SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
E.I. du Pont de Nemours and Company
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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[_] Fee paid previously with preliminary materials:
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[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
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4) Date Filed:
________________________________________________________________________________
DuPont
1007 Market Street
Wilmington, DE 19898
Chairman and
Chief Executive Officer
[LOGO OMITTED]
AANNUAL MEETING - APRIL 28, 2004
March 19, 2004
Dear Stockholder:
You are invited to attend the Company's 2004 Annual Meeting on Wednesday, April
28, 2004, at 10:30 a.m. in the DuPont Theatre, DuPont Building, Wilmington,
Delaware.
The enclosed Notice of Annual Meeting and Proxy Statement provide information
about the governance of our Company and describe the various matters to be acted
upon during the meeting. In addition, there will be a report on the state of the
Company's business and an opportunity for you to express your views on subjects
related to the Company's operations.
To make it easier for you to vote your shares, you have the choice of voting
over the Internet, by telephone, or by completing and returning the enclosed
proxy card. The proxy card describes your voting options in more detail. In any
case, you may request a ticket for the meeting. If you need special assistance
because of a disability, please contact the DuPont Stockholder Relations Office
at 302-773-3407.
The Annual Meeting gives us an opportunity to review the actions the Company is
taking to achieve our mission of sustainable growth and launch the new DuPont.
We appreciate your ownership of DuPont, and I hope you will be able to join us
on April 28.
Sincerely,
/s/ Charles Holliday
C. O. Holliday, Jr.
E.I. du Pont de Nemours and Company
March 19, 2004
To the Holders of Common Stock of
E. I. du Pont de Nemours and Company
NOTICE OF ANNUAL MEETING
The Annual Meeting of Stockholders of E. I. DU PONT DE NEMOURS AND COMPANY will
be held on Wednesday, APRIL 28, 2004, at 10:30 a.m. local time, in the DuPont
Theatre in the DuPont Building, 1007 Market Street, Wilmington, Delaware. The
meeting will be held to consider and act upon the election of directors, the
ratification of independent accountants, stockholder proposals described in the
Proxy Statement and such other business as may properly come before the meeting.
Holders of record of DuPont Common Stock at the close of business on March 9,
2004, are entitled to vote at the meeting.
This notice and the accompanying proxy materials are sent to you by order of the
Board of Directors.
/s/ Louise B. Lancaster
-----------------------
Louise B. Lancaster
Secretary
----------------------------------------------------------------------
YOUR VOTE IS IMPORTANT. THERE ARE THREE WAYS TO VOTE:
|X| By Internet, or
|X| By telephone, or
|X| Sign, date and return your proxy card in the enclosed envelope as
soon as possible.
----------------------------------------------------------------------
Registered stockholders and holders of shares in the Company's U.S. employee
benefit plans may access their proxy materials electronically next year by
visiting the Internet web site www.econsent.com/dd. Stockholders with brokerage
accounts can determine if their brokers offer electronic delivery by visiting
www.icsdelivery.com.
2004 ANNUAL MEETING OF STOCKHOLDERS
Proxy Statement
General Information 1
Governance of the Company 2
Board of Directors 3
Corporate Governance Guidelines 3
Committees of the Board 8
Committee Membership 9
Communications with the Board and Directors 10
Code of Business Conduct and Ethics 10
Office of the Chief Executive 10
Audit Committee Report 11
Directors' Compensation 12
Election of Directors 13
Nominee Biographies 13
Other Information
Ownership of Company Stock 16
Compensation Committee Report on
Executive Compensation 18
Summary Compensation Table 22
Stock Option Grants 23
Option Exercises/Year-End Values 24
Stock Performance 25
Retirement Benefits 26
Ratification of Independent Accountants 27
Stockholder Proposal on
Government Service 28
International Workplace Standards 29
Executive Compensation 31
Audit Committee Charter A-1
Summary of Audit Committee Policy on Pre-approval
of Services Performed by the Independent Auditors A-4
Compensation Committee Charter B-1
Corporate Governance Committee Charter C-1
Director Nomination Process C-2
PROXY STATEMENT
The enclosed proxy material is being sent at the request of the Board of
Directors of E. I. du Pont de Nemours and Company to encourage you to vote your
shares at the Annual Meeting of Stockholders to be held April 28, 2004. This
Proxy Statement contains information on matters that will be presented at the
meeting and is provided to assist you in voting your shares.
The Company's 2003 Annual Report on SEC Form 10-K, containing management's
discussion and analysis of financial condition and results of operations of the
Company and the audited financial statements, and this Proxy Statement were
distributed together beginning March 19, 2004.
GENERAL INFORMATION
WHO MAY VOTE
All holders of record of DuPont Common Stock as of the close of business on
March 9, 2004 (the record date) are entitled to vote at the meeting. Each share
of stock is entitled to one vote. As of the record date, 999,791,422 shares of
DuPont Common Stock were outstanding. A majority of the shares voted in person
or by proxy is required for the approval of each of the proposals described in
this Proxy Statement. Abstentions and broker non-votes are not counted in the
vote.
HOW TO VOTE
Even if you plan to attend the meeting you are encouraged to vote by proxy. You
may vote by proxy in one of the following ways:
[ ] By Internet at the address listed on the proxy card.
[ ] By telephone using the toll-free number listed on the proxy card.
[ ] By returning the enclosed proxy card (signed and dated) in the envelope
provided.
When you vote by proxy, your shares will be voted according to your
instructions. If you sign your proxy card but don't specify how you want your
shares to be voted, they will be voted as the Board of Directors recommends. You
can change or revoke your proxy by Internet, telephone or mail at any time
before the polls close at the Annual Meeting.
SHARES HELD IN SAVINGS AND
STOCK PURCHASE PLANS
If you participate in one of the following plans, your voting instruction card
will include the shares you hold in the plan:
DuPont 401(k) and Profit Sharing Plan for
DuPont Holographics, Inc.,
DuPont Display Solutions, Inc. and
DuPont Displays
DuPont Powder Coatings USA
Profit Sharing Plan
DuPont Savings and Investment Plan
DuPont Specialty Grains Retirement and
Savings Plan
Pioneer Hi-Bred International, Inc.
Savings Plan
Solae Savings Investment Plan
The Invironmentalists, Inc. 401(k) Plan
Thrift Plan for Employees of Sentinel
Transportation, LLC
1
The plan trustees will vote according to the instructions received on your
proxy. If proxies for shares in savings plans are not received by Internet,
telephone or mail, those shares will be voted at the discretion of the trustees.
PROXY STATEMENT PROPOSALS At each annual meeting stockholders are asked to elect
directors to serve on the Board of Directors and to ratify
the appointment of our independent accountants for the year. Other proposals may
be submitted by the Board of Directors or stockholders to be included in the
proxy statement. To be considered for inclusion in the 2005 Annual Meeting Proxy
Statement, stockholder proposals must be received by the Company no later than
November 19, 2004.
PROXY COMMITTEE
The Proxy Committee is composed of directors of the Company who vote as
instructed the shares of DuPont Common Stock for which they receive proxies.
Proxies also confer upon the Proxy Committee discretionary authority to vote the
shares on any matter which was not known to the Board of Directors a reasonable
time before solicitation of proxies, but which is properly presented for action
at the meeting.
SOLICITATION OF PROXIES
The Company will pay all costs relating
to the solicitation of proxies. Georgeson Shareholder Communications, Inc. has
been retained to assist in soliciting proxies at an estimated cost of $10,000
plus reasonable expenses. Proxies may be solicited by officers, directors and
employees of the Company personally, by mail, or by telephone or other
electronic means. The Company will also reimburse brokers, custodians, nominees
and fiduciaries for reasonable expenses in forwarding proxy materials to
beneficial owners of DuPont stock.
SECRECY IN VOTING
As a matter of policy, proxies, ballots and voting tabulations that identify
individual stockholders are held confidential by the Company. Such documents are
available for examination only by the independent tabulation agents, the
independent inspectors of election and certain employees associated with
tabulation of the vote. The identity of the vote of any stockholder is not
disclosed except as may be necessary to meet legal requirements.
GOVERNANCE OF THE COMPANY
Strong corporate governance is an integral part of the Company's core values,
supporting the Company's sustainable growth mission. DuPont is committed to
having sound corporate governance principles and practices. Please visit the
Company's website at www.dupont.com for the Board's Corporate Governance
Guidelines, the Board-approved Charters for the Audit, Compensation and
Corporate Governance Committees and related information. You may also write to
the Corporate Secretary to obtain a free copy of these Guidelines and Charters.
2
DUPONT BOARD OF DIRECTORS
CORPORATE GOVERNANCE GUIDELINES
These Guidelines serve as an important framework for the Board's
corporate governance practices and to assist the Board in carrying out its
responsibilities effectively. The Board reviews these Guidelines periodically
and may modify them as appropriate to reflect the evolution of its governance
practices.
THE BOARD
RESPONSIBILITY
The Board has an active responsibility for broad corporate policy and
overall performance of the Company through oversight of management and
stewardship of the Company to enhance the long-term value of the Company for its
shareholders and the vitality of the Company for its other stakeholders.
ROLE
In carrying out its responsibility, the Board has specific functions,
in addition to the general oversight of management and the Company's business
performance, including providing input and perspective in evaluating alternative
strategic initiatives; reviewing and, where appropriate, approving fundamental
financial and business strategies and major corporate actions; ensuring
processes are in place to maintain the integrity of the Company; evaluating and
compensating the CEO; and planning for CEO succession and monitoring succession
planning for other key positions.
DUTIES
Directors are expected to expend sufficient time, energy and attention
to assure diligent performance of their responsibility. Directors are expected
to attend meetings of the Board, its Committees on which they serve, and the
Annual Meeting of Shareholders; review materials distributed in advance of the
meetings; and make themselves available for periodic updates and briefings with
management via telephone or one-on-one meetings.
LEADERSHIP
The positions of Chairman of the Board and CEO are held by the same
person, except in specific circumstances.
INDEPENDENCE
A majority of the Board are independent directors in accordance with
the standards of independence of the New York Stock Exchange and as described in
the Guidelines at Appendix A. The Corporate Governance Committee as well as the
Board annually reviews relationships that Directors may have with the Company to
make a determination of whether there are any material relationships that would
preclude a Director being independent.
3
QUALIFICATIONS
Directors are selected for their integrity and character, sound,
independent judgment, breadth of experience, insight and knowledge, and business
acumen. Leadership skills, scientific or technology expertise, familiarity with
issues affecting global businesses in diverse industries, prior government
service, and diversity are among the relevant criteria, which will vary over
time depending on the needs of the Board. The Corporate Governance Committee
considers candidates for potential nomination to recommend for approval by the
full Board.
The Board does not limit the number of other public company boards that
a Director may serve on. However, the Corporate Governance Committee considers
the number of boards a Director sits on. Directors are encouraged to limit the
number of other public company boards to take into account their time and
effectiveness and are expected to advise the Chairman in advance of serving on
another board.
When a Director's principal responsibilities or business association
changes significantly, the Director will tender his or her resignation to the
Chairman for consideration by the Corporate Governance Committee of the
continued appropriateness for Board service.
No Director may stand for reelection to the Board after reaching age
70. An employee Director retires from the Board when retiring from employment
with the Company, with the exception of the former CEO. The Board may in unusual
circumstances and for a limited period ask a Director to stand for reelection
after the prescribed retirement date.
ORIENTATION AND CONTINUING EDUCATION
New Directors participate in an orientation process to become familiar
with the Company and its strategic plans and businesses, significant financial
matters, core values including ethics, compliance programs, corporate governance
practices and other key policies and practices through a review of background
materials, meetings with senior executives and visits to Company facilities. The
Corporate Governance Committee is responsible for providing guidance on
Directors' continuing education.
COMPENSATION
The Board believes that compensation for outside Directors should be
competitive. DuPont common stock is a key component with payment of a portion of
Director compensation as DuPont stock, options or similar form of equity-based
compensation, combined with stock ownership guidelines requiring all outside
Directors to hold DuPont stock equal at least to five times the annual retainer
within five years. The Compensation Committee reviews periodically the level and
form of Director compensation and, if appropriate, proposes changes for
consideration by the full Board.
ANNUAL SELF-EVALUATION
The Board and each Committee make an annual self-evaluation of its
performance with a particular focus on overall effectiveness. The Corporate
Governance Committee is responsible for overseeing the self-evaluation process.
4
ACCESS TO MANAGEMENT AND ADVISORS
Directors have access to the Company's management and, in addition, are
encouraged to visit the Company's facilities. As necessary and appropriate, the
Board and its Committees may retain outside legal, financial or other advisors.
BOARD MEETINGS
SELECTION OF AGENDA ITEMS
The Chairman establishes the agenda for Board meetings, in conjunction
with Chairs of the Committees. Directors are encouraged to suggest items for
inclusion on the agenda and may raise subjects not specifically on the agenda.
ATTENDANCE OF SENIOR EXECUTIVES
The Board welcomes regular attendance of senior executives to be
available to participate in discussions. Presentation of matters to be
considered by the Board are generally made by the responsible executive.
EXECUTIVE SESSIONS
Regularly scheduled Board meetings include a session of all Directors
and the CEO. In addition, the Board meets in regularly scheduled executive
sessions without the participation of the CEO or other senior executives. The
presiding director is generally the Chair of the Corporate Governance Committee,
unless there is a matter within the responsibility of another Committee, such as
CEO evaluation and compensation, when the Chair of that Committee presides.
LEADERSHIP ASSESSMENT
SUCCESSION PLANNING
The Board plans for succession to the position of CEO. The Compensation
Committee oversees the succession planning process. To assist the Board, the CEO
periodically provides the Board with an assessment of senior executives and
their potential to succeed to the position of CEO, as well as perspective on
potential candidates from outside the Company. The Board has available on a
continuing basis the CEO's recommendation should he/she be unexpectedly unable
to serve. The CEO also provides the Board with an assessment of potential
successors to key positions.
CEO EVALUATION AND COMPENSATION
Through an annual process overseen and coordinated by the Compensation
Committee, independent Directors evaluate the CEO's performance and set the
CEO's compensation.
5
GUIDELINES FOR DETERMINING THE INDEPENDENCE
OF DUPONT DIRECTORS
It is the expectation and practice of the Board that, in their roles as members
of the Board, all members will exercise their independent judgment diligently
and in good faith, and in the best interests of the Company and its shareholders
as a whole, notwithstanding any member's other activities or affiliations.
However, in addition, the Board has determined that a majority of its members
should be "independent" in that they are free of any material relationship with
the Company or Company management, whether directly or as a partner, shareholder
or officer of an organization that has a material relationship with the Company.
In furtherance of this objective, the Board has adopted the following Guidelines
for determining whether a member is considered "independent".
The Board will re-examine the independence of each of its members once per year
and again if a member's outside affiliations change substantially during the
year.
For purposes of these Guidelines, "members of his/her immediate family" and
similar phrases will mean a person's spouse, parents, children, siblings,
mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and
sisters-in-law, and anyone (other than an employee) who shares the person's
home. "The Company" means the Company and all of its consolidated subsidiaries.
1. Regardless of other circumstances, a Board member will not be deemed
independent if s/he does not meet the independence standards adopted by
the New York Stock Exchange, or any applicable legal requirement.*
2. Except in special circumstances, as determined by a majority of the
independent members of the Board, the following relationships will be
considered not to be material relationships that would affect a Board
member's independence:
(a) If the Board member is an executive officer or employee, or any
member of his/her immediate family is an executive officer, of
a bank to which the Company is indebted, and the total amount
of the indebtedness does not exceed one percent (1%) of the
total assets of the bank for any of the past three (3) years.
(b) If the Board member or any member of his/her immediate family
serves as an officer, director or trustee of a charitable or
educational organization, and contributions by the Company do
not exceed the greater of one million dollars (US$1,000,000) or
two percent (2%) of such organization's annual consolidated
gross revenues, including annual charitable contributions, for
any of the past three (3) years.
3. If a Board member has a relationship that exceeds the thresholds
described in Section 2 above, or another significant relationship with
the Company or its management that is not described in Section 2 above,
then the Board will determine by a majority of the independent members
whether that member's relationship would affect the Board member's
independence.
4. The Board will consider all relevant facts and circumstances in
determining independence.
5. Any determinations of independence made pursuant to Section 3 above
will be disclosed in the Company's annual meeting proxy statement.
Appendix A-1
DuPont Board of Directors Corporate Governance Guidelines
6
* Current New York Stock Exchange standards state that a director will not be
independent:
(a) If the Board member is an employee or any member of his/her
immediate family is an executive officer of the Company, until
three (3) years after the end of such employment relationship;
(b) If the Board member is affiliated with or employed by, or if
any member of his/her immediate family is affiliated with or
employed in a professional capacity by, a present or former
auditor of the Company, until three (3) years after the end of
either the affiliation/employment or the auditing relationship;
(c) If the Board member or any member of his/her immediate family
is, or in the past three (3) years has been, employed as an
executive officer of another company where a principal officer
appointed by the Board of the Company serves/served on the
compensation committee;
(d) If the Board member is an executive officer or employee, or if
any member of his/her family is an executive officer, of
another company that makes payments to, or receives payments
from, the Company for property or services which exceed the
greater of one million dollars (US$1,000,000) or two percent
(2%) of the other company's annual consolidated gross revenues
for any of the past three (3) years; or
(e) If the Board member, or a member of his/her immediate family,
has received more than one hundred thousand dollars
(US$100,000) in direct compensation from the Company (other
than director and committee fees and pension or other forms of
deferred compensation for prior service which are not
contingent in any way on continued service) within the past
three (3) years.
Appendix A-2
DuPont Board of Directors Corporate Governance Guidelines
7
COMMITTEES OF THE BOARD
--------------------------------------------------------------------------------
AUDIT Responsibilities include:
COMMITTEE [ ] Employs independent auditors, subject to
stockholder ratification, to audit the Company's
consolidated financial statements.
[ ] Pre-approves all services performed by the
independent auditors.
[ ] Provides oversight on the external reporting
process and the adequacy of the Company's
internal controls.
[ ] Reviews the scope of the audit activities of the
independent auditors and the Company's internal
auditors and appraises audit efforts of both.
[ ] Reviews services provided by independent
auditors and other disclosed relationships as
they bear on the independence of the independent
auditors.
[ ] Establishes procedures for the receipt,
retention and resolution of complaints regarding
accounting, internal controls or auditing
matters.
All members of the Audit Committee are independent
directors under the Board's Corporate Governance
Guidelines and applicable regulatory and listing
standards. The Board has determined that C.J.
Crawford is an audit committee financial expert
within the meaning of applicable SEC rules.
See the Audit Committee Report on page 11. The Audit
Committee Charter is attached at Appendix "A" and is
available on the Company's website (www.dupont.com).
A summary of The Audit Committee Policy on
Pre-approval of Services Performed by the Independent
Auditors is attached at Appendix "A-1."
COMPENSATION Responsibilities include:
COMMITTEE [ ] Establishes executive compensation policy
consistent with corporate objectives and
stockholder interests.
[ ] Oversees process for evaluating CEO performance
against Board-approved goals and objectives and
recommends to the Board compensation for the
CEO.
[ ] Administers grants under the Company's
compensation plans.
[ ] Oversees succession planning process for the CEO
and key leadership.
All members of the Compensation Committee are
independent directors under the Board's Corporate
Governance Guidelines and applicable regulatory and
listing standards.
See the Compensation Committee Report on page 18. The
Compensation Committee Charter is attached at
Appendix "B" and is available on the Company's
website (www.dupont.com).
CORPORATE Responsibilities include:
GOVERNANCE [ ] Recommends to the Board nominees for election to
COMMITTEE the Board of Directors.
[ ] Reviews principles, policies and procedures
affecting directors and the Board's operation
and effectiveness.
[ ] Oversees evaluation of the Board and its
effectiveness.
All members of the Corporate Governance Committee are
independent directors under the Board's Corporate
Governance Guidelines and applicable regulatory and
listing standards.
The Corporate Governance Charter is attached at
Appendix "C" and is available on the Company's
website (www.dupont.com). A description of the
Director Nomination Process is attached at Appendix
"C-1."
8
ENVIRONMENTAL Responsibilities include:
POLICY [ ] Reviews the Company's environmental policies and
COMMITTEE practices.
[ ] Provides support for the Company's sustainable
growth mission.
STRATEGIC Responsibilities include:
DIRECTION [ ] Reviews the strategic direction of the Company's
major business segments.
COMMITTEE [ ] Reviews significant trends in technology and
their anticipated impact on the Company.
COMMITTEE MEMBERSHIP
The following chart shows the current committee membership and the number of
meetings that each Committee held in 2003.
-----------------------------------------------------------------------------------------------------------------
Corporate Environmental Strategic
Audit Compensation Governance Policy Direction
Director Committee Committee Committee Committee Committee
-----------------------------------------------------------------------------------------------------------------
Alain J. P. Belda X X
Richard H. Brown X
-----------------------------------------------------------------------------------------------------------------
Curtis J. Crawford X C
Louisa C. Duemling X
-----------------------------------------------------------------------------------------------------------------
Edward B. du Pont* X
Charles O. Holliday, Jr. C
-----------------------------------------------------------------------------------------------------------------
Deborah C. Hopkins X
Lois D. Juliber C X
-----------------------------------------------------------------------------------------------------------------
Goran Lindahl** X X
Masahisa Naitoh X
-----------------------------------------------------------------------------------------------------------------
William K. Reilly X C
H. Rodney Sharp, III X X
-----------------------------------------------------------------------------------------------------------------
Charles M. Vest C
-----------------------------------------------------------------------------------------------------------------
Number of Meetings
in 2003 10 7 6 2 5
-----------------------------------------------------------------------------------------------------------------
C = Chairperson
* Retiring pursuant to the age 70 retirement policy in the Board's Corporate
Governance Guidelines.
** Not standing for election.
Directors fulfill their responsibilities not only by attending Board and
committee meetings but also through communication with the Chairman and Chief
Executive Officer and other members of management relative to matters of mutual
interest and concern to the Company.
In 2003, seven meetings of the Board were held. Each director attended at least
82% of the aggregate number of meetings of the Board and the committees of the
Board on which the director served. Attendance at these meetings averaged 95%
among all directors in 2003.
As provided in the Board's Corporate Governance Guidelines, directors are
expected to attend the Company's Annual Meetings of Stockholders. All directors
attended the 2003 Annual Meeting.
9
COMMUNICATIONS WITH THE BOARD
AND DIRECTORS
Stockholders and other parties interested
in communicating directly with the Board, presiding director or other outside
director may do so by writing in care of the Secretary of the Company. The
Board's independent directors have approved procedures for handling
correspondence received by the Company and addressed to the Board, presiding
director or other outside director. Concerns relating to accounting, internal
controls or auditing matters are immediately brought to the attention of the
Company's internal audit function and handled in accordance with procedures
established by the Audit Committee with respect to such matters, which include
an anonymous toll-free hotline (1-800-476-3016).
CODE OF BUSINESS CONDUCT
AND ETHICS
The Board has adopted a Code of Business Conduct and Ethics for Directors with
provisions specifically applicable to directors. In addition, the Company has a
long-standing Business Ethics Policy and Business Conduct Guide applicable to
all employees of the Company, including executive officers. The Business Ethics
Policy, Business Conduct Guide and Code of Business Conduct and Ethics for
Directors are available on the Company's website (www.dupont.com).
OFFICE OF THE CHIEF EXECUTIVE
The Office of the Chief Executive (OCE)
has responsibility for the overall direction
and operations of all the businesses of
the Company and broad corporate responsibility in such areas as corporate
financial performance, environmental leadership and safety, development of
global talent, research and development and global effectiveness. All seven
members are executive officers and employees, and one is a director. Its members
include the Chairman and Chief Executive Officer and six other senior leaders.
10
AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors (the "Committee") assists
the Board in fulfilling its oversight responsibilities with respect to the
external reporting process and the adequacy of the Company's internal controls.
Specific responsibilities of the Committee are set forth in the Audit Committee
Charter adopted by the Board and last amended and restated effective February 1,
2004. The Charter is attached to this Proxy Statement at Appendix "A."
The Committee is comprised of four directors, all of whom meet the standards
of independence adopted by the New York Stock Exchange and the Securities and
Exchange Commission. Subject to stockholder ratification, the Committee appoints
the Company's independent auditors. The Committee approves in advance all
services to be performed by the Company's independent auditors in accordance
with the Committee's Policy on Pre-approval of Services Performed by the
Independent Auditors. A summary of the Policy is attached to this Proxy
Statement at Appendix "A-1."
Management is responsible for the Company's financial statements and reporting
process, including the system of internal controls. PricewaterhouseCoopers LLP
(PwC), the Company's independent auditors, has responsibility for performing an
independent audit of and expressing an opinion on the consolidated financial
statements of the Company. The Committee has reviewed and discussed the audited
consolidated financial statements of the Company for the year ended December 31,
2003 with management and with representatives of PwC.
The Committee has also discussed with PwC matters required to be discussed by
Statement on Auditing Standards No. 61 (Communications with Audit Committees),
as amended. The Committee has received from PwC the written disclosures required
by Independence Standards Board Standard No.1 (Independence Discussions with
Audit Committees) and has discussed with PwC its independence.
The Committee has also considered whether the provision to the Company by PwC of
limited nonaudit services is compatible with maintaining the independence of
PwC. The Committee has satisfied itself as to the independence of PwC.
Based on the Committee's review of the audited consolidated financial statements
of the Company, and on the Committee's discussions with management of the
Company and with PwC, the Committee recommended to the Board of Directors that
the audited consolidated financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2003.
AUDIT COMMITTEE
Charles M. Vest, Chair
Curtis J. Crawford
Deborah C. Hopkins
H. Rodney Sharp, III
11
DIRECTORS' COMPENSATION
All nonemployee directors receive an annual cash retainer fee of $50,000 and a
stock option grant based on a Black-Scholes value of $85,000 for service on the
Board. In 2004, each nonemployee director received a grant of 7,500 options.
One-third of the options granted are exercisable beginning on each of the first
three anniversaries of the grant date and have a six year term.
Nonemployee directors receive annual compensation for committee service as
follows: (a) committee members receive $9,000 and (b) committee chairs receive
$18,000.
An employee director receives no additional compensation for Board service.
Stock ownership guidelines require each nonemployee director to hold DuPont
Common Stock equal to at least five times the annual retainer. Directors have up
to five years to achieve the required stock ownership.
Under the DuPont Stock Accumulation and Deferred Compensation Plan for
Directors, a director may defer all or part of the Board and committee fees in
cash or stock units until a specified year, until retirement as a director or
until death. Interest accrues on deferred cash payments and dividend equivalents
accrue on deferred stock units. Nine directors elected to defer payment of
directors' fees for 2004.
The Company's retirement income plan for nonemployee directors was discontinued
in 1998. Nonemployee directors who began their service on the Board before the
plan's elimination continue to be eligible to receive benefits under the plan
provided they have served as a director for at least five years. Annual benefits
payable under the plan equal one-half of the annual Board retainer (exclusive of
any committee compensation and stock or option grants) in effect at the
director's retirement. Benefits are payable for the lesser of life or ten years.
The Directors' Charitable Gift Plan was established in 1993. After the death of
a director, the Company will donate five consecutive annual installments up to
$200,000 each to tax-exempt educational institutions or charitable organizations
recommended by the director and approved by the Company.
A director is fully vested in the Plan after five years of service as a director
or upon death or disability. The Plan is unfunded; the Company does not purchase
insurance policies to satisfy its obligations under the Plan. The directors do
not receive any personal financial or tax benefit from this program because any
charitable, tax deductible donations accrue solely to the benefit of the
Company. Employee directors may participate in the Plan if they pay their
allocable cost.
The Company also maintains $300,000 accidental death and disability insurance on
nonemployee directors.
12
1 -- ELECTION OF DIRECTORS
The 12 nominees for election as directors are identified on pages 13 through 16.
All nominees are now members of the Board of Directors with the exception of
John T. Dillon. Two current directors are not standing for election: Edward B.
du Pont, who is retiring pursuant to the age 70 retirement policy in the Board's
Corporate Governance Guidelines, and Goran Lindahl.
The Board has determined that, except for C. O. Holliday, Jr., the Chairman and
CEO, each of the nominees is independent within the meaning of the Guidelines
for Determining the Independence of DuPont Directors set forth in the Board's
Corporate Governance Guidelines. See pages 6-7.
The Board knows of no reason why any nominee would be unable to serve as a
director. If any nominee should for any reason become unable to serve, the
shares represented by all valid proxies will be voted for the election of such
other person as the Board of Directors may designate following recommendation by
the Corporate Governance Committee, or the Board may reduce the number of
directors to eliminate the vacancy.
The following material contains information concerning the nominees, including
their recent employment, other directorships, and age as of the 2004 Annual
Meeting.
[PHOTO OMITTED]
ALAIN J. P. BELDA, 60 Director since 2000
Chairman and Chief Executive Officer of Alcoa Inc., the world's largest producer
of primary aluminum, fabricated aluminum and alumina. He formerly served as
president and chief executive officer, president and chief operating officer,
vice chairman, and executive vice president of Alcoa, Inc. Mr. Belda is a
director of Alcoa Inc., Citigroup Inc. and The Ford Foundation.
[PHOTO OMITTED]
RICHARD H. BROWN, 56 Director since 2001
Former chairman and chief executive officer of Electronic Data Systems, a
leading global services company, chief executive officer of Cable & Wireless
PLC, president and chief executive officer of H&R Block, Inc. and vice chairman
of Ameritech Corporation. Mr. Brown is a director of The Home Depot Inc. He is a
member of The Business Council, and a former member of the U.S.-Japan Business
Council, the French-American Business Council and the President's National
Security Telecommunications Advisory Committee. He also serves on the board of
trustees of Southern Methodist University and The Ohio University Foundation.
13
[PHOTO OMITTED]
CURTIS J. CRAWFORD, 56 Director since 1998
President and Chief Executive Officer of XCEO, Inc, a consulting firm
specializing in leadership and corporate governance. He formerly served as
president and chief executive officer of Onix Microsystems, Inc. and chairman,
president and chief executive officer of ZiLOG, Inc. Mr. Crawford is a director
of ITT Industries, Inc. and ON Semiconductor Company. He also serves as a
trustee of DePaul University.
[PHOTO OMITTED]
JOHN T. DILLON, 65
Retired chairman and chief executive officer, president and chief operating
officer and executive vice president - packaging of International Paper, a
global paper and paper distribution, packaging and forest products company. He
is a director of Caterpillar, Inc. and Kellogg Company. A member of The Business
Council, Mr. Dillon is a former chairman of The Business Roundtable, was a
member of the President's Advisory Council on Trade Policy and Negotiations and
served as chairman of the National Council on Economic Education.
[PHOTO OMITTED]
LOUISA C. DUEMLING, 68 Director since 1982
A trustee of the Maryland/DC Chapter of the Nature Conservancy and a member of
the board of managers of Mount Cuba Center, Inc.
[PHOTO OMITTED]
CHARLES O. HOLLIDAY, JR., 56 Director since 1997
Chairman and Chief Executive Officer of DuPont. He is a former president,
executive vice president, president and chairman-DuPont Asia Pacific and senior
vice president. He is a director of HCA and chairman of The Business Council.
Mr. Holliday is a founding member of the International Business Council and a
member of the National Infrastructure Advisory Council, The Business Roundtable
and the Executive Committee of the U.S. Council on Competitiveness. He also
serves as a trustee of the Winterthur Museum and Gardens and a member of the
board of Catalyst.
14
[PHOTO OMITTED]
DEBORAH C. HOPKINS, 49 Director since 2000
Chief Operations and Technology Officer and a member of the Management Committee
of Citigroup Inc., a diversified financial services company. She formerly served
as senior partner, Marakon Associates, executive vice president and chief
financial officer of Lucent Technologies, senior vice president and chief
financial officer of the Boeing Company, chairman of Boeing Capital Corp., vice
president and chief financial officer of General Motors Europe and vice
president and general auditor of General Motors Corporation.
[PHOTO OMITTED]
LOIS D. JULIBER, 55 Director since 1995
Chief Operating Officer of Colgate-Palmolive Company, the principal business of
which is the production and marketing of consumer products. She formerly served
as executive vice president-Developed Markets, president, Colgate-Palmolive
North America and chief technological officer of Colgate-Palmolive. Ms. Juliber
is a member of the board of trustees of Wellesley College, the Brookdale
Foundation and Girls, Inc.
[PHOTO OMITTED]
MASAHISA NAITOH, 66 Director since 2000
Chairman and Chief Executive Officer of the Institute of Energy Economics,
Japan. He formerly served as Executive Vice Chairman of ITOCHU Corporation, an
international trading company headquartered in Tokyo, Japan, and executive vice
president, senior managing director and advisor of ITOCHU. Prior to joining
ITOCHU, Mr. Naitoh served in a number of senior policy positions in the Japanese
government's Ministry of International Trade and Industry. Mr. Naitoh is a
director of Molex Incorporated and a member of the board of advisors of the
Center for International Political Economy in New York.
[PHOTO OMITTED]
WILLIAM K. REILLY, 64 Director since 1993
President and Chief Executive Officer of Aqua International Partners, L.P.,
which finances water supply and wastewater treatment in developing countries. He
formerly served as administrator of the United States Environmental Protection
Agency, the Payne visiting professor at the Institute for International Studies
at Stanford University and president of World Wildlife Fund and The Conservation
Foundation. Mr. Reilly is a director of ConocoPhillips, Eden Springs, Evergreen
Holdings, Inc., Ionics, and Royal Caribbean International. He also serves as a
trustee of The American Academy in Rome and The National Geographic Society and
is chairman of the board of World Wildlife Fund.
15
[PHOTO OMITTED]
H. RODNEY SHARP, III, 68 Director since 1981
President of the Board of Trustees of Longwood Foundation, Inc., and a director
of Wilmington Trust Corporation. He is a trustee and director of Christiana Care
Corporation. Mr. Sharp also serves as vice chairman of the board of Planned
Parenthood of Delaware.
[PHOTO OMITTED]
CHARLES M. VEST, 62 Director since 1993
President of the Massachusetts Institute of Technology. He is a former provost
and vice president of Academic Affairs and dean of Engineering of the University
of Michigan. Mr. Vest is a director of International Business Machines
Corporation, a fellow of the American Association for the Advancement of
Science, and a member of the National Academy of Engineering, the Corporation of
Woods Hole Oceanographic Institution and the President's Council of Advisors on
Science and Technology. He is vice chair of the Council on Competitiveness.
OWNERSHIP OF COMPANY STOCK
The following table includes shares in DuPont beneficially owned by each
director and nominee, by each executive officer named in the Summary
Compensation Table on page 22 and by all directors and executive officers as a
group as of December 31, 2003. Also included are shares of DuPont Common Stock
granted in 2004 under the Variable Compensation Plan.
Under rules of the Securities and
Exchange Commission, "beneficial ownership" includes shares for which the
individual, directly or indirectly, has or shares voting or investment power,
whether or not the shares are held for the individual's benefit.
16
Amount and Nature of
Beneficial Ownership
--------------------------------------------------------------
(Number of Shares)
------------------------------------------------------------------------------------------------------------
Voting or
Investment Right to Percent of
DuPont Common Stock Direct (1) Power (2)* Acquire (3) Class (4)
------------------------------------------------------------------------------------------------------------
A. J. P. Belda 7,148 -- 5,700 --
------------------------------------------------------------------------------------------------------------
R. H. Brown 3,156 -- 5,700 --
------------------------------------------------------------------------------------------------------------
C. J. Crawford 3,562 -- 5,700 --
------------------------------------------------------------------------------------------------------------
L. C. Duemling 168,710 576,700 5,700 --
------------------------------------------------------------------------------------------------------------
E. B. du Pont 1,463,654 7,143,104 5,700 0.9%
------------------------------------------------------------------------------------------------------------
R. R. Goodmanson 71,151 -- 870,000 --
------------------------------------------------------------------------------------------------------------
J. C. Hodgson 30,370 -- 223,433 --
------------------------------------------------------------------------------------------------------------
C. O. Holliday, Jr. 159,413 285,300 3,000,314 --
------------------------------------------------------------------------------------------------------------
D. C. Hopkins 3,408 -- 5,700 --
------------------------------------------------------------------------------------------------------------
L. D. Juliber 15,420 600 5,700 --
------------------------------------------------------------------------------------------------------------
G. Lindahl 8,285 -- 5,700 --
------------------------------------------------------------------------------------------------------------
S. J. Mobley 42,169 -- 496,663 --
------------------------------------------------------------------------------------------------------------
M. Naitoh 8,278 -- 5,700 --
------------------------------------------------------------------------------------------------------------
G. M. Pfeiffer 43,169 206,648 514,735 --
------------------------------------------------------------------------------------------------------------
W. K. Reilly 19,657 -- 5,700 --
------------------------------------------------------------------------------------------------------------
H. R. Sharp, III 367,837 6,214,224 5,700 0.7%
------------------------------------------------------------------------------------------------------------
C. M. Vest 14,150 -- 5,700 --
------------------------------------------------------------------------------------------------------------
Directors and Executive Officers 2,464,567 9,106,274 5,628,443 1.6%
as a Group
------------------------------------------------------------------------------------------------------------
(1) These shares are held individually or jointly with others, or in the name
of a bank, broker or nominee for the individual's account. Also included
are stock units credited under the Variable Compensation Plan, the Salary
Deferral and Savings Restoration Plan and the DuPont Stock Accumulation and
Deferred Compensation Plan for Directors, time-vested restricted stock
units credited under the Stock Performance Plan and shares resulting from
option exercises for which delivery is deferred.
(2) This column includes other shares over which directors and executive
officers have or share voting or investment power, including shares
directly owned by certain relatives with whom they are presumed to share
voting and/or investment power.
(3) This column includes shares which directors and executive officers have a
right to acquire through the exercise of stock options granted under
DuPont's stock option plans.
(4) Unless otherwise indicated, beneficial ownership of any named individual
does not exceed 0.5% of the outstanding shares of the class.
* Because they may be considered to share, directly or indirectly, voting
and/or investment power, E. B. du Pont and H. R. Sharp, III are each listed
as beneficial owners of the same 5,320,302 shares. These shares of DuPont
Common Stock are reported only once in the total for directors and
executive officers as a group.
17
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors and executive officers are required to file reports of ownership and
changes in ownership of DuPont Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. In 2003, all such reports were filed
on a timely basis.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") is responsible for establishing
executive compensation policies and programs consistent with corporate
objectives and shareholder interests. The Committee recommends to the Board
specific individual compensation actions for the Chairman and Chief Executive
Officer (CEO) based upon evaluation of the CEO's performance against
Board-approved goals and objectives.
The Company's executive compensation policy is to attract, reward and retain
management who will achieve the business objectives of the Company, and to
provide competitive total annual compensation based on positions of equivalent
responsibility within a self-constructed group of peer companies.
When determining variable compensation, the Committee evaluates the Company's
corporate performance and annual compensation against the peer group, which are
the same companies included in the peer group index used in the stock
performance graph shown on page 25. The policy also provides for competitive
long-term compensation opportunity when compared with other major industrial
companies, including many of those shown in the peer group index.
Periodically, the Committee undertakes a review of the Company's executive
compensation strategy. In 2003, Mercer Human Resources was engaged in connection
with that study. The changes implemented in response to the results of the study
are described later in this report in the section on the Stock Performance Plan.
STOCK OWNERSHIP GUIDELINES
The Committee believes senior leadership should have a significant equity
position in the Company. Stock ownership guidelines are in place to better align
executive officers and other senior leaders with the interests of stockholders
and to encourage a longer-term focus in managing the Company. Stock ownership
guidelines vary from a minimum of five times base salary for the CEO to one and
one-half times for Vice Presidents. An annual review is conducted to assess
compliance with the guidelines.
COMPONENTS OF COMPENSATION
Compensation for executive officers consists of the following components:
salary, annual variable compensation, stock options, and performance-based and
time-vested restricted stock units.
SALARY
Consistent with the Company's policy, salaries are about the median of the peer
group. Salary increases for executive officers are based on individual
contribution and position relative to the median of the peer group. This is the
same approach as used for other salaried employees.
VARIABLE COMPENSATION PLAN
The Variable Compensation Plan (VCP) provides approximately 7,600 DuPont
employees, including executive officers, with
18
total annual compensation that varies up or down based on the performance of the
Company, the performance of their business unit and their individual
contribution. Typically, 25% of variable compensation is paid in DuPont Common
Stock, and senior leaders have the choice of receiving up to 100% in stock.
As approved by stockholders, the VCP limits the annual maximum funding to 20% of
consolidated net income after deducting 6% of net capital employed. Each year
the Committee reviews operating results, excluding all special items, in
determining the overall limit on variable compensation. This ensures that the
amount available for variable compensation fluctuates in relation to the
Company's operating results.
In determining VCP payments to participants for 2003, the Committee used a
formula which consisted of equally weighted components of earnings per share
(EPS) (excluding special items) versus the prior year and return on investors'
capital (ROIC) versus the average of the peer group. The formula may be adjusted
based on a qualitative assessment of corporate financial performance compared
with the peer group.
Variable Compensation differentiation by business unit is based on after-tax
operating income (excluding special items) and free cash flow versus each unit's
financial commitments for the year and, for 2003, the achievement of specified
growth initiative commitments. In addition, payments may be differentiated by
business unit based on a qualitative assessment of performance on the Company's
core values: ethics and integrity; workplace environment, treatment and
development of people, and strategic staffing (including diversity); and safety,
health and environmental stewardship.
In arriving at the level of payments for 2003, the Committee considered that
2003 EPS (excluding special items) were 83% of 2002, ROIC was below the average
of the peer group and average business unit performance was 90% of
pre-established performance metrics. The Committee adjusted each of the business
unit performance factors with a five point increase to recognize achievement of
fourth quarter stretch goals that contributed to a strong finish in 2003. An
additional two point increase was provided for three business units that
delivered exceptional safety performance in 2003. These increases resulted in an
adjusted average business unit performance factor of 95%.
The combination of the corporate and business unit performance metrics described
above resulted in an average payment of 88% of the award target (with individual
business unit payouts ranging from 55% to 124%). The Committee approved awards
for 2003 that totaled 73% of the 2002 grant.
Variable compensation payments for
2003 were 55% of the maximum amount available under the VCP limit. Over the past
ten years, the Committee has approved payments on average of 48% of the maximum
available.
STOCK PERFORMANCE PLAN
Stock options are granted to provide
an incentive primarily for employees responsible for the growth and success of
the Company. Stock option grants are also intended to encourage the ownership of
DuPont stock and thereby further the identity of interest of optionees with
those of the Company's stockholders. About 2,200 employees, including executive
officers, key leaders globally and middle management, received grants in 2003.
The Committee has established long-term incentive targets for each participating
level of responsibility within the Company based on a survey of practices by
large industrial companies conducted by Mercer Human Resources. Mercer's survey
included several of the peer group companies used for
19
benchmarking total annual compensation and for the stock performance graph
referenced above, as well as other publicly traded companies with multibillion
dollar revenues. This broader group of companies, rather than the peer group, is
used for determining target long-term compensation because of the greater
variability in value of long-term compensation plans. Targets for DuPont are set
to be near the median long-term incentive opportunity granted by the survey
group.
Stock options typically are granted annually and individual grants generally
range from 0% to 200% of the target for each level of responsibility to reflect
employees' future potential and individual performance, including achievement of
critical operating tasks in such areas as organizational capacity and strategic
positioning. Annual grants are made at market price on the date of grant, vest
in one-third increments over three years, and carry a term of up to ten years.
Beginning with grants made in 2003, the Company has expensed stock options.
The Company has never repriced stock options and has no intent to reprice
options in the future.
A reload feature is available for options granted from 1997 through 2003 to
facilitate stock ownership by management. Participants are eligible for reload
options upon the exercise of those options with the condition that shares
received from the exercise are held for at least two years. Reloads are granted
as nonqualified stock options at fair market value and have a term equal to the
remaining term of the original option. Reload options do not increase the
combined number of shares and options held by the executive prior to the
exercise. Options granted in 2004 do not include a reload feature.
The review of the Company's executive compensation strategy conducted in 2003
concluded that DuPont's overall compensation is competitive; however the
long-term incentive program based principally on stock options should be
expanded to include a range of vehicles. As a result, for grants made in 2004,
the Company's long-term program uses a blend of stock options, performance-based
restricted stock units and time-vested restricted stock units. All options and
restricted stock units are granted under the Company's Stock Performance Plan,
previously approved by shareholders.
These vehicles serve to balance a core program of options, intended to reward
for long-term value creation, with an opportunity to reward appropriate
executives for achieving pre-established operational objectives over a mid-term
(three year) time horizon. The utilization of time-vested restricted stock units
provides capital accumulation opportunities and supports retention goals around
key employees. Restricted stock units are paid out in shares of DuPont stock.
For grants made in 2004, stock options represent 50%-75% of the target long-term
grant and will carry a term of six years.
Performance-based restricted stock units represent about 25% of the 2004
long-term grant for DuPont corporate officers, who drive the development and
execution of business strategy. Units are awarded to participants at the
beginning of a three year performance cycle. At the conclusion of the
performance cycle, payouts can range from 0%-200% of the target grant opposite
pre-established performance-based objectives in both revenue growth and ROIC vs.
the peer group, over a three year performance period.
20
Time-vested restricted stock units represent 25% of a corporate officer's
long-term grant in 2004. The time-based restrictions will lapse in accordance
with guidelines determined by the Committee, generally over a three year period.
The Chairman and CEO receives 50% options and 50% performance-based restricted
stock units; he does not receive time-vested restricted stock units.
Participants below the corporate officer level receive 75% options and 25%
time-vested restricted stock units.
In addition to annual grants, special grants of options, time-vested restricted
stock units and performance-vested restricted stock units are made to employees
to recognize advancement to key senior management positions and/or to recognize
significant achievements.
COMPENSATION FOR THE CHIEF
EXECUTIVE OFFICER (CEO)
The Committee has the practice of tracking the total annual compensation of CEOs
of the peer group to assist in the determination of the compensation of DuPont's
CEO. The Committee also monitors the competitive practice of a broader range of
Fortune 100 companies. There has been concern over the upward spiral of CEO
compensation, and the widening divergence of CEO compensation compared to that
of the average employee. Over the past decade, the position of DuPont's
Executive Vice President has been used as a benchmark tie to the peer group, in
addition to the CEO. Total annual cash compensation for the CEO is currently
targeted at twice that of the Executive Vice President.
Mr. Holliday's last salary adjustment was effective January 1, 2003, when he
received a three percent increase consistent with the salary adjustments for
other senior leaders. At Mr. Holliday's request, his 2004 salary remains at the
2003 level of $1,118,000.
The computation of Mr. Holliday's 2003 variable compensation grant was
consistent with the method followed for other corporate employees, reflecting
the 88% award target based on corporate and business unit financial results. Mr.
Holliday's variable compensation grant for 2003 was $1,300,000, representing a
reduction of about 40 percent from 2002. In reaching its decision on Mr.
Holliday's 2003 variable compensation award, the Committee noted Mr. Holliday's
leadership in the Company's revenue growth broadly across businesses and
regions, and an especially strong finish for 2003. In addition, the Committee
recognized the successful integration of recent acquisitions, solid progress on
separation of the fibers businesses and bold steps to launch the new DuPont,
with significant actions planned to improve 2005 pretax earnings by $900 million
through variable margin improvements, fixed cost reductions and organizational
actions.
In 2003, Mr. Holliday received 464,200 stock options. In February 2004, Mr.
Holliday received 245,800 stock options and 64,000 performance-based restricted
stock units to provide a strong incentive connected to the launch of the new
DuPont.
* * *
The federal tax laws impose requirements in order for compensation payable to
the CEO and certain executive officers to be fully deductible. The Company has
taken appropriate actions to maximize its income tax deduction.
The Compensation Committee believes the executive compensation programs and
practices described above are competitive. They are designed to provide
increased compensation with improved financial results and offer additional
opportunity for capital accumulation, but only if stockholder value is
increased.
COMPENSATION COMMITTEE
Lois D. Juliber, Chair
Alain J. P. Belda
H. Rodney Sharp, III
21
COMPENSATION AND STOCK OPTION INFORMATION
The following table shows information about the compensation of the Company's
chief executive officer and four other highest paid executive officers. Two
additional tables provide detailed information about these employees' stock
options.
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation
--------------------------------------------------------------------------------------------------------------------------
Shares All
Variable Other Restricted Underlying Other
Name and Compensation Annual Stock Options Compensation
Principal Position Year Salary (Bonus)(1) Compensation Awards(2) Granted (3)
--------------------------------------------------------------------------------------------------------------------------
C. O. Holliday, Jr. 2003 $1,118,000 $1,300,000 -- -- 464,200 $33,293
Chairman 2002 1,085,000 2,200,000 -- -- 540,000 32,625
& Chief Executive Officer 2001 1,085,000 0 -- -- 525,000 32,325
R. R. Goodmanson 2003 736,000 581,000 -- -- 174,000 31,120
Executive Vice President 2002 714,500 900,000 -- -- 300,000 21,180
& Chief Operating Officer 2001 640,000 0 -- -- 315,000 19,095
J. C. Hodgson 2003 468,000 454,000 -- -- 107,100 13,680
Executive Vice President 2002 413,000 600,000 -- -- 65,000 12,045
and Chief Marketing & 2001 323,600 193,000 -- -- 66,500 9,615
Sales Officer
S. J. Mobley 2003 513,640 367,000 -- -- 85,000 15,358
Senior Vice President, 2002 496,270 500,000 -- -- 135,000 14,737
Chief Administrative 2001 449,200 0 -- -- 100,000 13,434
Officer & General
Counsel
G. M. Pfeiffer 2003 506,020 417,000(4) -- -- 85,000 15,120
Senior Vice President 2002 486,285 500,000 -- -- 140,000 14,439
& Chief Financial Officer 2001 438,000 0 -- -- 225,000 13,086
--------------------------------------------------------------------------------------------------------------------------
(1) On average about 25% of variable compensation is paid in DuPont Common
Stock.
(2) At December 31, 2003, the following executive officers held restricted
stock in the following aggregate numbers and values based on $45.89 closing
price per share: R. R. Goodmanson, 17,239 shares, $791,098; and G. M.
Pfeiffer, 10,519 shares, $482,717. Dividends on restricted stock are
credited to grantees as additional units of restricted stock.
(3) The Company's matching contributions made pursuant to the Company's savings
plans, including the following amounts credited under the related savings
restoration plan in 2003: $27,293 for C. O. Holliday, Jr.; $25,120 for R.
R. Goodmanson; $7,680 for J. C. Hodgson; $9,358 for S. J. Mobley; and
$9,121 for G. M. Pfeiffer.
(4) Includes special bonus of $50,000 in recognition of Mr. Pfeiffer's
outstanding financial leadership.
22
OPTION GRANTS TABLE
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Option Grants in 2003(1) For Option Term (2)
-------------------------------------------------------------------------------------------------------------------------------
Number of Percent
Shares of Total
Underlying Options
Options Granted Exercise Expiration
Name Granted in 2003(3) Price(4) Date 0% 5% 10%
-------------------------------------------------------------------------------------------------------------------------------
C. O. Holliday, Jr. 464,200 3.84% $37.75 2/5/13 0 $11,029,392 $27,935,556
R. R. Goodmanson 174,000 1.44 37.75 2/5/13 0 4,134,240 10,471.320
J. C. Hodgson 107,100 .89 37.75 2/5/13 0 2,544,696 6,445,278
S. J. Mobley 85,000 .70 37.75 2/5/13 0 2,019,600 5,115,300
G. M. Pfeiffer 85,000 .70 37.75 2/5/13 0 2,019,600 5,115,300
-------------------------------------------------------------------------------------------------------------------------------
All Stockholders' Increase in market value of DuPont Common Stock
Gains at assumed rates of stock price appreciation (5) $23,639,358,101 $59,874,434,786
All Optionees' Gains As a percent of all stockholders' gains (6) 1.21% 1.21%
-------------------------------------------------------------------------------------------------------------------------------
(1) Stock options are exercisable beginning one to three years from date of
grant and have a term of ten years. The closing price of DuPont Common
Stock on the NYSE-Composite Transactions Tape must be at least 120% of
the option price for five consecutive trading days for the options to be
exercisable.
(2) Represents total appreciation over the exercise price at the assumed
annual appreciation rates of 0%, 5% and 10% compounded annually for the
term of the option.
(3) Options granted in 2003 include a total of 10.4 million options granted
to management employees under the Stock Performance Plan and a total of
1.7 million options granted to convert DuPont Canada Inc. stock options
to DuPont stock options.
(4) The exercise price is the average of the high and low prices of DuPont
Common Stock as reported on the NYSE-Composite Transactions Tape on the
date of grant.
(5) Calculated from the $37.75 exercise price applicable to options granted
in connection with the normal annual grant under the Stock Performance
Plan in 2003 based on the 994,922,479 shares outstanding on the February
5, 2003 grant date for those options.
(6) Represents potential realizable value for all options granted in 2003 as
compared to the increase in market value of DuPont Common Stock at
assumed rates of stock price appreciation. Potential realizable value for
all options granted in 2003 is calculated from the $37.75 exercise price
applicable to options granted in connection with the normal annual grant
under the Plan.
23
AGGREGATED 2003 OPTION EXERCISES/
YEAR-END 2003 OPTION VALUES TABLE
Shares Underlying Value of Unexercised
Option Unexercised Options In-the-Money Options
Exercises in 2003 Held at Dec. 31, 2003 Held at Dec. 31, 2003(2)
---------------------------------------------------------------------------------------------------------------
Shares
Underlying Value
Name Options Realized(1) Exercisable Unexercisable Exercisable Unexercisable
---------------------------------------------------------------------------------------------------------------
C. O. Holliday, Jr. 3,808 $63,556 1,667,571 1,829,200 $ 81,141 --
R. R. Goodmanson -- -- -- 1,086,000 -- --
J. C. Hodgson -- -- 59,000 257,500 65,156 --
S. J. Mobley -- -- 226,900 368,000 1,530,810 --
G. M. Pfeiffer -- -- 187,068 431,000 679,623 --
---------------------------------------------------------------------------------------------------------------
(1) Represents the pre-tax gain, the difference between the market value of the
option shares on the date of exercise and the exercise price.
(2) Represents the closing price for DuPont Common Stock on December 31, 2003
of $45.89 less the option grant price for all outstanding exercisable and
unexercisable options for which the option price is less than the closing
price. Exercisable options have been held at least one year from the date
of grant (or six months in the case of reload options) and have met
applicable stock price hurdles. Unexercisable options have either not met
the applicable vesting requirements or price hurdles.
RETENTION ARRANGEMENT
The Company generally does not enter into agreements with executive officers.
However, in connection with the Company's desire to retain R. R. Goodmanson, who
joined the Company in 1999 as an external executive hire in the position of
Executive Vice President, in March 2004 the Company entered into a retention
agreement with Mr. Goodmanson. This retention agreement supersedes the agreement
between the Company and Mr. Goodmanson dated April 22, 1999, described in prior
years' Annual Meeting Proxy Statements and included as an exhibit to the
Company's Forms 10-K and 10-Q.
Mr. Goodmanson's original agreement provided for a severance payment of two
years pay (salary plus variable compensation) in the event of termination by the
Company on or before May 1, 2004. The new retention arrangement extends the
period through which such a severance benefit is payable until May 1, 2009, and
provides that Mr. Goodmanson's target variable compensation award will be used
in the calculation of any severance payment.
The retention agreement further provides that Mr. Goodmanson will be entitled to
a special award of $1,000,000 if he remains with the Company though May 1, 2009,
and that he will be eligible for retiree medical, dental and life insurance
coverage regardless of the age at which he retires from the Company.
24
STOCK PERFORMANCE INFORMATION
The following graph presents the cumulative five-year total return for DuPont
Common Stock compared with the S&P 500 Stock Index and a self-constructed peer
group of companies. The peer group companies are Alcoa, BASF, Dow Chemical,
Eastman Kodak, Ford, General Electric, Hewlett-Packard, Minnesota Mining and
Manufacturing, Monsanto, Motorola, PPG Industries, Rohm & Haas and United
Technologies.
[LINE GRAPH OMITTED]
1998 1999 2000 2001 2002 2003
DuPont $100.00 $127.1 $ 96.1 $ 87.3 $ 89.8 $100.6
S&P 500 100.00 121.0 110.0 97.0 75.5 97.2
Peer Group 100.00 150.2 128.6 109.3 79.0 109.6
The graph assumes that the value of DuPont Common Stock, the S&P 500 Stock
Index, and the peer group of companies was each $100 on December 31, 1998 and
that all dividends were reinvested. The peer group is weighted by market
capitalization.
25
RETIREMENT BENEFITS
Retirement benefits for DuPont employees under the DuPont Pension and Retirement
Plan are based on an employee's years of service and average monthly pay during
the employee's three highest-paid years. "Average monthly pay" includes regular
compensation and 100% of annual variable compensation payments, but excludes
other bonuses and compensation over the limits imposed by the Internal Revenue
Code. The Internal Revenue Code limits the amount of annual benefits that can be
paid from the pension trust. Retirement benefits in excess of these limitations
are paid from the Company's general revenues under separate, nonfunded pension
restoration plans.
ESTIMATED ANNUAL RETIREMENT
BENEFITS BASED ON SERVICE OF:
---------------------------------------------------------------------------------------------
Salary and
Variable
Compensation 30 Years 35 Years 40 Years 45 Years
---------------------------------------------------------------------------------------------
$ 600,000 $ 260,000 $ 304,000 $ 349,000 $ 394,000
---------------------------------------------------------------------------------------------
1,080,000 476,000 556,000 637,000 718,000
---------------------------------------------------------------------------------------------
1,560,000 692,000 808,000 925,000 1,042,000
---------------------------------------------------------------------------------------------
2,040,000 908,000 1,060,000 1,213,000 1,366,000
---------------------------------------------------------------------------------------------
2,520,000 1,124,000 1,312,000 1,501,000 1,690,000
---------------------------------------------------------------------------------------------
3,000,000 1,340,000 1,564,000 1,789,000 2,014,000
---------------------------------------------------------------------------------------------
The table above illustrates the straight life annuity amounts payable under the
DuPont Pension and Retirement Plan and pension restoration plans to DuPont
employees retiring at age 65 in 2004. Benefits are subject to a Social Security
offset which is reflected in the estimated benefits shown in the table. As of
normal retirement age (65), the years of service credited for retirement
benefits for active DuPont employees named in the Summary Compensation Table on
page 22 would be as follows: 43 years for C. O. Holliday, Jr., 13 years for R.
R. Goodmanson, 42 years for J. C. Hodgson, 38 years for S. J. Mobley and 40
years for G. M. Pfeiffer.
26
2 -- RATIFICATION OF INDEPENDENT ACCOUNTANTS
Article III, Section 5, of the Bylaws provides that it shall be the duty of the
Audit Committee to employ, subject to stockholder ratification at each annual
meeting, independent accountants to audit the books of account, accounting
procedures and financial statements of the Company for the year and to perform
such other duties as prescribed from time to time by the Audit Committee. On
April 30, 2003, the stockholders ratified the appointment by the Audit Committee
of PricewaterhouseCoopers LLP (PwC) to perform the functions assigned to it in
accordance with the Bylaws.
PwC has served as independent accountants of the Company continuously since
1954. It is believed that its knowledge of the Company's business gained through
this period of service is valuable.
Past practice required reassignment of the partner responsible for the Company's
account no less than every seven years. Securities and Exchange Commission rules
now require reassignment of the lead partner after five years. This rotation
provides the Company the benefit of new thinking and approaches in the audit
area.
Fees for services provided by PwC for the past two completed fiscal years ended
December 31 (in millions) were as follows:
2003 2002
Audit Fees $ 8.9 $ 7.4
Audit-Related Fees $12.5 $ 8.7
Tax Fees $ 2.2 $ 4.9
All Other Fees $ 0.1 $ 1.5
TOTAL $23.7 $22.5
Fees for audit services included the audit
of the Company's consolidated financial statements, separate audits of its
subsidiaries, and services associated with regulatory filings. Fees for
audit-related services primarily included audits of separate financial
statements of businesses to be divested, reviews of controls associated with
information systems, and audits of company-sponsored benefit plans. Fees for tax
services included preparation and assistance with tax returns for expatriate
employees and certain tax compliance, consulting and planning services. Fees for
all other services primarily included litigation support and consulting
services.
The Audit Committee has adopted a Policy on Pre-approval of Services Performed
by the Independent Auditors. A summary of the Policy appears in this Proxy
Statement beginning on page A-4.
Subject to ratification by the holders of DuPont Common Stock, the Audit
Committee has reemployed PwC as independent accountants to audit the Company's
consolidated financial statements for the year 2004 and to render other services
as required of them. Representatives of PwC are expected to be present at the
meeting and will have an opportunity to address the meeting and respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS
THAT YOU VOTE "FOR" THE FOLLOWING
RESOLUTION:
RESOLVED: That the action of the Audit Committee in employing
PricewaterhouseCoopers LLP as independent accountants for the year 2004 to
perform the functions assigned to them in accordance with Article III, Section
5, of the Bylaws of E. I. du Pont de Nemours and Company hereby is ratified.
27
3 - STOCKHOLDER PROPOSAL
ON GOVERNMENT SERVICE
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue, NW, Suite
215, Washington, DC, owner of 300 shares of DuPont Common Stock, has given
notice that she will introduce the following resolution and statement in support
thereof:
RESOLVED: That the stockholders of DuPont assembled in Annual Meeting in person
and by proxy hereby request the Board of Directors to have the Company furnish
the stockholders each year with a list of people employed by the Corporation
with the rank of Vice President or above, or as a consultant, or as a lobbyist,
or as legal counsel or investment banker or director, who, in the previous five
years have served in any governmental capacity, whether Federal, City or State,
or as a staff member of any Congressional Committee or regulatory agency, and to
disclose to the stockholders whether such person was engaged in any matter which
had a bearing on the business of the Corporation and/or its subsidiaries,
provided that information directly affecting the competitive position of the
Corporation may be omitted.
STOCKHOLDER'S STATEMENT
REASONS: Full disclosure on these matters is essential at DuPont because of its
many dealings with Federal and State agencies, and because of pending issues
forthcoming in Congress and/or State and Regulatory Agencies.
If you AGREE, please mark your proxy FOR this resolution.
POSITION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE
"AGAINST" THIS PROPOSAL.
The Company recruits, selects and retains its directors, officers, employees,
consultants and advisors based on their substantive qualifications and expertise
and on their ethics and integrity. The Company has a multi-faceted program,
including an extensive code of business conduct and ethics policy, to protect
against conflicts of interest, the appearance of improper influence, and
violations of laws, including those laws applicable to activities of officials
after they leave government service.
The Board of Directors believes the proposal is unnecessary, and would present
an administrative burden to the Company without providing any corresponding
benefit.
28
4 - STOCKHOLDER PROPOSAL
ON INTERNATIONAL WORKPLACE STANDARDS
The Paper, Allied-Industrial, Chemical & Energy Workers International Union,
P.O. Box 1475, Nashville, Tennessee 37202, owner of 619 shares of DuPont Common
Stock, has given notice that it will introduce the following resolution and
statement in support thereof:
RESOLVED: The shareholders of
E. I. du Pont de Nemours and Company ("DuPont") urge the Board of Directors to
adopt and implement an enforceable company-wide human rights policy based on the
International Labor Organization's Declaration on Fundamental Principles and
Rights at Work ("ILO Declaration"), including the following:
o All workers have the right to form and join trade unions and to bargain
collectively (Conventions 87 and 98);
o There shall be no discrimination or intimidation in employment. DuPont
shall provide equality of opportunity and treatment regardless of race,
color, sex, religion, political opinion, age, nationality, social origin or
other distinguishing characteristics (Conventions 100 and 111);
o Employment shall be freely chosen. There shall be no use of forced labor,
including bonded or voluntary prison labor (Conventions 29 and 105);
o There shall be no use of child labor (Conventions 138 and 182);
and to prepare a report at reasonable cost to shareholders concerning
implementation of this policy.
STOCKHOLDER'S STATEMENT
As a global corporation, DuPont faces many regulatory regimes and public
pressures exposing it to various risks. Managing operations effectively and
increasing shareholder value depend on public and governmental goodwill. DuPont
would benefit from protecting its reputation of being a good corporate citizen
by adopting and enforcing a company-wide human rights policy based on the ILO
Declaration.
Such a policy would ensure that DuPont is not associated with human rights
violations in the workplace, and in turn, would protect DuPont's brand names and
its relationships with its customers and the numerous governments with which it
may do business and on whose goodwill DuPont's business success depends.
DuPont faces potentially high risk that it could be associated with workplace
human rights violations because of its operations in countries where, according
to the U.S. Department of State's 2002 Human Rights Reports and Amnesty
International, labor and human rights are not adequately protected in law and/or
practice. These high risk countries include China and Zimbabwe, which are
locations of some of DuPont's major sites.
In addition, an association with workplace human rights violations could expose
DuPont to costly and time-consuming litigation. For example, CHEMICAL WEEK
reported on February 23, 2000 that DuPont settled a Department of Labor claim
regarding discrimination against women and "will pay $14,731 each to 31 women,
the largest per capita settlement of its kind."
DuPont has taken a first step by signing on to the United Nations' Global
Compact, an initiative to encourage global corporations to support basic human
rights and environment principles. However, the Global Compact has no
enforcement mechanism. We believe an effective enforcement mechanism is the
29
ultimate measure of DuPont's commitment to the Global Compact principles.
Furthermore, DuPont has not incorporated all of the Global Compact principles in
its Mission Statement and Business Conduct Guide.
In our view, the adoption, implementation and enforcement of a comprehensive
policy based on the ILO Declaration would help bolster DuPont's integrity and
increase its reputation in the capital markets.
We urge you to vote FOR this resolution.
POSITION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE
"AGAINST" THIS PROPOSAL.
The Board of Directors recognizes the importance of being a responsible
corporate citizen globally and believes the Company meets the overall objectives
of the proposal.
The Company supports the general intent of the proposal and similar
international workplace standards suggested by other organizations. On an
ongoing basis the Company reviews principles and codes offered by a wide variety
of organizations and examines its own policies and practices in light of such
provisions. The Company also meets with advocates of principles and codes to
explore issues of mutual concern.
DuPont is committed to conducting its business with the highest ethical
standards and works diligently to be a responsible and respected corporate
citizen throughout the world. The Company has had in place for many years a
Business Ethics Policy, Business Conduct Guide and Mission Statement addressing
many of the matters covered in the standards described in the proposal. DuPont's
corporate policies and procedures are applicable to employees in DuPont
businesses around the globe.
The Business Ethics Policy requires employees to affirm on an annual compliance
statement that they have conducted business in accordance with the Company's
standards. The Company's Business Conduct Guide emphasizes the responsibility of
each employee to comply with all applicable laws and stresses the Company's zero
tolerance policy on discrimination and harassment.
DuPont has long been considered a leader in the area of workplace practices. In
the past year alone, the Company has been recognized by numerous U.S. and global
organizations for progressive and respectful workplace practices. For example,
DuPont was recognized as one of the best employers to work for in countries as
diverse as Mexico, Brazil, the United States, India and Korea. For more
information about DuPont and its people, please visit
www.peoplediversity.dupont.com.
Also, in 2003 DuPont adopted corporate policies regarding child and forced
labor. These principles clearly establish that DuPont will not tolerate the
exploitation of children or the physical punishment, abuse or involuntary
servitude of any worker. These policies are global requirements for DuPont
operations and suppliers.
Several years ago, DuPont was among the first companies to endorse the Global
Compact, an initiative of the United Nations. The U.N. Global Compact seeks to
have companies and other business associations embrace, support and enact a set
of core values in the areas of human rights, labor standards, and environmental
practices. The principles of the U.N. Global Compact address essentially all of
the tenets referenced in the proposal.
In addition to endorsing the Global Compact, DuPont supports the Global
Reporting Initiative (GRI). The GRI is a multi-stakeholder process and
independent institution whose mission is to develop and disseminate globally
applicable Sustainability Reporting Guidelines. These Guidelines provide a
comprehensive format for organizations to use for reporting on the economic,
environmental and social dimensions of their activities, products and
30
services. The Company publishes annually on its website (www.dupont.com) a broad
range of data in the GRI format.
The Board of Directors believes the objectives of this proposal are being
addressed through the Company's long-standing Business Ethics Policy, Business
Conduct Guide and Mission Statement; endorsement of the Global Compact; adoption
and publication of principles on child and forced labor; and active
participation in the Global Reporting Initiative.
5 -STOCKHOLDER PROPOSAL
ON EXECUTIVE COMPENSATION
The International Brotherhood of DuPont Workers, P.O. Box 16333, Louisville,
Kentucky 40256, owner of 60 shares of DuPont Common Stock, has given notice that
it will introduce the following resolution and statement in support thereof:
RESOLVED: That the stockholders of E. I. du Pont de Nemours and Company,
assembled in annual meeting in person and by proxy, hereby request that the
Board of Directors give consideration to preparing a report, to be made
available to shareholders four months after the 2004 Annual Meeting, that shall
review the compensation packages provided to senior executives of the Company
and address the following:
1. Ways to link compensation more closely to the Company's financial
performance.
2. Ways to link compensation to the Company's social corporate performance
(e.g., incentives given for meeting or surpassing certain standards, such
as those involving the impact of production on the environment).
3. Comparison of compensation packages for senior executives with that
provided to the lowest paid company employees in the U.S. and
internationally.
4. Whether there should be a ceiling on compensation provided to senior
executives so as to prevent the possibility of excessive compensation.
5. Whether compensation of senior executives should be adjusted in the event
of the layoff of a substantial number of employees.
STOCKHOLDER'S STATEMENT
During the time Mr. Holliday has served as CEO, his total compensation has been
made up of three elements - salary, cash bonus and stock options. His salary and
bonus have ranged from $2.74 million in 2000 to $3.285 million for 2002. His
stock options during the same time period have ranged from over 300,000 options
in 2000 (valued by DuPont at $11.5 million to $23 million, depending on
valuations) to 540,000 options in 2002 (valued by DuPont at $14.5 million to $29
million).
The justification for Mr. Holliday's compensation can be stated this way,
although not necessarily by DuPont.
If it was a profitable year for the Company, then it was a result of the
leadership provided by Mr. Holliday.
If it was not a profitable year for the Company, then this was a result of
forces outside of Mr. Holliday's control (e.g., global recession, the price of
oil) and only as a result of his leadership can we expect a return to
profitability.
Yet for the past three years, the employees in the U.S. who actually produce the
products that have made this Company so successful have received a yearly wage
increase that has averaged less than 3%. And during this same time period, these
employees have seen their health care costs skyrocket, with
31
monthly premiums more than doubling. For retirees, the picture is even worse,
with some retirees now paying more in health care costs than they receive from
their pension.
It is time to rethink the criteria used for compensating our senior executives.
This proposal will do just that, and would be applauded by the employees of
DuPont as well as the general public. This would serve DuPont well, given its
global stature and its increasing prominence in the market place.
If you AGREE, please mark your proxy FOR this resolution.
POSITION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE
"AGAINST" THIS PROPOSAL.
The Board shares the underlying objective for the Company's executive
compensation policy and programs to be linked to business and individual
performance and shareholder value and also take into account an appropriate
balance and competitive positioning for key leadership talent. The Board
believes that the objective of this proposal is being addressed through the
engaged oversight and work of the Compensation Committee and the Committee's
Report on Executive Compensation set forth on pages 18-21 of this Proxy
Statement (Report).
The Report describes how closely executive compensation is linked to the
Company's financial performance on an annual, mid-term and long-term basis.
In 2003 the Compensation Committee worked with an outside consultant to
undertake a study of DuPont's executive compensation strategy. As a result,
changes have further strengthened the link with financial performance by setting
pre-established performance-based operational metrics to compensate the
Company's senior leadership, using performance-based restricted stock units as
more fully described in the Report.
In addition, the Report describes the link between annual variable compensation
and social corporate performance, including performance on the Company's core
values - "payments may be differentiated by business unit based on a qualitative
assessment of performance on the Company's core values: ethics and integrity;
workplace environment, treatment and development of people, and strategic
staffing (including diversity); and safety, health and environmental
stewardship."
The Report also describes the steps taken by the Company to address concerns
over the upward spiral of CEO compensation. In the early 1990s, DuPont initiated
the practice of setting CEO pay relative to pay for senior positions below CEO,
rather than tying it to that of other CEOs.
In the Board's view, the report requested
by the proposal would duplicate the Compensation Committee's ongoing
work to review, evaluate and modify, when indicated, the Company's executive
compensation policy and programs and to report annually to all stockholders
through the Proxy Statement.
OTHER MATTERS
The Board of Directors knows of no other proposals that may properly be
presented for consideration at the meeting but, if other matters do properly
come before the meeting, the persons named in the proxy will vote your shares
according to their best judgment.
32
APPENDIX "A"
E. I. DU PONT DE NEMOURS AND COMPANY
AUDIT COMMITTEE CHARTER
I. PURPOSE
The primary purpose of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities relating to:
o Monitoring the quality, reliability and integrity of the Company's external
financial reporting process;
o The adequacy of the Company's internal controls particularly with respect
to the Company's compliance with legal and regulatory requirements and
corporate policy;
o The independence and qualifications of the Company's independent auditors,
who shall be accountable to the Audit Committee and the Board of Directors;
o The performance of the Company's internal audit function and the Company's
independent auditors; and
o The preparation of an Audit Committee Report for inclusion in the Company's
annual meeting proxy statement, in accordance with applicable rules and
regulations.
II. RESPONSIBILITIES
The Audit Committee's responsibilities shall include:
o Subject to shareholder approval, nominating, employing and replacing the
independent auditors to audit the consolidated financial statements of the
Company.
o Pre-approving all audit and permitted non-audit related services, including
the fees related to the provision of such services, to be performed by the
Company's independent auditors.
o Reviewing and appraising the audit efforts of the Company's independent
auditors.
o Reviewing and appraising the audit efforts of the Company's internal audit
function, including reviewing with the independent auditors the
responsibilities, budget and staffing of the internal audit function.
o Ensuring that the independent auditors submit, at least annually, to the
Audit Committee a report describing (1) the independent auditors' quality
control procedures, (2) all relationships between the independent auditors
and the Company, and (3) material issues raised by the independent
auditors' most recent internal quality control review or peer review or by
any governmental or professional inquiry or investigation in the most
recent five-year period relating to the independent auditors' audits. The
Audit Committee is responsible for actively engaging in a dialogue with the
independent auditors with respect to any disclosed relationships or
services that may impact the objectivity and independence of the
independent auditors. As appropriate, the Audit Committee shall recommend
that the Board of Directors take appropriate action in response to the
independent auditors' report to satisfy itself of their independence.
A-1
o Reviewing with management and the independent auditors the Company's
financial statements and disclosures under Management's Discussion and
Analysis of Financial Condition and Results of Operations to be included in
the Company's Annual Report on Form 10-K and in its quarterly reports on
Form 10-Q prior to filing such reports with the Securities and Exchange
Commission. Such review shall include discussing with the independent
auditors those matters required to be discussed under generally accepted
auditing standards and applicable regulations.
o Discussing with management the Company's earnings press releases, earnings
guidance, and other financial information provided to analysts and rating
agencies.
o Meeting with management periodically to discuss guidelines and policies
governing the processes used to assess, monitor and control the Company's
major risk exposures, including financial risk exposures.
o Discussing with the independent auditors any problems or difficulties
encountered during the course of the audit and any significant
disagreements with management.
o Approving the appointment or removal of the Vice President and General
Auditor.
o Providing an open avenue of communication among and individually with the
independent auditors, management, the internal audit function, and the
Board of Directors, and taking appropriate actions resulting from this
interaction.
o Establishing procedures for the receipt, retention and resolution of
complaints regarding accounting, internal controls or auditing matters,
including procedures for the confidential, anonymous submission of
complaints by employees of the Company.
o Reviewing and assessing the adequacy of this Charter on an annual basis and
recommending changes, if any, to the Board of Directors.
o Establishing a policy to govern the Company's hiring of employees or former
employees of its independent auditors.
o Reporting regularly to the Board.
o Conducting an annual performance evaluation of the Audit Committee.
III. COMPOSITION
The Audit Committee shall be comprised of at least three independent
directors. All of the members of the Audit Committee shall be independent as
determined under the Board's Corporate Governance Guidelines and the New York
Stock Exchange standard and shall be free from any relationship that, in the
opinion of the Board, would interfere with the exercise of his or her
independent judgment as a member of the Committee. In the judgment of the Board,
all of the members of the Audit Committee shall be financially literate or
become so within a reasonable period of time after his or her appointment to the
Audit Committee and at least one member of the Committee shall possess
experience and expertise in accounting or financial management.
The members of the Audit Committee shall be elected by the Board at the
annual organizational meeting of the Board. The members of the Audit Committee
shall serve until their successors shall be duly elected and qualified.
A-2
The Audit Committee shall have the authority to retain special legal,
accounting or other consultants to advise it. The Audit Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent accountants to attend a meeting of or to meet with any members of,
or consultants to, the Audit Committee.
The Company shall provide the Audit Committee with a level of funding
appropriate for the Audit Committee to carry out its responsibilities.
IV. MEETINGS
The Committee shall meet at least six times annually. As part of its
job to foster open communication, the Committee shall meet at least annually
with management, the Vice President and General Auditor and the independent
auditors in separate executive sessions to discuss any matters that the
Committee or each of these groups believe should be discussed privately.
V. LIMITATION OF DUTIES
While the Audit Committee has the responsibilities and powers set forth
in the Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements are complete,
accurate and in accordance with generally accepted accounting principles. The
independent auditors are responsible for planning and conducting audits.
Management is responsible for preparing complete, accurate financial statements
in accordance with generally accepted accounting principles.
A-3
APPENDIX "A-1"
SUMMARY OF AUDIT COMMITTEE POLICY
ON PRE-APPROVAL OF SERVICES PERFORMED BY THE INDEPENDENT AUDITORS
The independence of the Company's independent auditors is critical to
ensure the integrity of the Company's financial statements. To assure that the
services performed by the independent auditors do not impair their independence,
the Audit Committee has established a policy governing pre-approval of services
to be provided by the independent auditors.
The independent auditors will submit a report, which includes an aggregate
of services in the following four categories expected to be rendered during the
year and the related range of fees, to the Audit Committee for its approval:
1. Audit services comprise the work necessary for the independent auditors to
render an opinion on the audit of the consolidated financial statements of
the Company as well as work that generally only the independent auditors
can reasonably be expected to provide, including separate audits of the
Company's subsidiaries, services associated with SEC registration
statements, periodic reports and other documents issued in connection with
securities offerings.
2. Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the
Company's financial statements, including financial statement audits of
businesses to be divested, employee benefit plan audits, agreed-upon or
expanded audit procedures to meet certain regulatory requirements, and
certain attestation services.
3. Tax services include selected non-U.S. tax compliance and limited
assistance with tax audits involving federal, state and international tax
consulting projects commenced prior to December 31, 2001.
4. Other services include attestation services required in connection with
governmental requests/reviews and other attestation services performed in
connection with nonfinancial information.
From time to time, circumstances may arise in which it will become
necessary to engage the independent auditors for additional services not
contemplated in the original pre-approval (e.g., new services or approved
services exceeding the pre-approved range of fees). In those instances, the
Audit Committee requires specific pre-approval before engaging the independent
auditors.
The Audit Committee has delegated limited pre-approval authority to the
Audit Committee Chair. Any services and associated fees approved by the Audit
Committee Chair will be reported to the Audit Committee at its next meeting.
A-4
APPENDIX "B"
E. I. DU PONT DE NEMOURS AND COMPANY
COMPENSATION COMMITTEE CHARTER
I. PURPOSE
The primary purpose of the Compensation Committee is to:
o Discharge the responsibilities of the Company's Board of Directors relating
to compensation of the Company's executive employees;
o Produce a Report on Executive Compensation for inclusion in the Company's
annual meeting proxy statement, in accordance with applicable rules and
regulations;
o Oversee the succession planning process and personal development for key
positions.
II. RESPONSIBILITIES
The Compensation Committee's responsibilities shall include:
o Establishment of the executive compensation policy for the Company
consistent with corporate objectives and shareholder interests;
o Oversight of the process for evaluation of the performance of the Chief
Executive Officer, including coordination of input from independent
directors regarding the performance of the Chief Executive Officer against
Board-approved goals and objectives relevant to CEO compensation;
o Recommendation to the Board regarding the compensation for the Chief
Executive Officer based on the evaluation;
o Review and approval of compensation for, including employment arrangements
with, executive officers other than the CEO;
o Recommendation to the Board regarding the compensation for nonemployee
directors;
o Administration of grants under the Company's compensation plans, including
recommendation to the Board with respect to variable compensation and
equity-based plans;
o Assessment of key leadership talent and monitoring succession planning,
development and retention of key current and future leaders;
o Oversight of the Chief Executive Officer succession planning process;
o Reporting regularly to the Board; and
o Annual performance evaluation of the Compensation Committee.
B-1
In carrying out these responsibilities, the Compensation Committee may
o Take appropriate action to authorize the issuance of DuPont common stock
pursuant to provisions of the Company's compensation and benefit plans;
o Retain or replace trustees under the Company's benefit plans and take such
other actions as may be required by the Company's compensation and benefit
plans, related trust agreements or other plan documents;
o Retain any consultant that the Committee considers appropriate and approve
related fees and other retention terms; and
o Request any officer or employee of the Company or the Company's outside
counsel to attend a meeting of or to meet with any members of, or
consultants to, the Compensation Committee.
III. COMPOSITION
The Compensation Committee shall be comprised of at least three
independent directors, each of whom shall be independent as determined under the
Board's Corporate Governance Guidelines and the New York Stock Exchange standard
and shall be free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee.
The members of the Compensation Committee shall be elected by the Board
at the annual organizational meeting of the Board. The members of the
Compensation Committee shall serve until their successors shall be duly elected
and qualified.
The Company shall provide the Compensation Committee with a level of
funding appropriate for the Compensation Committee to carry out its
responsibilities.
IV. MEETINGS
The Committee shall meet at least three times annually. The Committee
may at its discretion meet with or without management, and with or without any
compensation consultant retained by the Committee, in separate executive
sessions to discuss any matters that the Committee, management or the
compensation consultant believe should be discussed privately.
B-2
APPENDIX "C"
E. I. DU PONT DE NEMOURS AND COMPANY
CORPORATE GOVERNANCE COMMITTEE CHARTER
I. PURPOSE
The primary purpose of the Corporate Governance Committee is to:
o Identify individuals qualified to become Board members consistent with
criteria approved by the Board and recommend to the Board nominees for
election as directors of the Company, including nominees whom the Board
proposes for election as directors at the annual meeting; and
o Develop and recommend to the Board a set of corporate governance principles
for the Company.
II. RESPONSIBILITIES
The Corporate Governance Committee's responsibilities shall include:
o Selection of new directors who shall have the highest personal and
professional integrity, who shall have demonstrated exceptional ability and
judgment and who shall be most effective, in conjunction with the other
nominees to the Board, in collectively serving the long-term interests of
the shareholders;
o Review and recommendation to the Board on the size, composition and
organization of the Board and its committees; directorship policies and
practices; Board operations; and associated matters of corporate
governance, including committee charters;
o Guidance on directors' continuing education;
o Oversight of the evaluation of the Board and its effectiveness;
o Reporting regularly to the Board; and
o Annual performance evaluation of the Corporate Governance Committee.
In carrying out these responsibilities, the Corporate Governance
Committee may
o Consult with the Chairman and Chief Executive Officer in developing
recommendations to the Board on potential nominees for election to the
Board and such other matters as the Committee considers appropriate; and
o Retain any search firm that the Committee considers appropriate to be used
to identify director candidates and approve related fees and retention
terms of such firm.
III. COMPOSITION
The Corporate Governance Committee shall be comprised of independent
directors, each of whom shall be independent as determined under the Board's
Corporate Governance Guidelines and the New York Stock Exchange standard and
shall be free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee.
The members of the Corporate Governance Committee shall be elected by
the Board at the annual organizational meeting of the Board. The members of the
Corporate Governance Committee shall serve until their successors shall be duly
elected and qualified.
The Company shall provide the Corporate Governance Committee with a
level of funding appropriate for the Corporate Governance Committee to carry out
its responsibilities.
IV. MEETINGS
The Committee shall meet at least three times annually. The Committee
may at its discretion meet with or without management, and with or without any
search firm retained by the Committee, in separate executive sessions to discuss
any matters that the Committee, management or the search firm believe should be
discussed privately.
C-1
APPENDIX "C-1"
DIRECTOR NOMINATION PROCESS
The purpose and responsibilities of the Corporate Governance
Committee, described in the Committee's Charter at Appendix C (and available on
the Company's website at www.dupont.com), include recommending to the Board
nominees for election as directors. The Committee's members are independent
under the Board's Corporate Governance Guidelines and the NYSE standard.
The Committee considers potential candidates suggested by
Board members, as well as management, stockholders and others. The Committee
does not, but may in the future, engage a third-party to assist in identifying
and evaluating potential candidates.
The Board's Corporate Governance Guidelines describe
qualifications for directors: Directors are selected for their integrity and
character; sound, independent judgment; breadth of experience, insight and
knowledge; and business acumen. Leadership skills, scientific or technology
expertise, familiarity with issues affecting global businesses in diverse
industries, prior government service, and diversity are among the relevant
criteria, which will vary over time depending on the needs of the Board.
Additionally, directors are expected to be willing and able to devote the
necessary time, energy and attention to assure diligent performance of their
responsibility.
When considering candidates for nomination, the Committee
takes into account these factors to assure that new directors have the highest
personal and professional integrity, have demonstrated exceptional ability and
judgment and will be most effective, in conjunction with other directors, in
serving the long-term interest of all stockholders.
The Committee will consider candidates for director suggested
by stockholders, applying the factors for potential candidates described above
and taking into account the additional information described below. Stockholders
wishing to suggest a candidate for director should write to the Secretary of the
Company and include:
o A statement that the writer is a stockholder of record (or providing
appropriate support of ownership of DuPont stock);
o The name of and contact information for the candidate;
o A statement of the candidate's business and educational experience;
o Information regarding each of the factors described above in sufficient
detail to enable the Committee to evaluate the candidate;
o A statement detailing any relationship between the candidate and any
customer, supplier or competitor of the Company or any other
information that bears on potential conflicts of interest, legal
considerations or a determination of the candidate's independence;
o Information concerning service as an employee, officer or member of a
board of any charitable, educational, commercial or professional
entity;
o Detailed information about any relationship or understanding between
the proposing stockholder and the potential candidate; and
o A statement by the potential candidate that s/he is willing to be
considered and to serve as a director if nominated and elected.
C-2
Once the Committee has identified a prospective candidate, the
Committee makes an initial determination as to whether to conduct a full
evaluation of the candidate. This initial determination is based on whatever
information is provided to the Committee with the recommendation of the
prospective candidate, as well as the Committee's own knowledge of the
prospective candidate, which may be supplemented by inquiries to the person
making the recommendation or others. The preliminary determination is based
primarily on the likelihood that the prospective nominee can satisfy the factors
described above. If the Committee determines, in consultation with the Chairman
of the Board and other Board members as appropriate, that further consideration
is warranted, it may gather additional information about the prospective
nominee's background and experience.
The Committee also considers such relevant factors as it deems
appropriate, including the current composition of the Board and specific needs
of the Board to assure its effectiveness. In connection with this evaluation,
the Committee determines whether to interview the prospective nominee; one or
more members of the Committee and other directors, as appropriate, may interview
the prospective nominee in person or by telephone. After completing this
evaluation, the Committee concludes whether to make a recommendation to the full
Board for its consideration.
* * *
This year John T. Dillon is standing for election by the
stockholders for the first time. He was brought to the attention of the
Corporate Governance Committee by the Chairman and Chief Executive Officer.
For DuPont's 2005 Annual Meeting, the Committee will consider
nominations submitted by stockholders of record and received by the Secretary of
the Company by December 6, 2004.
C-3
DIRECTIONS TO THE DUPONT THEATRE
FROM PHILADELPHIA ON I-95 SOUTH
1. Follow I-95 South to Wilmington.
2. From right lane take Exit 7A marked "52 South, Delaware Ave."
3. Follow exit road (11th Street) marked "52 South, Business District."
4. Continue on 11th Street bearing left through Delaware Avenue intersection
to parking.
5. The DuPont Theatre is in the Hotel du Pont Building.
FROM BALTIMORE ON I-95 NORTH
1. Follow I-95 North to Wilmington Exit 7 marked "Route 52, Delaware Avenue."
2. From right lane take Exit 7 onto Adams Street.
3. At the third traffic light on Adams Street, turn right onto 11th Street.
4. Follow 11th Street marked "52 South, Business District," bearing left
through Delaware Avenue intersection to parking.
5. The DuPont Theatre is in the Hotel du Pont Building.
DOWNTOWN WILMINGTON
[MAP OF DOWNTOWN WILMINGTON OMITTED]
To reach Wilmington by train, please call AMTRAK at 800-872-7245 for Northeast
Corridor service or SEPTA at 302-652-3278 for local train service.
www.dupont.com
Printed on Recycled Paper
E. I. DU PONT DE NEMOURS
AND COMPANY
ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 2004
10:30 A.M.
The DuPont Theatre
DuPont Building
1007 Market Street
Wilmington, Delaware
--------------------------------------------------------------------------------
DETACH HERE
PROXY / VOTING INSTRUCTION CARD
[DU PONT LOGO] E. I. DU PONT DE NEMOURS AND COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints C. J. Crawford, C. O. Holliday, Jr., and C.
M. Vest, or any of them, each with power of substitution, as proxies for the
undersigned to vote all shares of Common Stock of said Company which the
P undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held on April 28, 2004, and any adjournments thereof, as hereinafter
R specified and, in their discretion, upon such other matters as may properly
come before the meeting. The undersigned hereby revokes all proxies
O previously given.
X As described on page 1 of the proxy statement, this proxy also provides
voting instructions for shares held for the account of the undersigned in
Y certain employee savings plans. A trustee for each plan will vote these
shares as directed provided your voting instruction is received by April 22,
2004. A TRUSTEE FOR AN EMPLOYEE SAVINGS PLAN MAY VOTE IN ITS DISCRETION ALL
SHARES HELD IN THE PLAN FOR WHICH NO VOTING INSTRUCTIONS ARE RECEIVED. OTHER
SHARES OWNED BY YOU WILL BE VOTED ONLY IF YOU SIGN AND RETURN A PROXY CARD,
VOTE BY INTERNET OR TELEPHONE, OR ATTEND THE MEETING AND VOTE BY BALLOT.
ON MATTERS FOR WHICH YOU DO NOT SPECIFY A CHOICE, YOUR SHARES WILL BE VOTED
IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS.
Nominees for the Election of Directors are:
(01) A. J. P. Belda, (02) R. H. Brown, (03) C. J. Crawford,
(04) J. T. Dillon, (05) L. C. Duemling, (06) C. O. Holliday, Jr.,
(07) D. C. Hopkins, (08) L. D. Juliber, (09) M. Naitoh, (10) W. K. Reilly,
(11) H. R. Sharp, III, and (12) C. M. Vest
-----------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN THIS PROXY ON THE OTHER SIDE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE.
-----------------------------------------------------------------------------
If you write in the space below, please mark the corresponding
box on the other side.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
------------------------------------- ------------------------------------
------------------------------------- ------------------------------------
------------------------------------- ------------------------------------
Your shares will not be voted unless you vote by Internet or telephone as
desribed on the other side or sign and return this card.
E. I. DU PONT DE NEMOURS AND COMPANY
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8627
EDISON, NJ 08818-8627
------------------------------
------------------------------
YOUR VOTE IS IMPORTANT. PLEASE VOTE IMMEDIATELY.
----------------------------------------- -----------------------------------------
OR
VOTE-BY-INTERNET VOTE-BY-TELEPHONE
LOG ON TO THE INTERNET AND GO TO [GRAPHIC OF COMPUTER OMITTED] CALL TOLL-FREE [GRAPHIC OF PHONE OMITTED]
HTTP://WWW.EPROXYVOTE.COM/DD 1-877-PRX-VOTE (1-877-779-8683)
----------------------------------------- -----------------------------------------
IF YOU VOTE OVER THE INTERNET OR BY TELEPHONE, PLEASE DO NOT MAIL YOUR CARD.
THANK YOU FOR VOTING.
--------------------------------------------------------------------------------
DETACH HERE IF YOU ARE RETURNING YOUR PROXY CARD BY MAIL |2185
|
[X] PLEASE MARK |
VOTES AS IN -------
THIS EXAMPLE.
WHEN PROPERLY EXECUTED THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 AND
AGAINST PROPOSALS 3 THROUGH 5.
------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" BOARD PROPOSALS 1 AND 2.
------------------------------------------------------------------------------------------------------
FOR WITHHELD (01) A. J. P. Belda (07) D. C. Hopkins
1. On Election of [ ] [ ] (02) R. H. Brown (08) L. D. Juliber
Directors (03) C. J. Crawford (09) M. Naitoh
For all nominees except as noted below (04) J. T. Dillon (10) W. K. Reilly
[ ] (05) L. C. Duemling (11) H. R. Sharp, III
---------------------------------------- (06) C. O. Holliday, Jr. (12) C. M. Vest
FOR AGAINST ABSTAIN
2. On Ratification of [ ] [ ] [ ]
Accountants
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE
FOLLOWING STOCKHOLDER PROPOSALS.
------------------------------------------------------------------------------------------------------
FOR AGAINST ABSTAIN
3. On Government Service [ ] [ ] [ ]
4. On International Workplace Standards [ ] [ ] [ ]
5. On Executive Compensation [ ] [ ] [ ]
------------------------------------------------------------------------------------------------------
Send Annual
Meeting Ticket [ ]
Discontinue Annual Report [ ]
Mailings for this Account
Change Of [ ]
Address/Comments
Please sign this proxy exactly as name appears hereon. When
shares are held by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or
guardian, please give full title as such. If the signer is a
corporation, sign the full corporate name by duly authorized
officer.
Signature: Date: Signature: Date:
--------------------------------- ------------- --------------------------------- -------------
E. I. du Pont de Nemours and Company
2004 Telephone Voting Script
-------------------------------------------
Toll Free: 1-877-PRX-VOTE or 1-877-779-8683
-------------------------------------------
1. Welcome to the electronic voting system. Please have your proxy card or
voting instruction sheet or ballot available before voting.
2. Enter the series of numbers printed in the shaded area on your proxy card
followed by the pound sign.
3. One moment please while we verify your information.
4. Enter the last four digits of the U.S. Social Security number or the U.S.
taxpayer identification number for this account followed by the pound sign.
5. The company that you are voting is E. I. du Pont de Nemours and Company.
6. Your vote is subject to the same terms and authorizations as indicated on
the proxy card. It also authorizes the named proxies to vote according to
the instructions at the meeting of the stockholders.
7. To vote all proposals in accordance with the recommendations of the Board
of Directors, press 1. If you wish to vote on one proposal at a time, press
2.
If 1, go to 13.
If 2, go to 8.
8. Item #1. To vote for all nominees press 1. To withhold from all nominees
press 2. To withhold from individual nominees press 3.
If 1, go to 9.
If 2, go to 9.
If 3. go to DIRECTOR EXCEPTION.
----------------------------------------------------------------
DIRECTOR EXCEPTION
Enter the 2-digit number next to the nominee from whom you would
like to withhold your vote followed by the pound key. Or, if you
have completed voting on directors, press the pound key again.
If pound key entered, go to 9.
If valid nominee number, go to NEXT NOMINEE.
NEXT NOMINEE
To withhold your vote from another nominee, enter the 2-digit
number next to the nominee followed by the pound key. Or, if you
have completed voting on directors press the pound key again.
If pound key entered, go to 9.
If valid nominee number, go to NEXT NOMINEE.
INVALID NOMINEE NUMBER
You have entered an invalid nominee number.
{Go to NEXT NOMINEE.}
----------------------------------------------------------------
9. Item #2. To vote for, press 1; against, press 2; to abstain, press 3.
If 1, go to 10.
If 2, go to 10.
If 3, go to 10.
10. Item #3. To vote for, press 1; against, press 2; to abstain, press 3.
If 1, go to 11.
If 2, go to 11.
If 3, go to 11.
11. Item #4. To vote for, press 1; against, press 2; to abstain, press 3.
If 1, go to 12.
If 2, go to 12.
If 3, go to 12.
12. Item #5. To vote for, press 1; against, press 2; to abstain, press 3.
If 1, go to 13.
If 2, go to 13.
If 3, go to 13.
13. If you would like us to send you an Annual Meeting Admission Ticket,
press 1. If not, press 2.
If 1, go to 14.
If 2, go to 14.
14. If you would like to discontinue mailing an annual report to this account,
press 1. If not, press 2.
15. You have cast your vote as follows:
-----------------------------------------------------------------
PLAYBACK {Playback the appropriate vote for this proxy card.}
=================================================================
DEFAULT PLAYBACK
You have voted in the manner recommended by the Board of
Directors.
DIRECTOR PROPOSAL PLAYBACK
FOR ALL NOMINEES
OR
FOR ALL NOMINEES EXCEPT FOR THE FOLLOWING NOMINEE NUMBERS
OR
WITHHOLD FOR ALL NOMINEES
FOR/AGAINST/ABSTAIN PROPOSAL PLAYBACK
Item # {For | Against | Abstain}
-----------------------------------------------------------------
16. Your vote has been successfully recorded. It is not necessary for you to
mail your card. If you wish to vote another card or change your vote, press
1. Otherwise, please hang up. Thank you for voting.
-----------------------------------------------------------------
NO KEY PRESSED
Go to the same item (repeat three times); otherwise, go to ERROR.
INVALID NUMBER
Go to the same item (repeat three times); otherwise, go to ERROR.
ERROR
We are unable to process your request at this time. Thank you for
calling.
{Call ends.}
-----------------------------------------------------------------
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DELIVERY PREFERENCE
Select how you would like to receive your future annual meeting materials:
[_] Postal mail -or-
[_] Electronically (VIEW TERMS AND CONDITIONS FOR ELECTRONIC DELIVERY).
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Enter e-mail address again for validation [ ]
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PROXY / VOTING INSTRUCTIONS CARD
E. I. DU PONT DE NEMOURS AND COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints C. J. Crawford, C. O. Holliday, Jr., and C. M.
Vest, or any of them, each with power of substitution, as proxies for the
undersigned to vote all shares of Common Stock of said Company which the
undersigned is entitled to vote at the Annual Meeting of Stockholders to be held
on April 28, 2004, and any adjournments thereof, as hereinafter specified and,
in their discretion, upon such other matters as may properly come before the
meeting. The undersigned hereby revokes all proxies previously given.
As described on page 1 of the proxy statement, this proxy also provides voting
instructions for shares held for the account of the undersigned in certain
employee savings plans. A trustee for each plan will vote these shares as
directed provided your voting instruction is received by April 28, 2004. A
TRUSTEE FOR AN EMPLOYEE SAVINGS PLAN MAY VOTE IN ITS DISCRETION ALL SHARES HELD
IN THE PLAN FOR WHICH NO VOTING INSTRUCTIONS ARE RECEIVED. OTHER SHARES OWNED BY
YOU WILL BE VOTED ONLY IF YOU SIGN AND RETURN A PROXY CARD, VOTE BY INTERNET OR
TELEPHONE, OR ATTEND THE MEETING AND VOTE BY BALLOT.
On matters for which you do not specify a choice, your shares will be voted in
accordance with the recommendation of the Board of Directors.
E. I. DU PONT DE NEMOURS AND COMPANY DIRECTORS RECOMMEND A VOTE:
"FOR" ALL NOMINEES
"FOR" PROPOSAL 2
"AGAINST" PROPOSAL 3
"AGAINST" PROPOSAL 4
"AGAINST" PROPOSAL 5
Check this box to cast your vote in accordance with the recommendations of
E. I. du Pont de Nemours and Company Directors: [_]
E. I. DU PONT DE NEMOURS AND COMPANY DIRECTORS RECOMMEND A VOTE "FOR" ALL
NOMINEES.
1. Election of Directors [_] FOR ALL NOMINEES, [_] WITHHOLD AS TO
EXCEPT AS NOTED BELOW ALL NOMINEES
[_] A. J. P. Belda [_] R. H. Brown [_] C. J. Crawford
[_] J. T. Dillon [_] L. C. Duemling [_] C. O. Holliday, Jr.
[_] D. C. Hopkins [_] L. D. Juliber [_] M. Naitoh
[_] W. K. Reilly [_] H. R. Sharp, III [_] C. M. Vest
E. I. DU PONT DE NEMOURS AND COMPANY DIRECTORS RECOMMEND A VOTE "FOR"
PROPOSAL 2.
2. On Ratification of Accountants [_] FOR [_] AGAINST [_] ABSTAIN
E. I. DU PONT DE NEMOURS AND COMPANY DIRECTORS RECOMMEND A VOTE "AGAINST"
PROPOSAL 3.
3. On Government Service [_] FOR [_] AGAINST [_] ABSTAIN
E. I. DU PONT DE NEMOURS AND COMPANY DIRECTORS RECOMMEND A VOTE "AGAINST"
PROPOSAL 4.
4. On International Workplace Standards [_] FOR [_] AGAINST [_] ABSTAIN
E. I. DU PONT DE NEMOURS AND COMPANY DIRECTORS RECOMMEND A VOTE "AGAINST"
PROPOSAL 5.
5. On Executive Compensation [_] FOR [_] AGAINST [_] ABSTAIN
IF APPLICABLE, CLICK THE OPTIONS BOX: [_] Send Annual Meeting Ticket
[_] Discontinue Annual Report
Mailings for this Account
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(NOTE: Your vote will not be counted until you click "Submit".)
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----------
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2. On Ratification of Accountants ( )
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5. On Executive Compensation ( )
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for this account
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