-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jf3vrxcERYCbYp+Rh8ptwYAFFKcKa1d+xjmEAdZP1XJIJjSCWzT+M/cBqc6bfPIV c5y0EATh5hevIFHpXx+HWw== 0000950123-99-006512.txt : 19990715 0000950123-99-006512.hdr.sgml : 19990715 ACCESSION NUMBER: 0000950123-99-006512 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 19990714 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DUPONT E I DE NEMOURS & CO CENTRAL INDEX KEY: 0000030554 STANDARD INDUSTRIAL CLASSIFICATION: PLASTIC MAIL, SYNTH RESIN/RUBBER, CELLULOS (NO GLASS) [2820] IRS NUMBER: 510014090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-07714 FILM NUMBER: 99664035 BUSINESS ADDRESS: STREET 1: 1007 MARKET ST CITY: WILMINGTON STATE: DE ZIP: 19898 BUSINESS PHONE: 3027741000 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DUPONT E I DE NEMOURS & CO CENTRAL INDEX KEY: 0000030554 STANDARD INDUSTRIAL CLASSIFICATION: PLASTIC MAIL, SYNTH RESIN/RUBBER, CELLULOS (NO GLASS) [2820] IRS NUMBER: 510014090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13E4 BUSINESS ADDRESS: STREET 1: 1007 MARKET ST CITY: WILMINGTON STATE: DE ZIP: 19898 BUSINESS PHONE: 3027741000 SC 13E4 1 SCHEDULE 13E-4 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) 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 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 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 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 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.
(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.
6 7
(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).
7 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 9 EXHIBIT INDEX
(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).
EX-99.A.1 2 PRESS RELEASE 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 $80.76 for each share of DuPont common stock up to a maximum of 8 million shares of DuPont common stock. Only non-United States persons as defined in the Offer to Purchase are eligible to participate in the cash offer. The cash offer will expire at 12:00 midnight New York City time on Aug. 10, 1999, unless extended. This cash offer is being made in connection with an exchange offer in the United States in which DuPont is offering shareholders the opportunity to exchange DuPont common stock for shares of Conoco common stock owned by DuPont. The exchange offer in the United States is being offered to DuPont shareholders who are defined as United States persons in the Offering Circular-Prospectus. DuPont has retained the services of D.F. King & Co., Inc., as Information Agent to assist shareholders with the exchange offer and the cash offer. Questions regarding the terms and conditions of the exchange offer or the cash offer or information on tendering shares should be directed to D.F. King at 800-755-3105 (toll free) in the U.S. or 212-269-5550 (collect) outside the U.S. DuPont is a science company, delivering science-based solutions that make a difference in people's lives in food and nutrition; health care; apparel; home and construction; electronics; and transportation. Founded in 1802, the company operates in 65 countries and has 92,000 employees. # # # 7/14/99 EX-99.A.2 3 EUROPEAN PUBLICATIONS 1 [DUPONT LOGO] COMMUNIQUE E.I. du Pont de Nemours et Compagnie ("DuPont") va offrir de racheter a ses actionnaires non americains tout ou partie de leurs titres DuPont pour un prix par action de 80,76$. 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 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 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 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 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 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. 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):
------------------------------------------------------ 1997 1998 1999* ------------------------------------------------------ Maximum 107 125 116 Minimum 64 70 72
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 - --------------------------------------------------------------------------------
Numero de valeur ISIN ---------------- ---- Action ordinaire DuPont (certificat suisse) 927 401 CH 000 927 401 7
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):
------------------------------------------------------------ 1997 1998 1999* ------------------------------------------------------------ Hochst 107 125 116 Tiefst 64 70 72
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 - --------------------------------------------------------------------------------
Valorennummer ISIN ------------- ---- DuPont Stammaktien (Schweizer Zertifikate) 927 401 CH 000 927 401 7
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. 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):
1997 1998 1999* -------- ---- ---- ------ High 107 125 116 Low 64 70 72
(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. 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. 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 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 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 (<>) 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. 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. 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. EX-99.A.3 4 OFFER TO PURCHASE 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 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 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). 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
SECTION PAGE - ------- ---- 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
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. 1 6 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 2 7 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 3 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. 4 9 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 5 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. 6 11 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. 7 12 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. 8 13 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 9 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 10 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. 11 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 12 17 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 13 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 14 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 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.
HIGH LOW DIVIDENDS ---- ---- --------- 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)
- --------------- (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 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 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 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 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 25 DUPONT
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) 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
- --------------- (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 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. 22 27 DuPont incorporates by reference herein the following documents filed by it with the SEC pursuant to the Exchange Act:
PERIOD DUPONT SEC FILINGS (FILE NO. 1-815) ------ 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
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 23 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 24 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 25 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 26 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. 27 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. 28 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 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 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 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 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:
DATE OF NUMBER OF DESCRIPTION OF PRICE PER PERSON EFFECTING TRANSACTION TRANSACTION SHARES TRANSACTION SHARE - ---------------------------- ------------- --------- -------------- --------- 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
S-1 38
DATE OF NUMBER OF DESCRIPTION OF PRICE PER PERSON EFFECTING TRANSACTION TRANSACTION SHARES TRANSACTION SHARE - ---------------------------- ------------- --------- -------------- --------- 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
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:
APPROXIMATE NAME NUMBER OF SHARES ---- ---------------- 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
S-2 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 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
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: 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
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
EX-99.A.4 5 LETTER FROM DUPONT TO STOCKHOLDERS 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 EX-99.A.5 6 LETTER OF TRANSMITTAL 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 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
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.
- ------------------------------------------------------------------------------------------------------------------------------ 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) - ------------------------------------------------------------------------------------------------------------------------------ ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- ---------------------------------------------------------- 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. - ------------------------------------------------------------------------------------------------------------------------------
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 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 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 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 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 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 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 9 Form W-8 (Rev. November 1992) Department of the Treasury CERTIFICATE OF FOREIGN STATUS Internal Revenue Service - ------------------------------------------------------------------------------------
NAME OF OWNER (if joint account, also give joint owner's U.S. TAXPAYER IDENTIFICATION NUMBER name.) (See SPECIFIC INSTRUCTIONS.) (if any) ---------------------------------------------------------------------------------------------------
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.) - ------------------------------------------------------------------------
List account information Account number Account type Account number here (Optional, see SPECIFIC INSTRUCTIONS.) [ARROW]
- -------------------------------------------------------------------------------- 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. - -------------------------------------------------------------------------
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] - ------------------------------------------------------------------------
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 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. 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
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. 10 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 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 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 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 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 15 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 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 17 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: 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
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
EX-99.A.6 7 NOTICE OF GUARANTEED DELIVERY 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. 2 TO: FIRST CHICAGO TRUST COMPANY OF NEW YORK, DEPOSITARY 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
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 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: 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
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 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 EX-99.A.7 8 LETTER TO BROKERS 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 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 EX-99.A.8 9 LETTER TO CLIENTS 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. 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 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 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. Dated: _______________________________________, 1999 ----------------------------------------------------- ----------------------------------------------------- SIGNATURE(S) ----------------------------------------------------- ----------------------------------------------------- PLEASE PRINT NAME(S) HERE ----------------------------------------------------- ACCOUNT NUMBER ----------------------------------------------------- TAX IDENTIFICATION NUMBER
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 EX-99.A.9 10 LETTERS FROM TRUSTEES 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). 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. 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. 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 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). 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. 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. 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 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). 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. 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. 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 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). 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. 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. 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 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. 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. 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 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. 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. 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 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. 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. 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 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). 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. 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 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 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). 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. 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 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 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. 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 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 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 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. 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 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. 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. 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. 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. 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. 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 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. 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 EX-99.A.10 11 NOTICE TO PARTICIPANTS 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 - 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 - 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 - 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 - 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 - 6 [MAKING A DECISION FLOWCHART] - 6 - 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. 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). 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. 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 EX-99.A.11 12 CORRESPONDENCE TO EMPLOYEES OF DUPONT 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 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 EX-99.A.12 13 CORRESPONDENCE TO EMPLOYEES OF CONOCO 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 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 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 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 EX-99.A.13 14 CORRESPONDENCE TO ALL EMPLOYEES OF DUPONT 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 :- 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 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. 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. 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:- 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 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 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 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 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. 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 :- 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 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. 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. 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. 16 In summary, for your purposes the various mailings will be handled as follows :-
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER - - 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
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 ). 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. 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. 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. 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. 21 In summary, for your purposes the various mailings will be handled as follows :-
LOCATION OF SHARES ADMINISTRATOR PROCESSING THE EXCHANGE OFFER - - 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
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. 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) 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. 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. 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. 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. 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. EX-99.A.14 15 CORRESPONDENCE TO U.K. EMPLOYEES OF CONOCO 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. 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. 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. 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). 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. 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 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) EX-99.A.15 16 SUPPLEMENTAL BELGIUM CIRCULAR 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- 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.
Max. Min. Dividends 1998 4eme trimestre $ 25 3/4 $ 19 3/8 $ ___ 1999
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 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
-3- 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.
Max. Min. Dividends ---- ---- --------- 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
(1) Restated to reflect a two-for-one split of outstanding shares effective May 15, 1997. 5 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.
DUPONT: EVOLUTION DES MAXIMA ET MINIMA DEPUIS 1996 (BOURSE DE BRUXELLES)
1996 1997 1998 1(er) trimestre 2(eme) trimestre 1999 1999 Max. (EUR) 78,09 104,12 75,73 54,50 68 Min. (EUR) 51,31 47,47 44,62 45,01 53
DUPONT: EVOLUTION DES COURS ENTRE LE 5 JUILLET 1999 ET LE 9 JUILLET 1999 (BOURSE DE BRUXELLES) -5- 6
5 juillet 1999 6 juillet 1999 7 juillet 1999 8 juillet 1999 9 juillet 1999 Max. (EUR) 68 n.a. n.a. n.a. 66 Min. (EUR) 68 n.a. n.a. n.a. 66
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. 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 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. 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.
Max. Min. Dividenden 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
(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.
Max. Min. Dividenden 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
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)
1996 1997 1998 1ste trimester 2de trimester 1999 1999 ---- ---- ---- -------------- ------------- Max. (EUR) 78,09 104,12 75,73 54,50 68 Min. (EUR) 51,31 47,47 44,62 45,01 53
Bron : Bloomberg L.P. DUPONT : EVOLUTIE VAN DE KOERS VAN 5 JULI 1999 TOT EN MET 9 JULI 1999 (BEURS VAN BRUSSEL)
5 juli 1999 6 juli 1999 7 juli 1999 8 juli 1999 9 juli 1999 ----------- ----------- ----------- ----------- ----------- Max. (EUR) 68 n.a. n.a. n.a. 66 Min. (EUR) 68 n.a. n.a. n.a. 66
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- 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. 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- 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:
High Low Cash Dividends 1998 Fourth Quarter (from October 22 through December 31, 1998) $ 25 3/4 $ 19 3/8 $ ___ 1999
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 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 ------ -------- ----
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:
High Low Dividends ---- --- --------- 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
(1) Restated to reflect a two-for-one split of outstanding shares effective May 15, 1997. 16 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.
DUPONT: MAXIMA ET MINIMA SINCE 1996 (BRUSSELS STOCK EXCHANGE)
1996 1997 1998 First Quarter Second Quarter 1999 1999 Max. (EUR) 78,09 104,12 75,73 54,50 68 Min. (EUR) 51,31 47,47 44,62 45,01 53
DUPONT: TRADING PRICES BETWEEN 5 JULY 1999 AND 9 JULY 1999 (BRUSSELS STOCK EXCHANGE)
5 July 1999 6 July 1999 7 July 1999 8 July 1999 9 July 1999 Max. (EUR) 68 n.a. n.a. n.a. 66 Min. (EUR) 68 n.a. n.a. n.a. 66
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- 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. EX-99.G.1 17 CONSOLIDATED FINANCIAL STATEMENTS 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 2 Financial Statements E.I. du Pont de Nemours and Company and Consolidated Subsidiaries Consolidated Income Statement (Dollars in millions, except per share)
- -------------------------------------------------------------------------------- 1998 1997 1996 -------------------------------- 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 ================================================================================
See pages 45-67 for Notes to Financial Statements. DuPont 41 3 Financial Statements E.I. du Pont de Nemours and Company and Consolidated Subsidiaries Consolidated Balance Sheet (Dollars in millions, except per share)
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
See pages 45-67 for Notes to Financial Statements. 42 DuPont 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)
- ------------------------------------------------------------------------------------------------------------------------------------ Accumulated Additional Other Total Total Preferred Common Paid-In Reinvested Comprehensive Treasury Stockholders' Comprehensive Stock Stock Capital Earnings Loss Flexitrust Stock Equity Income ----------------------------------------------------------------------------------------------------------- 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 ===========================================================================================================
See pages 45-67 for Notes to Financial Statements. DuPont 43 5 Financial Statements E.I. du Pont de Nemours and Company and Consolidated Subsidiaries
Consolidated Statement of Cash Flows (Dollars in millions) - ------------------------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------ 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) =================================================================================================
*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 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 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 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.
- -------------------------------------------------------------------------------- Income from Operations of Discontinued Business (1) 1998 1997 1996 - -------------------------------------------------------------------------------- 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 ================================================================================
(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.
- -------------------------------------------------------------------------------- Gain on Disposal of Discontinued Business (1) 1998 - -------------------------------------------------------------------------------- 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 ================================================================================
(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.
- -------------------------------------------------------------------------------- Net Assets of Discontinued Operations 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
DuPont 47 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
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------ 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 - --------------------------------------------------------------------------------
* Includes a $217 gain on the sale of substantially all of the company's remaining interest in CONSOL Energy Inc. 4. Interest Expense
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------ Interest incurred $640 $469 $479 Less: Interest capitalized 120 80 70 ------------------------------------ $520 $389 $409 - --------------------------------------------------------------------------------
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 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
- -------------------------------------------------------------------------------- 1998 1997 1996 ----------------------------------------- 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 ================================================================================
(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 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:
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------ 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 ================================================================================
* 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:
- -------------------------------------------------------------------------------- 1998 1997 -------------------------------------------------- Deferred Tax Asset Liability Asset Liability - -------------------------------------------------------------------------------- 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 ================================================================================
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:
- -------------------------------------------------------------------------------- 1998 1997 1996 ----------------------------------- 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% ================================================================================
* 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.
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------ United States (including exports) $1,388 $1,820 $3,226 International 1,225 1,009 1,161 ------------------------------------ $2,613 $2,829 $4,387 ================================================================================
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 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:
- -------------------------------------------------------------------------------- 1998 1997 1996 - -------------------------------------------------------------------------------- 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 ================================================================================
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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- Trade--net of allowances of $101 in 1998 and $66 in 1997 $3,591 $3,438 Miscellaneous 610 871 ----------------------------- $4,201 $4,309 ================================================================================
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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- Buildings $ 3,889 $ 3,464 Equipment 28,485 27,326 Land 288 260 Construction 2,066 1,861 ----------------------------- $34,728 $32,911 ================================================================================
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 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.
Year Ended December 31 - -------------------------------------------------------------------------------- Results of operations 1998 (1) 1997 1996 - -------------------------------------------------------------------------------- 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) ================================================================================
(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.
- -------------------------------------------------------------------------------- Financial position at December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
* 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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
* 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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- Trade $1,206 $1,074 Payables to banks 162 188 Compensation awards 216 267 Miscellaneous 345 392 ----------------------------- $1,929 $1,921 ================================================================================
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 14 Notes to Financial Statements (Dollars in millions, except per share) 17. Short-Term Borrowings and Capital Lease Obligations
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
19. Long-Term Borrowings and Capital Lease Obligations
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- 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 ================================================================================
(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 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
- -------------------------------------------------------------------------------- December 31 1998 1997 - -------------------------------------------------------------------------------- Accrued postretirement benefits cost $5,555 $5,548 Reserves for employee-related costs 921 956 Miscellaneous 1,164 940 -------------------------- $7,640 $7,444 ================================================================================
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:
- ----------------------------------------------------------------------------------- Shares of Common Stock Held In ------------------------------- Issued Flexitrust Treasury ------------------------------------------------- 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) - ===================================================================================
54 DuPont 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:
- -------------------------------------------------------------------------------- Other Comprehensive Income Pretax Tax After-tax ----------------------------------------- 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) ================================================================================
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:
- -------------------------------------------------------------------------------- Accumulated Other Comprehensive Loss 1998 1997 1996 - -------------------------------------------------------------------------------- December 31 Foreign Currency Translation Adjustment $(176) $(153) $ (23) Minimum Pension Liability Adjustment (256) (144) (116) ------------------------------------- $(432) $(297) $(139) ================================================================================
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 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:
- -------------------------------------------------------------------------------- Fixed Variable -------------------------------------------------------- Number Weighted- Number Weighted- of Average of Average Shares Price Shares Price -------------------------------------------------------- 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 ================================================================================
* 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:
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------------ 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 -- ================================================================================
The fair value of options granted is calculated using the Black-Scholes option pricing model. Assumptions used were as follows:
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------------------------------ Fixed Variable Fixed Variable Fixed ------------------------------------------------------------ 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 ================================================================================
The following table summarizes information concerning currently outstanding and exercisable options:
- ----------------------------------------------------------------------------------- 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 - ----------------------------------------------------------------------------------- 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 -- -- -- -- ===================================================================================
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 18 Notes to Financial Statements (Dollars in millions, except per share)
- -------------------------------------------------------------------------------- Pro Forma Net Income and Earnings per share 1998 1997 1996 - -------------------------------------------------------------------------------- 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 ================================================================================
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 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 20 Notes to Financial Statements (Dollars in millions, except per share) Summarized information on the company's postretirement plans is as follows:
- ----------------------------------------------------------------------------------- Pension Benefits Other Benefits --------------------------------------------------- 1998 1997 1998 1997 --------------------------------------------------- Change in Benefit Obligation 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) ===================================================================================
- ---------------------------------------------------------------------------------- Weighted-average Pension Benefits Other Benefits assumptions as of ------------------------------------------------- December 31 1998 1997 1998 1997 ------------------------------------------------- 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% ===================================================================================
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.
- ------------------------------------------------------------------------------------------ Components of Pension Benefits Other Benefits Net Periodic ----------------------------------------------------------------------- Benefit Cost 1998 1997 1996 1998 1997 1996 ----------------------------------------------------------------------- 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 ==========================================================================================
DuPont 59 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:
- -------------------------------------------------------------------------------- 1-Percentage 1-Percentage Point Increase Point Decrease --------------------------------------------- Effect on total of service and interest cost components $ 44 $ (35) Effect on postretirement benefit obligation $444 $(366) ================================================================================
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 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 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
- -------------------------------------------------------------------------------- Notional Estimated Carrying Type of Instrument Amount Fair Value Amount - -------------------------------------------------------------------------------- Forward Exchange Contracts December 31, 1998 $ 11,389 $ (43) $ (41) 1997 8,621 (3) 16 ================================================================================
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 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 25 Notes to Financial Statements (Dollars in millions, except per share) 27. Geographic Information
- --------------------------------------------------------------------------------------------------- 1998 1997 1996 -------------------------------------------------------------------- Net Net Net Net Net Net Sales* Property Sales* Property Sales* Property -------------------------------------------------------------------- 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 ===================================================================================================
*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 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.
- -------------------------------------------------------------------------------------------------------------------- Agriculture Performance Pigments & Nylon Coatings & Pharma- & Nutrition Enterprise Polymers ceuticals Chemicals ---------------------------------------------------------------------------------- 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 ==================================================================================================================== - -------------------------------------------------------------------------------------------------------------------- Polyester Specialty Specialty Enterprise Fibers Polymers Other Total 1 ---------------------------------------------------------------------------------- 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 ===============================================================================================================
DuPont 65 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
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------------------- 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 ================================================================================
After-Tax Operating Income to Income from Continuing Operations
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------------------- 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 ================================================================================
Segment Net Assets to Total Assets
- -------------------------------------------------------------------------------- 1998 1997 1996 ------------------------------------------------- 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 ================================================================================
Other Items
- -------------------------------------------------------------------------------- Segment Consolidated Totals Adjustments Totals ------------------------------------------------- 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 ================================================================================
* Includes a charge of $903 for Pioneer in-process research and development reported in Note 5. 2 Includes the following (charges) benefits:
- -------------------------------------------------------------------------------- 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) ================================================================================
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:
- -------------------------------------------------------------------------------- Agriculture & Nutrition a $(1,465) Pharmaceuticals b 72 Polyester Enterprise c (63) Other d (220) ------- $(1,676) ================================================================================
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. 28 4 Includes the following (charges) benefits:
- -------------------------------------------------------------------------------- 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) ================================================================================
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 29 Quarterly Financial Data (Unaudited) (Dollars in millions, except per share)
Quarter Ended March 31 June 30 September 30 December 31 - ------------------------------------------------------------------------------------------------------------------------ 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 ==========================================================================================================================
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 30 Five-Year Financial Review 1 (Unaudited) (Dollars in millions, except per share)
- ------------------------------------------------------------------------------------------------------------------------------------ 1998 1997 1996 1995 1994 -------------------------------------------------------------------------------------- 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 ====================================================================================================================================
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 EX-99.G.2 18 CONSOLDIATED FINANCIAL STATEMENTS 1 (Unaudited) E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
Three Months Ended CONSOLIDATED INCOME STATEMENT(a)(b) March 31 - ------------------------------------------------------------------------------------------- (Dollars in millions, except per share) 1999 1998 - ------------------------------------------------------------------------------------------- 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 ====== ======
See Notes to Financial Statements. 1 2 Form 10-Q/A
Three Months Ended CONSOLIDATED STATEMENT OF CASH FLOWS(a)(b) March 31 - ----------------------------------------------------------------------------------------- (Dollars in millions) 1999 1998 - ----------------------------------------------------------------------------------------- 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 ======= =======
See Notes to Financial Statements. 2 3 Form 10-Q/A
CONSOLIDATED BALANCE SHEET(a)(b) March 31 December 31 - -------------------------------------------------------------------------------------------------------------- (Dollars in millions, except per share) 1999 1998 - -------------------------------------------------------------------------------------------------------------- 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 ======== ========
See Notes to Financial Statements. 3 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 5 Form 10-Q/A NOTES TO FINANCIAL STATEMENTS (Dollars in millions, except per share) (Continued)
(c) CONSOLIDATED SEGMENT INFORMATION - Three Months Ended CONTINUING OPERATIONS March 31 ---------------------------------------------------------------------------- (Dollars in millions) 1999 1998 ---------------------------------------------------------------------------- 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 ======= =======
March 31 December 31 SIGNIFICANT CHANGES IN SEGMENT ASSETS 1999 1998 ------------------------------------- -------- ----------- Performance Coatings & Polymers ......... $4,195(7) $2,214 ====== ======
5 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 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:
Three Months Ended March 31 --------------------------------------- Basic Diluted ------------- ------------- 1999 1,127,086,632 1,138,090,171 1998 1,128,415,102 1,145,674,145
7 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:
March 31 ------------------------------ 1999 1998 --------- --------- Stock Options 8,576,345 4,998,517
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."
March 31 December 31 (i) Inventories 1999 1998 ----------- -------- ----------- 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 ======= =======
8 9 Form 10-Q/A NOTES TO FINANCIAL STATEMENTS (Dollars in millions, except per share) (Continued)
March 31 December 31 (j) Net Assets of Discontinued Operations 1999 1998 ------------------------------------- -------- ----------- 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 ======= =======
(k) The following sets forth the company's total comprehensive income for the periods shown:
Three Months Ended March 31 ----------------------- 1999 1998 ---- ---- Net Income ................................ $663 $906 Other Comprehensive Loss, Net of Tax ...... (94) (20) ---- ---- Total Comprehensive Income ................ $569 $886 ==== ====
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