governmental entity, on, or any
other event that would reasonably be expected to materially adverse affect, the
extension of credit by banks or other lending institutions; (e) a commencement
of a war or armed hostilities or other national or international calamity
directly or indirectly involving the United States, which would reasonably be
expected to affect materially and adversely, or to delay materially, the
completion of the Offer; or (f) if any of the situations above exist at the time
of commencement of the Offer, the situation deteriorates materially;
(3) any tender or exchange offer with respect to some or all of the
outstanding Shares other than the Offer and the Exchange Offer, or a merger,
acquisition or other business combination proposal for the Company, shall have
been proposed, announced or made by any person or entity;
(4) there shall have occurred any event or events that have resulted, or
may result, in the judgment of the Company, in an actual or threatened change in
the business, condition (financial or other), income, operations, stock
ownership or prospects of the Company and its subsidiaries, taken as a whole; or
15
<PAGE> 20
(5) (a) any person, entity or "group" (as that term is used in Section
13(d)(3) of the Exchange Act) comes to own more than five percent of the
outstanding Shares (other than a person, entity or group which had publicly
disclosed such ownership with the SEC prior to July 8, 1999), (b) any such
person, entity or group which had publicly disclosed such ownership prior to
such date shall come to own additional Shares constituting more than two percent
of the outstanding Shares (options for and other rights to acquire Shares which
are so acquired, or proposed to be acquired, being deemed for this purpose to be
immediately exercisable) or (c) any new group shall have been formed which
beneficially owns more than five percent of the outstanding Shares which in the
judgment of the Company in any such case, and regardless of the circumstances,
makes it inadvisable to proceed with the Offer or with such acceptance for
purchase of Shares.
The foregoing conditions are for the Company's sole benefit and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition (including any action or inaction by the Company) or may be waived by
the Company in whole or in part. The Company's failure at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right, and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time. In certain circumstances, if the Company waives any
of the foregoing conditions, it may be required to extend the Expiration Date of
the Offer. Any determination by the Company concerning the events described
above and any related judgment or decision by the Company regarding the
inadvisability of proceeding with the purchase of or payment for any Shares
tendered will be final and binding on all parties.
7. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are listed on the NYSE and the Frankfurt, Dusseldorf, Paris and
Amsterdam exchanges and the relevant Non-U.S. Depositary Receipts are listed on
the Amsterdam, Brussels and Swiss exchanges (together with the Frankfurt,
Dusseldorf and Paris exchanges, the "Foreign Exchanges"). The Shares are traded
under the symbol "DD" on the NYSE. The high and low closing sales prices per
Share on the NYSE Composite Tape as compiled from published financial sources
and cash dividends paid in the periods indicated are listed below. Stockholders
are also urged to check the prices of DuPont common stock on any relevant local
Foreign Exchange, which prices may be different than the prices listed below.
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
---- ---- ---------
<S> <C> <C> <C>
1997
First Quarter (1)......................................... $ 57 5/8 $ 46 3/8 $0.285
Second Quarter (1)........................................ 62 7/8 49 3/4 0.315
Third Quarter............................................. 69 3/4 60 11/16 0.315
Fourth Quarter............................................ 64 15/16 50 3/16 0.315
1998
First Quarter............................................. $ 70 7/16 $ 52 5/8 $0.315
Second Quarter............................................ 84 7/16 67 1/8 0.350
Third Quarter............................................. 79 1/2 52 1/4 0.350
Fourth Quarter............................................ 66 1/2 51 11/16 0.350
1999
First Quarter............................................. $ 60 1/8 $ 50 1/16 $0.350
Second Quarter............................................ 75 3/16 57 3/16 $0.350
Third Quarter (through July 8, 1999)...................... 71 1/4 68 3/8 (2)
</TABLE>
- ---------------
(1) Restated to reflect a two-for-one split of outstanding Shares effective May
15, 1997.
(2) DuPont's third quarter dividend has not yet been declared. Stockholders who
tender Shares in the Offer, including participating owners of Non-U.S.
Depositary Receipts representing Shares tendered, will no longer be entitled
to any dividend on such Shares with a record date after the date Shares are
accepted for payment pursuant to the Offer. Stockholders will continue to
receive the regular quarterly dividend with respect to Shares that are not
tendered in the Offer. The Board of Directors of DuPont may declare
dividends on the Shares after considering many factors, including the
Company's competitive position,
16
<PAGE> 21
available cash, financial conditions, earnings and capital requirements. The
Company may choose not to pay dividends in the future.
On July 8, 1999, the last full day of trading prior to the setting of the
exchange ratio applicable to the Exchange Offer, the closing price per Share as
reported on the NYSE Composite Tape was $68.50. Stockholders should obtain
current market quotations for the Shares before deciding to tender. No assurance
can be given concerning the market price of Shares in the future.
8. BACKGROUND AND PURPOSE OF THE OFFER; CERTAIN EFFECTS OF THE OFFER.
As part of the Company's increased focus on its materials and life sciences
businesses, the Company announced in May 1998 its intention to separate its oil
and gas business, operated by Conoco, from its other businesses.
In September 1998, following a thorough review of the various alternatives
for divesting its oil and gas business, the Company's Board of Directors
approved an initial public offering for Conoco. In October 1998, Conoco
completed its initial public offering, selling 191.5 million shares of Conoco
Class A Common Stock (entitled to one vote per share), representing
approximately 30.5 percent of its total shares outstanding, to the public. The
Company, through its ownership of all of the 436.5 million Class B Stock
outstanding (entitled to five votes per share), retained 69.5% of the total
shares in, and 91.9 percent of the total voting power of the shares of, Conoco.
On July 12, 1999, the Company commenced the Exchange Offer pursuant to which it
is offering to exchange all of such shares of Class B Stock for Shares at an
exchange ratio of 2.95 shares of Conoco Class B Stock per Share. The Exchange
Offer is scheduled to expire on August 6, 1999.
If, in the Exchange Offer, fewer than all of the Conoco shares held by the
Company are distributed, the Company will distribute all or a portion of the
balance of its Conoco shares pro rata to all of its remaining stockholders,
including Non-U.S. Persons (i.e., a spin-off). Alternatively, the Company may
sell all or a portion of any such remaining Conoco shares in a secondary
offering that would close following the Exchange Offer, otherwise dispose of
such shares, or retain all or a portion of such remaining shares. However,
shares of Conoco Class B common stock representing at least 80% of the total
voting power of Conoco must be distributed in the Exchange Offer and any
subsequent spin-off taken together.
Non-U.S. Persons are being provided with the opportunity to participate in
this Offer and to tender their Shares for cash. The Purchase Price, without
giving effect to any deduction for applicable withholding taxes, equals the
aggregate value of the number of shares of Conoco Class B Stock (treating the
value of each such share as equal to the closing sale price of Conoco Class A
Common Stock on July 8, 1999 immediately prior to the determination of the
exchange ratio in the Exchange Offer), that will be exchanged for one Share in
the Exchange Offer. In the event that the exchange ratio in the Exchange Offer
is changed, the Company will change the cash price in this Offer, which will be
based on such revised exchange ratio and the sale price of Conoco Class A Common
Stock prior to the fixing of the amended exchange ratio. No assurances can be
given, however, that the trading prices of the Conoco Class B Stock will be the
same as the Conoco Class A Common Stock. In light of the greater per share
voting power of the shares of Class B Stock, the Class B Stock may trade higher
than the Class A Stock; alternatively, it is possible, for whatever reason, that
the Class A Stock may trade higher than the Class B Stock. In addition, the
aggregate trading price of the consideration offered in the Exchange Offer will
fluctuate, both during the Exchange Offer and thereafter. Thus, the premium
payable in this Offer may prove to be greater or less than that paid in the
Exchange Offer. Non-U.S. Persons who wish to increase their ownership interest
in Conoco in exchange for Shares may tender their Shares for cash, pay any
applicable taxes and purchase Conoco shares with the remaining proceeds, subject
to brokerage fees or commissions payable in connection with such transactions.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE MAKING OF THE OFFER.
HOWEVER, STOCKHOLDERS MUST MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES
AND, IF SO, HOW MANY SHARES TO TENDER. NEITHER THE COMPANY, ITS BOARD OF
DIRECTORS, THE DEPOSITARY NOR ANY INFORMATION AGENT MAKES ANY RECOMMENDATION TO
ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES AND
NEITHER THE COMPANY NOR ITS BOARD OF DIRECTORS HAS AUTHORIZED ANY PERSON TO MAKE
ANY SUCH RECOMMENDATION.
17
<PAGE> 22
Shares that the Company acquires pursuant to the Offer will become
authorized, issued but not outstanding Shares, will initially be held in the
treasury of the Company and will be available for resale by the Company without
further stockholder action (except as may be required by applicable law or the
rules of the securities exchanges on which the Shares are listed) for purposes
including, but not limited to, the acquisition of other businesses, raising of
additional capital for use in the Company's businesses, and satisfaction of
obligations under existing or future employee benefit plans. The Company has no
current plan with respect to Shares repurchased pursuant to the Offer, although
it reserves the right to resell such Shares, including as consideration in the
Pioneer transaction described in Section 11.
Except as disclosed in this Offer to Purchase, the Company currently has no
plans or proposals that relate to or would result in (a) the acquisition by any
person of additional securities of the Company or the disposition of securities
of the Company; (b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any or all of its
subsidiaries; (c) a sale or transfer of a material amount of assets of the
Company or any of its subsidiaries; (d) any change in the present Board of
Directors or management of the Company; (e) any material change in the present
dividend rate or policy, or indebtedness or capitalization of the Company; (f)
any other material change in the Company's corporate structure or business; (g)
any change in the Company's Certificate of Incorporation or By-Laws or any
actions which may impede the acquisition of control of the Company by any
person; (h) a class of equity security of the Company being delisted from a
national securities exchange; (i) a class of equity security of the Company
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Exchange Act; or (j) the suspension of the Company's obligation to file
reports pursuant to Section 15(d) of the Exchange Act.
On a pro forma basis, assuming the completion of the Exchange Offer and the
consummation of the Offer at March 31, 1999, the Offer would have increased the
Company's total indebtedness from $8,997 million to $9,643 million, the Exchange
Offer and the Offer would have reduced the Company's common stockholders' equity
from $14,133 million to $9,638 million and the Exchange Offer and the Offer
would have reduced the Company's book value per common share from $12.33 to
$9.68. See Section 11 for certain historical and financial information with
respect to the Company and certain pro forma financial information relating to
the Offer and the Exchange Offer.
9. INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING THE SHARES.
As of June 30, 1999, there were 1,129.5 million Shares outstanding. As of
June 30, 1999, the Company's directors and executive officers as a group
(eighteen persons) beneficially owned 7.2 million Shares, which constituted
approximately 0.6% of the outstanding Shares at such time. If the Company
purchases 8,000,000 Shares pursuant to the Offer and acquires 147,980,872 Shares
in the Exchange Offer, then after the purchase of such maximum number of Shares
pursuant to the Offer and acquisition of such maximum number of Shares pursuant
to the Exchange Offer, the Company's directors and executive officers as a group
would beneficially own approximately .7% of the outstanding Shares, assuming
such persons tender 80,000 Shares (the aggregate number of Shares such persons
have indicated to the Company that they intend to tender) pursuant to the
Exchange Offer and, because none of such persons are Non-U.S. Persons, none
pursuant to this Offer. However, each director and executive officer intends to
consider the Exchange Offer and make his or her own decision as to whether or
not to accept the Exchange Offer.
Except as set forth in Schedule I hereto, based on the Company's records
and information provided to the Company by its directors, executive officers,
associates and subsidiaries, neither the Company nor any of its associates or
subsidiaries or persons controlling the Company nor, to the best of the
Company's knowledge, any of the directors or executive officers of the Company
or any of its subsidiaries, nor any associates or subsidiaries of any of the
foregoing, has effected any transactions in the Shares during the 40 business
days prior to the date hereof.
Except as set forth in this Offer to Purchase, neither the Company or any
person controlling the Company nor, to the Company's knowledge, any of its
directors or executive officers, is a party to any contract, arrangement,
understanding or relationship with any other person relating, directly or
indirectly, to the Offer with respect to any securities of the Company
(including, but not limited to, any contract, arrangement,
18
<PAGE> 23
understanding or relationship concerning the transfer or the voting of any such
securities, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss or the giving or withholding of
proxies, consents or authorizations).
10. SOURCE AND AMOUNT OF FUNDS.
The Company estimates that the total funds required to purchase the Shares
pursuant to the Offer and to pay related fees and expenses will be approximately
$650 million. The Company anticipates that substantially all the funds necessary
to pay such amounts will come through the issuance of commercial paper or use of
existing credit facilities.
11. CERTAIN INFORMATION ABOUT THE COMPANY.
DuPont is a science company, delivering science-based solutions that make a
difference in people's lives in food and nutrition; healthcare; apparel; home
and construction; electronics; and transportation. Founded in 1802, DuPont
operates in 65 countries and has 92,000 employees.
DuPont presents its results in eight reportable segments -- Agriculture &
Nutrition, Nylon Enterprise, Performance Coating & Polymers, Pharmaceuticals,
Pigments & Chemicals, Polyester Enterprise, Specialty Fibers, and Specialty
Polymers. The balance of DuPont's continuing operations is reported in an Other
segment. DuPont also has petroleum operations conducted through Conoco, a 69.5
percent subsidiary; in the interim, petroleum operations are reported in
DuPont's financial statements as discontinued operations. The petroleum business
will be divested from DuPont's financial statements as discontinued operations.
The petroleum business will be divested from DuPont's operations once the
transaction is completed. DuPont and its subsidiaries, excluding Conoco, employ
approximately 80,000 people worldwide and has annual revenues of approximately
$25 billion.
DuPont, in the ordinary course and on a regular basis, engages in
discussions with other companies in their respective industries concerning
possible acquisitions, divestitures, joint ventures, research alliances and
other types of transactions, many of which are or could be material to DuPont.
Such transactions are often dilutive, particularly on a pro forma basis and in
the early years following their completion. In particular, DuPont is currently
engaged in discussions in a number of different areas, including
pharmaceuticals, with other companies relating to transactions of the types
described above. In this regard, DuPont announced at its annual meeting of
stockholders in April 1999 that it would seek to enter into an alliance to
strengthen its pharmaceutical business.
On March 10, 1999, DuPont announced the proposed creation of a tracking
stock for its life sciences businesses, which would be issued to all of its
stockholders. The amendment of DuPont's certificate of incorporation to create
this tracking stock, which is intended to provide investors an opportunity to
invest in a security the terms of which more closely track the economic
performance of DuPont's life sciences businesses, must be approved by DuPont
stockholders. After the issuance of the tracking stock, the existing DuPont
common stock is expected to more closely mirror the performance of its material
businesses. DuPont anticipates that stockholder approval will be sought in the
first quarter of 2000. In February 1999, the Clinton administration proposed
changes to the federal income tax laws, as part of its budget package, that, if
enacted, could adversely affect the tax consequences relating to the issuance of
tracking stock and, as a result, could adversely affect DuPont's ability to
issue the tracking stock for its life sciences businesses. It is presently
unclear whether this proposal will be enacted into law and, if so, what form it
would take. In the event that the tracking stock proposal is not implemented,
DuPont is unable to estimate what effect, if any, this would have on the trading
price of DuPont common stock.
On March 15, 1999, DuPont and Pioneer Hi-Bred International, Inc., the
world's largest seed company ("Pioneer"), agreed to a merger in which DuPont
will acquire the remaining approximately 80% of Pioneer not presently owned by
DuPont for approximately $7.7 billion in DuPont common stock and cash. Pioneer
develops, produces and markets hybrids of corn, sorghum and sunflowers;
varieties of soybeans, alfalfa, wheat and canola; and microorganisms useful in
crop and livestock production. In the year 2000, the first full year of combined
operations with Pioneer, DuPont expects fully diluted earnings per share,
excluding the impact of
19
<PAGE> 24
nonrecurring items, to be reduced by about seven percent as the result of
increased interest expense and amortization of intangible assets associated with
the acquisition. Preliminary analysis indicates that 1999 pro forma earnings,
assuming the merger took place on January 1, 1999, could show even more dilution
due to the required exclusion under pro forma rules of future operating benefits
DuPont expects to realize from the combined operations. Actual dilution will be
dependent on many factors including earnings of DuPont and Pioneer after the
merger, allocations of purchase price including amounts assigned to purchased
in-process research and development, the number of DuPont shares acquired under
the Exchange Offer and the Offer, and the number of DuPont shares issued to
acquire Pioneer.
Selected Historical Financial Information. The following table contains
summary consolidated historical and pro forma financial data of DuPont's
continuing operations as of the dates and for the periods indicated. The pro
forma information is provided to aid in your analysis of the financial aspects
of this Offer. This information may not necessarily reflect the results of
operations, financial position and cash flows of DuPont in the future. The
information is only a summary and you should read it together with the Company's
audited financial statements and "Management's Discussion and Analysis of
Financial Conditions and Results of Operations" located in the DuPont 1998 Form
10-K/A and the DuPont Form 10-Q/A for the quarter ended March 31, 1999, which we
have filed with the SEC, and which we hereby incorporate in this document by
reference. To find out where you can obtain copies of DuPont's SEC filings, see
"Additional Information" below.
Pro Forma Financial Information. The pro forma financial data for DuPont
give effect to the following transactions and events:
- the split-off of Conoco through an exchange of 100 percent of the
436,543,573 shares of Conoco Class B common stock held by DuPont for
DuPont common stock held by United States persons. At the exchange ratio
of 2.95 shares of Conoco Class B common stock for each share of DuPont
common stock, 147,980,872 shares of DuPont are assumed acquired.
- a cash offer of $80.76 a share to purchase a maximum of 8,000,000 shares
of DuPont common stock held by persons that are not United States
persons.
- various payments received by DuPont from Conoco in connection with
Conoco's repayment of intercompany indebtedness to DuPont as part of the
separation:
- receipt by DuPont of Conoco's initial public offering proceeds of
$4,228 million in October 1998.
- receipt by DuPont in April 1999 of $3,970 million from Conoco's sale
of senior debt securities.
- receipt by DuPont in May 1999 of $1,022 million from Conoco's sales
of commercial paper.
The historical financial statements of DuPont reflect these payments as of
the dates received. To the extent these events are not reflected in the
historical income statements, the unaudited pro forma income statements for
DuPont assume that these transactions occurred as of the beginning of the
periods presented. To the extent these events are not reflected in the
historical balance sheet, the unaudited pro forma balance sheet assumes that
these transactions occurred as of March 31, 1999.
20
<PAGE> 25
DUPONT
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA AS FOR
OF AND FOR THE THE YEAR
THREE MONTHS THREE MONTHS ENDED
ENDED MARCH 31, YEAR ENDED DECEMBER 31, ENDED DECEMBER
----------------- ----------------------------------------------- MARCH 31, 31,
1999 1998 1998 1997 1996 1995 1994 1999 1998
------- ------- ------- ------- ------- ------- ------- -------------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Sales........................ $ 6,295 $ 6,194 $24,767 $24,089 $23,644 $24,500 $22,518 $ 6,295 $24,767
Other Income................. 18(1) 297 981 1,005 1,101 797 674 18 981
------- ------- ------- ------- ------- ------- ------- ------- -------
Total................ 6,313 6,491 25,748 25,094 24,745 25,297 23,192 6,313 25,748
Cost of Goods Sold and Other
Operating Charges.......... 3,873 4,049 15,664 15,564 15,314 15,572 14,498 3,873 15,664
Selling, General and
Administrative Expenses.... 535 479 2,115 2,061 2,119 2,283 2,215 535 2,115
Depreciation and
Amortization............... 335 332 1,452 1,361 1,526 1,643 1,748 335 1,452
Research and Development
Expense.................... 358 264 1,308 1,072 990 1,031 1,004 358 1,308
Interest Expense............. 96 127 520 389 409 449 343 118 513
Purchased In-Process Research
and Development............ 40 60 1,443 1,478 - - - 40 1,443
Employee Separation Costs and
Write-down of Assets....... - 118 633 340 - - - - 633
------- ------- ------- ------- ------- ------- ------- ------- -------
Total................ 5,237 5,429 23,135 22,265 20,358 20,978 19,808 5,259 23,128
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from Continuing
Operations Before Income
Taxes and Minority
Interests.................. 1,076 1,062 2,613 2,829 4,387 4,319 3,384 1,054 2,620
Provision for Income Taxes... 432 417 941 1,354 1,416 1,432 1,164 421 919
Minority Interests in
Earnings of Consolidated
Subsidiaries............... 16 8 24 43 40 29 15 16 24
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from Continuing
Operations............... $ 628 $ 637 $ 1,648 $ 1,432 $ 2,931 $ 2,858 $ 2,205 $ 617 $ 1,677
======= ======= ======= ======= ======= ======= ======= ======= =======
Basic Earnings Per Share of
Common Stock -- Continuing
Operations................. $ 0.55 $ 0.56 $ 1.45 $ 1.26 $ 2.60 $ 2.43 $ 1.61 $ 0.63 $ 1.71
Diluted Earnings Per Share of
Common Stock -- Continuing
Operations................. $ 0.55 $ 0.55 $ 1.43 $ 1.24 $ 2.56 $ 2.41 $ 1.60 $ 0.63 $ 1.69
Dividends Per Common Share... $ 0.35 $ 0.315 $ 1.365 $ 1.23 $ 1.115 $ 1.015 $ .91
Weighted Average Number of
Shares Outstanding
(millions):
Basic.................... 1,127 1,128 1,129 1,131 1,121 1,170 1,360 971 973
Diluted.................. 1,138 1,146 1,145 1,150 1,140 1,183 1,371 982 988
OTHER DATA:
Cash Provided by Continuing
Operations................. $ 147 $ 152 $ 4,132 $ 4,027 $ 4,109 $ 5,170 $ 3,697
Cash Used for Investment
Activities of Continuing
Operations................. (2,086) (1,040) (178) (4,022) (987) (1,286) (1,744)
Cash Used for Financing
Activities................. 2,242 2,103 (3,053) (451) (4,018) (3,571) (2,878)
BALANCE SHEET DATA:
Cash and Cash Equivalents.... $ 1,003 $ 2,024 $ 1,059 $ 1,004 $ 1,066 $ 1,408 $ 856 $ 1,003
Working Capital.............. (3,872) (2,374) (2,374) (2,110) 15 (2,116) 3,208 283
Net Property, Plant and
Equipment.................. 14,817 13,092 14,131 12,601 10,959 11,389 11,385 14,817
Total Assets................. 41,967 39,797 38,536 36,689 32,342 32,748 32,577 33,317
Long-Term Borrowings and
Capital Lease
Obligations................ 4,566 6,402 4,495 5,897 5,052 5,646 6,338 4,566
Minority Interests........... 464 381 407 361 315 223 192 464
Stockholders' Equity......... 14,133 11,629 13,954 11,270 10,593 8,323 12,743 9,638
</TABLE>
- ---------------
(1) Includes an exchange loss of $131 on forward exchange contracts purchased in
1998 to fix in U.S. dollars the cash required to acquire Herberts, the
automotive coatings business of Hoechst AG. The purchase price for Herberts
was negotiated in German marks.
Note: The pro forma financial data do not give effect to DuPont's acquisition of
approximately 80% of Pioneer not presently owned by DuPont since the
effects of this transaction are not required for pro forma
21
<PAGE> 26
purposes. In the year 2000, the first full year of combined operations
with Pioneer, DuPont expects fully diluted earnings per share, excluding
the impact of nonrecurring items, to be reduced by about seven percent as
the result of increased interest expense and amortization of intangible
assets associated with the acquisition. Preliminary analysis indicates
that 1999 pro forma earnings, assuming the merger took place on January 1,
1999, could show even more dilution due to the required exclusion under
pro forma rules of future operating benefits DuPont expects to realize
from the combined operations. Actual dilution will be dependent on many
factors including earnings of DuPont and Pioneer after the merger,
allocations of purchase price, including amounts assigned to purchased
in-process research and development, the number of DuPont shares acquired
under the Exchange Offer and the Offer, and the number of DuPont shares
issued to acquire Pioneer.
Recent Developments.
On July 1, 1999, DuPont announced that it plans to restructure its $2
billion Crop Protection business to address intensely competitive market
conditions and position the business for future growth. The business intends to
consolidate its manufacturing capacity and refocus its research and development
programs and marketing activities, resulting in the elimination of approximately
800 jobs. As of the date hereof affected positions and locations had not yet
been determined. Estimated annual pre-tax savings of approximately $200 million
are expected to begin accruing in the fourth quarter of 1999. DuPont expects to
record a non-recurring charge in the third quarter for employee separation costs
associated with the restructuring. Potential asset write-offs are currently
under review. DuPont Crop Protection employs 5,500 people in 40 countries. It
sells herbicides, fungicides, and insecticides to the corn and soybean, cereals,
and specialties markets.
DuPont recently announced measures designed to improve the profitability of
its polyester business. Under the plan, polyester production capacity will be
better aligned to meet current market needs, some obsolete assets will be
permanently curtailed and the organizations will be streamlined to increase
competitiveness. The restructuring will result in the elimination of
approximately 800 DuPont positions and 600 contractor positions globally or
about 14 percent of the global polyester business work force.
In March 1999, DuPont acquired Herberts GmbH, the coating business of
Hoechst AG, for about $1.8 billion. Herberts is the market leader in automotive
coatings in Europe with strong positions in the industrial coatings markets and
markets for emerging ultra-low emission powder coatings. Based on business
integration studies following the Herberts acquisition, DuPont has recently
announced plans to consolidate its coatings manufacturing facilities and
reorganize other business activities by April 2000. Under the plan, subject to
government notification requirements and country labor laws, DuPont's
performance coatings business will shift production from six of its 46 coatings
facilities and business staff will be consolidated at other locations, affecting
approximately 1,300 of its 15,000 total employee work force. Costs incurred as a
result of these actions largely will be included in the purchase accounting for
the Herberts acquisition, and therefore, will not result in a material charge to
1999 earnings.
Additional Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is obligated to
file reports, proxy statements and other information with the SEC relating to
its business, financial condition and other matters. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549; at its regional offices located at 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material may also
be obtained by mail, upon payment of the Commission's customary charges, from
the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a Web site
on the World Wide Web at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. Such reports, proxy statements and other
information concerning the Company also can be inspected at the offices of the
NYSE, 20 Broad Street, New York, New York 10005, on which the Shares are listed.
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<PAGE> 27
DuPont incorporates by reference herein the following documents filed by it
with the SEC pursuant to the Exchange Act:
<TABLE>
<CAPTION>
PERIOD
DUPONT SEC FILINGS (FILE NO. 1-815) ------
<S> <C>
Annual Report on Form 10-K/A.................. Year ended December 31, 1998, filed as amended
July 7, 1999
Proxy Statement............................... Filed March 19, 1999
Form 8-K...................................... Filed April 16, 1999
Quarterly Report on Form 10-Q/A............... First Quarter ended March 31, 1999, filed as
amended July 8, 1999
Form 8-K...................................... Filed April 27, 1999
Form 8-K...................................... Filed June 14, 1999
Form 8-K...................................... Filed July 2, 1999
Schedule 13E-3................................ Filed July 2, 1999
Schedule 13E-4................................ Filed July 12, 1999
</TABLE>
All documents and reports filed by DuPont pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Offer to Purchase and
prior to the Expiration Date shall be deemed to be incorporated by reference in
this Offer to Purchase and to be a part hereof from the date of such filing. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Offer to Purchase to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Offer to Purchase. This Offer to Purchase
incorporates documents by reference which are not presented herein or delivered
herewith.
12. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; REGISTRATION UNDER THE
EXCHANGE ACT.
The Company's purchase of Shares pursuant to the Offer and the exchange of
Shares for Conoco Class B Stock in the Exchange Offer will reduce the number of
Shares that might otherwise trade publicly and is likely to reduce the number of
stockholders. There will still be a sufficient number of Shares outstanding and
publicly traded following the Offer and the Exchange Offer to ensure a continued
trading market in the Shares. Based on the published guidelines of the NYSE, the
purchase of Shares pursuant to the Offer and the exchange of Shares for Conoco
Class B Stock in the Exchange Offer will not cause the remaining Shares to be
delisted from the NYSE. With respect to the listing of Shares and Non-U.S.
Depositary Receipts on Foreign Exchanges, delisting criteria vary from exchange
to exchange and, depending on the number of Shares purchased pursuant to the
Offer that trade (or which underlie Non-U.S. Depositary Receipts that trade) on
a particular Foreign Exchange, delisting of Shares or Non-U.S. Depositary
Receipts could occur (although DuPont does not expect this to happen), or DuPont
may seek to delist Shares or the relevant Non-U.S. Depositary Receipts, from one
or more Foreign Exchanges. In any event, purchases of Shares that trade (or
which underlie Non-U.S. Depositary Receipts that trade) on any Foreign Exchange
will have the effect of decreasing the number of Shares or Non-U.S. Depositary
Receipts actually traded on such exchange and depending on the number of such
Shares purchased, could adversely affect the liquidity of Shares or the relevant
Non-U.S. Depositary Receipts traded on such exchange.
The Shares are currently "margin securities" under the rules of the Federal
Reserve Board. This has the effect, among other things, of allowing brokers to
extend credit on the collateral of the Shares. The Company believes that,
following the purchase of Shares pursuant to the Offer and the exchange of
Shares pursuant to the Exchange Offer, the Shares will continue to be "margin
securities" for purposes of the Federal Reserve Board's margin regulations.
The Shares are registered under the Exchange Act, which requires, among
other things, that the Company furnish certain information to its stockholders
and to the Commission and comply with the Commission's proxy rules in connection
with meetings of the Company's stockholders. The purchase of
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<PAGE> 28
Shares pursuant to the Offer and the exchange of Shares pursuant to the Exchange
Offer will not result in the Shares becoming subject to deregistration under the
Exchange Act.
13. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.
The Company is not aware of any license or regulatory permit material to
its business that might be adversely affected by its acquisition of Shares as
contemplated in the Offer or of any approval or other action by any government
or governmental, administrative or regulatory authority or agency, domestic or
foreign, that would be required for the Company's acquisition or ownership of
Shares as contemplated by the Offer, except with respect to actions relating to
the making of the Offer in certain non-U.S. jurisdictions which have been taken.
Should any such approval or additional other action be required, the Company
currently contemplates that it will seek such approval or other action, although
it reserves the right not to do so. The Company cannot predict whether it may
determine that it is required to delay the acceptance for payment of, or payment
for, Shares tendered pursuant to the Offer pending the outcome of any such
matter. There can be no assurance that any such approval or other action, if
needed, would be obtained or would be obtained without substantial conditions or
that the failure to obtain any such approval or other action might not result in
adverse consequences to the Company's business. The Company's obligations under
the Offer to accept for payment and pay for Shares are subject to certain
conditions. See Section 6.
14. CERTAIN TAX CONSEQUENCES TO NON-U.S. PERSONS.
Certain United States Federal Income Tax Consequences.
The following summary describes certain United States federal income tax
consequences of the Offer to Non-U.S. Persons. This summary is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed
Treasury regulations promulgated thereunder, rulings, administrative
pronouncements and judicial decisions, changes to which could materially affect
the tax consequences described herein and could be made on a retroactive basis.
This summary discusses only Shares held as capital assets, within the meaning of
Section 1221 of the Code, and does not address all of the tax consequences that
may be relevant to particular stockholders in light of their personal
circumstances, or to certain types of stockholders subject to special rules for
United States federal income tax purposes. This summary does not address the tax
consequences to stockholders who will be subject to United States federal income
tax on a net basis on the proceeds received pursuant to the Offer. In addition,
this summary does not address the tax consequences to Non-U.S. Persons who are
treated under the United States federal income tax laws as constructively owning
Shares that are exchanged by U.S. Persons pursuant to the Exchange Offer. This
summary may not be applicable with respect to Shares acquired as compensation
(including Shares acquired upon the exercise of options or which were or are
subject to forfeiture restrictions). As the context requires in this summary,
references to stockholders shall be deemed to refer to owners of Non-U.S.
Depositary Receipts and references to Shares shall be deemed to refer to
Non-U.S. Depositary Receipts. This summary also does not address the state,
local or foreign tax consequences of participating in the Offer. EACH
STOCKHOLDER AND OWNER OF NON-U.S. DEPOSITARY RECEIPTS SHOULD CONSULT SUCH
STOCKHOLDER'S OR OWNER'S TAX ADVISOR AS TO THE PARTICULAR TAX CONSEQUENCES TO
SUCH STOCKHOLDER OR OWNER OF PARTICIPATING IN THE OFFER.
Because the proceeds of the Offer may be treated as a dividend for United
States federal income tax purposes, United States federal income taxes equal to
30% of the gross proceeds payable to a Non-U.S. Person will be withheld unless a
reduced rate of withholding is available pursuant to a tax treaty or an
exemption from withholding is applicable because such gross proceeds are
effectively connected with the conduct of a trade or business within the United
States. In order to obtain a reduced rate of withholding pursuant to a tax
treaty, a Non-U.S. Person must deliver to the Depositary or such stockholder's
broker or bank prior to the payment date a properly completed and executed IRS
Form 1001 or other applicable form which may, in certain circumstances, consist
of a properly completed and executed IRS Form W-8 which includes such Non-U.S.
Person's address. Stockholders are urged to consult the Depositary or such
stockholder's broker or bank to determine whether such stockholder has
previously delivered a valid properly completed and executed IRS Form 1001 or
other applicable form and, if not, to determine which form to file. In order to
obtain an
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<PAGE> 29
exemption from withholding on the grounds that the gross proceeds paid pursuant
to the Offer are effectively connected with the conduct of a trade or business
within the United States, a Non-U.S. Person must deliver to the Depositary or
such stockholder's broker or bank prior to the payment date a properly completed
and executed IRS Form 4224 or other applicable form.
A Non-U.S. Person may be eligible to obtain a refund from the IRS of all or
a portion of any tax withheld if such stockholder satisfies one or more of the
"complete redemption," "substantially disproportionate" or "not essentially
equivalent to a dividend" tests described below or is otherwise able to
establish that no tax or a reduced amount of tax is due. In applying these
tests, a Non-U.S. Person generally will be treated as owning Shares actually or
constructively owned by certain related individuals and entities as well as
Shares that the Non-U.S. Person has the right to acquire by exercise of an
option or by conversion or exchange of a security. Due to the factual nature of
these tests, Non-U.S. Persons should consult their tax advisors regarding the
application of these tests in their particular circumstances. If a Non-U.S.
Person satisfies one or more of these tests, the receipt of gross proceeds by
such stockholder in the Offer will be treated, for United States federal income
tax purposes, as received in exchange for Shares, rather than as a dividend.
If a Non-U.S. Person sells Shares to persons other than the Company at or
about the time such stockholder also sells Shares to the Company pursuant to the
Offer, and the sales are part of an overall plan to reduce or terminate such
stockholder's proportionate interest in the Company, then the sales to persons
other than the Company may, for United States federal income tax purposes, be
integrated with the stockholder's of Shares pursuant to the Offer and, if
integrated, should be taken into account in determining whether the holder
satisfies any of the three tests described below. Moreover, the effect of the
Exchange Offer, which will reduce the number of outstanding Shares and,
therefore, may increase a Non-U.S. Person's percentage interest in such
outstanding Shares, should also be taken into account in determining whether
such stockholder satisfies any of the three tests described below.
- "Complete Redemption" Test. A Non-U.S. Person will satisfy the
"complete redemption" test if all of the Shares (a) actually owned by
such Non-U.S. Person are exchanged pursuant to the Offer and (b)
constructively owned by such Non-U.S. Person are exchanged pursuant to
the Offer or, with respect to Shares owned by certain related
individuals, such Non-U.S. Person effectively waives, in accordance with
specific rules in the Code, attribution of such Shares which otherwise
would be considered to be constructively owned by such Non-U.S. Person.
Non-U.S. Persons wishing to satisfy the "complete redemption" test
through waiver of such constructive ownership rules should consult their
tax advisors.
- "Substantially Disproportionate" Test. A Non-U.S. Person will satisfy
the "substantially disproportionate" test if the percentage of the then
outstanding Shares actually and constructively owned by such stockholder
immediately after the Offer is less than 80% of the percentage of the
Shares actually and constructively owned by such stockholder immediately
before the Offer.
- "Not Essentially Equivalent to a Dividend" Test. A Non-U.S. Person will
satisfy the "not essentially equivalent to a dividend" test if the
reduction in such stockholder's proportionate interest in the Company
constitutes a "meaningful reduction" given such stockholder's particular
facts and circumstances. The IRS has held that any reduction in the
percentage interest of a stockholder whose relative stock interest in a
publicly held corporation is minimal (an interest of less than 1% should
satisfy this requirement) and who exercises no control over corporate
affairs will constitute such a "meaningful reduction."
As described above, if a Non-U.S. Person is treated as having sold such
stockholder's Shares under any of the tests described above, such stockholder
may be eligible to obtain a refund from the IRS of all or a portion of any tax
withheld. The Company cannot predict whether or to what extent the Offer will be
oversubscribed. If the Offer is oversubscribed, proration of tenders pursuant to
the Offer will cause the Company to accept fewer Shares than are tendered.
Therefore, a stockholder can be given no assurance that a sufficient number of
such stockholder's Shares will be exchanged pursuant to the Offer to ensure that
such exchange will satisfy any of the three tests discussed above. In any event,
Non-U.S. Persons generally will not be able to determine
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<PAGE> 30
whether one or more of the three tests discussed above have been satisfied until
after both this Offer and the Exchange Offer are consummated.
Stockholders are urged to consult their tax advisors regarding their
eligibility to obtain a refund of any tax withheld and the procedures for
obtaining such refund. Neither the Company nor any of its agents will be
involved in, or provide advice with respect to, any aspect of a refund claim
made by a tendering stockholder or is making any representations regarding the
ability of a tendering stockholder to obtain a refund from the IRS.
Stockholders Who Do Not Receive Cash Pursuant to the Offer. The Offer will
result in no United States federal income tax consequences to stockholders that
do not tender Shares pursuant to the Offer.
See Section 3 with respect to the application of United States federal
backup withholding to payments made to Non-U.S. Persons.
Certain Non-United States Tax Consequences.
The following summary describes the Company's understanding of certain tax
consequences related to the Offer to Non-U.S. Persons that are subject to tax in
the following jurisdictions: Belgium, Canada, France, Germany, Ireland, the
Netherlands, Norway, Switzerland and the United Kingdom.
Owners of Non-U.S. Depositary Receipts should note that the interposition
of the issuer of such Non-U.S. Depositary Receipts in the tendering of the
underlying Shares of such Non-U.S. Depositary Receipts generally will not alter
the tax consequences to such owner.
NOTWITHSTANDING THE FOLLOWING SUMMARY, EACH STOCKHOLDER AND OWNER OF
NON-U.S. DEPOSITARY RECEIPTS SHOULD CONSULT SUCH STOCKHOLDER'S OR OWNER'S TAX
ADVISOR AS TO THE PARTICULAR CONSEQUENCES TO SUCH STOCKHOLDER OR OWNER OF
PARTICIPATING IN THE OFFER, INCLUDING UNDER ANY FEDERAL, STATE, PROVINCIAL,
LOCAL AND FOREIGN LAWS.
THE TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL INFORMATION ONLY
AND DOES NOT ADDRESS ALL TAX CONSEQUENCES THAT MAY BE RELEVANT. EACH ELIGIBLE
STOCKHOLDER AND OWNER OF NON-U.S. DEPOSITARY RECEIPTS REGARDLESS OF CITIZENSHIP
OR COUNTRY OF RESIDENCE IS URGED TO CONSULT ITS TAX ADVISOR TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO IT OF THE OFFER, INCLUDING THE APPLICABILITY AND
EFFECT OF TAX LAWS OF THE JURISDICTIONS APPLICABLE TO SUCH STOCKHOLDER.
Belgium. Belgian individual resident stockholders whose shares are
invested in their professional activity may have capital gain taxed at the
ordinary progressive individual income tax rates or, if the transaction could be
characterized as speculative, at the separate rate of 33%.
Stockholders subject to the Belgian corporate income tax may be subject to
the ordinary corporate income tax rate of 40.17%, unless they qualify for the
participation exemption regime under Article 192 of the Belgian Income Tax Code
or in the event a double tax treaty applies.
A separate tax from each party to a transaction is due for any public
exchange of securities concluded or executed in Belgium in which a professional
intermediary intervenes.
To the extent Shares underlying B.O.I.C. Depositary Receipts are purchased
pursuant to the Offer, a transactional tax calculated at a rate of 0.07% will
have to be paid for each purchase and sale of such Shares underlying B.O.I.C.
Depositary Receipts no later than the third day after the date of the
transaction. This tax is limited to BEF 10,000 per transaction. Subject to the
limitations described under "Procedure for Tendering Shares -- Transfer Taxes,"
the Company will pay such transactional taxes.
Canada. The following is a summary of certain Canadian federal income tax
consequences of the Offer generally applicable to stockholders of the Company
who are Non-U.S. Persons and who, for the purposes of the Income Tax Act
(Canada) (the "Tax Act") and the Convention between Canada and the United States
with Respect to Taxes on Income and on Capital (the "Canada-U.S. Treaty"), are
residents or deemed to be
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<PAGE> 31
resident in Canada, hold their Shares as capital property, deal at arm's length
with the Company and are not affiliated with the Company (a "Resident
Stockholder"). The Shares will generally be considered to be capital property to
a stockholder unless the stockholder either holds such Shares in the course of
carrying on a business of trading or dealing in securities or otherwise as part
of a business of buying or selling securities or acquired such Shares in a
transaction or transactions considered to be an adventure in the nature of
trade. This summary is not applicable to stockholders who are "financial
institutions" for the purposes of the mark-to-market rules contained in the Tax
Act or to stockholders in respect of which the Company is a "foreign affiliate"
as defined for the purposes of the Tax Act.
This summary is based on the current provisions of the Tax Act, the
regulations thereunder (the "Regulations") and the Canada-U.S. Treaty and the
current published administrative practices of Revenue Canada. This summary also
takes into account specific proposals to amend the Tax Act and Regulations
publicly announced by or on behalf of the Minister of Finance (Canada) prior to
the date hereof (the "Proposed Amendments") and assumes that all Proposed
Amendments will be enacted substantially as proposed. However, no assurances can
be given that the Proposed Amendments will be enacted as proposed, or at all.
This summary does not otherwise take into account or anticipate any changes in
the law, whether by way of legislative, judicial or governmental action or
decision, nor does it take into account other federal tax legislation or
considerations or provincial, territorial or foreign tax legislation or
considerations.
A Resident Stockholder who disposes of Shares pursuant to the Offer will
realize a capital gain (or a capital loss) to the extent that the cash payment
received for such Shares (inclusive of any amounts withheld on account of
foreign tax) expressed in Canadian dollars computed at the rate of exchange
prevailing on the date of disposition, net of any reasonable costs of
disposition, exceed (or are less than) the adjusted cost base (for the purposes
of the Tax Act) to the Resident Stockholder of such Shares. For purposes of the
Tax Act, the cost to the Resident Stockholder of such Shares will be the
Canadian dollar equivalent of the U.S. dollar price paid therefor computed at
the exchange rate prevailing on the date of acquisition subject to the averaging
of cost under the identical property rules in the Tax Act.
A Resident Stockholder will be required to include in income for the year
of disposition three-quarters of any such capital gain (a "taxable capital
gain") and will generally be entitled to deduct three-quarters of any capital
loss (an "allowable capital loss") from taxable capital gains realized by the
Resident Stockholder for the year, any of the three preceding years, or any
subsequent year to the extent and in the circumstances described in the Tax Act.
A Resident Stockholder that is a Canadian-controlled private corporation (as
defined for the purposes of the Tax Act) may be subject to a refundable tax of
6% on any such taxable capital gains. Capital gains realized by an individual or
a trust, other than certain specified trusts, may give rise to alternative
minimum tax under the Tax Act.
Subject to the provisions of the Tax Act and the Canada-U.S. Treaty, a
foreign tax credit or deduction in respect of U.S. withholding tax on the cash
payment received for the Shares may be available in computing the Resident
Stockholder's Canadian tax liability, except to the extent that such withholding
tax is refundable to the Resident Stockholder (see "Certain United States
Federal Income Tax Consequence" above). A refund of withholding tax, if any, may
give rise to a capital gain or capital loss if there is a fluctuation in the
Canadian-U.S. dollar exchange rate from the time such tax was withheld to the
time of receipt of such refund, which will be taxed in the manner described
above under "The Offer". Resident Stockholders should consult their own tax
advisor as to the availability of foreign credit tax relief and the consequences
of receiving a refund of withholding tax.
As U.S. currency is not a qualified investment under the Tax Act for trusts
governed by registered retirement savings plans, registered retirement income
funds, registered education savings plans and deferred profit sharing plans, the
cash payment received pursuant to the Offer by Resident Stockholders that are
such plans should be promptly converted to Canadian currency or reinvested in
qualified investments to avoid the imposition of penalty tax.
France. The repurchase of DuPont's securities for cash should be subject
to the regime of distributions.
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<PAGE> 32
Gains derived by French resident corporations should be subject to
corporate income tax at full rate. If, however, the stockholder is treated as
parent within the meaning of article 145 of the French General Tax Code (holding
of at least 10% of the share capital or of a portfolio the tax basis for which
is at least 150 million FF), such gains should be exempt from taxation under
parent-subsidiary rules.
Gains derived by French resident individuals should be subject to rules
provided in article 161 al.2 of the French General Tax Code. Under this regime,
the excess of the repurchase price over the acquisition price is subject to the
progressive scale taxation without tax credit (avoir fiscal).
Gains derived by French residents are not subject to French withholding
under French taxation laws by the paying agent, but are to be declared on the
annual tax return. Subject to the provisions of the applicable income tax treaty
with the United States, a foreign tax credit for the U.S. withholding taxes, if
any, may be available to French residents.
Germany. Assuming that a stockholder subject to the German taxation laws
holds less than 10% of the total shares of the Company, and that the shares are
privately held, if the period between the sale of DuPont shares for cash, in
accordance with the conditions of the Offer, and the original acquisition of the
DuPont shares exceeds one year, gains realized from such sale are tax free. If
these DuPont shares were acquired less than one year before the sale of the
DuPont shares becomes effective pursuant to the conditions of the Offer, the
sale will be qualified as a speculative transaction, with the result that the
difference between the sales price and the costs for acquiring the DuPont shares
is taxable as a speculatory short-term capital gain, unless the amount does not
exceed DM 1,000.00 taking into consideration losses realized on other
speculatory transactions. On the other hand, if a stockholder holds 10% or more
of the total shares of the Company, the sale of the DuPont shares is taxable if
the period between the sale of DuPont shares for cash and the original
acquisition of the DuPont shares exceeds one year.
If the sale is taxable as described above, Article 13 (5) of the Double
Taxation Treaty between Germany and the United States applies and the state
where the seller resides shall have the right to withhold taxes. If, for
example, the seller is a German resident, the Federal Republic of Germany has
the sole right to levy taxes.
Special rules apply to U.S. citizens who reside in Germany, or to persons
with U.S. immigration status who reside in Germany, which shall not be
considered here.
Pursuant to Article 13 (5) of the Double Taxation Treaty, the right to levy
taxes with regard to the Offer lies with the Federal Republic of Germany, if the
seller is a German resident. Pursuant to Article 23 (2) of the Double Taxation
Treaty, no credit will be given for any U.S. taxes withheld. Should the United
States qualify the sale of DuPont shares as a distribution of dividends pursuant
to Article 10 of the Double Taxation Treaty, rather than as a sale within the
meaning of Article 13 (5) of the Double Taxation Treaty, a mutual agreement
procedure would have to be implemented. In the event that the mutual agreement
procedure is unsuccessful, the Federal Republic of Germany is required to
prevent double taxation pursuant to No. 21 (a) (aa) of the Protocol regarding
Double Taxation by allowing a certain credit, which is only permitted within
certain limits.
For shares qualified as business assets, the difference between the sales
price of the DuPont shares and the costs for purchasing the DuPont shares shall
be taxed.
If the DuPont shares are held by an enterprise that has its place of
business in Germany but, if such shares are classified as assets of a U.S.
permanent establishment, the United States has the right of taxation pursuant to
Article 13 (5) of the Double Taxation Treaty. The Federal Republic of Germany,
on the other hand, is required to prevent double taxation of the transaction by
giving an exemption and applying a saving clause as to progression
(Freistellungsmethode mit Progressionsvorbehalt), with the result that the
transaction remains tax free in Germany. Income from other sources, however,
shall remain taxable with same tax rate that would apply if the Double Taxation
Treaty were not applicable. A credit shall not be given.
If the DuPont shares are held as business assets that do not belong to a
U.S. permanent establishment of a German enterprise, Article 13 (5) of the
Double Taxation Treaty applies, with the result that the same analysis as
described above, with respect to privately held shares, concerning Article (13)
(5) shall apply.
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<PAGE> 33
Ireland. The following summary is general in character and is based on
certain aspects of current Irish law, regulations, rulings and decisions and
Irish Revenue practice all of which are subject to change. Any such change may
be applied retroactively and may adversely affect the summary. It is assumed
that the person holding the DuPont shares (i) is resident, ordinarily resident
and domiciled in Ireland for tax purposes, (ii) beneficially owns the DuPont
shares as an investor and not as a dealer in securities or other person with
special tax status and (iii) is entitled to the benefits of the Double Taxation
Convention between Ireland and the United States of America (the "Convention")
(the "Shareholder"). This summary does not address all possible tax consequences
relating to the Cash Offer.
On disposal of DuPont shares, Irish capital gains tax will be chargeable on
the difference between the sale proceeds and the inflation-adjusted acquisition
cost (and enhancement expenditure, if any). The rate of capital gains tax is 20%
currently, with a IRL1,000 exemption per annum for individuals. The Convention
allows any United States tax payable on capital gains as a credit against Irish
tax on the same gains. Where United States federal income taxes are imposed on
the sale proceeds as if they were a dividend (see Section 14 "Certain United
States Federal Income Tax Consequences") it is uncertain whether such taxes can
be used as a credit against Irish capital gains tax payable in respect of the
sale proceeds.
Shareholders should refer to Section 3 "Withholding on Amounts Payable to
Non-U.S. Persons"; "U.S. Federal Income Tax Backup Withholding" and Section 14
"Certain United States Federal Income Tax Consequences" in relation to U.S.
withholding tax.
Netherlands. The following is a summary of certain Netherlands tax
consequences of a disposal of DuPont shares to DuPont by residents or deemed
residents of the Netherlands ("Residents"). This summary describes the
Netherlands tax consequences that will generally apply to Residents under the
tax laws of the Netherlands in force and in effect and as interpreted in
published case law at the date hereof. This summary is subject to changes in
Netherlands law, including changes that could have retroactive effect. This
summary does not purport to address all possible Netherlands tax consequences of
a disposal of DuPont shares. Any Netherlands tax consequences following from the
application of a special regime or special interpretation of the law, whether
agreed by ruling or otherwise, are excluded from the summary.
Generally, a disposal to DuPont of DuPont shares by a Resident who is
subject to Netherlands Income Tax ("Individual Resident") is a taxable event for
income tax purposes. If the DuPont shares were not attributable to an enterprise
carried on by or on behalf of such Individual Resident, the Individual Resident
will be treated as if he had received a distribution of all retained earnings
attributable to the DuPont shares. Accordingly, such Individual Resident is
subject to income tax at progressive rates up to 60 per cent to the extent the
proceeds exceed the average capital paid into the DuPont shares (as calculated
in accordance with Netherlands tax principles). If such Individual Resident has
a so-called "substantial interest" (term defined by statute; generally, an
interest of at least 5%) in DuPont, he will generally be subject to income tax
on the difference between the acquisition price of the DuPont shares and the
proceeds. The applicable rate is generally 25%.
An Individual Resident holding DuPont shares that are attributable to an
enterprise carried on by or on behalf of such Individual Resident and a Resident
that is subject to Netherlands corporate income tax are subject to taxes on the
difference between the book value of the DuPont shares in the tax books of such
Individual Resident or Resident and the proceeds. However, a Resident who is
subject to Netherlands corporate income tax is not taxed on such gain if the
so-called "participation exemption" is applicable. For an Individual Resident
holding Shares that are attributable to an enterprise carried on by or on behalf
of such Individual Resident progressive rates apply; corporate income tax is
levied at a flat rate of 35%.
A Netherlands qualifying pension fund is exempt from Netherlands corporate
income tax. A Netherlands qualifying investment fund is subject to Netherlands
corporate income tax at a rate of 0%; it is in principle required to distribute
income items, such as the proceeds received from DuPont.
United States tax which according to the tax treaty between the United
States and the Netherlands may be withheld in the United States from the
proceeds is generally creditable against Netherlands income or corporate income
tax to the extent the proceeds are included in the Netherlands tax base of the
Resident.
29
<PAGE> 34
Norway. A capital gain derived by a Norwegian tax resident from a disposal
of Shares pursuant to the Offer is taxable as general income for Norwegian tax
purposes. Correspondingly, a capital loss is deductible upon determining general
income. General income is taxed at 28%.
A capital gain or loss is calculated as the difference between the
consideration received and the tax basis of the shares. As regards shares of a
non-resident company, the tax basis will be equivalent to the acquisition cost
of the shares. If only some of a holder's shares are sold, the shares that were
first acquired will be deemed as first sold (the "FIFU"-principle) upon
calculating capital gain or loss.
Costs incurred in connection with the purchase and sale of shares are
deductible in the year of sale.
As it appears from the description of the U.S. tax consequences, U.S.
federal income tax will be withheld from the gross proceeds payable. To the
extent such amount is withheld and the stockholder is not eligible for a refund
of withholding tax, the holder may claim a tax credit under the Income Tax
Convention between Norway and the U.S. To clarify whether and to what extent
such tax credit may be obtained, the stockholder should consult its tax adviser.
Switzerland. To the extent the Shares tendered are part of their private
assets, for Swiss residents the proceeds of the purchase of Shares by DuPont are
not subject to income taxation under the Code on Direct Federal Taxes and the
Cantonal tax laws. Swiss residents qualify for a reduction of the U.S.
withholding tax of 30% to 15% (by way of tax refund) if they comply with the
formal requirements of the U.S. tax law and the Swiss-U.S. double taxation
treaty. Swiss tax law does not grant tax reduction and/or tax credits for the
U.S. withholding tax on the proceeds of the Offer.
Special rules may apply to Swiss residents with a U.S. immigration status.
To the extent the Shares are part of the business assets of a Swiss
resident or belong to an enterprise subject to Swiss taxation, capital gains
realized out of the purchase of Shares by DuPont form part of the taxable
income. Swiss residents and enterprises subject to Swiss taxation qualify for a
reduction of the U.S. withholding tax of 30% to 15% (by way of tax refund) if
they comply with the formal requirements of the U.S. tax law and the Swiss-U.S.
double taxation treaty. Tax credit for all or a portion of the U.S. withholding
tax may be obtained under the Swiss-U.S. double taxation treaty, if and to the
extent the requirements of Swiss tax law and the Swiss-U.S. double taxation
treaty are complied with.
Special rules may apply to companies with a special tax status.
To the extent Shares underlying Swiss Certificates are purchased pursuant
to the Offer, a transactional tax calculated at a rate of 0.30% of the purchase
price will have to be paid within 30 days following the end of the quarter when
the transaction has occurred. Subject to the limitations described in Section 3,
"Procedure for Tendering Shares -- Transfer Taxes", the Company will pay such
transactional taxes.
United Kingdom. The following summary is general in character and is based
on certain aspects of current United Kingdom ("UK") law, regulations, rulings
and decisions and UK Inland Revenue practice all of which are subject to change.
Any such change may adversely affect the summary. It is assumed that the person
holding the DuPont shares (the "Stockholder") (i) is resident, ordinarily
resident and domiciled in the UK for tax purposes, (ii) beneficially owns the
DuPont shares as an investor and not as a dealer in securities or other person
with special tax status and (iii) is entitled to the benefits of the Double
Taxation Convention between the UK and the United States of America ("the
Convention").
On disposal of DuPont shares, UK capital gains tax will be chargeable on
the difference between the sale proceeds and the acquisition cost after
adjusting the indexation allowance (and enhancement expenditure, if any).
Subject to an exemption from chargeable gains of L7,100 per individual per
annum, the chargeable gain is taxable at 20% or 40% to the extent total taxable
income and gains exceed the basic rate limit of L28,000. Corporate stockholders
are subject to corporation tax at 30% (or 20% for "small" companies as defined
in the tax legislation). The Convention allows any United States tax payable on
capital gains as a credit against UK tax on the same gains. Where United States
federal income taxes are imposed on the sale proceeds as if they were a dividend
(see Section 14 "Certain United States Federal Income Tax Consequences") it is
uncertain whether such taxes can be used as a credit against UK tax payable in
respect of capital gains.
30
<PAGE> 35
There is a remote possibility that part of the gain will be taxed as
income. In that event, stockholders will in general be subject to UK income tax
or corporation tax on that part of the gain with credit given for US tax. The
rate of UK corporation tax is 30% (or 20% for "small" companies as defined) with
effect from 1 April 1999. From 6 April 1999 individuals are subject to income
tax on such income at 10% or 32.5% to the extent total taxable income exceeds
the basic rate limit.
15. EXTENSION OF THE OFFER; TERMINATION; AMENDMENTS.
The Company expressly reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 6 shall have occurred or shall be deemed by the Company to
have occurred, to extend the period of time during which the Offer is open and
thereby delay acceptance for payment of, and payment for, any Shares by giving
oral or written notice of such extension to the Depositary and making a public
announcement thereof. The Company also expressly reserves the right, in its sole
discretion, to terminate the Offer and not accept for payment or pay for any
Shares not theretofore accepted for payment or paid for or, subject to
applicable law, to postpone payment for Shares upon the termination of the
Exchange Offer without any Shares having been accepted for payment thereunder or
the occurrence of any of the conditions specified in Section 6 hereof in any of
such cases by giving oral or written notice of such termination or postponement
to the Depositary and making a public announcement thereof. Additionally, in
certain circumstances, if the Company waives any of the conditions of the Offer
set forth in Section 6, it may be required to extend the Expiration Date of the
Offer. The Company's reservation of the right to delay payment for Shares that
it has accepted for payment is limited by Rule l3e-4(f)(5) promulgated under the
Exchange Act, which requires that the Company must pay the consideration offered
or return the Shares tendered promptly after termination or withdrawal of a
tender offer. The Company further reserves the right, in its sole discretion,
and regardless of whether any of the events set forth in Section 6 shall have
occurred or shall be deemed by the Company to have occurred, to amend the Offer
in any respect (including, without limitation, by decreasing or increasing the
consideration offered in the Offer to holders of Shares or by decreasing or
increasing the number of Shares being sought in the Offer). Amendments to the
Offer may be made at any time and from time to time effected by public
announcement thereof, such announcement, in the case of an extension, to be
issued no later than 9:00 a.m., New York City time, on the next business day
after the last previously scheduled or announced Expiration Date. Any public
announcement made pursuant to the Offer will be disseminated promptly to
stockholders in a manner reasonably designed to inform stockholders of such
change. Without limiting the manner in which the Company may choose to make any
public announcement, except as provided by applicable law (including Rule
l3e-4(e)(2) promulgated under the Exchange Act), the Company shall have no
obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
If the Company makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, the Company will extend the Offer to the extent required by Rules
13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act, which require
that the minimum period during which an offer must remain open following
material changes in the terms of the offer or information concerning the offer
(other than a change in price or a change in percentage of securities sought)
will depend upon the facts and circumstances, including the relative materiality
of such terms or information. If (i) the Company increases or decreases the
price to be paid for Shares, the Company increases the number of Shares being
sought and such increase in the number of Shares being sought exceeds 2% of the
outstanding Shares, or the Company decreases the number of Shares being sought,
and (ii) the Offer is scheduled to expire at any time earlier than the
expiration of a period ending on the tenth business day from, and including, the
date that notice of such increase or decrease is first published, sent or given,
the Offer will be extended until the expiration of such period of ten business
days.
In no event will this Offer terminate prior to the Exchange Offer.
16. FEES AND EXPENSES.
The Company has retained D.F. King & Co., Inc. as Managing Information
Agent, First Chicago Trust Company of New York as Depositary in connection with
the Offer and Deutsche Bank AG, Credit Suisse
31
<PAGE> 36
First Boston, B.O.I.C., Administratiekantoor voor Handel en Nijverheid B.V. and
Paribas as Non-U.S. Information Agents. The Depositary and the Information
Agents will receive reasonable and customary compensation for their services.
The Company will also reimburse the Depositary and the Information Agents for
out-of-pocket expenses, including reasonable attorneys' fees, and has agreed to
indemnify the Depositary and the Information Agents against certain liabilities
in connection with the Offer, including certain liabilities under the federal
securities laws. The Managing Information Agent may contact stockholders by
mail, telephone, telex, telegraph and personal interviews, and may request
brokers, dealers and other nominee stockholders to forward materials relating to
the Offer to beneficial owners. None of the Depositary or the Information Agents
has been retained to make solicitations or recommendations in connection with
the Offer.
The Company will not pay fees or commissions to any broker, dealer,
commercial bank, custodian bank, trust company or other person for soliciting
any Shares pursuant to the Offer. The Company will, however, on request,
reimburse such persons for customary handling and mailing expenses incurred in
forwarding materials in respect of the Offer to the beneficial owners for which
they act as nominees. No such broker, dealer, commercial bank, trust company,
custodian bank or other nominee has been authorized to act as the Company's
agent for purposes of the Offer. The Company will pay (or cause to be paid) any
U.S. stock transfer taxes and Belgian and Swiss transactional taxes on its
purchase of Shares, except as otherwise described in Section 3, "Procedure for
Tendering Shares -- Transfer Taxes."
17. MISCELLANEOUS.
The Company is not aware of any jurisdiction where the making of the Offer
is not in compliance with applicable law. If the Company becomes aware of any
jurisdiction where the making of the Offer is not in compliance with any valid
applicable law, the Company currently intends to make a good faith effort to
comply with such law. If, after such good faith effort, the Company cannot, or
if the Company otherwise determines not to comply with such law or, in the
Company's sole judgment, it becomes impracticable to do so, the Offer, at the
discretion of the Company, will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares residing in such jurisdiction. In
any jurisdiction the securities or blue sky laws of which require the Offer to
be made by a licensed broker or dealer, the Offer may be made on the Company's
behalf by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Pursuant to Rule 13e-4 promulgated under the Exchange Act, the Company has
filed with the Commission an Issuer Tender Offer Statement on Schedule 13E-4
(the "Schedule 13E-4") which contains additional information with respect to
this Offer. The Schedule 13E-4, including the exhibits and any amendments
thereto, may be examined, and copies may be obtained, at the same places and in
the same manner as is set forth in Section 11 with respect to information
concerning the Company.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE COMPANY IN CONNECTION WITH THE OFFER OTHER THAN
THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF
TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY.
E. I. DU PONT DE NEMOURS AND COMPANY
July 14, 1999
32
<PAGE> 37
SCHEDULE I
CERTAIN TRANSACTIONS INVOLVING SHARES
Neither DuPont, nor any of DuPont's executive officers or directors or
associates has engaged in any transaction involving shares of DuPont common
stock during the period of forty business days prior to the date of this Offer
to Purchase except for the following transactions by certain executive officers
and directors of DuPont:
<TABLE>
<CAPTION>
DATE OF NUMBER OF DESCRIPTION OF PRICE PER
PERSON EFFECTING TRANSACTION TRANSACTION SHARES TRANSACTION SHARE
- ---------------------------- ------------- --------- -------------- ---------
<S> <C> <C> <C> <C>
Curtis J. Crawford........... June 14, 1999 7 Dividends applied to deferred $67.33
Director directors fees
Edward B. du Pont............ June 17, 1999 200 Gave gift N/A
Director
Richard R. Goodmanson........ June 14, 1999 51 Dividends applied to $67.75
Executive Vice President restricted stock account
and
Chief Operating Officer
Charles O. Holliday, Jr...... June 14, 1999 106 Dividends applied to $67.75
Chairman and Chief restricted stock account
Executive
Officer
June 15, 1999 63 Dividends applied to deferred $67.75
variable compensation account
Lois D. Juliber.............. June 1, 1999 54 Monthly deferred directors $64.44
Director fees
June 14, 1999 30 Dividends applied to deferred $67.31
directors fees
Kurt M. Landgraf............. June 14, 1999 15 Dividends applied to $67.75
Executive Vice President restricted stock account
and
Chief Operating Officer
June 15, 1999 30 Dividends applied to deferred $67.75
variable compensation account
Stacey J. Mobley............. June 15, 1999 9 Dividends applied to deferred $67.75
Senior Vice President variable compensation account
Gary M. Pfeiffer............. June 14, 1999 7 Dividends applied to $67.75
Senior Vice President restricted stock account
June 15, 1999 16 Dividends applied to deferred $67.75
variable compensation account
Dennis H. Reilley............ June 14, 1999 17 Dividends applied to deferred $67.31
Executive Vice President unit account
and
Chief Operating Officer
June 14, 1999 19 Dividends applied to $67.75
restricted stock account
June 15, 1999 23 Dividends applied to deferred $67.75
variable compensation account
William K. Reilly............ June 1, 1999 51 Monthly deferred directors $64.44
Director fees
June 14, 1999 49 Dividends applied to deferred $67.31
directors fees
</TABLE>
S-1
<PAGE> 38
<TABLE>
<CAPTION>
DATE OF NUMBER OF DESCRIPTION OF PRICE PER
PERSON EFFECTING TRANSACTION TRANSACTION SHARES TRANSACTION SHARE
- ---------------------------- ------------- --------- -------------- ---------
<S> <C> <C> <C> <C>
Howard J. Rudge.............. June 14, 1999 107 Dividends applied to deferred $67.75
Senior Vice President and unit account
General Counsel
June 15, 1999 24 Dividends applied to deferred $67.75
variable compensation account
Charles M. Vest.............. June 1, 1999 31 Monthly deferred directors $64.44
Director fees
June 14, 1999 29 Dividends applied to deferred $67.31
directors fees
Sanford I. Weill............. June 14, 1999 7 Dividends applied to deferred $67.31
Director directors fees
</TABLE>
As of June 30, 1999, directors and executive officers of DuPont owned or
held rights to acquire approximately 7.2 million shares of DuPont common stock.
Certain of these persons have indicated to DuPont that they intend to tender an
aggregate of approximately 80,000 shares of DuPont common stock under the
Exchange Offer as follows:
<TABLE>
<CAPTION>
APPROXIMATE
NAME NUMBER OF SHARES
---- ----------------
<S> <C>
Louisa C. Duemling.......................................... 7,000
Director
Archie W. Dunham............................................ 60,000
Director
Howard J. Rudge............................................. 5,000
Senior Vice President and General Counsel
H. Rodney Sharp, III........................................ 8,000
Director
</TABLE>
S-2
<PAGE> 39
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and certificates for the Shares and any
other required documents should be sent or delivered by each stockholder or such
stockholder's broker, dealer, commercial bank, trust company, custodian bank or
other nominee to the Depositary at the applicable address set forth below:
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
If by mail: If by overnight courier: If by hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attn: Corporate Actions Dept. Attn: Corporate Actions Dept. c/o Securities Transfer and
P.O. Box 2569 8th Floor, Suite 4680 Reporting Services Inc. 100
Suite 4660 14 Wall Street William Street, Galleria
Jersey City, NJ 07303-2569 New York, NY 10005 New York, NY 10038
</TABLE>
If by facsimile transmission:
(For eligible institutions only)
(201) 222-4740
or
(201) 222-4721
Facsimile confirmation number:
(201) 222-4707
Any questions or requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Managing Information Agent at its telephone
number and address set forth below. Stockholders may also contact their broker,
dealer, commercial bank, trust company, custodian bank or other nominee for
assistance concerning the Offer.
The Managing Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect) for calls outside the United States
(800) 755-3105 (Toll-Free) for calls in the United States
The Non-U.S. Information Agents for the Offer Are:
<TABLE>
<S> <C> <C>
Deutsche Bank AG Credit Suisse First Boston Belgian Overseas Issuing Corporation
U+I/Emissionsfolgegeschaefte Equity Capital Markets Switzerland Avenue Marnix 24
Taunusanlage 12 T BSC 1000 Brussels, Belgium
D-60262 Frankfurt am Main, P.O. Box 900 Call +32-2-547-2725
Germany CH-8070 Zurich, Switzerland
Call +49-69-910-35274 Call +41-1-333-61-65
</TABLE>
<TABLE>
<S> <C> <C>
Administratiekantoor voor Handel en Nijverheid B.V. Paribas
Single 540, 1017 AZ 3 Rue D'Antin
Amsterdam, The Netherlands 75002 Paris, France
Call +31-20-551-6770 Call +33-1-4298-1488
</TABLE>
<PAGE> 1
[DUPONT LOGO] [DUPONT LOGO]
July 14, 1999
Dear Stockholder,
I am pleased to announce that E. I. du Pont de Nemours and Company is
commencing a cash offer in which DuPont stockholders will have an opportunity to
sell some or all of their shares to DuPont for $80.76 in cash for each share
purchased, less applicable withholding taxes, up to an aggregate of 8,000,000
shares of DuPont common stock. This cash offer is being made substantially
concurrent with an exchange offer in the United States in which DuPont is
offering stockholders who are U.S. persons the opportunity to exchange DuPont
common stock for shares of Conoco Class B common stock.
Only Non-U.S. persons, as explained on page 1 of the Offer to Purchase, are
eligible to participate in the cash offer. DuPont stockholders who are U.S.
persons are ineligible to participate in the cash offer, while stockholders who
are Non-U.S. persons may not participate in the exchange offer.
The cash offer will expire, unless extended by DuPont, at midnight, New
York City time, on August 10, 1999. The terms and conditions of the cash offer
are contained in the enclosed Offer to Purchase. If more than 8,000,000 shares
of DuPont common stock are tendered for cash, shares will be accepted for
purchase on a pro rata basis, except that generally any holder with less than
100 DuPont shares who validly tenders all such shares will not be subject to
proration. You should be aware that the cash purchase price will be subject to
U.S. federal income tax withholding, as explained in the Offer to Purchase.
Neither DuPont nor the board of directors of DuPont makes any
recommendation to any stockholder as to whether to tender shares of DuPont
common stock. Each stockholder must make his or her own decision whether to
tender such shares, and if so, how many shares to tender.
DuPont has retained the services of D.F. King & Co., Inc. as Managing
Information Agent to assist stockholders in connection with the cash offer.
Requests for additional documents, questions regarding the terms and conditions
of the cash offer, or information on the procedure for tendering shares should
be directed to D.F. King at (212) 269-5550 (collect) for calls outside the
United States or at (800) 755-3105 (toll-free) for calls in the United States.
In certain countries where DuPont's stock is listed on a local exchange,
stockholders should also contact the relevant Non-U.S. Information Agent listed
on the back cover of the Offer to Purchase for more information on procedures
for tendering.
I thank you for your continuing support of our company.
Sincerely,
/s/ Charles O. Holliday, Jr.
Charles O. Holliday, Jr.
Chairman and Chief Executive Officer
E. I. du Pont de Nemours and Company
C
<PAGE> 1
THE TENDER OFFER WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON AUGUST 10, 1999, UNLESS OTHERWISE EXTENDED
LETTER OF TRANSMITTAL
TO ACCOMPANY CERTIFICATES OF COMMON STOCK OF
E. I. DU PONT DE NEMOURS AND COMPANY
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C> <C>
If by mail: If by overnight courier: If by hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attn: Corporate Actions Dept. Attn: Corporate Actions Dept. c/o Securities Transfer and
P.O. Box 2569 8th Floor, Suite 4680 Reporting Service Inc.
Suite 4660 14 Wall Street 100 William Street, Galleria
Jersey City, NJ 07303-2569 New York, NY 10005 New York, NY 10038
</TABLE>
The Managing Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect) for calls outside the United States
(800) 755-3105 (Toll-Free) for calls in the United States
The undersigned acknowledges receipt of the Offer to Purchase dated July 14,
1999 (the "Offer to Purchase") of E. I. du Pont de Nemours and Company, a
Delaware corporation ("DuPont" or the "Company"), and this Letter of
Transmittal, which together constitute DuPont's offer (the "Offer") to purchase
shares of its common stock, par value $0.30 per share (the "Shares") held by
Non-U.S. Persons, at a price of $80.76 per Share in cash, without interest, less
applicable United States withholding taxes, upon the terms and subject to the
conditions set forth in the Offer to Purchase.
THIS CASH OFFER IS AVAILABLE ONLY TO DUPONT STOCKHOLDERS WHO ARE NON-U.S.
PERSONS, AS EXPLAINED ON PAGE 3.
DUPONT STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THEIR
STATUS AS A NON-U.S. PERSON IN ORDER TO DETERMINE THEIR ELIGIBILITY TO
PARTICIPATE IN THE OFFER. DUPONT STOCKHOLDERS WHO ARE U.S. PERSONS ARE
INELIGIBLE TO PARTICIPATE IN THE OFFER AND SHOULD NOT COMPLETE THIS LETTER OF
TRANSMITTAL. IF YOU ARE A U.S. PERSON AND YOU HAVE RECEIVED THIS DOCUMENT, YOU
SHOULD CONTACT D.F. KING OR YOUR BROKER OR NOMINEE.
DUPONT STOCKHOLDERS WHO PARTICIPATE IN THE OFFER WILL BE SUBJECT TO UNITED
STATES FEDERAL INCOME TAX WITHHOLDING ON THE GROSS PROCEEDS OF THE OFFER, AS
EXPLAINED ON PAGE 16.
Capitalized terms used but not defined herein have the meanings given to
them in the Offer to Purchase.
The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with respect
to the Offer.
NOTE THAT THIS LETTER OF TRANSMITTAL IS NOT TO BE COMPLETED BY HOLDERS OF
CERTIFICATES REPRESENTING NON-U.S. DEPOSITARY RECEIPTS (AS DEFINED ON PAGE 1 IN
THE OFFER TO PURCHASE). NON-U.S. DEPOSITARY RECEIPTS WILL NOT BE ACCEPTED FOR
PURCHASE BY THE COMPANY IN THE OFFER; ONLY SHARES UNDERLYING SUCH NON-U.S.
DEPOSITARY RECEIPTS WILL BE ACCEPTED FOR PURCHASE. OWNERS OF SUCH NON-U.S.
DEPOSITARY RECEIPTS SHOULD CONTACT THE RELEVANT NON-U.S. INFORMATION AGENT, THE
ISSUER THEREOF OR THEIR BROKER OR OTHER FINANCIAL INTERMEDIARY FOR MORE
INFORMATION.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 2 AND 3)
- ------------------------------------------------------------------------------------------------------------------------------
SHARES TENDERED
(ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
--------------------------------------------------------------
TOTAL NUMBER
NAME(S) AND ADDRESS(ES) OF SHARES NUMBER
OF REGISTERED HOLDER(S) CERTIFICATE REPRESENTED BY OF SHARES
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S)) NUMBER(S)(1) CERTIFICATE(S) TENDERED(2)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
Total Shares:
- ------------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by stockholders tendering Shares by book-entry transfer.
(2) Unless otherwise indicated, it will be assumed that all Shares represented by each Share certificate delivered to the
Depositary are being tendered hereby. See Instruction 4.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE INSTRUCTIONS SET FORTH
IN THIS LETTER OF TRANSMITTAL CAREFULLY.
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT BE
FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY.
DELIVERIES TO BOOK-ENTRY TRANSFER FACILITIES WILL NOT CONSTITUTE VALID DELIVERY
TO THE DEPOSITARY.
This Letter of Transmittal is to be used only if certificates for shares
are to be forwarded herewith to the Depositary, or if delivery of Shares (as
defined below) is to be made by book-entry transfer to the Depositary's account
at The Depository Trust Company ("DTC") (hereinafter also referred to as the
"Book-Entry Transfer Facility") pursuant to the procedures set forth in Section
3 of the Offer to Purchase unless an Agent's Message (as defined in the Offer to
purchase) is utilized. This Letter of Transmittal is not to be used in
connection with the delivery of Non-U.S. Depositary Receipts to the relevant
issuer or affiliate thereof. Persons holding certificates representing Non-U.S.
Depositary Receipts and wishing to participate in the Offer should contact the
relevant Non-U.S. Information Agent, the issuer thereof or their broker or other
financial intermediary for more information.
Stockholders who cannot deliver their Share certificates and any other
required documents to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares using the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2.
- --------------------------------------------------------------------------------
(BOXES BELOW FOR USE BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution
Account No.
Transaction Code No.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE
THE FOLLOWING:
Name(s) of Registered Holder(s)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution that Guaranteed Delivery
If delivery is by book-entry transfer:
Name of Tendering Institution
Account No. at DTC
Transaction Code No.
2
<PAGE> 3
LADIES AND GENTLEMEN:
The undersigned hereby tenders to E. I. du Pont de Nemours and Company the
above-described shares of its common stock, par value $0.30 per share (the
"Shares"), at a price of $80.76 per Share, in cash, without interest, less
applicable U.S. withholding taxes upon the terms and subject to the conditions
set forth in the Offer to Purchase and in this Letter of Transmittal.
The Offer is available only to DuPont stockholders who are Non-U.S.
Persons, as explained on page 1 of the Offer to Purchase. For purposes of the
Offer, a "Non-U.S. Person" is any person who is not a U.S. Person. A "U.S.
Person" for purposes of this Offer is any person that is:
- an individual who is a United States citizen or United States resident
(for United States federal income tax purposes);
- a corporation, partnership, limited liability company or other entity
created or organized in the United States or under the laws of the United
States or of any State within the United States;
- an estate which is subject to United States income tax on all of its
income (regardless of the source of such income); and
- a trust if (i) a United States court is able to exercise primary
supervision over the administration of the trust, and (ii) one or more
United States persons have the authority to control all substantial
decisions of the trust (including, without limitation, any United States
pension trust organized under Section 401(a) of the Internal Revenue Code
of 1986, as amended).
DUPONT STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THEIR
STATUS AS A NON-U.S. PERSON IN ORDER TO DETERMINE THEIR ELIGIBILITY TO
PARTICIPATE IN THE OFFER. PERSONS WHO ARE U.S. PERSONS CANNOT PARTICIPATE IN THE
OFFER. All Shares held in DuPont Non-U.S. Stock Ownership Plans (as defined on
page 3 of the Offer to Purchase) are deemed to be held by Non-U.S. Persons for
purposes of determining eligibility to participate in the Offer. If you are a
U.S. Person and you have received this document, you should contact D.F. King or
your broker or nominee.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any such extension or amendment), the undersigned hereby
sells, assigns and transfers to, or upon the order of, the Company all right,
title and interest in and to all the Shares that are being tendered hereby or
orders the registration of such Shares tendered by book-entry transfer that are
purchased pursuant to the Offer to or upon the order of the Company and hereby
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(i) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Company upon
receipt by the Depositary, as the undersigned's agent, of the Purchase
Price (as defined below) with respect to such Shares;
(ii) present certificates for such Shares for cancellation and transfer
on the books of the Company; and
(iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares, all in accordance with the terms of
the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned is a Non-U.S. Person (as defined above) for purposes of the Offer.
The undersigned hereby represents and warrants to the Company that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby and that, when and to the extent the same are
accepted for payment by the Company, the Company will acquire good, marketable
and unencumbered title thereto, free and clear of all liens, restrictions,
charges, encumbrances, conditional sales agreements or other obligations
relating to the sale or transfer thereof, and the same will not be subject to
any adverse claims. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or the Company to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby.
3
<PAGE> 4
The undersigned represents and warrants to the Company that the undersigned
has read and agrees to all of the terms of the Offer. All authority herein
conferred or agreed to be conferred shall not be affected by, and shall survive
the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
Instructions will constitute the undersigned's acceptance of the terms and
conditions of the Offer, including the undersigned's representation and warranty
to the Company that (i) the undersigned has a net long position in the Shares or
equivalent securities being tendered within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended, (ii) the
tender of such Shares complies with Rule 14e-4 and (iii) the undersigned is a
Non-U.S. Person. The Company's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Offer.
The names and addresses of the registered holders should be printed, if
they are not already printed above, exactly as they appear on the certificates
representing Shares tendered hereby. The certificate numbers, the number of
Shares represented by such certificates and the number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes on
this Letter of Transmittal.
The undersigned understands that upon the terms and conditions of the
Offer, the Company will pay $80.76 per Share in cash, without interest, less
applicable U.S. withholding taxes (the "Purchase Price") for Shares held by
Non-U.S. Persons validly tendered and not withdrawn pursuant to the Offer,
taking into account the number of Shares so tendered. The undersigned
understands that all Shares validly tendered and not withdrawn will be purchased
at the Purchase Price upon the terms and subject to the conditions of the Offer,
including its proration provisions, and that the Company will return all other
Shares, including Shares not purchased because of proration.
The undersigned recognizes that, under circumstances set forth in the Offer
to Purchase, the Company may terminate or amend the Offer or may postpone the
acceptance for payment of, or the payment for, Shares tendered or may not be
required to purchase any of the Shares tendered hereby or may accept for payment
fewer than all of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the Purchase Price of any Shares purchased, and/or return
any Shares not tendered or not purchased because of proration, in the name(s) of
the undersigned. The undersigned acknowledges that, unless local law requires
otherwise, all Shares not tendered or not purchased because of proration will be
returned by book-entry credit to the appropriate account maintained by the
tendering stockholder (or, in the case of a stockholder tendering certificates
or a stockholder who indicates under "Special Payment Instructions" that shares
should be issued to someone other than such stockholder, established by the
Depositary for the benefit of such stockholder or such other person indicated,
as the case may be) at the Book-Entry Transfer Facility. Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the Purchase Price of any Shares purchased and confirmation of any Shares
not tendered or not purchased (and accompanying documents, as appropriate) to
the undersigned at the address shown below the undersigned's signature(s). In
the event that both "Special Payment Instructions" and "Special Delivery
Instructions" are completed, please issue the check for the Purchase Price of
any Shares purchased and/or return any Shares not tendered or not purchased in
the name(s) of, and mail such check and confirmation of any such Shares not
tendered or not purchased to the person(s) so indicated. The undersigned
recognizes that the Company has no obligation, pursuant to the "Special Payment
Instructions," to transfer any Shares from the name of the registered holder(s)
thereof if the Company does not accept for payment any of the Shares so
tendered.
The undersigned understands that acceptance of Shares by the Company for
payment will constitute a binding agreement between the undersigned and the
Company upon the terms and subject to the conditions of the Offer.
IMPORTANT: THIS LETTER OF TRANSMITTAL, OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF, (TOGETHER WITH SHARES AND ALL OTHER REQUIRED DOCUMENTS) OR A
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE).
4
<PAGE> 5
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE CHECKING ANY BOX BELOW
This Letter of Transmittal is to be used if (1) certificate(s) representing
Shares are to be forwarded along with this letter to the Depositary, (2) tenders
are to be made by book-entry transfer to the account maintained by the
Depositary at The Depository Trust Company unless an Agent's Message is
utilized, or (3) guaranteed delivery procedures are being used, according to the
procedures set forth in the Offer to Purchase under "Section 3. Procedure for
Tendering Shares - Guaranteed Delivery." Delivery of documents to The Depository
Trust Company does not constitute delivery to the Depositary.
THIS LETTER OF TRANSMITTAL IS TO BE COMPLETED ONLY BY NON-U.S. PERSONS.
PERSONS WHO ARE U.S. PERSONS, CANNOT PARTICIPATE IN THE OFFER. ALL SHARES HELD
IN DUPONT NON-U.S. STOCK OWNERSHIP PLANS (AS DEFINED ON PAGE 3 OF THE OFFER TO
PURCHASE) ARE DEEMED TO BE HELD BY NON-U.S. PERSONS FOR PURPOSES OF DETERMINING
ELIGIBILITY TO PARTICIPATE IN THE OFFER.
Your broker can assist you in completing this form. The instructions
included with this Letter of Transmittal must be followed. Questions and
requests for assistance or for additional copies of the Offer to Purchase, this
Letter of Transmittal and the Notice of Guaranteed Delivery may be directed to
D.F. King & Co., Inc. (the "Managing Information Agent") at (212) 269-5550
(collect) outside of the United States or at (800) 755-3105 (toll free) in the
United States. See Instruction 12.
This Letter of Transmittal is not to be used in connection with the
delivery of Non-U.S. Depositary Receipts, which may not be tendered directly to
the Depositary. Owners of Non-U.S. Depositary Receipts should contact the
relevant Non-U.S. Information Agent, the issuer thereof or their broker or other
financial intermediary for more information.
I. TENDER OF CERTIFICATED SHARES ISSUED IN YOUR NAME.
If you are tendering Shares pursuant to this Section I, you must also
complete Section IV.
A. CERTIFICATED SHARES -- Complete this Section I.A. if you wish to tender
certificated shares issued in your name.
BY COMPLETING THIS SECTION I.A., SIGNING THIS LETTER OF TRANSMITTAL AND
DELIVERING THIS LETTER OF TRANSMITTAL AND THE CERTIFICATE(S) FOR DUPONT COMMON
STOCK TO THE DEPOSITARY, YOU WILL BE DEEMED TO HAVE TENDERED THE SHARES OF
DUPONT COMMON STOCK INDICATED BELOW.
If you wish to tender your Shares but they are not immediately available or
you cannot deliver your Shares and all other documents required hereby to the
Depositary on or before the Expiration Date, you must tender your Shares
according to the guaranteed delivery procedures set forth in the Offer to
Purchase under "Section 3. Procedure for Tendering Shares -- Guaranteed
Delivery." See Instruction 2.
[ ] CHECK HERE IF THE CERTIFICATE(S) REPRESENTING TENDERED SHARES ARE ENCLOSED
WITH THIS LETTER OF TRANSMITTAL.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SUBMITTED AND COMPLETE THE FOLLOWING:
Name(s) of registered holder(s):
Date of execution of notice of guaranteed delivery:
Name of institution that guaranteed delivery:
- --------------------------------------------------------------------------------
5
<PAGE> 6
B. DIVIDEND REINVESTMENT PLAN SHARES -- Complete this Section I.B. if you
wish to tender shares held in DuPont's Dividend Reinvestment Plan (the
"Dividend Reinvestment Plan").
BY COMPLETING THIS SECTION I.B. AND SIGNING AND DELIVERING THIS LETTER OF
TRANSMITTAL TO THE DEPOSITARY YOU WILL BE DEEMED TO HAVE TENDERED THE SHARES
INDICATED BELOW.
[ ] CHECK HERE IF YOU ARE A PARTICIPANT IN THE DIVIDEND REINVESTMENT
PLAN AND WISH TO TENDER SHARES HELD IN YOUR ACCOUNT UNDER THE
DIVIDEND REINVESTMENT PLAN AND COMPLETE THE FOLLOWING:
[ ] Tender all Dividend Reinvestment Plan Shares; or
[ ] Number of Whole (and Fractional) Shares Tendered From Dividend
Reinvestment Plan (if less than all):____________.
A tender of all Dividend Reinvestment Plan Shares will include
fractional shares and any Shares credited to the participant's account
after the date hereof and prior to the Expiration Date.
IF THE PARTICIPANT AUTHORIZES THE TENDER OF HIS OR HER DIVIDEND
REINVESTMENT PLAN SHARES, BUT DOES NOT INDICATE THE NUMBER OF SHARES TO
BE TENDERED, THE PARTICIPANT WILL BE DEEMED TO HAVE TENDERED ALL
DIVIDEND REINVESTMENT PLAN SHARES OWNED BY SUCH PARTICIPANT, PURSUANT TO
THE DIVIDEND REINVESTMENT PLAN. SEE INSTRUCTION 5.
C. ODD-LOT SHARES -- Complete this Section I.C. if you hold fewer than 100
Shares and wish to tender all such Shares.
[ ] CHECK HERE IF (1) YOU ARE THE OWNER BENEFICIALLY AND OF RECORD OF
LESS THAN 100 SHARES IN THE AGGREGATE AS OF JULY 7, 1999 AND (2) YOU
WISH TO TENDER ALL YOUR SHARES.
If you are the owner, beneficially and of record, of less than 100
Shares (an "Odd-Lot") and you tender all of your Shares, you will
receive preferential treatment if the Offer is oversubscribed. Shares
you hold in a DuPont Non-U.S. Stock Ownership Plan (as defined on page
3 of the Offer to Purchase) are not eligible for this preferential
treatment. However, Shares you hold in a Blueprint account at Merrill
Lynch are eligible for this preferential treatment. If your Odd-Lot
Shares are held by a broker for your account, you should contact the
broker and request the preferential treatment. See Instruction 9.
6
<PAGE> 7
II. SPECIAL PAYMENT INSTRUCTIONS -- Complete this Section II ONLY if you want
(1) payment of the Purchase Price issued to someone other than the stockholder,
and/or (2) Shares not tendered or tendered but not accepted for purchase to be
issued in the name of someone other than the stockholder.
Note: If this Section is completed, the signature in Section IV must be
guaranteed by an Eligible Institution.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTION 8)
To be completed ONLY if (1) payment of the Purchase Price is to be
issued to someone other than the undersigned, and/or (2) Shares not
accepted for purchase, if any, are to be ISSUED in the name of someone
other than the undersigned.
Issue Shares to:
Name(s):
---------------------------------------------------------------------
(PLEASE PRINT)
Address:
---------------------------------------------------------- ----------------
ZIP CODE
----------------------------------------------------------
EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NO.
(ALSO COMPLETE FORM W-8 ON PAGE 9)
III. SPECIAL DELIVERY INSTRUCTIONS -- Complete this Section III ONLY if you
want payment of the Purchase Price and/or confirmation of Shares to be mailed to
an address other than the one shown in the box entitled "Description of Shares
Tendered" or in Section II above.
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 8)
To be completed ONLY if (1) payment of the Purchase Price and/or (2)
confirmation of Shares not tendered or tendered but not accepted for
purchase, if any, are to be MAILED to someone other than the undersigned,
or to the undersigned at an address other than that shown in the box
entitled "Description of Shares Tendered" or in Section II above, as
applicable.
Mail:
check appropriate box(es):
[ ] Purchase Price of Shares accepted for purchase to:
[ ] Confirmation of Share(s) Not Tendered to:
[ ] Confirmation of Share(s) Not Accepted to:
Name(s):
---------------------------------------------------------------------
(PLEASE PRINT)
Address:
---------------------------------------------------------- ----------------
ZIP CODE
7
<PAGE> 8
IV. SIGNATURE -- Complete this Section IV if you are tendering Shares and you
completed Sections I.A., I.B. or I.C.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
IMPORTANT
ALL TENDERING STOCKHOLDERS PLEASE SIGN HERE
(PLEASE ALSO COMPLETE THE FORM W-8 ON PAGE 9)
(SEE INSTRUCTIONS 1, 2 AND 6)
BY SIGNING BELOW, (i) I AM CERTIFYING THAT I AM A NON-U.S. PERSON AS DEFINED
ABOVE AND ON PAGE 1 OF THE OFFER TO PURCHASE AND THAT I AM ELIGIBLE TO
PARTICIPATE IN THIS OFFER, AND (ii) IF I AM TENDERING SHARES ON BEHALF OF A
BENEFICIAL OWNER, TO THE BEST OF MY KNOWLEDGE, SUCH PERSON IS A NON-U.S. PERSON,
AS SO DEFINED, AND ELIGIBLE TO PARTICIPATE IN THIS OFFER.
X
-------------------------------------------------------------------------------
X
-------------------------------------------------------------------------------
(SIGNATURE(S) OF OWNERS(S))
Dated:
- --------------------------- , 1999
(Must be signed by the registered holder(s) of Shares as their name(s) appear(s)
on Share certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by endorsements and documents
transmitted with this Letter of Transmittal.)
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, please set forth full title. (See Instruction 6.)
Name(s):
------------------------------------------------------------------------
(PLEASE PRINT)
Capacity:
-----------------------------------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
ZIP CODE
Country Code and Daytime Telephone No.:
-----------------------------------------
SIGNATURE GUARANTEE
(IF REQUIRED -- SEE INSTRUCTIONS 1, 2 AND 6)
FOR USE BY ELIGIBLE INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Signature(s) Guaranteed by an Eligible Institution:
-----------------------------
(AUTHORIZED SIGNATURE)
Name:
---------------------------------------------------------------------------
(PLEASE PRINT)
Title:
--------------------------------------------------------------------------
Name of Firm:
-------------------------------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
ZIP CODE
Country Code and Daytime Telephone No.:
-----------------------------------------
Dated: , 1999
All tendering stockholders must complete the following Form W-8. If a
person other the tendering stockholder has been named in Section II, such other
person, rather than the person tendering the Shares, must complete the following
Form W-8.
8
<PAGE> 9
<TABLE>
<S> <C>
Form W-8
(Rev. November 1992)
Department of the
Treasury CERTIFICATE OF FOREIGN STATUS
Internal Revenue
Service
- ------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
NAME OF OWNER (if joint account, also give joint owner's U.S. TAXPAYER IDENTIFICATION NUMBER
name.) (See SPECIFIC INSTRUCTIONS.) (if any)
---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
PLEASE PERMANENT ADDRESS (See SPECIFIC INSTRUCTIONS.) (Include apt.
PRINT or suite no.)
OR TYPE
------------------------------------------------------------
City, province or state, postal code, and country
------------------------------------------------------------
CURRENT MAILING ADDRESS, if different from permanent address
(Include apt. or suite no., or P.O. box if mail is not
delivered to street address.)
------------------------------------------------------------
City, town or post office, state and ZIP code (If foreign
address, enter city, province or state, postal code, and
country.)
- ------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
List account information Account number Account type Account number
here (Optional, see
SPECIFIC INSTRUCTIONS.)
[ARROW]
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
NOTICE OF CHANGE IN STATUS. -- To notify the payer, mortgage
interest recipient, broker, or barter exchange that you no
longer qualify for exemption, check here.................... [ARROW] [ ]
IF YOU CHECK THIS BOX, REPORTING WILL BEGIN ON THE
ACCOUNT(S) LISTED.
- -------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
PLEASE CERTIFICATION. -- (Check applicable box(es)). Under
SIGN penalties of perjury, I certify that:
HERE [ ] For INTEREST PAYMENTS, I am not a U.S. citizen or
resident (or I am filing for a foreign corporation,
partnership, estate, or trust).
[ ] For DIVIDENDS, I am not a U.S. citizen or resident (or I
am filing for a foreign, corporation, partnership, estate,
or trust)
[ ] For BROKER TRANSACTIONS or BARTER EXCHANGES, I am an
exempt foreign person as defined in the instructions below.
------------------------------------------------------------
------------------------------------------------------------
Signature Date
[ARROW]
- ------------------------------------------------------------------------
</TABLE>
GENERAL INSTRUCTIONS
(Section references are to the Internal
Revenue Code unless otherwise noted).
PURPOSE
Use Form W-8 or a substitute form containing a substantially similar statement
to tell the payer, mortgage interest recipient, middleman, broker, or barter
exchange that you are a nonresident alien individual, foreign entity, or exempt
foreign person not subject to certain U.S. information return reporting or
backup withholding rules.
CAUTION: Form W-8 does not exempt the payee from the 30% (or lower treaty)
nonresident withholding rates.
NONRESIDENT ALIEN INDIVIDUAL
For income tax purposes, "nonresident alien individual" means an individual who
is neither a U.S. citizen nor resident. Generally, an alien is considered to be
a U.S. resident if:
-- The individual was a lawful permanent resident of the United States at any
time during the calendar year, that is, the alien held an immigrant visa (a
"green card"), or
-- The individual was physically present in the United States on:
(1) at least 31 days during the calendar year, and
(2) 183 days or more during the current year and the 2 preceding calendar
years (counting all the days of physical presence in the current year, one-third
the number of days of presence in the first preceding year, and only one-sixth
of the number of days in the second preceding year).
See PUB. 519, U.S. Tax Guide for Aliens, for more information on resident and
nonresident alien status.
NOTE: If you are a nonresident alien individual married to a U.S. citizen or
resident and have made an election under section 6013(g) or (h), you are treated
as a U.S. resident and MAY NOT use Form W-8.
EXEMPT FOREIGN PERSON
For purposes of this form, you are an "exempt foreign person" for a calendar
year in which:
1. You are a nonresident alien individual or a foreign corporation,
partnership, estate, or trust,
2. You are an individual who has not been, and plans not to be, present in the
United States for a total of 183 days or more during the calendar year, and
3. You are neither engaged, nor plan to be engaged during the year, in a U.S.
trade or business that has effectively connected gains from transactions with a
broker or barter exchange.
If you do not meet the requirements of 2 or 3 above, you may instead certify
on FORM 1001, Ownership, Exemption, or Reduced Rate Certificate, that your
country has a tax treaty with the United States that exempts your transactions
from U.S. tax.
FILING INSTRUCTIONS
WHEN TO FILE.-- File Form W-8 or substitute form before a payment is made.
Otherwise, the payer may have to withhold and send part of the payment to the
Internal Revenue Service (see BACKUP WITHHOLDING below). This certificate
generally remains in effect for three calendar years. However, the payer may
require you to file a new certificate each time a payment is made to you.
WHERE TO FILE.-- File this form with the payer of the qualifying income who is
the withholding agent (see WITHHOLDING AGENT on page 2). Keep a copy for your
own records.
BACKUP WITHHOLDING
A U.S. taxpayer identification number or Form W-8 or substitute form must be
given to the payers of certain income. If a taxpayer identification number or
Form W-8 or substitute form is not provided or the wrong taxpayer identification
number is provided, these payers may have to withhold 20% of each payment or
transaction. This is called backup withholding.
NOTE: On January 1, 1993, the backup withholding rate increases from 20% to 31%.
Reportable payments subject to backup withholding rules are:
-- Interest payments under section 6049(a).
-- Dividend payments under sections 6042(a) and 6044.
- - Other payments (i.e., royalties and payments from brokers and barter
exchanges) under sections 6041, 6041A(a), 6045, 6050A, and 6050N.
If backup withholding occurs, an exempt foreign person who is a nonresident
alien individual may get a refund by filing FORM 1040NR, U.S. Nonresident Alien
Income Tax Return, with the Internal Revenue Service Center, Philadelphia, PA
19255, even if filing the return is not otherwise required.
(Continued on back.)
- --------------------------------------------------------------------------------
Cat. No. 10230M Form W-8 (Rev. 11-92)
9
<PAGE> 10
Form W-8 (Rev. 11-92) Page 2
- --------------------------------------------------------------------------------
U.S. TAXPAYER IDENTIFICATION
NUMBER
The Internal Revenue law requires that certain income be reported to the
Internal Revenue Service using a U.S. taxpayer identification number (TIN). This
number can be a social security number assigned to individuals by the Social
Security Administration or an employer identification number assigned to
businesses and other entities by the Internal Revenue Service.
Payments to account holders who are foreign persons (nonresident alien
individuals, foreign corporations, partnerships, estates, or trusts) generally
are not subject to U.S. reporting requirements. Also, foreign persons are not
generally required to have a TIN, nor are they subject to any backup withholding
because they do not furnish a TIN to a payer or broker.
However, foreign persons with income effectively connected with a trade or
business in the United States (income subject to regular (graduated) income
tax), must have a TIN. To apply for a TIN, use FORM SS-4, Application for
Employer Identification Number, available from local Internal Revenue Service
offices, or FORM SS-5, Application for a Social Security Card, available from
local Social Security Administration offices.
SPECIAL RULES
MORTGAGE INTEREST.-- For purposes of the reporting rules, mortgage interest is
interest paid on a mortgage to a person engaged in a trade or business
originating mortgages in the course of that trade or business. A mortgage
interest recipient is one who receives interest on a mortgage that was acquired
in the course of a trade or business.
Mortgage interest is not subject to backup withholding rules, but is subject
to reporting requirements under section 6050H. Generally, however, the reporting
requirements do not apply if the payer of record is a nonresident alien
individual who pays interest on a mortgage not secured by real property in the
United States. Use Form W-8 or substitute form to notify the mortgage interest
recipient that the payer is a nonresident alien individual.
PORTFOLIO INTEREST.-- Generally, portfolio interest paid to a nonresident alien
individual or foreign partnership, estate, or trust is not subject to backup
withholding rules. However, if interest is paid on portfolio investments to a
beneficial owner that is neither a financial institution nor a member of a
clearing organization, Form W-8 or substitute form is required.
REGISTERED OBLIGATIONS NOT TARGETED TO FOREIGN MARKETS qualify as portfolio
interest not subject to 30% withholding, but require the filing of Form W-8 or
substitute form. See INSTRUCTIONS TO WITHHOLDING AGENTS on this page for
reporting rules.
See PUB. 515, Withholding of Tax on Nonresident Aliens and Foreign
Corporations, for REGISTERED OBLIGATIONS TARGETED TO FOREIGN MARKETS and when
form W-8 or substitute form is not required on these payments.
BEARER OBLIGATIONS.-- The interest from bearer obligations targeted to foreign
markets is treated as portfolio interest and is not subject to 30% withholding.
Form W-8 or substitute form is not required.
DIVIDENDS.-- Any distribution or payment of dividends by a U.S. corporation sent
to a foreign address is subject to the 30% (or lower treaty) withholding rate,
but is not subject to backup withholding. Also, there is no backup withholding
on dividend payments made to a foreign person by a foreign corporation. However,
the 30% withholding (or lower treaty) rate applies to dividend payments made to
a foreign person by a foreign corporation if:
-- 25% or more of the foreign corporation's gross income for the three
preceding taxable years was effectively connected with a U.S. trade or business,
and
-- The corporation was not subject to the branch profits tax because of an
income tax treaty (see section 884(e)).
If a foreign corporation makes payments to another foreign corporation, the
recipient must be a qualified resident of its country of residence to benefit
from that country's tax treaty.
BROKER OR BARTER EXCHANGES.-- Income from transactions with a broker or barter
exchanges is subject to reporting rules and backup withholding unless Form W-8
or substitute form is filed to notify the broker or barter exchange that you are
an exempt foreign person as defined on page 1.
SPECIFIC INSTRUCTIONS
NAME OF OWNER.-- If Form W-8 is being filed for portfolio interest, enter the
name of the beneficial owner.
U.S. TAXPAYER IDENTIFICATION NUMBER.-- If you have a U.S. taxpayer
identification number, enter your number in this space (see the discussion
earlier).
PERMANENT ADDRESS.-- Enter your complete address in the country where you reside
permanently for income tax purposes.
<TABLE>
<S> <C>
IF YOU ARE: SHOW THE
ADDRESS OF:
An individual Your permanent
residence
A partnership Principal office
or corporation
An estate or Permanent residence
trust or principal office
of any fiduciary
</TABLE>
Also show your current mailing address if it differs from your permanent
address.
ACCOUNT INFORMATION (OPTIONAL).-- If you have MORE THAN ONE ACCOUNT (savings,
certificate of deposit, pension, IRA, etc.) with the same payer, list all
account numbers and types on one Form W-8 or substitute form unless your payer
requires you to file a separate certificate for each account.
If you have MORE THAN ONE PAYER, file a separate Form W-8 with each payer.
If each owner of a joint account is a foreign person, EACH should sign a
separate Form W-8.
NOTICE OF CHANGE IN STATUS.-- If you become a U.S. citizen or resident after you
have filed Form W-8 or substitute form, or you cease to be an exempt foreign
person, you must notify the payer in writing within 30 days of your change in
status.
To notify the payer, you may check the box in the space provided on this form
or use the method prescribed by the payer.
Reporting will then begin on the account(s) listed and backup withholding may
also begin unless you certify to the payer that:
(1) The US. taxpayer identification number you have given is correct, AND
(2) The Internal Revenue Service has not notified you that you are subject to
backup withholding because you failed to report certain income.
You may use FORM W-9, Request for Taxpayer Identification Number and
Certification, to make these certifications.
If an account is no longer active, you do not have to notify a payer of your
change in status unless you also have another account with the same payer that
is still active.
FALSE CERTIFICATE.-- If you file a false certificate when you are not entitled
to the exemption from withholding or reporting, you may be subject to fines
and/or imprisonment under U.S. perjury laws.
INSTRUCTIONS TO WITHHOLDING AGENTS
WITHHOLDING AGENT.-- Generally, the person responsible for payment of the items
discussed above to a nonresident alien individual or foreign entity is the
withholding agent (see Pub. 515).
RETENTION OF STATEMENT.-- Keep Form W-8 or substitute form in your records for
at least four years following the end of the last calendar year during which the
payment is paid or collected.
PORTFOLIO INTEREST.-- Although registered obligations NOT targeted for foreign
markets are not subject to 30% withholding, you must file FORM 1042S, Foreign
Person's U.S. Source Income Subject to Withholding, to report the interest
payment. Both Form 1042S and a copy of Form W-8 or substitute form must be
attached to FORM 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
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<PAGE> 11
V. TENDER OF SHARES HELD BY A BROKER, DEALER, COMMERCIAL BANK, TRUST
COMPANY, CUSTODIAN BANK, EMPLOYEE BENEFIT PLAN SPONSORED BY DUPONT (OR A
SUBSIDIARY) OR OTHER NOMINEE.
If your Shares are held in an account with a broker, dealer, commercial
bank, trust company, employee benefit plans sponsored by DuPont (or a
subsidiary) or other nominee and you wish to tender all or part of those Shares,
do not return this Letter of Transmittal to the Depositary. This Letter of
Transmittal is being supplied for your information only. The institution holding
your Shares will supply you with separate instructions regarding the tender of
your Shares. If you have not received instructions regarding the tender of your
Shares, please contact a representative of the institution holding your Shares.
ONLY BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, CUSTODIAN BANKS,
TRUSTEES OF EMPLOYEE BENEFIT PLANS BASED OUTSIDE OF THE UNITED STATES SPONSORED
BY DUPONT (OR A SUBSIDIARY) AND OTHER NOMINEES SHOULD COMPLETE THIS SECTION V.
IF ANY OF SUCH ENTITIES HAVE CLIENTS WHO OWN NON-U.S. DEPOSITARY RECEIPTS AND
WISH TO PARTICIPATE IN THE OFFER, SUCH ENTITIES SHOULD NOT COMPLETE THIS LETTER
OF TRANSMITTAL BUT SHOULD INSTEAD DELIVER SUCH SECURITIES PURSUANT TO THE
INSTRUCTIONS OF THE ISSUER THEREOF.
A. BOOK-ENTRY TRANSFER SHARES -- COMPLETE THIS SECTION V.A. IF YOU WISH TO
TENDER SHARES HELD BY THE DEPOSITORY TRUST COMPANY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE
DEPOSITORY TRUST COMPANY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:
The Depository Trust Company Account Number:
Transaction Code Number:
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SUBMITTED AND COMPLETE
THE FOLLOWING:
Date of Execution of Notice of Guaranteed
Delivery:____________,1999
Name of Institution that Guaranteed Delivery:
B. ODD-LOT SHARES -- Complete this Section V.B. if you wish to tender on
behalf of an owner of an Odd-Lot.
If delivered by Book-Entry Transfer. The Depository Trust
Company Account Number:____________
[ ] CHECK HERE IF (1) YOU ARE TENDERING ON BEHALF OF THE OWNER
BENEFICIALLY AND OF RECORD OF AN ODD-LOT, (2) YOU BELIEVE, BASED
UPON REPRESENTATIONS MADE TO YOU BY SUCH OWNER, THAT SUCH OWNER
OWNED BENEFICIALLY AND OF RECORD LESS THAN 100 SHARES IN THE
AGGREGATE AS OF JULY 7, 1999, AND (3) SUCH OWNER WISHES TO TENDER
ALL HIS OR HER SHARES.
If you are the owner, beneficially and of record, of an Odd-Lot and you
tender all your Shares, you will receive preferential treatment if the Offer
is oversubscribed. Shares you hold in a DuPont Non-U.S. Stock Ownership Plan
are not eligible for this preferential treatment. However, Shares you hold
in a
11
<PAGE> 12
Blueprint account at Merrill Lynch are eligible for this preferential
treatment. If your Odd-Lot Shares are held by a broker for your account, you
should contact the broker and request the preferential treatment. See
Instruction 9.
VI. TENDER OF SHARES SUBJECT TO STOCK TRANSFER TAXES -- Complete this
Section VI. if the tender of your Shares is subject to Belgian or Swiss
transactional taxes.
[ ] CHECK HERE IF THE TENDER OF YOUR SHARES IS SUBJECT TO BELGIAN
TRANSACTIONAL TAXES.
[ ] CHECK HERE IF THE TENDER OF YOUR SHARES IS SUBJECT TO SWISS
TRANSACTIONAL TAXES.
12
<PAGE> 13
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm that is a
recognized member of an Eligible Institution (as defined in the Offer to
Purchase), unless (i) this Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this document, shall
include any participant in a Book-Entry Transfer Facility whose name appears on
a security position listing as the owner of Shares) tendered herewith and such
holder(s) have not completed the box entitled "Special Payment Instructions" on
this Letter of Transmittal, or (ii) such Shares are tendered for the account of
an Eligible Institution. See Instruction 6.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES; GUARANTEED
DELIVERY PROCEDURES. This Letter of Transmittal is to be used by Stockholders
who are Non-U.S. Persons and either if Share certificates are to be forwarded
herewith or if delivery of Shares is to be made by book-entry transfer pursuant
to the procedures set forth in Section 3 of the Offer to Purchase unless an
Agent's Message is utilized. Certificates for all physically delivered Shares,
or a confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal (or manually signed
facsimile thereof) and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the front page of this Letter of Transmittal prior to the Expiration
Date. If certificates are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery. This Letter of Transmittal should not be used in connection with
the delivery of Non-U.S. Depositary Receipts; Non-U.S. Depositary Receipts may
not be tendered to First Chicago Trust Company of New York.
Stockholders whose Share certificates are not immediately available, who
cannot deliver their Shares and all other required documents to the Depositary
or who cannot complete the procedure for delivery by book-entry transfer prior
to the Expiration Date may tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution, (ii) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Company (with any required
signature guarantees) must be received by the Depositary prior to the Expiration
Date, and (iii) the certificates for all physically delivered Shares in proper
form for transfer and delivery, or a confirmation of a book-entry transfer into
the account of the Depositary at the Book-Entry Transfer Facility of all Shares
delivered electronically, in each case together with a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof) and
any other documents required by this Letter of Transmittal, must be received by
the Depositary within three New York Stock Exchange, Inc. trading days after the
date of execution of such Notice of Guaranteed Delivery, all as provided in
Section 3 of the Offer to Purchase. The procedures described above with respect
to guaranteed delivery of Non-U.S. Depositary Receipts do not apply because
Non-U.S. Depositary Receipts may not be tendered directly to the Depositary.
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND
RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY
WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED
MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
The Offer is available only to DuPont stockholders who are Non-U.S.
Persons, as explained on page 1 of the Offer to Purchase. For purposes of the
Offer, a "Non-U.S. Person" is any person who is not a U.S. Person. A "U.S.
Person" for purposes of this Offer is any person that is:
- an individual who is a United States citizen or United States resident
(for United States federal income tax purposes);
13
<PAGE> 14
- a corporation, partnership, limited liability company or other entity
created or organized in the United States or under the laws of the United
States or of any State within the United States;
- an estate which is subject to United States income tax on all of its
income (regardless of the source of such income); and
- a trust if (i) a United States court is able to exercise primary
supervision over the administration of the trust, and (ii) one or more
United States persons have the authority to control all substantial
decisions of the trust (including, without limitation, any United States
pension trust organized under Section 401(a) of the Internal Revenue Code
of 1986, as amended).
DUPONT STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THEIR
STATUS AS A NON-U.S. PERSON IN ORDER TO DETERMINE THEIR ELIGIBILITY TO
PARTICIPATE IN THE OFFER. PERSONS WHO ARE U.S. PERSONS CANNOT PARTICIPATE IN THE
OFFER. All Shares held in DuPont Non-U.S. Stock Ownership Plans (as defined on
page 3 of the Offer to Purchase) are deemed to be held by Non-U.S. Persons for
purposes of determining eligibility to participate in the Offer. If you are a
U.S. Person and you have received this document contact D.F. King or your
broker. No alternative or contingent tenders will be accepted. By executing this
Letter of Transmittal (or a manually signed facsimile copy thereof), the
tendering stockholder waives any right to receive any notice of the acceptance
for payment of the Shares.
DuPont reserves the right to request any additional information from any
record or beneficial owner of DuPont shares that DuPont in its sole discretion
determines to so request including with respect to the tax status of any such
person or of its partners, stockholders, beneficiaries, principals or
participants or the tax impact to DuPont of such person tendering DuPont shares
or the applicability of transfer taxes to such person's participation in the
Offer.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule and attached to this Letter of Transmittal.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares that are to be tendered in the box entitled "Number of Shares
Tendered." Unless local law requires otherwise, Shares not tendered will be
returned by book-entry credit to the appropriate account established by the
Depositary for the tendering stockholder's benefit (or the benefit of the person
indicated in the "Special Payment Instructions" or "Special Delivery
Instruction" Section of this Letter of Transmittal), if applicable at the
Book-Entry Transfer Facility. Note that a new certificate for the remainder of
the Shares not tendered will not be sent to the person(s) signing this Letter of
Transmittal (nor to anyone otherwise provided in the "Special Payment
Instructions" or "Special Delivery Instructions" sections of this Letter of
Transmittal), except where local law requires otherwise. All Shares represented
by certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated. Any stockholder whose untendered shares are returned
by book-entry credit has the right to request physical certificates with respect
to such Shares pursuant to instructions contained in a statement mailed to such
stockholder following the Offer. An owner of Non-U.S. Depository Receipts
reading this Letter of Transmittal for informational purposes should consult the
relevant Non-U.S. Information Agent or the issuer thereof with respect to the
return of certificates in the event of a partial tender of Shares.
5. PARTICIPANTS IN THE DIVIDEND REINVESTMENT PLAN OF DUPONT. If a
tendering stockholder desires to tender Shares credited to the stockholder's
account under DuPont's Dividend Reinvestment Plan, Section I.B. of this Letter
of Transmittal should be completed. If a stockholder authorizes a tender of
Shares held in the Dividend Reinvestment Plan, all such Shares credited to such
stockholder's account(s), including fractional Shares, will be tendered, unless
otherwise specified in the appropriate space in Section I.B. In the event that
Section I.B. is not completed, no Shares held in the tendering stockholder's
account will be tendered.
PARTICIPANTS IN A DUPONT NON-U.S. STOCK OWNERSHIP PLAN OR A BLUEPRINT
BROKERAGE ACCOUNT AT MERRILL LYNCH MAY NOT USE THIS LETTER OF
14
<PAGE> 15
TRANSMITTAL TO DIRECT THE TENDER OF SHARES, BUT MUST FOLLOW THE SEPARATE
ELECTION INSTRUCTIONS SENT TO THEM.
6. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signatures(s) must correspond with the name(s) as written
on the face of the certificates without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal (or manually signed facsimile copies
thereof) as there are different registrations of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of certificates or separate stock powers
are required unless payment of the Purchase Price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), in which case the certificate(s) evidencing
the Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such certificates. Signatures on any such certificates or stock
powers must be guaranteed by an Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates evidencing the
Shares tendered hereby must be endorsed or accompanied by appropriate stock
powers, in either case, signed exactly as the name(s) of the registered
holder(s) appear(s) on such certificate(s). Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution. See
Instruction 1.
If this Letter of Transmittal or any certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
the Company of the authority of such person so to act must be submitted.
7. STOCK TRANSFER TAXES. The Company will pay or cause to be paid any U.S.
stock transfer taxes, and Belgian and Swiss transactional taxes, with respect to
the sale and transfer of any Shares to it or its order pursuant to the Offer.
If, however, payment of the aggregate Purchase Price is to be made to, or Shares
not tendered or not purchased are to be registered in the name of, any person
other than the registered holder(s), or if tendered Shares are registered in the
name of any person other than the person(s) signing this Letter of Transmittal,
the amount of any U.S. stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer to
such person will be deducted from the Purchase Price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted. The
Company will not pay Belgian and Swiss transactional taxes unless stockholders
using this Letter of Transmittal complete Section VI. See Section 5 of the Offer
to Purchase. Except as provided in this Instruction 7, it will not be necessary
to affix transfer tax stamps to the certificates representing Shares tendered
hereby.
8. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the Purchase
Price of any Shares tendered hereby is to be issued in the name of, and/or any
Shares not tendered or not purchased are to be returned to, a person other than
the person(s) signing this Letter of Transmittal, or if the check and/or any
confirmation for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to an
address other than that shown above in the box captioned "Description of Shares
Tendered," then the sections captioned "Special Payment Instructions" and/or
"Special Delivery Instructions" on this Letter of Transmittal should be
completed. Note that all stockholders tendering Shares will have Shares not
accepted for payment returned by crediting the account maintained by such
stockholder (or established by the Depositary for the benefit of such
stockholder or such other person indicated in the "Special Payment Instructions"
section of this Letter of Transmittal) at the Book-Entry
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<PAGE> 16
Transfer Facility, unless local law requires otherwise. Any stockholder whose
tendered Shares are not accepted for payment and returned by book entry credit
has the right to request a physical certificate with respect to such Shares
pursuant to instructions contained in statement mailed to such stockholder
following the Offer. See Section 3 in the Offer to Purchase.
9. ODD-LOTS. As described in the Offer to Purchase, if fewer than all
Shares tendered on or prior to the Expiration Date are to be purchased by the
Company, the Shares purchased first will consist of all Shares validly tendered
by any stockholder who owned beneficially and of record as of July 7, 1999 an
aggregate of less than 100 Shares (an "Odd-Lot") and who tendered all of such
Shares. If the Offer is completed, all Odd-Lot Shares will be accepted for
purchase and will not be subject to proration (except as provided below). This
preference will not be available unless Section I.C. or V.B. of this Letter of
Transmittal and the Notice of Guaranteed Delivery, if applicable, is completed.
Shares held in a DuPont Non-U.S. Stock Ownership Plan are not eligible for this
preferential treatment. However, Shares held in a Blueprint account at Merrill
Lynch are eligible for this preferential treatment. Stockholders whose Odd-Lot
Shares are held by a broker for their account are requested to contact the
broker directly to request this preferential treatment. The foregoing preference
with respect to owners of Odd-Lots also applies to owners of Non-U.S. Depositary
Receipts representing Odd-Lots, although owners of Non-U.S. Depositary Receipts
should not use this Letter of Transmittal but instead must follow relevant
instructions of the issuer of such securities in order to participate in the
Offer.
10. WITHHOLDING ON AMOUNTS PAYABLE TO NON-U.S. PERSONS. Tendering
stockholders, including participating owners of Non-U.S. Depositary Receipts,
will be subject to U.S. federal income tax withholding equal to 30% of the gross
proceeds payable unless a reduced rate of withholding is available pursuant to a
tax treaty or an exemption from withholding is applicable because such gross
proceeds are effectively connected with the conduct of a trade or business
within the United States. In order to obtain a reduced rate of withholding
pursuant to a tax treaty, a Non-U.S. Person must deliver to the Depositary or
such stockholder's broker or bank prior to the payment date a properly completed
and executed IRS Form 1001 or other applicable form which may, in certain
circumstances, consist of a properly completed and executed IRS Form W-8 which
includes such Non-U.S. Person's address. Stockholders are urged to consult the
Depositary or such stockholder's broker or bank to determine whether such
stockholder has previously delivered a valid properly completed and executed IRS
Form 1001 or other applicable form and, if not, to determine which form to file.
In order to obtain an exemption from withholding on the grounds that the gross
proceeds paid pursuant to the Offer are effectively connected with the conduct
of a trade or business within the United States, a Non-U.S. Person must deliver
to the Depositary or such stockholder's broker or bank prior to the payment date
a properly completed and executed IRS Form 4224 or other applicable form. A
Non-U.S. Person may be eligible to obtain a refund from the IRS of all or a
portion of any tax withheld if such stockholder satisfies one or more of the
"complete redemption," "substantially disproportionate" or "not essentially
equivalent to a dividend" tests described in Section 14 of the Offer to Purchase
or is otherwise able to establish that no tax or a reduced amount of tax is due.
Non-U.S. Persons are urged to consult their tax advisors regarding the
application of U.S. federal income tax withholding to the Offer, including their
eligibility for a withholding tax reduction or exemption, their eligibility to
obtain a refund of tax withheld and the procedures for obtaining such refund.
11. U.S. FEDERAL INCOME TAX BACKUP WITHHOLDING. If the tendering
stockholder, including a participating owner of Non-U.S. Depositary Receipts, is
not subject to the withholding described above in Instruction 10 and such
stockholder fails to complete fully, sign and return to the Depositary or such
stockholder's broker or bank the IRS Form W-8 Certificate of Foreign Status
included with the Letter of Transmittal, then such stockholder may be subject to
required U.S. federal income tax backup withholding of 31% of the gross proceeds
paid to such stockholder pursuant to the Offer. Most Non-U.S. Persons will not
be subject to backup withholding because they will be subject to the withholding
described above. Each tendering stockholder who is exempt from backup
withholding should complete and sign the IRS Form W-8 Certificate of Foreign
Status included as part of the Letter of Transmittal so as to provide the
information and certification necessary to avoid backup withholding, unless such
stockholder otherwise establishes that the stockholder is not subject to backup
withholding. Backup withholding is not an additional tax; any amounts so
16
<PAGE> 17
withheld may be credited against the U.S. federal income tax liability of the
stockholder subject to backup withholding.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance may be directed to the Managing Information Agent at its
telephone number and address listed below. Requests for additional copies of the
Offer to Purchase, this Letter of Transmittal or other tender offer materials
may be directed to the Managing Information Agent or the relevant Non-U.S.
Information Agent, and such copies will be furnished promptly at the Company's
expense. Stockholders may also contact their local broker, dealer, commercial
bank, trust company, custodian bank or other nominee for documents relating to,
or assistance concerning, the Offer.
13. IRREGULARITIES. All questions as to the number of Shares to be
accepted, the price to be paid therefor and the validity, form, eligibility
(including time of receipt) and acceptance for payment of any tender of Shares
will be determined by the Company, in its sole discretion, which determination
shall be final and binding on all parties. The Company reserves the absolute
right to reject any or all tenders it determines not to be in proper form or the
acceptance of or payment for which may, in the opinion of the Company's counsel
be unlawful. The Company also reserves the absolute right to waive any of the
conditions of the Offer and any defect or irregularity in the tender of any
particular Shares or any particular stockholder. No tender of Shares will be
deemed to be validly made until all defects or irregularities have been cured or
waived. None of the Company, the Depositary, the Information Agents or any other
person is or will be obligated to give notice of any defects or irregularities
in tenders, and none of them will incur any liability for failure to give any
such notice.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
THEREOF) TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY, PRIOR TO THE
EXPIRATION DATE. STOCKHOLDERS ARE ENCOURAGED TO RETURN A COMPLETED FORM W-8 WITH
THEIR LETTER OF TRANSMITTAL. NOTE THAT THIS LETTER OF TRANSMITTAL IS NOT TO BE
USED IN CONNECTION WITH THE DELIVERY OF NON-U.S. DEPOSITARY RECEIPTS TO THE
ISSUER OR AN AFFILIATE THEREOF.
Questions relating to the procedure for tendering and requests for
additional copies of the Offer to Purchase and this Letter of Transmittal may be
directed to D.F. King & Co., Inc. at the following address and telephone number.
The Managing Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect) for calls outside the United States
(800) 755-3105 (Toll-Free) for calls in the United States
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<PAGE> 18
The Managing Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect) for calls outside the United States
(800) 755-3105 (Toll-Free) for calls in the United States
The Non-U.S. Information Agents for the Offer Are:
<TABLE>
<S> <C> <C>
DEUTSCHE BANK AG CREDIT SUISSE FIRST BOSTON BELGIAN OVERSEAS ISSUING CORPORATION
U+I/Emissionsfolgegeschaefte Equity Capital Markets Switzerland Avenue Marnix 24
Taunusanlage 12 T BSC 1000 Brussels, Belgium
D-60262 Frankfurt am Main, Germany P.O. Box 900 Call +32-2-547-2725
Call +49-69-910-35274 CH-8070 Zurich, Switzerland
Call +41-1-333-61-65
</TABLE>
<TABLE>
<S> <C> <C>
ADMINISTRATIEKANTOOR VOOR HANDEL EN NIJVERHEID B.V. PARIBAS
Single 540, 1017 AZ 3 Rue D'Antin
Amsterdam, The Netherlands 75002 Paris, France
Call +31-20-551-6770 Call +33-1-4298-1488
</TABLE>
<PAGE> 1
E. I. DU PONT DE NEMOURS AND COMPANY
NOTICE OF GUARANTEED DELIVERY
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
This Notice of Guaranteed Delivery or one substantially similar hereto must
be used to accept the Offer (as defined herein) of E. I. du Pont de Nemours and
Company ("DuPont" or the "Company"), as set forth in the Offer to Purchase dated
July 12, 1999 (the "Offer to Purchase") and the accompanying Letter of
Transmittal, if (1) your stock certificate(s) representing shares of common
stock, par value $.30 per share ("Shares"), of DuPont are not immediately
available, (2) you cannot complete the procedure for book-entry transfer on a
timely basis or (3) you cannot deliver the certificate(s) and all other required
documents to First Chicago Trust Company of New York (the "Depositary") prior to
the Expiration Date (as defined in the Offer to Purchase). You may deliver this
Notice of Guaranteed Delivery by hand, telegram, facsimile transmission or mail
to the Depositary by the manner listed below. See "Section 3. Procedure for
Tendering Shares--Guaranteed Delivery" in the Offer to Purchase. Because the
guaranteed delivery procedures described in the Offer to Purchase do not apply
to the delivery of Non-U.S. Depositary Receipts, this Notice of Guaranteed
Delivery should not be used by an owner of Non-U.S. Depositary Receipts. If an
owner of Non-U.S. Depositary Receipts cannot deliver certificate(s) on a timely
basis to the issuer thereof (or the applicable affiliate), such owner should
follow applicable instructions of such issuer or their broker or other relevant
financial intermediary if such owner desires that Shares underlying Non-U.S.
Depositary Receipts be tendered.
The Offer is available only to DuPont stockholders who are Non-U.S.
Persons, as explained on page 1 of the Offer to Purchase. For purposes of the
Offer, a "Non-U.S. Person" is any person who is not a U.S. Person. A "U.S.
Person" for purposes of this Offer is any person that is:
- an individual who is a United States citizen or United States resident
(for United States federal income tax purposes);
- a corporation, partnership, limited liability company or other entity
created or organized in the United States or under the laws of the
United States or of any State within the United States;
- an estate which is subject to United States income tax on all of its
income (regardless of the source of such income); and
- a trust if (i) a United States court is able to exercise primary
supervision over the administration of the trust, and (ii) one or more
United States persons have the authority to control all substantial
decisions of the trust (including, without limitation, any United States
pension trust organized under Section 401(a) of the Internal Revenue
Code of 1986, as amended).
DUPONT STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THEIR
STATUS AS A NON-U.S. PERSON IN ORDER TO DETERMINE THEIR ELIGIBILITY TO
PARTICIPATE IN THE OFFER. PERSONS WHO ARE U.S. PERSONS CANNOT PARTICIPATE IN THE
OFFER. All Shares held in DuPont Non-U.S. Stock Ownership Plans (as defined on
page 3 of the Offer to Purchase) are deemed to be held by Non-U.S. Persons for
purposes of determining eligibility to participate in the Offer. If you are a
U.S. Person and you have received this document, please contact D.F. King or
your broker or nominee. Non-U.S. Persons are not eligible to participate in the
Exchange Offer.
<PAGE> 2
TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY
<TABLE>
<S> <C> <C>
If by mail: If by overnight courier: If by hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attn: Corporate Actions Dept. Attn: Corporate Actions Dept. c/o Securities Transfer and
P.O. Box 2569 8th Floor, Suite 4680 Reporting Service Inc.
Jersey City, NJ 07303-2569 14 Wall Street 100 William Street, Galleria
New York, NY 10005 New York, NY 10038
</TABLE>
If by facsimile transmission:
(For Eligible Institutions only)
(201) 222-4720
or
(201) 222-4721
Facsimile confirmation number:
(201) 222-4707
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the Instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
2
<PAGE> 3
LADIES AND GENTLEMEN:
I hereby tender to E. I. du Pont de Nemours and Company the Shares listed
below, upon the terms of and subject to the conditions set forth in the Offer to
Purchase and the related Letter of Transmittal and the Instructions thereto,
receipt of which I hereby acknowledge, pursuant to the guaranteed delivery
procedures set forth in the Offer to Purchase, as follows:
<TABLE>
<S> <C>
CERTIFICATE NO. NUMBER OF SHARES
- ----------------------------------------- -----------------------------------
- ----------------------------------------- -----------------------------------
- ----------------------------------------- -----------------------------------
- ----------------------------------------- -----------------------------------
THE BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER(IF THE SHARES WILL BE
TENDERED BY BOOK-ENTRY TRANSFER) SIGN HERE
------------------------------------
- ----------------------------------------- -----------------------------------
ACCOUNT NUMBER SIGNATURE(S)
- ----------------------------------------- -----------------------------------
NUMBER OF SHARES NUMBER AND STREET OR P.O. BOX
Dated: , 1999 -----------------------------------
----------------------------- CITY, STATE, ZIP CODE
</TABLE>
ODD-LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially and of record an aggregate of less than
100 Shares as of July 7, 1999.
(check one):
[ ] I am the owner beneficially and of record of less than 100 Shares in
the aggregate as of July 7, 1999, all of which are being tendered, or
[ ] I am a broker, dealer, commercial bank, trust company or other nominee
who (1) is tendering, for the beneficial owners thereof, Shares with
respect to which I am the record owner, and (2) believe, based upon
representations made to me by each such beneficial owner, that such
owner owned beneficially and of record less than 100 Shares as of July
7, 1999, and is tendering all such Shares.
3
<PAGE> 4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, (a) represents and guarantees that the above-named person(s) "own(s)"
the Shares tendered hereby within the meaning of Rule 14e-4 of the Securities
Exchange Act of 1934, as amended, (b) represents and guarantees that the tender
of such Shares complies with Rule 14e-4, and (c) guarantees delivery to the
Depositary of certificates for the Shares tendered hereby, in proper form for
transfer or delivery of such Shares pursuant to procedures for book-entry
transfer, in either case with delivery of a properly completed and duly executed
Letter of Transmittal (or manually signed facsimile thereof) and any other
required documents, unless an Agent's Message is utilized, all within three New
York Stock Exchange trading days after the date hereof.
--------------------------------------
FIRM NAME (PRINT)
--------------------------------------
AUTHORIZED SIGNATURE
--------------------------------------
ADDRESS
--------------------------------------
--------------------------------------
CITY, STATE, ZIP CODE
--------------------------------------
COUNTRY CODE AND TELEPHONE NUMBER
Date , 1999
DO NOT SEND CERTIFICATE(S) OR ANY OTHER REQUIRED DOCUMENTS WITH THIS FORM. THEY
SHOULD BE SENT TO THE DEPOSITARY WITH THE LETTER OF TRANSMITTAL (UNLESS A
BOOK-ENTRY TRANSFER FACILITY IS USED).
4
<PAGE> 1
E. I. DU PONT DE NEMOURS AND COMPANY
OFFER TO PURCHASE FOR CASH
UP TO 8,000,000 SHARES OF COMMON STOCK
OF E. I. DU PONT DE NEMOURS AND COMPANY
HELD BY NON-U.S. PERSONS
AT
$80.76 GROSS PER SHARE
To Brokers, Securities Dealers, Commercial Banks, Trust Companies, Custodian
Banks and Other Nominees:
E. I. du Pont de Nemours and Company ("DuPont" or the "Company") is
offering, upon the terms and subject to the conditions set forth in the enclosed
Offer to Purchase dated July 14, 1999 (the "Offer to Purchase") and the enclosed
Letter of Transmittal (the "Letter of Transmittal," and together with the Offer
to Purchase, the "Offer"), to purchase shares of common stock, par value $.30
per share, of DuPont ("Shares") held by Non-U.S. Persons, up to an aggregate of
8,000,000 Shares tendered and purchased.
The Shares being purchased in the offer include shares of DuPont common
stock listed on the NYSE, Frankfurt, Dusseldorf, Paris, and Amsterdam exchanges
and DuPont common stock underlying Non-U.S. Depositary Receipts. The "Non-U.S.
Depositary Receipts" consist of: (1) the International Depositary Receipts
issued by B.O.I.C. ("B.O.I.C. Depositary Receipts") listed on the Brussels
exchange, (2) the Swiss certificates registered in the name of SNOC Swiss
Nominee Company ("Swiss Certificates") listed on the Swiss exchange and (3) the
Netherlands Depositary Receipts (certificaten) ("Netherlands Depositary
Receipts") listed on the Amsterdam exchange.
The Offer is available only to DuPont stockholders who are Non-U.S.
Persons, as explained on page 1 of the Offer to Purchase. For purposes of the
Offer, a "Non-U.S. Person" is any person who is not a U.S. Person. A "U.S.
Person" for purposes of the Offer is any person that is:
- an individual who is a United States citizen or United States resident
(for United States federal income tax purposes);
- a corporation, partnership, limited liability company or other entity
created or organized in the United States or under the laws of the
United States or of any State within the United States;
- an estate which is subject to United States income tax on all of its
income (regardless of the source of such income); and
- a trust if (i) a United States court is able to exercise primary
supervision over the administration of the trust, and (ii) one or more
United States persons have the authority to control all substantial
decisions of the trust (including, without limitation, any United States
pension trust organized under Section 401(a) of the Internal Revenue
Code of 1986, as amended).
We are asking you to contact your clients who are Non-U.S. Persons and for
whom you hold Shares or Non-U.S. Depositary Receipts registered in your name or
in the name of your nominee or otherwise deposited with you. You will be
reimbursed for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients. DuPont will pay all
U.S. stock transfer taxes and Belgian and Swiss transactional taxes, if any,
except as otherwise provided in Instruction 7 of the Letter of Transmittal.
With respect to Non-U.S. Depositary Receipts owned by any of your clients
who wish to participate in the Offer, such Non-U.S. Depositary Receipts must be
delivered to the issuer thereof (or the applicable affiliate) so that it can
tender the underlying Shares. No Non-U.S. Depositary Receipts will be accepted
for purchase by DuPont in the Offer.
With respect to Shares listed on the Frankfurt, Dusseldorf, Paris and
Amsterdam exchanges, it is DuPont's understanding that you will be required to
tender such Shares owned by any of your clients wishing to participate in the
Offer through Deutsche Bank AG (with respect to Shares listed on the Frankfurt
and Dusseldorf exchanges), SICOVAM (with respect to Shares listed on the Paris
exchange) and ASAS (with respect to Shares listed on the Amsterdam exchange),
respectively.
You should be aware that you will be required to withhold United States
federal income taxes equal to 30% of the gross proceeds of the Offer unless a
reduced rate of withholding is available pursuant to a tax treaty or an
exemption from withholding is available because such gross proceeds are
effectively connected with the
<PAGE> 2
conduct of a trade or business within the United States. Stockholders may be
able to obtain a refund of such withholding taxes. See Sections 3 and 14 of the
enclosed Offer to Purchase for more details. YOU ARE STRONGLY URGED TO ADVISE
YOUR CLIENTS ABOUT SUCH UNITED STATES FEDERAL INCOME TAX WITHHOLDING
REQUIREMENT.
No broker, dealer, commercial bank, trust company, custodian bank or any
other nominee shall be deemed to be the agent of DuPont, the Depositary or the
Information Agents for purposes of the Offer.
Enclosed is a copy of each of the following documents:
- The Offer to Purchase.
- The Letter of Transmittal for your use and for the information of your
clients.
- The Notice of Guaranteed Delivery.
- A form of letter which may be sent to your clients for whose account you
hold Shares or Non-U.S. Depositary Receipts registered in your name or
the name of your nominee or otherwise deposited with you with space
provided for obtaining the clients' instructions with regard to the
Offer.
- A return envelope addressed to the First Chicago Trust Company of New
York, the Depositary, for your use only.
- Letter from DuPont to stockholders.
Your prompt action is requested. The Offer will expire at 12:00 Midnight,
New York City time, on August 10, 1999, or if extended by DuPont, the latest
date and time to which extended (the "Expiration Date"). Shares tendered
pursuant to the Offer may be withdrawn, subject to the procedures described in
the Offer to Purchase, at any time prior to the Expiration Date and after
September 3, 1999, if not theretofore accepted for purchase, although note that
issuers of Non-U.S. Depositary Receipts may have special rules and procedures
regarding withdrawal.
To participate in the Offer, certificates for Shares (or evidence of a
book-entry delivery into the Depositary's account at The Depository Trust
Company) and a duly executed and properly completed Letter of Transmittal or a
manually signed facsimile thereof, together with any other required documents,
or an Agent's Message in connection with a book-entry transfer, must be
delivered to the Depositary as indicated in the Offer. If holders of Shares wish
to tender their Shares, but it is impracticable for them to do so prior to the
Expiration Date, a tender may be effected by following the guaranteed delivery
procedures described in the Offer to Purchase under "Section 3. Procedure for
Tendering Shares -- Guaranteed Delivery."
Note, again, that certificates with respect to Non-U.S. Depositary Receipts
will not be directly accepted for purchase by DuPont; the underlying Shares must
be tendered. As a result, certificates with respect to such securities must be
delivered pursuant to the instructions of the issuer (or the applicable
affiliate) in order to ensure that the underlying Shares are tendered.
Guaranteed delivery procedures described in the Offer to Purchase do not apply
to the delivery of Non-U.S. Depositary Receipts.
Additional information concerning the Offer and additional copies of the
enclosed material may be obtained from D.F. King & Co., Inc. (the "Managing
Information Agent") at (212) 269-5550 (collect) outside the United States or at
(800) 755-3105 (toll free) in the United States.
Very truly yours,
E. I. DU PONT DE NEMOURS AND COMPANY
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
PERSON AS AN AGENT OF DUPONT, THE DEPOSITARY, THE MANAGING INFORMATION AGENT, OR
THE NON-U.S. INFORMATION AGENTS, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE
ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE OFFER, EXCEPT FOR
STATEMENTS EXPRESSLY MADE IN THE OFFER TO PURCHASE OR THE LETTER OF TRANSMITTAL.
2
<PAGE> 1
E. I. DU PONT DE NEMOURS AND COMPANY
OFFER TO PURCHASE FOR CASH
UP TO 8,000,000 SHARES OF COMMON STOCK
OF E. I. DU PONT DE NEMOURS AND COMPANY
HELD BY NON-U.S. PERSONS
AT
$80.76 GROSS PER SHARE
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated July 14, 1999
(the "Offer to Purchase") and a form of Letter of Transmittal for informational
purposes (the "Letter of Transmittal;" and together with the Offer to Purchase,
the "Offer") relating to the offer by E. I. du Pont de Nemours and Company
("DuPont" or the "Company") to purchase Shares of common stock, par value $.30
per share, of DuPont ("Shares") held by Non-U.S. Persons at a price of $80.76
per Share, in cash, without interest, less applicable United States withholding
taxes, up to an aggregate of 8,000,000 Shares tendered and purchased upon the
terms and subject to the conditions set forth in the Offer to Purchase.
The Shares being purchased in the offer include shares of DuPont common
stock listed on the NYSE, Frankfurt, Dusseldorf, Paris, and Amsterdam exchanges
and DuPont common stock underlying Non-U.S. Depositary Receipts. The "Non-U.S.
Depositary Receipts" consist of: (1) the International Depositary Receipts
issued by B.O.I.C. ("B.O.I.C. Depositary Receipts") listed on the Brussels
exchange, (2) the Swiss certificates registered in the name of SNOC Swiss
Nominee Company ("Swiss Certificates") listed on the Swiss exchange and (3) the
Netherlands Depositary Receipts (certificaten) ("Netherlands Depositary
Receipts") listed on the Amsterdam exchange.
THE OFFER IS AVAILABLE ONLY TO DUPONT STOCKHOLDERS WHO ARE NON-U.S.
PERSONS, AS EXPLAINED ON PAGE 1 OF THE OFFER TO PURCHASE. For purposes of the
Offer, a "Non-U.S. Person" is any person who is not a U.S. Person. A "U.S.
Person" for purposes of the Offer is any person that is:
- an individual who is a United States citizen or United States resident
(for United States federal income tax purposes);
- a corporation, partnership, limited liability company or other entity
created or organized in the United States or under the laws of the United
States or of any State within the United States;
- an estate which is subject to United States income tax on all of its
income (regardless of the source of such income); and
- a trust if (i) a United States court is able to exercise primary
supervision over the administration of the trust, and (ii) one or more
United States persons have the authority to control all substantial
decisions of the trust (including, without limitation, any United States
pension trust organized under Section 401(a) of the Internal Revenue Code
of 1986, as amended).
DUPONT STOCKHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THEIR
STATUS AS A NON-U.S. PERSON IN ORDER TO DETERMINE THEIR ELIGIBILITY TO
PARTICIPATE IN THE OFFER. DUPONT STOCKHOLDERS WHO ARE U.S. PERSONS ARE
INELIGIBLE TO PARTICIPATE IN THE OFFER AND SHOULD NOT COMPLETE THIS TENDER
INSTRUCTION FORM. If you are a U.S. Person and you have received this document,
you should contact D.F. King or your broker or nominee.
You should be aware that United States federal income tax withholding
generally will apply to the gross proceeds of the Offer to be received by
Non-U.S. Persons. See Section 3 and 14 of the Offer to Purchase for more
information with regard to such withholding taxes.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY
NOT BE USED BY YOU TO TENDER SHARES.
<PAGE> 2
The enclosed material is being forwarded to you as the owner of Shares or
Non-U.S. Depositary Receipts not registered in your name and/or deposited with
us. A tender of such Shares or, if applicable, a delivery of Non-U.S. Depositary
Receipts to the issuer thereof in order that the underlying Shares can be
tendered, may only be made by us as the registered holder or depositary
institution and pursuant to your instructions. Therefore, DuPont urges owners of
Shares and Non-U.S. Depositary Receipts registered in the name of, or otherwise
deposited with, a broker, dealer, commercial bank, trust company, custodian bank
or other nominee to contact such registered holder or the applicable financial
institution promptly if they wish to accept the Offer.
Accordingly, we request instructions as to whether you wish us to tender
any or all such Shares held by us or, with respect to Non-U.S. Depositary
Receipts held by us, to deliver such Non-U.S. Depositary Receipts to the issuer
thereof (or the applicable affiliate) in order that the underlying Shares can be
tendered, for your account pursuant to the terms and conditions set forth in the
enclosed Offer to Purchase and the related Letter of Transmittal.
Your instructions to us should be forwarded as promptly as possible in
order that you can participate in accordance with the provisions of the Offer.
The Offer will expire at 12:00 Midnight, New York City time, on August 10, 1999,
or if extended by DuPont, the latest date and time to which extended (the
"Expiration Date"). Shares tendered pursuant to the Offer may be withdrawn,
subject to the procedures described in the Offer to Purchase, at any time prior
to the Expiration Date and after September 3, 1999, if not theretofore accepted
for purchase. Owners of Non-U.S. Depositary Receipts should consult their
brokers, dealers, commercial banks, trust companies, custodian banks or other
nominees or the issuer of such Non-U.S. Depositary Receipts regarding their
withdrawal rights because the issuer may have special rules and procedures
regarding withdrawal.
Your attention is directed to the following:
- The Offer is for up to an aggregate of 8,000,000 Shares.
- The Offer is open only to Non-U.S. Persons.
- U.S. withholding taxes will generally apply to the proceeds to be
received by eligible participants.
- DuPont's obligation to accept Shares tendered in the Offer is subject to
certain conditions specified in the Offer to Purchase.
- No U.S. stock transfer taxes will be payable as a result of the
transaction. Although Belgian and Swiss transactional taxes will apply
for transactions in B.O.I.C. Depositary Receipts and Swiss Certificates
(both as defined in the Offer to Purchase), respectively, DuPont will pay
these transactional taxes subject to certain limitations described in the
Offer to Purchase and Letter of Transmittal.
If you wish to have us tender any or all of your Shares or deliver
certificates representing Non-U.S. Depositary Receipts to the issuer thereof in
order that the underlying Shares can be tendered, please so instruct us by
completing, executing and returning to us the instruction form which appears on
the opposite side of this letter. Note that by instructing us to tender Shares,
or to deliver certificates representing Non-U.S. Depositary Receipts in order
that the underlying Shares can be tendered, you will be certifying that you are
a non-U.S. person as described above and on page 1 of the Offer to Purchase and
that you are eligible to participate in the Offer. Participating owners of
Non-U.S. Depositary Receipts should consult their brokers, dealers, commercial
banks, trust companies, custodian banks or other nominees or the issuer of such
Non-U.S. Depositary Receipts regarding the return of certificates in the event
any Shares underlying such Non-U.S. Depositary Receipts are not tendered or are
not purchased in the event of proration.
2
<PAGE> 3
INSTRUCTIONS
I acknowledge receipt of your letter and the enclosed material referred to
therein relating to the Offer of E. I. du Pont de Nemours and Company ("DuPont"
or the "Company") for DuPont common stock, par value $.30 per share ("Shares")
held by Non-U.S. Persons.
I. SHARES: TO BE FILLED OUT BY OWNERS OF SHARES
This will instruct you to tender the Shares indicated below (or, if no
number is indicated below, all Shares) held by you for my account, pursuant to
the terms and conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Box 1 [ ] Please tender all of my Shares held by you for my account.
Box 2 [ ] Please tender (number) of the Shares held by you
----------
for my account.
- --------------------------------------------------------------------------------
ODD-LOTS
[ ] By checking this box, I represent that I owned beneficially and of record
as of July 7, 1999, an aggregate of less than 100 Shares and am tendering
all such Shares.
II. NON-U.S. DEPOSITARY RECEIPTS: TO BE FILLED OUT BY OWNERS OF NON-U.S.
DEPOSITARY RECEIPTS
This will instruct you to deliver the Non-U.S. Depositary Receipts to the
issuer thereof (or the applicable affiliate) in order that Shares indicated
below (or, if no number is indicated below, all Shares) underlying such Non-U.S.
Depositary Receipts held by you for my account, pursuant to the terms and
conditions set forth in the Offer to Purchase and the Letter of Transmittal.
Box 1 [ ] Please deliver Non-U.S. Depositary Receipts in accordance with
the instructions of the issuer thereof in order that all Shares
underlying such Non-U.S. Depositary Receipts can be tendered to
the Depositary.
Box 2 [ ] Please deliver Non-U.S. Depositary Receipts in accordance with
the instructions of the issuer thereof in order that
(number) of the Shares underlying such
----------------------------
Non-U.S. Depositary Receipts can be tendered to the Depositary.
- --------------------------------------------------------------------------------
ODD-LOTS
[ ] By checking this box, I represent that I owned beneficially and of record
Non-U.S. Depositary Receipts as of July 7, 1999 representing an aggregate
of less than 100 shares and wish to have tendered all such Shares.
3
<PAGE> 4
SIGNATURE
BY SIGNING BELOW, I HEREBY CERTIFY THAT I AM A NON-U.S. PERSON AS DESCRIBED
ABOVE AND ON PAGE 1 OF THE OFFER TO PURCHASE AND THAT I AM ELIGIBLE TO
PARTICIPATE IN THE OFFER.
<TABLE>
<S> <C>
Dated: _______________________________________, 1999
-----------------------------------------------------
-----------------------------------------------------
SIGNATURE(S)
-----------------------------------------------------
-----------------------------------------------------
PLEASE PRINT NAME(S) HERE
-----------------------------------------------------
ACCOUNT NUMBER
-----------------------------------------------------
TAX IDENTIFICATION NUMBER
</TABLE>
UNLESS A SPECIFIC CONTRARY INSTRUCTION IS GIVEN IN THE SPACE PROVIDED, YOUR
SIGNATURE(S) HEREON SHALL CONSTITUTE AN INSTRUCTION TO US TO TENDER ALL OF YOUR
SHARES.
PLEASE RETURN THIS FORM TO THE BROKERAGE FIRM OR CUSTODIAN BANK MAINTAINING
YOUR ACCOUNT, NOT THE DEPOSITARY, MANAGING INFORMATION AGENT OR DUPONT.
4
<PAGE> 1
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
To: Participants in the DuPont (U.K.) Limited Share Ownership Plan (the Plan)
Dear Participant
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Plan is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Plan and all shares held in the Plan are deemed to be held
by Non-U.S. Persons. SHARES HELD IN THE PLAN ARE ONLY ELIGIBLE TO BE TENDERED IN
THE CASH OFFER AND MAY NOT BE TENDERED IN THE EXCHANGE OFFER.
The purpose of this letter is to explain to you, as a participant in the Plan,
the implications of the Cash Offer. A copy of the Offer to Purchase is enclosed
which you should read carefully before making a decision. This letter is not
designed to encourage you to tender or hold your DuPont shares. It is intended
to inform you that there is a programme for tendering DuPont shares held in the
Plan and that you may participate as indicated.
If you own shares of DuPont stock other than in the Plan, including in a Merrill
Lynch Blueprint account or in any DuPont or Conoco share plan, you should
receive separate mailings relating to those shares.
A Plan Statement showing your DuPont shares held in the Plan is also enclosed
for ease of reference.
If you wish to direct the Trustee to tender for the Cash Offer on behalf of some
or all of your DuPont shares held in the Plan which are eligible for the Cash
Offer, you must complete the enclosed Form of Instruction. This must be returned
to the Trustee no later than 3.00 p.m. on Friday, 6 August 1999.
If you do not wish to tender for the Cash Offer, you do not need to take any
action.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
<PAGE> 2
1.2 Plan restrictions to the offer
In the context of the Plan, the normal sale rules continue to apply and so the
Cash Offer only relates to DuPont shares that are no longer subject to a
retention period as at the Trustee's closing date for accepting Forms of
Instruction. Please note, Company Purchased shares that are no longer subject to
a retention period but which have been held for less than three years on 10
August 1999 will be subject to income tax.
Participation in the Cash Offer will not be deemed a sale for the purposes of
the limit on the number of sales allowed in a tax year under the Plan. No
brokerage fees or other administration charges will apply to sales under the
Cash Offer.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Trustee will notify you of the new date
to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont Plan shares, you should complete the enclosed Form of Instruction,
following the instructions in this letter. Please note that you cannot alter
your instructions to the Trustee.
If you do not wish to tender for the Cash Offer in respect of any of your DuPont
Plan shares you do not need to take any action.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Plan under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely U.K. taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont Plan shares,
assuming that you are resident or ordinarily resident in the U.K. for taxation
purposes. IF YOU ARE IN ANY DOUBT AS TO YOUR TAX POSITION YOU SHOULD CONSULT A
PROFESSIONAL ADVISER.
<PAGE> 3
3.1 Income tax
If you instruct the Trustee to tender for the Cash Offer for any Company
Purchased DuPont shares that have been held for less than three years, income
tax will be payable in respect of the cash which the Trustee receives on your
behalf. The amount subject to income tax will generally be the original market
value of those DuPont Plan shares in respect of which you have successfully
tendered under the Cash Offer. As mentioned, the tax position will be the same
as for a normal sale and any amount that is subject to income tax will be
reduced if you have reached age 60 or you have left DuPont due to injury,
disability or redundancy.
Income tax will be deducted before any cash due under the Cash Offer is paid to
you. (See 4. Settlement below).
3.2 Capital gains tax
If you receive cash in respect of your DuPont Plan shares, you may be liable to
capital gains tax on the difference between the cash consideration received and
the original cost of the shares under capital gains tax rules i.e. the base
cost.
You will not, however, be liable to capital gains tax unless your chargeable
gains (less allowable losses) from all sources during the tax year 1999/2000
exceed the annual exemption. The annual exemption for 1999/2000 is pound
sterling 7,100. You should ensure that the relevant details are included on a
tax return under the self-assessment procedure for the 1999/2000 tax year.
3.3 U.S. withholding tax
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding will be
applied to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. Each participant may have to
complete appropriate forms for repayment and apply to the Internal Revenue
Service in the U.S. The facts of each case will determine whether a refund can
be claimed. On payment of the proceeds, the Trustee will notify you of any
available information on the refund procedure.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
<PAGE> 4
3.4 Risk of gain being taxed as income
Participants are referred to the Offer to Purchase and Section 14 "United
Kingdom" which highlights a remote possibility that part of the gain on a
disposal may be taxed as income and not as a capital gain.
4. SETTLEMENT
Although the Cash Offer is in $U.S., the proceeds will be converted by the
Trustee and paid to you in pound sterling STG.
If you are a current employee within DuPont, then the amount received by the
Trustee for your DuPont Plan shares, which is liable for income tax, will be
sent by the Trustee to your employing company to process through the payroll
system. The amount that is not liable to income tax will be sent to you by
cheque separately by the Trustee.
If you are no longer an employee of DuPont, the Trustee will deduct income tax
at the basic rate on the amount liable to income tax, and remit the balance and
the amount not liable to income tax by cheque to you at your registered address.
If you are subject to income tax at the higher rate, you will be liable to pay
the additional tax due under the self-assessment procedure and you should ensure
that details are included on a tax return for the 1999/2000 tax year.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Trustee to tender for the Cash Offer in respect of all
or some of your DuPont Plan shares, you should complete the accompanying Form of
Instruction and return it at your own risk to the Trustee, at PO Box 144,
Norfolk House, Wellesley Road, Croydon CR9 3EB in the enclosed envelope so that
it is received no later than 3.00 p.m. on Friday, 6 August 1999. (This will give
the Trustee time to act before Tuesday, 10 August 1999, which is the closing
date of the Cash Offer.)
As an alternative to posting your form to the Trustee you may fax your form to
0181 666 8118. If you use the fax, please check with the Trustee that your form
has been received by telephoning 0181 666 8285. Proof of sending is not proof of
receipt.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE TRUSTEE. IF YOU WISH
TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT
YOUR FORM OF INSTRUCTION. THE FAX SYSTEM MAY BE EXPERIENCING HEAVY CALL VOLUME
AND YOU MAY NOT BE ABLE TO DELIVER YOUR FORM OF INSTRUCTION BEFORE THE DEADLINE.
If you do not wish the Trustee to tender for the Cash Offer on behalf of your
DuPont Plan shares you should ignore the Form of Instruction and you do not need
to take any action.
If you have any questions, please contact the DuPont Share Ownership Plan
Hotline on 0181 666 8388. Please note that no recommendation or advice on a
particular course of action can be given by the Trustee.
Issued by Noble Lowndes Settlement Trustees Limited
<PAGE> 5
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
To: Participants in the Conoco Stock Ownership Plan (the Plan)
Dear Participant
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Plan is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Plan and all shares held in the Plan are deemed to be held
by Non-U.S. Persons. SHARES HELD IN THE PLAN ARE ONLY ELIGIBLE TO BE TENDERED IN
THE CASH OFFER AND MAY NOT BE TENDERED IN THE EXCHANGE OFFER.
The purpose of this letter is to explain to you, as a participant in the Plan,
the implications of the Cash Offer. A copy of the Offer to Purchase is enclosed
which you should read carefully before making a decision. This letter is not
designed to encourage you to tender or hold your DuPont shares. It is intended
to inform you that there is a programme for tendering DuPont shares held in the
Plan and that you may participate as indicated.
If you own shares of DuPont stock other than in the Plan, including in a Merrill
Lynch Blueprint account or in any other Conoco or DuPont share plan, you should
receive separate mailings relating to those shares.
A Plan Statement showing your DuPont shares held in the Plan is also enclosed
for ease of reference.
If you wish to direct the Trustee to tender for the Cash Offer on behalf of some
or all of your DuPont shares held in the Plan which are eligible for the Cash
Offer, you must complete the enclosed Form of Instruction. This must be returned
to the Trustee no later than 3.00 p.m. on Friday, 6 August 1999.
If you do not wish to tender for the Cash Offer, you do not need to take any
action.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
<PAGE> 6
1.2 Plan restrictions to the offer
In the context of the Plan, the normal sale rules continue to apply and so the
Cash Offer only relates to DuPont shares that are no longer subject to a
retention period as at the Trustee's closing date for accepting Forms of
Instruction. Please note, Company Purchased shares that are no longer subject to
a retention period but which have been held for less than three years on 10
August 1999 will be subject to income tax.
Participation in the Cash Offer will not be deemed a sale for the purposes of
the limit on the number of sales allowed in a tax year under the Plan. No
brokerage fees or other administration charges will apply to sales under the
Cash Offer.
The Cash Offer does not apply to any Conoco Class A common stock allocated to
you under the Plan.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Trustee will notify you of the new date
to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont Plan shares, you should complete the enclosed Form of Instruction,
following the instructions in this letter. Please note that you cannot alter
your instructions to the Trustee.
If you do not wish to tender for the Cash Offer in respect of any of your DuPont
Plan shares you do not need to take any action.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Plan under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely U.K. taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont Plan shares,
assuming that you are resident or ordinarily resident in the U.K. for taxation
purposes. IF YOU ARE IN ANY DOUBT AS TO YOUR TAX POSITION YOU SHOULD CONSULT A
PROFESSIONAL ADVISER.
<PAGE> 7
3.1 Income tax
If you instruct the Trustee to tender for the Cash Offer for any Company
Purchased DuPont shares that have been held for less than three years, income
tax will be payable in respect of the cash which the Trustee receives on your
behalf. The amount subject to income tax will generally be the original market
value of those DuPont Plan shares in respect of which you have successfully
tendered under the Cash Offer. As mentioned, the tax position will be the same
as for a normal sale and any amount that is subject to income tax will be
reduced if you have reached age 60 or you have left Conoco due to injury,
disability or redundancy.
Income tax will be deducted before any cash due under the Cash Offer is paid to
you. (See 4. Settlement below).
3.2 Capital gains tax
If you receive cash in respect of your DuPont Plan shares, you may be liable to
capital gains tax on the difference between the cash consideration received and
the original cost of the shares under capital gains tax rules i.e. the base
cost.
You will not, however, be liable to capital gains tax unless your chargeable
gains (less allowable losses) from all sources during the tax year 1999/2000
exceed the annual exemption. The annual exemption for 1999/2000 is pound
sterling 7,100. You should ensure that the relevant details are included on a
tax return under the self-assessment procedure for the 1999/2000 tax year.
3.3 U.S. withholding tax
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding will be
applied to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. Each participant may have to
complete appropriate forms for repayment and apply to the Internal Revenue
Service in the U.S. The facts of each case will determine whether a refund can
be claimed. On payment of the proceeds, the Trustee will notify you of any
available information on the refund procedure.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
3.4 Risk of gain being taxed as income
Participants are referred to the Offer to Purchase and Section 14 "United
Kingdom" which highlights a remote possibility that part of the gain on a
disposal may be taxed as income and not as a capital gain.
<PAGE> 8
4. SETTLEMENT
Although the Cash Offer is in $U.S., the proceeds will be converted by the
Trustee and paid to you in pound sterling STG.
If you are a current employee within Conoco, then the amount received by the
Trustee for your DuPont Plan shares, which is liable for income tax, will be
sent by the Trustee to your employing company to process through the payroll
system. The amount that is not liable to income tax will be sent to you by
cheque separately by the Trustee.
If you are no longer an employee of Conoco, the Trustee will deduct income tax
at the basic rate on the amount liable to income tax, and remit the balance and
the amount not liable to income tax by cheque to you at your registered address.
If you are subject to income tax at the higher rate, you will be liable to pay
the additional tax due under the self-assessment procedure and you should ensure
that details are included on a tax return for the 1999/2000 tax year.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Trustee to tender for the Cash Offer in respect of all
or some of your DuPont Plan shares, you should complete the accompanying Form of
Instruction and return it at your own risk to the Trustee, at PO Box 144,
Norfolk House, Wellesley Road, Croydon CR9 3EB in the enclosed envelope so that
it is received no later than 3.00 p.m. on Friday, 6 August 1999. (This will give
the Trustee time to act before Tuesday, 10 August 1999, which is the closing
date of the Cash Offer.)
As an alternative to posting your form to the Trustee you may fax your form to
0181 666 8118. If you use the fax, please check with the Trustee that your form
has been received by telephoning 0181 666 8285. Proof of sending is not proof of
receipt.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE TRUSTEE. IF YOU WISH
TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT
YOUR FORM OF INSTRUCTION. THE FAX SYSTEM MAY BE EXPERIENCING HEAVY CALL VOLUME
AND YOU MAY NOT BE ABLE TO DELIVER YOUR FORM OF INSTRUCTION BEFORE THE DEADLINE.
If you do not wish the Trustee to tender for the Cash Offer on behalf of your
DuPont Plan shares you should ignore the Form of Instruction and you do not need
to take any action.
If you have any questions, please contact the Conoco Stock Ownership Plan
Hotline on 0181 666 8285. Please note that no recommendation or advice on a
particular course of action can be given by the Trustee.
Issued by Noble Lowndes Settlement Trustees Limited
<PAGE> 9
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
To: Participants in the DuPont Dow Elastomers Limited Share Ownership Plan (the
Plan)
Dear Participant
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Plan is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Plan and all shares held in the Plan are deemed to be held
by Non-U.S. Persons. SHARES HELD IN THE PLAN ARE ONLY ELIGIBLE TO BE TENDERED IN
THE CASH OFFER AND MAY NOT BE TENDERED IN THE EXCHANGE OFFER.
The purpose of this letter is to explain to you, as a participant in the Plan,
the implications of the Cash Offer. A copy of the Offer to Purchase is enclosed
which you should read carefully before making a decision. This letter is not
designed to encourage you to tender or hold your DuPont shares. It is intended
to inform you that there is a programme for tendering DuPont shares held in the
Plan and that you may participate as indicated.
If you own shares of DuPont stock other than in the Plan, including in a Merrill
Lynch Blueprint account or in any DuPont or Conoco share plan, you should
receive separate mailings relating to those shares.
A Plan Statement showing your DuPont shares held in the Plan is also enclosed
for ease of reference.
If you wish to direct the Trustee to tender for the Cash Offer on behalf of some
or all of your DuPont shares held in the Plan which are eligible for the Cash
Offer, you must complete the enclosed Form of Instruction. This must be returned
to the Trustee no later than 3.00 p.m. on Friday, 6 August 1999.
If you do not wish to tender for the Cash Offer, you do not need to take any
action.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
<PAGE> 10
1.2 Plan restrictions to the offer
In the context of the Plan, the normal sale rules continue to apply and so the
Cash Offer only relates to DuPont shares that are no longer subject to a
retention period as at the Trustee's closing date for accepting Forms of
Instruction. Please note, Company Purchased shares that are no longer subject to
a retention period but which have been held for less than three years on 10
August 1999 will be subject to income tax.
Participation in the Cash Offer will not be deemed a sale for the purposes of
the limit on the number of sales allowed in a tax year under the Plan. No
brokerage fees or other administration charges will apply to sales under the
Cash Offer.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Trustee will notify you of the new date
to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont Plan shares, you should complete the enclosed Form of Instruction,
following the instructions in this letter. Please note that you cannot alter
your instructions to the Trustee.
If you do not wish to tender for the Cash Offer in respect of any of your DuPont
Plan shares you do not need to take any action.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Plan under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely U.K. taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont Plan shares,
assuming that you are resident or ordinarily resident in the U.K. for taxation
purposes. IF YOU ARE IN ANY DOUBT AS TO YOUR TAX POSITION YOU SHOULD CONSULT A
PROFESSIONAL ADVISER.
<PAGE> 11
3.1 Income tax
If you instruct the Trustee to tender for the Cash Offer for any Company
Purchased DuPont shares that have been held for less than three years, income
tax will be payable in respect of the cash which the Trustee receives on your
behalf. The amount subject to income tax will generally be the original market
value of those DuPont Plan shares in respect of which you have successfully
tendered under the Cash Offer. As mentioned, the tax position will be the same
as for a normal sale and any amount that is subject to income tax will be
reduced if you have reached age 60 or you have left DuPont Dow due to injury,
disability or redundancy.
Income tax will be deducted before any cash due under the Cash Offer is paid to
you. (See 4. Settlement below).
3.2 Capital gains tax
If you receive cash in respect of your DuPont Plan shares, you may be liable to
capital gains tax on the difference between the cash consideration received and
the original cost of the shares under capital gains tax rules i.e. the base
cost.
You will not, however, be liable to capital gains tax unless your chargeable
gains (less allowable losses) from all sources during the tax year 1999/2000
exceed the annual exemption. The annual exemption for 1999/2000 is pound
sterling 7,100. You should ensure that the relevant details are included on a
tax return under the self-assessment procedure for the 1999/2000 tax year.
3.3 U.S. withholding tax
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding will be
applied to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. Each participant may have to
complete appropriate forms for repayment and apply to the Internal Revenue
Service in the U.S. The facts of each case will determine whether a refund can
be claimed. On payment of the proceeds, the Trustee will notify you of any
available information on the refund procedure.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
<PAGE> 12
3.4 Risk of gain being taxed as income
Participants are referred to the Offer to Purchase and Section 14 "United
Kingdom" which highlights a remote possibility that part of the gain on a
disposal may be taxed as income and not as a capital gain.
4. SETTLEMENT
Although the Cash Offer is in $U.S., the proceeds will be converted by the
Trustee and paid to you in pound sterling STG.
If you are a current employee within DuPont Dow, then the amount received by the
Trustee for your DuPont Plan shares, which is liable for income tax, will be
sent by the Trustee to your employing company to process through the payroll
system. The amount that is not liable to income tax will be sent to you by
cheque separately by the Trustee.
If you are no longer an employee of DuPont, the Trustee will deduct income tax
at the basic rate on the amount liable to income tax, and remit the balance and
the amount not liable to income tax by cheque to you at your registered address.
If you are subject to income tax at the higher rate, you will be liable to pay
the additional tax due under the self-assessment procedure and you should ensure
that details are included on a tax return for the 1999/2000 tax year.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Trustee to tender for the Cash Offer in respect of all
or some of your DuPont Plan shares, you should complete the accompanying Form of
Instruction and return it at your own risk to the Trustee, at PO Box 144,
Norfolk House, Wellesley Road, Croydon CR9 3EB in the enclosed envelope so that
it is received no later than 3.00 p.m. on Friday, 6 August 1999. (This will give
the Trustee time to act before Tuesday, 10 August 1999, which is the closing
date of the Cash Offer.)
As an alternative to posting your form to the Trustee you may fax your form to
0181 666 8118. If you use the fax, please check with the Trustee that your form
has been received by telephoning 0181 666 8285. Proof of sending is not proof of
receipt.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE TRUSTEE. IF YOU WISH
TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT
YOUR FORM OF INSTRUCTION. THE FAX SYSTEM MAY BE EXPERIENCING HEAVY CALL VOLUME
AND YOU MAY NOT BE ABLE TO DELIVER YOUR FORM OF INSTRUCTION BEFORE THE DEADLINE.
If you do not wish the Trustee to tender for the Cash Offer on behalf of your
DuPont Plan shares you should ignore the Form of Instruction and you do not need
to take any action.
If you have any questions, please contact the DuPont Share Ownership Plan
Hotline on 0181 666 8388. Please note that no recommendation or advice on a
particular course of action can be given by the Trustee.
Issued by Noble Lowndes Settlement Trustees Limited
<PAGE> 13
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
To: Participants in the DuPont Pharmaceuticals Limited Share Ownership Plan (the
Plan)
Dear Participant
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Plan is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Plan and all shares held in the Plan are deemed to be held
by Non-U.S. Persons. Shares held in the plan are only eligible to be tendered in
the Cash Offer and may not be tendered in the Exchange Offer.
The purpose of this letter is to explain to you, as a participant in the Plan,
the implications of the Cash Offer. A copy of the Offer to Purchase is enclosed
which you should read carefully before making a decision. This letter is not
designed to encourage you to tender or hold your DuPont shares. It is intended
to inform you that there is a programme for tendering DuPont shares held in the
Plan and that you may participate as indicated.
If you own shares of DuPont stock other than in the Plan, including in a Merrill
Lynch Blueprint account or in any DuPont or Conoco share plan, you should
receive separate mailings relating to those shares.
A Plan Statement showing your DuPont shares held in the Plan is also enclosed
for ease of reference.
If you wish to direct the Trustee to tender for the Cash Offer on behalf of some
or all of your DuPont shares held in the Plan which are eligible for the Cash
Offer, you must complete the enclosed Form of Instruction. This must be returned
to the Trustee no later than 3.00 p.m. on Friday, 6 August 1999.
If you do not wish to tender for the Cash Offer, you do not need to take any
action.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
<PAGE> 14
1.2 Plan restrictions to the offer
In the context of the Plan, the normal sale rules continue to apply and so the
Cash Offer only relates to DuPont shares that are no longer subject to a
retention period as at the Trustee's closing date for accepting Forms of
Instruction. Please note, Company Purchased shares that are no longer subject to
a retention period but which have been held for less than three years on 10
August 1999 will be subject to income tax.
Participation in the Cash Offer will not be deemed a sale for the purposes of
the limit on the number of sales allowed in a tax year under the Plan. No
brokerage fees or other administration charges will apply to sales under the
Cash Offer.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Trustee will notify you of the new date
to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont Plan shares, you should complete the enclosed Form of Instruction,
following the instructions in this letter. Please note that you cannot alter
your instructions to the Trustee.
If you do not wish to tender for the Cash Offer in respect of any of your DuPont
Plan shares you do not need to take any action.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Plan under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely U.K. taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont Plan shares,
assuming that you are resident or ordinarily resident in the U.K. for taxation
purposes. If you are in any doubt as to your tax position you should consult a
professional adviser.
<PAGE> 15
3.1 Income tax
If you instruct the Trustee to tender for the Cash Offer for any Company
Purchased DuPont shares that have been held for less than three years, income
tax will be payable in respect of the cash which the Trustee receives on your
behalf. The amount subject to income tax will generally be the original market
value of those DuPont Plan shares in respect of which you have successfully
tendered under the Cash Offer. As mentioned, the tax position will be the same
as for a normal sale and any amount that is subject to income tax will be
reduced if you have reached age 60 or you have left DuPont due to injury,
disability or redundancy.
Income tax will be deducted before any cash due under the Cash Offer is paid to
you. (See 4. Settlement below).
3.2 Capital gains tax
If you receive cash in respect of your DuPont Plan shares, you may be liable to
capital gains tax on the difference between the cash consideration received and
the original cost of the shares under capital gains tax rules i.e. the base
cost.
You will not, however, be liable to capital gains tax unless your chargeable
gains (less allowable losses) from all sources during the tax year 1999/2000
exceed the annual exemption. The annual exemption for 1999/2000 is pound
sterling 7,100. You should ensure that the relevant details are included on a
tax return under the self-assessment procedure for the 1999/2000 tax year.
3.3 U.S. withholding tax
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding will be
applied to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. Each participant may have to
complete appropriate forms for repayment and apply to the Internal Revenue
Service in the U.S. The facts of each case will determine whether a refund can
be claimed. On payment of the proceeds, the Trustee will notify you of any
available information on the refund procedure.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
<PAGE> 16
3.4 Risk of gain being taxed as income
Participants are referred to the Offer to Purchase and Section 14 "United
Kingdom" which highlights a remote possibility that part of the gain on a
disposal may be taxed as income and not as a capital gain.
4. SETTLEMENT
Although the Cash Offer is in $U.S., the proceeds will be converted by the
Trustee and paid to you in pound sterling STG.
If you are a current employee within DuPont, then the amount received by the
Trustee for your DuPont Plan shares, which is liable for income tax, will be
sent by the Trustee to your employing company to process through the payroll
system. The amount that is not liable to income tax will be sent to you by
cheque separately by the Trustee.
If you are no longer an employee of DuPont, the Trustee will deduct income tax
at the basic rate on the amount liable to income tax, and remit the balance and
the amount not liable to income tax by cheque to you at your registered address.
If you are subject to income tax at the higher rate, you will be liable to pay
the additional tax due under the self-assessment procedure and you should ensure
that details are included on a tax return for the 1999/2000 tax year.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Trustee to tender for the Cash Offer in respect of all
or some of your DuPont Plan shares, you should complete the accompanying Form of
Instruction and return it at your own risk to the Trustee, at PO Box 144,
Norfolk House, Wellesley Road, Croydon CR9 3EB in the enclosed envelope so that
it is received no later than 3.00 p.m. on Friday, 6 August 1999. (This will give
the Trustee time to act before Tuesday, 10 August 1999, which is the closing
date of the Cash Offer.)
As an alternative to posting your form to the Trustee you may fax your form to
0181 666 8118. If you use the fax, please check with the Trustee that your form
has been received by telephoning 0181 666 8285. Proof of sending is not proof of
receipt.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE TRUSTEE. IF YOU WISH
TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT
YOUR FORM OF INSTRUCTION. THE FAX SYSTEM MAY BE EXPERIENCING HEAVY CALL VOLUME
AND YOU MAY NOT BE ABLE TO DELIVER YOUR FORM OF INSTRUCTION BEFORE THE DEADLINE.
If you do not wish the Trustee to tender for the Cash Offer on behalf of your
DuPont Plan shares you should ignore the Form of Instruction and you do not need
to take any action.
If you have any questions, please contact the DuPont Share Ownership Plan
Hotline on 0181 666 8388. Please note that no recommendation or advice on a
particular course of action can be given by the Trustee.
Issued by Noble Lowndes Settlement Trustees Limited
<PAGE> 17
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to
seek your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
TO: CLIENTS IN THE CONOCO ISA (ISA).
Dear Client
CASH OFFER BY E.I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Account
Manager of the ISA is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the ISA and all shares held in the ISA are deemed to be held by
Non-U.S. Persons. Shares held in the ISA are only eligible to be tendered in the
Cash Offer and may not be tendered in the Exchange Offer.
The purpose of this letter is to explain to you, as a participant in the
Individual Savings Account (ISA), the implications of the Cash Offer. A copy of
the Offer to Purchase is enclosed which you should read carefully before making
a decision. This letter is not designed to encourage you to tender or hold your
DuPont shares. It is intended to inform you that there is a programme for
tendering DuPont shares held in the ISA and that you may participate as
indicated. If you own shares of DuPont stock other than in the ISA you should
receive separate mailings relating to those shares.
If you wish to direct the Account Manager to tender for the Cash Offer on behalf
of some or all of your DuPont shares held in the ISA which are eligible for the
Cash Offer, you must complete the enclosed Proforma. This must be returned to
Stocktrade no later than 3.00 p.m. on Friday the 6th of August, 1999.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER, YOU DO NOT NEED TO TAKE ANY
ACTION.
1. TERMS OF THE CASH OFFER
1.1 The Offer
In summary, DuPont is making an offer of $80.76 in cash for
every DuPont share. Participants should note, however, that
U.S. withholding tax will be deducted from the gross proceeds
payable to tendering shareholders. (IMPORTANT see 2.2 U.S.
withholding tax below).
1.2 Scaling down of the offer
The number of DuPont shares that will be accepted under the
Cash Offer is 8 million. If more shares than the maximum
amount are tendered, the number of shares to be accepted from
each tendering shareholder will be reduced proportionally
among all the tendering shareholders. Proportionate acceptance
of DuPont shares from shareholders is called proration.
<PAGE> 18
1.3 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which
DuPont may terminate the Cash Offer, including if the Exchange
Offer is not consummated.
1.4 Extension of the Offer
DuPont has reserved the right to extend the period of time
during which the offer is open if any of the conditions for
completion are not satisfied. In the event the offer period is
extended, the Account Manager will notify you of the new date
to return your form.
2. TAXATION AND U.S. WITHHOLDING TAX
2.1 There are no UK income tax or capital gains tax liabilities on
disposal of the shares held within the SCP and ISA.
2.2 Under U.S. tax regulations the proceeds of the Cash Offer may
be treated as a dividend and must, therefore, be subject
initially to tax withholding in the U.S. It is anticipated
that the reduced 15% rate of tax withholding will be applied
to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE
U.S. TAX WITHHELD. The Offer to Purchase indicates the grounds
under which you might be able to recover the U.S. tax
withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will
depend on the facts and circumstances for each shareholder and
the overall effect of the Split-Off on DuPont's subsequent
share structure.
Whether or not the U.S. tax can be reclaimed can only be
determined after completion of the Exchange Offer transaction
and each participant will have to complete appropriate forms
for repayment and apply to the Internal Revenue Service in the
U.S. The facts of each case will determine whether a refund
can be claimed.
Participants are referred to the Offer to Purchase and Section
3 "Withholding on Amounts Payable to Non-U.S. Persons"; "U.S.
Federal Income Tax Backup Withholding" and Section 14 "Certain
United States Federal Income Tax Consequences" in relation to
U.S. withholding tax.
3. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some
of your DuPont ISA shares, you should complete the enclosed Proforma
following the instructions in this letter. Please note that you cannot
alter your instructions to the Account Manager.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER IN RESPECT OF ANY OF
YOUR DUPONT ISA SHARES YOU DO NOT NEED TO TAKE ANY ACTION.
4. IMPLICATIONS OF ACCEPTING THE CASH OFFER (ISA)
4.1 It is possible to tender for part or all of your holding of
DuPont shares and hold cash in the Conoco ISA. This can be
achieved under Inland Revenue Rules and regulations, but the
cash received in the Account would be re-invested into Conoco
Class B Common Stock on the next designated dealing day.
You should carefully consider the implications before making your
decision which could impact on your current tax free investment. If you
take no action then your DuPont shares will remain a tax free
investment within your ISA. There are no brokerage fees or charges
levied against you if you elect to tender for all or part of your
shares.
<PAGE> 19
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Account Manager to tender for the Cash Offer
in respect of all or some of your DuPont ISA shares, you should
complete the accompanying Proforma and return it at your own risk to:
The Account Manager, Conoco ISA, Stocktrade, PO Box 1076, 10 George
Street, Edinburgh, EH2 2PZ. in the enclosed envelope so that it is
received no later than 3.00 p.m. on Friday the 6th of August, 1999.
(This will give the Account Manager time to act before Tuesday the 10th
of August, 1999, which is the closing date of the Cash Offer).
As an alternative to posting your form to Stocktrade you may fax your
form to 0131 240 0424. This must be followed up in writing in the post.
This is an Inland Revenue requirement.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE ACCOUNT
MANAGER. DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT YOUR PROFORMA. IF
YOU DO NOT WISH THE ACCOUNT MANAGER TO TENDER FOR THE CASH OFFER ON
BEHALF OF YOUR CONOCO ISA SHARES YOU DO NOT NEED TO TAKE ANY ACTION.
If you have any questions, please contact Stocktrade and ask for the
Conoco ISA on 0131 529 0456. Please note that no recommendation or
advice on a particular course of action can be given by the Account
Manager.
Yours sincerely
for and on behalf
of Stocktrade
Mark Murray
Manager
STOCKTRADE
A DIVISION OF BREWIN DOLPHIN SECURITIES LTD
A MEMBER OF THE LONDON STOCK EXCHANGE REGULATED BY THE SECURITIES &
FUTURES AUTHORITY LTD REGISTERED OFFICE 5 GILTSPUR STREET LONDON
EC1A REGISTERED IN ENGLAND NO. 2135876
<PAGE> 20
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to
seek your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
TO: CLIENTS IN THE DUPONT SINGLE COMPANY PEP (SCP).
Dear Client
CASH OFFER BY E.I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Plan Manager
of the SCP is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the SCP and all shares held in the SCP are deemed to be held by
Non-U.S. Persons. Shares held in the SCP are only eligible to be tendered in the
Cash Offer and may not be tendered in the Exchange Offer.
The purpose of this letter is to explain to you, as a participant in the Single
Company Pep (SCP), the implications of the Cash Offer. A copy of the Offer to
Purchase is enclosed which you should read carefully before making a decision.
This letter is not designed to encourage you to tender or hold your DuPont
shares. It is intended to inform you that there is a programme for tendering
DuPont shares held in the SCP and that you may participate as indicated. If you
own shares of DuPont stock other than in the SCP you should receive separate
mailings relating to those shares.
If you wish to direct the Plan Manager to tender for the Cash Offer on behalf of
some or all of your DuPont shares held in the SCP which are eligible for the
Cash Offer, you must complete the enclosed Proforma. This must be returned to
Stocktrade no later than 3.00 p.m. on Friday the 6th of August, 1999.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER, YOU DO NOT NEED TO TAKE ANY
ACTION.
1. TERMS OF THE CASH OFFER
1.1 The Offer
In summary, DuPont is making an offer of $80.76 in cash for
every DuPont share. PARTICIPANTS SHOULD NOTE, HOWEVER, THAT
U.S. WITHHOLDING TAX WILL BE DEDUCTED FROM THE GROSS PROCEEDS
PAYABLE TO TENDERING SHAREHOLDERS. (IMPORTANT SEE 2.2 U.S.
WITHHOLDING TAX BELOW).
1.2 Scaling down of the offer
The number of DuPont shares that will be accepted under the
Cash Offer is 8 million. If more shares than the maximum
amount are tendered, the number of shares to be accepted from
each tendering shareholder will be reduced proportionally
among all the tendering shareholders. Proportionate acceptance
of DuPont shares from shareholders is called proration.
1.3 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which
DuPont may terminate the Cash Offer, including if the Exchange
Offer is not consummated.
1.4 Extension of the Offer
DuPont has reserved the right to extend the period of time
during which the offer is open if any of the conditions for
completion are not satisfied. In the event the offer period is
extended, the Plan Manager will notify you of the new date to
return your form.
<PAGE> 21
2. TAXATION AND U.S. WITHHOLDING TAX
2.1 There are no UK income tax or capital gains tax liabilities on
disposal of the shares held within the SCP and ISA.
2.2 Under U.S. tax regulations the proceeds of the Cash Offer may
be treated as a dividend and must, therefore, be subject
initially to tax withholding in the U.S. It is anticipated
that the reduced 15% rate of tax withholding will be applied
to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE
U.S. TAX WITHHELD. The Offer to Purchase indicates the grounds
under which you might be able to recover the U.S. tax
withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will
depend on the facts and circumstances for each shareholder and
the overall effect of the Split-Off on DuPont's subsequent
share structure.
Whether or not the U.S. tax can be reclaimed can only be
determined after completion of the Exchange Offer transaction
and each participant will have to complete appropriate forms
for repayment and apply to the Internal Revenue Service in the
U.S. The facts of each case will determine whether a refund
can be claimed.
Participants are referred to the Offer to Purchase and Section
3 "Withholding on Amounts Payable to Non-U.S. Persons"; "U.S.
Federal Income Tax Backup Withholding" and Section 14 "Certain
United States Federal Income Tax Consequences" in relation to
U.S. withholding tax.
3. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some
of your DuPont SCP shares, you should complete the enclosed Proforma
following the instructions in this letter. Please note that you cannot
alter your instructions to the Plan Manager.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER IN RESPECT OF ANY OF
YOUR DUPONT SCP SHARES YOU DO NOT NEED TO TAKE ANY ACTION.
4. IMPLICATIONS OF ACCEPTING THE CASH OFFER (SCP)
4.1 If you elect to tender for the Cash Offer for only some of
your DuPont shares then it is not possible under Inland
Revenue rules and regulations to hold the cash in the SCP with
the remaining DuPont shares. You can only hold one stock in
your SCP and you cannot re-invest the cash into an American
stock as it is deemed a non-qualifying investment. You will
therefore receive a cheque in your own name for the sale
proceeds. This will reduce the value of the investment you
currently hold in a tax free product.
4.2 If you elect to tender for all of the DuPont shares held in
the SCP then the cash could be held in the SCP. You would have
to re-invest all the proceeds into a qualifying SCP investment
(UK Equity) within 42 days. The Plan would no longer remain as
a DuPont SCP it would become a Self Select Single Company
Personal Equity Plan. Alternatively, you could take all the
cash and close the plan or transfer the SCP to another
provider by instructing the Plan Manager in writing. (IF YOU
APPLIED FOR THE TENDER FOR ALL SHARES AND THERE WAS SCALING
DOWN AS DETAILED IN 1.2 THEN THE IMPLICATIONS OUTLINED IN 4.1
WOULD APPLY).
You should carefully consider the implications before making your
decision which could impact on your current tax free investment. IF YOU
TAKE NO ACTION THEN YOUR DUPONT SHARES WILL REMAIN A TAX FREE
INVESTMENT WITHIN YOUR SCP. There are no brokerage fees or charges
levied against you if you elect to tender for all or part of your
shares.
<PAGE> 22
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Plan Manager to tender for the Cash Offer in
respect of all or some of your DuPont SCP shares, you should complete
the accompanying Proforma and return it at your own risk to: - The Plan
Manager, DuPont SCP, Stocktrade, PO Box 1076, 10 George Street,
Edinburgh, EH2 2PZ. in the enclosed envelope so that it is received no
later than 3.00 p.m. on Friday the 6th of August, 1999. (This will give
the Plan Manager time to act before Tuesday the 10th of August, 1999,
which is the closing date of the Cash Offer).
As an alternative to posting your form to Stocktrade you may fax your
form to 0131 240 0424. This must be followed up in writing in the post.
This is an Inland Revenue requirement.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE PLAN
MANAGER. DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT YOUR PROFORMA. IF
YOU DO NOT WISH THE PLAN MANAGER TO TENDER FOR THE CASH OFFER ON BEHALF
OF YOUR DUPONT SCP SHARES YOU DO NOT NEED TO TAKE ANY ACTION.
If you have any questions, please contact Stocktrade and ask for the
DuPont SCP on 0131 529 0456. Please note that no recommendation or
advice on a particular course of action can be given by the Plan
Manager.
Yours sincerely
for and on behalf
of Stocktrade
Mark Murray
MANAGER
STOCKTRADE
A DIVISION OF BREWIN DOLPHIN SECURITIES LTD
A MEMBER OF THE LONDON STOCK EXCHANGE REGULATED BY THE SECURITIES &
FUTURES AUTHORITY LTD REGISTERED OFFICE 5 GILTSPUR STREET LONDON
EC1A REGISTERED IN ENGLAND NO. 2135876
<PAGE> 23
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to
seek your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
TO: CLIENTS IN THE DUPONT SINGLE COMPANY PEP (SCP) & CONOCO ISA (ISA).
Dear Client
CASH OFFER BY E.I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. Persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Plan Manager
of the SCP and ISA is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the SCP and ISA and all shares held in the SCP and ISA are
deemed to be held by Non-U.S. Persons. SHARES HELD IN THE SCP AND ISA ARE ONLY
ELIGIBLE TO BE TENDERED IN THE CASH OFFER AND MAY NOT BE TENDERED IN THE
EXCHANGE OFFER.
The purpose of this letter is to explain to you, as a participant in the Single
Company Pep (SCP) and Individual Savings Account (ISA), the implications of the
Cash Offer. A copy of the Offer to Purchase is enclosed which you should read
carefully before making a decision. This letter is not designed to encourage you
to tender or hold your DuPont shares. It is intended to inform you that there is
a programme for tendering DuPont shares held in the SCP and ISA and that you may
participate as indicated. If you own shares of DuPont stock other than in the
SCP and ISA you should receive separate mailings relating to those shares.
If you wish to direct the Plan Manager to tender for the Cash Offer on behalf of
some or all of your DuPont shares held in the SCP and ISA which are eligible for
the Cash Offer, you must complete the enclosed Proformas. The Form(s) must be
returned to Stocktrade no later than 3.00 p.m. on Friday the 6th of August,
1999.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER, YOU DO NOT NEED TO TAKE ANY
ACTION.
1. TERMS OF THE CASH OFFER
1.1 The Offer
In summary, DuPont is making an offer of $80.76 in cash for
every DuPont share. Participants should note, however, that
U.S. withholding tax will be deducted from the gross proceeds
payable to tendering shareholders. (IMPORTANT see 2.2 U.S.
withholding tax below).
1.2 Scaling down of the offer
The number of DuPont shares that will be accepted under the
Cash Offer is 8 million. If more shares than the maximum
amount are tendered, the number of shares to be accepted from
each tendering shareholder will be reduced proportionally
among all the tendering shareholders. Proportionate acceptance
of DuPont shares from shareholders is called proration.
1.3 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which
DuPont may terminate the Cash Offer, including if the Exchange
Offer is not consummated.
<PAGE> 24
1.4 Extension of the Offer
DuPont has reserved the right to extend the period of time
during which the offer is open if any of the conditions for
completion are not satisfied. In the event the offer period is
extended, the Plan Manager will notify you of the new date to
return your form/forms.
2. TAXATION AND U.S. WITHHOLDING TAX
2.1 There are no UK income tax or capital gains tax liabilities on
disposal of the shares held within the SCP and ISA.
2.2 Under U.S. tax regulations the proceeds of the Cash Offer may
be treated as a dividend and must, therefore, be subject
initially to tax withholding in the U.S. It is anticipated
that the reduced 15% rate of tax withholding will be applied
to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE
U.S. TAX WITHHELD. The Offer to Purchase indicates the grounds
under which you might be able to recover the U.S. tax
withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will
depend on the facts and circumstances for each shareholder and
the overall effect of the Split-Off on DuPont's subsequent
share structure.
Whether or not the U.S. tax can be reclaimed can only be
determined after completion of the Exchange Offer transaction
and each participant will have to complete appropriate forms
for repayment and apply to the Internal Revenue Service in the
U.S. The facts of each case will determine whether a refund
can be claimed.
Participants are referred to the Offer to Purchase and Section
3 "Withholding on Amounts Payable to Non-U.S. Persons"; "U.S.
Federal Income Tax Backup Withholding" and Section 14 "Certain
United States Federal Income Tax Consequences" in relation to
U.S. withholding tax.
3. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some
of your DuPont SCP and ISA shares, you should complete the enclosed
Proformas following the instructions in this letter. Please note that
you cannot alter your instructions to the Plan Manager.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER IN RESPECT OF ANY OF
YOUR DUPONT SCP AND ISA SHARES YOU DO NOT NEED TO TAKE ANY ACTION.
4. IMPLICATIONS OF ACCEPTING THE CASH OFFER (SCP AND ISA)
SCP
4.1 If you elect to tender for the Cash Offer for only some of
your DuPont shares then it is not possible under Inland
Revenue rules and regulations to hold the cash in the SCP with
the remaining DuPont shares. You can only hold one stock in
your SCP and you cannot re-invest the cash into an American
stock as it is deemed a non-qualifying investment. You will
therefore receive a cheque in your own name for the sale
proceeds. This will reduce the value of the investment you
currently hold in a tax free product.
4.2 If you elect to tender for all of the DuPont shares held in
the SCP then the cash could be held in the SCP. You would have
to re-invest all the proceeds into a qualifying SCP investment
(UK Equity) within 42 days. The Plan would no longer remain as
a DuPont SCP it would become a Self Select Single Company
Personal Equity Plan. Alternatively, you could take all the
cash and close the plan or transfer the SCP to another
provider by instructing the Plan Manager in writing. (If you
applied for the tender for all shares and there was scaling
down as detailed in 1.2 then the implications outlined in 4.1
would apply). ISA
4.3 It is possible to tender for part or all of your holding of
DuPont shares and hold cash in the Conoco ISA. This can be
achieved under Inland Revenue Rules and regulations, but the
cash received in the Account would be re-invested into Conoco
Class B Common Stock on the next designated dealing day.
<PAGE> 25
You should carefully consider the implications before making
your decision which could impact on your current tax free
investment. If you take no action then your Dupont shares will
remain a tax free investment within your SCP and ISA. There
are no brokerage fees or charges levied against you if you
elect to tender for all or part of your shares.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Plan Manager to tender for the Cash Offer in
respect of all or some of your DuPont SCP and/or ISA shares, you should
complete the accompanying Proformas and return the Form(s) at your own
risk to: - The Plan Manager, DuPont SCP & ISA, Stocktrade, PO Box 1076,
10 George Street, Edinburgh, EH2 2PZ. in the enclosed envelope so that
it is received no later than 3.00 p.m. on Friday the 6th of August,
1999. (This will give the Plan Manager time to act before Tuesday the
10th of August, 1999 which is the closing date of the Cash Offer).
As an alternative to posting your form to Stocktrade you may fax your
form to 0131 240 0424. This must be followed up in writing in the post.
This is an Inland Revenue requirement.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE PLAN
MANAGER. DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT YOUR PROFORMA. IF
YOU DO NOT WISH THE PLAN MANAGER TO TENDER FOR THE CASH OFFER ON BEHALF
OF YOUR DUPONT SCP AND/OR ISA SHARES YOU DO NOT NEED TO TAKE ANY
ACTION.
If you have any questions, please contact Stocktrade and ask for the
DuPont SCP & ISA on 0131 529 0456. Please note that no recommendation
or advice on a particular course of action can be given by the Plan
Manager.
Yours sincerely
for and on behalf
of Stocktrade
Mark Murray
MANAGER
STOCKTRADE
A DIVISION OF BREWIN DOLPHIN SECURITIES LTD
A MEMBER OF THE LONDON STOCK EXCHANGE REGULATED BY THE SECURITIES &
FUTURES AUTHORITY LTD REGISTERED OFFICE 5 GILTSPUR STREET LONDON
EC1A REGISTERED IN ENGLAND NO. 2135876
<PAGE> 26
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
To: Participants in the DuPont Share Shop (the Share Shop)
Dear Participant
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Share Shop is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Share Shop and all shares held in the Share Shop are deemed
to be held by Non-U.S. Persons. Shares held in the Share Shop are only eligible
to be tendered in the Cash Offer and may not be tendered in the Exchange Offer.
The purpose of this letter is to explain to you, as a participant in the Share
Shop, the implications of the Cash Offer. A copy of the Offer to Purchase is
enclosed which you should read carefully before making a decision. This letter
is not designed to encourage you to tender or hold your DuPont shares. It is
intended to inform you that there is a programme for tendering DuPont shares
held in the Share Shop and that you may participate as indicated.
If you own shares of DuPont stock other than in the Share Shop including in a
Merrill Lynch Blueprint account or in any DuPont or Conoco share plan, you
should receive separate mailings relating to those shares.
A Statement showing your DuPont shares held in the Share Shop is also enclosed
for ease of reference.
If you wish to direct the Trustee to tender for the Cash Offer on behalf of some
or all of your DuPont shares held in the Share Shop, you must complete the
enclosed Form of Instruction. This must be returned to the Trustee no later than
3.00 p.m. on Friday, 6 August 1999.
If you do not wish to tender for the Cash Offer, you do not need to take any
action.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
<PAGE> 27
1.2 Share Shop restrictions to the offer
In the context of the Share Shop, the Cash Offer relates to any DuPont shares
held in the Share Shop.
No brokerage fees or other administration charges will apply to sales under the
Cash Offer.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Trustee will notify you of the new date
to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont shares held in the Share Shop, you should complete the enclosed Form of
Instruction, following the instructions in this letter. Please note that you
cannot alter your instructions to the Trustee.
If you do not wish to tender for the Cash Offer in respect of any of your DuPont
shares you do not need to take any action.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Share Shop under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely U.K. taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont shares held
in the Share Shop, assuming that you are resident or ordinarily resident in the
U.K. for taxation purposes. IF YOU ARE IN ANY DOUBT AS TO YOUR TAX POSITION YOU
SHOULD CONSULT A PROFESSIONAL ADVISER.
3.1 Income tax
If you instruct the Trustee to tender for the Cash Offer for your DuPont shares
there will be no liability to income tax.
<PAGE> 28
3.2 Capital gains tax
If you receive cash in respect of your DuPont shares, you may be liable to
capital gains tax on the difference between the cash consideration received and
the original cost of the shares under capital gains tax rules i.e. the base
cost.
You will not, however, be liable to capital gains tax unless your chargeable
gains (less allowable losses) from all sources during the tax year 1999/2000
exceed the annual exemption. The annual exemption for 1999/2000 is pound
sterling 7,100. You should ensure that the relevant details are included on a
tax return under the self-assessment procedure for the 1999/2000 tax year.
3.3 U.S. withholding tax
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding will be
applied to the tender of shares from the Share Shop.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. Each participant may have to
complete appropriate forms for repayment and apply to the Internal Revenue
Service in the U.S. The facts of each case will determine whether a refund can
be claimed. On payment of the proceeds, the Trustee will notify you of any
available information on the refund procedure.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
3.4 Risk of gain being taxed as income
Participants are referred to the Offer to Purchase and Section 14 "United
Kingdom" which highlights a remote possibility that part of the gain on a
disposal may be taxed as income and not as a capital gain.
4. SETTLEMENT
Although the Cash Offer is in $U.S., the proceeds will be converted by the
Trustee and paid to you in pound sterling STG by cheque.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Trustee to tender for the Cash Offer in respect of all
or some of your DuPont shares held in the Share Shop, you should complete the
accompanying Form of Instruction and return it at your own risk to the Trustee,
at PO Box 144, Norfolk House, Wellesley Road, Croydon CR9 3EB in the enclosed
envelope so that it is received no later than 3.00 p.m. on Friday, 6 August
1999. (This will give the Trustee time to act before Tuesday, 10 August 1999,
which is the closing date of the Cash Offer.)
As an alternative to posting your form to the Trustee you may fax your form to
0181 666 8118. If you use
<PAGE> 29
the fax please check with the Trustee that your form has been received by
telephoning 0181 666 8285. Proof of sending is not proof of receipt.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE TRUSTEE. IF YOU WISH
TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT
YOUR FORM OF INSTRUCTION. THE FAX SYSTEM MAY BE EXPERIENCING HEAVY CALL VOLUME
AND YOU MAY NOT BE ABLE TO DELIVER YOUR FORM OF INSTRUCTION BEFORE THE DEADLINE.
If you do not wish the Trustee to tender for the Cash Offer on behalf of your
DuPont shares you should ignore the Form of Instruction and you do not need to
take any action.
If you have any questions, please contact the DuPont Share Ownership Plan
Hotline on 0181 666 8388. Please note that no recommendation or advice on a
particular course of action can be given by the Trustee.
Issued by Noble Lowndes Settlement Trustees Limited
<PAGE> 30
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. When
considering what action you should take, you are recommended immediately to seek
your own financial advice from your stockbroker, bank manager, solicitor,
accountant or other independent financial adviser duly authorised under the
Financial Services Act 1986.
To: Participants in the Conoco Share Shop (the Share Shop)
Dear Participant
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
DuPont is offering its shareholders that are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for $80.76 in cash
(the Cash Offer). The Cash Offer is being made substantially concurrently with
an exchange offer in the United States in which DuPont is offering U.S. persons
the opportunity to exchange DuPont common stock for shares of Conoco Class B
common stock (the Exchange Offer). The Exchange Offer is the mechanism by which
DuPont will dispose of its remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Share Shop is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Share Shop and all shares held in the Share Shop are deemed
to be held by Non-U.S. Persons. SHARES HELD IN THE SHARE SHOP ARE ONLY ELIGIBLE
TO BE TENDERED IN THE CASH OFFER AND MAY NOT BE TENDERED IN THE EXCHANGE OFFER.
The purpose of this letter is to explain to you, as a participant in the Share
Shop, the implications of the Cash Offer. A copy of the Offer to Purchase is
enclosed which you should read carefully before making a decision. This letter
is not designed to encourage you to tender or hold your DuPont shares. It is
intended to inform you that there is a programme for tendering DuPont shares
held in the Share Shop and that you may participate as indicated.
If you own shares of DuPont stock other than in the Share Shop including in a
Merrill Lynch Blueprint account or in any other Conoco or DuPont share plan, you
should receive separate mailings relating to those shares.
A Statement showing your DuPont shares held in the Share Shop is also enclosed
for ease of reference.
If you wish to direct the Trustee to tender for the Cash Offer on behalf of some
or all of your DuPont shares held in the Share Shop, you must complete the
enclosed Form of Instruction. This must be returned to the Trustee no later than
3.00 p.m. on Friday, 6 August 1999.
If you do not wish to tender for the Cash Offer, you do not need to take any
action.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
<PAGE> 31
1.2 Share Shop restrictions to the offer
In the context of the Share Shop, the Cash Offer relates to any DuPont shares
held in the Share Shop.
No brokerage fees or other administration charges will apply to sales under the
Cash Offer.
The Cash Offer does not apply to any Conoco Class A common stock allocated to
you under the Share Shop.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Trustee will notify you of the new date
to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont shares held in the Share Shop, you should complete the enclosed Form of
Instruction, following the instructions in this letter. Please note that you
cannot alter your instructions to the Trustee.
If you do not wish to tender for the Cash Offer in respect of any of your DuPont
shares you do not need to take any action.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Share Shop under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely U.K. taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont shares held
in the Share Shop, assuming that you are resident or ordinarily resident in the
U.K. for taxation purposes. If you are in any doubt as to your tax position you
should consult a professional adviser.
3.1 Income tax
If you instruct the Trustee to tender for the Cash Offer for your DuPont shares
there will be no liability to income tax.
<PAGE> 32
3.2 Capital gains tax
If you receive cash in respect of your DuPont shares, you may be liable to
capital gains tax on the difference between the cash consideration received and
the original cost of the shares under capital gains tax rules i.e. the base
cost.
You will not, however, be liable to capital gains tax unless your chargeable
gains (less allowable losses) from all sources during the tax year 1999/2000
exceed the annual exemption. The annual exemption for 1999/2000 is pound
sterling 7,100. You should ensure that the relevant details are included on a
tax return under the self-assessment procedure for the 1999/2000 tax year.
3.3 U.S. withholding tax
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding will be
applied to the tender of shares from the Share Shop.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. Each participant may have to
complete appropriate forms for repayment and apply to the Internal Revenue
Service in the U.S. The facts of each case will determine whether a refund can
be claimed. On payment of the proceeds, the Trustee will notify you of any
available information on the refund procedure.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
3.4 Risk of gain being taxed as income
Participants are referred to the Offer to Purchase and Section 14 "United
Kingdom" which highlights a remote possibility that part of the gain on a
disposal may be taxed as income and not as a capital gain.
4. SETTLEMENT
Although the Cash Offer is in $U.S., the proceeds will be converted by the
Trustee and paid to you in pound sterling STG by cheque.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Trustee to tender for the Cash Offer in respect of all
or some of your DuPont shares held in the Share Shop, you should complete the
accompanying Form of Instruction and return it at your own risk to the Trustee,
at PO Box 144, Norfolk House, Wellesley Road, Croydon CR9 3EB in the enclosed
envelope so that it is received no later than 3.00 p.m. on Friday, 6 August
1999. (This will give the Trustee time to act before Tuesday, 10 August 1999,
which is the closing date of the Cash Offer.)
As an alternative to posting your form to the Trustee you may fax your form to
0181 666 8118. If you use
<PAGE> 33
the fax please check with the Trustee that your form has been received by
telephoning 0181 666 8285. Proof of sending is not proof of receipt.
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE TRUSTEE. IF YOU WISH
TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO SUBMIT
YOUR FORM OF INSTRUCTION. THE FAX SYSTEM MAY BE EXPERIENCING HEAVY CALL VOLUME
AND YOU MAY NOT BE ABLE TO DELIVER YOUR FORM OF INSTRUCTION BEFORE THE DEADLINE.
If you do not wish the Trustee to tender for the Cash Offer on behalf of your
DuPont shares you should ignore the Form of Instruction and you do not need to
take any action.
If you have any questions, please contact the Conoco Stock Ownership Plan
Hotline on 0181 666 8285. Please note that no recommendation or advice on a
particular course of action can be given by the Trustee.
Issued by Noble Lowndes Settlement Trustees Limited
<PAGE> 34
July 14, 1999
Members of Association
organized under Du Pont K.K.
Employee Stock Ownership Plan
Re: Cash Offer to Du Pont Shareholders
Dear Sir or Madam:
This is to notify each member of the association organized
under DuPont K.K. Employee Stock Ownership Plan (the "Association") that E. I du
Pont de Nemours and Company ("DuPont") is offering its shareholders who are not
U.S. Persons ("Non-U.S. Persons") the opportunity to sell some or all of their
shares to DuPont up to the aggregate of 8 million shares for $80.76 per share in
cash (the "Cash Offer"). The Cash Offer is being made substantially concurrently
with an exchange offer in the United States in which DuPont is offering U.S.
Persons the opportunity to exchange DuPont common stock for shares of Conoco
Class B common stock (the "Exchange Offer"). The Exchange Offer to U.S. Persons
is the mechanism by which DuPont will dispose of the shares of Conoco Inc. it
currently owns. The Cash Offer is being extended to Non-U.S. Persons in order to
give them the opportunity to receive substantially equivalent value (before
deductions for applicable taxes) in cash as U.S. Persons receive in the Exchange
Offer. For purposes of the Cash Offer, individuals who are neither U.S.
citizens nor U.S. residents for U.S. federal income tax purposes are all
Non-U.S. Persons.
U.S. Persons may not participate in the Cash Offer, while
Non-U.S. Persons may not participate in the Exchange Offer. All shares held by
the Association are deemed to be held by Non-U.S. Persons. Therefore, shares
held by the Association are only eligible to be tendered in the Cash Offer and
may not be tendered in the Exchange Offer.
<PAGE> 35
Members of Association
July 14, 1999
Page 2
The purpose of this letter is to explain to the members of the
Association certain important terms of the Cash Offer and the procedures you
need to follow to participate in the Cash Offer. The Offer to Purchase, which
sets forth more detailed information concerning the Cash Offer, will be
delivered to you in a few days, and you are urged to read the Offer to Purchase
carefully before making a decision. It is important to note, however, that
special procedures apply to the Cash Offer to the Association. Thus, to the
extent that any differences exist between the instructions set forth in this
letter and the procedures set forth in the Offer to Purchase, the instructions
hereof shall govern. This letter is not designed to encourage you to tender or
hold your DuPont shares. It is intended to inform you that there is an offering
made for the DuPont shares held by the Association and that you may participate
as indicated. If you own shares of DuPont stock other than through the
Association, you should receive separate mailings relating to those shares.
1. Certain Important Terms of the Cash Offer
a. The Offer
DuPont is making an offer of $80.76 in cash for each DuPont
share. Members should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders as described below.
b. Proration
The number of DuPont shares that will be accepted under the
Cash Offer is limited to 8 million. If more shares than the maximum amount are
tendered, the number of shares to be accepted from each tendering shareholder
will be reduced proportionally among all the tendering shareholders. If part of
the shares you have tendered are not accepted under the Cash Offer because of
proration, such shares will
<PAGE> 36
Members of Association
July 14, 1999
Page 3
be returned to your accounts through Daiwa Securities K.K. ("Daiwa Securities"),
but will not be restored in the Association's pool.
c. Conditions for Completion of the Offer
The Offer to Purchase sets out certain circumstances in which
DuPont may not proceed with the Cash Offer. Such circumstances include the
situation where the Exchange Offer is not consummated.
d. Extension of the Offer
DuPont has reserved the right to extend the period of time
during which the offer is open. DuPont also has the right to terminate the offer
or to postpone payment for the tendered shares upon the termination of the
Exchange Offer or the occurrence of certain conditions specified in the Offer to
Purchase. The Chairman will notify you of such extension, termination or
postponement as soon as practicable.
2. Certain Tax Consequences
Set forth below is a summary of certain U.S. and Japanese tax
consequences in connection with the Cash Offer. Each member should consult his
or her tax advisor in Japan and the United States as to the particular tax
consequences to him or her of participating in the Cash Offer.
a. U.S. Federal Income Tax
Because the proceeds of the Cash Offer may be treated as a
dividend for U.S. federal income tax purposes, U.S. federal withholding tax
equal to 30% of the gross proceeds payable to Non-U.S. Persons will be withheld.
However, the rate
<PAGE> 37
Members of Association
July 14, 1999
Page 4
will be reduced to 15% pursuant to the income tax treaty between Japan and the
United States if the appropriate documentation is submitted through Daiwa
Securities. In addition, you may be eligible to obtain a refund from the
Internal Revenue Service of all or a portion of any tax withheld if you satisfy
certain conditions or otherwise establish that no tax or a reduced amount of tax
is due. For further information, you should refer to relevant tax information
set forth in the Offer to Purchase.
b. Japanese Income Tax
For Japanese income tax purposes, the transfer of DuPont
shares under the Cash Offer is most likely to be taxed as a sale of shares. In
such case, the capital gain of each member of the Association is generally
subject to taxation separately from other income at the flat rate of 26%.
Subject to certain conditions, the members of the Association may elect for
taxation by withholding. If so elected, 1.05% of the gross proceeds will be the
amount of capital gains tax.
3. Extracting Shares
In order to participate in the Cash Offer, members must
extract their shares first from the pool held by the Association and then make
arrangements to tender such shares to the Depository in the United States. To
extract their shares, the members have two options. One is taking their shares
out of the Association's pool (hikidashi). In this case, the members can take
out their shares only in multiples of 100 shares. Those who have less than 100
shares cannot remove their shares from the Association's pool. Another option is
leaving the Association (taikai). If the members choose this alternative, they
can take all of their shares, whether the number of the shares is less than 100
shares or the number is not in multiples of 100 shares (except for a fractional
share, for which the members will receive its cash
<PAGE> 38
Members of Association
July 14, 1999
Page 5
equivalent). However, it is important to note that, once they leave the
Association, they cannot be readmitted to the Association without the Chairman's
authorization.
Shares withdrawn from the Association by means of hikidashi or
taikai will be deposited in your individual account at Daiwa Securities, and
will be tendered to the Depository through Daiwa Securities.
4. Documentation to be Submitted and Deadline
If you wish to participate in the Cash Offer with respect to
some or all of your DuPont shares held by the Association, you must complete (i)
the Acceptance Notice to the Chairman; (ii) (a) Application for hikidashi, or
(b) Application for taikai; and (iii) Form of Agency Agreement to be submitted
to Daiwa Securities and any other documents or forms Daiwa Securities or Daiwa
Securities Capital Markets K.K. ("DSBCM") may request in connection with the
Cash Offer, and the documents (i), (ii) and (iii) will be delivered to you
shortly. If you would like to extract your shares by means of taikai, you must
return the properly completed and executed documents described above (other than
(iii)) to the Chairman no later than 4:00 p.m. on July 21, 1999. If you wish to
extract your shares by means of hikidashi, you must submit such documents to the
Chairman no later than 4:00 p.m. on July 26, 1999. With respect to the documents
set forth in (iii), further instructions will be provided by Daiwa Securities or
DSBCM through the Association. The above deadlines are set earlier than the
Expiration Date described on the Offer to Purchase due to procedural
requirements relating to the operations of the Association. Once you have
submitted the requisite documents, you cannot alter your instructions to the
Chairman.
If you do not wish to participate in the Cash Offer, you do
not need to take any action. Any DuPont shares that you do not tender under the
Cash Offer may remain in the Association's pool under the normal rules.
<PAGE> 39
Members of Association
July 14, 1999
Page 6
If you have any questions, please contact Hideki Yamanaka,
Human Resources, at 03-5434-6152 (extension 8040). Please note that no
recommendation or advice on a particular course of action can be given by the
Chairman.
Kazutoshi Hanaki, Chairman
<PAGE> 40
DU PONT (AUSTRALIA) LIMITED
PARENT COMPANY CASH-FOR-STOCK OFFER
INFORMATION FOR EMPLOYEE SHARE SAVINGS PLAN MEMBERS
The Trustee of the Du Pont (Australia) Limited Employee Share Savings Plan
(ESSP) has received an offer from DuPont to purchase the DuPont stock held by
ESSP, and has resolved to pass it on to the members of the Plan in proportion to
their individual entitlements at the date of the offer. Details of your
entitlement are available from Rhonda Robertson, Payroll Administrator on (02)
9923 6239.
Full details of the offer are set out in the Formal Offer Document, but the main
features are:
- - The offer is for the purchase of your stock for cash.
- - THE OFFER OFFICIALLY CLOSES ON TUESDAY, AUGUST 10, 1999 (NEW YORK TIME),
HOWEVER, TENDERS FOR PLAN MEMBERS MUST BE RECEIVED BY WEDNESDAY, AUGUST 4,
1999, IN ORDER FOR PROCESSING TO OCCUR.
- - The offer is for US$80.76 per share.
- - You may tender all of your shares, or a lesser number, but acceptances may
be scaled back if there is an oversubscription.
- - There will be no U.S. brokerage or similar charges to be paid by the member.
- - The proceeds will be paid out to ESSP from DuPont in U.S. dollars and ESSP
will then pay you in Australian dollars, using the then current exchange
rate.
ATTACHMENTS
1. Formal Offer to Purchase for Cash document
2. ESSP Withdrawal Form
3. Personal Acceptance Form
HOW TO ACCEPT THE OFFER
Complete and forward the ESSP Withdrawal Form and the Personal Acceptance Form
to Frances Pensabene at North Sydney.
These forms must be received by Frances no later than August 4, 1999. Original,
signed, hard copies must be provided, as fax copies are not acceptable.
ANY COMMENTS ON TAX IN THIS MEMO ARE FOR GENERAL INFORMATION
ONLY, AND ARE NO SUBSTITUTE FOR PROFESSIONAL ADVICE.
PLEASE READ THE OFFER DOCUMENT CAREFULLY, AND OBTAIN
PROFESSIONAL ADVICE BEFORE MAKING ANY DECISION.
<PAGE> 41
ISSUES TO CONSIDER
1. The proceeds will be taxed in Australia as ordinary income, and will incur
tax at your marginal rate which, for many people, is 48.5%. No Australian
tax will be withheld, but the proceeds must be reported in your next tax
return.
2. U.S. Withholding Tax on the gross proceeds will be deducted. This tax can
be 30%, but DuPont has lodged an IRS Form W-8 with Merrill Lynch, and this
should ensure that the tax is reduced to 15%. You may be able to offset
this against your Australian tax, or a refund may be claimed by filing a
U.S. tax return.
3. If you keep the proceeds for your own use, you will be subject to ESSP Rule
7.3, under which company subscriptions less than two years old are
forfeited.
4. If you contribute the proceeds to the Employee Savings Trust, which invests
in AMP insurance bonds, you can avoid this forfeiture. Funds transferred in
this way must be allowed to mature over the following two years.
<PAGE> 42
DUPONT (NEW ZEALAND) LIMITED
PARENT COMPANY CASH-FOR-STOCK OFFER
INFORMATION FOR EMPLOYEE SHARE SAVINGS PLAN MEMBERS
The Trustee of the DuPont (New Zealand) Limited Employee Share Savings Plan
(ESSP) has received an offer from DuPont to purchase the DuPont stock held by
ESSP, and has resolved to pass it on to the members of the Plan in proportion to
their individual entitlements at the date of the offer. Details of your
entitlement are available from Sharan Aikman, Human Resources, on 09 268 5502.
Full details of the offer are set out in the Formal Offer to Purchase for Cash
document, but the main features are:
- - The offer is for the purchase of your stock for cash.
- - THE OFFER OFFICIALLY CLOSES ON TUESDAY, AUGUST 10, 1999 (NEW YORK
TIME). HOWEVER, TENDERS FOR PLAN MEMBERS MUST BE RECEIVED BY WEDNESDAY,
AUGUST 4, 1999, IN ORDER FOR PROCESSING TO OCCUR.
- - The offer is for US$80.76 per share.
- - You may tender all of your shares, or a lesser number, but acceptances
may be scaled back if there is an over-subscription.
- - There will be no U.S. brokerage or similar charges to be paid by the
member.
- - The proceeds will be paid out to the ESSP from DuPont in U.S. dollars.
The ESSP will then pay you in New Zealand dollars, using the then
current exchange rate. These proceeds will be paid by cheque or will be
subject to either point (4) or (5) under Issuers to Consider.
ATTACHMENTS
1. Formal Offer to Purchase for Cash document
2. ESSP Withdrawal Form
3. Personal Acceptance Form
HOW TO ACCEPT THE OFFER
Complete and forward the ESSP Withdrawal Form and the Personal Acceptance Form
to Sharan Aikman, Auckland office.
These forms must be received by Sharan no later than August 4, 1999. Original,
signed, hard copies must be provided as facsimile copies are not acceptable.
ANY COMMENTS ON TAX IN THIS MEMO ARE FOR GENERAL INFORMATION
ONLY, AND ARE NO SUBSTITUTE FOR PROFESSIONAL ADVICE.
PLEASE READ THE OFFER DOCUMENT CAREFULLY, AND OBTAIN
PROFESSIONAL ADVICE BEFORE MAKING ANY DECISION.
<PAGE> 43
ISSUES TO CONSIDER
1. U.S. Withholding Tax on the gross proceeds will be deducted. This tax can
be 30%, but DuPont has lodged an IRS Form W-8 with Merrill Lynch, and this
should ensure that the tax is reduced to 15%.
2. It is unlikely there will be any income liable for tax in New Zealand.
Therefore, the Non-Resident Withholding Tax (NRWT) will not be available to
be claimed against any New Zealand income tax.
3. It may be possible to claim a refund of the NRWT from the US IRS by filing
a US tax return. You may incur a cost in doing so.
4. If you keep the proceeds for your own use, you will be subject to ESSP Rule
11.4, under which company contributions less than two years old are
forfeited.
5. If you contribute the proceeds to the Employee Managed Investment Fund
Trust, which invests in Unit Trusts, you can avoid this forfeiture. Funds
transferred in this way must be allowed to mature over the following two
years.
ANY COMMENTS ON TAX IN THIS MEMO ARE FOR GENERAL INFORMATION
ONLY, AND ARE NO SUBSTITUTE FOR PROFESSIONAL ADVICE.
PLEASE READ THE OFFER DOCUMENT CAREFULLY, AND OBTAIN
PROFESSIONAL ADVICE BEFORE MAKING ANY DECISION.
<PAGE> 44
IMPORTANT DOCUMENT REQUIRING YOUR IMMEDIATE ATTENTION.
When considering what action you should take, you are recommended to seek your
own financial advice from your stockbroker, bank or other independent financial
advisor.
TO: PARTICIPANTS IN THE CONOCO EMPLOYEE STOCK OWNERSHIP PLAN
("AKSJESPAREPLANEN")
CASH OFFER BY E. I. DUPONT DE NEMOURS & CO. (DUPONT)
This document offers some more detail about DuPont's offer to its shareholders
that are non-United States Persons the opportunity to sell some or all of their
shares to DuPont for $ 80.76 in cash per share (the Cash Offer). The Cash Offer
is being made substantially concurrently with an exchange offer in the United
States in which DuPont is offering U.S. Persons the opportunity to exchange
DuPont common stock for shares of Conoco Class B common stock (the Exchange
Offer). The Exchange Offer is the mechanism by which DuPont will dispose of its
remaining ownership of Conoco Inc.
U.S. Persons may not participate in the Cash Offer, while persons that are not
U.S. Persons may not participate in the Exchange Offer. Because the Trustee of
the Plan is a Non-U.S. Person, it receives the Cash Offer on behalf of
participants in the Plan and all shares held in the Plan are deemed to be held
by Non-U.S. Persons. Shares held in the Plan are only eligible to be tendered in
the Cash Offer and may not be tendered in the Exchange Offer.
The purpose of this letter is to explain to you, as a participant in the Plan,
the implications of the Cash Offer. A copy of the Offer to Purchase is enclosed
which you should read carefully before making a decision. This letter is not
designed to encourage you to tender or hold your DuPont shares. It is intended
to inform you that there is a program for tendering DuPont shares held in the
Plan and that you may participate as indicated.
If you own shares of DuPont stock other than in the Plan, including in a Merrill
Lynch Blueprint account or in any other Conoco or DuPont share plan, you should
receive separate mailings relating to those shares.
A Plan Statement showing your DuPont shares held in the Plan is also enclosed
for ease of reference.
If you wish to direct the Administrator (DnB) of the plan to tender for the Cash
Offer on behalf of some or all of your DuPont shares held in the Plan which are
eligible for the Cash Offer, you must complete the enclosed Form of Instruction
(svarskjema). This must be returned to the Administrator no later than 12:00.
on Wednesday, 4 August 1999.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER, YOU DO NOT NEED TO TAKE ANY
ACTION.
1. TERMS OF THE CASH OFFER
1.1 The offer
In summary, DuPont is making an offer of $ 80.76 in cash for every DuPont share.
Participants should note, however, that U.S. withholding tax will be deducted
from the gross proceeds payable to tendering shareholders. (IMPORTANT - see 3.3
U.S. withholding tax below).
1.2 Plan restrictions to the offer
No brokerage fees or other administration charges will apply to sales under the
Cash Offer.
<PAGE> 45
The Cash Offer does not apply to any Conoco Class A common stock allocated to
you under the Plan.
1.3 Scaling down of the offer
The number of DuPont shares that will be accepted under the Cash Offer is 8
million. If more shares than the maximum amount are tendered, the number of
shares to be accepted from each tendering shareholder will be reduced
proportionally among all the tendering shareholders. Proportionate acceptance of
DuPont shares from shareholders is called proration.
1.4 Conditions for completion of the offer
The Offer to Purchase sets out certain circumstances in which DuPont may not
proceed with the Cash Offer, including if the Exchange Offer is not consummated.
1.5 Extension of the offer
DuPont has reserved the right to extend the period of time during which the
offer is open if any of the conditions for completion are not satisfied. In the
event the offer period is extended, the Administrator will notify you of the new
date to return your form.
2. YOUR CHOICES
Should you wish to tender for the Cash Offer in respect of all or some of your
DuPont Plan shares, you should complete the enclosed Form of Instruction,
following the instructions in this letter. Please note that you cannot alter
your instructions to the Administrator.
IF YOU DO NOT WISH TO TENDER FOR THE CASH OFFER IN RESPECT OF ANY OF YOUR DUPONT
PLAN SHARES YOU DO NOT NEED TO TAKE ANY ACTION.
Any DuPont shares that you do not sell under the Cash Offer may remain in the
Plan under the normal rules.
3. TAXATION AND U.S. WITHHOLDING TAX
The following is a broad summary of the likely Norway taxation implications of
successfully tendering in the Cash Offer in respect of your DuPont Plan shares,
assuming that you are resident in Norway for taxation purposes. IF YOU ARE IN
ANY DOUBT AS TO YOUR TAX POSITION YOU SHOULD CONSULT A PROFESSIONAL ADVISOR.
3.1 Capital gains tax
A capital gain derived from the sale of shares is taxable at 28% based on the
first in - first out (FIFO) principle. Correspondingly, a capital loss is
deductible as per Norwegian tax rules.
Capital gains tax will apply on the difference between the cash consideration
received and the original cost of the shares.
Employees are responsible for paying any capital gains tax to Norwegian tax
authorities.
3.2 U.S. withholding tax
<PAGE> 46
Under U.S. tax regulations the proceeds of the Cash Offer may be treated as a
dividend and must, therefore, be subject initially to tax withholding in the
U.S. It is anticipated that the reduced 15% rate of tax withholding of the total
proceeds will be applied to the tender of shares from the Plan.
THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE U.S. TAX WITHHELD.
The Offer to Purchase indicates the grounds under which you might be able to
recover the U.S. tax withheld. It is not possible to know in advance that a
successful claim for recovery can be made since this will depend on the facts
and circumstances for each shareholder and the overall effect of the transaction
on DuPont's subsequent share structure.
Whether or not the U.S. tax can be reclaimed can only be determined after
completion of the Exchange Offer transaction. EMPLOYEES MAY NOT RECEIVE FULL
BENEFIT OF A 15% US TAX WITHHOLDING TOWARDS THE 28% CAPITAL GAINS TAX.
Each participant may have to complete appropriate forms for repayment and apply
to the Internal Revenue Service in the U.S.
Participants are referred to the Offer to Purchase and Section 3 "Withholding on
Amounts Payable to Non-U.S. Persons"; "U.S. Federal Income Tax Backup
Withholding" and Section 14 "Certain United States Federal Income Tax
Consequences" in relation to U.S. withholding tax.
4. PURCHASE OF CONOCO STOCKS
You will be able to re-invest your cash from the sale proceeds in Conoco stocks
(at marketprice) via your ESOP ("aksjespareplanen") in DNB. The 7 year retention
period will still apply. If the sale proceeds relates to free shares, you will
not have any retention restrictions. Brokerage fees will be paid by Conoco.
5. ACTION TO BE TAKEN BY YOU
If you wish to direct the Administrator to tender for the Cash Offer in respect
of all or some of your DuPont Plan shares, you should complete the accompanying
Form of Instruction (svarskjema) and return it at your own risk to the
Administrator (DNB) by fax (22481709) or mail so that it is received no later
than 12:00 on Wednesday, 4 August 1999. (This will give the Administrator time
to act before Monday, 9 August 1999, which is the closing date of the Cash
Offer.)
PLEASE NOTE THAT YOU CANNOT ALTER YOUR INSTRUCTIONS TO THE ADMINISTRATOR. IF YOU
WISH TO PARTICIPATE IN THE CASH OFFER, DO NOT WAIT UNTIL THE LAST MINUTE TO
SUBMIT YOUR FORM OF INSTRUCTION (SVARSKJEMA), SINCE THE FAX SYSTEM MAY BE BUSY.
If you do not wish to tender for the Cash Offer on behalf of your DuPont Plan
shares you should ignore the Form of Instruction and you do not need to take any
action.
<PAGE> 47
TIL ANSATTE I NORSKE CONOCO AS
VAR REF. DERES REF. DATO
Investorservice/PA Oslo, 12. juli 1999
AKSJESPAREPLAN "CONOCO" - INNLOSNING AV DUPONT DE NEMOURS AKSJER.
DuPont tilbyr deltakerne i Aksjespareplan "Conoco" om a innlose aksjene i DuPont
pa folgende betingelser:
1. INNLOSNING PRIS: US$80,76 pr. aksje.
2. ANTALL AKSJER:
Hvis tilbudet blir overtegnet vil alle beholdninger over 100 aksjer bli
redusert pa pro rata basis.
For beholdninger inntil 100 aksjer kan man unnga reduksjon hvis man onsker
det.
3. FRIST.
Dersom De onsker a akseptere tilbudet ma DnB ha mottatt Deres svar senest
innen kl. 12.00, onsdag 4. august 1999.
Deres instruksjoner kan endres/kanselleres frem til svarfristen.
Vennligst benytt vedlagte svarskjema.
4. OPPGJOR.
Det gis anledning til a reinvestere belopet i nye Conoco aksjer til
markedspris, og Conoco vil dekke omkostningene. Salgsprovenyet vil ellers bli
utbetalt via lonningskontoret i Conoco.
5. Det gjores oppmerksom pa at bindingsreglene heves kun for de DuPont aksjer
som faktisk blir innlost.
Med vennlig hilsen
for Den norske Bank ASA
Philip Aldridge
<PAGE> 1
July 14, 1999
To: Non-U.S. Persons Who Hold DuPont Stock in Blueprint Accounts
The DuPont Company is offering its Non-U.S. Persons stockholders the opportunity
to tender their holdings of DuPont common stock for cash. Shares will be
purchased without any brokerage fees or commissions.
We are sending you this letter to give you information about how to participate
in the Offer to Purchase for Cash (see enclosed document) with shares of DuPont
stock that you hold in your Blueprint account. Note: If you own shares of DuPont
stock in other accounts, you will receive separate mailings relating to those
shares of DuPont stock.
THE OFFER IS AVAILABLE ONLY TO DUPONT STOCKHOLDERS WHO ARE NON-U.S. PERSONS
AS DEFINED IN THE ENCLOSED OFFER TO PURCHASE FOR CASH. IF YOU ARE A U.S.
PERSON, YOU ARE ELIGIBLE FOR THE CONOCO CLASS B COMMON STOCK EXCHANGE OFFER.
FOR THE PURPOSES OF THE EXCHANGE OFFER, A U.S. PERSON IS ANY INDIVIDUAL WHO
IS A U.S. CITIZEN OR U.S. RESIDENT (FOR U.S. FEDERAL INCOME TAX PURPOSES).
IF YOU ARE A U.S. PERSON, YOU MAY PARTICIPATE IN THE EXCHANGE OFFER, AND YOU
SHOULD CONTACT MERRILL LYNCH FOR FURTHER INSTRUCTIONS.
CASH SUBJECT TO U.S. FEDERAL INCOME TAX WITHHOLDING
If you participate in this offer, the cash received for the DuPont stock
accepted for tender will be subject to U.S. tax withholding as described in the
enclosed Offer to Purchase for Cash.
THE ELECTION PERIOD EXPIRES AT 3 P.M. NEW YORK CITY TIME, MONDAY, AUGUST 9,
1999
Both the election period for your Blueprint account and the ability to change or
cancel your election will expire at the time and date shown above, unless the
exchange offer is extended. Note: For accounting purposes, the Blueprint
election period for the cash offer closes one day earlier than the election
period for the general public.
NUMBER OF SHARES OF DUPONT STOCK MAY BE PRORATED
The maximum number of shares of DuPont stock that will be accepted under the
cash offer is stated on the front cover of the Offer to Purchase for Cash. If
more shares than the maximum amount are tendered, the number of shares to be
accepted from tendering stockholders will be reduced proportionately, as
described in the Offer to Purchase for Cash. Proportionate acceptance of DuPont
shares from stockholders is called proration.
IF YOU HOLD FEWER THAN 100 SHARES OF DUPONT STOCK IN YOUR BLUEPRINT ACCOUNT AND
TENDER ALL OF THEM, YOU MAY REQUEST PREFERENTIAL TREATMENT TO HAVE YOUR TENDER
EXEMPTED FROM PRORATION.
- 1 -
<PAGE> 2
HOW MANY SHARES YOU MAY TENDER
You may tender all or only part of your holdings of DuPont stock by giving
directions to Merrill Lynch, and you may increase, decrease or cancel your
election at any time during the election period. To increase or decrease the
number of shares that you want to tender, you must revoke your prior election
and then make a new election. If you tender only a part of your holdings of
DuPont stock, you have made an election not to tender your remaining holdings of
DuPont stock.
DuPont shareholders who own less than 100 shares may voluntarily exempt
themselves from proration. Therefore, tender elections will fall into one of the
following three categories:
Option D - You hold less than 100 shares of DuPont stock and elect
proration.
Option E - You hold less than 100 shares of DuPont stock and elect NOT to
have proration.
Option F - You hold 100 shares or more and will be subject to proration,
if applicable.
The shares you tender must be stated as a specific number of shares (whole and
fractional). In other words, you may not express your tender as a percentage of
your holdings or as a dollar amount.
IF YOU DO NOT WANT TO TENDER ANY OF YOUR SHARES OF DUPONT STOCK
You do not need to do anything if you do not want to tender any of your shares
of DuPont stock in your Blueprint account. If you do not call to elect to tender
your shares, you will be considered to have made an election not to tender your
holdings of DuPont stock and your DuPont stock will not be tendered.
GIVE YOUR TENDER INSTRUCTIONS TO MERRILL LYNCH
An election to tender must be made by telephone. Special phone lines have been
set up at Merrill Lynch for you to provide your tender instructions. Tender
elections will be taken only over these special lines. If you call the regular
SHARES line, you will be asked to call back on the special tender phone line.
ANOTHER COMPANY WILL ANSWER QUESTIONS ABOUT THE OFFER TO PURCHASE FOR CASH
In keeping with securities industry practice, an "information agent," D.F. King
& Co., Inc., has been hired by DuPont to answer general questions about the
Offer to Purchase for Cash. Note: The agent cannot answer questions about your
Blueprint account; only Merrill Lynch can do that.
- 2 -
<PAGE> 3
WHERE TO CALL
- ---------------------------------------------------------------------------
Call Special phone When to call
numbers
- ---------------------------------------------------------------------------
To provide Merrill Lynch 732-563-8775 Monday - Friday
instructions to international 7 a.m. - 10 p.m.
tender your shares (call collect) New York City
of DuPont stock or time
(or later change 1-877-809-8005
your election) in in the U.S. . . . except at
your Blueprint (toll-free) the end of the
account election period
when the lines
close on Monday
at 3 p.m. New
York City time
- ---------------------------------------------------------------------------
If you have D. F. King & 212-269-5550 Monday - Friday
general questions Co., Inc. international 8 a.m. - 9 p.m.
about the offers (the information (call collect) New York City
agent) or time
1-800-755-3105
in the U.S. Saturday
(toll-free) 8 a.m. - 5 p.m.
New York City
time
- ---------------------------------------------------------------------------
DO NOT WAIT UNTIL THE LAST MINUTE
If you wait until near the end of the election period to call, the phone system
may be experiencing heavy call volume and you may not be able to reach a
representative before the election period expires.
THE CHOICE IS YOURS
This letter is not designed to encourage you to tender or hold your shares of
DuPont stock. It is intended to inform you that there is a program for tendering
shares of DuPont stock in the Blueprint account and that you may participate.
Please read the Offer to Purchase for Cash carefully before making a decision.
Also, please refer to the attached Q&A document which has been provided by
DuPont.
Sincerely,
Merrill Lynch Group Employee Services
- 3 -
<PAGE> 4
QUESTIONS AND ANSWERS
(Provided by DuPont)
TENDERING SHARES IN THE BLUEPRINT ACCOUNT
Q.1 HOW DO I DECIDE WHETHER TO TENDER?
A.1 To decide whether tendering is a good option for you, review all the
information that you received in this packet, including the Offer to
Purchase for Cash, just as you would with any other investment. You also
may want to consult with your tax and/or investment advisor before making
a final decision.
Q.2 HOW DO I TENDER?
A.2 During the election period, Merrill Lynch has special telephone numbers
that you may use to tender shares of DuPont stock.
Call 732-563-8775 international (call collect) or 1-877-809-8005 in the
U.S. (toll-free) if you want to tender.
YOU MUST CALL THE SPECIAL NUMBERS TO GIVE TENDER INSTRUCTIONS. You cannot
participate in the cash offer through the regular phone line.
Q.3 IF I PARTICIPATE IN THE CASH OFFER, HOW MANY SHARES MAY I TENDER?
A.3 You may tender all or any part of your shares of DuPont stock. If you
tender, you must tender a specific number of shares (whole and
fractional). Merrill Lynch cannot accept dollar amounts or percentages for
these transactions.
You cannot tender more shares of DuPont stock than you have in your
account at the time you call.
Note: If you do nothing, you have made an election not to tender your
holdings of DuPont stock and your DuPont stock will not be tendered.
- 4 -
<PAGE> 5
Q.4 CAN I CHANGE MY ELECTION BEFORE THE ELECTION PERIOD CLOSES?
A.4 While the election period is open, you may change or revoke a previously
provided tender instruction.
If the number of shares of DuPont stock in your account changes during the
election period and you want to change your tender instructions, you must
call the special Merrill Lynch tender phone number again.
YOU MUST CALL THE SPECIAL PHONE NUMBER TO MAKE CHANGES. You cannot make
changes by calling the regular phone line.
Q.5 WHAT IF THE OFFER TO PURCHASE FOR CASH IS OVERSUBSCRIBED?
A.5 In the event that more shares of DuPont stock are tendered than the
maximum that can be accepted for the cash offer, shares properly
tendered will be accepted on a prorated basis (except for those exempt
from proration). For example, assume that you have 200 shares in your
account and you tender all 200. Now suppose the offer is
oversubscribed by 15%. In that case, 170 shares of DuPont stock will
be accepted for cash, leaving you with 30 shares of DuPont stock in
your account.
Q.6 IF I PARTICIPATE IN THE OFFER TO PURCHASE FOR CASH IN MY BLUEPRINT
ACCOUNT, WILL I RECEIVE ANYTHING CONFIRMING THE TRANSACTION?
A.6 Yes, after the Offer to Purchase for Cash is closed and cash is in your
account, Merrill Lynch will send you a confirmation. At the time of your
tender election, Merrill Lynch will confirm an address to mail a check for
the cash proceeds net of U.S. taxes withheld. Otherwise, the net cash
proceeds will be placed in your cash-balance Blueprint account and will
not earn interest until you call Merrill Lynch to give investment
instructions.
Q.7 WILL I BE ALLOWED TO TENDER DUPONT STOCK OPTIONS?
A.7 You may tender only actual shares of DuPont common stock. You cannot
tender DuPont stock options. You may exercise vested stock options in
order to receive DuPont stock which may then be tendered for cash, but you
must allow ample time to receive the stock and tender it before the
election period closes.
- 5 -
<PAGE> 6
[MAKING A DECISION FLOWCHART]
- 6 -
<PAGE> 7
DUPONT (NEW ZEALAND) LIMITED
PARENT COMPANY CASH-FOR-STOCK OFFER
INFORMATION FOR BLUEPRINT BROKERAGE ACCOUNT HOLDERS
This is a brief summary of the offer by DuPont to purchase the DuPont stock held
by its Non-U.S. Person stockholders in Merrill Lynch Blueprint Brokerage
Accounts. Full details of the offer are set out in the Formal Offer to Purchase
for Cash document, but the main features are:
- The offer is for the purchase of your DuPont stock for cash.
- THE ELECTION PERIOD FOR DUPONT STOCK HELD IN YOUR MERRILL LYNCH
BLUEPRINT ACCOUNT EXPIRES AT 3.00 PM NEW YORK TIME ON MONDAY, AUGUST 9,
1999 (7.00 AM NEW ZEALAND TIME ON TUESDAY, AUGUST 10, 1999) AND
ACCEPTANCES RECEIVED BY MERRILL LYNCH AFTER THAT DATE WILL BE
DISREGARDED.
- The offer is for US$80.76 per share.
- Option holders may exercise their options in accordance with the terms
of the stock option plan, and may tender the resulting stock. Note,
however, that this is a time-consuming process, and the procedure
explained under 'How To Accept' must be followed carefully.
- You may tender all of your shares, or a lesser number, but acceptances
may be scaled back if there is an over-subscription.
- Only Non-U.S. Persons who hold DuPont stock may accept the cash offer.
- You must complete the exercise of your options before you can tender the
resulting shares.
- DuPont will pay all U.S. stock transfer fees (subject to limitations set
forth in the Offer to Purchase for Cash document).
- The proceeds will be paid to you in U.S. dollars shortly after shares of
DuPont stock have been accepted for payment.
ISSUES TO CONSIDER
1. Stock Holders: US Non-Resident Withholding Tax (NRWT) on the gross
proceeds will be deducted. This tax can be 30%, but should you have lodged
an IRS form W-8 with Merrill Lynch this should ensure that the tax is
reduced to 15%. It may be possible to claim a foreign tax credit for this
against your New Zealand income tax, or a refund of the NRWT from the US IRS
may be possible in some cases by filing a US tax return. You may incur a
cost in doing so.
2. Option Holders who exercise their options and then sell the shares will
be taxed in New Zealand on the total gain that is made. This amount is not
subject to PAYE in New Zealand but must be included in your annual New
Zealand income tax return.
The payment may also be subject to US Non-Resident Withholding Tax (NRWT) on
the gross proceeds. This tax can be 30%, but reduces to 15% if you have
supplied an IRS Form W-8 to Merrill Lynch. You may be able to claim the NRWT
as a foreign tax credit against your New Zealand income tax payable on the
benefit.
ANY COMMENTS ON TAX IN THIS MEMO ARE FOR GENERAL INFORMATION
ONLY, AND ARE NO SUBSTITUTE FOR PROFESSIONAL ADVICE.
PLEASE READ THE OFFER DOCUMENT CAREFULLY, AND OBTAIN
PROFESSIONAL ADVICE BEFORE MAKING ANY DECISION.
<PAGE> 8
HOW TO ACCEPT THE OFFER - STOCKHOLDERS
1. Notify acceptance to Merrill Lynch by telephone BEFORE 3.00 PM NEW YORK TIME
ON AUGUST 9, 1999. (7.00 AM NEW ZEALAND TIME ON AUGUST 10, 1999).
2. Facsimile acceptances are not possible.
HOW TO ACCEPT THE OFFER - OPTIONHOLDERS
1. Notify your exercise to Merrill Lynch by facsimile in the normal way, and
using the normal Exercise Form and procedure.
2. Merrill Lynch allows five working days for the processing of an exercise, so
your exercise facsimile must be received by them by approximately July 28,
1999. If you are exercising your options in order to obtain DuPont stock to
tender in this offer, you must ensure that this process is completed at
Merrill Lynch on time. STOCK RECEIVED FROM AN OPTION EXERCISE MUST BE IN
YOUR BLUEPRINT ACCOUNT BEFORE THE ELECTION PERIOD EXPIRES IN ORDER FOR YOU
TO TENDER THAT STOCK FOR THIS OFFER.
3. Our experience is that some exercises can take longer than five days to
process, so please allow ample time for this.
4. If you nominate a Cash Exercise, you must remit the full purchase price to
Merrill Lynch, as they will not process the exercise otherwise. Funds Wire
Transferred to the address shown on the Exercise Form should provide
immediate value to Merrill Lynch, but funds remitted by bank draft or cheque
require several days or longer for clearance. Wire Transfer is the preferred
method, but additional time must be allowed for if you prefer another method
of payment. CASH EXERCISES WHICH ARE DELAYED BY THE NON-ARRIVAL OR LATE
ARRIVAL OF THE FUNDS, FOR ANY REASON, MAY RESULT IN STOCK NOT BEING IN YOUR
BLUEPRINT ACCOUNT BEFORE THE ELECTION PERIOD EXPIRES.
5. You can, if you wish, telephone Merrill Lynch to confirm that your exercise
has been received and processed.
6. Finally, notify your acceptance to Merrill Lynch by telephone BEFORE 3.00 PM
NEW YORK TIME ON AUGUST 9, 1999 (7.00 AM NEW ZEALAND TIME ON AUGUST 10,
1999). FACSIMILE ACCEPTANCES ARE NOT POSSIBLE.
PROCEEDS.
- - AFTER THE OFFER TO PURCHASE FOR CASH IS CLOSED AND CASH IS IN YOUR ACCOUNT,
MERRILL LYNCH WILL SEND YOU A CONFIRMATION. THE CASH THAT IS PLACED IN YOUR
ACCOUNT WILL BE THE NET OF U.S. TAXES WITHHELD AND WILL NOT EARN INTEREST
UNTIL YOU CALL MERRILL LYNCH TO GIVE INVESTMENT OR MAILING INSTRUCTIONS.
IF YOU HAVE QUESTIONS.
- - ON MERRILL LYNCH'S TELEPHONE NUMBER, THEY HAVE ARRANGED FOR TRANSLATOR
ASSISTANCE TO BE PROVIDED ON REQUEST.
- - MERRILL LYNCH HAVE ALSO EMPLOYED AN INFORMATION AGENT, D.F. KING & CO.,
INCORPORATED TO ANSWER YOUR GENERAL QUESTIONS. THE TELEPHONE NUMBER FROM NEW
ZEALAND IS 00 1 212 269 5550 (CALL COLLECT) AND WILL BE OPEN MONDAY TO
FRIDAY BETWEEN 8.00 AM AND 9.00 PM NEW YORK TIME (12.00 MIDNIGHT - 1.00 PM
NEW ZEALAND TIME).
MERRILL LYNCH TELEPHONE NUMBER FROM NEW ZEALAND IS 00 1 732 563 8775 (CALL
COLLECT), AND WILL BE OPEN MONDAY TO FRIDAY BETWEEN 7.00 AM AND 10.00 PM NEW
YORK TIME (11.00 PM - 2.00 PM NEW ZEALAND TIME).
<PAGE> 9
DU PONT (AUSTRALIA) LIMITED
PARENT COMPANY CASH-FOR-STOCK OFFER
INFORMATION FOR BLUEPRINT BROKERAGE ACCOUNT HOLDERS
This is a brief summary of the offer by DuPont to purchase the DuPont stock held
by its Non-U.S. stockholders in Merrill Lynch Blueprint Brokerage Accounts. Full
details of the offer are set out in the Formal Offer to Purchase for Cash
document, but the main features are:
- The offer is for the purchase of your DuPont stock for cash.
- THE ELECTION PERIOD FOR DUPONT STOCK HELD IN YOUR MERRILL
LYNCH BLUEPRINT ACCOUNT EXPIRES AT 3.00 P.M. NEW YORK TIME ON
MONDAY, AUGUST 9, 1999 (5.00 AM SYDNEY TIME ON TUESDAY, AUGUST
10, 1999) AND ACCEPTANCES RECEIVED BY MERRILL LYNCH AFTER THAT
DATE WILL BE DISREGARDED.
- The offer is for US$80.76 per share.
- Optionholders may exercise their options in accordance with
the terms of the stock option plan, and may tender the
resulting stock. Note, however, that this is a time-consuming
process, and the procedure explained under 'How To Accept'
must be followed carefully.
- You may tender all of your shares, or a lesser number, but
acceptances may be scaled back if there is an
oversubscription.
- Only Non-U.S. persons who hold DuPont stock may accept the
offer.
- You must complete the exercise of your options before you can
tender the resulting shares.
- DuPont will pay all U.S. stock transfer fees (subject to
limitations set forth in the Offer to Purchase for Cash
document).
- The proceeds will be paid to you in U.S. dollars shortly after
shares of DuPont stock have been accepted for payment.
ISSUES TO CONSIDER
1. The gain received by Stockholders will be subject to
Australian Capital Gains Tax.
2. The gain received by Optionholders who exercise their options
and then sell the shares will be taxed in Australia as
Ordinary Income.
3. In both cases, U.S. Withholding Tax on the gross proceeds will
be deducted. This tax can be 30%, but reduces to 15% if you
have supplied a Form W-8 to Merrill Lynch. You may be able to
offset the U.S. Withholding Tax against your Australian tax,
or a refund may be claimed in some cases by filing a U.S. tax
return.
ANY COMMENTS ON TAX IN THIS MEMO ARE FOR GENERAL INFORMATION
ONLY, AND ARE NO SUBSTITUTE FOR PROFESSIONAL ADVICE.
PLEASE READ THE OFFER DOCUMENT CAREFULLY, AND OBTAIN
PROFESSIONAL ADVICE BEFORE MAKING ANY DECISION.
<PAGE> 10
HOW TO ACCEPT THE OFFER - STOCKHOLDERS
1. Notify acceptance to Merrill Lynch by telephone BEFORE 3.00 P.M. NEW
YORK TIME ON AUGUST 9, 1999.
2. Facsimile acceptances are not possible.
HOW TO ACCEPT THE OFFER - OPTIONHOLDERS
1. Notify your exercise to Merrill Lynch by fax in the normal way, and
using the normal Exercise Form and procedure.
2. Merrill Lynch allows five working days for the processing of an
exercise, so your exercise fax must be received by them by
approximately July 28, 1999. If you are exercising your options in
order to obtain DuPont stock to tender in this offer, you must ensure
that this process is completed at Merrill Lynch on time. STOCK RECEIVED
FROM AN OPTION EXERCISE MUST BE IN YOUR BLUEPRINT ACCOUNT BEFORE THE
ELECTION PERIOD EXPIRES IN ORDER FOR YOU TO TENDER THAT STOCK FOR THIS
OFFER.
3. Our experience is that some exercises can take longer than five days to
process, so please allow ample time for this.
4. If you nominate a Cash Exercise, you must remit the full purchase price
to Merrill Lynch, as they will not process the exercise otherwise.
Funds Wire Transferred to the address shown on the Exercise form should
provide immediate value to Merrill Lynch, but funds remitted by bank
draft or cheque require several days or longer for clearance. Wire
Transfer is the preferred method, but additional time must be allowed
for if you prefer another method of payment. CASH EXERCISES WHICH ARE
DELAYED BY THE NON-ARRIVAL OR LATE ARRIVAL OF THE FUNDS, FOR ANY
REASON, MAY RESULT IN STOCK NOT BEING IN YOUR BLUEPRINT ACCOUNT BEFORE
THE ELECTION PERIOD EXPIRES.
5. You can, if you wish, telephone Merrill Lynch to confirm that your
exercise has been received and processed.
6. Finally, notify your acceptance to Merrill Lynch by telephone BEFORE
3.00 P.M. NEW YORK TIME ON AUGUST 9, 1999 (5.00 AM SYDNEY TIME ON
AUGUST 10, 1999). FACSIMILE ACCEPTANCES ARE NOT POSSIBLE.
PROCEEDS..
- - AFTER THE OFFER TO PURCHASE FOR CASH IS CLOSED AND CASH IS IN YOUR
ACCOUNT, MERRILL LYNCH WILL SEND YOU A CONFIRMATION. THE CASH THAT IS
PLACED IN YOUR ACCOUNT WILL BE THE NET OF U.S. TAXES WITHHELD AND WILL
NOT EARN INTEREST UNTIL YOU CALL MERRILL LYNCH TO GIVE INVESTMENT OR
MAILING INSTRUCTIONS.
IF YOU HAVE QUESTIONS..
- - ON MERRILL LYNCH'S TELEPHONE NUMBER, THEY HAVE ARRANGED FOR TRANSLATOR
ASSISTANCE TO BE PROVIDED ON REQUEST.
- - MERRILL LYNCH HAVE ALSO EMPLOYED AN INFORMATION AGENT, D.F. KING & CO.,
INCORPORATED TO ANSWER YOUR GENERAL QUESTIONS AND THE TELEPHONE NUMBER
FROM AUSTRALIA IS 0011 1 212 269 5550 (CALL COLLECT) AND WILL BE OPEN
MONDAY TO FRIDAY BETWEEN 8.00 AM AND 9.00 PM NEW YORK TIME (10.00 PM -
11.00 AM SYDNEY TIME).
MERRILL LYNCH TELEPHONE NUMBER FROM AUSTRALIA IS 0011 1 732 563 8775 (CALL
COLLECT), AND WILL BE OPEN MONDAY TO FRIDAY BETWEEN 7.00 A.M. AND 10.00 P.M. NEW
YORK TIME (9.00 P.M. - 12 NOON SYDNEY TIME).
July 14, 1999
<PAGE> 1
E-Mail Message:
To: All DuPont Colleagues
From: Chad Holliday
Subject: Separating from Conoco - Final Steps
July 9, 1999
Last May, we announced our plan to exit the oil and gas business operated by
Conoco. At that time we pointed out how this move would permit DuPont and Conoco
to focus on the respective growth of each company, facilitate future
partnerships for each company, and allow each company to offer incentives to
employees that were more closely linked to performance. Proceeds from the
Conoco divestiture are being invested in DuPont through such key moves as
acquiring the remaining 50 percent of the Pharmaceutical joint venture, the
purchase of Herberts and the merger of Pioneer.
In September 1998, following a thorough review of all alternatives for
divesting its oil and gas business, DuPont's board of directors approved an
initial public offering of Conoco. In October 1998, Conoco completed its
initial public offering, and as a result DuPont currently owns approximately
70% of Conoco's total outstanding shares. DuPont is announcing its intention to
divest its remaining ownership interest in Conoco through an exchange offer
that will allow DuPont stockholders to exchange on a tax-free basis each DuPont
share for 2.95 shares of Conoco Class B common stock. The exchange offer will
be available only to DuPont stockholders who are United States persons, as
defined in the Offering Circular-Prospectus.
DuPont stockholders who are not United States persons will be eligible to
participate in an offer in which DuPont will purchase for cash shares of DuPont
common stock. DuPont is providing the cash offer because of regulatory,
administrative and tax considerations.
If the exchange offer or cash offer is oversubscribed, the DuPont shares
tendered will be generally exchanged or purchased on a pro rata basis, with
only a certain percentage of each person's shares being exchanged or purchased
by DuPont.
Employees who are DuPont stockholders will be able to participate in the
exchange or cash offers through the various U.S. and non U.S. employee
<PAGE> 2
plans which hold DuPont stock and through Merrill Lynch Blueprint Accounts. If
you are an employee who holds DuPont stock, you will receive information in the
next several days on how you can participate.
The divestiture of Conoco closes one chapter in our company's long history,
and allows us to turn the page to a new era of sustainable growth. With your
help, DuPont's third century will be the best one yet.
Chad
Note: Chad's previous messages to employees are posted at
http://www.lvs.dupont.com/ea/chad/html/messages.html
<PAGE> 1
TO: ALL EMPLOYEES
SUBJECT: FINAL STEP TOWARD INDEPENDENCE BEGINS
Just over a year ago, the plan to separate Conoco from DuPont was announced.
Today, the final step in that process began. DuPont set the exchange ratio for a
stock exchange offer being provided to its U.S. shareholders. Through the offer
- -- which will commence on Monday -- DuPont plans to divest its remaining
ownership in Conoco.
The exchange offer provides DuPont's U.S. shareholders the opportunity to
exchange their DuPont common stock for Conoco Class B common stock. The exchange
ratio is the number of Conoco shares that will be received for each share of
DuPont stock tendered. (DuPont's news release is included at the bottom of this
e-mail.)
DuPont is providing its non-U.S. shareholders the opportunity to sell their
DuPont stock back to the company for a specified price. The cash offer will
begin on Wednesday.
Participating in the offers is a matter of personal choice and should be a fully
informed decision. Included in this e-mail is a summary of how information about
the offers is being provided, as well as some telephone numbers to call if you
have questions.
As we continue our journey to independence, I'm gratified by the extraordinary
progress we've made over the past year. Through our IPO last October, investors
purchased 30 percent of Conoco's stock for $4.4 billion. This spring, we closed
a landmark $4 billion jumbo bond offering, and followed that success with a
short-term commercial paper program that raised $1 billion. Through these
programs, Conoco has paid off the $5 billion debt owed to DuPont in connection
with the separation.
The exchange offer is the biggest step yet toward making Conoco a completely
independent company, prepared to set its own course in the global energy
industry.
Over the next few days, two teams of senior Conoco managers will begin a road
show in support of the exchange offer, meeting with major DuPont institutional
investors in the United States. Our goal is to provide these investors with a
greater understanding of Conoco. We'll discuss our businesses, key strategies,
major projects and growth potential. We'll also talk about our core values and
the integrity, talent and dedication of our employees -- factors that will
determine our long-term business success.
1
<PAGE> 2
I want to thank each of you for your continuing commitment to achieve the
company's goals. It has been an exciting journey. I'm optimistic about the
future and our ability to significantly grow the company.
Archie
HOW INFORMATION ON THE OFFERS IS BEING PROVIDED
Below is a summary of how information about the stock exchange offer and the
cash offer is being provided to eligible DuPont shareholders.
The stock exchange offer is available to DuPont shareholders who are "U.S.
persons." A "U.S. person" is defined as a U.S. citizen or a resident of the U.S.
for federal income tax purposes. DuPont is including only "U.S. persons" in the
stock exchange offer for tax and administrative reasons.
The cash offer is being made to DuPont shareholders who are non-U.S. persons.
In general, DuPont shareholders will have 20 business days to indicate that they
wish to participate in the offers. Employees who hold DuPont stock through some
company plans, however, may have an earlier deadline (so certain administrative
functions can be carried out). Employees should pay close attention to the
deadlines included in the information they receive.
If the exchange offer or cash offer are oversubscribed, the DuPont shares
tendered will be exchanged or purchased on a pro rata basis, with only a certain
percentage of each person's shares being exchanged or purchased by DuPont.
The FOLLOWING INFORMATION IS PROVIDED FOR INFORMATION ONLY. YOU SHOULD NOT TAKE
ANY ACTION UNTIL YOU RECEIVE THE MAILINGS THAT ARE DESCRIBED BELOW.
TELEPHONE LINES: Special telephone lines have been established to answer
shareholders' questions about the offers. General questions should be directed
to D.F. King & Co., the information agent, Monday through Friday from 7 a.m. to
8 p.m. (all hours listed here are Houston time) and Saturday from 7 a.m. to 4
p.m. The toll-free number in the U.S. is 1-800-755-3105. Outside the U.S.,
shareholders should call collect 212-269-5550.
Offer letters that include procedures for exchanging stock held in company plans
and Merrill Lynch Blueprint Accounts will be mailed to eligible shareholders.
Questions regarding these procedures should be directed to the telephone numbers
provided in the offer letters.
2
<PAGE> 3
INFORMATION FOR U.S. SHAREHOLDERS
THE OFFERING CIRCULAR-PROSPECTUS: The offering circular-prospectus is being
mailed to DuPont's U.S. shareholders. This document includes Q & A section
about the exchange offer, a detailed analysis of both DuPont and Conoco, a
discussion of the risks of investing in Conoco and information on the terms of
the exchange offer and how to participate. The offering circular-prospectus
will be posted on the Houston Intranet's "Road to Independence" site (Offer
Information) on Monday, July 12 (the day the exchange offer commences). The
site can be accessed by clicking this link
http://www.ho.dupont.com/ccn/road/index.stm.
U.S. THRIFT PLAN INFORMATION: Conoco employees who are members in the U.S.
Thrift Plan and the U.S. Retail Thrift Plan will receive a letter in their
offering circular-prospectus package providing information on how to
participate in the exchange offer.
MERRILL LYNCH BLUEPRINT ACCOUNT INFORMATION: Conoco employees who hold DuPont
stock in Merrill Lynch Blueprint Accounts will receive a letter in their
offering circular-prospectus package providing information on how to
participate in the exchange offer.
INFORMATION FOR NON-U.S. SHAREHOLDERS
CASH OFFER INFORMATION: Details on the cash offer will be provided in an "Offer
to Purchase" document that will be mailed to DuPont shareholders by the
appropriate administrator of individual company plans or brokerage firms
through which DuPont stock is held in private accounts. The "Offer to Purchase"
document will be posted on the Houston Intranet's "Road to Independence" site
(Offer Information) on Wednesday, July 14 (the day the cash offer commences).
The site can be accessed by clicking this link
http://www.ho.dupont.com/ccn/road/index.stm.
MERRILL LYNCH BLUEPRINT ACCOUNT INFORMATION: Conoco employees who are residents
of a non-U.S. location will receive the cash offer documents from Merrill Lynch
for the DuPont stock held in their Blueprint Accounts.
DUPONT NEWS RELEASE
DUPONT SETS RATIO FOR EXCHANGE OFFER FOR CONOCO INC. CLASS B COMMON STOCK
WILMINGTON, DEL., July 9 - DuPont (NYSE:DD) today set the exchange ratio for
the offer to its shareholders to exchange one share of DuPont common stock for
2.95 shares of the Conoco (NYSE:COC) Class B common stock currently held by
DuPont up to a maximum of 148 million shares of DuPont common stock. The
exchange ratio represents a premium of 18 percent based on the NYSE
3
<PAGE> 4
closing prices on July 8 of $68-5/8 per share for DuPont and $27-3/8 per share
for Conoco.
DuPont expects the registration statement filed with the Securities and Exchange
Commission (SEC) under which the exchange offer will be made to become
effective today. It is expected that the exchange offer will commence on July
12 subject to the effectiveness of the registration statement.
The exchange offer is to be available only to DuPont shareholders who are
United States persons as defined in the Offering Circular-Prospectus. If the
exchange offer, which will be made by means of an Offering Circular-Prospectus,
commences on July 12, it will expire at 12:00 midnight, New York City time, on
August 6, 1999, unless extended.
DuPont has retained the services of D.F. King & Co., Inc. as Information Agent
to assist shareholders with the exchange offer. Questions regarding the terms
and conditions of the exchange offer or information on tendering shares should
be directed to D.F. King at 800-755-3105 (toll free) in the U.S. or
212-269-5550 (collect) outside the U.S.
Morgan Stanley Dean Witter will act as dealer-manager.
Conoco is a major, integrated energy company based in Houston and active in 40
countries.
Dupont is a science company, delivering science-based solutions that make a
difference in people's lives in food and nutrition; health care; apparel; home
and construction; electronics; and transportation. Founded in 1802, the company
operates in 65 countries and has 92,000 employees.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission. This communication shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.
# # #
7/9/99
THIS E-MAIL IS FOR INTERNAL USE ONLY AND IS NOT TO BE USED OR DISTRIBUTED
OUTSIDE CONOCO.
4
<PAGE> 1
CONOCO SPLIT-OFF
THESE NOTES ARE BEING PRODUCED FOR AND ADDRESSED TO DUPONT SHAREHOLDERS WHO ARE
DUPONT EMPLOYEES IN EUROPE, AS A BRIEF EXPLANATION OF THE INTENDED CASH OFFER BY
DUPONT
INTRODUCTION
DuPont is intending to offer its shareholders who are non-United States Persons
the opportunity to sell some or all of their DuPont common stock to DuPont in
cash (the Cash Offer). The Cash Offer is being made substantially concurrently
with a share exchange offer in the United States in which DuPont is offering
shareholders who are US Persons the opportunity to exchange DuPont common stock
for shares of Conoco Class B common stock (the Exchange Offer). The Cash Offer
and the Exchange Offer (collectively referred to as the "Offer") are part of the
process by which DuPont is intending to dispose of its remaining ownership of
Conoco. THE PURPOSE OF THESE NOTES IS TO GIVE YOU SOME IMMEDIATE INFORMATION ON
THE OFFER PROCESS AND TO PROVIDE SOME QUESTION AND ANSWERS ON SOME PRELIMINARY
QUESTIONS YOU MAY HAVE AROUND THE OFFER.
As the offer to stockholders will take the form of an Exchange Offer in the
United States to those stockholders who are "US Persons" and a Cash Offer to
"Non-US Persons", it is the Cash Offer that will apply in Europe. Accordingly,
these notes (and particularly the Q and A's) will concentrate on the Cash Offer,
with information on the Exchange Offer being provided merely to place the Cash
Offer in context.
TIMETABLE
The offer is conditional on various procedures which still have to be completed.
The Exchange Offer in the United States is expected to commence on Monday 12
July and closes on Friday 6 August 1999. Because of local regulatory
requirements in some non-US countries, it is likely that the Cash Offer would
then commence two days later on Wednesday 14 July and close two trading days
later on Tuesday 10 August 1999.
COMMUNICATION TO SHAREHOLDERS
Each external organisation holding shares on behalf of DuPont stockholders
(referred to as "Administrators") will communicate and process the Offer with
stockholders in relation to the particular plan or account for which it is
responsible. Mailings will be made to the address currently on record with the
relevant Administrator.
The full details of the Cash Offer are contained in the "Offer to Purchase"
document. This document is currently being printed and will then be mailed to
the various Administrators. You should receive separate copies in respect of
your shareholding(s), along with a letter from the relevant Administrator, in
about four to six days time. Such provisions of this documentation will govern
the Cash Offer.
YOU ARE UNDER NO OBLIGATION TO PARTICIPATE IN THE OFFER. HOWEVER, IF YOU DO WISH
TO DO SO, YOU WILL HAVE TO MAKE A SEPARATE DECISION IN RESPECT OF EACH PLAN IN
WHICH YOU HOLD SHARES.
In summary, for your purposes the various mailings will be handled as follows :-
<PAGE> 2
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER
Merrill Lynch Blueprint Account Merrill Lynch
Privately owned shares First Chicago
Trust Company, or other
appointed broker holding
stocks on behalf of the
individual shareholder
CASH OFFER OR EXCHANGE OFFER
Where shares are held in a Company Plan or Trust, the nature of the offer is
automatically determined by the location of that Plan regardless of the
nationality or current geographical location of the individual shareholders. In
respect of any shares held in the Merrill Lynch Blueprint Account, UK payrolled
employees will be eligible to receive the Exchange Offer if they are currently
on expatriate assignment in the U.S. and fulfil the conditions of a "U.S.
Person".
For employees with DuPont shares in a Blueprint account, Merrill Lynch will
initially determine eligibility for the Cash or Exchange Offer based on the
location of the address they hold on file. Thus, US employees on expatriate
assignment in Europe will, in respect of shares in their Blueprint account,
receive the Cash Offer documentation from Merrill Lynch if they have a European
address on record with Merrill Lynch. They should contact Merrill Lynch if they
have any questions in relation to such shares.
QUESTIONS AND ANSWERS
As these notes are being produced for DuPont shareholders who are primarily UK
employees, the Q & A's relate particularly to the Cash Offer process.
Q:1 WHAT IS THE CASH OFFER?
A:1 DuPont is offering shareholders who are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for cash. The
Cash Offer is being made substantially concurrently with a share
exchange offer in the United States. It is the Cash Offer that will
apply in Europe.
THIS IS A COMPLETELY VOLUNTARY PROCESS ON THE PART OF DUPONT
SHAREHOLDERS. YOU ARE NOT REQUIRED TO TENDER ANY OF YOUR DUPONT COMMON
STOCK UNLESS YOU WISH TO DO SO.
Q:2 HOW DO I DECIDE WHETHER TO TENDER?
A:2 The information you receive from the relevant Administrator will
include the "Offer to Purchase" document and a cover letter from the
Administrator. You should review all this information, just as you
would with any other investment you are considering, before you decide
whether or not you wish to tender any of your DuPont common stock.
DuPont or Conoco is unable to advise you on this decision. It is
recommended that you seek advice from an independent financial adviser,
bank manager, stockbroker etc. competent to advise on such matters (who
may charge you for this advice ).
Q:3 HOW DO I TENDER?
A:3 The election period for the Cash Offer is expected to be open from
Wednesday 14 July to Tuesday 10 August 1999. Each Administrator will
send you details of how to participate in the Cash Offer in respect of
the shares held in that particular plan or account
Q:4 HOW MANY SHARES MAY I TENDER?
A:4 You may tender all or only part of your holdings of DuPont Stock in
each Plan or account. If you tender only a part of your holdings of
DuPont Stock in any Plan or account, you will be deemed to have made an
election not to tender your remaining holdings of DuPont
<PAGE> 3
stock in that Plan or account.
Q:5 WHAT MAY I TENDER?
A:5 You may tender only actual shares of DuPont common stock. YOU CANNOT
TENDER DUPONT SHARE OPTIONS.
Note: You may exercise vested share options in order to receive DuPont
shares which may then be tendered under the Exchange Offer. However,
you will need to consult with Merrill Lynch to ensure that the shares
will be registered in your name in time to meet the closing date for
the offer. MONDAY 2 AUGUST 1999 IS EXPECTED TO BE THE LATEST DATE ON
WHICH YOU CAN EXERCISE OPTIONS TO ACQUIRE SHARES FOR SUBSEQUENT
TENDERING WITHIN THE CASH OFFER DEADLINE. HAVING COMPLETED YOUR
EXERCISE, YOU WILL NEED IMMEDIATELY TO CONTACT YOUR COUNTRY SHARES
FACILITATOR VIA YOUR LOCAL HUMAN RESOURCES, IN ORDER TO OBTAIN THE
NECESSARY MERRILL LYNCH LETTER AND DOCUMENTATION TO ENABLE YOU TO
TENDER THOSE SHARES BEFORE THE CASH OFFER CLOSES.
Q:6 WHY IS DUPONT NOT MAKING THE EXCHANGE OFFER TO NON-U.S. PERSONS?
A:6 There are numerous complex and costly tax, legal and regulatory
requirements which would have had to be satisfied in order to extend
the Exchange Offer to other jurisdictions outside the U.S. and in some
countries a share offer could have been totally prohibited. To avoid
these complications and the associated cost and tax impacts, DuPont has
decided instead to make a Cash Offer to "Non-U.S. persons" in those
countries where it is legally able to do so.
Q:7 WHY IS THE CASH OFFER SUBJECT TO US TAX WITHHOLDING?
A:7 Under US tax law the Cash Offer must be treated in the same way as a
dividend and must, therefore, be subject initially to tax withholding
in the US.
Where a Form W8 has not been filed or is not completed under the Cash
Offer arrangements, a higher 30% or higher rate could be applied.
Q:8 CAN I CLAIM BACK THE TAX WITHHOLDING IMPOSED IN THE US?
A:8 THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE US TAX
WITHHELD. The formal Cash Offer document indicates the grounds under
which you might be able to recover the US tax withheld. It is not
possible to know in advance that a successful claim for recovery can be
made since this will depend on the facts and circumstances for each
shareholder and the overall effect of the process on DuPont's
subsequent share structure.
Whether or not the US tax can be reclaimed can only be determined
AFTER completion of the overall Exchange Offer transaction. Each
shareholder will have to complete appropriate forms for repayment and
apply to the Internal Revenue Service in the US. The facts of each case
will determine whether a refund can be claimed. You cannot rely on
recovering the US tax in deciding your response to the Cash Offer nor
is it possible to provide further guidance in advance of the process
being completed.
<PAGE> 4
Q:9 DO I HAVE TO EXCHANGE MY DUPONT SHARES NOW THAT CONOCO IS SEPARATING
FROM DUPONT?
A:9 No. Participation in the Cash Offer is completely voluntary. There is
nothing to prevent you from continuing to hold your DuPont common stock
as you have in the past.
Q:10 WILL I HAVE TO PAY ANY BROKERAGE FEES OR OTHER ADMINISTRATION CHARGES
UNDER THE CASH OFFER?
A:10 No. Brokerage fees or other administration charges will not apply to
the tender under the Cash Offer of DuPont shares held in Company
Plans.
Q:11 IF I HAVE ANY QUESTIONS ABOUT THE CASH OFFER, WHOM SHOULD I CONTACT
IN THE FIRST INSTANCE?
A:11 For other plans or accounts, you should call the relevant Administrator
as follows:-
Merrill Lynch (Blueprint Account) : 001-732-563-8775
For general questions about the Exchange Offer, you should contact the
official information agent in the US, D.F. King & Co., Inc, on
001-212-269-5550.
For tax advice, you should contact your own tax adviser.
European Compensation & Benefits
Monday 12th July 1999.
<PAGE> 5
CONOCO SPLIT-OFF
THESE NOTES ARE BEING PRODUCED FOR AND ADDRESSED TO DUPONT SHAREHOLDERS WHO ARE
DUPONT UK EMPLOYEES, AS A BRIEF EXPLANATION OF THE INTENDED CASH OFFER BY DUPONT
INTRODUCTION
DuPont is intending to offer its shareholders who are non-United States Persons
the opportunity to sell some or all of their DuPont common stock to DuPont in
cash (the Cash Offer). The Cash Offer is being made substantially concurrently
with a share exchange offer in the United States in which DuPont is offering
shareholders who are US Persons the opportunity to exchange DuPont common stock
for shares of Conoco Class B common stock (the Exchange Offer). The Cash Offer
and the Exchange Offer (collectively referred to as the "Offer") are part of the
process by which DuPont is intending to dispose of its remaining ownership of
Conoco. THE PURPOSE OF THESE NOTES IS TO GIVE YOU SOME IMMEDIATE INFORMATION ON
THE OFFER PROCESS AND TO PROVIDE SOME QUESTION AND ANSWERS ON SOME PRELIMINARY
QUESTIONS YOU MAY HAVE AROUND THE OFFER.
As the offer to stockholders will take the form of an Exchange Offer in the
United States to those stockholders who are "US Persons" and a Cash Offer to
"Non-US Persons", it is the Cash Offer that will apply in the UK. Accordingly,
these notes (and particularly the Q and A's) will concentrate on the Cash Offer,
with information on the Exchange Offer being provided merely to place the Cash
Offer in context.
TIMETABLE
The offer is conditional on various procedures which still have to be completed.
The Exchange Offer in the United States is expected to commence on Monday 12
July and closes on Friday 6 August 1999. Because of local regulatory
requirements in some non-US countries, it is likely that the Cash Offer would
then commence two days later on Wednesday 14 July and close two trading days
later on Tuesday 10 August 1999.
COMMUNICATION TO SHAREHOLDERS
Each share plan trustee or other external organisation holding shares on behalf
of DuPont stockholders (referred to as "Administrators") will communicate and
process the Offer with stockholders in relation to the particular plan or
account for which it is responsible. It may well be, therefore, that as a UK
stockholder you will receive several mailings, each relating to the particular
plan or account in which you hold shares. Mailings will be made to the address
currently on record with the relevant Administrator.
The full details of the Cash Offer are contained in the "Offer to Purchase"
document. This document is currently being printed and will then be mailed to
the various Administrators. You should receive separate copies in respect of
your shareholding(s), along with a letter from the relevant Administrator, in
about four to six days time. Such provisions of this documentation will govern
the Cash Offer.
YOU ARE UNDER NO OBLIGATION TO PARTICIPATE IN THE OFFER. HOWEVER, IF YOU DO WISH
TO DO SO, YOU WILL HAVE TO MAKE A SEPARATE DECISION IN RESPECT OF EACH PLAN IN
WHICH YOU HOLD SHARES.
In summary, for your purposes the various mailings will be handled as follows:-
<PAGE> 6
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER
DuPont Stock Ownership Plan Noble Lowndes Settlement Trustees Limited
DuPont Share Shop Noble Lowndes Settlement Trustees Limited
DuPont Single Company PEP Stocktrade
Merrill Lynch Blueprint Account Merrill Lynch
Privately owned shares First Chicago Trust Company, or other
appointed broker holding stocks on behalf
of the individual shareholder
CASH OFFER OR EXCHANGE OFFER
Where shares are held in a Company Plan or Trust, the nature of the offer is
automatically determined by the location of that Plan regardless of the
nationality or current geographical location of the individual shareholders.
Thus, the shares held in the UK Plans (SOP, Share Shop and DuPont Single Company
PEP) are automatically eligible for the Cash Offer only, and not the Exchange
Offer, because those Plans with their underlying trust arrangements are resident
in the UK. Similarly, where they are legally able to do so members of the U.S.
Thrift Plan will receive the Exchange Offer in respect of DuPont shares held in
the Thrift Plan, regardless of the country to which they are currently assigned,
because that Plan is "resident" in the U.S.
It is conceivable, subject to compliance with any relevant laws, that there will
be a few cases where individuals receive the Exchange Offer for some of the
shares they hold and the Cash Offer in respect of others. For example, in
respect of any shares held in the Merrill Lynch Blueprint Account, UK payrolled
employees will be eligible to receive the Exchange Offer if they are currently
on expatriate assignment in the U.S. and fulfil the conditions of a "U.S.
Person" whereas they will receive the Cash Offer in respect of any DuPont shares
in SOP.
For employees with DuPont shares in a Blueprint account, Merrill Lynch will
initially determine eligibility for the Cash or Exchange Offer based on the
location of the address they hold on file. Thus, US employees on expatriate
assignment in the UK will, in respect of shares in their Blueprint account,
receive the Cash Offer documentation from Merrill Lynch if they have a UK
address on record with Merrill Lynch. They should contact Merrill Lynch if they
have any questions in relation to such shares.
QUESTIONS AND ANSWERS
As these notes are being produced for DuPont shareholders who are primarily UK
employees, the Q & A's relate particularly to the Cash Offer process.
Q:1 WHAT IS THE CASH OFFER?
A:1 DuPont is offering shareholders who are non-United States Persons the
opportunity yo sell some or all of their shares to DuPont for cash. The
Cash Offer is being made substantially concurrently with a share
exchange offer in the United States. It is the Cash Offer that will
apply in the UK.
THIS IS A COMPLETELY VOLUNTARY PROCESS ON THE PART OF DUPONT
SHAREHOLDERS. YOU ARE NOT REQUIRED TO TENDER ANY OF YOUR DUPONT COMMON
STOCK UNLESS YOU WISH TO DO SO.
Q:2 HOW DO I DECIDE WHETHER TO TENDER?
A:2 The information you receive from the relevant Administrator (Noble
Lowndes Settlement Trustees Limited, Stocktrade etc) will include the
"Offer to Purchase" document and a cover letter from the Administrator.
You should review all this information, just as you
<PAGE> 7
would with any other investment you are considering, before you decide
whether or not you wish to tender any of your DuPont common stock.
DuPont or Conoco is unable to advise you on this decision. It is
recommended that you seek advice from an independent financial adviser,
bank manager, stockbroker etc. competent to advise on such matters (who
may charge you for this advice).
Q:3 HOW DO I TENDER?
A:3 The election period for the Cash Offer is expected to be open from
Wednesday 14 July to Tuesday 10 August 1999. Each Administrator will
send you details of how to participate in the Cash Offer in respect of
the shares held in that particular plan or account. PLEASE NOTE THAT
THE CLOSING DATE WILL VARY ACCORDING TO WHICH CATEGORY OF SHARES IS
BEING TENDERED. For example, the Administrators of the UK Share
Ownership Plan and DuPont Single Company PEP will have to set an
earlier closing date to receive instructions on shares in those Plans
in order to have sufficient time to collate all the tenders received
and submit a composite tender to the US in respect of the Plan.
Q:4 HOW MANY SHARES MAY I TENDER?
A:4 You may tender all or only part of your holdings of DuPont Stock in
each Plan or account, (subject to the normal retention restrictions of
SOP). If you tender only a part of your holdings of DuPont Stock in any
Plan or account, you will be deemed to have made an election not to
tender your remaining holdings of DuPont stock in that Plan or account.
Q:5 WHAT MAY I TENDER?
A:5 You may tender only actual shares of DuPont common stock. You cannot
tender DuPont share options.
Note: You may exercise vested share options in order to receive DuPont
shares which may then be tendered under the Exchange Offer. However,
you will need to consult with Merrill Lynch to ensure that the shares
will be registered in your name in time to meet the closing date for
the offer. MONDAY 2 AUGUST 1999 IS EXPECTED TO BE THE LATEST DATE ON
WHICH YOU CAN EXERCISE OPTIONS TO ACQUIRE SHARES FOR SUBSEQUENT
TENDERING WITHIN THE CASH OFFER DEADLINE. HAVING COMPLETED YOUR
EXERCISE, YOU WILL NEED IMMEDIATELY TO CONTACT YOUR COUNTRY SHARES
FACILITATOR VIA YOUR LOCAL HUMAN RESOURCES, IN ORDER TO OBTAIN THE
NECESSARY MERRILL LYNCH LETTER AND DOCUMENTATION TO ENABLE YOU TO
TENDER THOSE SHARES BEFORE THE CASH OFFER CLOSES.
Q:6 WHY IS DUPONT NOT MAKING THE EXCHANGE OFFER TO NON-U.S. PERSONS?
A:6 There are numerous complex and costly tax, legal and regulatory
requirements which would have had to be satisfied in order to extend
the Exchange Offer to other jurisdictions outside the U.S. and in some
countries a share offer could have been totally prohibited. To avoid
these complications and the associated cost and tax impacts, DuPont has
decided instead to make a Cash Offer to "Non-U.S. persons" in those
countries where it is legally able to do so.
Q:7 WHY IS THE CASH OFFER SUBJECT TO US TAX WITHHOLDING?
A:7 Under US tax law the Cash Offer must be treated in the same way as a
dividend and must, therefore, be subject initially to tax withholding
in the US. It is anticipated that the reduced 15% rate of tax
withholding will be applied to the tender of shares from SOP and the
DuPont Single Company PEP because of the compliance documentation (Form
W8) already filed with the US authorities by the respective Plan
managers.
Where a Form W8 has not been filed or is not completed under the Cash
Offer arrangements, a higher 30% or higher rate could be applied.
Q:8 CAN I CLAIM BACK THE TAX WITHHOLDING IMPOSED IN THE US?
A:8 THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE US TAX
WITHHELD. The formal
<PAGE> 8
Cash Offer document indicates the grounds under which you might be able
to recover the US tax withheld. It is not possible to know in advance
that a successful claim for recovery can be made since this will depend
on the facts and circumstances for each shareholder and the overall
effect of the process on DuPont's subsequent share structure.
Whether or not the US tax can be reclaimed can only be determined AFTER
completion of the overall Exchange Offer transaction. Each shareholder
will have to complete appropriate forms for repayment and apply to the
Internal Revenue Service in the US. The facts of each case will
determine whether a refund can be claimed. You cannot rely on
recovering the US tax in deciding your response to the Cash Offer nor
is it possible to provide further guidance in advance of the process
being completed.
Q:9 DO I HAVE TO PAY INCOME TAX ON THE CASH RECEIVED FOR DUPONT SHARES?
A:9 In general, there should be no UK income tax due on the cash received
for DuPont common stock under the Cash Offer. The exception is if you
decide to tender any SOP company-purchased shares which are less than
three years old. These shares would be taxable if sold in the normal
way and are similarly liable to UK income tax if tendered for cash
under the Cash Offer.
It is highly unlikely but there is a remote possibility that part of
the cash you receive will be taxed as income in the UK. In that event,
shareholders will be subject to UK income tax with credit given for any
irrecoverable US tax.
Q:10 DO I HAVE TO PAY CAPITAL GAINS TAX IF I TENDER SHARES UNDER THE CASH
OFFER?
A:10 Yes, except where you "dispose" of shares from a tax relieved
investment plan such as the DuPont Single Company PEP. In all other
cases, and after removing from charge any part of the cash to be taxed
as income, if you receive cash in respect of your DuPont common stock,
you will be potentially liable to Capital Gains Tax on the difference
between the cash proceeds received and the original cost of the shares
(as adjusted for indexation).
You will not, however, have to pay any Capital Gains Tax unless your
chargeable gains (less allowable losses) from all sources during the
tax year 1999/2000 exceed the annual exemption. The annual exemption
for 1999/2000 is pound sterling 7100. If you are unable to recover the
US Tax Withholding on the proceeds for the shares tendered, you can
deduct this tax in calculating the chargeable gain.
As an alternative, part of the US tax can be credited against any UK
capital gains tax payable on the transaction, but you will need to
consult your usual tax advisor.
Where necessary, you should ensure that the relevant details are
included on a tax return under the self-assessment procedures for the
1999/2000 tax year.
Q:11 IF I AM OUT OF THE UK ON EXPATRIATE ASSIGNMENT WILL I BE AFFECTED BY
CAPITAL GAINS TAX THROUGH TENDERING SHARES UNDER THE OFFER?
A:11 You will probably have become non-resident for UK tax purposes through
the length of assignment overseas. Nevertheless you may still be liable
to UK Capital Gains Tax through tendering shares under the Cash Offer
if you left the UK on assignment after 16 March 1998, having previously
been UK resident in the normal way, and remain abroad for less than 5
complete tax years. This means that you may have to report details of
your gain as a result of the Cash Offer (and other gains) whilst on
assignment, for the tax year in which
<PAGE> 9
you return to the UK. If you left the UK before 16 March 1998, the five
year time limit will not apply and no CGT liability should arise once
you have established non-UK resident status.
The position is complex and you may wish to seek independent
professional advice on it.
Q:12 DO I HAVE TO EXCHANGE MY DUPONT SHARES NOW THAT CONOCO IS SEPARATING
FROM DUPONT?
A:12 No. Participation in the Cash Offer is completely voluntary. There is
nothing to prevent you from continuing to hold your DuPont common stock
as you have in the past. This applies equally to shares held in Company
administered or sponsored plans such as SOP and the DuPont Single
Company PEP.
Q:13 CAN I RE-INVEST IN SOP THE CASH RECEIVED FOR DUPONT SHARES?
A:13 No. The exchange of your SOP shares for cash is deemed by the Inland
Revenue to be a "disposal" of those shares (i.e. it is treated like a
"sale" of your shares) and these proceeds cannot be re-invested in SOP.
(For your information, this situation would have been the same had
DuPont common stock in SOP been able to be exchanged for Conoco shares.
The Conoco Class B shares received could not have been held in the
Plan.)
Q:14 WILL MY TENDERING OF DUPONT SHARES IN SOP COUNT AS A SALE TO BE
INCLUDED IN THE NUMBER OF SALES PERMITTED IN THE TAX YEAR?
A:14 No. Participation in the Cash Offer will not be deemed a sale for the
purposes of the limit on the number of sales allowed in a tax year
under the Plan.
Q:15 WILL I HAVE TO PAY ANY BROKERAGE FEES OR OTHER ADMINISTRATION CHARGES
UNDER THE CASH OFFER?
A:15 No. Brokerage fees or other administration charges will not apply to
the tender under the Cash Offer of DuPont shares held in Company Plans.
Q:16 CAN I MAKE A NORMAL SALE IN SOP DURING THE CASH OFFER PERIOD?
A:16 Yes. DuPont shares in SOP can be sold in the normal way on the regular
sale day scheduled for Tuesday 3rd August. Sales will, as usual, be at
the market price on that day and free from the complications of US
Withholding Tax associated with the Cash Offer.
THE CLOSING DATE FOR NORMAL SALE INSTRUCTIONS TO BE RECEIVED BY NOBLE
LOWNDES SETTLEMENT TRUSTEES LIMITED WILL BE 5.00 PM ON MONDAY 26TH
JULY. Sale Forms (available from your local HR Dept) can be faxed as
well as mailed to the Trustee. Remember that you can, if you wish,
specify a minimum sterling price for your sale, with the instruction
that the Trustee cancel the sale if the price falls below that figure
on the sale day.
Q:17 IF I HAVE ANY QUESTIONS ABOUT THE CASH OFFER, WHOM SHOULD I CONTACT IN
THE FIRST INSTANCE?
A:17 For queries regarding the Stock Ownership Plan ( and the DuPont Share
Shop), you should call the Plan Hotline on 0181-666-8388.
For other plans or accounts, you should call the relevant Administrator
as follows:-
Stocktrade (Single company PEP) : 0131-529-0459
Merrill Lynch (Blueprint Account) : 001-732-563-8775
<PAGE> 10
For general questions about the Exchange Offer, you should contact the
official information agent in the US, D.F. King & Co., Inc, on
001-212-269-5550.
For tax advice, you should contact your own tax adviser.
Compensation & Benefits, Stevenage
Monday 12th July 1999.
<PAGE> 11
CONOCO SPLIT-OFF
THESE NOTES ARE BEING PRODUCED FOR AND ADDRESSED TO DUPONT SHAREHOLDERS WHO ARE
DUPONT DOW EMPLOYEES IN EUROPE, AS A BRIEF EXPLANATION OF THE INTENDED CASH
OFFER BY DUPONT
INTRODUCTION
DuPont is intending to offer its shareholders who are non-United States Persons
the opportunity to sell some or all of their DuPont common stock to DuPont in
cash (the Cash Offer). The Cash Offer is being made substantially concurrently
with a share exchange offer in the United States in which DuPont is offering
shareholders who are US Persons the opportunity to exchange DuPont common stock
for shares of Conoco Class B common stock (the Exchange Offer). The Cash Offer
and the Exchange Offer (collectively referred to as the "Offer") are part of the
process by which DuPont is intending to dispose of its remaining ownership of
Conoco. THE PURPOSE OF THESE NOTES IS TO GIVE YOU SOME IMMEDIATE INFORMATION ON
THE OFFER PROCESS AND TO PROVIDE SOME QUESTION AND ANSWERS ON SOME PRELIMINARY
QUESTIONS YOU MAY HAVE AROUND THE OFFER.
As the offer to stockholders will take the form of an Exchange Offer in the
United States to those stockholders who are "US Persons" and a Cash Offer to
"Non-US Persons", it is the Cash Offer that will apply in Europe. Accordingly,
these notes (and particularly the Q and A's) will concentrate on the Cash Offer,
with information on the Exchange Offer being provided merely to place the Cash
Offer in context.
TIMETABLE
The offer is conditional on various procedures which still have to be completed.
The Exchange Offer in the United States is expected to commence on Monday 12
July and closes on Friday 6 August 1999. Because of local regulatory
requirements in some non-US countries, it is likely that the Cash Offer would
then commence two days later on Wednesday 14 July and close two trading days
later on Tuesday 10 August 1999.
COMMUNICATION TO SHAREHOLDERS
Each external organisation holding shares on behalf of DuPont stockholders
(referred to as "Administrators") will communicate and process the Offer with
stockholders in relation to the particular plan or account for which it is
responsible. Mailings will be made to the address currently on record with the
relevant Administrator.
The full details of the Cash Offer are contained in the "Offer to Purchase"
document. This document is currently being printed and will then be mailed to
the various Administrators. You should receive separate copies in respect of
your shareholding(s), along with a letter from the relevant Administrator, in
about four to six days time. Such provisions of this documentation will govern
the Cash Offer.
YOU ARE UNDER NO OBLIGATION TO PARTICIPATE IN THE OFFER. HOWEVER, IF YOU DO WISH
TO DO SO, YOU WILL HAVE TO MAKE A SEPARATE DECISION IN RESPECT OF EACH PLAN IN
WHICH YOU HOLD SHARES.
In summary, for your purposes the various mailings will be handled as follows :-
<PAGE> 12
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER
Merrill Lynch Blueprint Account Merrill Lynch
Privately owned shares First Chicago Trust Company, or other
appointed broker holding stocks on behalf of
the individual shareholder
CASH OFFER OR EXCHANGE OFFER
Where shares are held in a Company Plan or Trust, the nature of the offer is
automatically determined by the location of that Plan regardless of the
nationality or current geographical location of the individual shareholders. In
respect of any shares held in the Merrill Lynch Blueprint Account, UK payrolled
employees will be eligible to receive the Exchange Offer if they are currently
on expatriate assignment in the U.S. and fulfil the conditions of a "U.S.
Person".
For employees with DuPont shares in a Blueprint account, Merrill Lynch will
initially determine eligibility for the Cash or Exchange Offer based on the
location of the address they hold on file. Thus, US employees on expatriate
assignment in Europe will, in respect of shares in their Blueprint account,
receive the Cash Offer documentation from Merrill Lynch if they have a European
address on record with Merrill Lynch. They should contact Merrill Lynch if they
have any questions in relation to such shares.
QUESTIONS AND ANSWERS
As these notes are being produced for DuPont shareholders who are primarily UK
employees, the Q & A's relate particularly to the Cash Offer process.
Q:1 WHAT IS THE CASH OFFER?
A:1 DuPont is offering shareholders who are non-United States Persons the
opportunity yo sell some or all of their shares to DuPont for cash. The
Cash Offer is being made substantially concurrently with a share
exchange offer in the United States. It is the Cash Offer that will
apply in Europe.
This is a completely voluntary process on the part of DuPont
shareholders. You are not required to tender any of your DuPont common
stock unless you wish to do so.
Q:2 HOW DO I DECIDE WHETHER TO TENDER?
A:2 The information you receive from the relevant Administrator will
include the "Offer to Purchase" document and a cover letter from the
Administrator. You should review all this information, just as you
would with any other investment you are considering, before you decide
whether or not you wish to tender any of your DuPont common stock.
DuPont or Conoco is unable to advise you on this decision. It is
recommended that you seek advice from an independent financial adviser,
bank manager, stockbroker etc. competent to advise on such matters (who
may charge you for this advice ).
Q:3 HOW DO I TENDER?
A:3 The election period for the Cash Offer is expected to be open from
Wednesday 14 July to Tuesday 10 August 1999. Each Administrator will
send you details of how to participate in the Cash Offer in respect of
the shares held in that particular plan or account
Q:4 HOW MANY SHARES MAY I TENDER?
A:4 You may tender all or only part of your holdings of DuPont Stock in
each Plan or account. If you tender only a part of your holdings of
DuPont Stock in any Plan or account, you will be deemed to have made an
election not to tender your remaining holdings of DuPont
<PAGE> 13
stock in that Plan or account.
Q:5 WHAT MAY I TENDER?
A:5 You may tender only actual shares of DuPont common stock. YOU CANNOT
TENDER DUPONT SHARE OPTIONS.
Note: You may exercise vested share options in order to receive DuPont
shares which may then be tendered under the Exchange Offer. However,
you will need to consult with Merrill Lynch to ensure that the shares
will be registered in your name in time to meet the closing date for
the offer. MONDAY 2 AUGUST 1999 IS EXPECTED TO BE THE LATEST DATE ON
WHICH YOU CAN EXERCISE OPTIONS TO ACQUIRE SHARES FOR SUBSEQUENT
TENDERING WITHIN THE CASH OFFER DEADLINE. HAVING COMPLETED YOUR
EXERCISE, YOU WILL NEED IMMEDIATELY TO CONTACT YOUR COUNTRY SHARES
FACILITATOR VIA YOUR LOCAL HUMAN RESOURCES, IN ORDER TO OBTAIN THE
NECESSARY MERRILL LYNCH LETTER AND DOCUMENTATION TO ENABLE YOU TO
TENDER THOSE SHARES BEFORE THE CASH OFFER CLOSES.
Q:6 WHY IS DUPONT NOT MAKING THE EXCHANGE OFFER TO NON-U.S. PERSONS?
A:6 There are numerous complex and costly tax, legal and regulatory
requirements which would have had to be satisfied in order to extend
the Exchange Offer to other jurisdictions outside the U.S. and in some
countries a share offer could have been totally prohibited. To avoid
these complications and the associated cost and tax impacts, DuPont has
decided instead to make a Cash Offer to "Non-U.S. persons" in those
countries where it is legally able to do so.
Q:7 WHY IS THE CASH OFFER SUBJECT TO US TAX WITHHOLDING?
A:7 Under US tax law the Cash Offer must be treated in the same way as a
dividend and must, therefore, be subject initially to tax withholding
in the US.
Where a Form W8 has not been filed or is not completed under the Cash
Offer arrangements, a higher 30% or higher rate could be applied.
Q:8 CAN I CLAIM BACK THE TAX WITHHOLDING IMPOSED IN THE US?
A:8 THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE US TAX
WITHHELD. The formal Cash Offer document indicates the grounds under
which you might be able to recover the US tax withheld. It is not
possible to know in advance that a successful claim for recovery can be
made since this will depend on the facts and circumstances for each
shareholder and the overall effect of the process on DuPont's
subsequent share structure.
Whether or not the US tax can be reclaimed can only be determined AFTER
completion of the overall Exchange Offer transaction. Each shareholder
will have to complete appropriate forms for repayment and apply to the
Internal Revenue Service in the US. The facts of each case will
determine whether a refund can be claimed. You cannot rely on
recovering the US tax in deciding your response to the Cash Offer nor
is it possible to provide further guidance in advance of the process
being completed.
<PAGE> 14
Q:9 DO I HAVE TO EXCHANGE MY DUPONT SHARES NOW THAT CONOCO IS SEPARATING
FROM DUPONT?
A:9 No. Participation in the Cash Offer is completely voluntary. There is
nothing to prevent you from continuing to hold your DuPont common stock
as you have in the past.
Q:10 WILL I HAVE TO PAY ANY BROKERAGE FEES OR OTHER ADMINISTRATION CHARGES
UNDER THE CASH OFFER?
A:10 No. Brokerage fees or other administration charges will not apply to
the tender under the Cash Offer of DuPont shares held in Company Plans.
Q:11 IF I HAVE ANY QUESTIONS ABOUT THE CASH OFFER, WHOM SHOULD I CONTACT IN
THE FIRST INSTANCE?
A:11 For other plans or accounts, you should call the relevant Administrator
as follows:-
Merrill Lynch (Blueprint Account) : 001-732-563-8775
For general questions about the Exchange Offer, you should contact the
official information agent in the US, D.F. King & Co., Inc, on
001-212-269-5550.
For tax advice, you should contact your own tax adviser.
Du Pont European Compensation & Benefits
Monday 12th July 1999.
<PAGE> 15
CONOCO SPLIT-OFF
THESE NOTES ARE BEING PRODUCED FOR AND ADDRESSED TO DUPONT SHAREHOLDERS WHO ARE
DUPONT PHARMACEUTICAL EMPLOYEES, AS A BRIEF EXPLANATION OF THE INTENDED CASH
OFFER BY DUPONT
INTRODUCTION
DuPont is intending to offer its shareholders who are non-United States Persons
the opportunity to sell some or all of their DuPont common stock to DuPont in
cash (the Cash Offer). The Cash Offer is being made substantially concurrently
with a share exchange offer in the United States in which DuPont is offering
shareholders who are US Persons the opportunity to exchange DuPont common stock
for shares of Conoco Class B common stock (the Exchange Offer). The Cash Offer
and the Exchange Offer (collectively referred to as the "Offer") are part of the
process by which DuPont is intending to dispose of its remaining ownership of
Conoco. THE PURPOSE OF THESE NOTES IS TO GIVE YOU SOME IMMEDIATE INFORMATION ON
THE OFFER PROCESS AND TO PROVIDE SOME QUESTION AND ANSWERS ON SOME PRELIMINARY
QUESTIONS YOU MAY HAVE AROUND THE OFFER.
As the offer to stockholders will take the form of an Exchange Offer in the
United States to those stockholders who are "US Persons" and a Cash Offer to
"Non-US Persons", it is the Cash Offer that will apply in the UK. Accordingly,
these notes (and particularly the Q and A's) will concentrate on the Cash Offer,
with information on the Exchange Offer being provided merely to place the Cash
Offer in context.
TIMETABLE
The offer is conditional on various procedures which still have to be completed.
The Exchange Offer in the United States is expected to commence on Monday 12
July and closes on Friday 6 August 1999. Because of local regulatory
requirements in some non-US countries, it is likely that the Cash Offer would
then commence two days later on Wednesday 14 July and close two trading days
later on Tuesday 10 August 1999.
COMMUNICATION TO SHAREHOLDERS
Each share plan trustee or other external organisation holding shares on behalf
of DuPont stockholders (referred to as "Administrators") will communicate and
process the Offer with stockholders in relation to the particular plan or
account for which it is responsible. It may well be, therefore, that as a UK
stockholder you will receive several mailings, each relating to the particular
plan or account in which you hold shares. Mailings will be made to the address
currently on record with the relevant Administrator.
The full details of the Cash Offer are contained in the "Offer to Purchase"
document. This document is currently being printed and will then be mailed to
the various Administrators. You should receive separate copies in respect of
your shareholding(s), along with a letter from the relevant Administrator, in
about four to six days time. Such provisions of this documentation will govern
the Cash Offer.
YOU ARE UNDER NO OBLIGATION TO PARTICIPATE IN THE OFFER. HOWEVER, IF YOU DO WISH
TO DO SO, YOU WILL HAVE TO MAKE A SEPARATE DECISION IN RESPECT OF EACH PLAN IN
WHICH YOU HOLD SHARES.
<PAGE> 16
In summary, for your purposes the various mailings will be handled as follows :-
<TABLE>
<CAPTION>
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER
<S> <C>
- - DuPont Pharmaceutical Stock Noble Lowndes Settlement Trustees Limited
Ownership Plan
- - DuPont Share Shop Noble Lowndes Settlement Trustees Limited
- - DuPont Single Company PEP Stocktrade
- - Privately owned shares First Chicago Trust Company, or other appointed broker
holding stocks on behalf of the individual shareholder
</TABLE>
CASH OFFER OR EXCHANGE OFFER
Where shares are held in a Company Plan or Trust, the nature of the offer is
automatically determined by the location of that Plan regardless of the
nationality or current geographical location of the individual shareholders.
Thus, the shares held in the UK Plans (SOP, Share Shop and DuPont Single Company
PEP) are automatically eligible for the Cash Offer only, and not the Exchange
Offer, because those Plans with their underlying trust arrangements are resident
in the UK. Similarly, where they are legally able to do so members of the U.S.
Thrift Plan will receive the Exchange Offer in respect of DuPont shares held in
the Thrift Plan, regardless of the country to which they are currently assigned,
because that Plan is "resident" in the U.S.
QUESTIONS AND ANSWERS
As these notes are being produced for DuPont shareholders who are primarily UK
employees, the Q & A's relate particularly to the Cash Offer process.
Q:1 WHAT IS THE CASH OFFER?
A:1 DuPont is offering shareholders who are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for cash. The
Cash Offer is being made substantially concurrently with a share
exchange offer in the United States. It is the Cash Offer that will
apply in the UK.
THIS IS A COMPLETELY VOLUNTARY PROCESS ON THE PART OF DUPONT
SHAREHOLDERS. YOU ARE NOT REQUIRED TO TENDER ANY OF YOUR DUPONT COMMON
STOCK UNLESS YOU WISH TO DO SO.
Q:2 HOW DO I DECIDE WHETHER TO TENDER?
A:2 The information you receive from the relevant Administrator (Noble
Lowndes Settlement Trustees Limited, Stocktrade etc) will include the
"Offer to Purchase" document and a cover letter from the Administrator.
You should review all this information, just as you would with any
other investment you are considering, before you decide whether or not
you wish to tender any of your DuPont common stock. DuPont or Conoco is
unable to advise you on this decision. It is recommended that you seek
advice from an independent financial adviser, bank manager, stockbroker
etc. competent to advise on such matters (who may charge you for this
advice ).
<PAGE> 17
Q:3 HOW DO I TENDER?
A:3 The election period for the Cash Offer is expected to be open from
Wednesday 14 July to Tuesday 10 August 1999. Each Administrator will
send you details of how to participate in the Cash Offer in respect of
the shares held in that particular plan or account. PLEASE NOTE THAT
THE CLOSING DATE WILL VARY ACCORDING TO WHICH CATEGORY OF SHARES IS
BEING TENDERED. For example, the Administrators of the UK Share
Ownership Plan and DuPont Single Company PEP will have to set an
earlier closing date to receive instructions on shares in those Plans
in order to have sufficient time to collate all the tenders received
and submit a composite tender to the US in respect of the Plan.
Q:4 HOW MANY SHARES MAY I TENDER?
A:4 You may tender all or only part of your holdings of DuPont Stock in
each Plan or account, (subject to the normal retention restrictions of
SOP). If you tender only a part of your holdings of DuPont Stock in any
Plan or account, you will be deemed to have made an election not to
tender your remaining holdings of DuPont stock in that Plan or account.
Q:5 WHAT MAY I TENDER?
A:5 You may tender only actual shares of DuPont common stock. You cannot
tender DuPont share options.
Q:6 WHY IS DUPONT NOT MAKING THE EXCHANGE OFFER TO NON-U.S. PERSONS?
A:6 There are numerous complex and costly tax, legal and regulatory
requirements which would have had to be satisfied in order to extend
the Exchange Offer to other jurisdictions outside the U.S. and in some
countries a share offer could have been totally prohibited. To avoid
these complications and the associated cost and tax impacts, DuPont has
decided instead to make a Cash Offer to "Non-U.S. persons" in those
countries where it is legally able to do so.
Q:7 WHY IS THE CASH OFFER SUBJECT TO US TAX WITHHOLDING?
A:7 Under US tax law the Cash Offer must be treated in the same way as a
dividend and must, therefore, be subject initially to tax withholding
in the US. It is anticipated that the reduced 15% rate of tax
withholding will be applied to the tender of shares from SOP and the
DuPont Single Company PEP because of the compliance documentation (Form
W8) already filed with the US authorities by the respective Plan
managers.
Where a Form W8 has not been filed or is not completed under the
Cash Offer arrangements, a higher 30% or higher rate could be applied.
Q:8 CAN I CLAIM BACK THE TAX WITHHOLDING IMPOSED IN THE US?
A:8 THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE US TAX
WITHHELD. The formal Cash Offer document indicates the grounds under
which you might be able to recover the US tax withheld. It is not
possible to know in advance that a successful claim for recovery can be
made since this will depend on the facts and circumstances for each
shareholder and the overall effect of the process on DuPont's
subsequent share structure.
Whether or not the US tax can be reclaimed can only be determined AFTER
completion of the overall Exchange Offer transaction. Each shareholder
will have to complete appropriate forms for repayment and apply to the
Internal Revenue Service in the US. The facts of each case will
determine whether a refund can be claimed. You cannot rely on
recovering the US tax in deciding your response to the Cash Offer nor
is it possible to provide further guidance in advance of the process
being completed.
<PAGE> 18
Q:9 DO I HAVE TO PAY INCOME TAX ON THE CASH RECEIVED FOR DUPONT SHARES?
A:9 In general, there should be no UK income tax due on the cash received
for DuPont common stock under the Cash Offer. The exception is if you
decide to tender any SOP company-purchased shares which are less than
three years old. These shares would be taxable if sold in the normal
way and are similarly liable to UK income tax if tendered for cash
under the Cash Offer.
It is highly unlikely but there is a remote possibility that part of
the cash you receive will be taxed as income in the UK. In that event,
shareholders will be subject to UK income tax with credit given for any
irrecoverable US tax.
Q:10 DO I HAVE TO PAY CAPITAL GAINS TAX IF I TENDER SHARES UNDER THE CASH
OFFER?
A:10 Yes, except where you "dispose" of shares from a tax relieved
investment plan such as the DuPont Single Company PEP. In all other
cases, and after removing from charge any part of the cash to be taxed
as income, if you receive cash in respect of your DuPont common stock,
you will be potentially liable to Capital Gains Tax on the difference
between the cash proceeds received and the original cost of the shares
(as adjusted for indexation).
You will not, however, have to pay any Capital Gains Tax unless your
chargeable gains (less allowable losses) from all sources during the
tax year 1999/2000 exceed the annual exemption. The annual exemption
for 1999/2000 is pound sterling 7100. If you are unable to recover the
US Tax Withholding on the proceeds for the shares tendered, you can
deduct this tax in calculating the chargeable gain.
As an alternative, part of the US tax can be credited against any UK
capital gains tax payable on the transaction, but you will need to
consult your usual tax advisor.
Where necessary, you should ensure that the relevant details are
included on a tax return under the self-assessment procedures for the
1999/2000 tax year.
Q:11 IF I AM OUT OF THE UK ON EXPATRIATE ASSIGNMENT WILL I BE AFFECTED BY
CAPITAL GAINS TAX THROUGH TENDERING SHARES UNDER THE OFFER?
A:11 You will probably have become non-resident for UK tax purposes through
the length of assignment overseas. Nevertheless you may still be liable
to UK Capital Gains Tax through tendering shares under the Cash Offer
if you left the UK on assignment after 16 March 1998, having previously
been UK resident in the normal way, and remain abroad for less than 5
complete tax years. This means that you may have to report details of
your gain as a result of the Cash Offer (and other gains) whilst on
assignment, for the tax year in which you return to the UK. If you left
the UK before 16 March 1998, the five year time limit will not apply
and no CGT liability should arise once you have established non-UK
resident status.
The position is complex and you may wish to seek independent
professional advice on it.
Q:12 DO I HAVE TO EXCHANGE MY DUPONT SHARES NOW THAT CONOCO IS SEPARATING
FROM DUPONT?
A:12 No. Participation in the Cash Offer is completely voluntary. There is
nothing to prevent you from continuing to hold your DuPont common stock
as you have in the past. This applies equally to shares held in Company
administered or sponsored plans such as SOP and the DuPont Single
Company PEP.
<PAGE> 19
Q:13 CAN I RE-INVEST IN SOP THE CASH RECEIVED FOR DUPONT SHARES?
A:13 No. The exchange of your SOP shares for cash is deemed by the Inland
Revenue to be a "disposal" of those shares (i.e. it is treated like a
"sale" of your shares) and these proceeds cannot be re-invested in SOP.
(For your information, this situation would have been the same had
DuPont common stock in SOP been able to be exchanged for Conoco shares.
The Conoco Class B shares received could not have been held in the
Plan.)
Q:14 WILL MY TENDERING OF DUPONT SHARES IN SOP COUNT AS A SALE TO BE
INCLUDED IN THE NUMBER OF SALES PERMITTED IN THE TAX YEAR?
A:14 No. Participation in the Cash Offer will not be deemed a sale for the
purposes of the limit on the number of sales allowed in a tax year
under the Plan.
Q:15 WILL I HAVE TO PAY ANY BROKERAGE FEES OR OTHER ADMINISTRATION CHARGES
UNDER THE CASH OFFER?
A:15 No. Brokerage fees or other administration charges will not apply to
the tender under the Cash Offer of DuPont shares held in Company
Plans.
Q:16 CAN I MAKE A NORMAL SALE IN SOP DURING THE CASH OFFER PERIOD ?
A:16 Yes. DuPont shares in SOP can be sold in the normal way on the
regular sale day scheduled for Tuesday 3rd August. Sales will, as
usual, be at the market price on that day and free from the
complications of US Withholding Tax associated with the Cash Offer.
THE CLOSING DATE FOR NORMAL SALE INSTRUCTIONS TO BE RECEIVED BY NOBLE
LOWNDES SETTLEMENT TRUSTEES LIMITED WILL BE 5.00 PM ON MONDAY 26TH
JULY. Sale Forms (available from your local HR Dept) can be faxed as
well as mailed to the Trustee. Remember that you can, if you wish,
specify a minimum sterling price for your sale, with the instruction
that the Trustee cancel the sale if the price falls below that figure
on the sale day.
Q:17 IF I HAVE ANY QUESTIONS ABOUT THE CASH OFFER, WHOM SHOULD I CONTACT IN
THE FIRST INSTANCE?
A:17 For queries regarding the Stock Ownership Plan ( and the DuPont Share
Shop), you should call the Plan Hotline on 0181-666-8388.
For other plans or accounts, you should call the relevant Administrator
as follows:-
Stocktrade (Single company PEP) : 0131-529-0459
For general questions about the Exchange Offer, you should contact the
official information agent in the US, D.F. King & Co., Inc, on
001-212-269-5550.
For tax advice, you should contact your own tax adviser.
Human Resources, Stevenage
Monday 12th July 1999.
<PAGE> 20
CONOCO SPLIT-OFF
THESE NOTES ARE BEING PRODUCED FOR AND ADDRESSED TO DUPONT SHAREHOLDERS WHO ARE
DUPONT DOW EMPLOYEES IN THE UK, AS A BRIEF EXPLANATION OF THE INTENDED CASH
OFFER BY DUPONT
INTRODUCTION
DuPont is intending to offer its shareholders who are non-United States Persons
the opportunity to sell some or all of their DuPont common stock to DuPont in
cash (the Cash Offer). The Cash Offer is being made substantially concurrently
with a share exchange offer in the United States in which DuPont is offering
shareholders who are US Persons the opportunity to exchange DuPont common stock
for shares of Conoco Class B common stock (the Exchange Offer). The Cash Offer
and the Exchange Offer (collectively referred to as the "Offer") are part of the
process by which DuPont is intending to dispose of its remaining ownership of
Conoco. THE PURPOSE OF THESE NOTES IS TO GIVE YOU SOME IMMEDIATE INFORMATION ON
THE OFFER PROCESS AND TO PROVIDE SOME QUESTION AND ANSWERS ON SOME PRELIMINARY
QUESTIONS YOU MAY HAVE AROUND THE OFFER.
As the offer to stockholders will take the form of an Exchange Offer in the
United States to those stockholders who are "US Persons" and a Cash Offer to
"Non-US Persons", it is the Cash Offer that will apply in the UK. Accordingly,
these notes (and particularly the Q and A's) will concentrate on the Cash Offer,
with information on the Exchange Offer being provided merely to place the Cash
Offer in context.
TIMETABLE
The offer is conditional on various procedures which still have to be completed.
The Exchange Offer in the United States is expected to commence on Monday 12
July and closes on Friday 6 August 1999. Because of local regulatory
requirements in some non-US countries, it is likely that the Cash Offer would
then commence two days later on Wednesday 14 July and close two trading days
later on Tuesday 10 August 1999.
COMMUNICATION TO SHAREHOLDERS
Each share plan trustee or other external organisation holding shares on behalf
of DuPont stockholders (referred to as "Administrators") will communicate and
process the Offer with stockholders in relation to the particular plan or
account for which it is responsible. It may well be, therefore, that as a UK
stockholder you will receive several mailings, each relating to the particular
plan or account in which you hold shares. Mailings will be made to the address
currently on record with the relevant Administrator.
The full details of the Cash Offer are contained in the "Offer to Purchase"
document. This document is currently being printed and will then be mailed to
the various Administrators. You should receive separate copies in respect of
your shareholding(s), along with a letter from the relevant Administrator, in
about four to six days time. Such provisions of this documentation will govern
the Cash Offer.
YOU ARE UNDER NO OBLIGATION TO PARTICIPATE IN THE OFFER. HOWEVER, IF YOU DO WISH
TO DO SO, YOU WILL HAVE TO MAKE A SEPARATE DECISION IN RESPECT OF EACH PLAN IN
WHICH YOU HOLD SHARES.
<PAGE> 21
In summary, for your purposes the various mailings will be handled as follows :-
<TABLE>
<CAPTION>
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER
<S> <C>
- - DuPont Dow Stock Ownership Plan Noble Lowndes Settlement Trustees Limited
- - DuPont Share Shop Noble Lowndes Settlement Trustees Limited
- - DuPont Single Company PEP Stocktrade
- - Merrill Lynch Blueprint Account Merrill Lynch
- - Privately owned shares First Chicago Trust Company, or other appointed broker
holding stocks on behalf of the individual shareholder
</TABLE>
CASH OFFER OR EXCHANGE OFFER
Where shares are held in a Company Plan or Trust, the nature of the offer is
automatically determined by the location of that Plan regardless of the
nationality or current geographical location of the individual shareholders.
Thus, the shares held in the UK Plans (SOP, Share Shop and DuPont Single Company
PEP) are automatically eligible for the Cash Offer only, and not the Exchange
Offer, because those Plans with their underlying trust arrangements are resident
in the UK. Similarly, where they are legally able to do so members of the U.S.
Thrift Plan will receive the Exchange Offer in respect of DuPont shares held in
the Thrift Plan, regardless of the country to which they are currently assigned,
because that Plan is "resident" in the U.S.
It is conceivable, subject to compliance with any relevant laws, that there will
be a few cases where individuals receive the Exchange Offer for some of the
shares they hold and the Cash Offer in respect of others. For example, in
respect of any shares held in the Merrill Lynch Blueprint Account, UK payrolled
employees will be eligible to receive the Exchange Offer if they are currently
on expatriate assignment in the U.S. and fulfil the conditions of a "U.S.
Person" whereas they will receive the Cash Offer in respect of any DuPont shares
in SOP.
For employees with DuPont shares in a Blueprint account, Merrill Lynch will
initially determine eligibility for the Cash or Exchange Offer based on the
location of the address they hold on file. Thus, US employees on expatriate
assignment in the UK will, in respect of shares in their Blueprint account,
receive the Cash Offer documentation from Merrill Lynch if they have a UK
address on record with Merrill Lynch. They should contact Merrill Lynch if they
have any questions in relation to such shares.
QUESTIONS AND ANSWERS
As these notes are being produced for DuPont shareholders who are primarily UK
employees, the Q & A's relate particularly to the Cash Offer process.
Q:1 WHAT IS THE CASH OFFER?
A:1 DuPont is offering shareholders who are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for cash. The
Cash Offer is being made substantially concurrently with a share
exchange offer in the United States. It is the Cash Offer that will
apply in the UK.
THIS IS A COMPLETELY VOLUNTARY PROCESS ON THE PART OF DUPONT
SHAREHOLDERS. YOU ARE NOT REQUIRED TO TENDER ANY OF YOUR DUPONT COMMON
STOCK UNLESS YOU WISH TO DO SO.
<PAGE> 22
Q:2 HOW DO I DECIDE WHETHER TO TENDER?
A:2 The information you receive from the relevant Administrator (Noble
Lowndes Settlement Trustees Limited, Stocktrade etc) will include the
"Offer to Purchase" document and a cover letter from the Administrator.
You should review all this information, just as you would with any
other investment you are considering, before you decide whether or not
you wish to tender any of your DuPont common stock. DuPont or Conoco is
unable to advise you on this decision. It is recommended that you seek
advice from an independent financial adviser, bank manager, stockbroker
etc. competent to advise on such matters (who may charge you for this
advice ).
Q:3 HOW DO I TENDER?
A:3 The election period for the Cash Offer is expected to be open from
Wednesday 14 July to Tuesday 10 August 1999. Each Administrator will
send you details of how to participate in the Cash Offer in respect of
the shares held in that particular plan or account. PLEASE NOTE THAT
THE CLOSING DATE WILL VARY ACCORDING TO WHICH CATEGORY OF SHARES IS
BEING TENDERED. For example, the Administrators of the UK Share
Ownership Plan and DuPont Single Company PEP will have to set an
earlier closing date to receive instructions on shares in those Plans
in order to have sufficient time to collate all the tenders received
and submit a composite tender to the US in respect of the Plan.
Q:4 HOW MANY SHARES MAY I TENDER?
A:4 You may tender all or only part of your holdings of DuPont Stock in
each Plan or account, (subject to the normal retention restrictions of
SOP). If you tender only a part of your holdings of DuPont Stock in any
Plan or account, you will be deemed to have made an election not to
tender your remaining holdings of DuPont stock in that Plan or account.
Q:5 WHAT MAY I TENDER?
A:5 You may tender only actual shares of DuPont common stock. You cannot
tender DuPont share options.
Note: You may exercise vested share options in order to receive DuPont
shares which may then be tendered under the Exchange Offer. However,
you will need to consult with Merrill Lynch to ensure that the shares
will be registered in your name in time to meet the closing date for
the offer. MONDAY 2 AUGUST 1999 IS EXPECTED TO BE THE LATEST DATE ON
WHICH YOU CAN EXERCISE OPTIONS TO ACQUIRE SHARES FOR SUBSEQUENT
TENDERING WITHIN THE CASH OFFER DEADLINE. HAVING COMPLETED YOUR
EXERCISE, YOU WILL NEED IMMEDIATELY TO CONTACT YOUR COUNTRY SHARES
FACILITATOR VIA YOUR LOCAL HUMAN RESOURCES, IN ORDER TO OBTAIN THE
NECESSARY MERRILL LYNCH LETTER AND DOCUMENTATION TO ENABLE YOU TO
TENDER THOSE SHARES BEFORE THE CASH OFFER CLOSES.
Q:6 WHY IS DUPONT NOT MAKING THE EXCHANGE OFFER TO NON-U.S. PERSONS?
A:6 There are numerous complex and costly tax, legal and regulatory
requirements which would have had to be satisfied in order to extend
the Exchange Offer to other jurisdictions outside the U.S. and in some
countries a share offer could have been totally prohibited. To avoid
these complications and the associated cost and tax impacts, DuPont has
decided instead to make a Cash Offer to "Non-U.S. persons" in those
countries where it is legally able to do so.
Q:7 WHY IS THE CASH OFFER SUBJECT TO US TAX WITHHOLDING?
A:7 Under US tax law the Cash Offer must be treated in the same way as a
dividend and must, therefore, be subject initially to tax withholding
in the US. It is anticipated that the reduced 15% rate of tax
withholding will be applied to the tender of shares from SOP and the
DuPont Single Company PEP because of the compliance documentation (Form
W8)
<PAGE> 23
already filed with the US authorities by the respective Plan managers.
Where a Form W8 has not been filed or is not completed under the Cash
Offer arrangements, a higher 30% or higher rate could be applied.
Q:8 CAN I CLAIM BACK THE TAX WITHHOLDING IMPOSED IN THE US?
A:8 THERE IS NO CERTAINTY THAT YOU WILL BE ABLE TO RECOVER THE US TAX
WITHHELD. The formal Cash Offer document indicates the grounds under
which you might be able to recover the US tax withheld. It is not
possible to know in advance that a successful claim for recovery can be
made since this will depend on the facts and circumstances for each
shareholder and the overall effect of the process on DuPont's
subsequent share structure.
Whether or not the US tax can be reclaimed can only be determined AFTER
completion of the overall Exchange Offer transaction. Each shareholder
will have to complete appropriate forms for repayment and apply to the
Internal Revenue Service in the US. The facts of each case will
determine whether a refund can be claimed. You cannot rely on
recovering the US tax in deciding your response to the Cash Offer nor
is it possible to provide further guidance in advance of the process
being completed.
Q:9 DO I HAVE TO PAY INCOME TAX ON THE CASH RECEIVED FOR DUPONT SHARES?
A:9 In general, there should be no UK income tax due on the cash received
for DuPont common stock under the Cash Offer. The exception is if you
decide to tender any SOP company-purchased shares which are less than
three years old. These shares would be taxable if sold in the normal
way and are similarly liable to UK income tax if tendered for cash
under the Cash Offer.
It is highly unlikely but there is a remote possibility that part of
the cash you receive will be taxed as income in the UK. In that event,
shareholders will be subject to UK income tax with credit given for any
irrecoverable US tax.
Q:10 Do I have to pay Capital Gains Tax if I tender shares under the Cash
Offer?
A:10 Yes, except where you "dispose" of shares from a tax relieved
investment plan such as the DuPont Single Company PEP. In all other
cases, and after removing from charge any part of the cash to be taxed
as income, if you receive cash in respect of your DuPont common stock,
you will be potentially liable to Capital Gains Tax on the difference
between the cash proceeds received and the original cost of the shares
(as adjusted for indexation).
You will not, however, have to pay any Capital Gains Tax unless your
chargeable gains (less allowable losses) from all sources during the
tax year 1999/2000 exceed the annual exemption. The annual exemption
for 1999/2000 is pound sterling 7100. If you are unable to recover the
US Tax Withholding on the proceeds for the shares tendered, you can
deduct this tax in calculating the chargeable gain.
As an alternative, part of the US tax can be credited against any UK
capital gains tax payable on the transaction, but you will need to
consult your usual tax advisor.
Where necessary, you should ensure that the relevant details are
included on a tax return under the self-assessment procedures for the
1999/2000 tax year.
<PAGE> 24
Q:11 IF I AM OUT OF THE UK ON EXPATRIATE ASSIGNMENT WILL I BE AFFECTED BY
CAPITAL GAINS TAX THROUGH TENDERING SHARES UNDER THE OFFER?
A:11 You will probably have become non-resident for UK tax purposes through
the length of assignment overseas. Nevertheless you may still be liable
to UK Capital Gains Tax through tendering shares under the Cash Offer
if you left the UK on assignment after 16 March 1998, having previously
been UK resident in the normal way, and remain abroad for less than 5
complete tax years. This means that you may have to report details of
your gain as a result of the Cash Offer (and other gains) whilst on
assignment, for the tax year in which you return to the UK. If you left
the UK before 16 March 1998, the five year time limit will not apply
and no CGT liability should arise once you have established non-UK
resident status. The position is complex and you may wish to seek
independent professional advice on it.
Q:12 DO I HAVE TO EXCHANGE MY DUPONT SHARES NOW THAT CONOCO IS SEPARATING
FROM DUPONT?
A:12 No. Participation in the Cash Offer is completely voluntary. There is
nothing to prevent you from continuing to hold your DuPont common stock
as you have in the past. This applies equally to shares held in Company
administered or sponsored plans such as SOP and the DuPont Single
Company PEP.
Q:13 CAN I RE-INVEST IN SOP THE CASH RECEIVED FOR DUPONT SHARES?
A:13 No. The exchange of your SOP shares for cash is deemed by the Inland
Revenue to be a "disposal" of those shares (i.e. it is treated like a
"sale" of your shares) and these proceeds cannot be re-invested in SOP.
(For your information, this situation would have been the same had
DuPont common stock in SOP been able to be exchanged for Conoco shares.
The Conoco Class B shares received could not have been held in the
Plan.)
Q:14 WILL MY TENDERING OF DUPONT SHARES IN SOP COUNT AS A SALE TO BE
INCLUDED IN THE NUMBER OF SALES PERMITTED IN THE TAX YEAR?
A:14 No. Participation in the Cash Offer will not be deemed a sale for the
purposes of the limit on the number of sales allowed in a tax year
under the Plan.
Q:15 WILL I HAVE TO PAY ANY BROKERAGE FEES OR OTHER ADMINISTRATION CHARGES
UNDER THE CASH OFFER?
A:15 No. Brokerage fees or other administration charges will not apply to
the tender under the Cash Offer of DuPont shares held in Company
Plans.
Q:16 CAN I MAKE A NORMAL SALE IN SOP DURING THE CASH OFFER PERIOD?
A:16 Yes. DuPont shares in SOP can be sold in the normal way on the regular
sale day scheduled for Tuesday 3rd August. Sales will, as usual, be at
the market price on that day and free from the complications of US
Withholding Tax associated with the Cash Offer.
THE CLOSING DATE FOR NORMAL SALE INSTRUCTIONS TO BE RECEIVED BY NOBLE
LOWNDES SETTLEMENT TRUSTEES LIMITED WILL BE 5.00 PM ON MONDAY 26TH
JULY. Sale Forms (available from your local HR Dept) can be faxed as
well as mailed to the Trustee. Remember that you can, if you wish,
specify a minimum sterling price for your sale, with the instruction
that the Trustee cancel the sale if the price falls below that figure
on the sale day.
<PAGE> 25
Q:17 IF I HAVE ANY QUESTIONS ABOUT THE CASH OFFER, WHOM SHOULD I CONTACT IN
THE FIRST INSTANCE?
A:17 For queries regarding the Stock Ownership Plan (and the DuPont Share
Shop), you should call the Plan Hotline on 0181-666-8388.
For other plans or accounts, you should call the relevant Administrator
as follows:-
Stocktrade (Single company PEP) : 0131-529-0459
Merrill Lynch (Blueprint Account) : 001-732-563-8775
For general questions about the Exchange Offer, you should contact the
official information agent in the US, D.F. King & Co., Inc, on
001-212-269-5550.
For tax advice, you should contact your own tax adviser.
DuPont Compensation & Benefits, Stevenage
Monday 12th July 1999.
<PAGE> 26
TO: ALL DUPA EMPLOYEES
FROM: JOHN FOOTE
RE: PARENT COMPANY STOCK OFFER
You will have received a Bulkmail message from Chad Holliday announcing that
DuPont was entering the final stages of the separation from Conoco, and that
these steps were being taken:
Monday July 12
An offer by DuPont to its U.S. stockholders to exchange their DuPont stock for
Conoco stock.
Wednesday July 14 (New York Time)
It is expected that approval will be provided that will allow DuPont to offer
its non-U.S. stockholders to purchase their DuPont stock for cash. The
stock-for-stock exchange offer is not available for non-U.S. stockholders.
Three groups of people are affected..
MEMBERS OF THE EMPLOYEE SHARE SAVINGS PLAN.. These employees will receive a copy
of the offer from the Trustee of the Plan within the next few days, plus a
simplified summary of the offer, and details of the acceptance procedure and
timing.
MERRILL LYNCH BLUEPRINT ACCOUNT HOLDERS.. All employees who own DuPont stock,
and hold it in their Blueprint Account, will receive an offer from Merrill Lynch
within the next few days, plus a simplified summary of the offer, and details of
the acceptance procedure and timing.
Holders of options to purchase shares may exercise those options in accordance
with the terms of the stock option plans, and may tender those shares for the
offer. Note, however, that this process is time-consuming, and the deadlines
explained in the acceptance procedure summary must be observed. Only holders of
DuPont stock can accept the offer, so this exercise process must be completed
first.
STOCKHOLDERS WHO OWN DUPONT STOCK DIRECTLY, RATHER THAN THROUGH A BLUEPRINT
ACCOUNT.. If you own shares of DuPont stock in other accounts, you will receive
separate mailings relating to those shares of DuPont stock.
These are important documents, and I urge you to read them carefully, and obtain
professional advice before making your decision.
If you are a stockholder and do not receive an offer, or if you have any
questions, please contact Frances Pensabene or Graeme Longe.
<PAGE> 27
TO: ALL DUPONT NEW ZEALAND EMPLOYEES
FROM: JOHN FOOTE
RE: PARENT COMPANY STOCK OFFER
You will have received a Bulkmail message from Chad Holliday announcing that
DuPont were entering the final stages of the separation from Conoco, and that
these steps were being taken:
Monday July 12
- --------------
An offer by DuPont to its U.S. stockholders to exchange their DuPont stock for
Conoco stock.
Wednesday July 14 (New York Time)
- ---------------------------------
It is expected that approval will be provided that will allow DuPont to offer
its Non-U.S. Person stockholders to purchase their DuPont stock for cash. The
stock-for-stock exchange offer is not available for Non-U.S. Person
stockholders.
Three groups of people are affected:
MEMBERS OF THE EMPLOYEE SHARE SAVINGS PLAN. These employees will receive a copy
of the offer from the Trustee of the Plan within the next few days, plus a
simplified summary of the offer, and details of the acceptance procedure and
timing.
MERRILL LYNCH BLUEPRINT ACCOUNT HOLDERS. All employees who own DuPont stock, and
hold it in their Blueprint Account, will receive an offer from Merrill Lynch
within the next few days, plus a simplified summary of the offer, and details of
the acceptance procedure and timing.
Holders of options to purchase shares may exercise those options in accordance
with the terms of the stock option plans, and may tender those shares for the
offer. Note, however, that this process is time-consuming, and the deadlines
explained in the acceptance procedure summary must be observed. Only holders of
DuPont stock can accept the offer, so this exercise process must be completed
first.
STOCKHOLDERS WHO OWN DUPONT STOCK DIRECTLY, RATHER THAN THROUGH A BLUEPRINT
ACCOUNT. If you own shares of DuPont stock in other accounts, you will receive
separate mailings relating to those shares of DuPont stock.
These are important documents, and I urge you to read them carefully, and obtain
professional advice before making your decision.
If you are a stockholder and do not receive an offer, or if you have any
questions, please contact Sharan Aikman at the Auckland office.
<PAGE> 1
To all regular UK Conoco Employees
CONOCO SPLIT-OFF
THESE NOTES ARE BEING PRODUCED FOR AND ADDRESSED TO DUPONT SHAREHOLDERS WHO ARE
UK EMPLOYEES, AS A BRIEF EXPLANATION OF THE INTENDED CASH OFFER BY DUPONT.
INTRODUCTION
DuPont is intending to offer its shareholders who are non-United States Persons
the opportunity to sell some or all of their DuPont common stock to DuPont for
cash (the Cash Offer). The Cash Offer is being made substantially concurrently
with a share exchange offer in the United States in which DuPont is offering
shareholders who are US Persons the opportunity to exchange DuPont common stock
for shares of Conoco Class B common stock (the Exchange Offer). The Cash Offer
and the Exchange Offer (collectively referred to as the "Offer") are part of
the process by which DuPont is intending to dispose of its remaining ownership
of Conoco. The purpose of these notes is to give you some immediate information
on the Offer process and to provide some Question and Answers on some
preliminary questions you may have around the Offer.
As the offer to shareholders will take the form of an Exchange Offer in the
United States to those stockholders who are "US Persons" and a Cash Offer to
"Non-US Persons", it is the Cash Offer that will apply in the UK. Accordingly,
these notes (and particularly the Q and A's) will concentrate on the Cash
Offer, with information on the Exchange Offer being provided merely to place
the Cash Offer in context.
TIMETABLE
The offer is conditional on various procedures which have still to be
completed. The Exchange Offer in the United States is expected to commence on
Monday 12 July and close on Friday 6 August 1999. Because of local regulatory
requirements in some non-US countries, it is likely that the Cash Offer would
then commence two days later on Wednesday 14 July and close two trading days
later on Tuesday 10 August 1999.
COMMUNICATION TO SHAREHOLDERS
Each share plan trustee or other external organisation holding shares on behalf
of DuPont stockholders (referred to as "Administrators") will communicate and
process the Offer with stockholders in relation to the particular plan or
account for which it is responsible. It may well be, therefore, that as a UK
stockholder you will receive several mailings, each relating to the particular
plan or account in which you hold shares. Mailings will be made to the address
currently on record with the relevant Administrator.
The full details of the Cash Offer are contained in the "Offer to Purchase"
document. This document is currently being printed and will then be mailed to
the various Administrators. You should receive separate copies in respect of
your shareholding(s), along with a letter from the relevant Administrator, in
about four to six days time. The provisions of such documentation will govern
the Cash Offer.
You are under no obligation to participate in the Offer. However, if you do
wish to do so, you will have to make a separate decision in respect of each
plan in which you hold shares.
<PAGE> 2
In summary, for your purposes the various mailings will be handled as follows:
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE OFFER
- - Conoco Stock Ownership Plan Noble Lowndes Settlement Trustees Limited
- - Conoco Share Shop Noble Lowndes Settlement Trustees Limited
- - DuPont Single Company PEP Stocktrade
- - Conoco ISA Stocktrade
- - Merrill Lynch Blueprint Account Merrill Lynch
- - Privately owned shares First Chicago Trust Company, or other
appointed broker holding stocks on behalf of
the individual shareholder
CASH OFFER OR EXCHANGE OFFER
Where shares are held in a Company Plan or Trust, the nature of the offer is
automatically determined by the location of that Plan regardless of the
nationality or current geographical location of the individual shareholders.
Thus, the shares held in the UK Plans (SOP, Share Shop DuPont Single Company PEP
and Conoco ISA) are automatically eligible for the Cash Offer only and not the
Exchange Offer, because those Plans with their underlying trust arrangements are
resident in the UK.
It is conceivable, subject to compliance with any relevant laws, that there will
be a few cases where individuals receive the Exchange Offer for some of the
shares they hold and the Cash Offer in respect of others. For example, in
respect of any shares held in the Merrill Lynch Blueprint Account, UK payrolled
employees will be eligible to receive the Exchange Offer if they are currently
on expatriate assignment in the U.S. and fulfill the conditions of a "U.S.
Person" whereas they will receive the Cash Offer in respect of any DuPont shares
in SOP.
For employees with DuPont shares in a Blueprint account, Merrill Lynch will
initially determine eligibility for the Cash or Exchange Offer based on the
location of the address they hold on file. Thus, US employees on expatriate
assignment in the UK will, in respect of shares in their Blueprint account,
receive the Cash Offer documentation from Merrill Lynch if they have a UK
address on record with Merrill Lynch. They should contact Merrill Lynch if they
have any questions in relation to such shares.
QUESTIONS AND ANSWERS
As these notes are being produced for DuPont shareholders who are UK
employees, the Q & A's relate particularly to the Cash Offer process.
Q:1 WHAT IS THE CASH OFFER?
A:1 DuPont is offering its shareholders who are non-United States Persons the
opportunity to sell some or all of their shares to DuPont for cash. The
Cash Offer is being made substantially concurrently with a share exchange
offer in the United States. It is the Cash Offer that will apply in the UK.
THIS IS A COMPLETELY VOLUNTARY PROCESS ON THE PART OF DUPONT SHAREHOLDERS.
YOU ARE NOT REQUIRED TO TENDER ANY OF YOUR DUPONT COMMON STOCK UNLESS YOU
WISH TO DO SO.
<PAGE> 3
Q:2 How do I decide whether to tender?
A:2 The information you receive from the relevant Administrator (Noble Lowndes
Settlement Trustees Limited, Stocktrade, etc.) will include the "Offer to
Purchase" document and a cover letter from the Administrator. You should
review all this information, just as you would with any other investment
you are considering, before you decide whether or not you wish to tender
any of your DuPont common stock. Dupont or Conoco is unable to advise you
on this decision. It is recommended that you seek advice from an
independent financial adviser, bank manager, stockbroker, etc. competent
to advise on such matters (who may charge you for this advice).
Q:3 How do I tender?
A:3 The election period for the Cash Offer is expected to be open from
Wednesday 14 July to Tuesday 10 August 1999. Each Administrator will send
you details of how to participate in the Cash Offer in respect of the
shares held in that particular plan or account. Please note that the
closing date will vary according to which category of shares is being
tendered. For example, the Administrators of the UK Share Ownership Plan
and DuPont Single Company PEP will have to set an earlier closing date to
receive instructions on shares in those Plans in order to have sufficient
time to collate all the tenders received and submit a composite tender to
the US in respect of the Plan.
Q:4 How many shares may I tender?
A:4 You may tender all or only part of your holdings of DuPont stock in each
Plan or account, (subject to the normal retention restrictions of SOP). If
you tender only a part of your holdings of DuPont stock in any Plan or
account, you will be deemed to have made an election not to tender your
remaining holdings of DuPont stock in that Plan or account.
Q:5 What may I tender?
A:5 You may tender only actual shares of DuPont common stock. You cannot tender
DuPont share options.
NOTE: You may exercise vested share options in order to receive DuPont
shares which may then be tendered under the Exchange Offer. However, you
will need to consult with Merrill Lynch to ensure that the shares will be
registered in your name in time to meet the closing date for the offer.
Monday 2 August 1999 is expected to be the latest date on which you can
exercise options to acquire shares for subsequent tendering within the Cash
Offer deadline. Having completed your exercise, you will need immediately
to contact your country SHARES facilitator, via your local HR Department,
in order to obtain the necessary Merrill Lynch letter and documentation to
enable you to tender those shares before the Cash Offer closes.
Q:6 Why is DuPont not making the Exchange Offer to Non-U.S. persons?
A:6 There are numerous complex and costly tax, legal and regulatory
requirements which would have had to be satisfied in order to extend the
Exchange Offer to other jurisdictions outside the U.S. and in some
countries a share offer could have been totally prohibited. To avoid these
complications and the associated cost and tax impacts, DuPont has decided
instead to make a Cash Offer to "Non-U.S. persons" in those countries where
it is legally able to do so.
<PAGE> 4
Q:7 WHY IS THE CASH OFFER SUBJECT TO US TAX WITHHOLDING?
A:7 Under US tax law the Cash Offer must be treated in the same way as a
dividend and must, therefore, be subject initially to tax withholding in
the US. It is anticipated that the reduced 15% rate of tax withholding will
be applied to the tender of shares from SOP and the DuPont Single Company
PEP and Conoco ISA because of the compliance documentation (Form W8)
already filed with the US authorities by the respective Plan managers.
Where a Form W8 has not been filed or is not completed under the Cash Offer
arrangements, a 30% or higher rate could be applied.
Q:8 CAN I CLAIM BACK THE TAX WITHHOLDING IMPOSED IN THE US?
A:8 There is no certainty that you will be able to recover the US tax withheld.
The formal Cash Offer document indicates the grounds under which you might
be able to recover the US tax withheld. It is not possible to know in
advance that a successful claim for recovery can be made since this will
depend on the facts and circumstances for each shareholder and the overall
effect of the process on DuPont's subsequent share structure.
Whether or not the US tax can be reclaimed can only be determined after
completion of the overall Exchange Offer transaction. Each shareholder will
have to complete appropriate forms for repayment and apply to the Internal
Revenue Service in the US. The facts of each case will determine whether a
refund can be claimed. You cannot rely on recovering the US tax in deciding
your response to the Cash Offer nor is it possible to provide further
guidance in advance of the process being completed.
The Company has, however, engaged the services of PricewaterhouseCoopers to
provide guidance, if required, to participating employees regarding the
basis of their claim for recovery and the completion of the appropriate
forms. They will also be able to advise on other tax related issues
associated with the Cash Offer. Employees will be charged a fee for the use
of this service which will be deducted through Payroll. The details of the
Helpline service are set out in Attachment 1 to these notes.
Q:9 DO I HAVE TO PAY INCOME TAX ON THE CASH RECEIVED FOR DuPONT SHARES?
A:9 In general, there should be no UK income tax due on the cash received for
DuPont common stock under the Cash Offer. The exception is if you decide to
tender any SOP company-purchased shares which are less than three years
old. These shares would be taxable if sold in the normal way and are
similarly liable to UK income tax if tendered for cash under the Cash
Offer.
It is highly unlikely but there is a remote possibility that part of the
cash you receive will be taxed as income in the UK. In that event,
shareholders will be subject to UK income tax with credit given for any
irrecoverable US tax.
Q:10 DO I HAVE TO PAY CAPITAL GAINS TAX IF I TENDER SHARES UNDER THE CASH OFFER?
A:10 Yes, except where you "dispose" of shares from a tax relieved investment
plan such as the DuPont Single Company PEP or Conoco ISA. In all other
cases, and after removing from charge any part of the cash to be taxed as
income, if you receive cash in respect of your DuPont common stock, you
will be potentially liable to Capital Gains Tax on the difference between
the cash proceeds received and the original cost of the shares (as adjusted
for indexation).
<PAGE> 5
You will not, however, have to pay any Capital Gains Tax unless your
chargeable gains (less allowable losses) from all sources during the tax
year 1999/2000 exceed the annual exemption. The annual exemption for
1999/2000 is pound sterling 7100. If you are unable to recover the US Tax
Withholding on the proceeds for the shares tendered, you can deduct this
tax in calculating the chargeable gain.
As an alternative, part of the US tax can be credited against any UK
capital gains tax payable on the transaction, but you will need to consult
your usual tax advisor.
For UK payrolled employees, more detailed "Guidance Notes on How to
Calculate Capital Gains Tax" are available via your local HR Department or
HR Central Services, Warwick.
Where necessary, you should ensure that the relevant details are included
on a tax return under the self-assessment procedures for the 1999/2000 tax
year.
Q:11 IF I AM OUT OF THE UK ON EXPATRIATE ASSIGNMENT WILL I BE AFFECTED BY
CAPITAL GAINS TAX THROUGH TENDERING SHARES UNDER THE OFFER?
A:11 You will probably have become non-resident for UK tax purposes through the
length of assignment overseas. Nevertheless you may still be liable to UK
Capital Gains Tax through tendering shares under the Cash Offer if you left
the UK on assignment after 16 March 1998, having previously been UK
resident in the normal way, and remain abroad for less than 5 complete tax
years. This means that you may have to report details of your gain as a
result of the Cash Offer (and other gains) whilst on assignment, for the
tax year in which you return to the UK. If you left the UK before 16 March
1998, the five-year time limit will not apply and no CGT liability should
arise once you have established non-UK resident status.
The position is complex and you may wish to seek independent professional
advice on it.
Q:12 DO I HAVE TO EXCHANGE MY DUPONT SHARES NOW THAT CONOCO IS SEPARATING FROM
DUPONT?
A:12 No. Participation in the Cash Offer is completely voluntary. There is
nothing to prevent you from continuing to hold your DuPont common stock as
you have in the past. This applies equally to shares held in Company
administered or sponsored plans such as SOP, the DuPont Single Company PEP
and the Conoco ISA.
Q:13 CAN I RE-INVEST IN SOP THE CASH RECEIVED FOR DUPONT SHARES?
A:13 No. The exchange of your SOP shares for cash is deemed by the Inland
Revenue to be a "disposal" of those shares (i.e. it is treated like a
"sale" of your shares) and these proceeds cannot be re-invested in SOP.
(For your information, this situation would have been the same had DuPont
common stock in SOP been able to be exchanged for Conoco shares. The Conoco
Class B shares received could not have been held in the Plan.)
Q:14 WILL MY TENDERING OF DUPONT SHARES IN SOP COUNT AS A SALE TO BE INCLUDED IN
THE NUMBER OF SALES PERMITTED IN THE TAX YEAR?
A:14 No. Participation in the Cash Offer will not be deemed a sale for the
purposes of the limit on the number of sales allowed in a tax year under
the Plan.
<PAGE> 6
Q:15 WILL I HAVE TO PAY ANY BROKERAGE FEES OR OTHER ADMINISTRATION CHARGES
UNDER THE CASH OFFER?
A:15 Brokerage fees or other administration charges will not apply to the
tender under the Cash Offer of DuPont shares held in Company Plans.
Q:16 CAN I MAKE A NORMAL SALE IN SOP DURING THE CASH OFFER PERIOD?
A:16 Yes. DuPont shares in SOP can be sold in the normal way on the regular
sale day scheduled for Tuesday 3rd August. Sales will, as usual, be at
the market price on that day and free from the complications of US
Withholding Tax associated with the Cash Offer.
The closing date for normal sale instructions to be received by Noble
Lowndes Settlement Trustees Limited will be 5:00 pm on Monday 26th July.
Sale Forms (available from your local HR Dept) can be faxed as well as
mailed to the Trustee. Remember that you can, if you wish, specify a
minimum sterling price for your sale, with the instruction that the
Trustee cancel the sale if the price falls below that figure on the sale
day.
Q:17 IF I HAVE ANY QUESTIONS ABOUT THE CASH OFFER, WHOM SHOULD I CONTACT IN
THE FIRST INSTANCE?
A:17 For queries regarding the Stock Ownership Plan (and the Conoco Share
Shop), you should call the Plan Hotline on 0181-666-8285.
For other plans or accounts, you should call the relevant Administrator
as follows:
Stocktrade (Single company PEP and ISA): 0131-529-0459
Merrill Lynch (Blueprint Account): 001-732-563-6775
For general questions about the Exchange Offer, you should contact the
official information agent in the US, D.F. King & Co., Inc. on
001-212-269-5550.
For tax advice, you should contact your own tax adviser or the PwC Helpline if
preferred.
HR CENTRAL SERVICES, WARWICK.
MONDAY 12TH JULY 1999
<PAGE> 7
ATTACHMENT 1
ADVICE ON RECOVERY OF US WITHHOLDING TAX
VIA PRICEWATERHOUSECOOPERS
PricewaterhouseCoopers (PwC) have been engaged to provide a telephone Helpline
advisory service to employees participating in the Cash Offer. The service has
been established primarily to provide guidance on the recovery of US
Withholding Tax but can also cover other tax-related issues, such as Capital
Gains Tax.
The procedure and charges for this service are set out below.
- - The Company recognises that your personal financial/tax advisor may not
be familiar with the rules of US Withholding Tax and has, therefore,
arranged for specialist assistance to be available via PwC. The service is
entirely voluntary. It has been established primarily to provide advice on
the basis for claiming recovery of Withholding Tax from the US Internal
Revenue Service and guidance on completing the necessary documentation.
- - To access the PwC Helpline you should call 0171-213-8242. This will be
connected to an answering facility so that you can leave your telephone
number and a PwC representative will call you back.
- - Employees will be charged a standard minimum fee of (pound sterling)50
(incl VAT) for up to 15 minutes telephone consultation with a PwC adviser.
If the call extends beyond 15 minutes, employees will be charged for the
extra time on a prorated basis (eg (pound sterling)67 for 20 minutes).
Employees will be limited to a maximum of (pound sterling)200 of usage,
whether through four short calls or extended discussion over fewer calls.
- - The PwC fee will be recovered by payroll deduction in the month following
notification by PwC to Conoco of Helpline usage details.
- - Before contacting PwC, employees should list their queries and gather all
relevant paperwork so that they can make best use of their consultation
time.
- - When contacting PwC, employees will on each occasion be asked to quote
their name and employee number to confirm their identity before any advice
can be given. Your Employee Number is the six digit number quoted on your
payslip.
- - The PwC Helpline has been designed to advise primarily on the US
Withholding Tax issue. PwC will also be able to provide guidance on other
tax-related aspects of the Cash Offer if required but they will not, via
this particular service, be able to advise on the merits or otherwise of
participating in the Cash Offer in individual cases. (Employees are, of
course, free to make their own private arrangements with PwC for personal
financial advice under the terms of the Financial Services Act)
<PAGE> 1
COMPLEMENT DE PROSPECTUS
RELATIF A UNE OFFRE PUBLIQUE D'ACHAT D'ACTIONS PROPRES (CI-APRES "L'OFFRE")
FAITE PAR E.I. DU PONT DE NEMOURS AND COMPANY (CI-APRES "L'OFFRANT" OU
"DUPONT"), UNE SOCIETE DE DROIT DE L'ETAT DU DELAWARE (ETATS-UNIS), DONT LE
PRINCIPAL SIEGE D'ACTIVITE EST ETABLI A 1007 MARKET STREET, WILMINGTON, DELAWARE
19898 (ETATS-UNIS), A SES ACTIONNAIRES NON-AMERICAINS.
APPROBATION DE LA COMMISSION BANCAIRE ET FINANCIERE
Le prospectus americain ("offer to purchase") relatif a l'Offre etabli en langue
anglaise complete par le present complement de prospectus a ete approuve le 12
juillet 1999 par la Commission bancaire et financiere conformement a l'article
17 de l'arrete royal du 8 novembre 1989, relatif aux offres publiques
d'acquisition et aux modifications du controle des societes et a l'article
29ter, Section 1(er), 1(Degree) de l'arrete royal n(Degree) 185 du 9 juillet
1935 relatif au controle des banques et aux emissions de titres et valeurs.
Cette approbation ne comporte aucune appreciation de l'opportunite et des
merites de l'operation, ni de la situation de celui qui la realise.
Conformement a l'article 21 de l'arrete royal du 8 novembre 1989 et a l'article
29, Section 1(er) de l'arrete royal n(Degree) 185 du 9 juillet 1935, l'avis
prescrit par ces articles a ete publie dans la presse.
LE PRESENT COMPLEMENT DE PROSPECTUS ET LE PROSPECTUS AMERICAIN ("OFFER TO
PURCHASE") RELATIF A LA CASH OFFER DANS SA VERSION ORIGINALE ANGLAISE
CONSTITUENT UN TOUT NE POUVANT CIRCULER SEPAREMENT EN BELGIQUE.
En cas de divergence d'interpretation entre la version francaise et la version
neerlandaise du present complement de prospectus, seule la version francaise
fait foi.
CONTEXTE DES OPERATIONS ET MOTIFS DE L'OFFRE
L'Offre s'inscrit dans le cadre de la separation des activites de DuPont. Dans
la mesure ou l'Offrant souhaite se recentrer sur ses activites liees aux
equipements et aux Life Sciences, son conseil d'administration a approuve en
septembre 1998 un plan visant a separer les activites liees au petrole et au
gaz, exercees par Conoco, des autres activites, qui seront poursuivies par
l'Offrant. Dans ce contexte, l'Offrant offre la possibilite a tous ses
actionnaires americains d'echanger tout ou partie de leurs actions DuPont contre
des actions Conoco Classe B conformement aux conditions contenues dans un
prospectus americain d'Exchange Offer. L'Offrant detient actuellement toutes les
actions emises Conoco Classe B qui representent environ 70% de la valeur et 92%
des droits de vote du capital de Conoco. Les actionnaires
-1-
<PAGE> 2
non-americains de DuPont beneficient d'une offre d'achat contre especes de leurs
actions par l'Offrant (Cash Offer). Les actionnaires americains de DuPont ne
peuvent pas participer a la Cash Offer. La Securities and Exchange Commision
americaine a autorise DuPont a limiter l'Exchange Offer aux actionnaires
americains et la Cash Offer aux actionnaires non-americains. L'Offrant a
sollicite cette mesure pour les raisons que (i) permettre aux actionnaires
non-americains de participer a l'Exchange Offer aurait eu des consequences
fiscales negatives importantes pour DuPont et que (ii) etendre l'Exchange Offer
aux actionnaires non-americains aurait entraine l'obligation de se conformer
simultanement a la legislation boursiere des nombreux pays ou les actionnaires
de DuPont resident.
RESUME DE L'OFFRE
(1) Le tableau ci-dessous indique, pour les periodes indiquees, le prix de vente
maximum et minimum a la cloture (en USD) de l'action Conoco Classe A au New York
Stock Exchange (source: NYSE composite tape), ainsi que le montant des
dividendes par action Conoco Classe A.
<TABLE>
<CAPTION>
Max. Min. Dividends
<S> <C> <C> <C>
1998
4eme trimestre $ 25 3/4 $ 19 3/8 $ ___
1999
</TABLE>
<PAGE> 3
1. L'Offre: Les detenteurs non-americains de certificats
au porteur representant des actions DuPont,
emis par Belgian Overseas Issuing Corporation
("B.O.I.C.") recevront, aux conditions
precisees dans le prospectus americain (voy.
infra), un montant en especes equivalent a
80,76 USD brut par action DuPont, coupons
n(Degree) 280 a 300 attaches.
UN IMPOT FEDERAL AMERICAIN SUR LES REVENUS DE
30% (QUI PEUT ETRE RAMENE A 15% S'IL EST FAIT
APPEL A LA CONVENTION PREVENTIVE DE DOUBLE
IMPOSITION PAR L'ACTIONNAIRE BELGE - B.O.I.C.
METTRA LES FORMULAIRES APPROPRIES A
DISPOSITION DES DETENTEURS QUI EN FONT LA
DEMANDE) SERA RETENU SUR LES MONTANTS BRUTS
DISTRIBUES. DES LORS, EN FONCTION DE
L'EVOLUTION DU COURS DE L'ACTION DUPONT, LE
MONTANT NET A RECEVOIR RISQUE D'ETRE
INFERIEUR AU COURS DE L'ACTION DUPONT EN
BOURSE DE BRUXELLES (VOY. INFRA "FRAIS ET
TAXES LIES A L'OFFRE").
L'OFFRANT N'A PAS L'INTENTION DE DEMANDER LA
RADIATION DE L'ACTION DUPONT DE LA BOURSE DE
BRUXELLES APRES LA CLOTURE DE L'OFFRE.
2. Justification du prix Le prix offert pour les actions DuPont a ete
calcule en utilisant la parite d'echange
appliquee pour l'Exchange Offer ainsi que les
cours de bourse recents au New York Stock
Exchange des actions Conoco Classe A(1) et
<TABLE>
<S> <C> <C> <C>
1(er) trimestre $ 25 7/16 $ 19 3/8 $ 0,14 (1)
2(eme) trimestre (jusqu'au 14 juin 1999) 31 1/4 22 15/16 0,19
</TABLE>
-3-
<PAGE> 4
DuPont (2).
(2) Le tableau ci-dessous indique, pour les periodes indiquees, le prix de vente
maximum et minimum a la cloture (en USD) de l'action DuPont au New York Stock
Exchange (source: NYSE composite tape), ainsi que le montant des dividendes par
action DuPont.
<TABLE>
<CAPTION>
Max. Min. Dividends
---- ---- ---------
<S> <C> <C> <C> <C>
1997
1(er) trimestre (1) $ 57 5/8 $ 46 3/8 $ 0,285
2(eme) trimestre (1) 62 7/8 49 3/4 0,315
3(eme) trimestre 69 3/4 60 11/16 0,315
4(eme) trimestre 64 15/16 50 3/16 0,315
1998
1(er) trimestre $ 70 7/16 $ 52 5/8 $ 0,315
2(eme) trimestre 84 7/16 67 1/8 0,350
3(eme) trimestre 79 1/2 52 1/4 0,350
4(eme) trimestre 66 1/2 51 11/16 0,350
1999
1(er) trimestre $ 60 1/8 $ 50 1/16 $ 0,350
2(eme) trimestre 75 3/16 57 3/16 $ 0,350
</TABLE>
(1) Restated to reflect a two-for-one split of outstanding shares effective May
15, 1997.
<PAGE> 5
<TABLE>
<S> <C>
3. Conditions de l'Offre et eventuelle cle de Les certificats peuvent etre retires de l'Offre par les
repartition: vendeurs a tout moment avant le 4 aout 1999 a 16h heure
de Bruxelles. L'Offrant achetera maximum 8.000.000
actions valablement apportees a l'Offre (dans le
monde), et non retirees. L'Offrant se reserve le droit
de resilier l'Offre dans certaines circonstances, notamment en cas
d'echec de l'Exchange Offer americaine, ou de soumettre l'attribution
des montants en especes a une cle de repartition.
4. Periode de l'Offre : 14 juillet au 4 aout 1999 (16h heure de Bruxelles).
5. Depots des acceptations (banque-guichet Banque Bruxelles Lambert S.A.
en Belgique) :
6. Publication des resultats de l'Offre : Les resultats de l'Offre seront publies des qu'ils
seront disponibles.
</TABLE>
DUPONT: EVOLUTION DES MAXIMA ET MINIMA DEPUIS 1996 (BOURSE DE BRUXELLES)
<TABLE>
<CAPTION>
1996 1997 1998 1(er) trimestre 2(eme) trimestre
1999 1999
<S> <C> <C> <C> <C> <C>
Max. (EUR) 78,09 104,12 75,73 54,50 68
Min. (EUR) 51,31 47,47 44,62 45,01 53
</TABLE>
DUPONT: EVOLUTION DES COURS ENTRE LE 5 JUILLET 1999 ET LE 9 JUILLET 1999
(BOURSE DE BRUXELLES)
-5-
<PAGE> 6
<TABLE>
<CAPTION>
5 juillet 1999 6 juillet 1999 7 juillet 1999 8 juillet 1999 9 juillet 1999
<S> <C> <C> <C> <C> <C>
Max. (EUR) 68 n.a. n.a. n.a. 66
Min. (EUR) 68 n.a. n.a. n.a. 66
</TABLE>
Sources: Bourse de Bruxelles
REGIME FISCAL LIE A L'ACCEPTATION DE L'OFFRE PAR DES INVESTISSEURS BELGES.
Il est presume qu'aucun investisseur ne detient une participation superieure ou
egale a 25% dans DuPont.
1. Investisseurs soumis a l'impot des societes (ou a l'impot des non-residents
societes)
La plus-value realisee lors de la cession d'actions DuPont par un actionnaire
resident belge soumis a l'impot des societes (ou a l'impot des non-residents
societes) sera exemptee d'impot en Belgique aux conditions prevues par l'article
192 du Code des Impots sur les Revenus (ci-apres "C.I.R."). Si les conditions de
l'article 192 C.I.R. ne sont pas remplies, cette plus-value constituera un
benefice imposable au taux ordinaire de l'impot des societes de 40,17%, sans
prejudice toutefois de l'application eventuelle des conventions preventives de
la double imposition au cas ou les actions DuPont etaient investies dans un
etablissement stable etranger de l'actionnaire.
2. Investisseurs soumis a l'impot des personnes morales
La plus-value realisee par un actionnaire soumis a l'impot des personnes morales
lors de la cession d'actions DuPont sera exemptee d'impot en Belgique.
3. Investisseurs soumis a l'impot des personnes physiques
La plus-value realisee par un actionnaire personne physique resident belge lors
de la cession d'actions DuPont sera en principe exemptee d'impot en Belgique,
sauf si les actions DuPont etaient investies dans l'activite professionnelle de
l'actionnaire ou si la cession fait partie d'une operation pouvant etre
qualifiee d'operation speculative.
FRAIS ET TAXES LIES A L'ACCEPTATION DE L'OFFRE
Un impot federal americain sur les revenus de 30% (qui peut etre ramene a 15%
s'il est fait appel a la convention preventive de double imposition par
l'actionnaire belge) sera retenu sur les montants bruts distribues.
<PAGE> 7
AANVULLING BIJ HET PROSPECTUS
BETREFFENDE EEN OPENBAAR AANKOOPBOD OP EIGEN AANDELEN (HIERNA "HET BOD")
VOORGESTELD DOOR E.I. DU PONT DE NEMOURS AND COMPANY (HIERNA "DE BIEDENDE
PARTIJ" OF "DUPONT"), EEN VENNOOTSCHAP NAAR HET RECHT VAN DE STAAT
DELAWARE (VERENIGDE STATEN) MET MAATSCHAPPELIJKE ZETEL GELEGEN
1007 MARKET STREET, WILMINGTON, DELAWARE 19898
(VERENIGDE STATEN) AAN ZIJN NIET-AMERIKAANSE
AANDEELHOUDERS.
GOEDKEURING DOOR DE COMMISSIE VOOR HET BANK- EN FINANCIEWEZEN.
De Amerikaanse prospectus ("Offer to purchase") betreffende het Bod opgesteld in
het Engels aangevuld door dit prospectusbijvoegsel is op 12 juli 1999
goedgekeurd door de Commissie voor het Bank- en Financiewezen overeenkomstig
Artikel 17 van het Koninklijk Besluit van 8 november 1989 op de openbare
overnameaanbiedingen en de wijzigingen in de controle op vennootschappen en
overeenkomstig Artikel 29 ter Section 1, 1(degree) van het Koninklijk Besluit nr
185 van 9 juli 1935 op de bankcontrole en het uitgifteregime voor titels en
effecten.
Deze goedkeuring houdt geen beoordeling in noch van de opportuniteit en de
verdiensten van de verrichting, noch van de situatie van diegene die ze
uitvoert.
Overeenkomstig Artikel 21 van het Koninklijk Besluit van 8 november 1989 en
Artikel 29 Section 1 van het Koninklijk Besluit nr 185 van 9 juli 1935 is het
door deze artikelen voorgeschreven bericht gepubliceerd in de pers.
DIT PROSPECTUSBIJVOEGSEL EN DE AMERIKAANSE PROSPECTUS ("OFFER TO PURCHASE")
BETREFFENDE HET CASH OFFER IN HUN ORIGINELE ENGELSE VERSIE VORMEN EEN
GEHEEL EN KUNNEN NIET AFZONDERLIJK VERSPREID WORDEN IN BELGIE.
In geval van interpretatieverschillen tussen de Nederlandse en de Franse versie
van deze prospectus, prevaleert de Franse versie.
ACHTERGROND VAN DE VERRICHTINGEN EN MOTIEVEN VAN HET BOD.
Het Bod schrijft zich in in het kader van de scheiding van de activiteiten van
de groep DuPont. In de mate dat de Biedende Partij zich op haar activiteiten
gebonden aan uitrustingen en Life Sciences wenst te hercentreren, heeft haar
Raad van Bestuur in september 1998 een plan goedgekeurd betreffende de scheiding
van de activiteiten gebonden aan petroleum en gas
<PAGE> 8
uitgeoefend door Conoco en de andere activiteiten die verder zullen worden
uitgeoefend door de Biedende Partij. In dit kader geeft de Biedende Partij aan
al haar Amerikaanse aandeelhouders de mogelijkheid alle of een deel van hun
DuPont aandelen tegen Conoco aandelen van Klas B om te ruilen volgens de
voorwaarden vermeld in de Amerikaanse prospectus van Exchange offer. De Biedende
Partij is voor het ogenblik houder van alle uitgegeven Conoco aandelen van Klas
B, die ongeveer 70 % van de waarde en 92 % van de stemrechten gebonden aan het
kapitaal van Conoco vertegenwoordigen. De niet-Amerikaanse aandeelhouders van
DuPont genieten een aankoopbod tegen geld van hun aandelen door de Biedende
Partij (Cash Offer). De Amerikaanse aandeelhouders van DuPont kunnen niet
deelnemen aan de Cash Offer. De Amerikaanse SEC heeft aan DuPont een
vrijstelling verleend zodanig dat de Exchange Offer beperkt kan worden tot
Amerikaanse aandeelhouders en de Cash Offer beperkt kan worden tot
niet-Amerikaanse aandeelhouders. DuPont heeft om deze vrijstelling verzocht
omdat het bezorgd was dat (i) het toelaten dat niet-Amerikaanse aandeelhouders
zouden deelnemen aan de Exchange Offer aanzienlijk negatieve fiscale gevolgen
zou kunnen hebben voor DuPont en (ii) het uitbreiden van de Exchange Offer tot
niet-Amerikaanse aandeelhouders DuPont ertoe zou verplichten om de lokale
beurswetgeving van de vele landen waarin de DuPont aandeelhouders wonen na te
leven.
SAMENVATTING VAN HET BOD.
1. Het Bod De niet-Amerikaanse houders van certificaten aan
toonder die DuPont aandelen vertegenwoordigen
uitgebracht door Belgian Overseas Issuing Corporation
("B.O.I.C.") zullen, aan de voorwaarden vermeld in de
Amerikaanse prospectus (zie infra) een bedrag in geld
gelijk aan 80,76 USD bruto per DuPont aandeel coupons
nr 280 tot 300 aangehecht verkrijgen.
EEN AMERIKAANSE FEDERALE BELASTING OP INKOMSTEN VAN
30% (DIE TERUGGEBRACHT KAN WORDEN TOT 15% INDIEN
EEN BEROEP WORDT GEDAAN OP DE CONVENTIE TER
VOORKOMING VAN DUBBELE BELASTINGSHEFFING NAAR DE
BELGISCHE AANDEELHOUDER - B.O.I.C. ZAL HET
DESBETREFFENDE FORMULIER BEZORGEN AAN DE HOUDER DIE
ER EEN ZOU AANVRAGEN) ZAL GEIND WORDEN OP DE BRUTO
UITGEKEERDE BEDRAGEN. DAARUIT VOLGT DAT, IN FUNCTIE
VAN DE EVOLUTIE VAN DE KOERS VAN HET DUPONT AANDEEL
OP DE BEURS VAN BRUSSEL, HET NETTO TE VERKRIJGEN
BEDRAG KLEINER ZOU KUNNEN ZIJN DAN DE KOERS VAN HET
DUPONT AANDEEL OP DE BEURS VAN BRUSSEL (ZIE INFRA
"KOSTEN EN TAKSEN GEBONDEN AAN HET BOD").
DUPONT HEEFT GEEN VOORNEMEN OM DE SCHRAPPING UIT DE
NOTERING VAN HET DUPONT AANDEEL VAN DE BEURS VAN
BRUSSEL AAN TE VRAGEN NA AFSLUITING VAN HET BOD.
<PAGE> 9
2. Verantwoording De prijs aangeboden voor de DuPont aandelen is
van de prijs uitgerekend geweest op basis van de
omruilingspariteit toegepast voor de Exchange Offer
en op basis van de recente beurskoersen op de New
York Stock Exchange
van de DuPont(1) en Conoco aandelen van Klas A(2).
- ----------
(1) De tabel hieronder vermeld, voor de aangegeven tijdbepalingen, de maximale
en minimale verkoopprijs bij sluiting (in USD) van het DuPont aandeel op de New
York Stock Exchange (Bron : NYSE composite tape) evenals het bedrag van de
dividenden per DuPont aandeel.
<TABLE>
<CAPTION>
Max. Min. Dividenden
<S> <C> <C> <C>
1997
1ste trimester (1) $ 57 5/8 $ 46 3/8 $ 0,285
2de trimester (1) $ 62 7/8 $ 49 3/4 $ 0,315
3de trimester $ 69 3/4 $ 60 11/16 $ 0,315
4de trimester $ 64 15/16 $ 50 3/16 $ 0,315
1998
1ste trimester $ 70 7/16 $ 52 5/8 $ 0,315
2de trimester $ 84 7/16 $ 67 1/8 $ 0,350
3de trimester $ 79 1/2 $ 52 1/4 $ 0,350
4de trimester $ 66 1/2 $ 51 11/16 $ 0,350
1999
1ste trimester $ 60 1/8 $ 50 1/16 $ 0,350
2de trimester $ 75 3/16 $ 57 3/16 $ 0,350
</TABLE>
(1) Restated to reflect a two-for-one split of outstanding shares effective May
15, 1997
(2) De tabel hieronder vermeld, voor de aangegeven tijdbepalingen, de maximale
en minimale verkoopprijs bij sluiting (in USD) van het Conoco aandeel van Klas A
op de New York Stock Exchange (Bron : NYSE composite tape) evenals het bedrag
van de dividenden per Conoco aandeel van Klas A.
<TABLE>
<CAPTION>
Max. Min. Dividenden
<S> <C> <C> <C>
1998
4de trimester $ 25 3/4 $ 19 3/8 $ ___
1999
1ste trimester $ 25 7/16 $ 19 3/8 $ 0,14 (1)
2de trimester (tot en met 14 juni 1999) $ 31 1/4 $ 22 15/16 $ 0,19
</TABLE>
<PAGE> 10
3. Voorwaarden van het Bod en De certificaten kunnen teruggetrokken
eventuele sleutel voor worden tot en met 4 augustus 1999 (16 u,
repartitie uur van Brussel). De Biedende Partij zal
maximum 8.000.000 aandelen ingebracht voor
het Bod (in de wereld) en niet
teruggetrokken, aankopen. De Biedende
Partij behoudt het recht het Bod op te
zeggen in bepaalde omstandigheden waaronder
het geval van mislukking van het
Amerikaanse Exchange Offer, of de
toewijzing van de bedragen in geld te
onderwerpen aan een repartitiesleutel.
4. Periode van het Bod Van 14 juli tot en met 4 augustus 1999 (16
u, uur van Brussel)
5. Deponeren van de Bank Brussel Lambert N.V.
aanvaardigen (loket-bank
in Belgie)
6. Publicatie van de resultaten De resultaten van het Bod zullen
van het Bod gepubliceerd worden zodra ze beschikbaar
zijn.
DUPONT : EVOLUTIE VAN DE MAXIMA EN MINIMA SINDS 1996 (BEURS VAN BRUSSEL)
<TABLE>
<CAPTION>
1996 1997 1998 1ste trimester 2de trimester
1999 1999
---- ---- ---- -------------- -------------
<S> <C> <C> <C> <C> <C>
Max. (EUR) 78,09 104,12 75,73 54,50 68
Min. (EUR) 51,31 47,47 44,62 45,01 53
</TABLE>
Bron : Bloomberg L.P.
DUPONT : EVOLUTIE VAN DE KOERS VAN 5 JULI 1999 TOT EN MET 9 JULI 1999 (BEURS VAN
BRUSSEL)
<TABLE>
<CAPTION>
5 juli 1999 6 juli 1999 7 juli 1999 8 juli 1999 9 juli 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Max. (EUR) 68 n.a. n.a. n.a. 66
Min. (EUR) 68 n.a. n.a. n.a. 66
</TABLE>
Bron : Bloomberg L.P.
FISCAAL REGIME GEBONDEN AAN DE AANVAARDING VAN HET BOD DOOR BELGISCHE
INVESTEERDERS.
Er wordt verondersteld dat geen investeerder een participatie hoger of gelijk
aan 25% bezit in DuPont.
1. Investeerders onderworpen aan de Vennootschapsbelasting (of aan de belasting
niet-inwoners-
<PAGE> 11
vennootschappen)
De meerwaarde gerealiseerd bij de verkoop van DuPont aandelen door een
aandeelhouder, Belgisch inwoner, onderworpen aan de vennootschapsbelasting (of
aan de belasting niet-inwoners-vennootschappen) zal vrijgesteld zijn van
belasting in Belgie volgens de voorwaarden voorzien in Artikel 192 van het
Wetboek van Inkomstenbelasting (hierna "W.I.B."). Indien de voorwaarden voorzien
in Artikel 192 W.I.B. niet vervuld zijn zal deze meerwaarde een belastbare winst
uitmaken aan de normale rentevoet van de vennootschapsbelasting van 40,17%,
evenwel ongeacht de eventuele toepassing van de voorlopige conventies van de
dubbele belastingsheffing in het geval dat de DuPont aandelen geinvesteerd waren
in een stabiel buitenlands etablissement ten opzichte van de aandeelhouder.
2. Investeerders onderworpen aan de belasting voor rechtspersonen
De meerwaarde gerealiseerd door een aandeelhouder onderworpen aan de belasting
voor rechtspersonen bij de verkoop van DuPont aandelen zal vrijgesteld worden
van belasting in Belgie.
3. Investeerders onderworpen aan de belasting voor fysische personen
De meerwaarde gerealiseerd door een aandeelhouder fysische persoon residerend in
Belgie op het moment van de verkoop van de DuPont aandelen zal in principe
vrijgesteld zijn van belasting in Belgie, behalve indien de DuPont aandelen
geinvesteerd waren in de professionele activiteit van de aandeelhouders of
indien de verkoop deel uitmaakt van een operatie die als speculatie operatie kan
gekwalificeerd worden.
KOSTEN EN TAKSEN GEBONDEN AAN DE AANVAARDING VAN HET BOD
Een Amerikaanse federale belasting op inkomsten van 30 % (die teruggebracht kan
worden tot 15 % indien een beroep wordt gedaan op de conventie ter voorkoming
van dubbele belastingsheffing naar de Belgische aandeelhouder) zal geind worden
op de bruto uitgekeerde bedragen.
<PAGE> 12
APPENDIX ("COMPLEMENT de PROSPECTUS")
RELATING TO A CASH OFFER (HEREAFTER, THE "OFFER") MADE BY E.I. DU PONT DE
NEMOURS AND COMPANY (HEREAFTER, THE "OFFEROR" OR "DUPONT"), A COMPANY UNDER THE
LAWS OF THE STATE OF DELAWARE (UNITED STATES), WITH PRINCIPAL PLACE OF BUSINESS
AT 1007 MARKET STREET, WILMINGTON, DELAWARE 19898 (UNITED STATES), TO ITS
NON-U.S. SHAREHOLDERS.
APPROVAL BY THE COMMISSION FOR BANKING AND FINANCE
The American offer to purchase relating to the Cash Offer set up in English as
supplemented by this appendix has been approved on 12 July 1999 by the
Commission for Banking and Finance pursuant to Article 17 of the Royal Decree of
8 November 1989, relating to public offerings and changes of control of
companies and to Article 29ter, Section 1(er), 1(Degree) of the Royal Decree
n(Degree) 185 of 9 July 1935 on supervision of banks and issues of securities.
Such approval does not contain any appreciation on the opportunity or the merits
of the bid nor on the situation of the Offeror.
Pursuant to Article 21 of the Royal Decree of 8 November 1989 and to Article 29,
Section 1(er) of the Royal Decree n(Degree) 185 of 9 July 1935, an announcement
has been published in the press.
THIS APPENDIX AND THE AMERICAN OFFER TO PURCHASE RELATING TO THE CASH OFFER IN
ITS ORIGINAL ENGLISH VERSION CONSTITUTE A WHOLE THAT CANNOT CIRCULATE SEPARATELY
IN BELGIUM.
In case of divergence of interpretation between the French and the Dutch version
of this appendix, the French version shall prevail.
CONTEXT AND REASONS FOR THE OFFER
The Offer takes place in the framework of the separation of the activities of
DuPont. As part of the Offeror's increased focus on materials and life sciences
businesses, its board of directors has approved in September 1998 a plan to
separate its oil and gas business, operated through Conoco, from other
businesses, which will be operated through the Offeror. In such context the
Offeror is offering its U.S. shareholders the opportunity to exchange some or
all of their DuPont stock for shares of Conoco Class B stock in accordance with
terms and conditions contained in the American Exchange Offer prospectus. The
Offeror currently holds all of the issued and
-1-
<PAGE> 13
outstanding Conoco Class B stock which represents approximately 70% of the value
and 92% of the voting power of all of the outstanding stock of Conoco. The
Exchange Offer is not extended to holders of DuPont stock that are non-U.S
persons (as defined in the offer to purchase). Non-U.S. holders of DuPont stock
may participate in the Cash Offer made by the Offeror. Holders of DuPont stock
who are U.S persons may not participate in the Cash Offer. The U.S. SEC has
granted exemptive relief to allow DuPont to limit the Exchange Offer to U.S.
persons and the Cash Offer to non-U.S. persons. DuPont requested the relief
because it was primarily concerned that (i) permitting non-U.S. persons to
participate in the Exchange Offer could have significant adverse tax
consequences to DuPont and (ii) extending the Exchange Offer to non-U.S. persons
would require DuPont to comply with the local securities laws in numerous
jurisdictions where DuPont stockholders reside.
SUMMARY OF THE OFFER
(1) The following table contains, for the periods indicated, the high and low
sale prices per share of Conoco Class A common stock as reported on the NYSE
composite tape and the cash dividends per share of Conoco Class A common stock:
<TABLE>
<CAPTION>
High Low Cash
Dividends
<S> <C> <C> <C>
1998
Fourth Quarter (from October 22 through December 31, 1998) $ 25 3/4 $ 19 3/8 $ ___
1999
</TABLE>
<PAGE> 14
1. The Offer: Non-U.S. persons holding bearer certificates
representing shares of DuPont stock, issued
by Belgian Overseas Issuing Corporation
("B.O.I.C."), are entitled to sell their
DuPont shares with coupon n(Degree) 280 to
300 attached, for 80.76 USD per share in cash
subject to the terms of the offer to
purchase.
UNITED STATES FEDERAL INCOME TAXES EQUAL TO
30% (THAT MAY BE REDUCED TO 15% BY
APPLICATION OF THE DOUBLE TAXATION TREATY
BETWEEN BELGIUM AND THE UNITED STATES) OF THE
GROSS PROCEEDS WILL BE WITHHELD. DEPENDING ON
THE FLUCTUATION OF DUPONT STOCK, THE NET
PROCEEDS RECEIVED MIGHT BE LOWER THAN THE
TRADING PRICE OF THE DUPONT STOCK ON THE
BRUSSELS STOCK EXCHANGE (SEE BELOW "COSTS AND
TAXES RELATING TO OFFER").
DUPONT HAS NO INTENTION TO DELIST DUPONT
STOCK FROM THE BRUSSELS STOCK EXCHANGE AFTER
THE CLOSING OF THE OFFER.
2. Justification of the price: The purchase price for DuPont shares has been
calculated using the exchange ratio applied
in the Exchange Offer and the recent trading
prices of Conoco Class A(1) and
<TABLE>
<S> <C> <C> <C>
First Quarter $ 25 7/16 $ 19 3/8 $ 0,14 (1)
------
Second Quarter (trough June 14, 1999) 31 1/4 22 15/16 0,19
------ -------- ----
</TABLE>
<PAGE> 15
DuPont(2) stock on the New York Stock
Exchange.
3. Conditional Offer and allotment: Tendered certificates may be withdrawn
at any time until 4 August 1999, 4 p.m.
Brussels time. The Offeror will pay the
purchase price for up to 8,000,000
shares validly tendered and not
withdrawn (worldwide). The Offeror may
decide not to complete the Offer under
certain circumstances, inter alia in
case of failure of the Exchange Offer,
or may decide to submit the Offer to a
proration.
(2) The following table contains, for the periods indicated, the high and low
closing sale prices per share of DuPont stock on the NYSE composite tape and the
cash dividends per share of DuPont stock:
<TABLE>
<CAPTION>
High Low Dividends
---- --- ---------
<S> <C> <C> <C>
1997
First Quarter (1) $57 5/8 $46 3/8 $0,285
Second Quarter (1) 62 7/8 49 3/4 0,315
Third Quarter 69 3/4 60 11/16 0,315
Fourth Quarter 64 15/16 50 3/16 0,315
1998
First Quarter $70 7/16 $52 5/8 $0,315
Second Quarter 84 7/16 67 1/8 0,350
Third Quarter 79 1/2 52 1/4 0,350
Fourth Quarter 66 1/2 51 11/16 0,350
1999
First Quarter $60 1/8 $50 1/16 $0,350
Second Quarter 75 3/16 57 3/16 $0,350
</TABLE>
(1) Restated to reflect a two-for-one split of outstanding shares effective May
15, 1997.
<PAGE> 16
<TABLE>
<S> <C>
4. Period of the Offer: 14 July until 4 August 1999 (4 p.m. Brussels time).
5. Filing of the acceptation forms: Bank Brussels Lambert S.A.
6. Publication of the results of the Offer: The results of the Offer will be published as soon as
they are available.
</TABLE>
DUPONT: MAXIMA ET MINIMA SINCE 1996 (BRUSSELS STOCK EXCHANGE)
<TABLE>
<CAPTION>
1996 1997 1998 First Quarter Second Quarter
1999 1999
<S> <C> <C> <C> <C> <C>
Max. (EUR) 78,09 104,12 75,73 54,50 68
Min. (EUR) 51,31 47,47 44,62 45,01 53
</TABLE>
DUPONT: TRADING PRICES BETWEEN 5 JULY 1999 AND 9 JULY 1999 (BRUSSELS STOCK
EXCHANGE)
<TABLE>
<CAPTION>
5 July 1999 6 July 1999 7 July 1999 8 July 1999 9 July 1999
<S> <C> <C> <C> <C> <C>
Max. (EUR) 68 n.a. n.a. n.a. 66
Min. (EUR) 68 n.a. n.a. n.a. 66
</TABLE>
Source: Brussels Stock Exchange
TAX MATTERS FOR BELGIAN INVESTORS
It is presumed that no Belgian investor owns a shareholding equal or higher than
25% in DuPont stock.
1. Investors subject to Belgian corporate income tax
Certificate holders subject to Belgian corporate income tax would not include
gains from the disposal of the certificates in their taxable base if they
qualify for the participation exemption regime under the conditions set forth in
article 192 of the Belgian Income Tax Code. If those conditions are not met, the
gain is taxable at the ordinary corporate income tax rate of 40,17%,
-3-
<PAGE> 17
unless, in the event a double tax treaty applies, the certificates were invested
in a foreign permanent establishment of the certificate holder.
2. Investors subject to Belgian tax on legal entities
No capital gain tax would apply to gains realised by certificate holders which
are subject to the Belgian income tax on legal entities.
3. Individual investors
Individual certificate holders resident in Belgium are not subject to tax and
capital gains realised upon disposal unless the certificates are invested in the
individual's professional activity or the transaction could be characterised as
speculative.
COST AND TAXES RELATING TO THE OFFER
United States federal income taxes equal to 30% (that can be reduced to 15% by
application of the Double Taxation Treaty between Belgium and the United States)
of the gross proceeds will be withheld.
<PAGE> 1
E.I. du Pont de Nemours and Company
February 19, 1999
Report of Independent Accountants
To the Stockholders and the Board of Directors of
E.I. du Pont de Nemours and Company
In our opinion, the consolidated financial statements appearing on pages 41-67
of this Annual Report present fairly, in all material respects, the financial
position of E.I. du Pont de Nemours and Company and its subsidiaries at
December 31, 1998 and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Thirty South Seventeenth Street
Philadelphia, Pennsylvania 19103
February 19, 1999
40 DuPont
<PAGE> 2
Financial Statements
E.I. du Pont de Nemours and Company and Consolidated Subsidiaries
Consolidated Income Statement
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
--------------------------------
<S> <C> <C> <C>
Sales $ 24,767 $ 24,089 $ 23,644
Other Income (Note 3) 981 1,005 1,101
Total 25,748 25,094 24,745
--------------------------------
Cost of Goods Sold and Other Operating Charges 15,664 15,564 15,314
Selling, General and Administrative Expenses 2,115 2,061 2,119
Depreciation and Amortization 1,452 1,361 1,526
Research and Development Expense 1,308 1,072 990
Interest Expense (Note 4) 520 389 409
Purchased In-Process Research and Development
(Note 5) 1,443 1,478 --
Employee Separation Costs and Write-down of
Assets (Note 6) 633 340 --
--------------------------------
Total 23,135 22,265 20,358
--------------------------------
Income from Continuing Operations Before
Income Taxes and Minority Interests 2,613 2,829 4,387
Provision for Income Taxes (Note 7) 941 1,354 1,416
Minority Interests in Earnings of
Consolidated Subsidiaries 24 43 40
--------------------------------
Income from Continuing Operations 1,648 1,432 2,931
Discontinued Operations (Note 2)
Income from Operations of
Discontinued Business, Net of
Income Taxes 594 973 705
Gain on Disposal of Discontinued
Business, Net of Income Taxes 2,439 -- --
--------------------------------
Income Before Extraordinary Item 4,681 2,405 3,636
Extraordinary Charge From Early
Extinguishment of Debt, Net of Income
Taxes (Note 8) (201) -- --
Net Income $ 4,480 $ 2,405 $ 3,636
================================================================================
Basic Earnings (Loss) Per Share of
Common Stock (Note 9)
Continuing Operations Before
Extraordinary Item $ 1.45 $ 1.26 $ 2.60
Discontinued Operations 2.69 .86 .63
--------------------------------
Before Extraordinary Item 4.14 2.12 3.23
Extraordinary Charge (.18) -- --
--------------------------------
Net Income $ 3.96 $ 2.12 $ 3.23
Diluted Earnings (Loss) Per Share ================================
of Common Stock (Note 9)
Continuing Operations Before
Extraordinary Item $ 1.43 $ 1.24 $ 2.56
Discontinued Operations 2.65 .84 .62
--------------------------------
Before Extraordinary Item 4.08 2.08 3.18
Extraordinary Charge (.18) -- --
--------------------------------
Net Income $ 3.90 $ 2.08 $ 3.18
================================================================================
</TABLE>
See pages 45-67 for Notes to Financial Statements.
DuPont 41
<PAGE> 3
Financial Statements
E.I. du Pont de Nemours and Company and Consolidated Subsidiaries
Consolidated Balance Sheet
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current Assets
Cash and Cash Equivalents (Note 10) $ 1,059 $ 1,004
Marketable Securities (Note 10) 10 142
Accounts and Notes Receivable (Note 11) 4,201 4,309
Inventories (Note 12) 3,129 2,792
Prepaid Expenses 192 169
Deferred Income Taxes (Note 7) 645 691
------------------------------
Total Current Assets 9,236 9,107
------------------------------
Property, Plant and Equipment (Note 13) 34,728 32,911
Less: Accumulated Depreciation and Amortization 20,597 20,310
------------------------------
Net Property, Plant and Equipment 14,131 12,601
------------------------------
Investment in Affiliates (Note 14) 1,796 2,372
Other Assets (Notes 7 and 15) 4,956 4,211
Net Assets of Discontinued Operations (Note 2) 8,417 8,398
------------------------------
Total $ 38,536 $ 36,689
================================================================================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable (Note 16) $ 1,929 $ 1,921
Short-Term Borrowings and Capital Lease
Obligations (Note 17) 6,629 6,152
Income Taxes (Note 7) 130 120
Other Accrued Liabilities (Note 18) 2,922 3,024
------------------------------
Total Current Liabilities 11,610 11,217
Long-Term Borrowings and Capital Lease
Obligations (Note 19) 4,495 5,897
Other Liabilities (Note 20) 7,640 7,444
Deferred Income Taxes (Note 7) 430 500
------------------------------
Total Liabilities 24,175 25,058
------------------------------
Minority Interests 407 361
------------------------------
Stockholders' Equity (next page)
Preferred Stock, without par value -
cumulative; 23,000,000 shares
authorized; issued at December 31:
$4.50 Series--1,672,594 shares
(callable at $120) 167 167
$3.50 Series--700,000 shares
(callable at $102) 70 70
Common Stock, $.30 par value;
1,800,000,000 shares authorized;
Issued at December 31, 1998--1,140,354,154;
1997--1,152,762,128 342 346
Additional Paid-In Capital 7,854 7,991
Reinvested Earnings 6,705 4,389
Accumulated Other Comprehensive Loss (432) (297)
Common Stock Held in Trust for Unearned
Employee Compensation and Benefits
(Flexitrust), at Market
(Shares: December 31, 1998--14,167,867;
1997--23,245,747) (752) (1,396)
------------------------------
Total Stockholders' Equity 13,954 11,270
------------------------------
Total $ 38,536 $ 36,689
================================================================================
</TABLE>
See pages 45-67 for Notes to Financial Statements.
42 DuPont
<PAGE> 4
Financial Statements
E.I. du Pont de Nemours and Company and Consolidated Subsidiaries
Consolidated Statement of Stockholders' Equity (Notes 21 and 22)
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulated
Additional Other Total Total
Preferred Common Paid-In Reinvested Comprehensive Treasury Stockholders' Comprehensive
Stock Stock Capital Earnings Loss Flexitrust Stock Equity Income
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1996
Balance January 1, 1996 $ 237 $ 441 $ 8,689 $ 9,503 $ (113) $ (1,645) $(8,789) $ 8,323
----------------------------------------------------------------------------------------------
Net Income 3,636 $ 3,636
Cumulative Translation
Adjustment (23) (23)
Minimum Pension
Liability (3) (3)
-------------
Total Comprehensive
Income $ 3,610
=============
Common Dividends
($1.115 per share) (1,251)
Preferred Dividends (10)
Treasury Stock
Retirement (94) (1,748) (6,947) 8,789
Warrant Repurchase (504)
Common Stock Issued
Flexitrust (289) 644
Compensation Plans 70
Adjustments to Market
Value 458 (458)
----------------------------------------------------------------------------------------------
Balance December 31, 1996 $ 237 $ 347 $ 6,676 $ 4,931 $ (139) $ (1,459) $ - $10,593
----------------------------------------------------------------------------------------------
1997
Net Income 2,405 $ 2,405
Cumulative Translation
Adjustment (130) (130)
Minimum Pension Liability (28) (28)
-------------
Total Comprehensive
Income $ 2,247
=============
Common Dividends
($1.23 per share) (1,391)
Preferred Dividends (10)
Treasury Stock
Acquisition (1,747)
Retirement (8) (193) (1,546) 1,747
Common Stock Issued
Flexitrust (299) 419
Businesses Acquired 7 1,317
Compensation Plans 134
Adjustments to Market
Value 356 (356)
----------------------------------------------------------------------------------------------
Balance December 31, 1997 $ 237 $ 346 $ 7,991 $ 4,389 $ (297) $ (1,396) $ - $11,270
----------------------------------------------------------------------------------------------
1998
Net Income 4,480 $ 4,480
Cumulative Translation
Adjustment (23) (23)
Minimum Pension Liability (112) (112)
-------------
Total Comprehensive
Income $ 4,345
=============
Common Dividends ($1.365
per share) (1,539)
Preferred Dividends (10)
Treasury Stock
Acquisition (704)
Issuance/Retirement (4) (85) (615) 704
Common Stock Issued
Flexitrust (279) 598
Businesses Acquired 4
Compensation Plans 269
Adjustments to Market
Value (46) 46
----------------------------------------------------------------------------------------------
Balance December 31, 1998 $ 237 $ 342 $ 7,854 $ 6,705 $ (432) $ (752) $ - $13,954
===========================================================================================================
</TABLE>
See pages 45-67 for Notes to Financial Statements.
DuPont 43
<PAGE> 5
Financial Statements
E.I. du Pont de Nemours and Company and Consolidated Subsidiaries
<TABLE>
<CAPTION>
Consolidated Statement of Cash Flows
(Dollars in millions)
- -------------------------------------------------------------------------------------------------
1998 1997 1996
------------------------------------
<S> <C> <C> <C>
Cash and Cash Equivalents at Beginning of Year $ 1,004 $ 1,066 $ 1,408
------------------------------------
Cash Provided by Continuing Operations
Net Income 4,480 2,405 3,636
Adjustments to Reconcile Net Income to Cash
Provided by Continuing Operations:
Net Income from Discontinued Operations (3,033) (973) (705)
Extraordinary Charge from Early Retirement of
Debt (Note 8) 275 -- --
Depreciation and Amortization 1,452 1,361 1,526
Purchased In-Process Research and
Development (Note 5) 1,443 1,478 --
Other Noncash Charges and Credits--Net (319) 569 (270)
Decrease (Increase) in Operating Assets:
Accounts and Notes Receivable (580) (783) (262)
Inventories and Other Operating Assets 34 (335) (258)
Increase (Decrease) in Operating Liabilities:
Accounts Payable and Other Operating Liabilities 254 (20) 151
Accrued Interest and Income Taxes (Notes 4 and 7) 126 325 291
------------------------------------
Cash Provided by Continuing Operations 4,132 4,027 4,109
------------------------------------
Investment Activities of Continuing Operations (Note 23)
Purchases of Property, Plant and Equipment (2,240) (2,089) (1,665)
Investments in Affiliates (63) (1,920) (82)
Payments for Businesses (Net of Cash Acquired) (3,282) (1,238) (75)
Proceeds from Sales of Assets 946 558 996
Net Proceeds from Sale of Interest in Petroleum
Operations (Note 2) 4,206 -- --
Net Decrease (Increase) in Short-Term Financial
Instruments 131 115 (197)
Miscellaneous--Net 124 552 36
------------------------------------
Cash Used for Investment Activities of
Continuing Operations (178) (4,022) (987)
------------------------------------
Financing Activities
Dividends Paid to Stockholders (1,549) (1,401) (1,261)
Net Increase (Decrease) in Short-Term Borrowings 1,574 1,737 (954)
Long-Term and Other Borrowings:
Receipts 6,335 6,462 3,194
Payments (8,966) (5,562) (5,171)
Acquisition of Treasury Stock (Note 21) (704) (1,747) --
Repurchase of Warrants (Note 21) -- -- (504)
Proceeds from Exercise of Stock Options 257 116 315
Increase (Decrease) in Minority Interests -- (56) 363
------------------------------------
Cash Used for Financing Activities (3,053) (451) (4,018)
------------------------------------
Net Cash Flow from Discontinued Operations (568) 483 606
Effect of Exchange Rate Changes on Cash 97 (99) (52)
------------------------------------
Cash and Cash Equivalents at End of Year $ 1,434* $ 1,004 $ 1,066
------------------------------------
Increase (Decrease) in Cash and Cash Equivalents $ 430 $ (62) $ (342)
=================================================================================================
</TABLE>
*Includes cash and cash equivalents classified in the Consolidated Balance Sheet
within "Net Assets of Discontinued Operations."
See pages 45-67 for Notes to Financial Statements.
44 DuPont
<PAGE> 6
Notes to Financial Statements
(Dollars in millions, except per share)
1. Summary of Significant Accounting Policies
DuPont observes the generally accepted accounting principles described below.
These, together with the other notes that follow, are an integral part of the
consolidated financial statements.
Basis of Consolidation
The accounts of wholly owned and majority-owned subsidiaries are included in the
consolidated financial statements. Investments in affiliates owned 20 percent or
more are accounted for under the equity method. Other securities and
investments, excluding marketable securities, are generally carried at cost. The
company's petroleum business is reported as discontinued operations and is
discussed in Note 2.
Subsidiary Stock Transactions
Gains or losses arising from issuances by a subsidiary of its own stock in a
public offering are recorded as nonoperating income.
Inventories
Substantially all inventories are valued at cost as determined by the last-in,
first-out (LIFO) method; in the aggregate, such valuations are not in excess of
market. Elements of cost in inventories include raw materials, direct labor and
manufacturing overhead. Stores and supplies are valued at cost or market,
whichever is lower; cost is generally determined by the average cost method.
Property, Plant and Equipment
Property, plant and equipment (PP&E) is carried at cost and, where placed in
service in 1995 and following years, is depreciated using the straight-line
method. PP&E placed in service prior to 1995 is depreciated under the
sum-of-the-years' digits method and other substantially similar methods.
Depreciation rates are based on estimated useful lives ranging from 3 to 25
years. Capitalizable costs associated with internal use of computer software are
amortized on a straight-line basis over 5 to 7 years. Generally, for PP&E
acquired in 1991 and later, the gross carrying value and related accumulated
depreciation of assets surrendered, retired, sold or otherwise disposed of are
removed from the accounts and included in determining gain or loss on such
disposals. For disposals of PP&E acquired prior to 1991, the gross carrying
value is charged to accumulated depreciation and any salvage or other recovery
therefrom is credited to accumulated depreciation.
Maintenance and repairs are charged to operations; replacements and betterments
are capitalized.
Intangible Assets
Identifiable intangible assets such as purchased technology, patents and
trademarks are amortized using the straight-line method over their estimated
useful lives, generally for periods ranging from 5 to 40 years. Goodwill is
amortized over periods up to 40 years using the straight-line method. The
company continually evaluates the reasonableness of its amortization of
intangibles. In addition, if it becomes probable that expected future
undiscounted cash flows associated with intangible assets are less than their
carrying value, the assets are written down to their fair value.
Environmental Liabilities and Expenditures
Accruals for environmental matters are recorded in operating expenses when it is
probable that a liability has been incurred and the amount of the liability can
be reasonably estimated. Accrued liabilities do not include claims against third
parties and are not discounted.
Costs related to environmental remediation are charged to expense. Other
environmental costs are also charged to expense unless they increase the value
of the property and/or mitigate or prevent contamination from future operations,
in which event they are capitalized.
Income Taxes
The provision for income taxes has been determined using the asset and liability
approach of accounting for income taxes. Under this approach, deferred taxes
represent the future tax consequences expected to occur when the reported
amounts of assets and liabilities are recovered or paid. The provision for
income taxes represents income taxes paid or payable for the current year plus
the change in deferred taxes during the year. Deferred taxes result from
differences between the financial and tax bases of the company's assets and
liabilities and are adjusted for changes in tax rates and tax laws when changes
are enacted. Valuation allowances are recorded to reduce deferred tax assets
when it is more likely than not that a tax benefit will not be realized.
Provision has been made for income taxes on unremitted earnings of subsidiaries
and affiliates, except for subsidiaries in which earnings are deemed to be
permanently invested. Investment tax credits or grants are accounted for in the
period earned (the flow-through method).
DuPont 45
<PAGE> 7
Notes to Financial Statements
(Dollars in millions, except per share)
Foreign Currency Translation
The U.S. dollar is the "functional currency" of the company's worldwide
continuing operations. All foreign currency asset and liability amounts are
remeasured into U.S. dollars at end-of-period exchange rates, except for
inventories, prepaid expenses and property, plant and equipment, which are
remeasured at historical rates. Foreign currency income and expenses are
remeasured at average exchange rates in effect during the year, except for
expenses related to balance sheet amounts remeasured at historical exchange
rates. Exchange gains and losses arising from remeasurement of foreign
currency-denominated monetary assets and liabilities are included in income in
the period in which they occur.
Hedging and Trading Activities
The company routinely uses forward exchange contracts to hedge its net exposure,
by currency, related to monetary assets and liabilities denominated in
currencies other than the U.S. dollar. Exchange gains and losses associated with
these contracts, net of their related tax effects, are included in income in the
period in which they occur and substantially offset the exchange gains and
losses arising from remeasurement as described above. As a result, net exchange
gains and losses are not material in amount.
The company selectively enters into forward exchange contracts and similar
agreements to effectively convert firm foreign currency commitments to
functional currency-denominated transactions. Gains and losses on these firm
commitment hedges are deferred and included in the functional currency
measurement of the related foreign currency-denominated transactions. Changes in
the fair value of forward exchange contracts that do not qualify for hedge
accounting treatment are reflected in income in the period the change occurs.
The company enters into interest rate swap agreements as part of its program to
manage the fixed and floating interest rate mix of its total debt portfolio and
related overall cost of borrowing. The differential to be paid or received is
accrued as interest rates change and is recognized in income over the life of
the agreements.
The company enters into commodity futures contracts to hedge its exposure to
price fluctuations for certain raw material purchases. Gains and losses on these
hedge contracts are deferred and included in the measurement of the related
transaction.
In the event that a derivative designated as a hedge of a firm commitment or
anticipated transaction is terminated prior to the maturation of the hedged
transaction, gains or losses realized at termination are deferred and included
in the measurement of the hedged transaction. If a hedged transaction matures,
or is sold, extinguished or terminated prior to the maturity of a derivative
designated as a hedge of such transaction, gains or losses associated with the
derivative through the date the transaction matured are included in the
measurement of the hedged transaction and the derivative is reclassified as for
trading purposes. Derivatives designated as a hedge of an anticipated
transaction are reclassified as for trading purposes if the anticipated
transaction is no longer likely to occur.
In the Consolidated Statement of Cash Flows, the company reports the cash flows
resulting from its hedging activities in the same category as the related item
that is being hedged.
Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Reclassifications
Certain reclassifications of prior years' data have been made to conform to 1998
classifications.
2. Discontinued Operations
On September 28, 1998, the company announced that the Board of Directors had
approved a plan to divest the company's 100 percent-owned petroleum business
(Conoco Inc.). On October 21, 1998, Conoco sold, in an initial public offering
(IPO), 191,456,427 shares of Conoco Class A common stock at $23 per share for
net proceeds of $4,228, which were remitted to DuPont to repay a portion of
Conoco's intercompany indebtedness to DuPont. In addition, $22 in other costs
directly related to the IPO were incurred. The company intends to complete the
divestiture with a tax-free split off by exchanging its remaining Conoco shares
(69.5 percent) for DuPont shares no later than third quarter 1999. The company
has not recognized a deferred tax liability for the difference between the book
basis and tax basis of its investment in Conoco's common stock because the
company does not expect this basis difference to become subject to tax. The
46 DuPont
<PAGE> 8
Notes to Financial Statements
(Dollars in millions, except per share)
company's consolidated financial statements and notes report its petroleum
business as discontinued operations. Prior periods have been restated. Results
reported separately by Conoco are reported on a stand-alone basis and may differ
from results based on discontinued operations reporting as discussed below. In
addition, beginning October 22, 1998, the company's results from discontinued
operations reflect minority interests of 30.5 percent.
Income from operations of discontinued business reflects Conoco's operations
through September 30, 1998. Effective October 1, 1998, Conoco's results are
reported as part of gain on disposal of discontinued business, and include the
gain realized by the company from the IPO. For the three months and year ended
December 31, 1998, such gain is $2,439. This includes a loss from Conoco's
operations of $147 (after a tax benefit of $116) and reflects nonrecurring
charges of $164; principally $127 for compensation expense for options granted
by Conoco in substitution for DuPont options held by Conoco employees, $69 for
employee separation costs and property impairments, partially offset by $32 of
asset sales. In addition, net gain from sale of stock by subsidiary includes
charges of $40 that are a direct result of the decision to divest Conoco. Also,
1998 results of income from operations of discontinued business includes a $31
tax benefit related to the sale of an international subsidiary, partly offset by
a $28 litigation accrual in the United States. The year ended December 31, 1997,
includes charges of $112 for impairment of nonrevenue producing properties and
$55 for a write-down of an office building held for sale, substantially offset
by a $161 gain on the sale of certain North Sea producing and exploration
properties. The year ended December 31, 1996, includes charges of $63 for
write-down of investment in an European natural gas marketing joint venture and
$22 principally for employee separation costs in the United States, partly
offset by a net benefit of $44 related to environmental insurance recoveries.
The cumulative translation adjustment reflected in the Consolidated Balance
Sheet and Consolidated Statement of Stockholders' Equity pertains to Conoco's
operations. Effective January 1, 1996, local currency was designated as the
functional currency for Conoco's integrated European petroleum operations to
properly reflect changed circumstances in the primary economic environment in
which these subsidiaries operate. For Conoco subsidiaries whose functional
currency is local currency, assets and liabilities denominated in local currency
are translated into U.S. dollars at end-of-period exchange rates, and resultant
translation adjustments are reported as a separate component of stockholders'
equity.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Income from Operations of
Discontinued Business (1) 1998 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales $14,446 $20,990 $20,166
Income Before Income Taxes and
Minority Interests (2) 921 1,918 1,654
Provision for Income Taxes 311 921 930
Minority Interests 16 24 19
-------------------------------------------
Income from Operations,
Net of Income Taxes $ 594 $ 973 $ 705
================================================================================
</TABLE>
(1) 1998 results are nine months ended September 30, 1998.
(2) Includes net interest expense allocations (based on the ratio of net assets
of discontinued operations to consolidated net assets plus debt) of $240
through September 30, 1998, $248 for 1997, and $285 for 1996.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Gain on Disposal of Discontinued Business (1) 1998
- --------------------------------------------------------------------------------
<S> <C>
Net Sales $ 4,737
(Loss) Before Income Taxes and
Minority Interests (2) (308)
Provision for Income Taxes (116)
Minority Interests (45)
-----------
(Loss) from Operations, Net of Income Taxes (147)
Net Gain from Sale of Stock by Subsidiary 2,586
-----------
Gain on Disposal of Discontinued Business,
Net of Income Taxes $ 2,439
================================================================================
</TABLE>
(1) Three months ended December 31, 1998.
(2) Includes interest expense allocation (based on specific debt to be assumed)
of $93.
The 1998 effective income tax rate (EITR) of 31.8 percent on Conoco's operations
is significantly lower than the 1997 EITR of 48.0 percent and the 1996 EITR of
56.2 percent due to a larger U.S. alternative fuels tax credit, realization of a
tax benefit on the sale of a subsidiary and a greater percentage of earnings in
countries with lower effective tax rates.
It is expected that there will be a gain on ultimate disposal of Conoco, taking
into account its estimated results in 1999.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Net Assets of Discontinued Operations 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
December 31
Cash and Cash Equivalents $ 375 $ --
Other Current Assets 2,864 2,938
Property, Plant and Equipment - net 11,438 10,982
Other Assets 2,011 1,490
Current Liabilities (2,473) (3,023)
Other Liabilities (4,115) (3,680)
Minority Interests (1,683) (309)
--------------------------
Net Assets of Discontinued Operations $ 8,417 $ 8,398
================================================================================
</TABLE>
DuPont 47
<PAGE> 9
Notes to Financial Statements
(Dollars in millions, except per share)
As of December 31, 1998, DuPont and Conoco had an intercompany receivable and
payable, respectively, for $4,596 that has been eliminated for purposes of
presenting net assets of discontinued operations. As described in the
Restructuring, Transfer and Separation Agreement, Conoco is obligated to repay
all outstanding debt owed to DuPont at such time as DuPont's voting power
becomes less than 50 percent of Conoco.
3. Other Income
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
------------------------------------
<S> <C> <C> <C>
Royalty income $ 132 $ 64 $ 72
Interest income, net of
miscellaneous interest expense 112 131 118
Equity in earnings of affiliates
(see Note 14) 278 643 694
Sales of assets 375* 64 162
Miscellaneous income and
expenses--net 84 103 55
------------------------------------
$ 981 $1,005 $1,101
- --------------------------------------------------------------------------------
</TABLE>
* Includes a $217 gain on the sale of substantially all of the company's
remaining interest in CONSOL Energy Inc.
4. Interest Expense
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
------------------------------------
<S> <C> <C> <C>
Interest incurred $640 $469 $479
Less: Interest capitalized 120 80 70
------------------------------------
$520 $389 $409
- --------------------------------------------------------------------------------
</TABLE>
Interest paid (net of amounts capitalized) was $553 in 1998, $324 in 1997 and
$451 in 1996.
5. Purchased In-Process Research and Development
Purchased in-process research and development represents the value assigned in a
purchase business combination to research and development projects of the
acquired business that were commenced but not yet completed at the date of
acquisition, for which technological feasibility has not been established and
which have no alternative future use in research and development activities or
otherwise. In accordance with Statement of Financial Accounting Standards No. 2,
"Accounting for Research and Development Costs," as interpreted by FASB
Interpretation No. 4, amounts assigned to purchased in-process research and
development meeting the above criteria must be charged to expense at the date of
consummation of the purchase business combination.
In 1997, a charge of $903 was recorded in conjunction with the purchase of a 20
percent interest in Pioneer Hi-Bred International Inc. In addition, charges of
$500 and $75 were recorded in conjunction with the purchase of Protein
Technologies International and the ICI polyester resins and intermediates
businesses, respectively, based on preliminary allocations of purchase price.
In 1998, charges of $60 and $103 were recorded to revise the preliminary
allocation for Protein Technologies International, and the ICI polyester resins
and intermediates businesses, respectively, upon revision of preliminary
purchase price allocations for these acquisitions. In addition, a charge of $50
was recorded in conjunction with the 1998 acquisition of the ICI polyester films
business based on preliminary allocations of the purchase price for this
acquisition and a charge of $1,230 was recorded in conjunction with the 1998
purchase of Merck & Co.'s interest in The DuPont Merck Pharmaceutical Company,
based on preliminary allocations of purchase price. See Note 23.
6. Employee Separation Costs and Write-down of Assets
During 1998 the company recorded charges totaling $577 directly related to
management decisions to implement company-wide productivity improvement
initiatives. Charges from these initiatives reduced segment earnings as follows:
Agriculture & Nutrition - $19; Nylon Enterprise - $231; Performance Coatings &
Polymers - $25; Pigments & Chemicals - $23; Polyester Enterprise - $158;
Specialty Fibers - $6; Specialty Polymers - $47; Other - $68.
These charges included $310 related to employee separation costs, substantially
all of which were for estimated involuntary and voluntary termination payments
for approximately 4,100 employees, and were based on plans that identified the
number of employees to be terminated, their functions and their businesses.
Approximately two-thirds of the reductions will occur in the United States. As
of December 31, 1998, about 2,700 employees have been terminated under these
initiatives, and about $134 has been settled and charged against the related
liability. The remaining 1,400 employee terminations will occur in 1999.
48 DuPont
<PAGE> 10
Notes to Financial Statements
(Dollars in millions, except per share)
The remaining charge of $267 relates to write-downs of property, plant and
equipment, principally due to the shutdown of excess production capacity. The
charge covers the net book value of the facilities and estimated dismantlement
costs less estimated salvage proceeds. The largest component, $114, covers the
shutdown of polyester manufacturing lines at Circleville, Ohio; Cooper River,
South Carolina; Kinston, Cape Fear and Cedar Creek, North Carolina; and
Luxembourg. In addition, $78 represents the shutdown of DuPont Nylon
manufacturing operations at Martinsville, Virginia; Doncaster, United Kingdom;
and Bayswater, Australia. Other charges are principally attributable to the
shutdown of manufacturing and other facilities within the Pigments & Chemicals
and Other segments. DuPont expects to complete these activities in 1999.
In the fourth quarter of 1998, the company also recorded a charge of $56
relating to the impairment of certain intangible assets held for use by the
Pharmaceuticals segment when it was determined that future undiscounted cash
flows associated with these assets were insufficient to recover their carrying
value. The impaired assets principally represent the company's historical
ownership interest in product rights and license agreements contributed in 1991
by Merck & Co. Inc. to The DuPont Merck Pharmaceutical Company. The assets were
written down to fair value, which was determined on the basis of discounted cash
flows.
During 1997 DuPont and the Agfa-Gevaert Group (Agfa) signed an agreement under
which Agfa would acquire DuPont's global graphic arts and offset printing plates
businesses. Agfa agreed to purchase the company's inventory, manufacturing
facilities in Germany and the United Kingdom, and provide employment to most of
the 2,200 DuPont employees working in these businesses. A decision was made to
dispose of these businesses, which are a component of the Other segment, after
it became apparent that the company would not be a leader in this industry. In
connection with the sale, DuPont recorded a charge of $340 in the third quarter
1997 period. This included $233 to write down assets held for sale to their
estimated net realizable value based on the agreement with Agfa, $53 for
employee separation and other people related costs, and $54 to provide for other
expenses associated with exiting these businesses. The number of people
identified for termination was less than 250. Total remaining reserve balances
are approximately $30 at December 31, 1998. The 1997 loss from operations from
these businesses was not material. The transaction closed during the first
quarter of 1998.
7. Provision for Income Taxes
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
-----------------------------------------
<S> <C> <C> <C>
Current tax expense:
U.S. federal $ 526 $ 841 $ 718
U.S. state and local (15) 45 23
International 447 398 381
-----------------------------------------
Total 958 1,284 1,122
-----------------------------------------
Deferred tax expense:
U.S. federal (129) 110 314
U.S. state and local 21 3 5
International 91 (43) (25)
-----------------------------------------
Total (17) 70 294
-----------------------------------------
Provision for Income Taxes 941 1,354 1,416
Stockholders' Equity
Stock Compensation (1) (82) (96) (69)
Minimum Pension Liability (2) (81) (18) (1)
Extraordinary Loss (74) -- --
Discontinued Operations 195 921 930
-----------------------------------------
Total $ 899 $ 2,161 $ 2,276
================================================================================
</TABLE>
(1) Represents tax benefit of certain stock compensation amounts that are
deductible for income tax purposes but do not affect net income.
(2) Represents deferred tax charge for minimum pension liability recorded in
stockholders' equity. See Note 21.
Total income taxes paid on continuing operations worldwide were $782 in 1998,
$1,094 in 1997 and $1,083 in 1996.
DuPont 49
<PAGE> 11
Notes to Financial Statements
(Dollars in millions, except per share)
Deferred income taxes result from temporary differences between the financial
and tax bases of the company's assets and liabilities. The tax effects of
temporary differences and tax loss/tax credit carryforwards included in the
deferred income tax provision are as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
------------------------------------
<S> <C> <C> <C>
Depreciation $ 185 $ 96 $ 28
Accrued employee benefits 71 63 122
Other accrued expenses 19 9 (63)
Inventories 54 (36) (31)
Unrealized exchange gains (losses) (11) (6) 5
Investment in subsidiaries and
affiliates (73) (38) (19)
Amortization of intangibles (504)* (2) 5
Other temporary differences 158 61 173
Tax loss/tax credit carryforwards 35 (50) 119
Valuation allowance change-- net 49 (27) (45)
------------------------------------
$ (17) $ 70 $ 294
================================================================================
</TABLE>
* Amortization of intangibles includes the write-off of in-process research
and development for DuPont Pharmaceuticals, Polyester Films, and Polyester
Resins & Intermediates.
The significant components of deferred tax assets and liabilities at December
31, 1998 and 1997, are as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997
--------------------------------------------------
Deferred Tax Asset Liability Asset Liability
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Depreciation $ -- $1,578 $ -- $1,345
Accrued employee benefits 3,075 1,143 2,913 968
Other accrued expenses 454 3 505 25
Inventories 278 63 331 55
Unrealized exchange gains 8 8 6 19
Tax loss/tax credit
carryforwards 118 -- 130 --
Investment in subsidiaries
and affiliates 77 35 62 93
Amortization of intangibles 519 178 21 --
Other 227 921 237 662
--------------------------------------------------
Total $4,756 $3,929 $4,205 $3,167
------- --------------
Less: Valuation
allowance 220 171
-------- -------
Net $4,536 $4,034
================================================================================
</TABLE>
Current deferred tax liabilities (included in the Consolidated Balance Sheet
caption "Income Taxes") were $14 and $7 at December 31, 1998 and 1997,
respectively. In addition, deferred tax assets of $406 and $683 were included in
Other Assets at December 31, 1998 and 1997, respectively (see Note 15).
An analysis of the company's effective income tax rate follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
-----------------------------------
<S> <C> <C> <C>
Statutory U.S. federal income tax rate 35.0% 35.0% 35.0%
International operations 2.0 (3.5) --
Lower effective tax rate on export sales (1.9) (2.2) (1.4)
In-process research and development 1.7 17.9* --
Other--net (0.8) 0.7 (1.3)
-----------------------------------
Effective income tax rate 36.0% 47.9% 32.3%
================================================================================
</TABLE>
* Charges associated with the Pioneer and PTI transactions were not tax
effected because these purchases were stock acquisitions rather than asset
purchases. See Note 5.
Income from continuing operations before income taxes and minority interests
shown below are based on the location of the corporate unit to which such
earnings are attributable. However, since such earnings are often subject to
taxation in more than one country, the income tax provision shown above as U.S.
or international does not correspond to the earnings set forth below.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
------------------------------------
<S> <C> <C> <C>
United States (including exports) $1,388 $1,820 $3,226
International 1,225 1,009 1,161
------------------------------------
$2,613 $2,829 $4,387
================================================================================
</TABLE>
At December 31, 1998, unremitted earnings of subsidiaries outside the United
States totaling $5,996 were deemed to be permanently invested. No deferred tax
liability has been recognized with regard to the remittance of such earnings. It
is not practicable to estimate the income tax liability that might be incurred
if such earnings were remitted to the United States.
Under the tax laws of various jurisdictions in which the company operates,
deductions or credits that cannot be fully utilized for tax purposes during the
current year may be carried forward, subject to statutory limitations, to reduce
taxable income or taxes payable in a future year. At December 31, 1998, the tax
effect of such carryforwards approximated $118. Of this amount, $77 has no
expiration date and $41 expires after 1999 but before 2003.
8. Extraordinary Charge from Early Extinguishment of Debt
In September 1998, the company redeemed various outstanding notes and debentures
with an aggregate principal value of $1,633. The extraordinary charge of $201,
net of a tax benefit of $74, principally represents call premium and unamortized
discount. The effective income tax rate of 26.9 percent reflects the mix of U.S.
and international operations.
50 DuPont
<PAGE> 12
Notes to Financial Statements
(Dollars in millions, except per share)
9. Earnings Per Share of Common Stock
Basic earnings per share is computed by dividing income available to common
stockholders (the numerator) by the weighted-average number of common shares
(the denominator) for the period. The numerator for both income from continuing
operations and net income is reduced by preferred dividends of $10. For diluted
earnings per share, the numerator is adjusted to recognize reduced share of
earnings assuming options in subsidiary company stock are exercised if the
effect of this adjustment is dilutive. For 1998 this effect was anti-dilutive.
The denominator is based on the following weighted-average number of common
shares and includes the additional common shares that would have been
outstanding if potentially dilutive common shares had been issued:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Basic 1,128,826,525 1,130,755,483 1,121,350,592
Diluted 1,145,347,028 1,149,803,450 1,139,822,755
================================================================================
</TABLE>
Average stock options of 5,527,629 and 4,930,300 are not included in the diluted
earnings per share calculation for the years 1998 and 1997, respectively, since
in each case the exercise price is greater than the average market price.
Shares held by the Flexitrust are not considered as outstanding in computing the
weighted-average number of common shares. See Notes 21 and 22
10. Cash and Cash Equivalents and Marketable Securities
Cash equivalents represent investments with maturities of three months or less
from time of purchase. They are carried at cost plus accrued interest, which
approximates fair value because of the short maturity of these instruments. Cash
and cash equivalents are used in part to support a portion of the company's
commercial paper program.
Marketable securities represent investments in fixed and floating rate financial
instruments classified as available-for-sale securities and reported at fair
value.
11. Accounts and Notes Receivable
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Trade--net of allowances of $101 in 1998
and $66 in 1997 $3,591 $3,438
Miscellaneous 610 871
-----------------------------
$4,201 $4,309
================================================================================
</TABLE>
Accounts and notes receivable are carried at amounts that approximate fair value
and include $70 for 1998 and $74 for 1997 due from equity affiliates.
See Note 28 for a description of business segment markets and associated
concentrations of credit risk.
12. Inventories
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Finished products $2,209 $2,115
Semifinished products 836 827
Raw materials and supplies 749 659
-----------------------------
Total 3,794 3,601
Less: Adjustment of inventories
to a last-in, first-out
(LIFO) basis 665 809
-----------------------------
$3,129 $2,792
================================================================================
</TABLE>
Inventory values before LIFO adjustment are generally determined by the average
cost method, which approximates current cost. Inventories valued under the LIFO
method comprised 85 percent of consolidated inventories before LIFO adjustment
at December 31, 1998 and 1997.
13. Property, Plant and Equipment
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Buildings $ 3,889 $ 3,464
Equipment 28,485 27,326
Land 288 260
Construction 2,066 1,861
-----------------------------
$34,728 $32,911
================================================================================
</TABLE>
Property, plant and equipment includes gross assets acquired under capital
leases of $115 and $130 at December 31, 1998 and 1997, respectively; related
amounts included in accumulated depreciation and amortization were $54 and $57
at December 31, 1998 and 1997, respectively.
DuPont 51
<PAGE> 13
Notes to Financial Statements
(Dollars in millions, except per share)
14. Summarized Financial Information for Affiliated Companies
Summarized combined financial information for affiliated companies for which the
equity method of accounting is used (see Note 1, Basis of Consolidation) is
shown below on a 100 percent basis. The most significant of these affiliates at
December 31, 1998, are DuPont Dow Elastomers LLC (50 percent owned by DuPont)
and Pioneer Hi-Bred International Inc. (20 percent owned by DuPont). Dividends
received from equity affiliates were $239 in 1998, $676 in 1997 and $776 in
1996.
<TABLE>
<CAPTION>
Year Ended December 31
- --------------------------------------------------------------------------------
Results of operations 1998 (1) 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales (2) $8,656 $7,778 $7,604
Earnings before income taxes 863 1,166 803
Net Income 689 1,027 661
----------------------------------------
DuPont's equity in earnings
of affiliates
Partnerships (3) $ 162 $ 493 $ 610
Corporate joint ventures
(after income taxes) 116 150 84
----------------------------------------
$ 278 $ 643 (4) $ 694 (5)
================================================================================
</TABLE>
(1) Effective July 1, 1998, DuPont purchased Merck's 50 percent interest in
DuPont Merck and results are fully consolidated. Effective November 5,
1998, substantially all of DuPont's 50 percent interest in CONSOL Energy
Inc. was sold.
(2) Includes sales to DuPont of $614 in 1998, $685 in 1997 and $734 in 1996.
(3) Income taxes are reflected in the company's provision for income tax.
(4) Includes a benefit of $115 from the gain on the sale by DuPont Merck of its
generic and multisource product lines.
(5) Reflects a more favorable allocation of DuPont Merck operating income to
recognize the performance of assets originally contributed to the venture
by DuPont.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Financial position at December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Current assets $ 3,428 $ 4,234
Noncurrent assets 3,838 7,239
----------------------------------
Total assets $ 7,266 $11,473
----------------------------------
Short-term borrowings* $ 1,022 $ 633
Other current liabilities 1,569 2,128
Long-term borrowings* 679 874
Other long-term liabilities 231 2,857
----------------------------------
Total liabilities $ 3,501 $ 6,492
----------------------------------
DuPont's investment in affiliates
(includes advances) $ 1,796 $ 2,372
================================================================================
</TABLE>
* DuPont's pro rata interest in total borrowings was $705 in 1998 and $688 in
1997 of which $168 in 1998 and $192 in 1997 was guaranteed by the company.
These amounts are included in the guarantees disclosed in Note 26.
15. Other Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Prepaid pension cost $1,362 $1,602
Intangible assets - net of accumulated
amortization of $225 in 1998 and
$130 in 1997 2,566* 1,270
Other securities and investments 84 185
Deferred income taxes (see Note 7) 406 683
Miscellaneous 538 471
-----------------------------
$4,956 $4,211
================================================================================
</TABLE>
* Includes $1,070 for DuPont Pharmaceuticals, and increases of $58 reflecting
revision of preliminary purchase price allocations for businesses purchased
from Ralston Purina and ICI.
Other securities and investments includes $97 at December 31, 1997, representing
marketable securities classified as available for sale and reported at fair
value. The remainder represents numerous small investments in securities for
which there are no quoted market prices and for which it is not practicable to
determine fair value. Such securities are reported at cost.
16. Accounts Payable
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Trade $1,206 $1,074
Payables to banks 162 188
Compensation awards 216 267
Miscellaneous 345 392
-----------------------------
$1,929 $1,921
================================================================================
</TABLE>
Payables to banks represents checks issued on certain disbursement accounts but
not presented to the banks for payment. The reported amounts shown above
approximate fair value because of the short maturity of these obligations.
52 DuPont
<PAGE> 14
Notes to Financial Statements
(Dollars in millions, except per share)
17. Short-Term Borrowings and Capital Lease Obligations
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper $5,978 $2,576
Private placement commercial paper -- 2,896
Non-U.S. bank borrowings 180 197
Medium-term notes payable within
one year 140 128
Long-term borrowings payable
within one year 300 300
Industrial development bonds
payable on demand 26 51
Capital lease obligations 5 4
----------------------------------
$6,629 $6,152
================================================================================
</TABLE>
The estimated fair value of the company's short-term borrowings, including
interest rate financial instruments, based on quoted market prices for the same
or similar issues or on current rates offered to the company for debt of the
same remaining maturities, was $6,700 and $6,200 at December 31, 1998 and 1997,
respectively. The increase in estimated fair value in 1998 was primarily due to
higher short-term borrowing levels.
Unused short-term bank credit lines were approximately $7,400 and $6,200 at
December 31, 1998 and 1997, respectively. These lines support short-term
industrial development bonds, a portion of the company's commercial paper
program and other borrowings.
The weighted-average interest rate on short-term borrowings outstanding at
December 31, 1998 and 1997, was 5.4 percent and 5.9 percent, respectively.
18. Other Accrued Liabilities
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Payroll and other employee-related costs $ 673 $ 582
Accrued postretirement benefits cost (see Note 24) 302 317
Productivity initiatives 165 --
Miscellaneous 1,782 2,125
-------------------------
$2,922 $3,024
================================================================================
</TABLE>
19. Long-Term Borrowings and Capital Lease Obligations
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. dollar:
Industrial development bonds due 2007-2026 $ 309 $ 333
Medium-term notes due 2000-2048 (1) 653 437
7.50% notes due 1999 -- 301
9.15% notes due 2000 301 303
6.00% debentures due 2001 ($660 face
value, 13.95% yield to maturity) -- 505
6.50% notes due 2002 499 498
6.75% notes due 2002 300 299
8.00% notes due 2002 252 252
8.50% notes due 2003 (2) 141 300
8.13% notes due 2004 331 331
8.25% notes due 2006 282 282
6.75% notes due 2007 499 499
8.25% debentures due 2022 49 372
7.95% debentures due 2023 38 299
6.50% debentures due 2028 298 --
7.50% debentures due 2033 23 247
6.25% Swiss franc notes due 2000 (3) 103 103
Other loans (various currencies)
due 1999-2008 363 475
Capital lease obligations 54 61
---------------------------------
$4,495 $5,897
================================================================================
</TABLE>
(1) Average interest rates at December 31, 1998 and 1997, were 6.4 percent and
7.1 percent, respectively.
(2) The company entered into an interest rate swaption agreement as part of the
program to manage the fixed and floating interest rate mix of total
borrowings. The agreement gives the swaption counterparty the one-time
option to put the company into an interest rate swap with a notional amount
of $300, whereby the company would, over the remaining term of the note,
receive fixed rate payments essentially equivalent to the fixed interest
rate of the underlying note, and pay the counterparty a floating rate of
interest essentially equivalent to the rate the company pays on its
commercial paper. If exercised, the swaption would effectively convert the
note to a floating rate obligation over the remaining maturity of the note.
The premium received from the counterparty for this swaption is being
amortized to income, using the effective interest method, over the
remaining maturity of the note. The interest rate swaption agreement was
reduced to a notional amount of $141 in September 1998. The fair value and
carrying value of the swaption at December 31, 1998 and 1997, was not
material.
(3) Represents notes denominated as 150 million Swiss francs with a 6.25
percent Swiss franc fixed interest rate. Concurrent with the issuance of
these notes, the company entered into an interest and principal currency
swap that effectively established a $103 fixed principal amount with a 6.9
percent U.S. dollar fixed interest rate.
DuPont 53
<PAGE> 15
Notes to Financial Statements
(Dollars in millions, except per share)
At December 31, 1998, average interest rates on industrial development bonds and
on other loans (various currencies) were 6.1 percent and 7.0 percent,
respectively, the same as December 31, 1997.
Maturities of long-term borrowings, together with sinking fund requirements for
years ending after December 31, 1999, are $628, $107, $1,242 and $428 for the
years 2000, 2001, 2002 and 2003, respectively.
The estimated fair value of the company's long-term borrowings, including
interest rate financial instruments, based on quoted market prices for the same
or similar issues or on current rates offered to the company for debt of the
same remaining maturities was $4,900 and $6,500 at December 31, 1998 and 1997,
respectively.
20. Other Liabilities
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
December 31 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C>
Accrued postretirement benefits cost $5,555 $5,548
Reserves for employee-related costs 921 956
Miscellaneous 1,164 940
--------------------------
$7,640 $7,444
================================================================================
</TABLE>
21. Stockholders' Equity
In January 1997 the company approved plans to purchase and retire up to 20
million shares of common stock to offset dilution resulting from shares issued
under its compensation programs. In 1997 the company spent $327 to purchase and
retire 5,833,100 shares of DuPont common stock under this program. In 1998 the
company spent $769 to purchase 12,814,162 shares, of which 6 million shares were
purchased in a private placement transaction. Under the terms of this private
placement agreement, the final settlement payment resulted in the issuance of
333,862 treasury shares valued at $20. In 1998, 12,480,300 shares were retired.
In 1997, 509,778 shares were issued for 100 percent of the capital stock of
Pfister Hybrid Corn Company. Also in 1997, 22.5 million shares were issued for
100 percent of the capital stock of Protein Technologies International (PTI).
Immediately subsequent to the PTI transaction, 22.5 million shares were
repurchased for $1,420 ($63.13 a share) in two private placement transactions.
The purchase price for one transaction for 16 million shares was subject to
adjustment under terms of the private placement agreement. The company received
$65 in 1998 as a final settlement payment associated with this transaction. The
remaining 6.5 million shares were purchased from the DuPont Pension Trust Fund
for $410. Also in 1998, 72,326 shares valued at $4.4 were issued for final
settlement of 1997 acquisitions, principally PTI.
Additional paid-in capital (compensation plans) includes $66 and $38 at December
31, 1998 and 1997, respectively, related to amounts accrued for variable
options.
In July 1996 DuPont repurchased warrants from Seagram for $504. Coincident with
the repurchase, the company retired 312 million shares of common stock held as
treasury stock.
Shares held by the Flexitrust are used to satisfy existing employee compensation
and benefit programs.
Set forth below is a reconciliation of common stock share activity for the three
years ended December 31, 1998:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Shares of Common Stock Held In
-------------------------------
Issued Flexitrust Treasury
-------------------------------------------------
<S> <C> <C> <C>
Balance January 1, 1996 1,470,085,448 (47,092,352) (312,000,000)
-------------------------------------------------
Issued 2 16,100,762
Treasury Stock Retirement (312,000,000) 312,000,000
-------------------------------------------------
Balance December 31, 1996 1,158,085,450 (30,991,590) -
-------------------------------------------------
Businesses Acquired 23,009,778
Issued 7,745,843
Treasury Stock
Acquisition (28,333,100)
Retirement (28,333,100) 28,333,100
-------------------------------------------------
Balance December 31, 1997 1,152,762,128 (23,245,747) -
-------------------------------------------------
Businesses Acquired 72,326
Issued 9,077,880 333,862
Treasury Stock
Acquisition (12,814,162)
Retirement (12,480,300) 12,480,300
-------------------------------------------------
Balance December 31, 1998 1,140,354,154 (14,167,867) -
===================================================================================
</TABLE>
54 DuPont
<PAGE> 16
Notes to Financial Statements
(Dollars in millions, except per share)
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income," was adopted by the company in 1998 and establishes standards for
reporting and displaying comprehensive income. The pretax, tax and after-tax
effects of the components of other comprehensive income are shown below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Other Comprehensive Income Pretax Tax After-tax
-----------------------------------------
<S> <C> <C> <C>
1998
Cumulative Translation Adjustment $ (23) $ - $ (23)
Minimum Pension Liability Adjustment (193) 81 (112)
-----------------------------------------
Other Comprehensive Income (Loss) $ (216) $ 81 $ (135)
1997
Cumulative Translation Adjustment $ (130) $ - $ (130)
Minimum Pension Liability Adjustment (46) 18 (28)
-----------------------------------------
Other Comprehensive Income (Loss) $ (176) $ 18 $ (158)
1996
Cumulative Translation Adjustment $ (23) $ - $ (23)
Minimum Pension Liability Adjustment (4) 1 (3)
-----------------------------------------
Other Comprehensive Income (Loss) $ (27) $ 1 $ (26)
================================================================================
</TABLE>
The minimum pension liability included in the Consolidated Statement of
Stockholders' Equity is $256, $144 and $116 as of December 31, 1998, 1997 and
1996, respectively, and includes $79, $25 and $16 for Conoco for the years then
ended.
Balances of related after-tax components comprising accumulated other
comprehensive loss are summarized below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Accumulated Other Comprehensive Loss 1998 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
December 31
Foreign Currency Translation Adjustment $(176) $(153) $ (23)
Minimum Pension Liability Adjustment (256) (144) (116)
-------------------------------------
$(432) $(297) $(139)
================================================================================
</TABLE>
22. Compensation Plans
From time to time, the Board of Directors has approved the adoption of worldwide
Corporate Sharing Programs. Under these programs, essentially all employees have
received a one-time grant to acquire shares of DuPont common stock at the market
price on the date of grant. Option terms are "fixed" and options generally are
exercisable one year after date of grant and expire 10 years from date of grant.
There are no additional shares that may be subject to option under existing
programs.
Stock option awards under the DuPont Stock Performance Plan may be granted to
key employees of the company and may be "fixed" and/or "variable." The purchase
price of shares subject to option is equal to or in excess of the market price
of the company's stock at the date of grant. Optionees are eligible for reload
options upon the exercise of stock options with the condition that shares
received from the exercise are held for at least two years. A reload option is
granted at the market price on the date of grant and has a term equal to the
remaining term of the original option. The maximum number of reload options
granted is limited to the number of shares subject to option in the original
option times the original option price divided by the option price of the reload
option. Generally, fixed options are fully exercisable from one to three years
after date of grant and expire 10 years from date of grant. Beginning in 1998,
shares otherwise receivable from the exercise of nonqualified options can be
deferred as stock units for a designated future delivery.
Variable stock option grants have been made to certain members of senior
management. These options are subject to forfeiture if, within five years from
the date of grant, the market price of DuPont common stock does not achieve a
price of $75 per share for 50 percent of the options and $90 per share for the
remaining 50 percent. This condition was met in 1998 for options with a $75 per
share hurdle price and, as a result, these options became "fixed" and
exercisable.
The maximum number of shares that may be subject to option for any consecutive
five-year period is 72 million shares. Subject to this limit, additional shares
that may have been made subject to options were 60,949,492 for 1998, 56,842,462
for 1997 and 59,078,926 for 1996.
Awards for 1998 under the DuPont Stock Performance Plan (granted to key
employees in 1999) consisted of 4,946,131 fixed options to acquire DuPont common
stock at the market price ($52.50 per share) on the date of grant and 700,000
fixed options at an exercise price of $75 per share. Fixed options granted at
$52.50 per share vest over a three-year period and, except for the last six
months of the 10-year option term, are exercisable when the market price of
DuPont common stock exceeds the option grant price by 20 percent. Fixed options
granted at an exercise price of $75 per share vest three years from the date of
grant and expire 10 years after the date of grant.
DuPont 55
<PAGE> 17
Notes to Financial Statements
(Dollars in millions, except per share)
The following table summarizes activity for fixed and variable options for the
last three years:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Fixed Variable
--------------------------------------------------------
Number Weighted- Number Weighted-
of Average of Average
Shares Price Shares Price
--------------------------------------------------------
<S> <C> <C> <C> <C>
January 1, 1996 61,539,178 $23.83 -- --
Granted 5,674,188 $39.41 -- --
Exercised 17,754,052 $23.56 -- --
Forfeited 93,186 $25.96 -- --
- --------------------------------------------------------------------------------
December 31, 1996 49,366,128 $25.73 -- --
Granted 22,937,612 $52.82 4,926,900 $ 52.66
Exercised 9,719,982 $24.47 -- --
Forfeited 1,373,884 $47.85 95,600 $ 52.50
- --------------------------------------------------------------------------------
December 31, 1997 61,209,874 $35.58 4,831,300 $ 52.66
Granted 5,697,539 $59.96 101,000 $ 64.90
Reclassified 1,653,748 $52.52 (1,653,748) $ 52.52
Exercised 8,345,303 $33.70 -- --
Forfeited* 8,786,328 $39.74 629,800 $ 52.50
- --------------------------------------------------------------------------------
December 31, 1998 51,429,530 $38.42 2,648,752 $ 53.25
================================================================================
</TABLE>
* Includes options cancelled as part of the Conoco IPO.
Options exercisable and weighted-average exercise price at the end of the last
three years and the weighted-average fair value of options granted are as
follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
------------------------------------------
<S> <C> <C> <C>
Fixed Options:
Number of shares at year-end 46,728,321 40,037,649 43,742,702
Weighted-avg. price at year-end $36.29 $26.50 $23.97
Weighted-avg. fair value of
options granted during year $14.30 $12.91 $ 8.95
- --------------------------------------------------------------------------------
Variable Options:
Number of shares at year-end -- -- --
Weighted-avg. price at year-end -- -- --
Weighted-avg. fair value of
options granted during year $15.79 $13.08 --
================================================================================
</TABLE>
The fair value of options granted is calculated using the Black-Scholes option
pricing model. Assumptions used were as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
------------------------------------------------------------
Fixed Variable Fixed Variable Fixed
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend yield 2.1% 2.1% 2.2% 2.2% 2.6%
Volatility 19.8% 19.9% 18.8% 18.6% 21.0%
Risk-free
interest rate 5.5% 5.6% 6.4% 6.4% 5.4%
Expected life
(years) 5.7 5.8 5.6 5.7 6.0
================================================================================
</TABLE>
The following table summarizes information concerning currently outstanding and
exercisable options:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Exercise Exercise Exercise Exercise
Price Price Price Price
$16.13- $24.38- $39.63- $59.50-
December 31, 1998 $24.19 $36.56 $59.44 $82.09
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed Options
Options outstanding 9,882,545 15,920,674 21,105,446 4,520,865
Weighted-avg. remaining
contractual life (years) 2.4 5.5 7.9 9.0
Weighted-avg. price $ 19.76 $ 27.48 $ 50.76 $ 60.16
Options exercisable 9,882,545 15,920,674 20,813,569 111,533
Weighted-avg. price $ 19.76 $ 27.48 $ 50.69 $ 72.42
- -----------------------------------------------------------------------------------
Variable Options
Options outstanding -- -- 2,505,752 143,000
Weighted-avg. remaining
contractual life (years) -- -- 8.1 9.0
Weighted-avg. price -- -- $ 52.54 $ 65.71
Options exercisable -- -- -- --
Weighted-avg. price -- -- -- --
===================================================================================
</TABLE>
The company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees," and related interpretations in accounting for its stock option
plans. Accordingly, no compensation expense has been recognized for fixed
options. Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting
for Stock-Based Compensation," was issued in 1995. The company has elected not
to adopt the optional recognition provisions of SFAS No. 123. In addition,
certain majority-owned subsidiaries of the company grant options to their
respective employees under APB Opinion No. 25 and have elected not to adopt SFAS
No. 123. The following table sets forth pro forma information as if the company
and Conoco had adopted these recognition provisions; the effect on reported net
income of applying these recognition provisions to majority-owned subsidiaries
other than Conoco is not material. The pro forma disclosures are not
representative of the effects on net income and earnings per share in future
years.
56 Dupont
<PAGE> 18
Notes to Financial Statements
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Pro Forma Net Income and
Earnings per share 1998 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income
As Reported $4,480 $2,405 $3,636
Pro Forma $4,584 $2,206 $3,602
Earnings Per Share - Basic
As Reported $ 3.96 $ 2.12 $ 3.23
Pro Forma $ 4.05 $ 1.94 $ 3.20
Earnings Per Share - Diluted
As Reported $ 3.90 $ 2.08 $ 3.18
Pro Forma $ 3.99 $ 1.91 $ 3.15
================================================================================
</TABLE>
Compensation expense recognized in income for stock-based employee compensation
awards was $174 ($15 excluding Conoco), $65 ($40 excluding Conoco) and $22 ($9
excluding Conoco) for 1998, 1997 and 1996, respectively.
Awards under the company's Variable Compensation Plan may be granted in stock
and/or cash to employees who have contributed most in a general way to the
company's success, consideration being given to ability to succeed to more
important managerial responsibility. Such awards were $182 for 1998, $268 ($223
excluding Conoco) for 1997 and $233 ($195 excluding Conoco) for 1996. Amounts
credited to the Variable Compensation Fund are dependent on company earnings and
are subject to maximum limits as defined by the plan. The amounts credited to
the fund were $188 in 1998, $265 ($221 excluding Conoco) in 1997 and $230 ($189
excluding Conoco) in 1996. Awards made and amounts credited under the Variable
Compensation Plan for 1998 relate solely to employees of continuing operations.
In accordance with the terms of the Variable Compensation Plan and similar plans
of subsidiaries, 1,309,208 shares of common stock are awaiting delivery from
awards for 1998 and prior years.
23. Investment Activities
The company purchased Merck's 50 percent interest in The DuPont Merck
Pharmaceutical Company on July 1, 1998, for a cash payment of $2,586. As part of
the purchase, the company agreed to indemnify Merck for certain liabilities that
may arise from events that occurred during Merck's tenure as a general partner
(see Note 26). In addition, related costs of $8 were incurred. The company now
operates as DuPont Pharmaceuticals. For accounting purposes, the acquisition has
been treated as a purchase. The preliminary allocation of purchase price is as
follows: cash $69; other current assets $203; noncurrent assets $1,361;
in-process research and development $1,230; and liabilities $269. Noncurrent
assets includes $73 of goodwill, which is being amortized over 20 years.
Excluding the effect of the $1,230 charge for purchased in-process research and
development on 1997's unaudited pro forma results, the unaudited pro forma
effect on net income and earnings per share for 1998 and 1997 is not material.
The company purchased ICI's global polyester films business on January 31, 1998,
for a cash payment of $647; in addition, related costs of $5 were incurred and
liabilities of $110 were assumed, including $54 in employee separation costs and
$6 in other costs pursuant to an exit plan the company began to formulate as of
the acquisition date. For accounting purposes, the acquisition has been treated
as a purchase. The preliminary allocation of purchase price is as follows:
current assets $62; noncurrent assets $650; and in-process research and
development $50. Noncurrent assets includes $76 of goodwill, which is being
amortized over 20 years.
Investment in affiliates in 1997 includes $1,711 for the September 1997 purchase
of a 20 percent interest in Pioneer Hi-Bred International. Pioneer develops,
produces and markets hybrids of corn and varieties of soybeans. For accounting
purposes, the acquisition has been treated as a purchase. Of the $1,711 purchase
price, $903 was allocated to purchased in-process research and development and
the remainder was allocated based on fair values to assets and liabilities of
Pioneer, principally intangible assets (including $206 of goodwill to be
amortized over 40 years), for purposes of determining equity in earnings. The
1997 allocation of purchase price was revised in 1998 with finalization of
purchase accounting.
Protein Technologies International was purchased on December 1, 1997. PTI is a
global supplier of soy proteins and applied technology to the food and paper
processing industries. 22,500,000 shares of DuPont common stock were issued in
this transaction with a fair value of $1,297. In addition, related costs of $4
were incurred. For accounting purposes, the acquisition has been treated as a
purchase. Based on preliminary estimates, the purchase price was allocated as
follows: cash $47; other current assets $158; noncurrent assets $897; in-process
research and
DuPont 57
<PAGE> 19
Notes to Financial Statements
(Dollars in millions, except per share)
development $500; and liabilities $301, including $188 of debt. In 1998, an
additional 70,673 shares of DuPont common stock were issued with a fair value of
$4, and related costs of $1 were incurred. The purchase price allocations were
revised as follows: cash $47; other current assets $179; noncurrent assets
$1,072; in-process research and development $560; deferred tax liability $280;
and other liabilities $272. Noncurrent assets includes $85 of goodwill, which is
being amortized over 25 years.
The company purchased ICI's global polyester resins and intermediates businesses
on December 31, 1997, for a cash payment of $1,240, including $50 held in escrow
pending satisfactory demonstration of intermediates process technology in a new
facility; in addition, related costs of $7 were incurred and liabilities of $230
were assumed. As part of the transaction, the company acquired a 70 percent
interest in an ICI subsidiary that had approximately $225 in long-term
borrowings at December 31, 1997. For accounting purposes, the acquisition has
been treated as a purchase. The preliminary allocation of purchase price was as
follows: current assets $99; noncurrent assets $1,303; in-process research and
development $75; and liabilities $230, including $176 of debt. In 1998, the
purchase price allocations were revised as follows: current assets $89;
noncurrent assets $1,245; in-process research and development $178; and
liabilities $265, including $15 in employee separation costs pursuant to an exit
plan the company began to formulate as of the acquisition date. Noncurrent
assets includes $26 of goodwill, which is being amortized over 20 years.
Note 5 provides information on purchased in-process research and development in
connection with the Pioneer, PTI, ICI and DuPont Merck transactions.
Proceeds from sales of assets in 1998 principally include: (a) $500 from the
sale of substantially all of DuPont's 50 percent interest in CONSOL Energy Inc.;
(b) $279 from the sale of the global hydrogen peroxide business; and (c) $86
from the sale of the printing and publishing businesses.
Proceeds from sales of assets in 1997 principally include: (a) $175 from
collection of a note from The Sterling Group Inc. received in connection with
its purchase of the Diagnostic Imaging business in 1996; (b) $125 from DuPont
Merck for sale of its generic and multisource product lines; and (c) $62 from
the sale of the NEN Life Sciences Products to Genstar Capital LLC.
Proceeds from sales of assets in 1996 principally include $570 from the sales of
Medical Products businesses, and $390 from the formation of the elastomers joint
venture. Assets sold in connection with these sales amounted to $1,163, of which
$644 was for property, plant and equipment, with the remainder being primarily
working capital.
Payments for businesses acquired in 1996 principally relate to the purchase of
commercial floorcovering distribution and installation companies.
24. Pensions and Other Postretirement Benefits
Statement of Financial Accounting Standards No. 132, "Employers' Disclosures
about Pensions and Other Postretirement Benefits," was adopted by the company in
1998. The standard revises disclosures for pensions and other postretirement
benefits and standardizes them into a combined format.
The company offers various postretirement benefits to its employees. Where
permitted by applicable law, the company reserves the right to change, modify or
discontinue the plans.
Pensions
The company has noncontributory defined benefit plans covering substantially all
U.S. employees. The benefits under these plans are based primarily on years of
service and employees' pay near retirement. The company's funding policy is
consistent with the funding requirements of federal law and regulations.
Pension coverage for employees of the company's non-U.S. consolidated
subsidiaries is provided, to the extent deemed appropriate, through separate
plans. Obligations under such plans are systematically provided for by
depositing funds with trustees, under insurance policies or by book reserves.
Other Postretirement Benefits
The parent company and certain subsidiaries provide medical, dental, and life
insurance benefits to pensioners and survivors. The associated plans are
unfunded and approved claims are paid from company funds.
58 DuPont
<PAGE> 20
Notes to Financial Statements
(Dollars in millions, except per share)
Summarized information on the company's postretirement plans is as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
Pension Benefits Other Benefits
---------------------------------------------------
1998 1997 1998 1997
---------------------------------------------------
Change in Benefit Obligation
<S> <C> <C> <C> <C>
Benefit obligation at
beginning of year $ 17,133 $ 15,505 $ 4,590 $ 4,486
Service cost 355 328 61 55
Interest cost 1,121 1,123 310 334
Plan participants'
contributions 17 17 28 24
Actuarial loss 1,586 1,595 245 34
Foreign currency exchange
rate changes 43 (182) (4) (2)
Benefits paid (1,236) (1,213) (330) (341)
Amendments 7 -- (167) --
New Plans 389 28 32 --
Divestiture (144) (68) -- --
Benefit obligation at end ---------------------------------------------------
of year $ 19,271 $ 17,133 $ 4,765 $ 4,590
===================================================
Change in Plan Assets
Fair value of plan assets
at beginning of year $ 18,697 $ 16,957 $ -- $ --
Actual return on
plan assets 2,411 3,196 -- --
Foreign currency exchange
rate changes 9 (112) -- --
Employer contributions 189 137 302 317
Plan participants'
contributions 17 17 28 24
Benefits paid (1,236) (1,213) (330) (341)
Retiree health care
pension assets transfer (249) (232) -- --
Special termination
payments (159) -- -- --
New plans 244 27 -- --
Divestiture (94) (80) -- --
Fair value of plan ---------------------------------------------------
assets at end of year $ 19,829 $ 18,697 $ -- $ --
===================================================
Funded Status $ 558 $ 1,564 $ (4,765) $ (4,590)
Unrecognized prior
service cost 572 625 (752) (650)
Unrecognized actuarial
(gain) loss 201 (439) (340) (625)
Unrecognized transition
asset (622) (776) -- --
---------------------------------------------------
Net amount recognized $ 709 $ 974 $ (5,857) $ (5,865)
===================================================
Amounts recognized in the
statement of financial
position consist of:
Prepaid (accrued) benefit cost $ 798 $ 1,055 $ (5,857) $ (5,865)
Accrued benefit liability (448) (327) -- --
Intangible asset 61 51 -- --
Accumulated other
comprehensive income 298 195 -- --
---------------------------------------------------
Net amount recognized $ 709 $ 974 $ (5,857) $ (5,865)
===================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Weighted-average Pension Benefits Other Benefits
assumptions as of -------------------------------------------------
December 31 1998 1997 1998 1997
-------------------------------------------------
<S> <C> <C> <C> <C>
Discount rate 6.5% 7.0% 6.5% 7.0%
Expected return on plan assets 9.0% 9.0% -- --
Rate of compensation increase 5.0% 5.0% 5.0% 5.0%
===================================================================================
</TABLE>
The above assumptions are for U.S. plans only. For non-U.S. plans, no one of
which was material, assumptions reflect economic assumptions applicable to each
country.
The assumed health care trend rates used in determining other benefits at
December 31, 1998, are 7.5 percent decreasing to 4 percent over five years. At
December 31, 1997, such rates were 8 percent decreasing to 5 percent over eight
years.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Components of Pension Benefits Other Benefits
Net Periodic -----------------------------------------------------------------------
Benefit Cost 1998 1997 1996 1998 1997 1996
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Service cost $ 355 $ 328 $ 327 $ 61 $ 55 $ 62
Interest cost 1,121 1,123 1,097 310 334 316
Expected return
on plan assets (1,581) (1,417) (1,369) -- -- --
Amortization of
transition asset (150) (150) (159) -- -- --
Amortization of
unrecognized
(gain) loss 56 35 52 (25) (21) (22)
Amortization of
prior service
cost 53 54 38 (65) (65) (75)
Curtailment/
settlement loss 6 -- -- -- -- --
Net periodic -----------------------------------------------------------------------
benefit cost
(credit) $ (140) $ (27) $ (14) $ 281 $ 303 $ 281
==========================================================================================
</TABLE>
DuPont 59
<PAGE> 21
Notes to Financial Statements
(Dollars in millions, except per share)
The projected benefit obligation, accumulated benefit obligation, and fair value
of plan assets for the pension plan with accumulated benefit obligations in
excess of plan assets were $2,364, $1,968, and $990, respectively, as of
December 31, 1998, and $1,307, $974, and $167, respectively, as of December 31,
1997. The special termination benefit of $159 was provided to U.S. employees
terminated under company-wide productivity improvement initiatives. (These
initiatives are described in Note 6.) U.S. pension assets consist principally of
common stocks, including 9,353,570 shares of DuPont at December 31, 1998 and
U.S. government obligations.
Excluded from Note 24 are the Conoco projected benefit obligation and fair value
of plan assets of $1,737 and $1,316, respectively, as of December 31, 1998, and
$1,404 and $1,196, respectively, as of December 31, 1997.
Assumed health care cost trend rates have a significant effect on the amount
reported for the health care plan. A one-percentage-point change in assumed
health care cost trend rates would have the following effects:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1-Percentage 1-Percentage
Point Increase Point Decrease
---------------------------------------------
<S> <C> <C>
Effect on total of service and
interest cost components $ 44 $ (35)
Effect on postretirement
benefit obligation $444 $(366)
================================================================================
</TABLE>
25. Derivatives and Other Hedging Instruments
The company enters into contractual arrangements (derivatives) in the ordinary
course of business to hedge its exposure to currency, interest rate and
commodity price risks. The company has established an overlying Financial Risk
Management Framework for risk management and derivative activities. The
framework sets forth senior management's financial risk management philosophy
and objectives through a Corporate Financial Risk Management Policy. In
addition, it establishes oversight committees and risk management guidelines
that authorize the use of specific derivative instruments and further
establishes procedures for control and valuation, counterparty credit approval,
and routine monitoring and reporting. The counterparties to these contractual
arrangements are major financial institutions. The company is exposed to credit
loss in the event of nonperformance by these counterparties. The company manages
this exposure to credit loss through the aforementioned credit approvals, limits
and monitoring procedures and, to the extent possible, by restricting the period
over which unpaid balances are allowed to accumulate. The company does not
anticipate nonperformance by counterparties to these contracts, and no material
loss would be expected from such nonperformance. Market and counterparty credit
risks associated with these instruments are regularly reported to management.
The company's accounting policies with respect to these financial instrument
transactions are set forth in Note 1.
Currency Risk
The company routinely uses forward exchange contracts to hedge its net
exposures, by currency, related to monetary assets and liabilities of its
operations that are denominated in currencies other than the designated
functional currency. The primary business objective of this hedging program is
to maintain an approximately balanced position in foreign currencies so that
exchange gains and losses resulting from exchange rate changes, net of related
tax effects, are minimized.
In addition, the company from time to time will enter into forward exchange
contracts to establish with certainty the functional currency amount of future
firm commitments denominated in another currency. Decisions regarding whether or
not to hedge a given commitment are made on a case-by-case basis, taking into
consideration the amount and duration of the exposure, market volatility and
economic trends. At December 31, 1998, the company had no open forward exchange
contracts designated as hedges of firm foreign currency commitments. Forward
exchange contracts are also used from time to time to manage near-term foreign
currency cash requirements and, from time to time, to place foreign currency
deposits and marketable securities investments into currencies offering
favorable returns. Net cash inflow (outflow) from settlement of forward exchange
contracts was $(31), $146 and $(192) for the years 1998, 1997 and 1996,
respectively.
60 DuPont
<PAGE> 22
Notes to Financial Statements
(Dollars in millions, except per share)
In December 1998 the company entered into forward exchange contracts to purchase
3.1 billion German marks for about $1,900 in conjunction with the signing of a
definitive agreement to purchase the performance coatings business of Hoechst AG
for 3.1 billion German marks. The business purpose of these contracts was to
lock in the U.S. dollar functional currency cost of this acquisition and thereby
prevent adverse movements in the dollar/mark exchange rate from causing the net
U.S. dollar cash purchase price to exceed the negotiated fair value of the
business. The use of hedge accounting for these contracts is precluded by
accounting guidance. Changes in fair value of these contracts are included in
income in the period the change occurs and the U.S. dollar purchase price for
the acquired business will be measured using the dollar/mark exchange rate on
the date of payment. At December 31, 1998, the change in fair value of these
contracts resulted in a loss of $20.
Interest Rate Risk
The company uses a combination of financial instruments, including interest rate
swaps, interest and principal currency swaps and structured medium-term
financings, as part of its program to manage the fixed and floating interest
rate mix of the total debt portfolio and related overall cost of borrowing.
Interest rate swaps involve the exchange of fixed for floating rate interest
payments that are fully integrated with underlying fixed-rate bonds or notes to
effectively convert fixed rate debt into floating rate debt based on LIBOR or
commercial paper rates. Interest rate swaps also involve the exchange of
floating for fixed rate interest payments that are fully integrated with
commercial paper or other floating rate borrowings to effectively convert
floating rate debt into fixed rate debt. Both types of interest rate swaps are
denominated in U.S. dollars. Interest rate swaps allow the company to maintain a
target range of floating rate debt.
Under interest and principal currency swaps, the company receives predetermined
foreign currency-denominated payments corresponding, both as to timing and
amount, to the fixed or floating interest rate and fixed principal amount to be
paid by the company under concurrently issued foreign currency-denominated
bonds. In return, the company pays a U.S. dollar-denominated fixed or floating
interest rate and a U.S. dollar-denominated fixed principal amount to the
counterparty, thereby effectively converting the foreign currency-denominated
bonds into U.S. dollar-denominated obligations for both interest and principal.
Interest and principal currency swaps allow the company to be fully hedged
against fluctuations in currency exchange rates and foreign interest rates and
to achieve U.S. dollar fixed or floating interest rate payments below the market
interest rate, at the date of issuance, for borrowings of comparable maturity.
An interest and principal currency swap was outstanding at December 31, 1998 and
1997, that effectively converted a 150 million Swiss franc borrowing with a 6.25
percent Swiss franc fixed interest rate and a maturity of 2000 to a U.S. dollar
fixed principal amount of $103 with a 6.9 percent U.S. dollar fixed interest
rate. The fair value of this swap at December 31, 1998 and 1997, was not
material.
Structured medium-term financings consist of: (a) a structured medium-term note
with interest and/or principal payments (denominated in either U.S. dollars or
foreign currencies) determined using a specified calculation incorporating
changes in currency exchange rates or other financial indexes, and (b) a
concurrently executed structured medium-term swap that, for any and all
calculations of the note's interest and/or principal payments over the term of
the note, provides a fully hedged transaction such that the note is effectively
converted to a U.S. dollar-denominated fixed or floating interest rate with a
U.S. dollar-denominated fixed principal amount. Structured medium-term swaps
allow the company to be fully hedged against fluctuations in exchange rates and
interest rates and to achieve U.S. dollar fixed or floating interest rate
payments below the market interest rate, at the date of issuance, for borrowings
of comparable maturity.
The face amount of structured medium-term financings outstanding was $50 at
December 31, 1998 and 1997. The weighted-average interest rate and
weighted-average maturity was 5.1 percent and 5.6 percent, and 6.8 years and 7.8
years, at December 31, 1998 and 1997, respectively. The fair value of the
structured medium-term swap associated with these financings at December 31,
1998 and 1997, was not material.
It is the company's policy that foreign currency bonds and structured
medium-term notes will not be issued unless a hedge of the market risks inherent
in such borrowings is executed simultaneously with a management-approved, highly
creditworthy counterparty to provide a fully hedged transaction.
DuPont 61
<PAGE> 23
Notes to Financial Statements
(Dollars in millions, except per share)
Interest rate financial instruments did not have a material effect on the
company's overall cost of borrowing at December 31, 1998 and 1997.
See also Notes 17 and 19 for additional descriptions of interest rate financial
instruments.
Summary of Outstanding Derivative Financial Instruments
Set forth below is a summary of the notional amounts, estimated fair values and
carrying amounts of outstanding financial instruments at December 31, 1998 and
1997.
Notional amounts represent the face amount of the contractual arrangements and
are not a measure of market or credit exposure. Estimated fair value of forward
exchange contracts is based on market prices for contracts of comparable time to
maturity. Carrying amounts represent the receivable (payable) recorded in the
Consolidated Balance Sheet. See also Notes 10, 11, 15, 16, 17 and 19 for fair
values and carrying amounts of other financial instruments.
Notional Amount, Estimated Fair Value and Carrying Amount of Outstanding
Derivative Financial Instruments
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Notional Estimated Carrying
Type of Instrument Amount Fair Value Amount
- --------------------------------------------------------------------------------
Forward Exchange Contracts
<S> <C> <C> <C>
December 31, 1998 $ 11,389 $ (43) $ (41)
1997 8,621 (3) 16
================================================================================
</TABLE>
Estimated fair values shown above only represent the value of the hedge
component of these transactions, and thus are not indicative of the fair value
of the company's overall hedged position. The estimated fair value of the
company's total debt portfolio, based on quoted market prices for the same or
similar issues or on current rates offered to the company for debt of the same
remaining maturities, was $11,600 and $12,700 at December 31, 1998 and 1997,
respectively. The decrease in fair value in 1998 was primarily due to lower
borrowing levels.
Commodity Price Risk
The company enters into exchange-traded and over-the-counter derivative
commodity instruments to hedge its exposure to price fluctuations on certain raw
material purchases. The fair value of outstanding derivative commodity
instruments at December 31, 1998 and 1997, was not material.
26. Commitments and Contingent Liabilities
The company uses various leased facilities and equipment in its operations.
Future minimum lease payments under noncancelable operating leases are $148,
$111, $84, $69 and $45 for the years 1999, 2000, 2001, 2002 and 2003,
respectively, and $260 for subsequent years, and are not reduced by
noncancelable minimum sublease rentals due in the future in the amount of $18.
Rental expense under operating leases was $214 in 1998, $250 in 1997 and $240 in
1996.
In June 1997, DuPont formed alliances with Computer Sciences Corporation (CSC)
and Andersen Consulting. CSC operates a majority of DuPont's global information
systems and technology infrastructure and provides selected applications and
software services. Andersen Consulting provides information systems solutions
designed to enhance DuPont's manufacturing, marketing, distribution and customer
service. The total dollar value of the contracts is in excess of $4,000 over 10
years. Minimum payments due under the contracts are: $253, $203, $168, $161 and
$154 for the years 1999, 2000, 2001, 2002 and 2003, respectively, and a total of
$502 thereafter.
The company has various purchase commitments for materials, supplies and items
of permanent investment incident to the ordinary conduct of business. In the
aggregate, such commitments are not at prices in excess of current market.
The company is subject to various lawsuits and claims with respect to such
matters as product liabilities, governmental regulations and other actions
arising out of the normal course of business. While the effect on future
financial results is not subject to reasonable estimation because considerable
uncertainty exists, in the opinion of company counsel, the ultimate liabilities
resulting from such lawsuits and claims will not materially affect the
consolidated financial position of the company.
62 DuPont
<PAGE> 24
Notes to Financial Statements
(Dollars in millions, except per share)
During 1991 the company initiated a stop-sale and recall of Benlate(R) 50 DF
fungicide. About 140 of the more than 750 cases filed against the company in
connection with the recall remain, the rest having been disposed of by trial,
dismissal or settlement. In the fourth quarter of 1995, DuPont and the other
major defendants in litigation concerning allegedly defective plumbing systems
made with polybutylene pipe and acetal fittings settled two of several national
class actions. The company's liability in the settled actions is limited to 10
percent of the cost of repairing plumbing systems up to a total company payout
of $120. The related liability for each of these matters included in the
Consolidated Balance Sheet is not reduced by the amounts of any expected
insurance recoveries. Adverse changes in estimates for such costs could result
in additional future charges.
The company is also subject to contingencies pursuant to environmental laws and
regulations that in the future may require the company to take further action to
correct the effects on the environment of prior disposal practices or releases
of chemical or petroleum substances by the company or other parties. The company
has accrued for certain environmental remediation activities consistent with the
policy set forth in Note 1. At December 31, 1998, such accrual amounted to $462
and, in management's opinion, was appropriate based on existing facts and
circumstances. Under adverse changes in circumstances, potential liability may
exceed amounts accrued. In the event that future remediation expenditures are in
excess of amounts accrued, management does not anticipate that they will have a
material adverse effect on the consolidated financial position of the company.
The company has indirectly guaranteed various debt obligations under agreements
with certain affiliated and other companies to provide specified minimum
revenues from shipments or purchases of products. At December 31, 1998, these
indirect guarantees totaled $15, and the company had directly guaranteed $502 of
the obligations of certain affiliated companies and others. No material loss is
anticipated by reason of such agreements and guarantees.
As part of the company's purchase of Merck's 50 percent interest in The DuPont
Merck Pharmaceutical Company, the company agreed to indemnify Merck for certain
liabilities that may arise from events that occurred during Merck's tenure as
general partner. As this contingency is resolved and if additional consideration
is paid, the amount of such payments will be recorded as additional cost of the
acquired business and will increase the amount of goodwill recorded for this
acquisition. Amounts paid in 1998 under the indemnity were not material.
In addition, the company has historically guaranteed certain obligations and
liabilities of Conoco Inc., its subsidiaries and affiliates. The company has
guaranteed $808, plus interest, of the financial obligations of Conoco as well
as certain non-financial performance obligations. Conoco has indemnified the
company for any liabilities the company may incur pursuant to these guarantees.
The Restructuring, Transfer and Separation Agreement between DuPont and Conoco
requires Conoco to use its best efforts to have Conoco, or any of its
subsidiaries, substitute for DuPont as guarantor.
DuPont 63
<PAGE> 25
Notes to Financial Statements
(Dollars in millions, except per share)
27. Geographic Information
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
1998 1997 1996
--------------------------------------------------------------------
Net Net Net Net Net Net
Sales* Property Sales* Property Sales* Property
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
North America
United States $13,075 $ 8,454 $12,802 $ 7,469 $12,472 $ 6,690
Canada 881 459 867 559 808 526
Mexico 421 117 402 118 343 103
Other 93 135 65 74 66 74
--------------------------------------------------------------------
Total 14,470 9,165 14,136 8,220 13,689 7,393
Europe, Middle East and Africa
Germany 1,450 388 1,300 384 1,214 517
United Kingdom 988 1,078 925 759 968 467
France 904 181 863 174 962 167
Italy 902 5 818 5 832 6
Other 2,108 1,188 2,029 1,102 2,091 1,023
--------------------------------------------------------------------
Total 6,352 2,840 5,935 2,424 6,067 2,180
Asia Pacific
Japan 820 159 914 77 1,020 101
Taiwan 591 707 396 688 356 219
China 398 208 373 205 348 161
Singapore 86 635 85 584 63 561
Other 947 244 1,157 212 1,138 190
--------------------------------------------------------------------
Total 2,842 1,953 2,925 1,766 2,925 1,232
South America
Brazil 659 83 642 106 560 101
Other 444 90 451 85 403 53
--------------------------------------------------------------------
Total 1,103 173 1,093 191 963 154
--------------------------------------------------------------------
Total $24,767 $14,131 $24,089 $12,601 $23,644 $10,959
===================================================================================================
</TABLE>
*Sales are attributed to countries based on location of customer.
28. Industry Segment Information
Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures about
Segments of an Enterprise and Related Information," was adopted by the company
beginning with this Annual Report. This standard requires disclosure of segment
information on the same basis used internally for evaluating segment performance
and deciding how to allocate resources to segments. The company's strategic
business units (operating segments) are organized by product line. For purposes
of SFAS No. 131, these have been aggregated into eight reportable segments
including Agriculture & Nutrition, Nylon Enterprise, Performance Coatings &
Polymers, Pharmaceuticals, Pigments & Chemicals, Polyester Enterprise, Specialty
Fibers and Specialty Polymers. The company's ongoing photomasks, safety
resources, and global services businesses, and the divested businesses of
printing and publishing, medical products and coal are included in Other. Major
products by segment include: Agriculture & Nutrition (herbicides, fungicides,
insecticides, soy protein and value-enhanced grains); Nylon Enterprise (flooring
systems, textiles, industrial fibers and intermediates); Performance Coatings &
Polymers (automotive finishes, engineering polymers and elastomers);
Pharmaceuticals (prescription pharmaceuticals and radiopharmaceuticals);
Pigments & Chemicals (white pigment and mineral products, specialty chemicals
and fluorochemicals); Polyester Enterprise (Dacron(R) polyester,
high-performance films and resins and intermediates); Specialty Fibers (Lycra(R)
brand elastane, nonwovens and aramids); and Specialty Polymers (photopolymers
and electronic materials, packaging and industrial polymers, Corian(R) surfaces
and fluoropolymers). The company operates globally in substantially all of its
product lines. The company's sales are not materially dependent on a single
customer or small group of customers. The Performance
64 DuPont
<PAGE> 26
Notes to Financial Statements
(Dollars in millions, except per share)
Coatings & Polymers and Nylon Enterprise segments have several large customers
in their respective industries that are important to these segments' operating
results.
In general, the accounting policies of the segments are the same as those
described in the Summary of Significant Accounting Policies. Exceptions are
noted as follows and are shown in the reconciliations below. Sales include pro
rata equity affiliate sales and intersegment transfers. After-tax operating
income does not include corporate expenses, interest and exchange gains
(losses).
Segment net assets measures net working capital, net permanent investment and
other noncurrent operating assets and liabilities of the segment. Affiliate net
assets (pro rata share) excludes borrowings and other long-term liabilities.
Depreciation and amortization includes depreciation on research and development
facilities and amortization of intangible assets, excluding write-down of assets
discussed in Note 6. Expenditures for long-lived assets excludes investments in
affiliates and includes payments for long-lived assets as part of business
acquisitions. See Note 23 for discussion of strategic acquisitions in the
segments.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Agriculture Performance Pigments
& Nylon Coatings & Pharma- &
Nutrition Enterprise Polymers ceuticals Chemicals
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998
Total Segment Sales $ 3,156 $ 4,594 $ 4,607 $ 1,109 $ 3,659
Intersegment Transfers -- 39 42 -- 228
After-Tax Operating Income 2 257 244 508 (668) 577
Depreciation and Amortization 133 236 149 60 232
Equity in Earnings of Affiliates 10 35 16 77 (3)
Provision for Income Taxes 25 140 264 (317) 303
Segment Net Assets 4,069 3,082 2,214 1,843 1,734
Affiliate Net Assets 1,169 551 281 23 62
Expenditures for Long-Lived Assets 214 493 229 655 189
====================================================================================================================
1997
Total Segment Sales $ 2,513 $ 4,582 $ 4,676 $ 753 $ 3,812
Intersegment Transfers -- 26 51 -- 228
After-Tax Operating Income 3 (1,017) 372 519 234 513
Depreciation and Amortization 73 231 157 -- 241
Equity in Earnings of Affiliates (913) 42 67 232 --
Provision for Income Taxes (16) 177 274 142 238
Segment Net Assets 3,231 2,928 2,043 404 1,885
Affiliate Net Assets 882 507 262 437 68
Expenditures for Long-Lived Assets 499 490 258 -- 203
=====================================================================================================================
1996
Total Segment Sales $ 2,443 $ 4,186 $ 4,573 $ 721 $ 3,734
Intersegment Transfers -- 29 47 -- 230
After-Tax Operating Income 4 351 334 502 305 493
Depreciation and Amortization 70 244 198 -- 253
Equity in Earnings of Affiliates 6 26 51 302 --
Provision for Income Taxes 56 172 282 186 231
Segment Net Assets 1,405 2,325 1,879 439 1,929
Affiliate Net Assets 28 283 220 479 70
Expenditures for Long-Lived Assets 88 300 219 -- 196
====================================================================================================================
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Polyester Specialty Specialty
Enterprise Fibers Polymers Other Total 1
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1998
Total Segment Sales $ 2,797 $ 3,296 $ 4,093 $ 445 $ 27,756
Intersegment Transfers 175 86 155 4 729
After-Tax Operating Income 2 (228) 659 598 183 2,130
Depreciation and Amortization 419 230 169 64 1,692
Equity in Earnings of Affiliates (1) 25 12 81 252
Provision for Income Taxes (100) 331 318 89 1,053
Segment Net Assets 3,142 2,574 2,183 260 21,101
Affiliate Net Assets 174 134 237 -- 2,631
Expenditures for Long-Lived Assets 706 361 267 134 3,248
====================================================================================================================
1997
Total Segment Sales $ 2,215 $ 3,320 $ 4,094 $ 1,022 $ 26,987
Intersegment Transfers 169 70 192 18 754
After-Tax Operating Income 3 124 708 577 (225) 1,805
Depreciation and Amortization 126 240 178 64 1,310
Equity in Earnings of Affiliates 3 23 21 67 (458)
Provision for Income Taxes 77 319 289 (178) 1,322
Segment Net Assets 3,156 2,332 2,011 375 18,365
Affiliate Net Assets 158 127 199 249 2,889
Expenditures for Long-Lived Assets 1,131 285 320 136 3,322
====================================================================================================================
1996
Total Segment Sales $ 2,337 $ 3,095 $ 3,835 $ 1,542 $ 26,466
Intersegment Transfers 275 32 129 76 818
After-Tax Operating Income 4 161 624 496 (24) 3,242
Depreciation and Amortization 147 247 179 101 1,439
Equity in Earnings of Affiliates 11 20 25 36 477
Provision for Income Taxes 76 287 250 (63) 1,477
Segment Net Assets 1,212 2,232 1,865 1,123 14,409
Affiliate Net Assets 144 116 185 436 1,961
Expenditures for Long-Lived Assets 167 326 247 67 1,610
===============================================================================================================
</TABLE>
DuPont 65
<PAGE> 27
Notes to Financial Statements
(Dollars in millions, except per share)
1 A reconciliation of the totals reported for the operating segments to the
applicable line items on the consolidated financial statements is as
follows:
Segment Sales to Total Sales
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
-------------------------------------------------
<S> <C> <C> <C>
Total Segment Sales $ 27,756 $ 26,987 $ 26,466
Elimination of Intersegment
Transactions (729) (754) (818)
Elimination of Equity
Affiliate Sales (2,260) (2,204) (2,045)
Miscellaneous -- 60 41
-------------------------------------------------
Total Sales $ 24,767 $ 24,089 $ 23,644
================================================================================
</TABLE>
After-Tax Operating Income to Income from Continuing Operations
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
-------------------------------------------------
<S> <C> <C> <C>
Total Segment ATOI $ 2,130 $ 1,805 $ 3,242
Interest and Exchange
Gains (Losses) (292) (226) (182)
Corporate Expenses (190) (147) (129)
-------------------------------------------------
Income from Continuing
Operations $ 1,648 $ 1,432 $ 2,931
================================================================================
</TABLE>
Segment Net Assets to Total Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 1997 1996
-------------------------------------------------
<S> <C> <C> <C>
Total Segment Net Assets $ 21,101 $ 18,365 $ 14,409
Corporate Assets 4,768 5,296 5,990
Liabilities included
in Net Assets 4,250 4,630 4,092
Net Assets of
Discontinued Operations 8,417 8,398 7,851
-------------------------------------------------
Total Assets $ 38,536 $ 36,689 $ 32,342
================================================================================
</TABLE>
Other Items
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Segment Consolidated
Totals Adjustments Totals
-------------------------------------------------
<S> <C> <C> <C>
1998
Depreciation and Amortization $ 1,692 $ (240) $ 1,452
Equity in Earnings of Affiliates 252 26 278
Provision for Income Taxes 1,053 (112) 941
Affiliate Net Assets 2,631 (835) 1,796
Expenditures for Long-Lived
Assets 3,248 135 3,383
1997
Depreciation and Amortization $ 1,310 $ 51 $ 1,361
Equity in Earnings of Affiliates (458) 1,101* 643
Provision for Income Taxes 1,322 32 1,354
Affiliate Net Assets 2,889 (517) 2,372
Expenditures for Long-Lived
Assets 3,322 118 3,440
1996
Depreciation and Amortization $ 1,439 $ 87 $ 1,526
Equity in Earnings of Affiliates 477 217 694
Provision for Income Taxes 1,477 (61) 1,416
Affiliate Net Assets 1,961 (389) 1,572
Expenditures for Long-Lived
Assets 1,610 63 1,673
================================================================================
</TABLE>
* Includes a charge of $903 for Pioneer in-process research and development
reported in Note 5.
2 Includes the following (charges) benefits:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Agriculture & Nutrition a $ (73)
Nylon Enterprise b (162)
Performance Coatings & Polymers b (17)
Pharmaceuticals c (853)
Pigments & Chemicals b (4)
Polyester Enterprise d (221)
Specialty Fibers b (3)
Specialty Polymers b (10)
Other e 78
-------
$(1,265)
================================================================================
</TABLE>
a Includes a $60 charge to adjust the preliminary allocation of purchased
in-process research and development for PTI and a $13 charge related to
productivity improvement initiatives.
b Includes charges associated with productivity improvement initiatives.
c Includes a $799 charge for purchased in-process research and development
associated with the purchase of Merck's 50 percent interest in The DuPont
Merck Pharmaceutical Company and a $54 impairment write-down to fair value
of certain Pharmaceuticals assets.
d Includes a $123 charge for adjustments to the preliminary allocation of
purchased in-process research and development for the purchase of the ICI
polyester businesses and a $98 charge associated with productivity
improvement initiatives.
e Includes a $121 gain on the sale of CONSOL Energy Inc. and a $43 charge
related to productivity improvement initiatives.
3 Includes the following (charges) benefits:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Agriculture & Nutrition a $(1,465)
Pharmaceuticals b 72
Polyester Enterprise c (63)
Other d (220)
-------
$(1,676)
================================================================================
</TABLE>
a Includes charges of $1,403 for acquired in-process research and development
relating to the Pioneer transaction ($903) and PTI transaction ($500) and
$62 associated with the Benlate(R) 50 DF fungicide recall.
b Includes a benefit of $72 from the gain on the sale by DuPont Merck of its
generic and multisource product lines.
c Includes a charge of $63 for acquired in-process research and development
relating to the ICI polyester resins and intermediates transaction.
d Includes a charge of $220 associated with the divestiture of certain
printing and publishing businesses.
<PAGE> 28
4 Includes the following (charges) benefits:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Agriculture & Nutrition a $(110)
Nylon Enterprise b (20)
Performance Coatings & Polymers c 55
Pigments & Chemicals b (14)
Polyester Enterprise b (16)
Other d 45
-----
$ (60)
================================================================================
</TABLE>
a Includes charge associated with the Benlate(R) 50 DF fungicide recall.
b Includes charges associated principally with employee separation costs in
the United States.
c Includes benefit associated with formation of the DuPont Dow elastomers
joint venture.
d Includes gains of $41 from the sale of certain medical products businesses
and $33 related to sale of stock received in connection with the previously
sold connector systems business, and a charge of $29, principally employee
separation costs outside the United States, associated with the printing
and publishing business.
See segment discussions on pages 16-23 for a description of each industry
segment. Products are transferred between segments on a basis intended to
reflect as nearly as practicable the "market value" of the products.
29. Subsequent Event
In February 1999 the company acquired Herberts, the leading supplier of
automotive coatings in Europe, from Hoechst for about $1,900. This business will
become part of DuPont's Performance Coatings & Polymers segment. Herberts
operates 37 manufacturing facilities worldwide and currently employs
approximately 9,000 employees. For the year-ended December 31, 1998, Herberts
had sales of approximately $1,900. The acquisition will be accounted for as a
purchase in 1999.
DuPont 67
<PAGE> 29
Quarterly Financial Data (Unaudited)
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
Quarter Ended March 31 June 30 September 30 December 31
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998
Sales $ 6,194 $ 6,432 $ 6,042 $ 6,099
Cost of Goods Sold and Other Expenses 1 5,302 5,272 6,874 5,167
Income (Loss) from Continuing Operations 637 2 794 3 (564) 4 781 5
Income from Discontinued Operations 269 165 160 2,439
Net Income 906 959 (404) 6 3,220
Basic Earnings Per Share of Common Stock 7
Income (Loss) from Continuing Operations .56 .70 (.50) .69
Income from Discontinued Operations .24 .15 .14 2.17
Net Income .80 .85 (.36) 6 2.86
Diluted Earnings Per Share of Common Stock 7
Income (Loss) from Continuing Operations .55 .69 (.50) .68
Income from Discontinued Operations .24 .14 .14 2.14
Net Income .79 .83 (.36) 6 2.82
Dividends Per Share of Common Stock .315 .35 .35 .35
Market Price of Common Stock 8
High 70 7/16 84 7/16 79 1/2 66 1/2
Low 52 5/8 67 1/8 52 1/4 51 11/16
==========================================================================================================================
1997
Sales $ 5,851 $ 6,541 $ 5,794 $ 5,903
Cost of Goods Sold and Other Expenses 1 4,854 5,260 6,038 5,724
Income (Loss) from Continuing Operations 710 924 (273) 9 71 10
Income from Discontinued Operations 310 216 256 191
Net Income 1,020 1,140 (17) 262
Basic Earnings Per Share of Common Stock 7
Income (Loss) from Continuing Operations .63 .82 (.24) .06
Income from Discontinued Operations .27 .19 .22 .17
Net Income .90 1.01 (.02) .23
Diluted Earnings Per Share of Common Stock 7
Income (Loss) from Continuing Operations .62 .80 (.24) .06
Income from Discontinued Operations .27 .19 .22 .17
Net Income .89 .99 (.02) .23
Dividends Per Share of Common Stock .285 .315 .315 .315
Market Price of Common Stock 8
High 57 5/8 62 7/8 69 3/4 64 15/16
Low 46 3/8 49 3/4 60 11/16 50 3/16
==========================================================================================================================
</TABLE>
1 Excludes interest expense and provision for income taxes.
2 Includes a net charge of $145 ($.13 per share-diluted) reflecting: a charge
of $85 for the modernization program for global nylon operations; and a
charge of $60 to revise a prior estimate for the 1997 write-off of acquired
in-process research and development relating to the PTI transaction.
3 Includes a net charge of $45 ($.04 per share-diluted) reflecting a charge
principally for the modernization program for global nylon operations.
4 Includes a net charge of $1,174 ($1.03 per share-diluted) reflecting: a
charge of $954 associated with acquired in-process research and development
relating to the DuPont Merck acquisition ($845) and a revision to the 1997
ICI polyester write-off ($109); a charge of $256 related to productivity
improvement initiatives involving employee separation costs and asset
write-downs; a benefit of $36 related to the sale of hydrogen peroxide
assets.
5 Includes a net benefit of $99 ($.08 per share-diluted) reflecting: a gain
of $121 on the sale of substantially all of the company's remaining
interest in CONSOL Energy Inc.; a charge of $54 associated with the
impairment write-down to fair value of certain pharmaceutical assets; and a
net benefit of $32 to revise prior estimates for the write-off of acquired
in-process research and development relating to the DuPont Merck
acquisition ($46 benefit) and the ICI polyester purchase ($14 charge).
6 Before effect of extraordinary item.
7 Earnings per share for the year may not equal to the sum of quarterly
earnings per share due to changes in average share calculations.
8 As reported on the New York Stock Exchange, Inc. Composite Transactions
Tape.
9 Includes a net charge of $998 ($.87 per share - diluted) reflecting: a
charge of $850 associated with acquired in-process research and development
for the Pioneer transaction; a charge of $220 associated with the planned
divestiture of certain printing and publishing businesses; and a gain of
$72 from the sale by DuPont Merck of its generic and multisource product
lines.
10 Includes a net charge of $678 ($.59 per share - diluted) reflecting: a
charge of $616 associated with acquired in-process research and development
relating to the PTI transaction ($500), the Pioneer transaction ($53), and
the ICI polyester intermediates and resins transaction ($63); and a charge
of $62 associated with the Benlate(R) 50 DF fungicide recall.
68 DuPont
<PAGE> 30
Five-Year Financial Review 1 (Unaudited)
(Dollars in millions, except per share)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Summary of Operations
Sales $ 24,767 $ 24,089 $ 23,644 $ 24,500 $ 22,518
Income from Continuing Operations Before
Income Taxes and Minority Interests $ 2,613 $ 2,829 $ 4,387 $ 4,319 $ 3,384
Provision for Income Taxes $ 941 $ 1,354 $ 1,416 $ 1,432 $ 1,164
Income from Continuing Operations $ 1,648 $ 1,432 $ 2,931 $ 2,858 $ 2,205
Income from Discontinued Operations $ 3,033 $ 973 $ 705 $ 435 $ 522
Net Income $ 4,681 2 $ 2,405 $ 3,636 $ 3,293 $ 2,727
--------------------------------------------------------------------------------------
Basic Earnings Per Share of Common Stock
Income from Continuing Operations $ 1.45 $ 1.26 $ 2.60 $ 2.43 $ 1.61
Income from Discontinued Operations $ 2.69 $ 0.86 $ 0.63 $ 0.38 $ 0.39
Net Income $ 4.14 2 $ 2.12 $ 3.23 $ 2.81 $ 2.00
Diluted Earnings Per Share of Common Stock
Income from Continuing Operations $ 1.43 $ 1.24 $ 2.56 $ 2.41 $ 1.60
Income from Discontinued Operations $ 2.65 $ 0.84 $ 0.62 $ 0.36 $ 0.38
Net Income $ 4.08 2 $ 2.08 $ 3.18 $ 2.77 $ 1.98
======================================================================================
Financial Position at Year End
Working Capital $ (2,374) $ (2,110) $ 15 $ (2,116) $ 3,208
Total Assets $ 38,536 $ 36,689 $ 32,342 $ 32,748 $ 32,577
Borrowings and Capital Lease Obligations:
Short Term $ 6,629 $ 6,152 $ 3,907 $ 6,152 $ 1,286
Long Term $ 4,495 $ 5,897 $ 5,052 $ 5,646 $ 6,338
Stockholders' Equity $ 13,954 $ 11,270 $ 10,593 $ 8,323 $ 12,743
======================================================================================
General
For the Year:
Capital Expenditures $ 5,480 3 $ 7,075 3 $ 1,783 $ 1,810 $ 1,615
Depreciation and Amortization $ 1,452 $ 1,361 $ 1,526 $ 1,643 $ 1,748
Research and Development Expense $ 1,308 4 $ 1,072 4 $ 990 $ 1,031 $ 1,004
As Percent of Sales: 5.3% 4.5% 4.2% 4.2% 4.5%
Average Number of Shares (millions)
Basic 1,129 1,131 1,121 1,170 1,360
Diluted 1,145 1,150 1,140 1,183 1,371
Dividends Per Common Share $ 1.365 $ 1.23 $ 1.115 $ 1.015 $ 0.91
Common Stock Prices
High $ 84 7/16 $ 69 3/4 $ 49 11/16 $ 36 1/2 $ 31 3/16
Low $ 51 11/16 $ 46 3/8 $ 34 13/16 $ 26 5/16 $ 24 1/8
Year-End Close $ 53 1/16 $ 60 1/16 $ 47 1/16 $ 34 15/16 $ 28 1/16
At Year End:
Employees (thousands) 5 101 98 97 105 107
Common Stockholders of Record (thousands) 145 154 158 166 172
Book Value Per Common Share $ 12.18 $ 9.77 $ 9.19 $ 7.28 $ 9.18
====================================================================================================================================
</TABLE>
1 See Management's Discussion and Analysis, Consolidated Financial Statements
and Quarterly Financial Data for information relating to significant items
affecting the results of operations and financial position.
2 Before extraordinary item (Note 8).
3 Includes strategic acquisitions as discussed in Note 23.
4 Excludes purchased in-process research and development.
5 Includes employees of discontinued operations.
DuPont 69
<PAGE> 1
(Unaudited)
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
<TABLE>
<CAPTION>
Three Months Ended
CONSOLIDATED INCOME STATEMENT(a)(b) March 31
- -------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1999 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C>
SALES(c) ..................................................... $6,295 $6,194
Other Income ................................................. 18(d) 297
------ ------
Total .................................................... 6,313 6,491
------ ------
Cost of Goods Sold and Other Expenses ........................ 3,873 4,049
Selling, General and Administrative Expenses ................. 535 479
Depreciation and Amortization ................................ 335 332
Research and Development ..................................... 358 264
Interest Expense ............................................. 96 127
Purchased In-Process Research and Development(e) ............. 40 60
Employee Separation Costs and Write-Down of Assets ........... -- 118(f)
------ ------
Total .................................................... 5,237 5,429
------ ------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND
AND MINORITY INTERESTS ...................................... 1,076 1,062
Provision for Income Tax Expenses ............................ 432 417
Minority Interests in Earnings of Consolidated Subsidiaries .. 16 8
------ ------
INCOME FROM CONTINUING OPERATIONS(c) ......................... 628 637
DISCONTINUED OPERATIONS
Income from Operations of Discontinued Business,
Net of Income Taxes ...................................... -- 269
Gain on Disposal of Discontinued Business,
Net of Income Taxes ...................................... 35 --
------ ------
NET INCOME ................................................... $ 663 $ 906
====== ======
BASIC EARNINGS PER SHARE OF COMMON STOCK(g)
Continuing Operations ........................................ $ .55 $ .56
Discontinued Operations ...................................... .04 .24
------ ------
Net Income ................................................... $ .59 $ .80
====== ======
DILUTED EARNINGS PER SHARE OF COMMON STOCK(g)
Continuing Operations ........................................ $ .55 $ .55
Discontinued Operations ...................................... .03 .24
------ ------
Net Income ................................................... $ .58 $ .79
====== ======
DIVIDENDS PER SHARE OF COMMON STOCK .......................... $ .35 $ .315
====== ======
</TABLE>
See Notes to Financial Statements.
1
<PAGE> 2
Form 10-Q/A
<TABLE>
<CAPTION>
Three Months Ended
CONSOLIDATED STATEMENT OF CASH FLOWS(a)(b) March 31
- -----------------------------------------------------------------------------------------
(Dollars in millions) 1999 1998
- -----------------------------------------------------------------------------------------
<S> <C> <C>
CASH PROVIDED BY OPERATIONS
Net Income ............................................ $ 663 $ 906
Adjustments to Reconcile Net Income to Cash
Provided by Continuing Operations:
Net Income from Discontinued Operations .......... (35) (269)
Depreciation and Amortization .................... 335 332
Purchased In-Process Research and Development .... 40 60
Other Noncash Charges and Credits - Net .......... 88 (24)
Change in Operating Assets and Liabilities - Net . (944) (853)
------- -------
Cash Provided by Continuing Operations .......... 147 152
------- -------
INVESTMENT ACTIVITIES
Purchases of Property, Plant and Equipment ............ (473) (465)
Investment in Affiliates .............................. (7) (17)
Payments for Businesses Acquired (Net of Cash Acquired) (1,656) (694)
Proceeds from Sales of Assets ......................... 59 240
Investments in Short-Term Financial Instruments - Net . (2) (94)
Miscellaneous - Net ................................... (7) (10)
------- -------
Cash Used for Investment Activities ............. (2,086) (1,040)
------- -------
FINANCING ACTIVITIES
Dividends Paid to Stockholders ........................ (397) (358)
Net Increase in Borrowings ............................ 2,590 2,734
Acquisition of Treasury Stock ......................... (44) (309)
Proceeds from Exercise of Stock Options ............... 14 36
Increase in Minority Interests ........................ 79 --
------- -------
Cash Provided by Financing Activities ........... 2,242 2,103
------- -------
Net Cash Flow from Discontinued Operations .............. (255) (191)
------- -------
Effect of Exchange Rate Changes on Cash ................. (68) (4)
------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ........ $ (20)(h) $ 1,020
======= =======
</TABLE>
See Notes to Financial Statements.
2
<PAGE> 3
Form 10-Q/A
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET(a)(b) March 31 December 31
- --------------------------------------------------------------------------------------------------------------
(Dollars in millions, except per share) 1999 1998
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents ................................................... $ 1,003 $ 1,059
Marketable Securities ....................................................... 11 10
Accounts and Notes Receivable ............................................... 5,399 4,201
Inventories(i) .............................................................. 3,566 3,129
Prepaid Expenses ............................................................ 216 192
Deferred Income Taxes ....................................................... 596 645
-------- --------
Total Current Assets ........................................................ 10,791 9,236
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and amortization
(March 31, 1999 - $20,652; December 31, 1998 - $20,597) ..................... 14,817 14,131
INVESTMENT IN AFFILIATES .................................................... 1,801 1,796
OTHER ASSETS ................................................................ 5,908 4,956
NET ASSETS OF DISCONTINUED OPERATIONS(j) .................................... 8,650 8,417
-------- --------
TOTAL(c) .................................................................... 41,967 38,536
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable ............................................................ 1,900 1,929
Short-Term Borrowings and Capital Lease Obligations ......................... 9,232 6,629
Income Taxes ................................................................ 374 130
Other Accrued Liabilities ................................................... 3,157 2,922
-------- --------
Total Current Liabilities ................................................... 14,663 11,610
LONG-TERM BORROWINGS AND CAPITAL LEASE OBLIGATIONS .......................... 4,566 4,495
OTHER LIABILITIES ........................................................... 7,663 7,640
DEFERRED INCOME TAXES ....................................................... 478 430
-------- --------
Total Liabilities ........................................................... 27,370 24,175
-------- --------
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES ............................. 464 407
-------- --------
STOCKHOLDERS' EQUITY(k)
Preferred Stock ............................................................. 237 237
Common Stock, $.30 par value; 1,800,000,000 shares authorized; shares issued
at March 31, 1999 - 1,139,514,154; December 31, 1998 - 1,140,354,154 ...... 342 342
Additional Paid-In Capital .................................................. 7,866 7,854
Reinvested Earnings ......................................................... 6,933 6,705
Accumulated Other Comprehensive Loss ........................................ (526) (432)
Common Stock Held in Trust for Unearned Employee Compensation and Benefits
(Flexitrust), at Market (Shares: March 31, 1999 - 12,379,279;
December 31, 1998 - 14,167,867) ........................................... (719) (752)
-------- --------
Total Stockholders' Equity .................................................. 14,133 13,954
-------- --------
TOTAL ....................................................................... $ 41,967 $ 38,536
======== ========
</TABLE>
See Notes to Financial Statements.
3
<PAGE> 4
Form 10-Q/A
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(a) These statements are unaudited, but reflect all adjustments that, in the
opinion of management, are necessary to provide a fair presentation of
the financial position, results of operations and cash flows for the
dates and periods covered. All such adjustments are of a normal
recurring nature. The company's petroleum business is reported as
discontinued operations and is discussed in Notes (b) and (j).
(b) Discontinued Operations:
On September 28, 1998, the company announced that the Board of Directors
had approved a plan to divest the company's 100 percent-owned petroleum
business (Conoco Inc.). The company intends to complete the divestiture
with a tax-free split off by exchanging its remaining Conoco shares
(69.5 percent) for DuPont shares no later than third quarter 1999. The
company has not recognized a deferred tax liability for the difference
between the book basis and tax basis of its investment in Conoco's
common stock because the company does not expect this basis difference
to become subject to tax. The company's consolidated financial
statements and notes report its petroleum business as discontinued
operations. Prior periods have been restated. Results reported
separately by Conoco are reported on a stand-alone basis and may differ
from results based on discontinued operations reporting. In addition,
beginning October 22, 1998, the company's results from discontinued
operations reflect minority interests of 30.5 percent.
4
<PAGE> 5
Form 10-Q/A
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Continued)
<TABLE>
<CAPTION>
(c) CONSOLIDATED SEGMENT INFORMATION - Three Months Ended
CONTINUING OPERATIONS March 31
----------------------------------------------------------------------------
(Dollars in millions) 1999 1998
----------------------------------------------------------------------------
<S> <C> <C>
SEGMENT SALES(1)
Agriculture & Nutrition .................... $ 780 $ 770
Nylon Enterprise ........................... 1,103 1,173
Performance Coatings & Polymers ............ 1,158 1,157
Pharmaceuticals(2) ......................... 409 217
Pigments & Chemicals ....................... 866 920
Polyester Enterprise ....................... 624 734
Specialty Fibers ........................... 863 851
Specialty Polymers ......................... 1,002 1,034
Other ...................................... 94 164
------- -------
Total Segment Sales .................... $ 6,899 $ 7,020
Elimination of Intersegment Transfers ...... (173) (204)
Elimination of Equity Affiliate Sales ...... (431) (622)
------- -------
SALES .................................. $ 6,295 $ 6,194
======= =======
AFTER-TAX OPERATING INCOME (LOSS)
Agriculture & Nutrition .................... $ 91 $ 29(3)
Nylon Enterprise ........................... 102 5(4)
Performance Coatings & Polymers ............ 100(5) 122
Pharmaceuticals ............................ 75 50
Pigments & Chemicals ....................... 146 157
Polyester Enterprise ....................... (6) 4
Specialty Fibers ........................... 181 188
Specialty Polymers ......................... 164 158
Other ...................................... 10 45
------- -------
Total Segment ATOI ..................... 863 758
Interest & Exchange Gains (Losses) ......... (163)(6) (70)
Corporate Expenses ......................... (72) (51)
------- -------
INCOME FROM CONTINUING OPERATIONS .... $ 628 $ 637
======= =======
</TABLE>
<TABLE>
<CAPTION>
March 31 December 31
SIGNIFICANT CHANGES IN SEGMENT ASSETS 1999 1998
------------------------------------- -------- -----------
<S> <C> <C>
Performance Coatings & Polymers ......... $4,195(7) $2,214
====== ======
</TABLE>
5
<PAGE> 6
Form 10-Q/A
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Continued)
Footnotes to Note (c)
(1) Includes pro rata equity affiliate sales and intersegment transfers.
(2) The increase in sales reflects the current 100 percent ownership of the
pharmaceuticals business versus 50 percent in 1998. In addition, effective
first quarter 1999, revenues from contract manufacturing are reclassified
from Other Income to Sales, and prior periods have been restated. These
revenues are $27 and $15 for 1999 and 1998, respectively.
(3) Includes a charge of $60 for revision of the purchase price allocation in
conjunction with the purchase of Protein Technologies International,
related to the value assigned to research and development in progress at
the time of purchase for which technological feasibility has not yet been
established and no alternative future use is anticipated.
(4) Includes a charge of $85 related to rationalization of global Nylon
operations, principally shutdown of certain manufacturing facilities and
employee separation costs.
(5) Includes an estimated charge of $40 based on preliminary purchase price
allocations in conjunction with the purchase of Herberts, the automotive
coatings business of Hoechst AG, related to the value assigned to research
and development in progress at the time of purchase for which
technological feasibility has not yet been established and no alternative
future use is anticipated.
(6) Includes an exchange loss of $81 on forward exchange contracts purchased
in 1998 to fix in U.S. dollars the cash required to acquire Herberts, the
automotive coatings business of Hoechst AG. The purchase price for
Herberts was negotiated in German marks.
(7) The change is primarily the result of the purchase of Herberts, the
automotive coatings business of Hoechst AG, in February 1999.
6
<PAGE> 7
Form 10-Q/A
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Continued)
(d) Includes an exchange loss of $131 on forward exchange contracts pur-
chased in 1998 to fix in U.S. dollars the cash required to acquire
Herberts, the automotive coatings business of Hoechst AG. The purchase
price for Herberts was negotiated in German marks.
(e) Purchased in-process research and development represents the value
assigned in a purchase business combination to research and development
projects of the acquired business that were in progress at time of
purchase for which technological feasibility has not yet been established
and no alternative future use is anticipated.
In this regard, an estimated charge was recorded in the first quarter 1999
in conjunction with the purchase of Herberts, the automotive coatings
business of Hoechst AG, based on preliminary allocations of purchase price
that are subject to revision.
First quarter 1998 represents a charge for revision of the purchase price
allocation in conjunction with the purchase of Protein Technologies
International. The charge was not tax effected because this transaction
was a stock acquisition rather than an asset purchase.
(f) Represents $40 of employee separation costs within the Nylon business and
$78 for the shutdown of related manufacturing facilities.
(g) Basic earnings per share is computed by dividing income available to
common stockholders (the numerator) by the weighted-average number of
common shares (the denominator) for the period. The numerator for both
income from continuing operations and net income is reduced by preferred
dividends of $2.5. For diluted earnings per share, the numerator is
adjusted to recognize reduced share of earnings assuming options in
subsidiary company stock are exercised if the effect of this adjustment is
dilutive. The denominator is based on the following weighted-average
number of common shares and includes the additional common shares that
would have been outstanding if potentially dilutive common shares had been
issued:
<TABLE>
<CAPTION>
Three Months Ended
March 31
---------------------------------------
Basic Diluted
------------- -------------
<S> <C> <C>
1999 1,127,086,632 1,138,090,171
1998 1,128,415,102 1,145,674,145
</TABLE>
7
<PAGE> 8
Form 10-Q/A
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Continued)
The difference between basic and diluted weighted-average common shares
outstanding results from the assumption that dilutive stock options
outstanding were exercised.
The following number of stock options are antidilutive, and therefore
are not included in the diluted earnings per share calculation since the
exercise price is greater than the average market price:
<TABLE>
<CAPTION>
March 31
------------------------------
1999 1998
--------- ---------
<S> <C> <C>
Stock Options 8,576,345 4,998,517
</TABLE>
Compensation expense recognized in income for stock-based employee
compensation awards was $7 and $34 for the three months ended March 31,
1999 and 1998, respectively.
Shares held by the Flexitrust are not considered outstanding in comput-
ing the foregoing weighted-average number of common shares.
(h) Includes the change in cash and cash equivalents classified in the
Consolidated Balance Sheet within "Net Assets of Discontinued
Operations."
<TABLE>
<CAPTION>
March 31 December 31
(i) Inventories 1999 1998
----------- -------- -----------
<S> <C> <C>
Finished Products ......................... $ 2,567 $ 2,209
Semifinished Products ..................... 826 836
Raw Materials and Supplies ................ 846 749
------- -------
4,239 3,794
Less: Adjustment of Inventories to a
Last-In, First-Out (LIFO) Basis ......... 673 665
------- -------
Total ................................. $ 3,566 $ 3,129
======= =======
</TABLE>
8
<PAGE> 9
Form 10-Q/A
NOTES TO FINANCIAL STATEMENTS
(Dollars in millions, except per share)
(Continued)
<TABLE>
<CAPTION>
March 31 December 31
(j) Net Assets of Discontinued Operations 1999 1998
------------------------------------- -------- -----------
<S> <C> <C>
Cash and Cash Equivalents ................. $ 411 $ 375
Other Current Assets ...................... 2,885 2,864
Property, Plant and Equipment - Net ....... 11,254 11,438
Other Assets .............................. 2,102 2,011
Current Liabilities ....................... (2,404) (2,473)
Other Liabilities ......................... (3,898) (4,115)
Minority Interests ........................ (1,700) (1,683)
------- -------
Net Assets of Discontinued Operations ... $ 8,650 $ 8,417
======= =======
</TABLE>
(k) The following sets forth the company's total comprehensive income for the
periods shown:
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------
1999 1998
---- ----
<S> <C> <C>
Net Income ................................ $663 $906
Other Comprehensive Loss, Net of Tax ...... (94) (20)
---- ----
Total Comprehensive Income ................ $569 $886
==== ====
</TABLE>
9
