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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
OPTIMUM QUALITY GRAINS, LLC RETIREMENT AND SAVINGS PLAN
(FULL TITLE OF THE PLAN)
E. I. DU PONT DE NEMOURS AND COMPANY
1007 MARKET STREET WILMINGTON,
DELAWARE 19898
(NAME AND ADDRESS OF PRINCIPAL EXECUTIVE OFFICE OF ISSUER)
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Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Administrative Committee formed under the Optimum Quality Grains, LLC Retirement
and Savings Plan has duly caused the Annual Report to be signed by the
undersigned hereunto duly authorized.
Qptimum Quality Grains LLC
Retirement and Savings Plan
Dated: June 29, 2001
By: /s/ Nancy Betz
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Nancy Betz
Director of Human Resources
Optimum Quality Grains, LLC
Retirement and Savings Plan
Index to Financial Statements and Supplemental Schedule
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Page(s)
Report of Independent Accountants 1
Financial Statements:
Statements of Net Assets Available for Benefits at December 31, 2000 and 1999 2
Statements of Changes in Net Assets Available for Benefits for the Years Ended
December 31, 2000 and 1999 3
Notes to Financial Statements 4-10
Supplemental Schedule*:
Schedule of Assets (Held at End of Year) 11
* Other schedules required by Section 2520.103-10 of the Department of Labor
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
applicable.
Report of Independent Accountants
To the Administrator and Participants
of the Optimum Quality Grains, LLC
Retirement and Savings Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Optimum Quality Grains, LLC Retirement and Savings Plan (the "Plan") at
December 31, 2000 and 1999 and the changes in net assets available for benefits
for the years then ended, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statements
presentation. We believe that our audits provide a reasonable basis for our
opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. The
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
June 22, 2001
Optimum Quality Grains, LLC
Retirement and Savings Plan
Statements of Net Assets Available for Benefits
December 31, 2000 and 1999
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2000 1999
Assets:
Investments:
Plan interest in DuPont and Related Companies
Defined Contribution Plan Master Trust $ 2,624,076 $ 2,126,313
Company stock funds 818,533 820,708
Mutual funds 5,961,891 5,977,294
Common/collective trust funds 1,295,340 2,072,631
Short-term investments and cash 10 788
Participant loans 134,976 142,983
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Total investments 10,834,826 11,140,617
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Receivables:
Participants' contributions 32,896 32,554
Employer's contributions 10,922 44,640
Investment income 5,851 4,685
Investment securities sold 24,616 -
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Total receivables 74,285 81,879
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Net assets available for benefits $ 10,909,111 $ 11,222,496
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The accompanying notes are an integral part of these financial statements.
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 2000 and 1999
2000 1999
Additions:
Investment income:
Net (depreciation) appreciation in fair value of investments $(1,504,881) $ 1,852,553
Interest and dividend income 572,560 472,230
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(932,321) 2,324,783
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Contributions:
Participant 727,341 677,602
Employer 553,257 791,806
Other - 10
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1,280,598 1,469,418
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Total additions 348,277 3,794,201
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Deductions:
Benefits paid to participants (661,662) (1,153,479)
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Net (decrease) increase (313,385) 2,640,722
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Net assets available for benefits:
Beginning of year 11,222,496 8,581,774
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End of year $10,909,111 $ 11,222,496
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The accompanying notes are an integral part of these financial statements.
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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1. Description of the Plan
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all
employees of Optimum Quality Grains, LLC (the "Company"), a wholly-owned
subsidiary of E.I. du Pont de Nemours and Company ("DuPont"). The Plan was
established on January 1, 1998 through asset transfers of $3,612,684 from
the Savings and Investment Plan of E.I. du Pont de Nemours and Company and
$2,827,047 from the Pioneer Hi-bred International Retirement Plan. The Plan
is subject to the Employee Retirement Income Security Act of 1974 ("ERISA")
and the Internal Revenue Code ("IRC").
Contributions
Participants authorize payroll deductions which are contributed to the Plan
and credited to their individual accounts. Participant contributions are
limited to a maximum of 16% of a participant's earnings, as defined.
Participants may also contribute amounts representing rollovers from other
qualified retirement plans.
The Company makes matching contributions in the amount of 50% of all
participant contributions up to 6% of the participant's earnings, as
defined. Company contributions are invested in accordance with the
participant's investment elections. The Company also makes a discretionary
monthly profit sharing contribution to participants in an amount equal to
6% of a participant's earnings, as defined. There were no discretionary
profit sharing contributions for the year ended December 31, 2000. For the
year ended December 31, 1999, discretionary profit sharing contributions
were $581,306.
Participant Accounts
Each participant's account is credited with the participant's contributions
and allocations of the Company's contributions and Plan earnings.
Allocations are based on account balances as defined. The benefit to which
a participant is entitled is the benefit that can be provided from the
participant's vested account.
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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Eligibility and Vesting
Employees are eligible to participate in the plan on the first day of the
month following the date on which they have completed at least 1,000 hours
of service in a 12-consecutive-month period and are qualified employees, as
defined. Participants are 100% vested in their contributions. Participants
are 100% vested in all of their accounts, including Company contributions
and profit sharing contributions, if they retire from Optimum after
reaching age 65 or if their employment terminates because of death or
disability. If participants leave Optimum under any other circumstances,
they are entitled to the vested percentage of their company contributions,
profit sharing contributions and earnings on those contributions as
follows:
Vested
Years of Service Percent
1 - 2 20%
2 - 3 40%
3 - 4 60%
4 - 5 80%
5 or more 100%
Participant Loans
Participants may borrow from their accounts, a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account
balance. Loan terms shall not exceed 5 years, unless the loan is for the
purchase of a primary residence, then it shall not exceed 10 years. The
loans are collateralized by the balance in the participant's account and
bear interest at the average rate for secured personal loans in effect
at five banks on the last working day of the month preceding the date on
which the loan application was made. Principal and interest are paid
ratably through payroll deductions.
Payment of Benefits
A participant may make three withdrawals in a calendar year, withdrawing
all or a portion of his or her account balance, except the portion
attributable to pre-tax contributions allocated to the participant's loan
account. If a participant is under age 59 1/2, a withdrawal may be made
from the participant's pre-tax contributions and earnings account without
penalty only if a financial hardship is demonstrated.
If a participant's employment terminates due to the participant's death,
total and permanent disability or retirement, the participant or the
participant's beneficiary is entitled to receive the vested balance of the
participant's accounts in a single lump-sum distribution.
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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Administrative Expenses
Reasonable expenses of administering the Plan, at the election of the Plan
Committee, may be paid by the Plan. For the years ended December 31, 2000
and 1999, the Company paid all administrative expenses of the Plan.
Brokerage fees, transfer taxes, investment fees and other expenses incident
to the purchase and sale of securities and investment shall be included in
the cost of such securities or investments or deducted from the sales
proceeds.
Forfeited Accounts
At December 31, 1999 and 2000, forfeited nonvested accounts totaled $19,377
and $7,481, respectively. These accounts can be used to reduce future
employer contributions. Also, in 2000 and 1999, employer contributions were
reduced by $30,832 and $7,194, respectively, from forfeited nonvested
accounts.
2. Significant Accounting Policies
Basis of Accounting
The financial statements have been prepared on the accrual basis of
accounting.
Investment Valuation and Income Recognition
The investments of the Plan are carried at fair value, except for the
Plan's interest in the DuPont and Related Companies Defined Contribution
Plan Master Trust ("Master Trust"). The Plan's interest in the Master Trust
relating to investment contracts, is based upon its beginning value plus
actual contributions and allocated investment income less actual
distributions (see Note 4). The Master Trust's investment contracts are
fully benefit responsive and thus, are stated at contract value. Shares of
the asset allocation portfolios, included in the Master Trust are valued at
net unit value as determined by the trustee at year end. Shares of
registered investment companies (mutual funds) are valued at quoted market
prices which represent the net asset value of shares held by the Plan at
year end. Share of common/collective trust funds are valued at net unit
value as determined by the trustee at year end. Company stock funds are
valued at net unit values based upon the quoted market price of shares at
year end. Participant loans and short-term investments are valued at cost
which approximates fair value.
Purchases and sales of investments are recorded on the trade-date. Dividend
income is recorded on the ex-dividend date. Interest income is accrued when
earned.
Payment of Benefits Benefits are recorded when paid.
Use of Estimates
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States of America requires the
Plan's management to make estimates and assumptions that affect the
reported amounts in the financial statements. Actual results could differ
from those estimates.
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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3. Investments
Investments that represent more than 5% of the net assets available for
benefits as of December 31, 2000 and 1999 were as follows:
2000 1999
DuPont Company Stock Fund $ 789,756 $ 777,427
Aggressive Asset Allocation Portfolio - 735,200
Franklin Small Cap Growth Fund Class I 624,512 768,261
Janus Mercury Fund 849,061 1,043,444
Merrill Lynch Equity Index Trust Tier 6 892,143 884,201
Plan interest in DuPont and Related Companies
Defined Contribution Plan Master Trust 2,624,076 2,126,313
During the years ended December 31, 2000 and 1999, the Plan's investments
appreciated (depreciated) (including realized gains and losses) in value as
follows:
2000 1999
Company stock funds $ (196,689) $ 208,047
Mutual funds (1,276,269) 1,321,441
Common/collective trust funds (104,033) 323,065
Master Trust 72,110 --
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Net appreciation (depreciation) $(1,504,881) $ 1,852,553
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4. DuPont and Related Companies Defined Contribution Plan Master Trust
On April 1, 1999, the Company and certain affiliates (as employers) entered
into a Master Trust Agreement with Merrill Lynch Trust Company of America
("Trustee") to establish a master trust to allow participants from
affiliated plans to invest in a Stable Value Fund and three different Asset
Allocation Funds: the Conservative, the Moderate and the Aggressive. Prior
to April 1, 1999, the Stable Value Fund and Asset Allocation Funds were
separate investment options of the Plan. To participate in the Master
Trust, affiliates who sponsor qualified savings plans and who have adopted
the Master Trust Agreement are required to make monthly payments to the
Trustee of designated portions of employees' savings and other payments to
the Trustee of designated portions of employees' savings and other
contributions by the affiliate. The Plan's undivided interest in the Master
Trust was .038% and .053% as of December 31, 2000 and 1999, respectively.
Investment income relating to the Master Trust is allocated
proportionately, by investment fund, to the plans within the Master Trust
based on the plan's interest to the total fair value of the Master Trust.
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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The Stable Value Fund is invested in guaranteed investment contracts,
separate account portfolios, synthetic guaranteed investment contracts and
money market funds. The interest rates on investment contracts ranged from
5.83% to 8.50% and 5.41% to 9.60% for the years ended December 31, 2000 and
1999, respectively. The blended rate of return was 6.72% in 2000 and 7.05%
in 1999.
The interest rates for certain investment contracts are reset annually and
are based on the market value of the underlying portfolio of assets backing
these contracts. Inputs used to determine the crediting rate include each
contract's portfolio market value, current yield-to-maturity, duration
(i.e., weighted average life) and market value relative to contract value.
All contracts have a guaranteed rate of 0% or higher with respect to
interest rate resets.
A synthetic guaranteed investment contract provides for a guaranteed return
on principle over a specified period of time through the use of underlying
assets and a benefit responsive wrapper contract issued by a third party.
Included in the contract value of synthetic guaranteed investment contracts
is $(61,031,076) and $60,029,739 at December 31, 2000 and 1999,
respectively, attributable to wrapper contract providers representing the
amounts by which the value of contracts are greater than or (less than) the
value of the underlying assets.
The Asset Allocation Funds invest in money market funds, common/collective
trust funds and Stable Value Fund assets.
Assets of the Master Trust include:
December 31,
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2000 1999
Investment Contracts $ 5,134,555,882 $ 5,569,282,564
Common/Collective Trust Funds 25,007,540 -
Money Market Funds 31,437,135 45,408,849
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Total $ 5,191,000,557 $ 5,614,691,413
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-8-
Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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Investments of the Master Trust that represent more than 5% of the assets
of the Master Trust were as follows:
December 31,
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2000 1999
Investment Contracts:
Bankers Trust $ - $ 323,423,566
Aetna Life and Annuity 356,648,682 335,052,829
Peoples Security 301,118,125 282,136,014
CDC Financial 336,220,628 313,990,127
Deutsche Bank (DUP-1) 330,341,799 309,537,018
Deutsche Bank (PIM-DUP-1) 273,816,467 328,679,231
Deutsche Bank (PIM-DUP-2) 347,269,727 -
JP Morgan (95-04) 320,535,834 301,786,966
JP Morgan (95-12) 353,745,646 332,976,797
Metropolitan Life 412,600,954 387,590,206
Union Bank of Switzerland 416,151,942 389,800,804
Peoples Security (BDA-0063-TR) - 334,215,802
Principal Life 280,402,889 -
Monumental Life Insurance Co. 356,840,431 -
At December 31, 2000 and 1999, the total assets of the Master Trust of
$5,191,000,557 include participant investments in the Stable Value Fund of
$5,144,944,410 and participant investments of $46,056,147 held by the
Conservative, Moderate and Aggressive Allocation Funds. At December 31,
1999, the total Master Trust value of $5,614,691,413 included participant
investments in the Stable Value Fund of $5,573,930,424 and participant
investments of $40,760,989 in the Conservative, Moderate and Aggressive
Allocation Funds.
Total investment income of the Master Trust for the years ended December
31, 2000 and 1999 was $353,329,080 and $366,044,652, respectively.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS No.
133"). SFAS No. 133 requires that an entity recognize all derivatives and
measure those instruments at fair value.
SFAS No. 133 is effective for fiscal years beginning after June 15, 2000.
Pursuant to SFAS No. 137, the Master Trust is required to adopt SFAS No.
133 effective January 1, 2001. Management has not yet been able to
determine the impact of SFAS No. 133 on the Master Trust's financial
statements due to an inconsistency in accounting literature between SFAS
No. 133, requiring derivatives to be measured at fair value, and the AICPA
Audit and Accounting Guide on "Audits of Employee Benefit
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Optimum Quality Grains, LLC
Retirement and Savings Plan
Notes to Financial Statements
December 31, 2000 and 1999
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Plans" and Statement of Position 94-4, "Reporting of Investment Contracts
Held by Health and Welfare Benefits Plans and Defined Contribution Pension
Plans," requiring benefit responsive investment contracts (including
syntheti guaranteed investment contracts) to be measures at contract value.
Until this inconsistency is resolved, management is unable to determine the
impact that SFAS No. 133 will have on the financial statements. The
carrying value of those instruments is $4,001,503,657 and $3,994,653,926 at
December 31, 2000 and 1999, respectively.
The impact on the Master Trust's net assets available for benefits of
adopting SFAS No. 133 will be determined based on the derivative positions
at the date of adoption.
5. Tax Status
The Plan is currently in the process of applying for a tax determination
letter from the Internal Revenue Service. The Plan's administrator and the
Plan's tax counsel believe that the Plan is designed and is currently being
operated in accordance with the applicable requirements of the Internal
Revenue Code. Accordingly, no provision has been made for federal income
taxes in the accompanying financial statements.
6. Related Party Transactions
Certain Plan investments are shares of mutual funds and units of collective
trust funds managed by Merrill Lynch, the Trustee of the Plan. In addition,
the Plan offers a Company Stock Fund investment option. The Master Trust is
managed by DuPont Capital Management and the Trustee. Therefore,
transactions in these investments qualify as party-in-interest transactions
which are exempt from the prohibited transaction rules of ERISA.
7. Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become 100 percent vested in the employer
contributions.
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Optimum Quality Grains, LLC Exhibit I
Retirement and Savings Plan
Schedule of Assets (Held at End of Year)
Form 5500, Schedule H, Part IV, Line I
At December 31, 1999
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Current
Identity of Issue Description of Investment Value
Franklin Small Capital Growth Fund Class I Registered Investment Company $ 624,512
Janus Enterprise Fund Registered Investment Company 357,586
Janus Mercury Fund Registered Investment Company 849,061
Mercury HW International Value Fund Class I Registered Investment Company 202,594
Fidelity Low Priced Stock Registered Investment Company 277,536
MFS Total Return Fund Registered Investment Company 61,689
Mercury Global Holdings Fund Class I Registered Investment Company 40,833
Templeton Growth Fund Registered Investment Company 120,957
AIM Value Fund Registered Investment Company 446,964
Fidelity Growth & Income Fund Class A Registered Investment Company 520,093
*Merrill Lynch Growth Fund Class A Registered Investment Company 233,103
AIM Equity Constellation Fund Registered Investment Company 405,492
Franklin Balance Sheet Registered Investment Company 265,438
Templeton Foreign Fund Registered Investment Company 119,616
Fidelity Magellan Fund Registered Investment Company 482,740
Fidelity Fund PV1 Registered Investment Company 211,072
Fidelity Equity Income Fund Registered Investment Company 213,322
Franklin Custom Fund Income Growth Registered Investment Company 199,089
MFS Total Return Fund Registered Investment Company 120,348
*Merrill Lynch Balanced Capital Fund Class A Registered Investment Company 46,876
*Merrill Lynch Basic Value Fund Class A Registered Investment Company 162,970
Barclays 3-Way Common/Collective Trusts 243,594
*Merrill Lynch SM Capital Index CT Tier 2 Common/Collective Trusts 88,278
*Merrill Lynch Equity Index TR Tier 6 Common/Collective Trusts 892,143
*Merrill Lynch Index CT Tier 2 Common/Collective Trusts 71,325
Conoco Stock Company Stock 28,777
*DuPont Stock Company Stock 789,756
Plan interest in the DuPont and Related
Companies Defined Contribution Plan
Master Trust ("Master Trust") Master Trust 2,624,076
Participant loans 8.5% to 9.0% 134,976
Cash 10
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$ 10,834,826
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* Party-in-interest
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