FILED PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-86363
REGISTRATION NO. 33-53327
PROSPECTUS SUPPLEMENT
--------------------------------
(TO PROSPECTUS DATED SEPTEMBER 24, 1999 AND PROSPECTUS DATED MAY 25, 1994)
$1,400,000,000
[DUPONT LOGO]
E. I. DU PONT DE NEMOURS AND COMPANY
$900,000,000 4 1/8% NOTES DUE APRIL 30, 2010
$500,000,000 4 7/8% NOTES DUE APRIL 30, 2014
------------------------
We will pay interest on the notes (collectively, the "Notes") on April 30
and October 30 of each year, beginning October 30, 2004. We may redeem the Notes
prior to maturity, in whole or in part, as described in this prospectus
supplement.
------------------------
PUBLIC UNDERWRITING PROCEEDS BEFORE
OFFERING PRICE(1) DISCOUNT EXPENSES
----------------- ------------ ---------------
Per 4 1/8% Note.......................................... 99.391% .375% 99.016%
Total.................................................. $894,519,000 $ 3,375,000 $ 891,144,000
Per 4 7/8% Note.......................................... 99.126% .450% 98.676%
Total.................................................. $495,630,000 $ 2,250,000 $ 493,380,000
(1) Plus accrued interest, if any, from April 30, 2004.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or either accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The Notes will be ready for delivery in book-entry form only through The
Depository Trust Company, Clearstream, Luxembourg or the Euroclear System, as
the case may be, on or about April 30, 2004.
------------------------
JOINT BOOKRUNNERS
CREDIT SUISSE FIRST BOSTON MERRILL LYNCH & CO.
------------------------
CO-MANAGERS
CITIGROUP DEUTSCHE BANK SECURITIES
GOLDMAN, SACHS & CO. JPMORGAN
LEHMAN BROTHERS MORGAN STANLEY
UBS WARBURG
------------------------
The date of this prospectus supplement is April 27, 2004.
TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUPPLEMENT
About DuPont................................................ S-4
Recent Developments......................................... S-4
Ratios of Earnings to Fixed Charges......................... S-6
Use of Proceeds............................................. S-6
Description of Notes........................................ S-7
United States Federal Taxation.............................. S-13
Underwriting................................................ S-17
Notice to Canadian Residents................................ S-19
Legal Opinions.............................................. S-20
PROSPECTUS DATED SEPTEMBER 24, 1999
About this Prospectus....................................... 1
Where You Can Find More Information......................... 1
Forward Looking Information................................. 2
About DuPont................................................ 3
Use of Proceeds............................................. 3
Ratio Of Earnings To Fixed Charges.......................... 4
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 12
Legal Opinion............................................... 13
Experts..................................................... 13
PROSPECTUS DATED MAY 25, 1994
Available Information....................................... 2
Incorporation of Certain Documents by Reference............. 2
The Company................................................. 3
Ratio of Earnings to Fixed Charges.......................... 3
Use of Proceeds............................................. 3
Plan of Distribution........................................ 3
Description of Debt Securities.............................. 4
Limitations on Issuance of Bearer Securities................ 12
Experts..................................................... 13
You should rely only on the information contained in this prospectus
supplement and the accompanying prospectuses. We have not authorized anyone to
provide you with information different from that contained in this prospectus
supplement and the accompanying prospectuses. We are offering to sell Notes and
making offers to buy Notes only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus supplement and the
accompanying prospectuses is accurate only as of the date of this prospectus,
regardless of the time of delivery of this prospectus supplement and the
accompanying prospectuses or any sale of the notes. In this prospectus
supplement and the accompanying prospectuses, the "Company," "we," "us" and
"our" refer to DuPont.
If we use a capitalized term in this prospectus supplement and do not
define the term in this document, it is defined in the prospectuses.
------------------------
The Notes are offered globally for sale in those jurisdictions in the
United States, Canada, Europe, Asia and elsewhere where it is lawful to make
such offers. See "Underwriting."
The distribution of this prospectus supplement and prospectuses and the
offering of the Notes in certain jurisdictions may be restricted by law. Persons
into whose possession this prospectus supplement and the prospectuses come
should inform themselves about and observe any such restrictions. This
S-2
prospectus supplement and the prospectuses do not constitute, and may not be
used in connection with, an offer or solicitation by anyone in any jurisdiction
in which such offer or solicitation is not authorized or in which the person
making such offer or solicitation is not qualified to do so or to any person to
whom it is unlawful to make such offer or solicitation. See "Underwriting."
References herein to "$" and "dollars" are to the currency of the United
States.
S-3
ABOUT DUPONT
We were founded in 1802 and incorporated in Delaware in 1915. We have been
in continuous operation for over 200 years. Our principal offices are at 1007
Market Street in Wilmington, Delaware.
We are a world leader in science and technology in a range of disciplines
including biotechnology, electronics, materials science, safety and security and
synthetic fibers. We operate globally through five business platforms plus our
retained interest in Cozaar(R)/Hyzaar(R) drugs. We manufacture a wide range of
products for distribution and sale to many different markets, including the
transportation, safety and protection, construction, motor vehicle,
agricultural, home furnishings, medical, packaging, electronics and the
nutrition and health markets.
Our operating and financial reporting segments are Agriculture & Nutrition,
Coatings & Color Technologies, Electronic & Communication Technologies,
Performance Materials, Pharmaceuticals, Safety & Protection and Textiles &
Interiors.
RECENT DEVELOPMENTS
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
THREE MONTHS
ENDED MARCH 31,
---------------
CONSOLIDATED INCOME STATEMENT 2004 2003
(DOLLARS IN MILLIONS, EXCEPT PER SHARE) ------ ------
NET SALES................................................... $8,073 $7,008
Other Income(a)............................................. 132 178
------ ------
Total..................................................... 8,205 7,186
------ ------
Cost of Goods Sold and Other Operating Charges(b)........... 5,757 5,168
Selling, General and Administrative Expenses................ 820 746
Amortization of Intangible Assets........................... 54 56
Research and Development Expense............................ 337 315
Interest Expense............................................ 85 81
Separation Charges -- Textiles & Interiors(c)............... 345 --
------ ------
Total..................................................... 7,398 6,366
INCOME BEFORE INCOME TAXES AND MINORITY INTERESTS........... 807 820
Provision for Income Taxes(d)............................... 126 231
Minority Interests in Earnings of Consolidated
Subsidiaries.............................................. 13 25
------ ------
INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING
PRINCIPLE................................................. 668 564
Cumulative Effect of a Change in Accounting Principle, Net
of Income Taxes(e)........................................ -- (29)
------ ------
NET INCOME.................................................. $ 668 $ 535
====== ======
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK(f)
Income before Cumulative Effect of a Change in Accounting
Principle.............................................. $ .67 $ .56
Cumulative Effect of a Change in Accounting Principle..... -- (.03)
------ ------
Net Income................................................ $ .67 $ .53
====== ======
S-4
THREE MONTHS
ENDED MARCH 31,
---------------
CONSOLIDATED INCOME STATEMENT 2004 2003
(DOLLARS IN MILLIONS, EXCEPT PER SHARE) ------ ------
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK(f)
Income before Cumulative Effect of a Change in Accounting
Principle.............................................. $ .66 $ .56
Cumulative Effect of a Change in Accounting Principle..... -- (.03)
------ ------
Net Income................................................ $ .66 $ .53
====== ======
DIVIDENDS PER SHARE OF COMMON STOCK......................... $ .35 $ .35
====== ======
---------------
(a) First quarter 2004 includes a charge of $150 to provide for the company's
share of anticipated losses associated with DuPont Dow Elastomers LLC
antitrust litigation matters.
(b) First quarter 2004 includes a charge of $36 to provide for the anticipated
settlement of litigation in Refinish. First quarter 2003 includes a charge
of $78 to provide for settlement of the 1995 Benlate(R) shareholder
litigation case.
(c) First quarter 2004 reflects an additional INVISTA-related charge of $345
which includes an agreed upon reduction of sales price by $240, and other
changes in estimates associated with the sale.
(d) First quarter 2004 includes tax benefits of $210 related to the anticipated
separation of INVISTA.
(e) The company's adoption of SFAS No. 143, "Accounting for Asset Retirement
Obligations," resulted in a cumulative effect adjustment to income of $29
effective January 1, 2003.
(f) Earnings per share are calculated on the basis of the following
weighted-average number of common shares outstanding:
THREE MONTHS ENDED MARCH 31,
--------------------------------
BASIC DILUTED
----------- -------------
2004......................................... 999,242,763 1,003,401,021
2003......................................... 995,752,067 998,192,276
E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES
THREE MONTHS
ENDED MARCH 31,
---------------
CONSOLIDATED SEGMENT INFORMATION 2004 2003
(DOLLARS IN MILLIONS) ------ ------
SEGMENT SALES(a)
Agriculture & Nutrition..................................... $2,202 $1,790
Coatings & Color Technologies............................... 1,417 1,269
Electronic & Communication Technologies..................... 816 677
Performance Materials....................................... 1,519 1,336
Safety & Protection......................................... 1,088 985
Textiles & Interiors........................................ 1,883 1,717
Other....................................................... 12 3
------ ------
Total Segment Sales....................................... 8,937 7,777
Elimination of Transfers.................................... (251) (219)
Elimination of Equity Affiliate Sales....................... (613) (550)
------ ------
CONSOLIDATED NET SALES.................................... $8,073 $7,008
====== ======
S-5
THREE MONTHS
ENDED MARCH 31,
---------------
CONSOLIDATED SEGMENT INFORMATION 2004 2003
(DOLLARS IN MILLIONS) ------ ------
PRE-TAX OPERATING INCOME (LOSS) (PTOI)
Agriculture & Nutrition..................................... $ 630 $ 518
Coatings & Color Technologies(b)............................ 153 141
Electronic & Communication Technologies..................... 92 32
Performance Materials(c).................................... 5 133
Pharmaceuticals............................................. 148 153
Safety & Protection......................................... 232 206
Textiles & Interiors(d)..................................... (195) 5
Other(e).................................................... (32) (106)
------ ------
Total Segment PTOI........................................ 1,033 1,082
Exchange Gains and Losses................................... (13) (50)
Corporate Expenses & Interest............................... (213) (212)
------ ------
Income Before Income Taxes and Minority Interests......... $ 807 $ 820
====== ======
---------------
(a) Includes transfers and pro rata share of equity affiliate sales.
(b) First quarter 2004 includes a charge of $36 to provide for the anticipated
settlement of litigation in Refinish.
(c) First quarter 2004 includes a charge of $150 to provide for the company's
share of anticipated losses associated with the DuPont Dow Elastomers LLC
antitrust litigation matters.
(d) First quarter 2004 reflects an additional INVISTA-related charge of $345
which includes an agreed upon reduction of sales price by $240, and other
changes in estimates associated with the sale.
(e) First quarter 2003 includes a charge of $78 to provide for settlement of
the 1995 Benlate(R) shareholder litigation case.
RATIOS OF EARNINGS TO FIXED CHARGES
YEAR ENDED DECEMBER 31,
--------------------------------
2003 2002 2001 2000 1999
---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges.......................... 2.3 5.5 10.5 4.5 2.9
USE OF PROCEEDS
We will use the net proceeds from the sale of the Notes, which are expected
to be $1,384,299,000 after payment of expenses related to the offering, for
general corporate purposes. These purposes may include repayment and refinancing
of debt, acquisitions, working capital, capital expenditures and repurchases and
redemptions of securities. Pending any specific application, we may initially
invest funds in short-term marketable securities or apply them to the reduction
of short-term indebtedness.
S-6
DESCRIPTION OF NOTES
The following description of the particular terms of the 4 1/8% Notes due
April 30, 2010 (the "4 1/8% Notes") and the 4 7/8% Notes due April 30, 2014 (the
"4 7/8% Notes") offered hereby (referred to in the prospectus as the "Debt
Securities") supplements the description of the general terms and provisions of
the Debt Securities included in the prospectuses. The 4 1/8% Notes and the
4 7/8% Notes are collectively referred to in this prospectus supplement as the
"Notes". Each series constitutes a separate series of notes for purposes of the
Indenture. The following summary of the Notes is qualified in its entirety by
reference in the prospectuses to the description of the indenture dated as of
June 1, 1992, between the Company and Deutsche Bank Trust Company Americas,
formerly known as Bankers Trust Company, as trustee.
GENERAL
The 4 1/8% Notes will mature at par on April 30, 2010. The 4 7/8% Notes
will mature at par on April 30, 2014. The Notes will constitute part of the
senior debt of the Company and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Company. The Notes will be issued in fully
registered form only, in denominations of $1,000 and multiples thereof.
Principal of and interest on the Notes will be payable, and the transfer of
Notes will be registerable, through the Depositary as described below.
Each 4 1/8% Note will bear interest from April 30, 2004 at the annual rate
of 4 1/8%. Each 4 7/8% Note will bear interest from April 30, 2004, at the
annual rate of 4 7/8%. Interest on the Notes will be payable semiannually on
April 30 and October 30, commencing October 30, 2004, to the person in whose
name such Note is registered at the close of business on the preceding April 15
or October 15.
Interest payable at the maturity of the Notes will be payable to the
registered holder of the Note to whom principal is payable. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
If any interest payment date falls on a day that is not a Business Day, the
interest payment will be postponed to the next day that is a Business Day, and
no interest on such payment will accrue for the period from and after such
interest payment date. If the maturity date of the Notes falls on a day that is
not a Business Day, the payment of interest and principal may be made on the
next succeeding Business Day, and no interest on such payment will accrue for
the period from and after the maturity date.
Interest payments for the Notes will include accrued interest from and
including the date of issue or from and including the last date in respect of
which interest has been paid, as the case may be, to, but excluding, the
interest payment date or the date of maturity, as the case may be.
The 4 1/8% Notes and the 4 7/8% Notes will each constitute a separate
series of Debt Securities under the Indenture.
The Company may, without the consent of the holders of either series of
Notes, issue additional notes having the same ranking and the same interest
rate, maturity and other terms as the applicable series of Notes. Any additional
notes having such similar terms, together with such applicable Notes, will
constitute a single series of notes under the indenture. No additional notes may
be issued if an Event of Default has occurred with respect to the applicable
series of Notes.
As used in this prospectus supplement, "Business Day" means any day, other
than a Saturday or Sunday, that is neither a legal holiday nor a day on which
banking institutions are authorized or required by law or regulation to close in
The City of New York.
BOOK-ENTRY, DELIVERY AND FORM
The Notes will be issued in the form of one or more fully registered Global
Notes (the "Global Notes") registered in the name of The Depository Trust
Company, New York, New York (the "Depositary" or "DTC") or Cede & Co., the
Depositary's nominee. Beneficial interests in the Global
S-7
Notes will be represented through book-entry accounts of financial institutions
acting on behalf of beneficial owners as direct and indirect participants in the
Depositary.
Investors may elect to hold interests in the Global Notes through the
Depositary, Clearstream Banking Luxembourg S.A. ("Clearstream") or Euroclear
Bank S.A./N.A., as operator of the Euroclear System ("Euroclear") if they are
participants of such systems, or indirectly through organizations which are
participants in such systems. Clearstream and Euroclear will hold interests on
behalf of their participants through customers' securities accounts in
Clearstream and Euroclear's names on the books of their respective depositaries,
which in turn will hold such interests in customers' securities accounts in the
depositaries' names on the books of the Depositary. Citibank, N.A. will act as
depositary for Clearstream and JPMorgan Chase Bank successor to The Chase
Manhattan Bank, will act as depositary for Euroclear (in such capacities, the
"U.S. Depositaries"). Beneficial interest in the Global Notes will be held in
denominations of $1,000 and integral multiples thereof. Except as described
below, the Global Notes may be transferred, in whole and not in part, only to
another nominee of the Depositary or to a successor of the Depositary or its
nominee.
The Depositary has advised the Company as follows: the Depositary is a
limited-purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a member
of the Federal Reserve System, a "clearing corporation" within the meaning of
the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. The Depositary
holds securities deposited with it by its participants and facilitates the
settlement of transactions among its participants in such securities through
electronic computerized book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities certificates.
The Depositary's participants include securities brokers and dealers (including
the Underwriters), banks, trust companies, clearing corporations and certain
other organizations, some of whom (and/or their representatives) own the
Depositary. Access to the Depositary book-entry system is also available to
others, such as banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a participant, either directly or
indirectly.
Clearstream advises that it is incorporated under the laws of Luxembourg as
a bank. Clearstream holds securities for its customers ("Clearstream Customers")
and facilitates the clearance and settlement of securities transactions between
Clearstream Customers through electronic book-entry transfers between their
accounts. Clearstream provides to Clearstream Customers, among other things,
services for safekeeping, administration, clearance and settlement of
internationally traded securities and securities lending and borrowing.
Clearstream interfaces with domestic securities markets in over 30 countries
through established depository and custodial relationships. As a bank,
Clearstream is subject to regulation by the Luxembourg Commission for the
Supervision of the Financial Sector (Commission de Surveillance du Secteur
Financier). Clearstream Customers are recognized financial institutions around
the world, including underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. Clearstream's
U.S. customers are limited to securities brokers and dealers and banks. Indirect
access to Clearstream is also available to other institutions such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream Customer.
Distributions with respect to the Notes held through Clearstream will be
credited to cash accounts of Clearstream Customers in accordance with its rules
and procedures, to the extent received by the U.S. Depositary for Clearstream.
Euroclear advises that it was created in 1968 to hold securities for its
participants ("Euroclear Participants") and to clear and settle transactions
between Euroclear Participants through simultaneous electronic book-entry
delivery against payment, thereby eliminating the need for physical movement of
certificates and any risk from lack of simultaneous transfers of securities and
cash. Euroclear provides various other services, including securities lending
and borrowing and interfaces with domestic markets in several countries.
Euroclear is operated by Euroclear Bank S.A./N.A. (the "Euroclear Operator"),
under contract with Euroclear Clearance Systems, S.C., a Belgian cooperative
corporation (the "Cooperative").
S-8
All operations are conducted by the Euroclear Operator, and all Euroclear
securities clearance accounts and Euroclear cash accounts are accounts with the
Euroclear Operator, not the Cooperative. The Cooperative establishes policy for
Euroclear on behalf of Euroclear Participants. Euroclear Participants include
banks (including central banks), securities brokers and dealers and other
professional financial intermediaries and may include the Underwriters. Indirect
access to Euroclear is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either directly
or indirectly.
Securities clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear and the
related Operating Procedures of the Euroclear System, and applicable Belgian law
(collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants and has no record of or relationship with persons holding
through Euroclear Participants.
Distributions with respect to the Notes held beneficially through Euroclear
will be credited to the cash accounts of Euroclear Participants in accordance
with the Terms and Conditions, to the extent received by the U.S. Depositary for
Euroclear.
Euroclear further advises that investors that acquire, hold and transfer
interests in the Notes by book-entry through accounts with the Euroclear
Operator or any other securities intermediary are subject to the laws and
contractual provisions governing their relationship with their intermediary, as
well as the laws and contractual provisions governing the relationship between
such an intermediary and each other intermediary, if any, standing between
themselves and the Global Notes.
The Euroclear Operator advises as follows: Under Belgian law, investors
that are credited with securities on the records of the Euroclear Operator have
a co-property right in the fungible pool of interests in securities on deposit
with the Euroclear Operator in an amount equal to the amount of interests in
securities credited to their accounts. In the event of the insolvency of the
Euroclear Operator, Euroclear Participants would have a right under Belgian law
to the return of the amount and type of interests in securities credited to
their accounts with the Euroclear Operator. If the Euroclear Operator did not
have a sufficient amount of interests in securities on deposit of a particular
type to cover the claims of all Participants credited with such interests in
securities on the Euroclear Operator's records, all Participants having an
amount of interests in securities of such type credited to their accounts with
the Euroclear Operator would have the right under Belgian law to the return of
their pro rata share of the amount of interests in securities actually on
deposit.
Under Belgian law, the Euroclear Operator is required to pass on the
benefits of ownership in any interests in securities on deposit with it (such as
dividends, voting rights and other entitlements) to any person credited with
such interests in securities on its records.
Individual certificates in respect of the Notes will not be issued in
exchange for the Global Notes, except in very limited circumstances. If DTC
notifies the Company that it is unwilling or unable to continue as a clearing
system in connection with the Global Notes, or ceases to be a clearing agency
registered under the Exchange Act, and a successor clearing system is not
appointed by the Company within 90 days after receiving such notice from DTC or
upon becoming aware that DTC is no longer so registered, the Company will issue
or cause to be issued individual certificates in registered form on registration
of transfer of, or in exchange for, book-entry interests in the Notes
represented by such Global Notes upon delivery of such Global Notes for
cancellation.
Title to book-entry interests in the Notes will pass by book-entry
registration of the transfer within the records of Clearstream, Euroclear or
DTC, as the case may be, in accordance with their respective procedures.
Book-entry interests in the Notes may be transferred within Clearstream and
within Euroclear
S-9
and between Clearstream and Euroclear in accordance with procedures established
for these purposes by Clearstream and Euroclear. Book-entry interests in the
Notes may be transferred within DTC in accordance with procedures established
for this purpose by DTC. Transfers of book-entry interests in the Notes among
Clearstream and Euroclear and DTC may be effected in accordance with procedures
established for this purpose by Clearstream, Euroclear and DTC.
A further description of the Depositary's procedures with respect to the
Global Notes is set forth in each prospectus under "Global Securities." The
Depositary has confirmed to the Company, the Underwriters and the Trustee that
it intends to follow such procedures.
GLOBAL CLEARANCE AND SETTLEMENT PROCEDURES
Initial settlement for the Notes will be made in immediately available
funds. Secondary market trading between DTC participants will occur in the
ordinary way in accordance with the Depositary's rules and will be settled in
immediately available funds using the Depositary's Same-Day Funds Settlement
System. Secondary market trading between Clearstream Customers and/or Euroclear
Participants will occur in the ordinary way in accordance with the applicable
rules and operating procedures of Clearstream and Euroclear and will be settled
using the procedures applicable to conventional Eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or indirectly
through the Depositary on the one hand, and directly or indirectly through
Clearstream Customers or Euroclear Participants, on the other, will be effected
in the Depositary in accordance with the Depositary's rules on behalf of the
relevant European international clearing system by its U.S. Depositary; however,
such cross-market transactions will require delivery of instructions to the
relevant European international clearing system by the counterparty in such
system in accordance with its rules and procedures and within its established
deadlines (European time). The relevant European international clearing system
will, if the transaction meets its settlement requirements, deliver instructions
to its U.S. Depositary to take action to effect final settlement on its behalf
by delivering interests in the Notes to or receiving interests in the Notes from
the Depositary, and making or receiving payment in accordance with normal
procedures for same-day funds settlement applicable to the Depositary.
Clearstream Customers and Euroclear Participants may not deliver instructions
directly to their respective U.S. Depositaries.
Because of time-zone differences, credits of interests in the Notes
received in Clearstream or Euroclear as a result of a transaction with a DTC
participant will be made during subsequent securities settlement processing and
dated the business day following the Depositary settlement date. Such credits or
any transactions involving interests in such Notes settled during such
processing will be reported to the relevant Clearstream Customers or Euroclear
Participants on such business day. Cash received in Clearstream or Euroclear as
a result of sales of interests in the Notes by or through a Clearstream Customer
or a Euroclear Participant to a DTC participant will be received with value on
the Depositary settlement date but will be available in the relevant Clearstream
or Euroclear cash account only as of the business day following settlement in
the Depositary.
Although the Depositary, Clearstream and Euroclear have agreed to the
foregoing procedures in order to facilitate transfers of interests in the Notes
among participants of the Depositary, Clearstream and Euroclear, they are under
no obligation to perform or continue to perform such procedures and such
procedures may be changed or discontinued at any time.
OPTIONAL REDEMPTION
The 4 1/8% Notes will be redeemable as a whole at any time or in part from
time to time, at the option of the Company, at a redemption price equal to the
greater of (i) 100% of the principal amount of the 4 1/8% Notes or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon from the redemption date to the applicable maturity date
(exclusive of any accrued interest) discounted, in each case, to the redemption
date on a semiannual basis (assuming a 360-day year
S-10
consisting of twelve 30-day months) at the Treasury Rate plus 12.5 basis points,
plus, in each case, any interest accrued but not paid to the date of redemption.
The 4 7/8% Notes will be redeemable as a whole at any time or in part from
time to time, at the option of the Company, at a redemption price equal to the
greater of (i) 100% of the principal amount of the 4 7/8% Notes or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon from the redemption date to the applicable maturity date
(exclusive of any accrued interest) discounted, in each case, to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 15 basis points, plus, in each case, any
interest accrued but not paid to the date of redemption.
"Treasury Rate" means, with respect to any redemption date for the Notes
(i) the yield, under the heading which represents the average for the
immediately preceding week, appearing in the most recently published statistical
release designated "H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Comparable Treasury Issue (if no maturity is
within three months before or after the maturity date for the Notes, yields for
the two published maturities most closely corresponding to the Comparable
Treasury Issue shall be determined and the Treasury Rate shall be interpolated
or extrapolated from such yields on a straight line basis, rounding to the
nearest month) or (ii) if that release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semiannual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for that redemption date. The Treasury
Rate shall be calculated on the third business day preceding the redemption
date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes, as the case may be, to be redeemed that would
be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the remaining term of such Securities. "Independent Investment
Banker" means one of the Reference Treasury Dealers appointed by the trustee
after consultation with the Company.
"Comparable Treasury Price" means with respect to any redemption date for
the Notes (i) the average of four Reference Treasury Dealer Quotations for that
redemption date, after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or (ii) if the trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Reference Treasury Dealer" means each of Credit Suisse First Boston LLC,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and two other primary U.S.
Government securities dealers in New York City (each, a "Primary Treasury
Dealer") appointed by the trustee in consultation with the Company; provided,
however, that if any of the foregoing shall cease to be a Primary Treasury
Dealer, the Company shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the trustee by that Reference Treasury Dealer at 5:00 p.m. (New York
City time) on the third business day preceding that redemption date.
Unless the Company defaults in payment of the redemption price, on and
after the redemption date interest will cease to accrue on the Notes or portions
thereof called for redemption.
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TAX REDEMPTION
The Notes may be redeemed as a whole, at the option of the Company at any
time prior to maturity, upon the giving of a notice of redemption as described
below, if the Company determines that, as a result of any change in or amendment
to the laws (or any regulations or rulings promulgated thereunder) of the United
States or of any political subdivision or taxing authority thereof or therein,
or any change in official position regarding the application or interpretation
of such laws, regulations or rulings, which change or amendment becomes
effective on or after the date of this prospectus supplement, the Company has or
will become obligated to pay Additional Amounts (as defined below) with respect
to such Notes for reasons outside its control and after taking reasonable
measures to avoid such obligation. The Notes will be redeemed at a redemption
price equal to 100% of the principal amount thereof, together with accrued
interest to the date fixed for redemption. Prior to the giving of any notice of
redemption pursuant to this paragraph, the Company will deliver to the Trustee
(i) a certificate stating that the Company is entitled to effect such redemption
and setting forth a statement of facts showing that the conditions precedent to
the right of the Company to so redeem have occurred and (ii) an opinion of
independent counsel satisfactory to such Trustee to the effect that the Company
has or will become obligated to pay Additional Amounts for the reasons described
above; provided that no such notice of redemption shall be given earlier than 60
days prior to the earliest date on which the Company would be obligated to pay
such Additional Amounts if a payment in respect of the Note were then due.
Notice of redemption will be given not less than 30 nor more than 60 days
prior to the date fixed for redemption, which date and the applicable redemption
price will be specified in the notice. Such notice will be given in accordance
with "Notices" below.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will, subject to certain exceptions and limitations set forth
below, pay such additional amounts ("Additional Amounts") to the beneficial
owner of any Note who is a United States Alien as may be necessary in order that
every net payment of principal of and interest on such Note and any other
amounts payable on such Note, after withholding for or on account of any present
or future tax, assessment or governmental charge imposed upon or as a result of
such payment by the United States (or any political subdivision or taxing
authority thereof or therein), will not be less than the amount provided for in
such Note to be then due and payable. The Company will not, however, be required
to make any payment of Additional Amounts to any beneficial owner for or on
account of:
(a) any such tax, assessment or other governmental charge that would
not have been so imposed but for the existence of any present or former
connection between such beneficial owner (or between a fiduciary, settlor,
beneficiary, member or shareholder of such beneficial owner, if such
beneficial owner is an estate, a trust, a partnership or a corporation) and
the United States and its possessions, including, without limitation, such
beneficial owner (or such fiduciary, settlor, beneficiary, member or
shareholder) being or having been a citizen or resident thereof or being or
having been engaged in a trade or business or present therein or having, or
having had, a permanent establishment therein;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or any similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed by reason
of such beneficial owner's past or present status as a personal holding
company or foreign personal holding company or controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation that accumulates earnings to avoid United
States federal income tax;
(d) any tax, assessment or other governmental charge that is payable
otherwise than by withholding from payments on or in respect of any Note;
(e) any tax, assessment or other governmental charge that would not
have been imposed but for the failure to comply with certification,
information or other reporting requirements concerning the nationality,
residence or identity of the beneficial owner of such Note, if such
compliance is required
S-12
by statute or by regulation of the United States or of any political
subdivision or taxing authority thereof or therein as a precondition to
relief or exemption from such tax, assessment or other governmental charge;
(f) any tax, assessment or other governmental charge imposed by reason
of such beneficial owner's past or present status as the actual or
constructive owner of 10% or more of the total combined voting power of all
classes of stock entitled to vote of the Company or as a controlled foreign
corporation that is related directly or indirectly to the Company through
stock ownership;
(g) any withholding tax arising as a result of the Council of the
European Union Directive 2003/48/EC; or
(h) any combination of items (a), (b), (c), (d), (e), (f) or (g);
nor shall Additional Amounts be paid with respect to any payment on a Note to a
United States Alien who is a fiduciary or partnership or other than the sole
beneficial owner of such payment to the extent such payment would be required by
the laws of the United States (or any political subdivision thereof) to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner held its interest in the Note directly.
The term "United States Alien" means any person that is, for United States
federal income tax purposes, a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership to the extent that one or more of its members is a foreign
corporation, a nonresident alien individual or a nonresident alien fiduciary of
a foreign estate or trust.
UNITED STATES FEDERAL TAXATION
The following summary describes the material United States federal income
and certain estate tax consequences of ownership and disposition of the Notes.
This summary provides general information only and is directed solely to
original beneficial owners purchasing Notes at the "issue price," that is, the
first price at which a substantial amount of Notes is sold to the public
(excluding sales to bond houses, brokers or similar persons or organizations
acting in the capacity of underwriters, placement agents or wholesalers). This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), existing administrative pronouncements and judicial
decisions, existing and proposed Treasury Regulations currently in effect, and
interpretations of the foregoing, changes to any of which subsequent to the date
of this prospectus supplement may affect the tax consequences described herein,
possibly with retroactive effect. This summary deals only with Notes held as
capital assets within the meaning of Section 1221 of the Code. This summary does
not discuss all of the tax consequences that may be relevant to a beneficial
owner in light of his particular circumstances or to beneficial owners subject
to special rules, such as certain financial institutions, insurance companies,
dealers in securities, persons holding Notes in connection with a hedging
transaction, "straddle," conversion transaction or other integrated transaction
or persons who have ceased to be United States citizens or to be taxed as
resident aliens. Persons considering the purchase of Notes should consult their
own tax advisors with regard to the application of the United States federal
income and estate tax laws to their particular situations, as well as any tax
consequences arising under the laws of any state, local or foreign taxing
jurisdiction.
TAX CONSEQUENCES TO UNITED STATES PERSONS
For purposes of the following discussion, "United States person" means a
beneficial owner of a Note that is, for United States federal income tax
purposes, (i) a citizen or resident of the United States, (ii) a corporation or
other entity treated as a corporation for United States federal income tax
purposes created or organized in or under the laws of the United States, any
State or the District of Columbia, (iii) an estate the income of which is
subject to United States federal income taxation regardless of its source, or
(iv) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all
S-13
substantial decisions of the trust. Partnerships are subject to special tax
rules and should contact their own tax advisors.
PAYMENTS OF INTEREST
Interest on a Note will generally be taxable to a United States person as
ordinary interest income at the time it is accrued or is received in accordance
with the United States person's method of accounting for tax purposes.
SALE, EXCHANGE OR RETIREMENT OF THE NOTES
Upon the sale, exchange or retirement of a Note, a United States person
will recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement and the United States person's
adjusted tax basis in the Note. For these purposes, the amount realized does not
include any amount attributable to accrued interest on the Note. Amounts
attributable to accrued interest are treated as interest as described under
"Payments of Interest" above. A United States person's adjusted tax basis in a
Note generally will equal the cost of the Note to the United States person.
In general, gain or loss realized on the sale, exchange or redemption of a
Note will be capital gain or loss. Prospective investors should consult their
own tax advisors regarding the treatment of capital gains (which may be taxed at
lower rates than ordinary income for taxpayers who are individuals, trusts or
estates) and losses (the deductibility of which is subject to limitations).
BACKUP WITHHOLDING AND INFORMATION REPORTING
Backup withholding and information reporting requirements may apply to
certain payments of principal, premium and interest on a Note, and to payments
of proceeds of the sale or redemption of a Note, to certain non-corporate United
States persons. The Company, its agent, a broker, or any paying agent, as the
case may be, will be required to withhold from any payment a tax at a rate
currently equal to 28 percent of such payment if the United States person fails
to furnish or certify its correct taxpayer identification number to the payor in
the manner required, fails to certify that such United States person is not
subject to backup withholding, or otherwise fails to comply with the applicable
requirements of the backup withholding rules. Any amounts withheld under the
backup withholding rules from a payment to a United States person may be
credited against such United States person's United States federal income tax
and may entitle such United States person to a refund, provided that the
required information is furnished to the Internal Revenue Service.
TAX CONSEQUENCES TO NON-UNITED STATES PERSONS
As used herein, the term "non-United States person" means a beneficial
owner of a Note that is not a United States person.
INCOME AND WITHHOLDING TAX
Subject to the discussion of backup withholding below:
(a) payments of principal and interest on a Note that is beneficially
owned by a non-United States person will not be subject to United States
federal withholding tax; provided, that in the case of interest, (1)(i) the
beneficial owner does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Company entitled
to vote, (ii) the beneficial owner is not a controlled foreign corporation
that is related, directly or indirectly, to the Company through stock
ownership, (iii) the beneficial owner of the Notes is not a bank whose
receipt of interest is described in Section 881(c)(3)(A) of the Code; and
(iv) either (A) the beneficial owner of the Note provides an IRS Form W-8
or W-8 BEN (or successor form) certifying to the person otherwise required
to withhold United States federal income tax from such interest, under
penalties of perjury, that it is not a United States person and provides
its name and address or (B) a securities clearing organization, bank or
other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "financial institution") and
holds an interest in the Note
S-14
certifies to the person otherwise required to withhold United States
federal income tax from such interest, under penalties of perjury, that
such statement has been received from the beneficial owner by it or by a
financial institution between it and the beneficial owner and furnishes the
payor with a copy thereof; (2) the beneficial owner is entitled to the
benefits of an income tax treaty under which the interest is exempt from
United States federal withholding tax and the beneficial owner of the Note
or such owner's agent provides an IRS Form W-8 BEN (or successor form)
claiming the exemption; or (3) the beneficial owner conducts a trade or
business in the United States to which the interest is effectively
connected and the beneficial owner of the Note or such owner's agent
provides an IRS Form W-8 ECI (or successor form) provided that in each such
case, the relevant certification or IRS Form is delivered pursuant to
applicable procedures and is properly transmitted to the person otherwise
required to withhold United States federal income tax, and none of the
persons receiving the relevant certification or IRS Form has actual
knowledge that the certification or any statement on the IRS Form is false.
The Forms W-8 ECI and W-8 BEN must be periodically updated.
(b) a non-United States person will not be subject to United States
federal withholding tax on any gain realized on the sale, exchange or other
disposition of a Note unless the gain is effectively connected with the
beneficial owner's trade or business in the United States or, in the case
of an individual, the beneficial owner is present in the United States for
183 days or more in the taxable year in which the sale, exchange or other
disposition occurs and certain other conditions are met, or the non-United
States person is subject to U.S. tax under provisions applicable to certain
U.S. expatriates, and
(c) a Note owned by an individual who at the time of death is not, for
United States estate tax purposes, a citizen or resident of the United
States generally will not be subject to United States federal estate tax as
a result of such individual's death if the individual does not actually or
constructively own 10% or more of the total combined voting power or all
classes of stock of the Company entitled to vote and, at the time of such
individual's death the income on the Note would not have been effectively
connected with a United States trade or business of the individual.
If a non-United States person owning a Note is engaged in a trade or
business in the United States, and if interest on the Note (or gain realized on
its sale, exchange or other disposition) is effectively connected with the
conduct of such trade or business, such owner, although exempt from the
withholding tax discussed in the preceding paragraphs, will generally be subject
to regular United States income tax on such effectively connected income in the
same manner as if it were a United States person. In addition, if such owner is
a foreign corporation, it may be subject to a 30% branch profits tax (unless
reduced or eliminated by an applicable treaty) of its effectively connected
earnings and profits for the taxable year, subject to certain adjustments. For
purposes of the branch profits tax, interest on, and any gain recognized on the
sale, exchange or other disposition of, a Note will be included in the
effectively connected earnings and profits of such owner if such interest or
gain, as the case may be, is effectively connected with the conduct by such
owner of a trade or business in the United States.
Each owner of a Note should be aware that if it does not properly provide
the required IRS form, or if the IRS form (or, if permissible, a copy of such
form) is not properly transmitted to and received by the United States person
otherwise required to withhold United States federal income tax, interest on the
Note may be subject to United States withholding tax at a 30% rate, and the
owner will not be entitled to any Additional Amounts from the Company described
under the heading "Description of Notes -- Payment of Additional Amounts" with
respect to such tax. Such tax, however, may in certain circumstances be allowed
as a refund or as a credit against such owner's United States federal income
tax. The foregoing does not deal with all aspects of federal income tax
withholding that may be relevant to foreign owners of the Notes. Investors are
advised to consult their own tax advisors for specific advice concerning the
ownership and disposition of Notes.
S-15
BACKUP WITHHOLDING AND INFORMATION REPORTING
Under current Treasury Regulations, backup withholding (imposed at a rate
currently equal to 28 percent) will not apply to payments made by the Company or
a Paying Agent to an owner in respect of a Note if the certifications described
above are received, provided in each case that the Company or the Paying Agent,
as the case may be, does not have actual knowledge that the payee is a United
States person.
Backup withholding is not a separate tax, but is allowed as a refund or
credit against the owner's United States federal income tax, provided the
necessary information is furnished to the Internal Revenue Service.
Interest on a Note that is beneficially owned by a non-United States person
will be reported annually on IRS Form 1042S, which must be filed with the
Internal Revenue Service and furnished to such beneficial owner.
POSSIBLE EUROPEAN UNION REPORTING AND WITHHOLDING
The Council of the European Union recently approved a directive regarding
the taxation of savings income, Council Directive 2003/48/EC. Under this
directive, if a paying agent for interest on a debt claim is resident in one
member state of the European Union and an individual who is the beneficial owner
of the interest is a resident of another member state, then the former member
state will be required to provide information (including the identity of the
recipient) to authorities of the latter member state. This requirement is
subject to the right of several countries to opt instead to withhold tax on the
interest during a transitional period.
These provisions may become effective on January 1, 2005, but may instead
be delayed. No assurance can be given as to whether, or on what date, the
directive or any similar provision might become effective.
The United States federal income tax discussion set forth above is included
for general information only and may not be applicable depending upon an owner's
particular situation. Owners should consult their own tax advisors with respect
to the tax consequences to them of the ownership and disposition of the Notes,
including the tax consequences under state, local, foreign and other tax laws
and the possible effects of changes in federal or other tax laws.
S-16
UNDERWRITING
Under the terms and subject to the conditions set forth in the Underwriting
Agreement, dated April 27, 2004 (the "Underwriting Agreement"), the underwriters
named below (the "Underwriters") have severally agreed to purchase, and the
Company has agreed to sell to them, severally, the respective principal amount
of the Notes set forth opposite their respective names below:
PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF
NAME 4 1/8% NOTES 4 7/8% NOTES
---- ------------ ------------
Credit Suisse First Boston LLC................... $360,000,000 $200,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................ 360,000,000 200,000,000
Citigroup Global Markets Inc. ................... 25,715,000 14,286,000
Deutsche Bank Securities Inc. ................... 25,715,000 14,286,000
Goldman, Sachs & Co. ............................ 25,714,000 14,286,000
J.P. Morgan Securities Inc. ..................... 25,714,000 14,286,000
Lehman Brothers Inc. ............................ 25,714,000 14,286,000
Morgan Stanley & Co. Incorporated................ 25,714,000 14,285,000
UBS Securities LLC............................... 25,714,000 14,285,000
------------ ------------
Total.................................. $900,000,000 $500,000,000
============ ============
The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the Notes are subject to, among
other things, the approval of certain legal matters by their counsel and certain
other conditions. The Underwriters are obligated to take and pay for all the
Notes if any are taken.
The Underwriters propose initially to offer part of the Notes to the public
at the public offering prices set forth on the cover page hereof and in part to
certain dealers at prices that represent a concession not in excess of .250% of
the principal amount of the 4 1/8% Notes and .300% of the principal amount of
the 4 7/8% Notes. Any Underwriter may allow, and such dealers may reallow, a
concession not in excess of .125% of the principal amount of the 4 1/8% Notes
and .150% of the principal amount of the 4 7/8% Notes to certain other dealers.
After the initial offering of the Notes, the offering price and other selling
terms may from time to time be varied by the Underwriters.
In order to facilitate the offering of the Notes, the Underwriters may
engage in transactions that stabilize, maintain or otherwise affect the price of
the Notes. Specifically, the Underwriters may over-allot in connection with this
offering, creating short positions in the Notes for their own account. In
addition, to cover over-allotments or to stabilize the price of the Notes, the
Underwriters may bid for, and purchase, Notes in the open market. Finally, the
Underwriters may reclaim selling concessions allowed to an underwriter or dealer
for distributing Notes in this offering, if the Underwriters repurchase
previously distributed Notes in transactions that cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Notes above independent market
levels. The Underwriters are not required to engage in these activities, and may
end any of these activities at any time.
Certain of the Underwriters and their affiliates engage in transactions
with, and perform services for, the Company in the ordinary course of business
and have engaged, and may in the future engage, in commercial banking and
investment banking transactions with the Company.
The Notes are offered for sale in those jurisdictions in the United States,
Canada, Europe, Asia and elsewhere where it is lawful to make such offers.
Each of the Underwriters has represented and agreed that it has not and
will not offer, sell or deliver any of the Notes directly or indirectly, or
distribute this prospectus supplement or the prospectuses or any
S-17
other offering material relating to the Notes, in or from any jurisdiction
except under circumstances that will result in compliance with the applicable
laws and regulations thereof and that will not impose any obligations on the
Company except as set forth in the Underwriting Agreement.
In particular, each Underwriter has represented and agreed that:
(i) it has not offered or sold and will not offer or sell any Notes to
persons in the United Kingdom prior to the expiry of the period of six
months from the issue date of the Notes except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995 or the Financial Services and
Markets Act 2000;
(ii) it has complied and will comply with all applicable provisions of
the Financial Services and Markets Act 2000 with respect to anything done
by it in relation to any Notes in, from or otherwise involving the United
Kingdom;
(iii) it has only communicated or caused to be communicated and will
only communicate or cause to be communicated any invitation or inducement
to engage in investment activity (within the meaning of Section 21 of the
Financial Services and Markets Act 2000) received by it in connection with
the issue or sale of the Notes in circumstances in which Section 21(1) of
the Financial Services and Markets Act 2000 does not apply to the Company;
and
(iv) it will not offer or sell any Notes directly or indirectly in
Japan or to, or for the benefit of any Japanese person or to others, for
re-offering or re-sale directly or indirectly in Japan or to any Japanese
person except under circumstances which will result in compliance with all
applicable laws, regulations and guidelines promulgated by the relevant
governmental and regulatory authorities in effect at the relevant time. For
purposes of this paragraph, "Japanese person" shall mean any person
resident in Japan, including any corporation or other entity organized
under the laws of Japan.
The Notes are a new issue of securities with no established trading market.
The Underwriters have advised the Company the Underwriters intend to make a
market in the Notes. The Underwriters are not obligated, however, to do so and
may discontinue their market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for the Notes.
Expenses associated with this offering, to be paid by the Company, are
estimated to be $225,000.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act.
Credit Suisse First Boston LLC will make securities available for
distribution on the Internet through a proprietary Web site and/or a third-party
system operated by Market Axess Inc., an Internet-based communications
technology provider. Market Axess Inc. is providing the system as a conduit for
communications between Credit Suisse First Boston LLC and its customers and is
not a party to any transactions. We do not believe that Market Axess Inc. will
function as an underwriter or agent of the issuer, nor do we believe that Market
Axess Inc. will act as a broker for any customer of Credit Suisse First Boston
LLC. Market Axess Inc., a registered broker-dealer, will receive compensation
from Credit Suisse First Boston LLC based on transactions the underwriter
conducts through the system. Credit Suisse First Boston LLC will make securities
available to its customers through the Internet distributions, whether made
through a proprietary or third party system, on the same terms as distributions
made through other channels.
S-18
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Notes in Canada is being made only on a private
placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of Notes are made. Any resale of the Notes in Canada must be made under
applicable securities laws, which will vary depending on the relevant
jurisdiction, and which may require resales to be made under available statutory
exemptions or under a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of the Notes.
REPRESENTATIONS OF PURCHASERS
By purchasing Notes in Canada and accepting a purchase confirmation a
purchaser is representing to us and the dealer from whom the purchase
confirmation is received that
- the purchaser is entitled under applicable provincial securities laws to
purchase the Notes without the benefit of a prospectus qualified under
those securities laws,
- where required by law, that the purchaser is purchasing as principal and
not as agent, and
- the purchaser has reviewed the text above under Resale Restrictions.
RIGHTS OF ACTION -- ONTARIO PURCHASERS ONLY
Under Ontario securities legislation, a purchaser who purchases a security
offered by this prospectus supplement and the prospectuses during the period of
distribution will have a statutory right of action for damages, or while still
the owner of the Notes, for rescission against us in the event that this
prospectus supplement and the prospectuses contain a misrepresentation. A
purchaser will be deemed to have relied on the misrepresentation. The right of
action for damages is exercisable not later than the earlier of 180 days from
the date the purchaser first had knowledge of the facts giving rise to the cause
of action and three years from the date on which payment is made for the Notes.
The right of action for rescission is exercisable not later than 180 days from
the date on which payment is made for the Notes. If a purchaser elects to
exercise the right of action for rescission, the purchaser will have no right of
action for damages against us. In no case will the amount recoverable in any
action exceed the price at which the Notes were offered to the purchaser and if
the purchaser is shown to have purchased the securities with knowledge of the
misrepresentation, we will have no liability. In the case of an action for
damages, we will not be liable for all or any portion of the damages that are
proven to not represent the depreciation in value of the Notes as a result of
the misrepresentation relied upon. These rights are in addition to, and without
derogation from, any other rights or remedies available at law to an Ontario
purchaser. The foregoing is a summary of the rights available to an Ontario
purchaser. Ontario purchasers should refer to the complete text of the relevant
statutory provisions.
ENFORCEMENT OF LEGAL RIGHTS
All of our directors and officers as well as the experts named herein may
be located outside of Canada and, as a result, it may not be possible for
Canadian purchasers to effect service of process within Canada upon us or those
persons. All or a substantial portion of our assets and the assets of those
persons may be located outside of Canada and, as a result, it may not be
possible to satisfy a judgment against us or those persons in Canada or to
enforce a judgment obtained in Canadian courts against us or those persons
outside of Canada.
S-19
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of Notes should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the Notes in
their particular circumstances and about the eligibility of the Notes for
investment by the purchaser under relevant Canadian legislation.
LEGAL OPINIONS
The validity of the Notes offered hereby will be passed on for the Company
by Stacey J. Mobley, Esq., Senior Vice President, Chief Administrative Officer
and General Counsel of the Company, and for the Underwriters by Cravath, Swaine
& Moore LLP. Mr. Mobley beneficially owned as of December 31, 2003, 42,169
shares of the Common Stock of the Company, plus 496,663 shares of which he has
the right to acquire beneficial ownership within 60 days through the exercise of
stock options awarded under the Company's Stock Option Plan. Cravath, Swaine &
Moore LLP performs legal services for the Company from time to time.
S-20
[DUPONT LOGO]
E. I. DU PONT DE NEMOURS
AND COMPANY
1007 MARKET STREET
WILMINGTON, DELAWARE 19898
(302) 774-1000
$4,000,000,000
DEBT SECURITIES
------------------------
We will provide the specific terms of the securities in supplements to this
prospectus. You should read this prospectus and any supplement carefully before
you invest.
------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined whether
this prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is September 24, 1999
TABLE OF CONTENTS
About This Prospectus....................................... 1
Where You Can Find More Information......................... 1
Forward Looking Information................................. 2
About DuPont................................................ 3
Use Of Proceeds............................................. 3
Ratio Of Earnings To Fixed Charges.......................... 4
Description of Debt Securities.............................. 4
Plan of Distribution........................................ 12
Legal Opinion............................................... 13
Experts..................................................... 13
i
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we have filed with
the Securities and Exchange Commission using a "shelf" registration process.
Using this process, we may offer the securities described in this prospectus in
one or more offerings with a total initial offering price of up to
$4,000,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we offer securities, we will provide a
supplement to this prospectus. The prospectus supplement will describe the
specific terms of that offering. The prospectus supplement may also add, update
or change the information contained in this prospectus. Please carefully read
this prospectus and the prospectus supplement, in addition to the information
contained in the documents we refer you to under the heading "Where You Can Find
More Information."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can read and copy any materials we file with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the SEC's regional offices located at Seven World Trade
Center, New York, New York 10048, and at 500 West Madison Street, Chicago,
Illinois 60661. You can obtain information about the operation of the SEC's
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a web site that contains information we file electronically with the
SEC, which you can access over the internet at http://www.sec.gov. You can
obtain information about us at the offices of the New York Stock Exchange, 20
Broad Street, New York, New York 10005 or by visiting our web site at
http://www.dupont.com.
This prospectus is part of a registration statement we have filed with the
SEC relating to the debt securities. As permitted by SEC rules, this prospectus
does not contain all of the information we have included in the registration
statement and the accompanying exhibits and schedules we file with the SEC. You
may refer to the registration statement, the exhibits and schedules for more
information about us and the debt securities. The registration statement,
exhibits and schedules are available at the SEC's Public Reference Room or
through its web site.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information we incorporate by reference is
an important part of this prospectus, and later information that we file with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below, and any future filings we make with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 until we sell all the debt securities. The documents we incorporate by
reference are:
- our annual report on Form 10-K/A Amendment No. 1 for the year ended
December 31, 1998;
- our quarterly reports on Form 10-Q/A for the quarter ended March 31,
1999, and on Form 10-Q for the quarter ended June 30, 1999; and
- our current report(s) on Form 8-K as filed with the SEC on January 27,
1999; February 1, 1999; February 4, 1999; March 1, 1999; March 10, 1999;
March 12, 1999; March 15, 1999; March 15, 1999; April 16, 1999; April 27,
1999; June 14, 1999; July 2, 1999; July 12, 1999; July 14, 1999; July 28,
1999; August 2, 1999; August 9, 1999; August 11, 1999; August 16, 1999;
September 1, 1999; and September 15, 1999.
1
You may request a copy of these filings (other than an exhibit to these
filings unless we have specifically incorporated that exhibit by reference into
the filing), at no cost, by writing or telephoning us at the following address:
DuPont
1007 Market Street
Wilmington, DE 19898
Attention: Treasury
Telephone: (302) 774-1000
You should rely only on the information we have provided or incorporated by
reference in this prospectus, any prospectus supplement or any incorporated
document. We have not authorized anyone to provide you with different
information. You should not assume that the information in this prospectus, any
prospectus supplement, or any incorporated document is accurate as of any date
other than the date on its cover.
FORWARD LOOKING INFORMATION
This document contains forward-looking statements, which may be identified
by the use of words like "plans," "expects," "will," "anticipates," "intends,"
"projects," "estimates" or other words of similar meaning. All statements that
address expectations or projections about the future, including statements about
our strategy for growth, product development, market position, expenditures,
financial results and our efforts to remediate Year 2000 issues, are
forward-looking statements.
Forward-looking statements are based on certain assumptions and
expectations of future events. We cannot guarantee that these assumptions and
expectations are accurate or will be realized. The following are some of the
important factors that could cause our actual results to differ materially from
those projected in any such forward-looking statements:
- We operate in approximately 65 countries worldwide and derive about half
of our revenues from sales outside the United States. Changes in the laws
or policies of other governmental and quasi-governmental entities that
relate to our activities in the countries in which we operate could
affect our business in those countries and our results of operations. In
addition, economic factors, including inflation and fluctuations in
interest rates and foreign currency exchange rates, and competitive
factors, such as greater price competition or a decline in U.S. or
European industry sales from slowing economic growth in those countries
could affect our revenues, expenses and results.
- Our growth objectives largely depend on our ability to renew our pipeline
of new products and to bring those products to market. This ability may
be adversely affected by difficulties or delays in product development
such as the inability to:
- identify viable new products;
- successfully complete clinical trials of new pharmaceuticals;
- obtain relevant regulatory approvals, which may include approval from
the U.S. Food and Drug Administration;
- obtain adequate intellectual property protection; or
- gain market acceptance of the new products.
- As part of our strategy for growth, we have made and may continue to make
acquisitions, divestitures and alliances. There can be no assurance that
these will be completed or beneficial to us.
2
- We have undertaken and may continue to undertake productivity
initiatives, including organizational restructurings, to improve
performance and generate cost savings. There can be no assurance that
these will be completed or beneficial to us. Also, there can be no
assurance that any estimated cost savings from such activities will be
realized.
- Our periodic reports filed with the Securities and Exchange Commission on
Forms 10-Q and 10-K explain our timetable and assessment of costs to
become Year 2000-capable. Our failure or that of third parties with which
we conduct business to become Year 2000-capable could adversely affect
our financial condition, results of operation and liquidity.
- Our facilities are subject to a broad array of environmental laws and
regulations. The costs of complying with complex environmental laws and
regulations, as well as internal voluntary programs, are significant and
will continue to be so for the foreseeable future. Our accruals for such
costs and liabilities may not be adequate. The estimates on which the
accruals are based depend on a number of factors including:
- the nature of the allegation;
- the complexity of the site;
- the nature of the remedy;
- the outcome of discussions with regulatory agencies and other
potentially responsible parties at multi-party sites; and
- the number and financial viability of other potentially responsible
parties.
- Our results of operations could be affected by significant litigation
adverse to us including product liability claims, patent infringement
claims and antitrust claims.
This list of important factors does not include all factors, and may not be in
order of importance.
ABOUT DUPONT
We were founded in 1802 and incorporated in Delaware in 1915. We have been
in continuous operation for 196 years. Our principal offices are at 1007 Market
Street in Wilmington, Delaware.
We are 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. We have a portfolio of 2,000
trademarks and brands, including such well-known consumer brands as Lycra(R),
Teflon(R), Stainmaster(R), Kevlar(R), Nomex(R), Tyvek(R), Dacron(R), Cordura(R),
Corian(R), SilverStone(R) and Mylar(R) We operate in 65 countries worldwide.
Our strategic business units have been aggregated into eight reportable
segments -- Agriculture & Nutrition, Nylon Enterprise, Performance Coatings &
Polymers, Pharmaceuticals, Pigments & Chemicals, Polyester Enterprise, Specialty
Fibers and Specialty Polymers.
About 47% of our sales are derived outside the United States, based on
location of the customer. We have about 92,000 employees.
USE OF PROCEEDS
Unless we inform you otherwise in a prospectus supplement, we will use the
net proceeds from the sale of the offered securities for general corporate
purposes. These purposes may include repayment and refinancing of debt,
acquisitions, working capital, capital expenditures and repurchases and
redemptions of securities. Pending any specific application, we may initially
invest funds in short-term marketable securities or apply them to the reduction
of short-term indebtedness.
3
RATIO OF EARNINGS TO FIXED CHARGES
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------
JUNE 30, 1999 1998 1997 1996 1995 1994
------------- ---- ---- ---- ---- ----
Ratio of Earnings to Fixed Charges.................... 5.9 3.3 5.2 5.8 5.4 5.3
Pro Forma
Ratio of Earnings to Fixed Charges on a continuing
operations basis excluding interest and debt expense
allocated to or incurred by Conoco, Inc., which is
reported as discontinued operations................. 8.3 4.5 7.8 9.1 8.4 7.6
DESCRIPTION OF DEBT SECURITIES
We will issue the debt securities under one of two indentures:
- an indenture dated as of June 1, 1992 between us and Bankers Trust
Company, as trustee; or
- an indenture dated as of June 1, 1992 between us and The Chase Manhattan
Bank, formerly Chemical Bank, as trustee.
Each indenture is incorporated into or filed as an exhibit to the
registration statement, of which this prospectus is a part. The trustee will be
designated in the prospectus supplement for each offering of debt securities.
All references to the "trustee" mean the trustee identified in the prospectus
supplement. The following summaries of certain provisions of the indentures are
not complete. We encourage you to read the indentures.
GENERAL
The indentures do not limit the amount of debt securities that we may
issue. Each provides that debt securities may be issued up to the aggregate
principal amount that we authorize from time to time. The debt securities will
be unsecured and will rank on a parity with all of our other unsecured and
unsubordinated indebtedness.
The prospectus supplement relating to a series of debt securities will
describe the terms of that series, including, where applicable:
- the designation, aggregate principal amount, currency or currencies and
denominations of the debt securities;
- whether the debt securities may be convertible into or exchangeable for
other securities;
- the price or prices, expressed as a percentage of aggregate principal
amount, at which the debt securities will be issued;
- the date or dates on which the debt securities will mature;
- the currency or currencies in which the debt securities are being sold
and in which the principal of and any interest on the debt securities
will be payable and whether the holder of the debt securities may elect
the currency in which payments are to be made, and, if so, the manner of
such election;
- the rate or rates, which may be fixed or variable, at which the debt
securities will bear interest, if any;
- the date from which interest on the debt securities will accrue, the
dates on which interest will be payable and the date on which payment of
interest will commence;
- the dates on which and the price or prices at which the debt securities
will, under any mandatory sinking fund provision, or may, under any
optional redemption or required repayment provisions, be
4
redeemed or repaid and the other terms and provisions of any mandatory
sinking fund, optional redemption or required repayment;
- whether the debt securities are to be issuable as registered securities,
bearer securities or both and the terms upon which any bearer securities
of a series may be exchanged for registered securities of that series;
- whether the debt securities are to be issued in whole or in part in the
form of one or more global securities and, if so, the identity of the
depositary or depositaries for the global security or securities;
- any special provisions for the payment of additional amounts on the debt
securities;
- if a temporary global security is to be issued for a series, the
requirements for certification of ownership by non-United States persons
that will apply before (a) the issuance of a definitive bearer security
or (b) the payment of interest on an interest payment date that occurs
before the issuance of a definitive bearer security;
- if a temporary global security is to be issued with respect to the
series, the terms upon which interests in the temporary global security
may be exchanged for interests in a definitive global security or for
definitive debt securities of the series and the terms upon which
interests in a definitive global security, if any, may be exchanged for
definitive debt securities of the series;
- any additional restrictive covenants included for the benefit of holders
of the debt securities;
- additional events of default provided with respect to the debt
securities;
- if the debt securities of the series are subject to defeasance at our
option, the provisions, Federal income tax consequences and other
considerations applicable thereto; and
- the designated trustee for the debt securities. (Section 301)
Debt securities of a series may be issuable in whole or in part in the form
of one or more global securities, as described below under "Global Securities".
Registered securities denominated in U.S. dollars will ordinarily be issued only
in denominations of $1,000 or any integral multiple of $1,000. One or more
global securities will be issued in a denomination or aggregate denominations
equal to the aggregate principal amount of outstanding debt securities of the
series. The prospectus supplement relating to a series of debt securities
denominated in a foreign or composite currency will specify the allowable
denominations and any special U.S. Federal income tax and other considerations.
No service charge will be made for any tender or exchange of debt securities but
we may require payment of a sum sufficient to cover any tax or other
governmental charge. (Sections 302 and 305)
Debt securities may be presented for exchange, and registered securities
that are not in global form may be presented for transfer, with the form of
transfer endorsed thereon duly executed, at the office of any transfer agent or
at the office of the security registrar, without service charge and upon payment
of any taxes and other governmental charges as described in the indenture.
Transfers or exchanges will be effected once the transfer agent or the security
registrar, as the case may be, is satisfied with the documents of title and
identity of the person making the request. (Section 305)
Debt securities may be issued under the indenture as original issue
discount securities to be offered and sold at a substantial discount below their
stated principal amount. "Original issue discount securities" means any debt
securities that provide for an amount less than their principal amount to be due
and payable upon a declaration of acceleration of maturity upon the occurrence
and continuation of an event of default and any debt securities issued with
original issue discount for U.S. Federal income tax purposes. (Section 101) A
prospectus supplement will describe U.S. Federal income tax consequences and
other special considerations applicable to any original issue discount
securities.
5
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary identified in the prospectus supplement relating to that
series. Global securities may be issued in either registered or bearer form and
in either temporary or definitive form. Unless and until it is exchanged in
whole or in part for debt securities in definitive form, a global security may
not be transferred except as a whole by the depositary to a nominee of the
depositary or by a nominee of the depositary to the depositary or another
nominee of the depositary or by the depositary or any nominee to a successor of
the depositary or a nominee of that successor. (Sections 303 and 305)
The specific terms of the depositary arrangement with respect to any debt
securities of a series will be described in the prospectus supplement relating
to that series. We anticipate that the following provisions will apply to all
depositary arrangements.
Upon the issuance of a global security, the depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global security to the accounts of
"participants" that have accounts with the depositary. The accounts to be
credited shall be designated by the underwriters of debt securities, by certain
of our agents or by us if we sell debt securities directly. Ownership of
beneficial interests in a global security will be limited to participants or
persons that may hold interests through participants. Ownership of beneficial
interests in a global security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the depositary or
by participants or persons that hold through participants. The laws of some
states require that certain purchasers of securities take physical delivery of
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a global security.
So long as the depositary or its nominee is the owner of a global security,
the depositary or its nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by that global security for
all purposes under the indenture. Except as set forth below, owners of
beneficial interests in a global security will not be entitled to have debt
securities of the series represented by that global security registered in their
names, will not receive or be entitled to receive physical delivery of debt
securities in definitive form and will not be considered the owners or holders
of the debt securities under the indenture governing the debt securities.
Accordingly, each person owning a beneficial interest in a global security must
rely on the procedures of the depositary and, if such person is not a
participant, on the procedures of the participant and, if applicable, the
indirect participant, through which such person owns its interest, to exercise
any right of a holder under the indenture.
Principal, premium, if any, and interest payments on debt securities
registered in the name of or held by a depositary or its nominee will be made to
the depositary or its nominee, as the case may be, as the registered owner or
the holder of the global security representing those debt securities. Neither
we, the trustee, any paying agent nor the security registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global security
or for maintaining, supervising or reviewing any records relating to beneficial
ownership interests.
We expect that the depositary for debt securities of a series, upon receipt
of any payment of principal, premium or interest in respect of a definitive
global security, will credit immediately participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of the global security as shown on the records of the depositary. We also
expect that payments by participants to owners of beneficial interests in a
global security held through those participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of those participants.
If a depositary for debt securities of a series is at any time unwilling or
unable to continue as depositary and we do not appoint a successor depositary
within 90 days, we will issue debt securities of that series in definitive form
in exchange for the global security or securities representing the debt
6
securities of that series. In addition, we may at any time and in our sole
discretion determine not to have any debt securities of a series represented by
one or more global securities. In that event, we will issue debt securities of
that series in definitive form in exchange for the global security or securities
representing those debt securities. An owner of a beneficial interest in a
global security representing debt securities of a series may, on terms
acceptable to us and the depositary for such global security, receive debt
securities of that series in definitive form. In any of these instances, an
owner of a beneficial interest in a global security will be entitled to physical
delivery in definitive form of debt securities of the series represented by that
global security equal in principal amount to that beneficial interest and to
have debt securities registered in its name if the debt securities of that
series are issuable as registered securities. Debt securities of that series
issued in definitive form will be issued only in authorized denominations.
PAYMENT AND PAYING AGENTS
Payment of principal of and any premium on registered securities will be
made in the designated currency against surrender of any registered securities
at the corporate trust office of the trustee in New York City. Payment of any
installment of interest on registered securities will ordinarily be made to the
person in whose name the debt security is registered at the close of business on
the regular record date for that interest payment. Payments of interest will be
made at the corporate trust office of the trustee in New York City or by a check
in the designated currency mailed to each holder at the holder's registered
address. (Sections 307 and 1001)
The paying agents outside the United States that we initially appoint for a
series of debt securities will be named in the prospectus supplement. We may
terminate the appointment of any of the paying agents from time to time, except
that we will maintain at least one paying agent in New York City for payments on
registered securities. So long as any series of debt securities is listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited or the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and it is a requirement of that stock exchange, we
will maintain a paying agent in London or Luxembourg or any other required city
located outside the United States, as the case may be, for that series of debt
securities. (Section 1002)
All moneys that we pay to a paying agent for the payment of principal of or
any premium, or interest on any debt security that remains unclaimed at the end
of two years after it became due and payable will be repaid to us and the holder
of that debt security will thereafter look only to us for payment. (Section
1003)
CERTAIN COVENANTS
Liens. We covenant that, so long as any of the debt securities remain
outstanding, we will not, nor will we permit any Restricted Subsidiary (as
defined below, in "Definition of Certain Terms") to issue, assume, or guarantee
any debt for money borrowed if that debt is secured by a mortgage on any
Principal Property (as defined), or on any shares of stock or indebtedness of
any Restricted Subsidiary (whether the Principal Property, shares of stock, or
indebtedness are now owned or hereafter acquired) without in any such case
effectively providing that the debt securities shall be secured equally and
ratably with such debt. This restriction, however, shall not apply to:
- mortgages on property, shares of stock, or indebtedness of any
corporation existing at the time such corporation becomes a Restricted
Subsidiary;
- mortgages on property existing at the time that it is acquired, or to
secure debt incurred for the purpose of financing the purchase price of
such property or improvements or construction on the property, which debt
is incurred prior to, at the time of or within one year after such
acquisition, completion of such construction, or the commencement of
commercial operation of such property thereon;
- mortgages securing debt owing by any Restricted Subsidiary to us or
another Restricted Subsidiary;
7
- mortgages on property of a corporation existing at the time that
corporation is merged into or consolidated with us or a Restricted
Subsidiary or at the time of a sale, lease or other disposition of the
properties of a corporation as an entirety or substantially as an
entirety to us or a Restricted Subsidiary;
- mortgages on property of us or a Restricted Subsidiary in favor of the
United States of America or any State thereof, or any department, agency
or instrumentality or political subdivision of the United States of
America or any State thereof or in favor of any other country, or any
political subdivision thereof, to secure certain payments pursuant to any
contract or statute or to secure any indebtedness incurred for the
purpose of financing all or any part of the purchase price or the cost of
construction of the property subject to such mortgages, including without
limitation mortgages incurred in connection with pollution control,
industrial revenue or similar financings;
- mortgages existing at the date of the indenture;
- mortgages on particular property, or any proceeds of the sale of that
property, to secure all or any part of the cost of exploration, drilling,
mining or development of that property, including construction of
facilities for field processing of minerals, intended to obtain or
materially increase the production and sale or other disposition of oil,
gas, coal, uranium, copper or other minerals of that property, or any
indebtedness created, issued, assumed or guaranteed to provide funds for
any or all such purposes; or
- any extension. renewal or replacement or successive extensions, renewals
or replacements, in whole or in part, of any mortgage referred to in the
clauses immediately above.
Notwithstanding the above, we and one or more of our Restricted
Subsidiaries may, without securing the debt securities, issue, assume, or
guarantee secured debt which would otherwise be subject to the above
restrictions, provided that the aggregate amount of that debt that would
then be outstanding, with certain exceptions does not at any one time
exceed 10% of the Consolidated Net Tangible Assets (as defined) of us and
our consolidated subsidiaries. (Section 1004)
For the purposes of this covenant, the following types of transactions
shall not be deemed to create debt secured by a mortgage: the sale or other
transfer of
- oil, gas, coal, uranium, copper or other minerals in place for a period
of time until, or in an amount such that, the purchaser will realize
therefrom a specified amount of money (however determined) or a specified
amount of such minerals; or
- any other interest in property of the character commonly referred to as a
"production payment". (Section 1004)
Sale and Leaseback Transactions. Sale and leaseback transactions by us or
any Restricted Subsidiary of any Principal Property are prohibited unless (a) we
or such Restricted Subsidiary would be entitled to issue, assume, or guarantee
debt secured by the property involved at least equal in amount to the
Attributable Debt (as defined) for that transaction without equally and ratably
securing the debt securities or (b) an amount equal to the Attributable Debt for
that transaction is applied to the retirement of our nonsubordinated debt or
that of a Restricted Subsidiary, which by its terms matures at or is extendible
or renewable at the option of the obligor to a date more than twelve months
after its creation. (Section 1005)
Consolidation or Merger. We will not consolidate or merge with or dispose
of all or substantially all of our property to any corporation unless the
surviving corporation, if other than us, shall assume our obligations under the
indenture and under the debt securities. (Section 801) If on any consolidation
or merger of us or any Restricted Subsidiary with or into any other corporation,
or on any sale, conveyance, or lease of substantially all our or a Restricted
Subsidiary's properties, any Principal Property or any shares of stock or
indebtedness of any Restricted Subsidiary would then become subject to any
mortgage, pledge, security interest, or other lien or encumbrance, we, prior to
such event, will secure the debt securities by a
8
direct lien on that Principal Property, shares of stock or indebtedness, prior
to all liens other than any previously existing. (Section 802)
Except for the limitations on secured debt and sale and leaseback
transactions described above, the indenture and debt securities do not contain
any covenants or other provisions designed to afford holders of the debt
securities protection in the event of a highly leveraged transaction involving
us.
DEFINITION OF CERTAIN TERMS
"Subsidiary" is defined to mean any corporation which is consolidated in
our accounts and any corporation of which at least a majority of the outstanding
stock having voting power under ordinary circumstances to elect a majority of
the board of directors of that corporation shall at the time be owned or
controlled by us or by us and one or more Subsidiaries or by one or more
Subsidiaries. (Section 101)
"Restricted Subsidiary" is defined to mean any wholly-owned subsidiary
- substantially all the property of which is located within the continental
United States of America,
- which owns a Principal Property, and
- in which our investment exceeds 1% of our consolidated assets as of the
end of the preceding year.
The term "Restricted Subsidiary" does not include any wholly-owned subsidiary
which is principally engaged in leasing or in financing installment receivables
or which is principally engaged in financing our operations outside the
continental United States. (Section 101)
"Principal Property" is defined as any manufacturing plant or facility or
any mineral producing property or any research facility located within the
continental United States owned by us or any Restricted Subsidiary, unless, in
the opinion of our Board or Directors, such plant facility, property or research
facility is not of material importance to the total business conducted by us and
our Restricted Subsidiaries. (Section 101)
"Attributable Debt" is defined as the present value, discounted as provided
in the indenture, of the obligation of a lessee for rental payments during the
remaining term of any lease. (Section 1005)
"Consolidated Net Tangible Assets" means the total amount of assets less
applicable reserves and other properly deductible items after deducting (a) all
current liabilities excluding any thereof which are by their terms extendible or
renewable at the option of the obligor thereon to a time more than 12 months
after the time as of which the amount thereof is being computed, and (b) all
goodwill, trade names, trademarks, patents, purchased technology, unamortized
debt discount and other like intangible assets, all as set forth on our most
recent quarterly balance sheet and computed in accordance with generally
accepted accounting principles. (Section 101)
MODIFICATION OF THE INDENTURE
The indenture permits us and the trustee, with the consent of the holders
of not less than a majority in principal amount of the debt securities at the
time outstanding and affected, to execute a supplemental indenture modifying the
indenture or the rights of the holders of debt securities and any related
coupons. No modification shall, without the consent of the holder of each debt
security affected thereby,
- change the maturity of any debt security or coupon, or reduce its
principal amount, or reduce the rate or change the time of payment of
interest, or change any place of payment or change the coin or currency
in which a debt security or coupon is payable or impair the right of any
holder to institute suit for the enforcement of payment in accordance
with the foregoing, or
- reduce the percentage of debt securities, the consent of the holders of
which is required for any modification. (Section 902)
The indenture contains provisions for convening meetings of the holders of
debt securities of a series. (Section 1401) A meeting may be called at any time
by the trustee or upon our request or the request of
9
holders of at least 10% in principal amount of the outstanding debt securities
of the series, upon notice given in accordance with the indenture. (Section
1402) Except as limited in the preceding paragraph, any resolution presented at
a meeting or adjourned meeting at which a quorum is present may be adopted by
the affirmative vote of the holders of not less than a majority in principal
amount of the outstanding debt securities of that series. Except as limited in
the preceding paragraph, any resolution with respect to any demand, consent,
waiver or other action that may be made, given or taken by the holders of a
specified percentage, which is less than a majority in principal amount of
outstanding debt securities of a series, may be adopted at a meeting or
adjourned meeting at which a quorum is present by the affirmative vote of the
holders of such specified percentage in principal amount of the outstanding debt
securities of that series. (Section 1403)
Any resolution passed or decision taken at any meeting of holders of debt
securities of any series duly held in accordance with the indenture will be
binding on all holders of debt securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing not less than a
majority in principal amount of the outstanding debt securities of a series.
(Section 1403)
EVENTS OF DEFAULT
The indenture defines an event of default with respect to any series of
debt securities as any one of the following events and any other event that is
established for the debt securities of a particular series:
- default for 30 days in any payment of interest on the series;
- default in any payment of principal and premium, if any, on the series;
- default in the payment of any sinking fund installment;
- default for 60 days after appropriate notice in performance of any other
covenant in the indenture; or
- certain events involving bankruptcy, insolvency or reorganization.
No event of default with respect to a particular series of debt securities
issued under the indenture necessarily constitutes an event of default with
respect to any other series of debt securities. (Section 501).
We are required to file with the trustee annually an officer's certificate
indicating whether we are in default under the indenture. (Section 1008)
The indenture provides that if an event of default shall occur and be
continuing with respect to any series of debt securities, either the trustee or
the holders of 25% in principal amount of the debt securities of the series (in
the case of defaults under the final two clauses listed above, the holders of
25% in principal amount of all the debt securities) then outstanding may declare
the principal, or in the case of original issue discount securities, that
portion of the principal amount as may be specified, of the debt securities of
the series or of all the debt securities, as the case may be to be due and
payable. (Section 502) In certain cases, the holders of a majority in principal
amount of the outstanding debt securities of any series or in the case of
defaults under the final two clauses listed above, the holders of a majority in
principal amount of all the debt securities may on behalf of the holders of all
the debt securities of any such series or of all the debt securities, as the
case may be waive any past default or event of default except a default not
previously cured in payment of the principal of or premium, if any, or interest
on any of the debt securities of such series or of all the debt securities.
(Sections 502 and 513)
The indenture contains a provision entitling the trustee, subject to the
duty of the trustee during default to act with the required standard of care, to
be indemnified by the holders of the debt securities of any series before
exercising any right or power under the indenture at the request of the holders.
(Section 603) The indenture provides that no holder of any debt securities of
any series may institute any proceeding, judicial or otherwise, to enforce the
indenture except, among other things, where the trustee has, for 60 days after
it is given notice of default, failed to act, and where there has been both a
request to
10
enforce the indenture by the holders of not less than 25% in aggregate principal
amount of the then outstanding debt securities of that series and an offer of
reasonable indemnity to the trustee. (Section 507) This provision will not
prevent any holder of debt securities from enforcing payment of the principal
thereof and premium, if any, and interest thereon at their due dates. (Section
508) The holders of a majority in aggregate principal amount of the debt
securities of any series then outstanding may direct the time, method and place
of conducting any proceedings for any remedy available to the trustee or
exercising any trust or power conferred on it for the debt securities of that
series. However, the trustee may refuse to follow any direction that conflicts
with law or the indenture or which would be unjustly prejudicial to the other
holders. (Section 512)
The indenture provides that the trustee will, within 90 days after the
occurrence of a default on any series of debt securities known to it, give to
the holders of that series notice of the default if not cured or waived. Except
in the case of a default in the payment of principal of, any premium, or
interest on, any debt securities, the trustee shall be protected in withholding
such notice if it determines in good faith that doing so is in the holders'
interests. (Section 602)
DISCHARGE AND DEFEASANCE
The indenture provides that we may specify that, for debt securities of a
certain series, we will be discharged from any and all obligations regarding
those debt securities if we irrevocably deposit with the trustee, in trust,
money and/or U.S. Government Obligations which through the payment of interest
and principal will provide enough money to pay any installment of principal, any
premium, and, any interest, on and any mandatory sinking fund payments of such
debt securities on their stated maturity in accordance with the terms of the
indenture and the debt securities. A trust may only be established if it would
not cause the debt securities of a series listed on any nationally recognized
securities exchange to be de-listed. Establishment of a trust may be conditioned
on our delivery to the trustee of an opinion of counsel, who may be our counsel,
to the effect that, based upon applicable U.S. Federal income tax law or a
ruling published by the United States Internal Revenue Service, a defeasance and
discharge will not be deemed, or result in, a taxable event to holders of the
debt securities. (Section 1301) Defeasance, however, will not end our
obligations to register the transfer or exchange of debt securities, to replace
stolen, lost or mutilated debt securities, to maintain paying agencies and hold
monies for payment in trust and, if so specified for debt securities of a
certain series, to pay the principal of and premium, if any, and interest, if
any, on those debt securities.
TRUSTEE'S RELATIONSHIP WITH ISSUER
The Chase Manhattan Bank acts as depositary for funds of, makes loans to,
and performs other services for us in the normal course of business. It also
acts as trustee for our Medium-Term Notes Series C, Euro Medium-Term Notes
Series C, Medium-Term Notes Series D, Euro Medium-Term Notes Series D,
Medium-Term Notes Series E, Euro Medium-Term Notes Series E, Medium-Term Notes
Series G, 9.15% Notes Due 2000, 8.50% Notes Due February 15, 2003, 8.125% Notes
Due March 15, 2004, 8.25% Notes Due September 15, 2006, and 8 1/4% Debentures
Due 2022.
Bankers Trust Company acts as depositary for funds of, makes loans to, and
performs other services for us in the normal course of business. It also acts as
trustee for our Medium-Term Notes Series F, 6 3/4% Notes Due 2002, 7.95%
Debentures Due 2023, and 7 1/2% Debenture Due 2033, 6 1/2% Notes Due 2002,
6 3/4% Notes Due 2007 and 6.50% Debentures Due 2028. It also acts as fiscal
agent for our 8% Notes Due 2002 and 5.875% Notes Due 2009.
11
PLAN OF DISTRIBUTION
We may sell the debt securities in and outside the United States (a)
through underwriters or dealers, (b) directly to purchasers or (c) through
agents. The prospectus supplement will include the following information:
- the terms of the offering
- the names of any underwriters or agents
- the purchase price from us of the securities
- the net proceeds to us from the sale of the securities
- any delayed delivery arrangements
- any underwriting discounts and other items constituting underwriters'
compensation
- any initial public offering price
- any discounts or concessions allowed or reallowed or paid to dealers
If we use underwriters in the sale, the underwriters will acquire the debt
securities for their own account. The underwriters may resell the securities
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Underwriters may offer securities to the public either
through underwriting syndicates represented by one or more managing underwriters
or directly by one or more firms acting as underwriters. Unless we inform you
otherwise in the prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions, and the
underwriters will be obligated to purchase all the offered securities if they
purchase any of them. The underwriters may change from time to time any initial
public offering price and any discounts or concessions allowed or re-allowed or
paid to dealers.
During and after an offering through underwriters, the underwriters may
purchase and sell the securities in the open market. These transactions may
include over-allotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, whereby selling concessions allowed
to syndicate members or other broker-dealers for the offered securities sold for
their account may be reclaimed by the syndicate if those offered securities are
repurchased by the syndicate in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
offered securities, which may be higher than the price that might otherwise
prevail in the open market. If commenced, these activities may be discontinued
at any time.
If we use dealers in the sale of securities, we will sell the securities to
them as principals. They may then resell those securities to the public at
varying prices determined by the dealers at the time of resale. We will include
in the prospectus supplement the names of the dealers and the terms of the
transaction.
We may sell the securities directly. In that case, no underwriters or
agents would be involved. We may also sell the securities through agents we
designate from time to time. In the prospectus supplement, we will name any
agent involved in the offer or sale of the offered securities, and we will
describe any commissions payable by us to the agent. Unless we inform you
otherwise in the prospectus supplement, any agent will agree to use its
reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or others
who may be deemed to be underwriters within the meaning of the Securities Act of
1933 with respect to any sale of those securities. We will describe the terms of
any such sales in the prospectus supplement.
If we so indicate in the prospectus supplement, we may authorize agents,
underwriters or dealers to solicit offers from certain types of institutions to
purchase securities from us at the public offering price under delayed delivery
contracts. These contracts would provide for payment and delivery on a specified
12
date in the future. The contracts would be subject only to those conditions
described in the prospectus supplement. The prospectus supplement will describe
the commission payable for solicitation of those contracts.
We may have agreements with the agents, dealers and underwriters to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act of 1933, or to contribute to payments that the agents,
dealers or underwriters may be required to make. Agents, dealers and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of their businesses.
LEGAL OPINION
Howard J. Rudge, our General Counsel, or another of our lawyers, will issue
an opinion about the legality of the offered securities for us. Any underwriters
will be advised about other issues relating to any offering by their own legal
counsel.
EXPERTS
The consolidated financial statements of DuPont incorporated in this
prospectus by reference to the Annual Report on Form 10-K/A Amendment No. 1 for
the year ended December 31, 1998, have been so incorporated in reliance on the
report of PricewaterhouseCoopers LLP, independent accountants, given on the
authority of said firm as experts in auditing and accounting.
13
[DUPONT LOGO]
E. I. DU PONT DE NEMOURS
AND COMPANY
DEBT SECURITIES
------------------------
E. I. du Pont de Nemours and Company (the "Company" or "DuPont") may sell
from time to time debt securities (the "Debt Securities") on terms to be
determined at the time of sale, from which the Company will receive up to an
aggregate of $3,442,560,000 in proceeds or, if the principal of the Debt
Securities is payable in a foreign or composite currency, the equivalent thereof
at the time of offering. The specific designation, aggregate principal amount,
designated currency or composite currency, authorized denominations, purchase
price, maturity, rate (which may be fixed or variable) and time of payment of
any interest, any redemption terms, terms for sinking fund payments, and other
specific terms in connection with the offering and sale of Debt Securities, and
any listing on a securities exchange of the Debt Securities in respect of which
this Prospectus is being delivered ("Offered Debt Securities") are set forth in
the accompanying prospectus supplement ("Prospectus Supplement"), together with
the terms of offering of the Offered Debt Securities.
The Debt Securities will be sold through agents designated from time to
time, through underwriters or dealers or directly by the Company. If any agents
of the Company or any underwriters are involved in the sale of the Offered Debt
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and any applicable commissions or discounts are set
forth in the Prospectus Supplement. The net proceeds to the Company from such
sale are also set forth in the Prospectus Supplement.
Debt Securities of a series may be issuable in registered form without
coupons ("Registered Securities"), in bearer form with coupons attached ("Bearer
Securities") or in the form of one or more global securities (each a "Global
Security"). Bearer Securities will be offered only outside the United States and
its possessions to non-United States persons and to offices located outside the
United States and its possessions of certain United States financial
institutions and other exempt persons.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is May 25, 1994
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY AGENT, UNDERWRITER OR DEALER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. THE DELIVERY OF
THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and in accordance therewith files reports and other
information with the Securities and Exchange Commission. Reports, proxy
statements and other information filed by the Company with the Securities and
Exchange Commission can be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: New York
Regional Office, 7 World Trade Center, New York, New York 10048; and Chicago
Regional Office, Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can also be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates. Such reports, proxy statements and other information can also
be inspected at the offices of the New York Stock Exchange Inc., 20 Broad
Street, New York, New York 10005, on which certain of the Company's securities
are listed. This Prospectus does not contain all information set forth in the
Registration Statement and Exhibits thereto, which the Company has filed with
the Commission under the Securities Act of 1933 and to which reference is hereby
made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below heretofore filed with the Securities and
Exchange Commission are incorporated herein by reference.
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1993.
(b) The Company's Current Report on Form 8-K, filed on April 25, 1994.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering of the Debt Securities shall be
deemed to be incorporated by reference in this Prospectus and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein, or contained in the accompanying Prospectus Supplement, 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
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. Any documents
incorporated by reference do not form part of the listing particulars of the
Council of The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited.
THE COMPANY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A
COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF
ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE DOCUMENTS REFERRED TO ABOVE WHICH
HAVE BEEN OR MAY BE INCORPORATED BY REFERENCE IN THIS PROSPECTUS, OTHER THAN
EXHIBITS TO SUCH DOCUMENTS (UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO THE INFORMATION THAT THIS PROSPECTUS INCORPORATES). REQUESTS
FOR SUCH COPIES SHOULD BE DIRECTED TO CAPITAL MARKETS, DUPONT FINANCE, E. I. DU
PONT DE NEMOURS AND COMPANY, 1007 MARKET STREET, WILMINGTON, DELAWARE 19898
(TELEPHONE: 302-774-1000).
2
THE COMPANY
E. I. du Pont de Nemours and Company (the "Company") was founded in 1802
and was incorporated in Delaware in 1915. Its principal executive offices are at
1007 Market Street, Wilmington, Delaware 19898 (telephone: (302) 774-1000).
The Company has five principal business segments -- Chemicals, Fibers,
Polymers, Petroleum and Diversified Businesses. Manufacturing and selling
activities of businesses in the Chemicals, Fibers, Polymers and Diversified
Businesses segments are conducted principally through various operating units.
The Petroleum segment businesses are conducted principally through Conoco Inc.
Other subsidiaries and affiliates also conduct exploration, production,
manufacturing or selling activities, and some are distributors of products
manufactured by the Company.
The Company has approximately 85 businesses that manufacture and sell a
wide range of products to many different markets, including the energy,
transportation, textile, construction, automotive, electronics, printing, health
care, packaging and agricultural markets. The Company and its subsidiaries have
operations in about 70 nations worldwide and, as a result, about 45% of
consolidated revenues are derived from sales outside the United States, based on
the location of the corporate unit making the sale.
RATIO OF EARNINGS TO FIXED CHARGES
THREE MONTHS ENDED
MARCH 31, 1994
------------------
Ratio of Earnings to Fixed 6.2
Charges...........................
YEAR ENDED DECEMBER 31,
-----------------------------------------
1993 1992 1991 1990 1989
---- ---- ---- ---- ----
Ratio of Earnings to Fixed 2.0 2.7 3.5 4.7 6.0
Charges...........................
USE OF PROCEEDS
Except as may otherwise be disclosed in the Prospectus Supplement, the net
proceeds to the Company from the sale of the Debt Securities offered hereby will
be used for general corporate purposes.
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities in any of four ways: (i) through
underwriters or dealers; (ii) directly to one or more purchasers, (iii) to both
investors and dealers through a specific bidding or auction process or
otherwise; or (iv) through agents. The Prospectus Supplement with respect to the
Offered Debt Securities sets forth the terms of the offering of the Offered Debt
Securities, including the name or names of any underwriters, the purchase price
of the Offered Debt Securities and the proceeds to the Company from such sale,
any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers and any securities exchanges on which
the Offered Debt Securities may be listed. If a bidding or auction process is
utilized, it is described in the Prospectus Supplement.
If underwriters are used in the sale, the Debt Securities will be acquired
by the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The Debt
Securities may be offered to the public either through underwriting syndicates
represented by managing underwriters or directly by any underwriters. Unless
otherwise set forth in the Prospectus Supplement, the obligations of the
underwriters to purchase the Offered Debt Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all the
Offered Debt Securities if any are purchased. Any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers may be
changed from time to time.
Offered Debt Securities may be sold directly by the Company or through
agents designated by the Company from time to time. Any agent involved in the
offer or sale of the Offered Debt Securities in respect of which this Prospectus
is delivered will be named, and any commissions payable by the Company
3
to such agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Offered Debt Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions set forth in the
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for the solicitation of such contracts.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain liabilities,
including liabilities under the Securities Act of 1933, or to contribution with
respect to payments which the agents or underwriters may be required to make in
respect thereof. Agents and underwriters may be customers of, engage in
transactions with, or perform services for the Company in the ordinary course of
business.
Each underwriter, dealer and agent participating in the distribution of any
Offered Debt Securities which are issuable in bearer form will agree that it
will not offer, sell or deliver Offered Debt Securities in bearer form within
the United States or to, or for the account or benefit of, United States persons
(other than qualifying financial institutions) (i) until 40 days after the
settlement date or (ii) at any time if the obligation is held as part of an
unsold allotment or subscription (the "Restricted Period").
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued either under an Indenture dated as of
June 1, 1992 between the Company and Bankers Trust Company, as Trustee (the "BT
Indenture") or under an Indenture dated as of June 1, 1992 between the Company
and Chemical Bank, as Trustee (the "Chemical Indenture", and collectively with
the BT Indenture, the "Indenture"), each of which is incorporated or filed as an
exhibit to the Registration Statement, of which this Prospectus is a part, filed
by the Company with the Securities and Exchange Commission. The Trustee will be
designated in the Prospectus Supplement for each series of Debt Securities, and
all references herein to the "Trustee" shall be deemed to mean the Trustee so
identified in such Prospectus Supplement. The following summaries of certain
provisions of the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Indenture, including the definition therein of certain terms.
GENERAL
The Indenture does not limit the amount of Debt Securities which can be
issued thereunder and provides that Debt Securities may be issued thereunder up
to the aggregate principal amount which may be authorized from time to time by
the Company. The Debt Securities will be unsecured and will rank on a parity
with all other unsecured and unsubordinated indebtedness of the Company.
Reference is hereby made to the Prospectus Supplement relating to the
Offered Debt Securities for the terms of such Debt Securities, including, where
applicable: (i) the designation, aggregate principal amount, currency or
currencies and denominations of such Debt Securities; (ii) the price or prices
(expressed as a percentage of the aggregate principal amount thereof) at which
such Debt Securities will be issued; (iii) the date or dates on which such Debt
Securities will mature; (iv) the currency or currencies in which such Debt
Securities are being sold and in which the principal of and any interest on such
Debt Securities will be payable and whether the holder of any such Debt
Securities may elect the currency in which payments thereon are to be made, and,
if so, the manner of such election; (v) the rate or rates (which may be fixed or
variable) per annum at which such Debt Securities will bear interest, if any;
(vi) the date from which such interest on such Debt Securities will accrue, the
dates on which such interest will be payable and the date on which payment of
such interest will commence; (vii) the dates on which and the price or prices at
which such Debt Securities will, pursuant to any mandatory sinking fund
provision, or may, pursuant to any optional redemption or required repayment
provisions, be redeemed or
4
repaid and the other terms and provisions of any such mandatory sinking fund,
optional redemption or required repayment; (viii) whether such Debt Securities
are to be issuable as Registered Securities, Bearer Securities or both and the
terms upon which any Bearer Securities of such series may be exchanged for
Registered Securities of such series; (ix) whether such Debt Securities are to
be issued in whole or in part in the form of one or more Global Securities and,
if so, the identity of the Depositary or Depositaries for such Global Security
or Securities; (x) any special provisions for the payment of additional amounts
with respect to such Debt Securities; (xi) if a temporary Global Security is to
be issued with respect to such series, the requirements for certification of
ownership by non-United States persons that will apply prior to (a) the issuance
of a definitive Bearer Security or (b) the payment of interest on an Interest
Payment Date that occurs before the issuance of a definitive Bearer Security;
(xii) if a temporary Global Security is to be issued with respect to such
series, the terms upon which interests in such temporary Global Security may be
exchanged for interests in a definitive Global Security or for definitive Debt
Securities of the series and the terms upon which interests in a definitive
Global Security, if any, may be exchanged for definitive Debt Securities of the
series; (xiii) any additional restrictive covenants included for the benefit of
holders of such Debt Securities; (xiv) additional Events of Default provided
with respect to such Debt Securities; (xv) if the Debt Securities of such series
are subject to defeasance at the option of the Company, the provisions, Federal
income tax consequences and other considerations applicable thereto; and (xvi)
the designated Trustee for such Debt Securities. (Section 301)
The Debt Securities may be issuable as Registered Securities, Bearer
Securities or both. Debt Securities of a series may be issuable in whole or in
part in the form of one or more Global Securities, as described below under
"Global Securities". Unless the Prospectus Supplement relating thereto specifies
otherwise, Registered Securities denominated in U.S. dollars will be issued only
in denominations of $1,000 or any integral multiple thereof and Bearer
Securities denominated in U.S. dollars will be issued only in the denominations
of $1,000, $10,000, and $100,000. See, however, "Limitations on Issuance of
Bearer Securities" below. One or more Global Securities will be issued in a
denomination or aggregate denominations equal to the aggregate principal amount
of Outstanding Debt Securities of the series to be represented by such Global
Security or Securities. The Prospectus Supplement relating to a series of Debt
Securities denominated in a foreign or composite currency will specify the
denomination thereof and any special U.S. Federal income tax and other
considerations relating thereto. No service charge will be made for any transfer
or exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. (Sections 302 and 305)
At the option of the Holder upon request confirmed in writing, and subject
to the terms of the Indenture, Bearer Securities (with all unmatured coupons,
except as provided below) of any series will be exchangeable into an equal
aggregate principal amount of Registered Securities (if the Debt Securities of
such series are issuable as Registered Securities) or Bearer Securities of the
same series (with the same interest rate and maturity date), but no Bearer
Security will be delivered in or to the United States, and Registered Securities
of any series (other than a Global Security, except as set forth below) will be
exchangeable into an equal aggregate principal amount of Registered Securities
of the same series (with the same interest rate and maturity date) of different
authorized denominations. If a Holder surrenders Bearer Securities in exchange
for Registered Securities between a Regular Record Date or, in certain
circumstances, a Special Record Date, and the relevant interest payment date,
such Holder will not be required to surrender the coupon relating to such
interest payment date. Registered Securities may not be exchanged for Bearer
Securities. (Section 305)
Debt Securities may be presented for exchange, and Registered Securities
(other than a Global Security) may be presented for transfer (with the form of
transfer endorsed thereon duly executed), at the office of any transfer agent or
at the office of the Security Registrar, without service charge and upon payment
of any taxes and other governmental charges as described in the Indenture. Such
transfer or exchange will be effected upon the transfer agent or the Security
Registrar, as the case may be, being satisfied with the documents of title and
identity of the person making the request. (Section 305) Bearer Securities will
be transferable by delivery.
5
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities will be
described in the Prospectus Supplement relating thereto. "Original Issue
Discount Securities" means any Debt Securities that provide for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof upon the occurrence of an Event of Default
and the continuation thereof and any Debt Securities issued with original issue
discount for U.S. Federal income tax purposes. (Section 101)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Securities may be issued in either registered or
bearer form and in either temporary or definitive form. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive form, a Global
Security may not be transferred except as a whole by the Depositary for such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor. (Sections 303 and 305)
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series will be described in the Prospectus Supplement relating
to such series if other than or in addition to the description below. The
Company anticipates that the following provisions will apply to all depositary
arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security will credit, on its book-entry registration and transfer system, the
respective principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such Depositary
("participants"). The accounts to be credited shall be designated by the
underwriters of such Debt Securities, by certain agents of the Company or by the
Company, if such Debt Securities are offered and sold directly by the Company.
Ownership of beneficial interests in a Global Security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary for such Global Security or by participants or persons that hold
through participants. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
owner of such Global Security, such Depositary or such nominee, as the case may
be, will be considered the sole owner or holder of the Debt Securities
represented by such Global Security for all purposes under the Indenture
governing such Debt Securities. Except as set forth below, owners of beneficial
interests in a Global Security will not be entitled to have Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of Debt Securities of
such series in definitive form and will not be considered the owners or holders
thereof under the Indenture governing such Debt Securities. Accordingly, each
person owning a beneficial interest in a Global Security must rely on the
procedures of the Depositary and, if such person is not a participant, on the
procedures of the participant and, if applicable, the indirect participant,
through which such person owns its interest, to exercise any rights of a holder
under the Indenture.
Subject to the restrictions discussed under "Limitations on Issuance of
Bearer Securities" below, principal, premium, if any, and interest payments on
Debt Securities registered in the name of or held by a Depositary or its nominee
will be made to the Depositary or its nominee, as the case may be, as the
registered owner or the holder of the Global Security representing such Debt
Securities. None of the Company, the Trustee for such Debt Securities, any
paying agent or the Security Registrar for such Debt
6
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for Debt Securities of a series,
upon receipt of any payment of principal, premium or interest in respect of a
definitive Global Security, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Security as shown on the records of such
Depositary. The Company also expects that payments by participants to owners of
beneficial interests in such Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name", and will be the responsibility of such participants. Receipt
by owners of beneficial interests in a temporary Global Security of payments in
respect of such temporary Global Security will be subject to the restrictions
discussed under "Limitations on Issuance of Bearer Securities" below.
If a Depositary for Debt Securities of a series is at any time unwilling or
unable to continue as Depositary and a successor Depositary is not appointed by
the Company within 90 days, the Company will issue Debt Securities of such
series in definitive form in exchange for the Global Security or Securities
representing the Debt Securities of such series. In addition, the Company may at
any time and in its sole discretion determine not to have any Debt Securities of
a series represented by one or more Global Securities and, in such event, will
issue Debt Securities of such series in definitive form in exchange for the
Global Security or Securities representing such Debt Securities. Further, an
owner of a beneficial interest in a Global Security representing Debt Securities
of such series may, on terms acceptable to the Company and the Depositary for
such Global Security, receive Debt Securities of such series in definitive form.
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery in definitive form of Debt Securities of
the series represented by such Global Security equal in principal amount to such
beneficial interest and to have such Debt Securities registered in its name (if
the Debt Securities of such series are issuable as Registered Securities). Debt
Securities of such series so issued in definitive form will be issued (a) as
Registered Securities in denominations, unless otherwise specified by the
Company, of $1,000 and integral multiples thereof if the Debt Securities of such
series are issuable as Registered Securities, (b) as Bearer Securities in the
denomination, unless otherwise specified by the Company, of $1,000, $10,000 or
$100,000 if the Debt Securities of such series are issuable as Bearer Securities
or (c) as either Registered or Bearer Securities, if the Debt Securities of such
series are issuable in either form. (Section 305) See, however, "Limitations on
Issuance of Bearer Securities" below for a description of certain restrictions
on the issuance of a Bearer Security in definitive form in exchange for an
interest in a Global Security.
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, and interest on Bearer
Securities will be payable in the currency designated in the Prospectus
Supplement, subject to any applicable laws and regulations, at such paying
agencies outside the United States as the Company may appoint from time to time.
Any such payment may be made, at the option of a Holder, by a check in the
designated currency or by transfer to an account in the designated currency
maintained by the payee with a bank located outside the United States. No
payment with respect to any Bearer Security will be made at the Corporate Trust
Office of the Trustee or any other paying agency maintained by the Company in
the United States nor will any such payment be made by transfer to an account,
or by mail to an address, in the United States. Notwithstanding the foregoing,
payments of principal of and premium, if any, and interest on Bearer Securities
will be made in U.S. dollars at the Corporate Trust Office of the Trustee in The
City of New York if payment of the full amount thereof at all paying agencies
outside the United States is illegal or effectively precluded by exchange
controls or other similar restrictions. (Section 1002)
Payment of principal of and premium, if any, on Registered Securities will
be made in the designated currency against surrender of such Registered
Securities at the Corporate Trust Office of the Trustee in The City of New York.
Unless otherwise indicated in the Prospectus Supplement, payment of any
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installment of interest on Registered Securities will be made to the person in
whose name such Debt Security is registered at the close of business on the
Regular Record Date for such interest. Unless otherwise indicated in the
Prospectus Supplement, payments of such interest will be made at the Corporate
Trust Office of the Trustee in The City of New York, or by a check in the
designated currency mailed to each Holder at such Holder's registered address.
(Sections 307 and 1001)
The paying agents outside the United States initially appointed by the
Company for a series of Debt Securities will be named in the Prospectus
Supplement. The Company may terminate the appointment of any of the paying
agents from time to time, except that the Company will maintain at least one
paying agent in The City of New York for payments with respect to Registered
Securities and at least one paying agent in a city outside the United States so
long as any Bearer Securities are outstanding where Bearer Securities may be
presented for payment and may be surrendered for exchange, provided that so long
as any series of Debt Securities is listed on The International Stock Exchange
of the United Kingdom and the Republic of Ireland Limited or the Luxembourg
Stock Exchange or any other stock exchange located outside the United States and
such stock exchange shall so require, the Company will maintain a paying agent
in London or Luxembourg or any other required city located outside the United
States, as the case may be, for such series of Debt Securities. (Section 1002)
All moneys paid by the Company to a paying agent for the payment of
principal of or premium, if any, or interest on any Debt Security that remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company and the Holder
of such Debt Security or any coupon appertaining thereto will thereafter look
only to the Company for payment thereof. (Section 1003)
CERTAIN COVENANTS OF THE COMPANY
The Company covenants that, so long as any of the Debt Securities remains
outstanding, it will not, nor will it permit any Restricted Subsidiary (as
defined, see "Definition of Certain Terms" below) to issue, assume, or guarantee
any debt for money borrowed (herein referred to as "Debt") if such Debt is
secured by a mortgage on any Principal Property (as defined), or on any shares
of stock or indebtedness of any Restricted Subsidiary (whether such Principal
Property, shares of stock, or indebtedness are now owned or hereafter acquired)
without in any such case effectively providing that the Debt Securities shall be
secured equally and ratably with such Debt. This restriction, however, shall not
apply to: (i) mortgages on property, shares of stock, or indebtedness of any
corporation existing at the time such corporation becomes a Restricted
Subsidiary; (ii) mortgages on property existing at the time that it is acquired,
or to secure Debt incurred for the purpose of financing the purchase price of
such property or improvements or construction on the property, which Debt is
incurred prior to, at the time of or within one year after such acquisition,
completion of such construction, or the commencement of commercial operation of
such property thereon; (iii) mortgages securing Debt owing by any Restricted
Subsidiary to the Company or another Restricted Subsidiary; (iv) mortgages on
property of a corporation existing at the time such corporation is merged into
or consolidated with the Company or a Restricted Subsidiary or at the time of a
sale, lease or other disposition of the properties of a corporation as an
entirety or substantially as an entirety to the Company or a Restricted
Subsidiary; (v) mortgages on property of the Company or a Restricted Subsidiary
in favor of the United States of America or any State thereof, or any
department, agency or instrumentality or political subdivision of the United
States of America or any State thereof or in favor of any other country, or any
political subdivision thereof, to secure certain payments pursuant to any
contract or statute or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of construction of
the property subject to such mortgages (including without limitation mortgages
incurred in connection with pollution control, industrial revenue or similar
financings); (vi) mortgages existing at the date of the Indenture; (vii)
mortgages on particular property (or any proceeds of the sale thereof) to secure
all or any part of the cost of exploration, drilling, mining or development
thereof (including construction of facilities for field processing of minerals)
intended to obtain or materially increase the production and sale or other
disposition of oil, gas, coal, uranium, copper or other minerals therefrom, or
any indebtedness created, issued, assumed or guaranteed to provide funds
8
for any or all such purposes; or (viii) any extension, renewal or replacement
(or successive extensions, renewals or replacements), in whole or in part, of
any mortgage referred to in the foregoing clauses (i) through (vii) inclusive.
Notwithstanding the above, the Company and one or more Restricted Subsidiaries
may, without securing the Debt Securities, issue, assume, or guarantee secured
Debt which would otherwise be subject to the above restrictions, provided that
the aggregate amount of such Debt which would then be outstanding (not including
secured Debt permitted under the foregoing exceptions) and the aggregate
Attributable Debt (as defined) of sale and leaseback transactions subject to the
restrictions described in the second following paragraph and in existence at
such time (not including any sale and leaseback transaction as to which the
Company has complied with clause (b) of such paragraph) does not at any one time
exceed 10% of the Consolidated Net Tangible Assets (as defined) of the Company
and its consolidated Subsidiaries. (Section 1004)
For the purposes of the foregoing covenant, the following types of
transactions shall not be deemed to create Debt secured by a mortgage: the sale
or other transfer of (i) oil, gas, coal, uranium, copper or other minerals in
place for a period of time until, or in an amount such that, the purchaser will
realize therefrom a specified amount of money (however determined) or a
specified amount of such minerals or (ii) any other interest in property of the
character commonly referred to as a "production payment". (Section 1004)
Sale and leaseback transactions by the Company or any Restricted Subsidiary
of any Principal Property are prohibited unless (a) the Company or such
Restricted Subsidiary would be entitled (pursuant to the provisions of the
second preceding paragraph) to issue, assume, or guarantee Debt secured by the
property involved at least equal in amount to the Attributable Debt (as defined)
in respect of such transaction without equally and ratably securing the Debt
Securities or (b) an amount equal to such Attributable Debt is applied to the
retirement of nonsubordinated Debt of the Company or a Restricted Subsidiary
which by its terms matures at or is extendible or renewable at the option of the
obligor to a date more than twelve months after the creation of such Debt.
(Section 1005)
The Company will not consolidate or merge with or dispose of all or
substantially all of its property to any corporation unless the surviving
corporation (if other than the Company) shall assume the obligations of the
Company under the Indenture and under the Debt Securities. (Section 801) If on
any consolidation or merger of the Company or any Restricted Subsidiary with or
into any other corporation, or on any sale, conveyance, or lease of
substantially all its properties, any Principal Property or any shares of stock
or indebtedness of any Restricted Subsidiary would then become subject to any
mortgage, pledge, security interest, or other lien or encumbrance, the Company,
prior to such event, will secure the Debt Securities by a direct lien on such
Principal Property, shares of stock or indebtedness, prior to all liens other
than any previously existing. (Section 802)
Except for the limitations on secured debt and sale and leaseback
transactions described above, the Indenture and Debt Securities do not contain
any covenants or other provisions designed to afford holders of the Debt
Securities protection in the event of a highly leveraged transaction involving
the Company.
DEFINITION OF CERTAIN TERMS
"Subsidiary" is defined to mean any corporation which is consolidated in
the Company's accounts and any corporation of which at least a majority of the
outstanding stock having voting power under ordinary circumstances to elect a
majority of the board of directors of said corporation shall at the time be
owned or controlled by the Company or by the Company and one or more
Subsidiaries or by one or more Subsidiaries. (Section 101)
"Restricted Subsidiary" is defined to mean any wholly-owned Subsidiary (i)
substantially all the property of which is located within the continental United
States of America, (ii) which owns a Principal Property, and (iii) in which the
Company's investment exceeds 1% of the consolidated assets of the Company as of
the end of the last preceding year; provided, however, that the term "Restricted
Subsidiary" does not include any wholly-owned Subsidiary which is principally
engaged in leasing or in
9
financing installment receivables or which is principally engaged in financing
the Company's operations outside the continental United States. (Section 101)
"Principal Property" is defined as any manufacturing plant or facility or
any mineral producing property or any research facility located within the
continental United States of America owned by the Company or any Restricted
Subsidiary, unless, in the opinion of the Board of Directors, such plant,
facility, property or research facility is not of material importance to the
total business conducted by the Company and its Restricted Subsidiaries.
(Section 101)
"Attributable Debt" is defined as the present value (discounted as provided
in the Indenture) of the obligation of a lessee for rental payments during the
remaining term of any lease. (Section 1005)
"Consolidated Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities (excluding any thereof which are by their
terms extendible or renewable at the option of the obligor thereon to a time
more than 12 months after the time as of which the amount thereof is being
computed), and (b) all goodwill, trade names, trademarks, patents, purchased
technology, unamortized debt discount and other like intangible assets, all as
set forth on the most recent quarterly balance sheet of the Company and its
consolidated Subsidiaries and computed in accordance with generally accepted
accounting principles. (Section 101)
MODIFICATION OF THE INDENTURE
The Indenture permits the Company and the Trustee, with the consent of the
holders of not less than a majority in principal amount of the Debt Securities
at the time outstanding thereunder and affected thereby, to execute a
supplemental indenture modifying the Indenture or the rights of the holders of
such Debt Securities and any related coupons, provided that no such modification
shall, without the consent of the holder of each Debt Security affected thereby,
(i) change the maturity of any Debt Security or coupon, or reduce the principal
amount thereof, or reduce the rate or change the time of payment of interest
thereon, or change any Place of Payment or change the coin or currency in which
a Debt Security or coupon is payable or impair the right of any holder to
institute suit for the enforcement of payment in accordance with the foregoing,
or (ii) reduce the aforesaid percentage of Debt Securities, the consent of the
holders of which is required for any such modification. (Section 902)
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series. (Section 1401) A meeting may be called at any time
by the Trustee or upon the request of the Company or the Holders of at least 10%
in principal amount of the outstanding Debt Securities of such series, in any
such case upon notice given in accordance with the Indenture. (Section 1402)
Except as limited by the proviso in the preceding paragraph, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may be
adopted by the affirmative vote of the Holders of not less than a majority in
principal amount of the outstanding Debt Securities of that series; provided,
however, that, except as limited by the proviso in the preceding paragraph, any
resolution with respect to any demand, consent, waiver or other action that may
be made, given or taken by the Holders of a specified percentage, which is less
than a majority in principal amount of outstanding Debt Securities of a series,
may be adopted at a meeting or adjourned meeting at which a quorum is present by
the affirmative vote of the Holders of such specified percentage in principal
amount of the outstanding Debt Securities of that series. (Section 1403)
Any resolution passed or decision taken at any meeting of Holders of Debt
Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series and the related
coupons. The quorum at any meeting called to adopt a resolution, and at any
reconvened meeting, will be persons holding or representing not less than a
majority in principal amount of the outstanding Debt Securities of a series.
(Section 1403)
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EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of
Debt Securities as being any one of the following events and such other event as
may be established for the Debt Securities of a particular series: (a) default
for 30 days in any payment of interest on such series; (b) default in any
payment of principal, and premium, if any, on such series; (c) default in the
payment of any sinking fund installment; (d) default for 60 days after
appropriate notice in performance of any other covenant in the Indenture; or (e)
certain events involving bankruptcy, insolvency or reorganization. No Event of
Default with respect to a particular series of Debt Securities issued under the
Indenture necessarily constitutes an Event of Default with respect to any other
series of Debt Securities issued thereunder. (Section 501) The Company is
required to file with the Trustee annually an Officer's Certificate indicating
whether the Company is in default under the Indenture. (Section 1008)
The Indenture provides that if an Event of Default specified therein shall
occur and be continuing with respect to any series of Debt Securities, either
the Trustee or the Holders of 25% in principal amount of the Debt Securities of
such series (in the case of defaults under clauses (d) and (e), the Holders of
25% in principal amount of all the Debt Securities) then outstanding may declare
the principal (or in the case of Original Issue Discount Securities, such
portion of the principal amount thereof as may be specified in the terms
thereof) of the Debt Securities of such series (or of all the Debt Securities,
as the case may be) to be due and payable. (Section 502) In certain cases, the
Holders of a majority in principal amount of the outstanding Debt Securities of
any series (or in the case of defaults under clauses (d) and (e), the Holders of
a majority in principal amount of all the Debt Securities) may on behalf of the
Holders of all the Debt Securities of any such series (or of all the Debt
Securities, as the case may be) and any related coupons waive any past default
or event of default except a default not theretofore cured in payment of the
principal of or premium, if any, or interest on any of the Debt Securities of
such series (or of all the Debt Securities, as the case may be) and any related
coupons. (Sections 502 and 513)
The Indenture contains a provision entitling the Trustee, subject to the
duty of the Trustee during default to act with the required standard of care, to
be indemnified by the Holders of the Debt Securities of any series or any
related coupons before proceeding to exercise any right or power under the
Indenture with respect to such series at the request of such Holders. (Section
603) The Indenture provides that no Holder of any Debt Securities of any series
or any related coupons may institute any proceeding, judicial or otherwise, to
enforce such Indenture except, among other things, where the Trustee has, for 60
days after it is given notice of default, failed to act, and where there has
been both a request to enforce such Indenture by the Holders of not less than
25% in aggregate principal amount of the then outstanding Debt Securities of
such series and an offer of reasonable indemnity to the Trustee. (Section 507)
This provision will not prevent any Holder of Debt Securities or any related
coupons from enforcing payment of the principal thereof and premium, if any, and
interest thereon at the respective due dates thereof. (Section 508) The Holders
of a majority in aggregate principal amount of the Debt Securities of any series
then outstanding may direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any trust or
power conferred on it with respect to the Debt Securities of such series.
However, the Trustee may refuse to follow any direction that conflicts with law
or the Indenture or which would be unjustly prejudicial to Holders not joining
therein. (Section 512)
The Indenture provides that the Trustee will, within 90 days after the
occurrence of a default with respect to any series of Debt Securities known to
it, give to the Holders of Debt Securities of such series notice of such default
if not cured or waived, but, except in the case of a default in the payment of
principal of (or premium, if any), or interest on, any Debt Securities, the
Trustee shall be protected in withholding such notice if it determines in good
faith that the withholding of such notice is in the interests of the Holders of
such Debt Securities. (Section 602)
DISCHARGE AND DEFEASANCE
The Indenture provides that the Company may specify that, with respect to
the Debt Securities of a certain series, it will be discharged from any and all
obligations in respect of such Debt Securities (except
11
for certain obligations to register the transfer or exchange of Debt Securities,
to replace stolen, lost or mutilated Debt Securities, to maintain paying
agencies and hold monies for payment in trust and, if so specified with respect
to the Debt Securities of a certain series, to pay the principal of (and
premium, if any) and interest, if any, on such specified Debt Securities) upon
the irrevocable deposit with the Trustee, in trust, of money and/or U.S.
Government Obligations which through the payment of interest and principal
thereof in accordance with their terms will provide money in an amount
sufficient to pay any installment of principal (and premium, if any) and
interest, if any, on and any mandatory sinking fund payments in respect of such
Debt Securities on the stated maturity of such payments in accordance with the
terms of the Indenture and such Debt Securities. If so specified with respect to
the Debt Securities of a series, such a trust may only be established if
establishment of the trust would not cause the Debt Securities of any such
series listed on any nationally recognized securities exchange to be de-listed
as a result thereof. Also, if so specified with respect to a series of Debt
Securities, such establishment of such a trust may be conditioned on the
delivery by the Company to the Trustee of an Opinion of Counsel (who may be
counsel to the Company) to the effect that, based upon applicable U.S. Federal
income tax law or a ruling published by the United States Internal Revenue
Service, such a defeasance and discharge will not be deemed, or result in, a
taxable event with respect to Holders of such Debt Securities. The designation
of such provisions, U.S. Federal income tax consequences and other
considerations applicable thereto will be described in the Prospectus Supplement
relating thereto. (Section 1301)
TRUSTEE'S RELATIONSHIP WITH ISSUER
Chemical Bank will act as Trustee for Debt Securities issued under the
Chemical Indenture. Chemical Bank acts as depositary for funds of, makes loans
to, and performs other services for the Company in the normal course of
business. It also acts as trustee for the Company's Medium-Term Notes Series C,
Euro Medium-Term Notes Series C, Medium-Term Notes Series D, Euro Medium-Term
Notes Series D, Medium-Term Notes Series E, Euro Medium-Term Notes Series E,
8.45% Notes Due October 15, 1996, 8.65% Notes Due 1997, 9.15% Notes Due 2000, 6%
Debentures Due 2001, 8.50% Notes Due February 15, 2003, 8.125% Notes Due March
15, 2004, 8.25% Notes Due September 15, 2006, and 8 1/4% Debentures Due 2022. It
also acts as fiscal agent for the Company's 9% Notes Due 1994.
Bankers Trust Company will act as Trustee for Debt Securities issued under
the BT Indenture and may act as underwriter or agent (through an affiliate) with
respect to securities of the Company. Bankers Trust Company acts as depositary
for funds of, makes loans to, and performs other services for the Company in the
normal course of business. It also acts as trustee for the Company's Medium-Term
Notes Series F, 6 3/4% Notes Due 2002, 7.95% Debentures Due 2023, and 7 1/2%
Debentures Due 2033. It also acts as fiscal agent for the Company's 8 1/2% Notes
Due 1996, 8 1/2% Notes Due 1998, 7 1/2% Notes Due 1999, and 8% Notes Due 2002.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States Federal tax laws and regulations, in
general Bearer Notes may not be offered or sold during the Restricted Period (as
defined under "Plan of Distribution") to a person within the United States or
its possessions or to or for the account or benefit of, a United States person.
However, offers or sales can be made to (i) the U.S. office of international
organizations (as defined in Section 7701(a)(18) of the U.S. Internal Revenue
Code of 1986, as amended (the "Code") and the regulations thereunder), (ii) the
U.S. office of foreign central banks (as defined in Section 895 of the Code and
the regulations thereunder) and (iii) foreign branches of United States
financial institutions which are purchasing for their own account or for resale,
and which have agreed to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the Code. In addition, sales can be made to a United States person
acquiring a Bearer Note through a financial institution described in clause
(iii) of the preceding sentence. Definitive Bearer Notes will not be delivered
within the United States, or in any event unless the beneficial owner of the
Notes had complied with the certification requirements described above under
"Description of Debt Securities -- General".
12
Bearer Notes will bear the following legend on their face and on any
interest coupons which may be detached therefrom or, if the obligation is
evidenced by a book entry, appears in the book of record in which the book entry
is made: "Any United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the limitations
provided in Sections 165(j) and 1287(a) of the United States Internal Revenue
Code". The Sections referred to in such legend provide that a United States
person who holds a Bearer Note will not be allowed to deduct any loss realized
on the sale, exchange or redemption of such Bearer Note and any gain (which
might otherwise be characterized as capital gain) recognized on such sale,
exchange or redemption will be treated as ordinary income.
As used herein, "United States person" means an individual who is a citizen
or resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source.
EXPERTS
The consolidated financial statements of E. I. du Pont de Nemours and
Company incorporated in this Prospectus by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1993, have been so
incorporated in reliance on the report of Price Waterhouse, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
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