424B3 1 PRICE SUPPLEMENT Filed Under Rule 424(b)(3) File No. 33-48128 PRICING SUPPLEMENT NO. 41 DATED JUNE 23, 1994 To Prospectus dated June 2, 1992 and Prospectus Supplement dated July 24, 1992 E. I. DU PONT DE NEMOURS AND COMPANY MEDIUM-TERM NOTES, SERIES F DUE NINE MONTHS OR MORE FROM DATE OF ISSUE (FIXED RATE) DSE-CUSIP: 26353V BL2 Face Amount: $26,000,000 Net Proceeds to Company: $25,961,000 Issue Price: 100% Specified Currency: U.S. Dollars Original Issue Date: Determination Agent: July 5, 1994 Goldman, Sachs & Co. Stated Maturity: Form [X] Book-Entry July 5, 1995 [ ] Certificated Interest Rate: 5.45% Reference Date: June 23, 1995 Interest Payment Dates: January 5, 1995 and July 5, 1995 Minimum Denominations: N/A ----------------------------------------------------------------------------- Redemption: [X] The Notes cannot be redeemed prior to the Stated Maturity. [ ] The Notes may be redeemed prior to the Stated Maturity. Initial Redemption Date: Initial Redemption Price: Annual Redemption Price Reduction: Repayment: [X] The Notes cannot be repaid prior to the Stated Maturity. [ ] The Notes may be repaid prior the Stated Maturity. Initial Repayment Date: Initial Repayment Price: Annual Repayment Price Reduction: Discount Notes: [ ] Yes [X] No Total Amount of OID: Yield to Maturity: Initial Accrual Period OID: Principal Discount or Commission: 0.150% Agent: Goldman, Sachs & Co. - 1 - DESCRIPTION OF NOTES The following description of the particular terms of the Notes described herein (which are Indexed Notes) supplements, and to the extent inconsistent therewith replaces, the descriptions of the general terms and provisions of the Notes set forth in the accompanying Prospectus Supplement and of the Debt Securities set forth in the accompanying Prospectus, to which descriptions reference is hereby made. All terms used but not defined herein which are defined in the accompanying Prospectus or Prospectus Supplement shall have the meanings therein assigned to them. Any payment required to be made in respect of a Note on a date that is not a Business Day need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on such date. No additional interest will accrue as a result of such delayed payment. "Business Day" means any day, other than a Saturday or Sunday, that is not a day on which banking institutions are authorized or required by law or regulation to be closed in the City of New York. Payment of Interest The Notes will bear interest at the fixed rate per annum stated above. Interest will be payable on January 5, 1995 and at Stated Maturity. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Payment of Principal The principal amount of a Note payable at Stated Maturity shall be the greater of (i) zero and (ii) an amount determined by the Determination Agent on the Reference Date based on the following formula: Face Amount + Face Amount x [10 x (USD5-LIBOR-1.26%)] See "Description of Notes--Certain Definitions" for the definition of certain terms used in the foregoing formula. The principal amount of a Note payable at Stated Maturity thus will be determined with reference to the five-year mid-market U.S. Dollar swap rate, and three-month LIBOR, but will never be less than zero. Depending on such rates on the Reference Date, the principal amount payable at Stated Maturity will range from zero to an amount in excess of the Face Amount. In the absence of manifest error, the determination by the Determination Agent of the principal amount payable at Stated Maturity shall be final and binding. - 2 - Certain Definitions "USD5" means the rate determined by the Determination Agent on the Reference Date in accordance with the following provisions: USD5 will be determined on the basis of the mid-market five-year U.S. Dollar swap rate which appears on the Reuters Screen SWAP Page as of 11:00 A.M., London time. If such rate does not so appear on such page, USD5 will be determined on the basis of the mid-market five-year U.S. Dollar swap rate which appears on the Telerate Page 19901 as of 11:00 A.M., London time. If such rate does not so appear on such page, the Determination Agent will request each of five Reference Dealers to provide the Determination Agent with its quotation for the five-year U.S. Dollar swap rate at approximately 11:00 A.M., London time, on the Reference Date in an amount that is representative of a single trans- action for such Reference Dealer at such time. The Determination Agent will disregard the highest and lowest of the five quotations and "USD5" will be the arithmetic mean of the remaining three quotations. If fewer than five but at least two such quotations are provided, the rate shall be the arithmetic mean of the quotations without disregarding any quotations, and, if fewer than two quotations are provided as requested, the rate will be determined by the Determination Agent by such method as the Determination Agent determined, in good faith, in its absolute discretion. "U.S. Dollar swap rate" means, in general, a fixed per annum rate of interest quoted on an Actual/360 day basis and paid semi-annually that a hypothetical fixed rate payor would be prepared to pay under an interest rate swap or exchange agreement, and for which such payor would expect to receive, in return, over the period of years specified, a floating rate of interest equal to the then-prevailing six-month U.S. Dollar LIBOR rate. "Reuters Screen SWAP Page" means the display page so designated on the Reuter Monitor Money Rates Service (or such other page as may replace that page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices relating to U.S. Dollar swap rates). "Telerate Page 19901" means the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices relating to U.S. Dollar swap rates). "LIBOR" means the rate determined by the Determination Agent as follows: (i) With respect to the Reference Date, the Determination Agent will determine the arithmetic mean of the offered rates for deposits in United States dollars for the period of three months commencing on the second London Banking Day immediately following the Reference Date, which appear on the "Reuters Screen LIBO Page" - 3 - at approximately 11:00 a.m. London time, on the Reference Date. If at least two such offered rates appear on the Reuters Screen LIBO Page, LIBOR with respect to the Reference Date will be such arithmetic mean. (ii) If fewer than two such offered rates appear on the Reuters Screen LIBO Page, the Determination Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Determination Agent, to provide the Determination Agent with its offered quotation for deposits in United States dollars for the period of three months commencing on the second London Banking Day immediately following the Reference Date to prime banks in the London interbank market at approximately 11:00 a.m., London time, on the Reference Date and in a principal amount equal to an amount of not less than U.S. $1,000,000 that is representative of a single transaction in such market at such time. If at least two such quotations are provided, LIBOR will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR in respect of the Reference Date will be the arithmetic mean of rates quoted by three major banks in The City of New York selected by the Determination Agent at approximately 11:00 a.m., New York City time, on the Reference Date for loans in U.S. dollars to leading European Banks, for the period of three months commencing on the second London Banking Day immediately following the Reference Date and in a principal amount equal to an amount of not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time; provided, however, that if fewer than three banks selected as aforesaid by the Determination Agent are quoting such rates as mentioned in this sentence, LIBOR shall be calculated as of the first preceding day on which it can be calculated by one of the means set forth above. "Reuters Screen LIBO Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks). "Reference Date" means June 23, 1995, unless such day is not a day on which commercial banks in New York City and London are open for business (including dealings in foreign exchange and foreign currency deposits) (a "New York and London Banking Day"), in which case the Reference Date shall be the next succeeding New York and London Banking Day. "Reference Dealer" means any major bank or banking corporation in London, selected in good faith by the Determination Agent, which will provide offered quotations on the relevant swap rates. - 4 - IMPORTANT INFORMATION An investment in the Notes entails significant risks that are not associated with a similar investment in other Debt Securities. Such risks include, without limitation, the possibility of significant changes in U.S. Dollar swap rates, LIBOR or the spread between the two. Such risks generally depend on factors over which the Company has no control. THIS PRICING SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS AND PROSPECTUS SUPPLEMENT DO NOT DESCRIBE ALL THE RISKS OF AN INVESTMENT IN THE NOTES. THE COMPANY BELIEVES THAT THESE RISKS ARE POTENTIALLY TOO VARIABLE TO ASCERTAIN AND DESCRIBE WITH ANY REASONABLE DEGREE OF CERTAINTY AND INCORPORATING EVERY ECONOMIC, FINANCIAL, POLITICAL AND MILITARY CIRCUMSTANCE, AMONG OTHER THINGS, WOULD BE IMPRACTICAL. PROSPECTIVE INVESTORS SHOULD THEREFORE CONSULT THEIR OWN FINANCIAL AND LEGAL ADVISORS AS TO THE RISKS ENTAILED BY AN INVESTMENT IN THE NOTES. SUCH NOTES ARE NOT AN APPROPRIATE INVESTMENT FOR INVESTORS WHO ARE UNFAMILIAR WITH USD5 AND LIBOR SPREAD TRANSACTIONS. HISTORIC RATES The following table sets forth certain historical swap rates as reported by Bloomberg Financial Markets on the last New York Business Day of the month indicated: Five-Year U.S. Dollar 3 Month Spread in Month-End Swap Rate LIBOR Basis Points ========= =========== ======= ============ 1989: March 10.1900 10.3125 (12.2500) June 8.7700 9.3125 (54.2500) September 9.1100 9.1875 (7.7500) December: 8.6700 8.3750 29.5000 1990: March 9.4100 8.5000 91.0000 June 9.0500 8.3750 67.5000 September 9.0300 8.3125 71.7500 December: 8.3900 7.5625 82.7500 1991: March 8.3900 6.3750 201.5000 June 8.4900 6.1875 230.2500 September 7.4200 5.6250 179.5000 December: 6.4900 4.2500 224.0000 - 5 - HISTORIC RATES (Continued) Five-Year U.S. Dollar 3 Month Spread in Month-End Swap Rate LIBOR Basis Points ========= =========== ======= ============ 1992: March 7.3700 4.3750 299.5000 June 6.5300 3.9375 259.2500 September 5.6500 3.2500 240.0000 December: 6.3300 3.4375 289.2500 1993: March 5.4600 3.2500 221.0000 June 5.2900 3.3125 197.7500 September 4.9400 3.3750 156.5000 December: 5.4300 3.3750 205.5000 1994: March 6.5700 3.9375 263.2500 On June 23, 1994, the mid-market five-year U.S. Dollar swap rate as reported by Bloomberg Financial Markets was 6.9700% and three-month LIBOR was 4.6875%. The spread between these two rates was 228.2500 basis points. The information presented in the above table is furnished as a matter of information only. In recent years, U.S. Dollar swap rates have been highly volatile and such volatility may occur in the future. The fluctuations in the U.S. Dollar swap rates that have occurred in the past, however, are not necessarily indicative of fluctuations in the rates that may occur over the term of the notes. - 6 - HYPOTHETICAL REPAYMENT AMOUNT The following table sets forth for purposes of illustration the principal amount of a note that will be payable at Stated Maturity if the spread between the five-year U.S. Dollar Swap Rate and three-month LIBOR set forth therein is the spread for purposes of determining the principal amount of a Note payable at Stated Maturity. Spread in Hypothetical Basis Points Repayment Amount ============ ================ (100) $20,124,000 (75) $20,774,000 (50) $21,424,000 (25) $22,074,000 0 $22,724,000 25 $23,374,000 50 $24,024,000 75 $24,674,000 100 $25,324,000 125 $25,974,000 150 $26,624,000 175 $27,274,000 200 $27,924,000 225 $28,574,000 250 $29,224,000 275 $29,874,000 300 $30,524,000 325 $31,174,000 350 $31,824,000 375 $32,474,000 400 $33,124,000 CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES In addition to the consequences summarized in the Prospectus Supplement under the heading "United States Taxation," set forth below is a summary of certain United States Federal income tax consequences to original Holders of the Notes that have purchased the Notes at their Issue Price. The Federal income tax treatment of the payments on the Notes is unclear because payment on the Notes at Stated Maturity is entirely con- tingent. However, there are at least three possible alternative approaches. - 7 - Under the first approach, interest payments made on January 5, 1995, and at Stated Maturity will be taxable to a Holder that is a United States person (a "U.S. Holder") as ordinary income at the time they accrue or are received, depending on the U.S. Holder's method of tax accounting. At Stated Maturity a U.S. Holder will recognize short-term capital loss if the amount paid with respect to a Note is less than the Note's Issue Price and short-term capital gain or possibly ordinary income if the amount paid is greater than the Issue Price. Under the second approach, the payments of interest on January 5, 1995, and at Stated Maturity will be treated as a nontaxable return of principal and reduce the U.S. Holder's tax basis (which initially was the Issue Price). On the Stated Maturity, a U.S. Holder will recognize ordinary income (treated as interest) to the extent the payment made by the Company exceeds such U.S. Holder's tax basis and capital loss to the extent it is less than such U.S. Holder's tax basis. In the case of non-U.S. Holders, such interest will be treated as described in the Prospectus Supplement under "Non-United States Persons." This approach is based on existing proposed original issue discount regulations relating to contingent payment debt obligations (the "Proposed Regulations"), which by their terms apply to the Notes. However, the Proposed Regulations no longer appear to reflect the IRS's current position with respect to contingent payment debt obligations. Under the third approach, accrual method U.S. Holders would accrue original issue discount ("OID") into income, as described in the Prospectus Supplement, based on the expected yield of the Note using a reasonable estimate of the payment at Stated Maturity determined as of the end of a taxable year or as of the issue date, or a market yield for the Note deter- mined as of the issue date. Such amounts would be subject to subsequent adjustments to the extent that the estimate was incorrect. The payments of interest on January 5, 1995, and at Stated Maturity will be treated first as payments of OID to the extent of accrued OID at such time and then as a return of principal and, therefore, such payments would not be included in a U.S. Holder's income. Cash method U.S. Holders would apply estimates in a similar fashion to that described in the Prospectus Supplement under "United States Taxation--United States Holders--Short-Term Notes" to determine the portion of interest received that was taxable. This approach is based on proposed contingent payment debt regulations that were announced by the IRS in January 1993 but subsequently withdrawn. Although under the third approach any gain recognized on the sale or exchange of a Note would be ordinary income, under the first and second approaches, it is not clear whether any such gain recognized would be ordinary income or capital gain. Any loss on the sale or exchange of a Note would be a capital loss (except in some circumstances under the third approach). Backup Withholding. The rate of backup withholding has been increased from 20% to 31%. price.doc - 8 -