8-KMaterial Agreements

EIDP, Inc. 8-K Report, Material Agreement (Feb 1, 2005)

Filed February 1, 2005For Securities:CTA-PBCTA-PA

Summary

E. I. du Pont de Nemours and Company (EIDP), in its February 1, 2005, 8-K filing, announced changes to its director and executive compensation. Notably, the company's Board of Directors approved an amendment to the director compensation plan, replacing the annual $85,000 Black Scholes value stock option grant with restricted stock units payable in cash. These units will accrue dividend equivalents and vest over three years, with payment deferral possible until retirement. The Chair of the Audit Committee will also see an increase in annual compensation from $18,000 to $25,000. In addition, the Board recognized the leadership of Chairman and CEO C. O. Holliday, Jr. by increasing his annual salary from $1.118 million to $1.255 million, effective after his last raise in January 2003. Mr. Holliday was also awarded a $2.4 million variable compensation payment for 2004, aligned with corporate performance and employee guidelines. Furthermore, he received a grant of 300,000 stock options and 70,000 performance-based restricted stock units, effective February 2, 2005.

Key Highlights

  • 1Director compensation plan amended: Annual stock options ($85,000 Black Scholes value) replaced with cash-payable restricted stock units.
  • 2Restricted stock units for directors will accrue dividend equivalents and vest in three annual installments.
  • 3Director payment receipt for units may be deferred until retirement.
  • 4Audit Committee Chair compensation increased from $18,000 to $25,000 annually.
  • 5CEO C. O. Holliday, Jr.'s annual salary increased to $1.255 million from $1.118 million.
  • 6CEO received a $2.4 million variable compensation payment for 2004 performance.
  • 7CEO granted 300,000 stock options and 70,000 performance-based restricted stock units, effective Feb 2, 2005.

Frequently Asked Questions

The company replaced the annual grant of stock options (valued at $85,000 using the Black Scholes method) with restricted stock units that will be paid in cash. These units will also accrue dividend equivalents.

The restricted stock units will vest in three equal annual installments. Directors have the option to defer receiving the payment for these units until their retirement.

The increase in compensation for Mr. Holliday, including his salary and variable pay, was in recognition of his leadership in 2004. This included overseeing the sale of a significant portion of the Textiles & Interiors segment, achieving solid volume growth, and making progress on cost rationalization and resource alignment.

Mr. Holliday was granted 300,000 stock options and 70,000 performance-based restricted stock units, which are set to become effective on February 2, 2005, and will be subject to the same terms as other grants made on that date.