DUPONT VARIABLE COMPENSATION PLAN
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
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
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 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
(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 3lst of such year and December 3lst 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.
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
(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
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.
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
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.
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.
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.
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.