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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[X] Soliciting Material under Section 240.14a-12
CONOCO INC.
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The following segment was posted on July 18, 2001 on Conoco's Pathfinder
Intranet site regarding the proposed combination of Conoco's Class A common
stock and Class B common stock into a single class of new common stock on a
one-for-one basis.
Conoco's Board of Directors has approved, and recommended to stockholders for
approval, a proposal to eliminate Conoco's dual-class capital structure by
combining the company's Class A common stock and Class B common stock into a
single class of new common stock. Click here for the news release and a Q&A on
how this will affect Conoco's compensation and benefits plans.
Conoco News Release
Conoco to Combine its Class A and Class B Shares
into a New, Single Class of Common Stock
HOUSTON (July 17, 2001) -- Conoco Inc. (NYSE: COC.A) (NYSE COC.B) today
announced that its Board of Directors has approved, and recommended to the
stockholders for approval, the elimination of Conoco's dual class capital
structure by combining the company's Class A common stock and Class B common
stock into a single class of new common stock on a one-for-one basis.
The transaction is subject to the approval of Conoco Class A stockholders and
Class B stockholders voting together as a single class, and to the approval of
the Class B stockholders voting as a separate class. The current dual class
structure was established in connection with Conoco's 1998 initial public
offering (IPO) of Class A common stock. At the time of the IPO, Conoco's former
sole stockholder, E.I. du Pont de Nemours and Company, retained ownership of all
of the Class B common stock, representing approximately 92 percent of the voting
power and 70 percent of all outstanding Conoco stock. Such Class B common stock
was subsequently distributed to the DuPont stockholders.
DuPont received a ruling from the Internal Revenue Service that the distribution
would be tax free to DuPont and its stockholders. DuPont recently received a
supplemental ruling from the Internal Revenue Service confirming that the
proposed combination will not affect the prior letter ruling.
"Having a single publicly traded class of common stock will eliminate the
confusion that resulted from the dual class structure, and will end trading
disparities that existed between the Class A and Class B stock," said Conoco
Chairman and CEO Archie Dunham. "This also is expected to increase the overall
liquidity of Conoco's common stock."
After the transaction, the holders of the new common stock will have one vote
per share on all matters submitted to a stockholder vote. Class B stockholders
currently have five votes per share.
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Conoco intends to call a special meeting as soon as practicable to obtain the
approval of its stockholders. A complete description of the proposal will be
included in the proxy statement for the special meeting, and stockholders are
encouraged to read the proxy statement before making any decision with respect
to the proposal.
Conoco is a major, integrated energy company headquartered in Houston and active
in more than 40 countries.
# # #
07/17/01
Note: Conoco will file the proxy statement for the special meeting with the
Securities and Exchange Commission. Conoco urges its stockholders to read the
proxy statement because it will contain important information about the proposal
and the interests of the participants in the solicitation of proxies. A free
copy of the proxy statement (when it is available) and other documents filed
electronically by Conoco with the SEC can be obtained at the SEC's website at
http://www.sec.gov. Conoco stockholders may also obtain a free copy of the proxy
statement (when it is available) and these other documents by directing requests
to Conoco, Attention: Shareholder Relations Department.
This release contains "forward-looking statements", as defined in the U.S.
Private Securities Litigation Reform Act of 1995. Specifically, statements that
are not historical facts, including statements accompanied by words such as
"believe," "expect," "estimate," "intend," or "plan" are intended to identify
forward-looking statements and convey the uncertainty of future events or
outcomes. These statements are not guarantees of future performance, involve
certain risks, uncertainties, and assumptions that are difficult to predict, and
are based upon assumptions as to future events that may not prove accurate.
Therefore, actual outcomes and results may differ materially from what is
expressed herein. Among the factors that could cause such differences include,
but are not limited to: risks associated with implementing the combination;
risks that the stockholders of the company may not approve and/or the company
may not implement the combination; and risks associated with the company's
inability to predict the effect of the proposal or its enactment on the prices
of either its Class A common stock or its Class B common stock or the new common
stock to be issued.
Questions and Answers
Q - How does this affect Conoco stock options and "Shares" held by Conoco
employees?
A - If the proposal is approved by shareholders, your options will be exchanged
on a one-for-one basis regardless of whether your current options are for Class
A or Class B stock. For example, if you have options to purchase 100 shares of
Class A stock and 100 shares of Class B stock, you will receive in exchange
options to purchase 200 shares of
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the converted Conoco stock. All terms and conditions for each group of options
held -- such as expiration date, strike price, any price hurdles, etc. -- will
remain the same.
Q - How does this affect the number of shares of stock in my Thrift Plan
account?
A - If the proposal is approved by shareholders, for each share of Class A
stock or Class B stock held in the Conoco Thrift Plan or the Retail Thrift Plan,
your account will receive one new share of the converted Conoco stock. For
example, if your account has 100 shares of Class A stock and 100 shares of Class
B stock, they will be replaced with 200 shares of the converted stock. This is
the same way it will be handled outside the Thrift Plan.
Q - How does this affect the value of the stock in my Thrift Plan account?
A - The value of the converted stock will be worth the number of shares you
have at the time of the exchange multiplied by the price at which the converted
stock trades on the New York Stock Exchange, the same as outside the Thrift
Plan.
Q - When will the exchange take place in my Thrift Plan account?
A - If the proposal is approved by shareholders, it will take place at the same
time that the exchange is made for all other Conoco stockholders. The exchange
will occur after a shareholder vote on the proposal to convert the two classes
of Conoco stock into a single class of stock (see questions below).
Q - The news release said this change is subject to a vote of Conoco Class A
and Class B stockholders. How will the voting process be handled, and when will
it occur?
A - Shareholders will receive by mail a proxy statement that contains the
proposal relating to the conversion of the two classes of Conoco stock into a
single class of stock. Shareholders can mail in their vote (voting by proxy), or
they can cast their vote at a special meeting of shareholders that is expected
to take place in Houston sometime in the fall.
Members of the Conoco Thrift Plan or the Retail Thrift Plan who have Conoco A
or Conoco B stock as part of their accounts also will receive by mail the same
proxy statement. Members who hold Conoco stock will be able to direct the
Trustee of the Plans as to the way in which the Trustee should vote the stock
allocated to their accounts. An independent fiduciary will be appointed to
determine how to direct the Trustee to vote any Conoco A or Conoco B stock held
in either Thrift Plan, but for which no voting direction is received from the
Plan member. Persons holding options under the Conoco "Shares" program and the
company's other stock options plans will not have any option-related voting
rights with regard to this proposal.
Q - If shareholders approve the proposal, how soon after the vote will the A
and B classes of stock go away?
A - The two classes of stock are expected to go away shortly - within a matter
of days.