<PAGE>
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
E.I. DU PONT DE NEMOURS AND COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
E.I. DU PONT DE NEMOURS AND COMPANY
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
<PAGE>
[LETTERHEAD OF DUPONT APPEARS HERE]
Annual Meeting--April 30, 1997
March 21, 1997
Dear Stockholder:
You are invited to attend the Company's 1997 Annual Meeting on Wednesday,
April 30, 1997, at 10:30 a.m. in The Playhouse Theatre, DuPont Building,
Wilmington, Delaware.
The enclosed Notice of Annual Meeting and Proxy Statement 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 obtain a ticket, please check the appropriate box on the enclosed proxy.
Please include information on any accommodation you may need because of a
disability. Because seating capacity is limited, we suggest that you arrive as
close as possible to 9:30 a.m., when The Playhouse opens.
If you are unable to attend this year's meeting, you can ensure your
representation by completing the enclosed proxy and returning it in the postage-
paid envelope.
The Annual Meeting gives us an opportunity to review results and discuss the
steps the Company is taking to assure a strong performance in the future. Your
interest in the Company is much appreciated, and I hope you will be able to join
us as we talk about these matters on April 30.
Sincerely,
/s/ Edgar S. Woolard, Jr.
Edgar S. Woolard, Jr.
[LOGO OF RECYCLED PAPER APPEARS HERE]
<PAGE>
March 21, 1997
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 30, 1997, at 10:30 a.m. local time, in The
Playhouse Theatre in the DuPont Building, 1007 Market Street, Wilmington,
Delaware. The meeting will be held to consider and act upon the election of
directors, ratification of independent accountants, management proposals on
Charter amendment to effect two-for-one Common Stock split and on Variable
Compensation Plan amendment, 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 7, 1997, are entitled to vote at the meeting.
This notice and the accompanying proxy material are sent to you by order of
the Board of Directors.
Louise B. Lancaster
Secretary
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE PROXY IN THE
ENCLOSED ENVELOPE AS SOON AS POSSIBLE.
<PAGE>
PROXY STATEMENT
March 21, 1997
The enclosed proxy is being solicited by order of the Board of Directors of
E. I. du Pont de Nemours and Company for use in connection with the Annual
Meeting of Stockholders to be held April 30, 1997.
The record date with respect to this solicitation is March 7, 1997. All
holders of record of DuPont Common Stock as of the close of business on that
date are entitled to vote at the meeting. As of that date the Company had
xxx,xxx,xxx shares of common stock outstanding. Each share of stock is entitled
to one vote. A favorable vote of a majority of the shares of common stock voted
in person or by proxy at the meeting is required for the approval of each of the
proposals described in this Proxy Statement, except Proposal Number 3 which
requires a favorable vote of a majority of the shares of common stock
outstanding. Abstentions and broker non-votes are not counted in the calculation
of the vote. A proxy may be revoked by the stockholder at any time prior to its
being voted. If a proxy is properly signed and is not revoked by the
stockholder, the shares it represents will be voted at the meeting in accordance
with the instructions of the stockholder. If the proxy is signed and returned
without specifying choices, the shares will be voted in accordance with the
recommendations of the Board of Directors.
The enclosed proxy also serves as the voting instruction card for the
trustees who hold shares of record for participants in the DuPont Savings and
Investment Plan, the Conoco Thrift Plan, the Investment Plan for Salaried
Employees of Consolidation Coal Company and the Conoco Employee Stock Ownership
Plan. If proxies representing shares in the employee savings plans listed above
are not returned, those shares will be voted at the discretion of a trustee.
Shares in the Conoco Employee Stock Ownership Plan cannot be voted unless the
proxy is signed and returned.
The Company's Annual Report to Stockholders, containing financial
statements reflecting the financial position and results of the operations of
the Company for 1996, and this Proxy Statement were distributed together
beginning March 21, 1997.
General Information
Proxy Statement Proposals. Each year the Board of Directors submits to the
stockholders at the annual meeting its nominations for election of directors. In
addition, the Bylaws of the Company require that the selection of independent
accountants by the Audit Committee of the Board of Directors be submitted for
stockholder ratification at each annual meeting. Other proposals may be
submitted by the Board of Directors or stockholders for inclusion in the proxy
statement for action at the annual meeting. Any proposal submitted by a
stockholder for inclusion in the 1998 Annual Meeting Proxy Statement must be
received by the Company no later than November 21, 1997.
Stockholder Nominations for Election of Directors. The Corporate Governance
Committee recommends to the Board of Directors nominees for election as
directors at the annual meeting. In making such recommendations, the Corporate
Governance Committee will consider nominations submitted by stockholders. Any
such nominations must be made by stockholders of record and received by the
Secretary of the Company by the first Monday in December. Nominations must be
accompanied by a statement of the nominee indicating willingness to serve if
elected and disclosing principal occupations or employments held over the past
five years.
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. Proxy cards 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.
1
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Proxy Solicitation. All costs relating to the solicitation of proxies will be
borne by the Company. Morrow & Co. has been retained by the Company to aid in
the solicitation of proxies, at an estimated cost of $13,500 plus reimbursement
of out-of-pocket expenses. Proxies may also be solicited by officers, directors
and employees of the Company personally or by mail, telephone or facsimile
transmission. On request, the Company will pay brokers and other persons holding
shares of stock in their names or in those of their nominees for their
reasonable expenses in sending soliciting material to, and seeking instructions
from, their principals.
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 inspectors of
election, none of whom is an employee of the Company, 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.
The Board of Directors
Operation and Meetings. The Board of Directors is responsible for broad
corporate policy and the overall performance of the Company. Members of the
Board are kept informed of the Company's business by various documents sent to
them before each meeting and oral reports made to them during these meetings by
the Chairman, President and Chief Executive Officer and other corporate
executives. They are advised of actions taken by the Audit, Compensation,
Corporate Governance, Environmental Policy and Strategic Direction Committees
and the Office of the Chief Executive. In addition, the directors receive
written reports from the businesses when they propose actions for Board
approval. Directors have access to all books, records and reports, and members
of management are available at all times to answer their questions.
In 1996 six regular meetings and one special meeting of the Board of
Directors were held. All current directors attended 75% or more of the total
Board and committee meetings held in 1996, and attendance averaged 95%.
Directors discharge their responsibilities not only by attending Board and
committee meetings but also through communication with the Chairman and members
of management relative to matters of mutual interest and concern to the Company.
Retirement Policy. The Company's retirement policy for directors provides that
no director may stand for reelection to the Board after reaching age 70. All
employee directors retire from the Board when they retire from employment with
the Company with the exception of former Chief Executive Officers. The Board at
its discretion may in unusual circumstances, and for a limited period, ask a
Board member to stand for reelection after the prescribed retirement date.
Compensation. Members of the Board who are employees of DuPont or any of its
subsidiaries are not compensated for service on the Board or on committees.
E. S. Woolard, Jr., who retired as an employee of the Company and remains
Chairman of the Board and Chairman of the Strategic Direction Committee,
receives $300,000 per year. All other nonemployee directors receive an annual
retainer fee of $35,000 for service on the Board, and a fee of $1,000 per
meeting for attending special meetings of the Board and stockholder meetings
held on a day when the Board does not meet. Nonemployee directors receive annual
compensation for committee service as follows: (a) committee chairmen receive
$15,000, (b) members of the Strategic Direction Committee receive $9,000 and
(c) members of the other Board committees receive $6,000. Nonemployee directors,
other than the Chairman, also receive an annual grant of 200 shares of DuPont
Common Stock. The Chairman received a grant in January 1996 of a nonqualified
stock option for 100,000 shares of DuPont Common Stock. In 1996, A. F. Brimmer
provided economic advice to the Board and W. K. Reilly attended a business
meeting in Japan for fees of $40,000 and $8,000 respectively.
2
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Under the terms of the DuPont Stock Accumulation and Deferred Compensation
Plan for Directors, any director may defer all or part of the payment of Board
and committee fees in the form of cash or stock units until a specified year or
until ceasing to be a director of the Company. Annual stock grants may also be
deferred but only as stock units. Interest equivalents accrue on payments
deferred in the form of cash and dividend equivalents accrue on payments
deferred in the form of stock units. For 1997, six directors have elected to
defer payment of directors' fees or the annual stock grant. Nonemployee
directors are also eligible to participate in a retirement income plan if on the
date of retirement from the Board they have served on the Board for at least
five years and have not qualified for an immediate or deferred pension benefit
from the Company or any of its subsidiaries. The annual benefits payable under
the plan are equal to one-half of the annual Board retainer (exclusive of any
committee compensation and annual stock grants) in effect on the date of the
director's retirement. Benefits are available for the lesser of life or 10
years.
The Directors' Charitable Gift Plan was established to improve the
competitiveness of the compensation and benefits package for Board members.
After a director's death, 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 will be fully vested in the Plan upon completion of five
years of service as a director or upon death or disability. The Plan is
unfunded. The Company may fund the Plan through, among other vehicles, the
purchase of life insurance policies on the lives of directors, and the Company
would own and be the beneficiary of the policies. Directors derive no personal
financial or tax benefit from the Plan because the charitable, tax deductible
donations and insurance proceeds, if any, accrue solely to the benefit of the
Company. Employee directors may participate in the Plan provided they bear their
allocable cost. The Company also maintains accidental death, dismemberment and
disability insurance on nonemployee directors in the amount of $300,000.
Office of the Chief Executive. The Office of the Chief Executive has
responsibility for the overall direction and operations of all the businesses of
the Company, including corporate financial performance, environmental leadership
and safety, and development of global talent. All five members are employees and
two are directors. Its members include the President and Chief Executive
Officer, three Executive Vice Presidents and the Senior Vice President-DuPont
Finance. The Office of the Chief Executive works in close coordination with the
executive officers of the Company who constitute the Operating Group. Together,
the Office of the Chief Executive and the Operating Group have broad corporate
responsibility for such areas as research and development, marketing,
manufacturing, global effectiveness and valuing people.
Strategic Direction Committee. The Strategic Direction Committee, which consists
of five directors, is responsible for reviewing the strategic direction of the
Company's major business segments. The Committee also reviews major trends in
technology and their anticipated impact on the Company. The Strategic Direction
Committee also had responsibility for recommending to the Board nominees for
election as directors at the annual meeting or between annual meetings. During
1996, the Strategic Direction Committee held three meetings.
Environmental Policy Committee. The Environmental Policy Committee is
responsible for reviewing the Company's environmental policies and practices.
The Committee also provides support for the Company's leadership role in
corporate environmentalism. The Environmental Policy Committee, which consists
of five directors, held three meetings in 1996.
Audit Committee. The Audit Committee, which consists of four directors, employs
independent accountants, subject to stockholder ratification, to audit the
Company's financial statements and perform other assigned duties. The Committee
also requests the Company's subsidiaries to engage independent accountants, as
the Committee deems appropriate, to audit their respective financial statements.
Further, the Committee provides general oversight with respect to the accounting
principles employed in financial reporting and the adequacy of the Company's
internal controls. No member of the Audit Committee may be an officer or
employee of the Company or any subsidiary or affiliated company. During 1996,
the Audit Committee held three meetings.
3
<PAGE>
Compensation Committee. The Compensation Committee, which consists of four
directors, is responsible for establishing an executive compensation policy
consistent with corporate objectives and stockholder interests. The Committee
has responsibility for recommending to the Board levels of compensation,
including salaries as well as variable compensation and stock options, for the
employee directors. The Compensation Committee also administers grants under the
Company's compensation plans. During 1996, the Compensation Committee held four
meetings.
Corporate Governance Committee. In January 1997 the Board established a
Corporate Governance Committee which consists of three directors. The Committee
is responsible for recommending to the Board nominees for election as directors,
including nominees for election as directors at the annual meeting, formerly a
responsibility of the Strategic Direction Committee. The Committee also has
responsibility for reviewing and making recommendations to the Board related to
matters on corporate governance such as the practices, policies and procedures
affecting directors and the Board's operations and effectiveness. No members of
the Committee may be an officer or employee of the Company or its subsidiaries.
Other Information. In August 1995 a purported stockholder derivative action was
brought in the U.S. District Court in Columbus, Georgia, by one individual on
behalf of the Company against the then current and certain former directors
(including all nominees except A. W. Dunham, L. D. Juliber and G. Watanabe). The
civil suit, which seeks unspecified damages and other relief, alleges a breach
of fiduciary duty related to the Company's response to a ruling by that court
imposing a conditional fine of about $115 million on the Company in connection
with its conduct of certain Benlate(R) 50 DF fungicide litigation. That fine has
been vacated by the Eleventh Circuit Court of Appeals. The derivative action has
been stayed pending resolution of any further review regarding the fine.
1--ELECTION OF DIRECTORS
The 13 nominees for election as directors are identified on pages x through
x. All nominees are now members of the Board of Directors. 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, positions with the Company, other
directorships, and age as of the date of the 1997 Annual Meeting.
[PHOTO OF PERCY N. BARNEVIK
PERCY N.
BARNEVIK Director since 1991 Chairman, Corporate Governance Committee
APPEARS Age 56 and Member, Strategic Direction Committee
HERE]
Mr. Barnevik is Chairman and former chief executive officer of ABB
Asea Brown Boveri Ltd., headquartered in Zurich, Switzerland, a
company serving electric power generation, transmission and
distribution customers as well as industrial, environmental
control and mass transit markets. In addition to ABB Asea Brown
Boveri Ltd., he is also a director of General Motors Corporation
and Investor AB and non-executive chairman of the boards of
Sandvik AB and Skanska AB.
4
<PAGE>
[PHOTO OF ANDREW F. BRIMMER
ANDREW F.
BRIMMER Director since 1974 Chairman, Audit Committee and
APPEARS Age 70 Member, Strategic Direction and
HERE] Corporate Governance Committees
Dr. Brimmer is President and a director of Brimmer & Company,
Inc., a Washington, D.C.-based economic and financial consulting
firm. He serves as Chairman, District of Columbia Financial
Responsibility and Management Assistance Authority. He was a
visiting professor at the Harvard Business School and a member of
the Board of Governors of the Federal Reserve System. Dr. Brimmer
is a director of Airborne Freight Corporation, BankAmerica
Corporation, BlackRock Investment Income Trust, CarrAmerica
Corporation, Gannett Company, Inc., Navistar International
Corporation and PHH Corporation. He serves as chairman of the
Board of Trustees of Tuskegee University and is a member of the
Council on Foreign Relations.
[PHOTO OF LOUISA C. DUEMLING
LOUISA C.
DUEMLING Director since 1982 Member, Environmental
APPEARS Age 61 Policy Committee
HERE]
Mrs. Duemling is a member of the board of governors of the Nature
Conservancy and the board of trustees of the Chesapeake Bay
Foundation.
[PHOTO OF ARCHIE W. DUNHAM
ARCHIE W.
DUNHAM Director since 1996 Member, Environmental
APPEARS Age 58 Policy Committee
HERE]
An Executive Vice President, Mr. Dunham is also President and
Chief Executive Officer of Conoco. He is a former senior vice
president-DuPont, executive vice president-exploration production
of Conoco and senior vice president of DuPont Polymers and DuPont
Chemicals and Pigments. He is a director of Louisiana Pacific
Corporation, the American Petroleum Institute, the National
Petroleum Council, the U.S.-Russia Business Council and the
Greater Houston Partnership and a director and vice chairman of
the United States Energy Association. Mr. Dunham also serves on
the board of trustees of the Memorial Hospital System in Houston,
the Houston Grand Opera, Houston Symphony and George Bush
Presidential Library.
[PHOTO OF EDWARD B. du PONT
EDWARD B.
du PONT Director since 1978 Member, Audit Committee
APPEARS Age 63
HERE]
Mr. du Pont is former chairman of Atlantic Aviation Corporation,
the principal business of which is the charter, completion,
storage, operation and maintenance of aircraft. He is a former
vice president of Wilmington Trust Company. He serves as a
director of Atlantic Aviation Corporation and Wilmington Trust
Corporation, treasurer and a director of the Medical Center of
Delaware, president and a trustee of Eleutherian Mills-Hagley
Foundation, and vice president and a trustee of Longwood
Foundation, Inc.
5
<PAGE>
[PHOTO OF CHARLES M. HARPER
CHARLES M.
HARPER Director since 1992 Chairman, Compensation Committee
APPEARS Age 69 and Member, Strategic Direction and
HERE] Corporate Governance Committees
Mr. Harper is former chairman and chief executive officer of RJR
Nabisco Holdings, Corp., a food and tobacco company. He is a
director and former chairman and chief executive officer of
ConAgra, Inc., and a director of Norwest Corporation, Peter Kiewit
Sons', Inc., and Valmont Industries Inc.
[PHOTO OF LOIS D. JULIBER
LOIS D.
JULIBER Director since 1995 Member, Audit and
APPEARS Age 48 Compensation Committees
HERE]
Ms. Juliber is Executive Vice President and Chief of Operations,
Developed Markets, Colgate-Palmolive Company, the principal
business of which is the production and marketing of consumer
products. She formerly served as president, Colgate-Palmolive
North America, chief technological officer of Colgate-Palmolive
and president of that company's Far East/Canada businesses.
Ms. Juliber is a member of the board of trustees of Wellesley
College.
[PHOTO OF JOHN A. KROL
JOHN A.
KROL APPEARS Director since 1992 Member, Strategic Direction and
HERE] Age 60 Environmental Policy Committees
President and Chief Executive Officer, Mr. Krol is a former vice
chairman and senior vice president of DuPont Fibers and DuPont
Agricultural Products. He is a director of J. P. Morgan & Co. Inc.
and Mead Corporation, a member of the Business Roundtable and The
Business Council, and serves on the boards of the National
Association of Manufacturers and the Delaware Art Museum. Mr. Krol
is also a trustee of Eleutherian Mills-Hagley Foundation, Tufts
University, the University of Delaware and the United States
Council for International Business.
[PHOTO OF WILLIAM K. REILLY
WILLIAM K.
REILLY Director since 1993 Chairman, Environmental
APPEARS Age 57 Policy Committee
HERE]
Mr. Reilly is Chief Executive Officer of Aqua International
Partners, 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 Allied Waste
Industries, Inc., Catalytic Combustion Systems and Evergreen
Holdings, Inc., and a trustee of The National Geographic Society
and World Wildlife Fund. He also serves on the boards of The Yale
Corporation, the American Farmland Trust, Clean Sites, Inc., and
the German Marshall Fund of the United States.
6
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[PHOTO OF H. RODNEY SHARP, III
H. RODNEY
SHARP, III Director since 1981 Member, Audit and
APPEARS Age 61 Compensation Committees
HERE]
Mr. Sharp served as manager of Computer Systems of DuPont
Information Systems. He is president of the Board of Trustees of
Longwood Foundation, Inc., and serves as a trustee of St.
Augustine's College (Raleigh, North Carolina). Mr. Sharp is also a
director of the Medical Center of Delaware Foundation, Community
Housing, Inc., Planned Parenthood of Delaware, and the YMCA of
Delaware.
[PHOTO OF CHARLES M. VEST
CHARLES M.
VEST APPEARS Director since 1993 Member, Environmental Policy and
HERE] Age 55 Compensation Committees
Mr. Vest is 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, a member of the National Academy of Engineering and the
Corporation of the Woods Hole Oceanographic Institution and a
trustee of Wellesley College.
[PHOTO OF GORO WATANABE
GORO
WATANABE Director since September 1996
APPEARS Age 62
HERE]
Mr. Watanabe is an Executive Vice President of Mitsui & Co., Ltd.,
an international trading company headquartered in Tokyo, Japan. He
formerly served as senior executive managing director and
president and chief executive officer of Mitsui & Co. (U.S.A.).
[PHOTO OF EDGAR S. WOOLARD, JR.
EDGAR S.
WOOLARD, JR. Director since 1983 Chairman, Strategic
APPEARS Age 63 Direction Committee
HERE]
Chairman of the Board, Mr. Woolard served as chief executive
officer, president and chief operating officer, vice chairman and
executive vice president. He is a director of Apple Computer,
Inc., and Citicorp and a member of The Business Council. He also
serves as a trustee of the Medical Center of Delaware, Protestant
Episcopal Theological Seminary and the Winterthur Museum and
Gardens.
7
<PAGE>
Beneficial Ownership of Securities
Principal Stockholders. As of December 31, 1996, Wilmington Trust Corporation,
Wilmington, Delaware, beneficially owned an aggregate of 56,610,566 shares of
the Company's Common Stock, or 9.8% of such shares outstanding at the time. The
shares held by Wilmington Trust are held of record for trust, estate, custody or
agency accounts and include 15,495,795 shares held in the DuPont Flexitrust, a
trust created by the Company to satisfy obligations of the Company under various
employee benefit and compensation plans.
Directors and Executive Officers. Following is information concerning beneficial
ownership of shares in DuPont for each director and nominee, executive officers
named in the Summary Compensation Table on page xx and for all directors and
executive officers as a group as of December 31, 1996. Also included are shares
of DuPont Common Stock granted in 1997 under the Variable Compensation Plan and
those acquired by exercise of stock options by February 21, 1997 (with a
corresponding adjustment to stock options held at December 31, 1996, and net of
any dispositions). Under rules of the Securities and Exchange Commission,
"beneficial ownership" is deemed to include shares for which the individual,
directly or indirectly, has or shares voting or investment power, whether or not
they are held for the individual's benefit.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
--------------------------------------
(Number of Shares)
Voting or
Investment Right to Percent of
Direct(1) Power(2) Acquire(3) Class(4)
--------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DuPont Common Stock
P. N. Barnevik............................................
J. A. Blumberg............................................
A. F. Brimmer.............................................
L. C. Duemling............................................
A. W. Dunham..............................................
E. B. du Pont.............................................
G. W. Edwards.............................................
C. M. Harper..............................................
C. O. Holliday, Jr........................................
L. D. Juliber.............................................
J. A. Krol................................................
W. K. Reilly..............................................
H. R. Sharp, III..........................................
C. M. Vest................................................
G. Watanabe...............................................
E. S. Woolard, Jr.........................................
Directors and Executive Officers as a Group...............
</TABLE>
(1) Reported in this column are shares held individually or jointly with others,
or in the name of a bank, broker or nominee for the individual's account.
Also included in this column 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.
(2) Reported in this column are other shares with respect to 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) Reported in this column are shares which directors and executive officers
have a right to acquire through the exercise of stock options granted under
the DuPont Stock Performance Plan.
(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 deemed 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 x,xxx,xxx shares; and E. B. du Pont and J. A.
Krol are each listed as beneficial owners of the same xx,xxx shares. These
shares of DuPont Common Stock are reported only once in the total for
directors and executive officers as a group.
8
<PAGE>
Section 16(a) Beneficial Ownership Reporting Compliance. The Company's directors
and executive officers are required under the Securities Exchange Act of 1934 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. One
report timely filed by G. W. Edwards, an executive officer, was amended to
include an additional transaction.
Compensation Committee Report on Executive Compensation
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for establishing policies and programs which govern compensation for
executive officers and other employees who participate in the Company's Variable
Compensation Plan and Stock Performance Plan. The Committee makes specific
individual recommendations to the Board of Directors for employee directors.
The Company's executive compensation policy is to provide appropriate total
annual compensation when compared with positions of equivalent responsibility
within a self-constructed group of peer companies. Total annual compensation
consists of salary and variable compensation. 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 xx. 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.
Compensation for executive officers consists of three components: salary,
variable compensation and stock options.
Salary
Consistent with the Company's policy, salaries are about the average of the
peer group. Salary increases for executive officers are based on individual
contribution and position versus the average of the peer group. This is the same
approach as used for other salaried employees.
Variable Compensation
The Variable Compensation Plan (VCP) provides approximately 10,000
employees, including executive officers, with total annual compensation that
varies up or down based on the performance of the Company, the performance of
their business unit and their own contribution. Typically, 25% of variable
compensation is paid in DuPont Common 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 nonrecurring 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.
To determine the amounts of payments to VCP participants for 1996, the
Committee used a formula which consists of equally weighted components of
earnings per share (EPS) 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 subjective assessment of cash flow management for the year and corporate
financial performance compared with the peer group. For 1996 the Committee
reviewed the Company's performance relative to the peer group's EPS, ROIC and
total shareholder return.
9
<PAGE>
Since 1993, the Company has had a program to differentiate variable
compensation by business unit. Business differentiation is based on underlying
after-tax operating income and cash flow from operations versus each business
unit's financial commitment for the year. In addition, payments may be
differentiated by business unit based on a subjective assessment of performance
in such areas as valuing and developing people, safety, the environment, and
continuous improvement. The assessment of performance in these areas may also be
used to adjust the formula for overall corporate performance.
In arriving at the level of payments for 1996, the Committee considered
that 1996 EPS (excluding all nonrecurring items) was at an all-time high and 14%
higher than 1995 and ROIC was above the peer group, but business unit
performance opposite objectives was not as good as achieved in 1995. After
further adjusting EPS and ROIC for certain items not representative of operating
results (e.g., Seagram share redemption), the Committee approved average
payments that were 101% of 1995 levels. Payments among businesses ranged from
64% to 160% of the average.
Variable compensation payments for 1996 were 34% of the maximum amount
available under the overall VCP limit. Over the past ten years, the Committee
has approved payments on average of 57% of the maximum available.
Stock Options
Stock options are designed to provide an incentive for employees primarily
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 interests of optionees with those of the Company's stockholders.
About 1,100 employees, including executive officers and key leaders in all
global regions and middle management, received grants in 1996.
The Committee has established stock option targets for each participating
level of responsibility within the Company based on a survey conducted by
Frederic W. Cook & Co., Inc., of 40 large industrial companies. The consulting
firm's survey included nine of the peer group companies used for the total
annual compensation and stock performance graph comparisons 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
long-term compensation because of the greater variability in value of long-term
compensation plans. Corporate financial performance may be considered by the
Committee in determining the number of stock options granted. Targets for DuPont
are set to be near the median long-term incentive opportunity granted by the
survey group.
Stock options are typically granted annually. Individual grants may range
from 50% to 150% of the target for each level of responsibility to reflect
individual performance and potential. In addition to annual grants, special
stock option grants are made to employees to recognize advancement to key senior
management positions and to recognize significant achievements. All grants are
at market price on the date of grant and, after they become exercisable, have
value only if the price of DuPont Common Stock has increased to a value greater
than at the grant date. As further incentive for stock performance, for options
granted from 1994 through 1996 to be exercisable during all but the last six
months of the 10-year option term, the price of DuPont Common Stock must be at
least 120% of the price on the date of grant. This insures that a significant
gain for stockholders is achieved before any compensation is realized.
Equity Compensation Program
A unique Equity Compensation Program was implemented for 1997 with the goal
of continuing to drive performance to achieve on average at least 15% total
shareholder return per year. The program's key feature is the
10
<PAGE>
1997 stock option grant for senior management which has stock price hurdles
which must be met by 2002, the Company's bicentennial. For the full option grant
to become exercisable, the price of DuPont stock must be about 170% of grant
price, resulting in about a $42 billion increase in value for stockholders. The
Equity Compensation Program has three major components: ownership, the higher-
leveraged stock options, and a stock option grant for all employees.
The Board of Directors believes that executives should have a significant
stock ownership position in the Company. Ownership provides alignment with the
interests of stockholders by having personal assets at risk, and it encourages a
long-term focus in managing the Company. The Board has approved guidelines
specifying a level of stock ownership that each executive is expected to achieve
and maintain. Under these guidelines, senior management are expected to own
stock valued at five times annual base salary for the Chief Executive Officer
(CEO), four times for Executive Vice Presidents, three times for Senior Vice
Presidents and one and one-half times for Vice Presidents. Incumbents would have
three years in which to meet these guidelines. While specific amounts apply to
positions of Vice President and higher, all management is encouraged to maintain
a significant ownership position in DuPont stock.
In January 1997, a reload feature was added to the stock option program to
accelerate stock ownership by more effectively using previously granted stock
options. For a one-year period, employee participants are eligible for reload
options upon the exercise of previously granted stock options with the condition
that shares received from that exercise are held for at least five years.
Reloads are granted as nonqualified stock options at fair market value with a
grant value equal to the original option and a term equal to the remaining term
of the original option.
In support of management's stated objective of achieving on average at
least 15% per year total shareholder return, a unique Bicentennial Stock Option
Grant was made in January 1997 in lieu of a normal stock option grant described
above. This grant was designed to encourage greater management innovation and
creativity to achieve this growth challenge. For approximately 75 executives,
half of the options are exercisable at $150 per share and half at $180 per
share. In addition, these options will be forfeited if the exercise price is not
achieved within five years of the date of grant. Other participants received
fixed options that are exercisable at $150 per share, without a forfeiture
provision.
This program puts DuPont executives at a significantly higher risk than
their peers at other companies. Because of this higher risk, larger grants were
made. The number of options granted to the CEO and four other highest paid
executive officers are as follows:
J. A. Krol 291,500
A. W. Dunham 143,500
J. A. Blumberg 91,600
C. O. Holliday, Jr. 91,600
G. W. Edwards 66,600
In conjunction with the senior management program, the Board of Directors
approved the 1997 Corporate Sharing Program which granted 100 nonqualified stock
options to substantially all employees globally to engage everyone in achieving
profitable growth targets and to participate in the Company's success. These
fixed options have the same stock price hurdle price of $150 per share. A total
of 9.5 million shares were authorized for this program.
Compensation for the Chief Executive Officer
Since 1990, the Committee has used the position of Senior Vice President as
the benchmark tie to the peer group rather than that of CEO for determining the
CEO's total annual compensation. This practice has been used
11
<PAGE>
to address concerns over the upward spiral of CEO pay and the widening
divergence in CEO compensation compared to the average employee. Total annual
compensation for the CEO is about twice that of the Executive Vice Presidents
responsible for Chemicals and Specialties businesses.
John A. Krol became President and CEO on December 1, 1995. For 1996,
Mr. Krol's salary was 28% higher than 1995 reflecting the first full year of his
substantially increased responsibilities. For 1996, his variable compensation
was 110% of target for his position. In determining his variable compensation,
the Committee applied the same formula on a basis consistent with the
determination of variable compensation granted to other employees for 1996. In
evaluating Mr. Krol's performance, the Committee noted the Company's record
earnings, the 38% total shareholder return for 1996, and his leadership in
continuing to position the Company for long-range profitable growth. Mr. Krol
also received a stock option grant in 1996 that was 100% of target for his
position.
* * * * *
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 preserve its income tax deduction, including
the proposed amendments to the VCP described on page xx.
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 provide additional
opportunity for capital accumulation, but only if stockholder value is
increased.
COMPENSATION COMMITTEE
Charles M. Harper, Chairman
Lois D. Juliber
H. Rodney Sharp, III
Charles M. Vest
12
<PAGE>
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
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------- ------------
Name and Variable Other Shares All Other
Principal Compensation Annual Underlying Compensa-
Position Year Salary (Bonus)(1) Compensation(2) Options Granted tion(3)
-------- ---- -------- ---------- --------------- --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
J. A. Krol 1996 $900,000 $1,500,000 -- 103,000 $27,000
President and CEO 1995 702,000 1,040,000 -- 213,500 21,060
1994 567,000 830,000 -- 43,200 17,010
A. W. Dunham 1996 600,000 1,020,000 -- 105,000 36,000
Executive Vice President 1995 454,400 470,000 -- 35,000 27,254
1994 434,800 470,000 -- 28,000 26,058
J. A. Blumberg 1996 485,600 710,000 34,000 14,568
Executive Vice President 1995 396,600 510,000 -- 63,000 11,898
1994 349,500 440,000 -- 25,000 9,648
C. O. Holliday, Jr. 1996 472,000 710,000 34,000 14,160
Executive Vice President 1995 361,000 530,000 63,000 10,830
1994 308,000 410,000 25,000 8,611
G. W. Edwards 1996 416,040 540,000 -- 24,800 24,962
Senior Vice President 1995 395,200 345,000 -- 30,000 23,702
1994 378,400 370,000 -- 24,000 22,674
</TABLE>
__________
(1) On average, about 25% of variable compensation is paid in DuPont Common
Stock.
(2) For 1996, 1995 and 1994, respectively, includes $xxx,xxx, $xxx,xxx and
$xxx,xxx for C. O. Holliday, Jr., and $xxx,xxx for 1996 for J. A. Blumberg,
for reimbursement of taxes in excess of those that would have been incurred
in the foreign service employee's base country; and $xxx,xxx, $xxx,xxx and
$xxx,xxx for C. O. Holliday, Jr., and $xxx,xxx in 1996 for J. A. Blumberg,
in foreign housing allowances and other customary payments for expenses
related to overseas assignments.
(3) The Company's matching contributions made pursuant to the Company's savings
and thrift plans, including the following amounts credited under the related
savings restoration plan in 1996: $22,500 for J. A. Krol; $27,000 for A. W.
Dunham; $10,068 for J. A. Blumberg; $9,660 for C. O. Holliday, Jr.; and
$15,962 for G. W. Edwards.
13
<PAGE>
OPTION GRANTS TABLE
<TABLE>
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation
Individual Option Grants in 1996 for Option Term(3)
--------------------------------------------------------------------------------------------------
Number of Percent
Shares of Total
Underlying Options Expira-
Options Granted Exercise tion 0% 5% 10%
Name Granted(1) in 1996 Price(2) Date $79.25 $129.00 $205.50
- ---- ---------- ------- -------- --------- ------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. A. Krol .................. 103,000 3.62% $79.25 2/6/2006 0 $ 5,124,250 $13,003,750
A. W. Dunham ................ 53,000 1.86% 79.25 2/6/2006 0 2,636,750 6,691,250
52,000 1.83% 70.00 12/31/2005 0(4) 3,068,000(4) 7,046,000(4)
J. A. Blumberg .............. 34,000 1.19% 79.25 2/6/2006 0 1,691,500 4,292,500
C. O. Holliday, Jr. ......... 34,000 1.19% 79.25 2/6/2006 0 1,691,500 4,292,500
G. W. Edwards ............... 24,800 0.87% 79.25 2/6/2006 0 1,233,800 3,131,000
All Stockholders'
Gains ..................... increase in market value of DuPont
Common Stock at assumed rates of
stock price appreciation(5). $28,807,375,519 $73,104,143,905
All Optionees'
Gains...................... as a percent of all stockholders'
gains(6). 0.49% 0.49%
</TABLE>
_________
(1) Stock options reported here are exercisable twelve months from the date of
grant and have a term of ten years. The price of DuPont Common Stock must be
at least 120% of the price on the date of grant for the options to be
exercisable. All of these options were granted on February 7, 1996, except
for the 52,000 options granted to A. W. Dunham on January 1, 1996.
(2) 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.
(3) Represents total potential appreciation of about 0%, 63% and 159% for
assumed annual rates of appreciation of 0%, 5% and 10%, respectively,
compounded annually for the ten-year option term.
(4) Potential realizable value based on assumed DuPont Common Stock prices of
$79.25, $129.00 and $205.50 determined as described in Note 3 above. For
options granted on January 1, 1996 the representative equivalent DuPont
Common Stock prices applying the total potential appreciation of about 0%,
63% and 159% to the exercise price of $70.00 would be $70.00, $114.00 and
$181.50 which results in potential realizable values of $0, $2,288,000 and
$5,798,000 for A. W. Dunham.
(5) Calculated from the $79.25 exercise price applicable to most options granted
in 1996 based on the 579,042,724 shares outstanding on the February 7, 1996
grant date.
(6) Represents potential realizable value for all options granted in 1996 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 1996 is calculated from the $79.25 exercise price
applicable to most options granted in 1996.
14
<PAGE>
AGGREGATED 1996 OPTION EXERCISES/YEAR-END 1996 OPTION VALUES TABLE
<TABLE>
<CAPTION>
Shares Underlying Value of Unexercised
Option Unexercised Options In-the-Money Options
Exercises in 1996(1) Held at Dec. 31, 1996 Held at Dec. 31, 1996(3)
-------------------------- -------------------------- --------------------------
Shares
Underlying Value
Name Options Realized(2) Exercisable Unexercisable Exercisable Unexercisable
- ---- ---------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. A. Krol................. 6,000 $ 388,710 426,300 103,000 $17,720,815 $1,532,125
A. W. Dunham............... 68,400 4,128,167 179,100 105,000 8,417,564 2,042,875
J. A. Blumberg............. 6,200 256,525 164,100 34,000 7,204,414 505,750
C. O. Holliday, Jr......... 8,170 247,653 108,730 34,000 4,203,784 505,750
G. W. Edwards.............. 24,524 1,197,957 138,876 24,800 6,471,346 368,900
- ----------
</TABLE>
(1) Excludes any option exercises in 1997 which resulted in changes in the
Beneficial Ownership Table on page x.
(2) Represents the pre-tax gain, which is the difference between the market
value of the shares on the date of exercise of the options and the exercise
price.
(3) Represents the closing price for DuPont Common Stock on December 31, 1996 of
$94.125 less the exercise price for all outstanding exercisable and
unexercisable options for which the exercise price is less than such closing
price. Exercisable options have been held at least one year from the date of
grant. Unexercisable options have been held for less than one year.
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 peer group of
companies. DuPont has used this peer group for several years to compare
compensation for senior management, and eight of the twelve companies are direct
competitors. The peer group companies are: AlliedSignal, Amoco, Dow Chemical,
Eastman Kodak, Exxon, Ford Motor, General Electric, International Business
Machines, Minnesota Mining and Manufacturing, Monsanto, Union Carbide and Xerox.
The graph assumes that the value of the investment in DuPont Common Stock,
the S&P 500 Stock Index and the peer group of companies each was $100 on
December 31, 1991 and that all dividends were reinvested. The peer group is
weighted by market capitalization.
[BAR GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
DuPont ==== $100 $104.7 $111.1 $133.4 $171.5 $237.3
S&P 500 ---- 100 107.6 118.4 120.0 165.0 202.7
Peer Group ____ 100 102.9 123.7 130.5 175.0 234.6
</TABLE>
15
<PAGE>
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" for
this purpose includes regular compensation and 100% of annual variable
compensation payments, but excludes other bonuses and compensation in excess of
limits imposed by the Internal Revenue Code. The Internal Revenue Code limits
the amount of annual benefits which may be payable from the pension trust.
Retirement benefits provided under the pension plan in excess of these
limitations are paid from the Company's general revenues under a separate,
nonfunded Pension Restoration Plan.
<TABLE>
<CAPTION>
Estimated Annual Retirement
Salary and Benefits Based on Service of:
Variable -------------------------------------------------
Compensation 30 Years 35 Years 40 Years 45 Years
------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ xxx,xxx............... $ xxx,xxx $ xxx,xxx $ xxx,xxx $xxx,xxx
x,xxx,xxx............... xxx,xxx xxx,xxx xxx,xxx xxx,xxx
x,xxx,xxx............... xxx,xxx xxx,xxx xxx,xxx xxx,xxx
x,xxx,xxx............... xxx,xxx x,xxx,xxx x,xxx,xxx xxx,xxx
x,xxx,xxx............... x,xxx,xxx x,xxx,xxx x,xxx,xxx xxx,xxx
x,xxx,xxx............... x,xxx,xxx x,xxx,xxx x,xxx,xxx xxx,xxx
</TABLE>
The above table illustrates the straight life annuity amounts payable under
the DuPont Pension and Retirement Plan and Pension Restoration Plan to DuPont
employees retiring at age 65 in 1997. As of normal retirement age (65), the
years of service credited for retirement benefits for DuPont employees named in
the Summary Compensation Table on page xx would be as follows: 38 years for
J. A. Krol, 45 years for J. A. Blumberg, and 43 years for C. O. Holliday, Jr.
The DuPont Pension and Retirement Plan as it applies to Conoco employees
and the Retirement Restoration Benefit Plan of Conoco are similar to the DuPont
Pension and Retirement Plan and the Pension Restoration Plan described above for
DuPont employees.
<TABLE>
<CAPTION>
Estimated Annual Retirement
Salary and Benefits Based on Service of:
Variable -------------------------------------------------
Compensation 30 Years 35 Years 40 Years 45 Years
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ xxx,xxx.............. $ xx,xxx $ xxx,xxx $ xxx,xxx $xxx,xxx
x,xxx,xxx.............. xxx,xxx xxx,xxx xxx,xxx xxx,xxx
x,xxx,xxx.............. xxx,xxx xxx,xxx x,xxx,xxx xxx,xxx
x,xxx,xxx.............. xxx,xxx x,xxx,xxx x,xxx,xxx xxx,xxx
</TABLE>
The above table illustrates the straight life annuity amounts payable to
employees of Conoco retiring at age 65 in 1997, including payments under the
Retirement Restoration Benefit Plan. As of normal retirement age (65), A. W.
Dunham would have 37 years of credited service and G. W. Edwards would have 43
years.
16
<PAGE>
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 24, 1996, the stockholders ratified the appointment by the
Audit Committee of Price Waterhouse LLP to perform the functions assigned to it
in accordance with the Bylaws.
Price Waterhouse LLP 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 most valuable. Partners and
employees of the firm who work on the Company's account are periodically
changed, thus giving the Company the benefit of new thinking and approaches in
the audit area.
During 1996, Price Waterhouse LLP audited the Company's annual consolidated
financial statements and those of a significant majority of its subsidiaries,
reviewed financial information in filings with the Securities and Exchange
Commission and other regulatory agencies, audited employee benefit plans and
provided various other services. Worldwide fees for all services provided by
Price Waterhouse LLP totaled $18.5 million for the year, of which $6.4 million
was for the annual audit of the Company's consolidated financial statements and
those of its subsidiaries.
Subject to ratification by the holders of DuPont Common Stock, the Audit
Committee has reemployed Price Waterhouse LLP as independent accountants to
perform an examination of the Company's consolidated financial statements for
the year 1997 and to render other services as required of them.
Representatives of Price Waterhouse LLP 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 Price
Waterhouse LLP as independent accountants for the year 1997 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.
3--MANAGEMENT PROPOSAL ON AMENDMENT OF CHARTER TO
EFFECT TWO-FOR-ONE COMMON STOCK SPLIT
The Board of Directors believes that splitting the Company's common stock
would result in a market price that should be more attractive to a broader
spectrum of investors and be in the best interests of the Company and its
stockholders. Therefore, the Board has authorized a two-for-one common stock
split and recommends that stockholders approve amendment of the Company's
Charter to increase the number of authorized shares of DuPont Common Stock in
order to effect the stock split.
When the Charter amendment becomes effective: (i) each issued share of
common stock of the par value of $0.60 per share will be changed into two shares
of common stock of the par value of $0.30 per share, (ii) each certificate
representing shares of common stock of the par value of $0.60 per share will
continue, without any necessity of presenting the same for exchange, to
represent thereafter the same number of shares of common stock of the par value
of $0.30 per share, and (iii) each holder of shares of common stock of the par
value of $0.60 per share of record at the time such amendment becomes effective
will be entitled, without surrendering the certificate or certificates
representing such shares, to receive a certificate or certificates representing
one additional share of common stock of the par value of $0.30 per share with
respect to each share so held of record.
17
<PAGE>
If the proposed Charter amendment is approved by the stockholders the
Company expects to make the recommended amendment and proposed stock split
effective on May 15, 1997, by filing in the Office of the Secretary of State of
the State of Delaware a Certificate of Amendment of the Company's Restated
Certificate of Incorporation. Each stockholder of record at the close of
business on the effective date will be entitled to receive certificates
representing one additional share for each share held. The Company expects to
mail certificates for the additional shares on June 12, 1997. Certificates
representing the shares issued prior to the date the amendment becomes effective
will continue to represent the same number of shares of the Company's common
stock as they did prior to that date. PLEASE DO NOT DESTROY YOUR EXISTING
CERTIFICATES OR RETURN THEM TO THE COMPANY.
As of the effective date of the proposed stock split and pursuant to the
Company's compensation and benefit plans and programs, appropriate adjustments
will be made in the number of shares allocated or issuable, exercise prices,
stock price hurdles, and the number of stock appreciation rights, unit options,
dividend units and shares granted but not delivered under all such plans and
programs.
The increase in the authorized shares of common stock will not affect the
present ratio of authorized but unissued stock to issued stock, thus maintaining
the same relative degree of flexibility for the Company in meeting future
business needs. The Board of Directors has authority to cause authorized but
unissued shares of common stock to be issued for any proper corporate purpose as
the Board deems advisable without further action by the Company's stockholders.
Counsel advises that under existing United States federal income tax laws,
the proposed stock split would not result in any taxable income or in any gain
or loss to stockholders. Immediately after the stock split, the tax basis of
each share of Company stock will be one-half of the tax basis before the stock
split. For tax purposes, each new share will be deemed to have been acquired at
the same time as the original share with respect to which the new share was
issued. The laws of jurisdictions other than the United States may impose income
taxes on the receipt of the additional shares and stockholders may wish to
consult their tax advisors.
If stockholders dispose of their shares subsequent to the stock split, they
may pay higher stock transfer taxes and brokerage commissions on the same
relative interest in the Company because that interest is represented by a
greater number of shares. Stockholders may wish to consult their brokers
regarding the transfer taxes and commissions applicable to the additional number
of shares. The Company will apply to list the additional shares issued pursuant
to the proposed amendment with the New York Stock Exchange and will take
appropriate action with respect to various other exchanges.
As of March 7, 1997, there were xxx,xxx,xxx shares of issued and
outstanding common stock, including xx,xxx,xxx shares held in the DuPont
Flexitrust created by the Company to satisfy obligations under various
compensation and benefit plans. The proposed stock split will not result in a
change in the stated capital or surplus accounts of the Company. The additional
shares will have the same rights and privileges as shares of DuPont Common Stock
currently issued and outstanding. The closing price of a share of the Company's
common stock on the New York Stock Exchange Composite Transactions Tape on March
7, 1997, was $xxx.xx.
18
<PAGE>
The Board of Directors recommends that you vote "FOR" the following
resolution:
RESOLVED, that the first paragraph of Article Fourth of the Restated
Certificate of Incorporation of E. I. du Pont de Nemours and Company be
deleted and the following substituted therefor:
"Fourth: - The total authorized stock of the corporation is as follows:
The total number of shares of all classes of stock which the
corporation shall have authority to issue shall be One Billion Eight
Hundred Twenty-Three Million (1,823,000,000), of which Twenty-Three Million
(23,000,000) shares shall be Preferred Stock without par value and One
Billion Eight Hundred Million (1,800,000,000) shares shall be Common Stock
having a par value of Thirty Cents ($0.30) each. Each share of Common Stock
of the par value of Sixty Cents ($0.60) of the corporation issued as of the
effective date of this Certificate of Amendment is hereby reclassified,
changed and converted into two fully-paid and nonassessable shares of
Common Stock of the par value of Thirty Cents ($0.30) each of the
corporation."
4--MANAGEMENT PROPOSAL ON AMENDMENT OF
VARIABLE COMPENSATION PLAN
The DuPont Variable Compensation Plan (formerly the Incentive Compensation
Plan) was last approved by the stockholders at the 1989 Annual Meeting. The
Board of Directors has adopted amendments to the Plan, subject to stockholder
approval, to limit the overall amount available for grants under the Plan and
limit individual grants to certain executive officers. Approval of this proposal
will constitute approval of these amendments which are described below and
incorporated in Article III of the Variable Compensation Plan set forth at
Exhibit A.
The Plan
Under the DuPont Variable Compensation Plan (VCP) nonforfeitable grants may
be made to employees of DuPont and entities in which DuPont has at least a 50%
ownership interest who have contributed most in a general way to the Company's
success by their ability, efficiency and loyalty. Through grants under the VCP,
the total annual compensation of approximately 10,000 employees, including
executive officers, varies up or down year to year based on the Company's
performance and that of the employees' respective business units, as well as
their personal level of contributions. Grants may be in the form of shares of
DuPont Common Stock or in cash, or in a combination of cash and stock.
Typically, 25% of variable compensation is paid in DuPont Common Stock. Delivery
of grants is generally made promptly except where eligible employees defer
delivery to a future date. Interest and dividend equivalents will be paid on
deferred cash and stock units.
The VCP is administered by the Compensation Committee of the Board of
Directors, whose members are ineligible for grants while serving on the
Committee. The Compensation Committee, or the Board of Directors if the grant is
made to an employee director, determines the amount of the grant. No grant may
be made to a director except for services performed as an employee of the
Company. The Board of Directors reserves the right to modify the VCP from time
to time, provided that no modification shall operate to annul, without the
grantee's consent, a grant already made. Furthermore, no modification shall
increase the maximum amount which may be credited to the Variable Compensation
Fund (the Fund) without approval of stockholders. All expenses and costs of the
VCP are borne by the Company.
The maximum amount which may be made available for all grants under the
VCP is tied to the Company's earnings performance and operating results. The
stockholder-approved formula under which the overall amount available for grants
is determined requires that the portion of earnings equivalent to 6% of the net
capital employed and at least 80% of the remaining earnings, if any, be reserved
for the stockholders. Thus, the VCP limits the annual maximum funding to 20% of
consolidated net income after deducting 6% of net capital
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employed. The Compensation Committee may determine to credit the Fund for less
than the full amount creditable under the VCP formula described above. For
example, over the past 10 years, the Committee approved payments on average of
57% of the maximum available.
Amendments - Limitations on Grants
The federal income tax laws generally limit the deductibility of
compensation over $1 million payable to the Chief Executive Officer (CEO) and
the four other highest compensated executive officers named in the Company's
Proxy Statement unless compensation is provided under performance-based plans.
To preserve deduction for amounts over $1 million, compensation paid under plans
such as the VCP must be performance based with limits on individual grants. The
VCP amendment would eliminate the Compensation Committee's flexibility to
exercise discretion in determining whether to take into account certain
significant items of income or loss in calculating the maximum amount which may
be credited to the Fund. Specifically, in computing net income or loss, the
Committee would be required to disregard the earnings effect of all
extraordinary transactions, accounting changes and similarly disclosed charges
or credits. This ensures that the maximum amount available for variable
compensation fluctuates in relation to the Company's operating results.
Additionally, the amendment would impose a limit on the maximum amount which may
be granted to the CEO and the four other most highly compensated executive
officers at year end. These are typically the individuals shown in the Summary
Compensation Table of the Company's Annual Meeting Proxy Statement. The maximum
limit per specified individual is two percent (2%) of the maximum amount which
may be credited to the Fund for the year.
Nothing would preclude the Compensation Committee from actually crediting
the Fund with an amount less than the maximum (as has been done in recent years,
as described above) nor in making grants to the specified individuals which are
less than the individual limit. The Compensation Committee would be able to
exercise discretion within the maximums in determining individual grants. It is
expected that generally the Committee would make individual grants that are
substantially lower than the individual limit.
As described above in the Compensation Committee Report on Executive
Compensation, there is a three-step process performed by the Committee in
determining variable compensation: determine the maximum amount creditable to
the Fund based on the Company's operating results (from which discretion would
be removed by the amendment); determine the actual credit to the Fund, which may
be less than the maximum; and determine the grants for individuals (which may be
less than the individual grant maximum). In determining the actual overall Fund
credit and the individual grants, it is expected that the Committee will
continue its current practice of using financial performance criteria (in
absolute terms or as compared to other companies) such as change in earnings per
share (as reported or excluding nonrecurring items) (EPS), total shareholder
return, return on equity (ROE), return on net assets (RONA), return on
investors' capital (ROIC), cash flow management and other criteria, standards,
goals and measures as it may determine are appropriate such as the performance
of specific business units and the individual's overall level of responsibility
and contribution to the Company's success, along with assessments of performance
in areas such as valuing people, safety, the environment and continuous
improvement. The specific application of this process and the formula used for
1996 variable compensation are described in detail in the Compensation Committee
Report under "Variable Compensation" at page xx.
These amendments would not affect the number of employees who may receive
grants under the VCP in the future. No determination can be made as to the type
or size of future grants for specific employees since actual amounts will depend
on actual performance. The Summary Compensation Table on page xx provides
information relating to prior grants to the CEO and four other most highly
compensated executive officers.
Based on the Company's interpretation of existing federal tax law,
including the regulations under Section 162(m) of the Internal Revenue Code, all
grants made under the VCP will continue to be deductible by the Company. Each
grant will be taxable to the employee in the year received.
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The Board of Directors recommends that you vote "FOR" the following
resolution:
RESOLVED, That the amendments to the Variable Compensation Plan as
described in the Proxy Statement of the Company for the Annual Meeting of
Stockholders on April 30, 1997, hereby are approved.
5--STOCKHOLDER PROPOSAL ON POLITICAL CONTRIBUTIONS
Mrs. Evelyn Y. Davis, Watergate Office Building, 2600 Virginia Avenue,
N.W., Suite 215, Washington D.C., owner of 150 shares of DuPont Common Stock,
has given notice that she will introduce the following resolution and statement
in support thereof:
Resolved: That the shareholders recommend that the Board direct management
that within five days after approval by the shareholders of this proposal,
the management shall publish in newspapers of general circulation in the
cities of New York, Wilmington, Washington, D.C., Detroit, Chicago, San
Francisco, Los Angeles, Dallas, Houston and Miami, and in the Wall Street
Journal and U.S.A. Today, a detailed statement of each contribution made by
the Company, either directly or indirectly, within the immediately
preceding fiscal year, in respect of a political campaign, political party,
referendum or citizens' initiative, or attempts to influence legislation,
specifying the date and amount of each such contribution, and the person or
organization to whom the contribution was made. Subsequent to this initial
disclosure, the management shall cause like data to be included in each
succeeding report to shareholders. And if no such disbursements were made,
to have that fact publicized in the same manner.
Stockholder's Statement
REASONS: This proposal, if adopted, would require the management to advise
the shareholders how many corporate dollars are being spent for political
purposes and to specify what political causes the management seeks to promote
with those funds. It is therefore no more than a requirement that the
shareholders be given a more detailed accounting of these special purpose
expenditures that they now receive. These political contributions are made with
dollars that belong to the shareholders as a group and they are entitled to know
how they are being spent.
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.
Legally permitted contributions are made from time to time in support of,
or in opposition to, specific ballot issues, where a substantial company
interest is present. In the recent past, the Company has, where lawful, also
made modest contributions to individual candidates in state elections and may do
so again in the future.
In addition, the Company has established political action committees (PACs)
through which individuals may, on an entirely voluntary basis, contribute
personal funds to candidates. The Company assumes the small administrative cost
associated with these PACs.
DuPont and the PACs comply with all federal and state reporting
requirements, which have been established to ensure public disclosure of
political contributions. Therefore, the Board believes that no useful purpose
would be served by taking the further actions envisioned by this Proposal.
6--STOCKHOLDER PROPOSAL ON CUMULATIVE VOTING
John J. and Margaret R. Gilbert, 29 E. 64th Street, New York, New York,
owners of 612 and 60 shares respectively, of DuPont Common Stock, and trustees
under wills for an additional 1,036 shares; have given notice that one or both
of them will introduce the following resolution and statement in support
thereof:
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Resolved, That the stockholders of E. I. du Pont de Nemours and Company,
Inc., assembled in annual meeting in person and by proxy, hereby request
the Board of Directors to take the steps necessary to provide for
cumulative voting in the election of directors, which means each
stockholder shall be entitled to as many votes as shall equal the number of
shares he or she owns multiplied by the number of directors to be elected,
and he or she may cast all of such votes for a single candidate, or any two
or more of them as he or she may see fit.
Stockholders' Statement
Continued strong support along the lines we suggest were shown at the last
annual meeting when over 17%, 6,118 owners of 75,995,774 shares, were cast in
favor of this proposal. The vote against included approximately 8,500 unmarked
proxies.
A California law provides that all state pension holdings and state college
funds invested in shares must be voted in favor of cumulative voting proposals,
showing increasing recognition of the importance of this democratic means of
electing directors.
The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative voting.
Banking authorities have the right to question the capability of directors to be
on banking boards. In many cases authorities come in after and say the director
or directors were not qualified. We were delighted to see that the SEC has
finally taken action to prevent bad directors from being on the boards of public
companies. The SEC should have hearings to prevent such persons becoming
directors before they harm investors.
We think cumulative voting is the answer to find new directors for various
committees. Some recommendations have been made to carry out the CERES 10
points. The 11th should be, in our opinion, having cumulative voting and ending
staggered boards.
When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. The huge derivative losses
might have also been prevented with cumulative voting.
Many successful corporations have cumulative voting. Example, Pennzoil
defeated Texaco in that famous case. Ingersoll-Rand also having cumulative
voting won two awards. FORTUNE magazine ranked it second in its industry as
"America's Most Admired Corporations" and the WALL STREET TRANSCRIPT noted "on
almost any criteria used to evaluate management, Ingersoll-Rand excels." In 1994
and 1995 they raised their dividend.
Lockheed Martin, as well as VWR Corporation, now have a provision that if
anyone has 40% of the shares cumulative voting applies, it applies at the latter
company.
In 1995 American Premier adopted cumulative voting. Alleghany Power System
tried to take away cumulative voting, as well as put in a stagger system, and
stockholders defeated it, showing stockholders are interested in their rights.
If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain.
Position of Board of Directors
The Board of Directors recommends that you vote "AGAINST" this proposal.
The Company's stockholders have had the opportunity to consider and vote on
this issue on numerous occasions beginning in 1955. Each time, the stockholders
have rejected the proposal, most recently in 1996 when the same resolution was
rejected by more than 82% of the votes cast.
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The Board continues to believe that cumulative voting is not in the best
interest of the Company or its stockholders. In the opinion of the Board,
cumulative voting would permit a small minority of shares to elect a director
for the sole purpose of supporting a particular point of view, without regard to
the interests of other parties. A director elected in this manner could not be
expected to exercise free judgment and would not represent the stockholders as a
whole.
7--STOCKHOLDER PROPOSAL ON CONSIDERING POTENTIAL NOMINEES
The International Brotherhood of DuPont Workers, P.O. Box 16333,
Louisville, Kentucky, owner of 30 shares of DuPont Common Stock, and Ed Escue,
4253 Samoa Drive, Hermitage, Tennessee, owner of 524 shares of DuPont Common
Stock, have given notice that they 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 having a DuPont wage roll employee
who is currently serving as a representative of the employees at his or her
plant site to be nominated for election to the Board of Directors.
Stockholders' Statement
Right now the Board is composed of thirteen individuals who have the
following qualifications and experience:
-executives and retired executives of DuPont;
-executives and retired executives of other major corporations;
-a financial consultant;
-a trustee of an environmental organization;
-the former head of the Environmental Protection Agency;
-the president of the Massachusetts Institute of Technology.
With the sale of stock by Seagram back to DuPont, four Seagram directors
resigned from the DuPont Board of Directors. Since that time, two people have
been nominated to the Board, each of whom serves as an executive with another
major corporation.
I believe it would be of great benefit to DuPont for a wage roll DuPont
employee who is currently serving as a representative of the workers at his or
her site to serve on the Board of Directors.
A wage roll employee who has spent years working in a factory, who as an
employee representative has listened first hand to employees, learning what
motivates them positively and negatively, would provide the Board with knowledge
and insight that is not now present on the Board.
Moreover, such an addition to the Board would be viewed by the wage roll
employees, who comprise the vast majority of the DuPont workforce and the
largest single "block" of DuPont stockholders, as a sincere effort by DuPont to
recognize and understand their concerns. This is particularly important at a
time when there have been so many reductions in the number of employees and a
resulting increase in each employee's work load and responsibility.
Chairman Woolard has credited the employees as being the key factor in the
outstanding financial performance of DuPont. He has stated that, in order for
the Company to move to the next level, the Company must enable employees to
become energized about the role they see for themselves.
For the employees to become so energized, for the Company to reach the next
level of performance, it is necessary that the wage roll employees' voice be
present at the highest decision making level of the Company, on the Board of
Directors.
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Position of the Board of Directors
The Board of Directors recommends that you vote "AGAINST" this proposal.
The Board of Directors believes that each director should represent all
stockholders and has long been opposed to electing a director to represent a
particular point of view or particular constituency other than stockholders as a
whole.
It is important to the Board that its members possess a breadth of
experience, insight and knowledge to exercise independent judgment in carrying
out its responsibilities for broad corporate policy and the overall performance
of the Company. When it reviews potential nominees to recommend to the Board,
the nominating committee considers a wide range of criteria, which will vary
over time depending on the needs of the Board. For example, in recent years, the
Board's composition has broadened to include members with global business
perspectives and strong marketing experience.
In the Board's view, the interests of stockholders as a whole are best
served when the nominating committee and the Board are able to exercise
discretion to consider potential qualified nominees who will bring broad
experience, skills and perspectives to bear on the Company's efforts to achieve
continued business success and increase stockholder value.
OTHER MATTERS
The Board of Directors knows of no other proposals to 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.
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EXHIBIT A
VARIABLE COMPENSATION PLAN
I. Purposes
The purposes of this Variable Compensation Plan (the "Plan") are: (a) to
provide greater incentive for employees continually to exert their best efforts
on behalf of E. I. du Pont de Nemours and Company (the "Company") by granting
them compensation that, combined with their regular salaries, results in total
compensation that is competitive based on performance; and (b) to further the
identity of interests of such employees with those of the Company's stockholders
generally.
II. Form of Grants
1. Variable compensation under this Plan may be granted in acquired common
stock of this Company, or in new common stock to be issued directly to the
beneficiaries, or in cash, or in two or more of said forms.
2. The Compensation Committee shall determine the portion of each award
under this Plan to be paid in cash and the portion to be delivered to the
beneficiary in the form of common stock.
III. Limitations On Grants
1. Grants under this Plan shall be made from the Variable Compensation
Fund which the Company shall establish and to which shall be credited annually
an amount to be determined by the Compensation Committee. This amount shall not
exceed 20% of the "variable net income." For any year, the maximum amount of the
individual grant under this Plan to the Chief Executive Officer or any of the
four other highest compensated executive officers of the Company at year-end
shown in the Company's Proxy Statement, or such other individuals as may be
prescribed in rules under Section 162(m) of the Internal Revenue Code, shall not
exceed 2% of the maximum amount which may be credited to the Fund for such year;
however, the Compensation Committee, or the Board of Directors if the grant is
made to an employee director, may in its discretion make individual grants which
are less than such individual maximum amount. This Plan shall be interpreted
consistent with the requirements of performance-based compensation plans under
Section 162(m) of the Internal Revenue Code.
2. The term "variable net income" for any year, as used in this Plan,
shall mean the amount of net income or loss as shown in the Consolidated Income
Statement of this Company and its consolidated subsidiaries set forth in the
Annual Report to the Stockholders for such year; provided, however, that such
net income or loss shall be adjusted to omit the effects of
(i) charges and/or credits resulting from extraordinary items,
accounting changes (including charges and/or credits to current year operations
therefrom), and similarly disclosed amounts in the Company's Consolidated Income
Statement, and
(ii) any charges/credits disclosed in the footnotes to Industry Segment
Information for such year;
and shall be further adjusted by
(a) adding any amount which has been deducted in computing said net
income with respect to any provision for the Variable Compensation Fund,
and
(b) deducting an amount equal to 6% of the "variable net capital
employed," as defined in paragraph 3 of this Article.
3. The term "variable net capital employed" for any year, as used in this
Plan, shall mean the average of the amounts of Stockholders' Equity as of
December 31st of such year and December 31st of the preceding year, as shown in
the Consolidated Balance Sheets of this Company and its subsidiaries set forth
in the Annual Reports to the Stockholders, after adjusting said amounts,
however, by adding to Stockholders' Equity as stated in the later of such
Balance Sheets any amount which has been deducted in computing net income with
respect to any provision for the Variable Compensation Fund, as described in
paragraph 2(a) of this Article.
4. Grants for each year need not have an aggregate value equal to the
entire amount available in the Variable Compensation Fund. Any ungranted portion
of the Fund shall be carried forward and be available for grants in a succeeding
year or years, and while grants in the aggregate for any year may exceed the
amount credited for that year to the Variable Compensation Fund, they shall not
exceed the total amount in the Fund.
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IV. Administration
1. Except as otherwise specifically provided, the Plan shall be
administered by the Compensation Committee of the Company's Board of Directors.
The Compensation Committee shall be elected pursuant to the Bylaws of the
Company, and the members thereof shall be ineligible for grants for services
performed while serving on said Committee.
2. The decision of the Compensation Committee with respect to any
questions arising as to interpretation of this Plan, including the severability
of any and all of the provisions thereof, shall be final, conclusive and
binding.
V. Eligibility for Grants
1. Grants under the Plan may be made to those employees who have
contributed the most in a general way to the Company's success by their ability,
efficiency, and loyalty, consideration being given to ability to succeed in more
important managerial responsibility in the Company. Grants may also be made to:
(a) a person performing services on a consultant basis,
(b) an employee who retired or plans to retire pursuant to the provisions
of the pension and retirement plan or policy of a plan company,
(c) a former employee, and
(d) the surviving spouse or estate of a deceased employee.
No grant may be made to a director except for services performed as an employee
of a plan company.
2. Except as set forth in subparagraphs (a) to (d) of the preceding
paragraph, to be eligible for a grant an employee shall be employed by a plan
company as of the date final action is taken on a grant under this Plan and
shall be expected to continue in the employ of such a company.
3. For purposes of this Plan, the term "employee" shall include an
employee of a corporation or other business entity in which the Company shall
directly or indirectly own fifty percent or more of the outstanding voting stock
or other ownership interest. The term "plan company" as used in this Plan shall
mean a business entity whose employees are eligible for grants under this Plan.
VI. Grants
1. The Compensation Committee shall determine each year the total amount
of the Variable Compensation Fund to be distributed. Grants for any calendar
year shall be made as soon as practicable after the close of such calendar year.
2. Employees in countries other than the United States may be granted
variable compensation through plans or programs other than this Plan.
VII. Stock for Grants
1. With respect to the portion of grants under this Plan to be delivered
in common stock, the Compensation Committee of the Company's Board of Directors
shall determine whether, and to what extent, such portion of the grants shall be
in new common stock to be issued directly to beneficiaries, or in common stock
acquired by the Company.
2. The value per share at which common stock is to be granted to
beneficiaries under this Plan shall be fixed and determined by the Board of
Directors. Common stock to be delivered in payment of grants under this Plan
shall be issued or registered in the names of beneficiaries at the time of
delivery provided under Article IX hereof.
VIII.Recommendations and Grants
1. Recommendations for grants to members of the Board of Directors shall
be made by the Compensation Committee. Recommendations for grants to employees
who are not members of the Board of Directors shall be made to the Compensation
Committee by the Office of the Chief Executive.
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2. Any grant to a director shall be made in the sole discretion of the
Board of Directors, a majority of whose members taking final action on any such
grant shall be ineligible for grants under Article V. Any grant to an employee
who is not a member of the Board of Directors shall be made in the sole
discretion of the Compensation Committee which shall take final action on any
such grant. No person shall have a right to a grant under this Plan until final
action has been taken to make such grant. At the discretion of the Compensation
Committee, grants to employees of a plan company may be made subject to approval
by the board of directors or other management group of such company.
3. Action to establish a minimum liability for variable compensation
grants under this Plan, if deemed appropriate, shall be taken by the
Compensation Committee prior to year-end of the calendar year for which grants
are to be made.
IX. DELIVERY OF GRANTS
When any stock or cash is granted under this Plan, certificates of stock,
or cash, as the case may be, representing such grant, shall be delivered to the
beneficiary promptly, or at such future times and under such terms and
conditions as the Compensation Committee may determine. If it is determined that
the grant be delivered promptly to the beneficiary, that beneficiary may be
given the option to defer delivery of the grant to the extent provided in terms
and conditions established by the Compensation Committee.
X. AMENDMENTS
While it is the present intention of the Company to make grants annually,
the Board of Directors reserves the right to modify this Plan from time to time
or to repeal the Plan entirely, or to direct the discontinuance of making grants
either temporarily or permanently; provided, however, that no modification of
this Plan shall operate to annul, without the consent of the beneficiary, a
grant already made hereunder; provided, also, that no modification without
approval of the stockholders shall increase the maximum amount which may be
credited to the Variable Compensation Fund as hereinabove provided.
XI. MISCELLANEOUS
All expenses and costs in connection with the operation of this Plan shall
be borne by the Company and no part thereof shall be charged against the
Variable Compensation Fund.
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[LOGO OF RECYCLED PAPER APPEARS HERE]
Printed on Recycled Paper
(10% postconsumer waste)
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[LOGO OF DU PONT (R)
APPEARS HERE]
PROXY/VOTING INSTRUCTION CARD
E.I. DU PONT DE NEMOURS AND COMPANY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints A.F. Brimmer, J.A. Krol and E.S. Woolard, Jr.,
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 30,
1997, 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 heretofore given.
As described on page 1 the proxy statement, this proxy also provides voting
instructions for shares held for the account of the undersigned in the employee
savings stock ownership plans. A trustee for these plans will vote these shares
as directed provided you sign and return a proxy by April 23, 1997. A trustee
for the employee savings plans may vote in its discretion all shares held in
these plans for which no voting instructions are received. Shares held through
the Conoco Employee Stock Ownership Plan will be voted for you only if you sign
and return a proxy. Other shares owned by you will be voted only if you sign and
return a proxy, 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.
1. Election of Directors (mark only one)
[_] Vote FOR all nominees listed [_] Vote WITHHELD from all
below and recommended by the nominees
Board of Directors (except as
directed to the contrary below)
P.N. Barnevik; A.F. Brimmer; L.C. Duemling; A.W. Dunham; E.B. du Pont;
C.M. Harper; L.D. Juliber, J.A. Krol; W.K. Reilly; H.R. Sharp, III; C.M. Vest;
G. Watanabe; E.S. Woolard, Jr.
INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
(continued, and to be signed, on other side)
(continued from other side)
The Board of Directors recommends a vote "FOR" Board proposals NO.
No. 2 through No. 4:
For Against Abstain
2. On independent accountants [_] [_] [_]
3. On Charter amendment to effect
2-for-1 Common Stock split [_] [_] [_]
4. On Variable Compensation Plan amendment [_] [_] [_]
The Board of Directors recommends a vote "AGAINST" the following stockholder
proposals:
For Against Abstain
5. On political contributions [_] [_] [_]
6. On cumulative voting [_] [_] [_]
7. On considering potential nominees [_] [_] [_]
PLEASE SIGN, DATE, +++++
DETACH AND RETURN +
THIS PROXY, USING THE +
ENCLOSED POSTAGE [_] Please check to receive
PREPAID ENVELOPE an admission ticket to the
meeting.
Dated ________, 1997. SIGN HERE_____________________________________
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If the signer is a corporation, sign
the full corporation name by duly authorized officer.
