8-KMaterial Agreements

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

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

Summary

This 8-K filing from E. I. du Pont de Nemours and Company (DuPont) on November 1, 2005, details significant changes to its non-employee director compensation program, effective January 1, 2006. The Compensation Committee approved a substantial increase in annual retainers, a shift towards a 50/50 cash and equity compensation mix, and revised stock ownership guidelines. These adjustments are intended to enhance DuPont's ability to attract and retain top-tier board talent. Key changes include an increase in the annual retainer from $135,000 to $200,000, with the cash portion rising from $50,000 to $85,000 and restricted stock units increasing from $85,000 to $115,000. The Audit Committee member fee also saw a boost from $9,000 to $15,000. While these represent significant increases, the core structure of deferral options, vesting schedules for restricted stock units, and existing benefits like the Charitable Gift Plan and insurance remain in place. The company's rationale for these changes is to align director compensation with market practices and reflect the significant commitment required for board service.

Key Highlights

  • 1Effective January 1, 2006, DuPont is increasing the annual retainer for non-employee directors from $135,000 to $200,000.
  • 2The compensation mix for non-employee directors will now be approximately 50% cash and 50% equity.
  • 3The annual cash retainer component is increasing from $50,000 to $85,000.
  • 4The restricted stock unit grant, payable in cash, is increasing from $85,000 to $115,000.
  • 5Stock ownership guidelines for directors are being revised from five times the annual cash retainer ($250,000) to two times the annual retainer ($400,000).
  • 6The fee for Audit Committee members is being raised from $9,000 to $15,000, with other committee fees remaining unchanged.
  • 7The changes are aimed at attracting and retaining highly qualified individuals for the Board of Directors.

Frequently Asked Questions

This 8-K filing announces changes to E. I. du Pont de Nemours and Company's (DuPont) compensation plan for its non-employee directors, effective January 1, 2006. The company is increasing compensation and adjusting the mix of cash and equity to ensure it remains competitive in attracting and retaining qualified board members.

The annual retainer will increase from $135,000 to $200,000. This will be split roughly 50% cash ($85,000, up from $50,000) and 50% equity ($115,000 in restricted stock units, up from $85,000). Additionally, Audit Committee member fees will increase from $9,000 to $15,000.

The stock ownership requirement is being revised. Previously, directors needed to hold stock equivalent to five times their annual cash retainer ($250,000). The new guideline requires directors to hold stock equivalent to two times their total annual retainer, which will be $400,000 based on the new retainer amount.

Yes, aside from the compensation and ownership guideline changes, existing provisions such as the ability to defer compensation, interest accrual on deferred payments, dividend accrual on deferred stock units, vesting schedules for restricted stock units, the Directors' Charitable Gift Plan, and accidental death and disability insurance will remain unchanged.