-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, fjxlVZSkyFaN9sLwF5baiLXrm/BLyd7vKYqvBQKjulE+FToIQJJboTZD6SGWy6CD etxQuYwXRKRh5Z6fSqiF4w== 0000030554-94-000024.txt : 19940511 0000030554-94-000024.hdr.sgml : 19940511 ACCESSION NUMBER: 0000030554-94-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940510 FILED AS OF DATE: 19940510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUPONT E I DE NEMOURS & CO CENTRAL INDEX KEY: 0000030554 STANDARD INDUSTRIAL CLASSIFICATION: 2820 IRS NUMBER: 510014090 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00815 FILM NUMBER: 94526825 BUSINESS ADDRESS: STREET 1: 1007 MARKET ST CITY: WILMINGTON STATE: DE ZIP: 19898 BUSINESS PHONE: 3027741000 10-Q 1 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-815 E. I. du Pont de Nemours and Company (Exact Name of Registrant as Specified in Its Charter) Delaware 51-0014090 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 1007 Market Street, Wilmington, Delaware 19898 (Address of Principal Executive Offices) (302) 774-1000 (Registrant's Telephone Number) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No 679,678,463 shares of common stock, $0.60 par value, were outstanding at April 30, 1994. 1 Form 10-Q E. I. DU PONT DE NEMOURS AND COMPANY Table of Contents Page ---- Part I Item 1. Financial Statements Consolidated Income Statement ................................. 3 Consolidated Statement of Cash Flows .......................... 4 Consolidated Balance Sheet .................................... 5 Notes to Financial Statements ................................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Financial Results ............................................. 7 Industry Segment Performance .................................. 7 Consolidated Industry Segment Information ..................... 9 Financial Condition ........................................... 10 Part II Item 1. Legal Proceedings ...................................... 10 Item 4. Submission of Matters to a Vote of Security Holders .... 12 Item 6. Exhibits and Reports on Form 8-K ....................... 13 Signature ......................................................... 14 Exhibit Index ..................................................... 15 Exhibit 10.7 - Stock Performance Plan of E. I. du Pont de Nemours and Company ......................................... 16 Exhibit 10.8 - Variable Compensation Plan of E. I. du Pont de Nemours and Company .......................................... 27 Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges .... 33 2 Form 10-Q PART I. FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Three Months Ended CONSOLIDATED INCOME STATEMENT March 31 - ----------------------------------------------------------------------- (Dollars in millions, except per share) 1994 1993 - ---------------------------------------------------------------------- SALES ......................................... $ 9,190 $ 9,070 Other Income .................................. 205 208 ------- ------- Total ..................................... 9,395 9,278 ------- ------- Cost of Goods Sold and Other Expenses ......... 6,675 6,772 Selling, General and Administrative Expenses .. 664 742 Depreciation, Depletion and Amortization ...... 703 677 Exploration Expenses, Including Dry Hole Costs and Impairment of Unproved Properties ....... 59 56 Interest and Debt Expense ..................... 142 144 ------- ------- Total ..................................... 8,243 8,391 ------- ------- EARNINGS BEFORE INCOME TAXES .................. 1,152 887 Provision for Income Taxes .................... 510 394 ------- ------- NET INCOME .................................... $ 642 $ 493 ======= ======= EARNINGS PER SHARE OF COMMON STOCK ........ $ .94 $ .73 ======= ======= DIVIDENDS PER SHARE OF COMMON STOCK ........... $ .44 $ .44 ======= ======= See page 6 for Notes to Financial Statements. 3 Form 10-Q
Three Months Ended CONSOLIDATED STATEMENT OF CASH FLOWS March 31 - --------------------------------------------------------------------------------------------- (Dollars in millions) 1994 1993 - --------------------------------------------------------------------------------------------- CASH PROVIDED BY OPERATIONS Net Income ........................................................ $ 642 $ 493 Adjustments to Reconcile Net Income to Cash Provided by Operations: Depreciation, Depletion and Amortization ...................... 703 677 Dry Hole Costs and Impairment of Unproved Properties .......... 18 12 Other Noncash Charges and Credits - Net ....................... (72) (14) Change in Operating Assets and Liabilities - Net .............. (200) (405) ------ ----- Cash Provided by Operations ................................. 1,091 763 ------ ----- INVESTMENT ACTIVITIES Purchases of Property, Plant and Equipment ........................ (662) (890) Investment in Affiliates .......................................... (30) (16) Miscellaneous - Net ............................................... 108 308 ------ ----- Cash Used for Investment Activities ......................... (584) (598) ------ ----- FINANCING ACTIVITIES Dividends Paid to Stockholders .................................... (301) (300) Net Increase in Borrowings ........................................ 998 955 Common Stock Issued in Connection with Compensation Plans ......... 45 11 ------ ----- Cash Provided by Financing Activities ....................... 742 666 ------ ----- Effect of Exchange Rate Changes on Cash ............................. 23 (35) ------ ----- INCREASE IN CASH AND CASH EQUIVALENTS ............................... $1,272 $ 796 ====== ===== See page 6 for Notes to Financial Statements.
4 Form 10-Q
CONSOLIDATED BALANCE SHEET March 31 December 31 - --------------------------------------------------------------------------------------------- (Dollars in millions, except per share) 1994 1993 - --------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and Cash Equivalents .................................... $ 2,512 $ 1,240 Accounts and Notes Receivable ................................ 5,216 4,848 Inventories .............................................. 3,970 3,818 Prepaid Expenses ............................................. 335 231 Deferred Income Taxes ........................................ 627 762 ------- ------- Total Current Assets ....................................... 12,660 10,899 PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation, depletion and amortization (March 31, 1994 - $27,021; December 31, 1993 - $26,503) ................................. 21,282 21,423 INVESTMENT IN AFFILIATES ....................................... 1,653 1,607 OTHER ASSETS ................................................... 2,917 3,124 ------- ------- TOTAL ...................................................... $38,512 $37,053 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable ............................................. $ 2,408 $ 2,444 Short-Term Borrowings and Capital Lease Obligations .......... 3,929 2,796 Income Taxes ................................................. 441 321 Other Accrued Liabilities .................................... 3,777 3,878 ------- ------- Total Current Liabilities .................................. 10,555 9,439 LONG-TERM BORROWINGS AND CAPITAL LEASE OBLIGATIONS ............. 6,414 6,531 OTHER LIABILITIES .............................................. 8,252 8,200 DEFERRED INCOME TAXES .......................................... 1,468 1,466 ------- ------- Total Liabilities .......................................... 26,689 25,636 ------- ------- MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES ................ 193 187 ------- ------- STOCKHOLDERS' EQUITY Preferred Stock .............................................. 237 237 Common Stock, $.60 par value; 900,000,000 shares authorized; shares issued at March 31, 1994 - 679,487,795; December 31, 1993 - 677,577,437 408 407 Additional Paid-In Capital ................................... 4,718 4,660 Reinvested Earnings .......................................... 6,267 5,926 ------- ------- Total Stockholders' Equity ................................. 11,630 11,230 ------- ------- TOTAL ...................................................... $38,512 $37,053 ======= ======= See page 6 for Notes to Financial Statements.
5 Form 10-Q NOTES TO FINANCIAL STATEMENTS (Dollars in millions) [FN] These statements are unaudited, but reflect all adjustments that, in the opinion of management, are necessary to provide a fair statement of the financial position, results of operations and cash flows for the dates and periods covered. All such adjustments are of a normal recurring nature. Certain reclassifications of 1993 data have been made to conform to 1994 classifications. Earnings per share are calculated on the basis of the following average number of common shares outstanding. Three Months Ended March 31: 1994 -- 678,476,595 1993 -- 675,497,105 Inventories March 31 December 31 ----------- 1994 1993 -------- ----------- Chemicals .................................. $ 303 $ 250 Fibers ..................................... 619 571 Polymers ................................... 479 550 Petroleum .................................. 1,364 1,367 Diversified Businesses ..................... 1,205 1,080 ------ ------ Total $3,970 $3,818 ====== ====== 6 Form 10-Q Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (a) Results of Operations (1) Financial Results: Net income for the first quarter of 1994 was $642 million, or $.94 per share, compared with $493 million, or $.73 per share, earned in the first quarter 1993. Excluding a prior-year $32 million nonrecurring gain from exchange of North Sea petroleum properties, first quarter 1994 net income was up 39 percent, principally due to lower costs. The first quarter earnings marked the company's best quarterly performance since 1990. Excluding the 1993 nonrecurring item, each industry segment posted earnings gains over last year. Efforts to focus on businesses where we have a competitive advantage and technological strength, combined with significant reduction in costs, are having the desired effect on earnings. In addition, compared to last year, the company is seeing increased demand in key markets for a number of its businesses, including automotive products, engineering polymers, nylon, "Lycra" spandex, and nonwovens. Not only is demand generally improved in the United States, but market conditions are better in Europe and Asia, where the chemicals and specialties sales are up 15 percent and 6 percent respectively. (2) Industry Segment Performance: The following text and accompanying "Consolidated Industry Segment Information" table compare segment results for the first quarter of 1994 with the same period last year. Sales totaled $9.2 billion, up $120 million or 1 percent. Despite lower worldwide crude oil prices, Petroleum segment sales were up 2 percent versus last year on higher worldwide natural gas prices and volumes and higher international crude oil volumes. For combined segments other than Petroleum, sales were up 1 percent, reflecting 5 percent higher volume, partly offset by 4 percent lower selling prices. o Chemicals segment earnings were $83 million, up $14 million, or 20 percent, attributable to better results for fluoro- chemicals and specialty chemicals. Sales decreased 1 percent, as 3 percent higher volume was more than offset by a 4 percent decline in selling prices. 7 Form 10-Q o Fibers segment earnings of $144 million were up $42 million, or 41 percent, as improvements in nylon and "Lycra" spandex were partly offset by lower results for "Dacron" polyester. Segment results reflect lower costs and an improvement in European business from weaker conditions a year ago. Segment sales were 14 percent higher. After adjusting for additional sales from the acquisition of ICI's nylon business, sales volume was up 6 percent. Prices were down 2 percent, principally from the currency effect of a stronger dollar. o Polymers segment earnings were $147 million, up $70 million or 91 percent from last year. Both automotive products and engineering polymers improved significantly, reflecting lower costs and higher sales. Adjusting for the absence of sales from the acrylics business divested last year, segment sales were up 5 percent, reflecting 9 percent higher volume, partly offset by 4 percent lower prices. o Petroleum segment earnings were $215 million, up $15 million, or 8 percent, excluding the prior-year property exchange benefit. The earnings improvement is attributable to stronger domestic downstream performance, reflecting higher refined product margins. Upstream earnings were down 5 percent, reflecting a drop of more than 20 percent in crude oil prices. Higher worldwide natural gas prices and volumes, higher crude oil volumes outside of the United States, and lower costs were sufficient to offset most of the impact of the lower crude oil prices. o Diversified Businesses segment earnings totaled $148 million, up $41 million or 38 percent from the prior year. This reflects earnings improvements in crop protec- tion chemicals and printing and publishing, primarily from lower costs. Segment sales were down 1 percent after adjusting for prior-year divestitures of the connector systems and sporting goods businesses, primarily reflect- ing lower sales of crop protection chemicals and medical products in the United States. 8 Form 10-Q E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES Three Months Ended CONSOLIDATED INDUSTRY SEGMENT INFORMATION March 31 - --------------------------------------------------------------------- (Dollars in millions) 1994 1993 - --------------------------------------------------------------------- SALES - ----- Chemicals ................................. $ 848 $ 859 Fibers .................................... 1,645 1,447 Polymers .................................. 1,483 1,460 Petroleum ................................. 3,862 3,794 Diversified Businesses .................... 1,352 1,510 ------- ------- Total ................................. $ 9,190 $ 9,070 ======= ======= AFTER-TAX OPERATING INCOME - -------------------------- Chemicals ................................. $ 83 $ 69 Fibers .................................... 144 102 Polymers .................................. 147 77 Petroleum ................................. 215 232(a) Diversified Businesses .................... 148 107 ------- ------- Total ................................. 737 587 Interest and Other Corporate Expenses Net of Tax ..................... (95) (94) ------- ------- NET INCOME ................................ $ 642 $ 493 - ---------- ======= ======= (a) Includes $32 gain from exchange of North Sea properties. 9 Form 10-Q (b) Financial Condition at March 31, 1994 The following comments pertain to the "Consolidated Statement of Cash Flows." In the first quarter 1994, DuPont recorded a net cash inflow of $507 million from Operations and Investment Activities. This inflow reflects improved business results, coupled with reductions in both operating and capital expenditures, partly offset by increases in working capital. The increase in working capital was mostly due to higher Accounts Receivable-Trade and Inventories, reflecting increased business activity and the seasonal pattern in certain businesses (principally crop protection chemicals). Days' sales outstanding averaged 39 days in the first quarter, down one day from the first quarter of 1993. After payment of $301 million for dividends, the cash inflow was $206 million. This inflow, plus other inflows totaling $68 million and borrowings of $998 million made to accomplish a planned buildup in cash balances, resulted in a total increase in cash for the quarter of $1,272 million. Certain ratios are shown below: At 3/31/94 At 12/31/93 ---------- ----------- Debt Ratio (total debt to total capitalization) 46.7% 45.0% Current Ratio (current assets to current liabilities) 1.2:1 1.2:1 The ratio of earnings to fixed charges is 6.2 for the first three months of 1994. The ratio is up from 2.0 for the year 1993. The 1993 ratio reflects $1.8 billion (pretax) of restructuring charges. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS In 1991, DuPont received claims by growers that use of "Benlate" 50 DF fungicide had caused crop damages. Based on the belief that "Benlate" 50 DF would be found to be a contributor to the claimed damage, DuPont paid claims. In 1992, after 18 months of extensive research, DuPont scientists concluded that "Benlate" 50 DF was not responsible for plant damage reports received since March 1991. Concurrent with these research findings, DuPont stopped paying claims relating to those reports. To date, DuPont has been served with more than 550 lawsuits in several jurisdictions, principally Florida, Hawaii, and Puerto Rico, by growers who allege plant damage from using "Benlate" 50 DF fungicide. DuPont recently settled 220 lawsuits for various amounts totaling about $214 million. The settlement follows two recent verdicts in a Florida trial in which a jury found "Benlate" to be free of defects. With this settlement, about half of the lawsuits brought against the company since 1991 have been disposed of. Excluding this settlement, more than 75 "Benlate" cases have been disposed of by courts, juries, and settlements, many in DuPont's favor. Even where juries have 10 Form 10-Q awarded growers any damages, those damages have been, on average, less than a third of what they sought, and growers have been found to share responsibility for their claimed losses. DuPont believes that "Benlate" 50 DF fungicide did not cause the alleged damages and intends to continue to prove this in ongoing matters. Since 1989, DuPont has been served with approximately 60 lawsuits in several jurisdictions, principally in Texas, Florida, Maryland and Arizona alleging damages as a result of leaks in certain polybutylene plumbing systems. Two nationwide class actions have been filed in state and federal courts in Houston, Texas, but neither has been certified as of this date. In most cases, DuPont is a codefendant with Shell, Hoechst-Celanese and other parts manufacturers. The polybutylene plumbing systems consist of flexible pipe extruded from polybutylene connected by fittings made from acetal. Shell Chemical is the sole producer of polybutylene; the acetals are provided by Hoechst-Celanese and DuPont. DuPont entered the market in 1983 and it is not known as to the number of commercial or dwelling units that have polybutylene plumbing systems, or the number of commercial or dwelling units that have DuPont's product in their plumbing systems. During 1994, DuPont settled a majority of the Texas lawsuits. Presently, DuPont is active in eleven suits involving 1,028 plaintiffs. Forty-five lawsuits have been disposed of (44 by pretrial settlements, 1 by dismissal). DuPont has not been to trial in any case. On June 28, 1991, DuPont entered into a voluntary agreement with the Environmental Protection Agency (EPA) to conduct an audit of the U.S. sites under the Toxic Substance Control Act (TSCA). Agreement participation is not an admission of TSCA noncompliance. Maximum stipulated penalties that DuPont could pay under the agreement are capped at $1 million. The first phase of the audit was completed, but no findings have been issued. Subject to the EPA's issuance of new reporting criteria, the second phase of its audit is expected to begin at the end of 1994. On October 18, 1991, the EPA issued an Administrative Order under the Resource Conservation and Recovery Act (RCRA) directing Conoco Pipeline Company (CPLC) to undertake specific remedial measures related to a former oil reprocessing facility in Converse County, Wyoming. CPLC contested the Administrative Order, and has taken voluntary measures at the site together with other interested parties. On February 19, 1993, the U.S. Department of Justice filed a lawsuit against 10 entities, including CPLC, to enforce the Order and collect penalties. CPLC has settled this matter with the U.S. government pending approval by the Court. CPLC along with four other com- panies have agreed to a cleanup of this site which is estimated to cost between $4.4 million and $8.9 million and pay as a group, $300,000 in civil penalties. CPLC's share of this settlement is approximately 11%. CPLC plans to seek recovery of these amounts from other nonsettling parties. On October 15, 1993, the EPA filed a complaint in the U.S. District Court, Eastern District of Texas (Beaumont), against DuPont alleging various violations of the Clean Water Act at the Sabine River Works. Included are alleged unauthorized discharges, effluent limitation violations, and monitoring and reporting violations under the plant's NPDES permit. The Government was seeking a civil penalty of $1.4 million. On April 20, 1994, 11 Form 10-Q the Government and DuPont reached a settlement in this action. DuPont has agreed to pay a civil penalty of $516,430 and to implement a Supplemental Environmental Project with an estimated cost to DuPont of $3.2 million. A consent decree will be drafted and agreed to by the parties contained in the settlement as well as other requirements including reporting and stipulated penalties. The consent order will be noticed in the Federal Register for 30 day public comment before being entered by the court. On April 11, 1994, the Texas Natural Resource Conservation Commission (TNRCC) issued a Notice of Executive Director's Preliminary Report and Petition for a TNRCC Order assessing penalties of $122,640 for alleged violations at DuPont's Beaumont Works Plant of the Texas Solid Waste Disposal Act, the Texas Water Code and the applicable regulations. The company's legal counsel believes that the basis for the penalty calculations asserted by TNRCC does not accurately reflect the facts concerning the impact on the environment nor the significance of the allegations and, therefore a signif- icant reduction in penalty is appropriate. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Business transacted at the Annual Meeting: A total of 571,981,115 shares of common stock were voted in person or by proxy at the annual meeting of stockholders on April 27, or 84.3 percent of the shares entitled to be voted. Business was transacted as follows: 1. ELECTION OF DIRECTORS: The 16 nominees listed in the proxy statement were elected to serve on the Board of Directors for the ensuing year. All nominees were members of the Board. The vote tabulation with respect to each nominee follows: Votes Cast Votes Cast Against Director For or Withheld P. N. Barnevik 570,047,761 1,922,499 A. F. Brimmer 570,441,734 1,528,526 C. R. Bronfman 569,913,639 2,056,621 E. M. Bronfman 569,865,825 2,104,435 E. Bronfman, Jr. 569,872,556 2,097,704 L. C. Duemling 570,555,836 1,414,424 E. B. du Pont 570,667,441 1,302,819 C. M. Harper 570,500,297 1,469,963 J. A. Krol 570,655,305 1,314,955 M. P. MacKimm 570,631,408 1,338,852 C. S. Nicandros 570,633,275 1,336,985 W. K. Reilly 570,393,348 1,576,912 H. R. Sharp, III 570,614,964 1,355,296 C. M. Vest 570,396,262 1,573,998 J. L. Weinberg 570,403,970 1,566,290 E. S. Woolard, Jr. 570,465,377 1,504,883 12 Form 10-Q 2. RATIFICATION OF INDEPENDENT ACCOUNTANTS: The proposal to ratify the appointment of Price Waterhouse as independent accountants for 1994 was approved by a vote of 569,177,760 shares for, 761,076 shares against and 2,042,279 abstentions and broker nonvotes. 3. AMENDMENT OF STOCK PERFORMANCE PLAN: The proposal to amend the Stock Performance Plan was approved by a vote of 537,728,743 shares for, 30,490,378 shares against and 3,761,994 abstentions and broker nonvotes. 4. POLITICAL NONPARTISANSHIP: A stockholder proposal concerning political contributions was defeated by a vote of 507,385,938 shares against, 13,148,536 shares for and 51,446,641 abstentions and broker nonvotes. 5. CUMULATIVE VOTING: A stockholder proposal to provide for cumulative voting in the election of directors was defeated by a vote of 469,057,938 shares against, 61,778,504 shares for and 41,144,672 abstentions and broker nonvotes. 6. SITE LISTING: A stockholder proposal to list in the company's annual environmental progress report each site expected to cause environmental liabilities to accrue to the company was defeated by a vote of 505,842,160 shares against, 15,782,471 shares for and 50,356,484 abstentions and broker nonvotes. Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits The exhibit index filed with this Form 10-Q is on page 15. (b) Reports on Form 8-K 1. The company filed a Current Report on Form 8-K, dated January 26, 1994, in connection with Debt Securities that may be offered on a delayed or continuous basis under Registration Statements on Form S-3 (No. 33-39161 and No. 33-48128). Through this Form 8-K, a copy of the Registrant's Earnings Press Release, dated January 26, 1994, was filed under Item 7. 13 Form 10-Q SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. E. I. DU PONT DE NEMOURS AND COMPANY (Registrant) Date: May 10, 1994 -------------------------------------- By /s/C. L. Henry -------------------------------------- C. L. Henry Senior Vice President - DuPont Finance (As Duly Authorized Officer and Principal Financial and Accounting Officer) 14 EX-10.7 2 EXHIBIT 10.7 EXHIBIT 10.7 STOCK PERFORMANCE PLAN Originally Adopted - November 12, 1957 Last Amended - November 24, 1993 and reflecting changes approved by the Board on that date for Shareholder approval on April 27, 1994 E. I. DU PONT DE NEMOURS AND COMPANY 16 STOCK PERFORMANCE PLAN I. PURPOSES The purposes of this Stock Performance Plan (the "Plan") are: (a) to provide greater incentive for employees who are or will be primarily responsible for the growth and success of the business to exert their best efforts on behalf of E. I. du Pont de Nemours and Company ("the Company"); and (b) to further the identity of interests of such employees with those of the Company's stockholders generally by encouraging them to acquire stock ownership in the Company. II. FORM OF GRANTS 1. Grants under this Plan may be made in the form of stock options, stock options accompanied by stock appreciation rights, restricted stock or a combi- nation of any of these forms and may be made in replacement of or as alternatives to salary or grants under any other plan or program of a plan company. 2. Stock options to purchase shares of the Company's common stock granted under this Plan may be either incentive, performance or other stock options qualified under the Internal Revenue Code as in effect from time to time ("qualified stock options") or stock options that are not qualified under the Internal Revenue Code ("nonqualified stock options"), or a combination of qualified and nonqualified stock options. 3. Stock appreciation rights may be granted by the Company under this Plan upon such terms and condi- tions as the Compensation and Benefits Committee may determine. Such rights may be granted only when they accompany the concurrent grant of stock options. Each stock appreciation right shall give the grantee the right to receive a payment equal to the excess of the fair market value of a share of the Company's common stock on the date when such right is exercised over the option price provided for in the accompany- ing stock option. Such rights may be exercised only if the grantee exercises the accompanying stock option by purchasing one share of the Company's common stock for each stock appreciation right exercised. 17 The number of shares subject to exercise under an accompanying stock option shall be automatically reduced by one share for each stock appreciation right exercised. 4. Shares of restricted stock granted under this Plan shall be subject to restriction, such as forfeiture and a minimum vesting period. A grantee shall generally have all incidents of ownership in restricted stock, including the right to dividends (unless otherwise restricted) and to vote. Shares may be evidenced by book-entry registration, a stock certificate registered in the grantee's name but held in the Company's custody or issuance of an appro- priate legended stock certificate, as determined by the Compensation and Benefits Committee. III. LIMITATIONS ON GRANTS 1. The aggregate number of shares of the Company's stock which may be made subject to stock options granted under this Plan shall not exceed 36,000,000, or 5% of such number for any optionee, during any five consecutive years, of which only 6,000,000 shares may be subject to restricted stock grants. The number of stock appreciation rights which may be granted to any optionee under this Plan shall not exceed 50% of the number of shares made subject to an accompanying stock option. 2. If any stock option or restricted stock (without benefit of dividends) granted under this Plan shall terminate or expire for any reason without having been exercised or vested in full, the shares not acquired under such grant shall become available again for further grants under this Plan; provided also, that shares withheld by or tendered to the Company as payment of exercise price or other consideration or satisfaction of withholding taxes shall become available again for further grants to employees who are not executive officers; provided, however, that the shares which become so available for further grants shall not include any shares as to which a stock option has been reduced by reason of receiving payments under accompanying stock appreciation rights. The limitations set forth above shall be subject to adjustment as provided in Article XII hereof. 18 IV. ADMINISTRATION 1. Except as otherwise specifically provided, the Plan shall be administered by the Compensation and Benefits Committee of the Company's Board of Directors. The Compensation and Benefits Committee shall be elected pursuant to the Bylaws of the Company, and the members thereof shall be ineligible for grants while serving on said Committee. 2. The Compensation and Benefits Committee is authorized, subject to the provisions of the Plan, from time to time to establish such rules and regulations as it deems appropriate for the proper administration of the Plan, and to make such determinations and take such steps in connection therewith as it deems necessary or advisable. 3. The Compensation and Benefits Committee shall, subject to the provisions of the Plan, determine the time or times when stock options will be granted, which employees, if any, shall be granted stock options, the types of stock options to be granted, whether they shall be granted singly or in combi- nation, when they shall be exercisable, the number of shares to be covered by each stock option or options, and the terms and conditions of such stock options; which employees, if any, shall also be granted accompanying stock appreciation rights, the number of stock appreciation rights which shall be granted to each of them, and the terms and conditions of such rights; and the time or times when restricted stock will be granted, which employees, if any, shall be granted restricted stock, the number of restricted shares to be granted, the restrictions or conditions on the right to transfer or dispose of such shares, and the terms and conditions of such restricted stock, including the number, amount, and timing of vesting increments. 4. The decision of the Compensation and Benefits Committee with respect to any questions arising as to interpretation of this Plan, including the sever- ability of any and all of the provisions thereof, shall be final, conclusive and binding. 5. The Company's Board of Directors may elect a Special Stock Performance Committee pursuant to the Bylaws of the Company which shall have and may exercise all the rights, powers and duties of the Compensation and Benefits Committee specified in this Plan for pur- poses of making grants for significant achievements 19 by employees who are not directors or executive officers of the Company. The Special Stock Performance Committee may also be authorized by the Compensation and Benefits Committee to assume certain administrative responsibilities under this Plan. V. ELIGIBILITY FOR GRANTS 1. Grants under this Plan may be made to employees (including those who are directors or executive officers of the Company) as determined by the Compensation and Benefits Committee (or Board of Directors, if the grantee is a director of the Company). In determining those employees to whom grants are to be made, the Compensation and Benefits Committee (or Board of Directors, if the beneficiary is a director of the Company) may take into consideration present and potential contributions to the Company's success by such employees, and any other factors which the Compensation and Benefits Committee (or Board of Directors, if the grantee is a director of the Company) may deem relevant in connection with accomplishing the purposes of the Plan. 2. The term "employee" may 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, but shall exclude any director who is not also an officer or a full-time employee of a plan company. The term "plan company" as used in this Plan shall mean a business entity whose employees are eligible for grants under this Plan). The term "grantee" as used in this Plan means an employee to whom a grant has been made under this Plan or, where appropriate, his or her successor in interest upon death. VI. RECOMMENDATIONS AND GRANTS 1. Recommendations for grants to members of the Board of Directors shall be made by the Compensation and Benefits Committee. Recommendations for grants to employees who are not members of the Board of Directors shall be made to the Compensation and Benefits Committee by the Office of the Chairman. 20 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 by the Compensation and Benefits Committee which shall take final action on any such grant. 3. Grants may be made at any time under this Plan and in any of the forms or combinations thereof provided in Article II hereof. A grantee may receive and may hold more than one grant under this Plan. 4. The date on which a grant shall be deemed to have been made under this Plan shall be the date of the Compensation and Benefits Committee (or Board of Directors, if the grantee is a director) authoriza- tion of the award or such later date as may be determined by the Compensation and Benefits Committee (or Board of Directors, if the grantee is a director) at the time the grant is authorized. Each grantee shall be advised in writing by the Company of a grant and the terms and conditions thereof, which terms and conditions, as the Compensation and Benefits Committee from time to time shall determine, shall not be inconsistent with the provisions of this Plan. VII. OPTION PRICE The price per share of the Company's common stock which may be purchased upon exercise of a stock option granted under this Plan shall be determined by the Compensation and Benefits Committee, but shall in no event be less than the fair market value of such share on the date the stock option is granted, and in no event less than the par value thereof. The price so determined also shall be applicable to any accompanying stock appreciation right. For purposes of this Plan, fair market value shall be the average of the high and low prices of the Company's common stock as reported on the "NYSE-Composite Transactions Tape" on the date of grant of a stock option or the date of exercise of a stock option or stock appreciation right, or if no sales of such stock were reported on said Tape on such date, the average of the high and low prices of such stock on the next preceding day on which sales were reported on said Tape. Such price shall be subject to adjustment as provided in Article XII hereof. 21 VIII. OPTION TERM The term of each stock option and each stock appreciation right granted under this Plan shall be for such period as the Compensation and Benefits Committee shall determine, but not for more than ten years from date of grant. IX. EXERCISE OF OPTIONS 1. Subject to the provisions of this Plan, each stock option and each stock appreciation right granted hereunder shall be exercisable on such date or dates and during such period and for such number of shares or stock appreciation rights as the Compensation and Benefits Committee may determine. However, in no event shall a stock option or stock appreciation right be exercisable prior to six months from date of grant. The Compensation and Benefits Committee may fix from time to time a minimum number of shares which must be purchased at the time a stock option is exercised. 2. A grantee electing to exercise a stock option shall at the time of exercise pay the Company the full purchase price of the shares he or she has elected to purchase. Payment of the purchase price shall be made in cash, the Company's common stock (valued at fair market value on the date of exercise), or a combination thereof, as the Compensation and Benefits Committee may determine from time to time. A grantee electing to exercise a stock appreciation right granted under this Plan shall so notify the Company at the same time he or she elects to exercise an accompanying stock option. Payment by the Company for such stock appreciation right may be in cash, common stock (valued at fair market value on date of exercise), or a combination thereof, as the Compensation and Benefits Committee may determine from time to time, but no fractional share of common stock shall be delivered. With respect to shares of the Company's common stock to be delivered upon exercise of a stock option or a stock appreciation right, the Compensation and Benefits Committee shall periodically determine whether, and to what extent, such stock shall be in the form of new common stock issued for such purposes, or common stock acquired by the Company. 22 3. Notwithstanding any other provision of this Plan, when the fair market value of a share of the Company's common stock on the date a grantee elects to exercise a stock option is less than such amount per share as may be determined by the Compensation and Benefits Committee from time to time, the Company may at its election pay the grantee in cash for each share he or she elected to purchase an amount equal to the excess of such fair market value over the option price provided for in the stock option. The Compensation and Benefits Committee shall period- ically determine whether the Company shall make such cash payment upon exercise of a stock option. When the Company makes a payment to the grantee under this paragraph 3 of Article IX, it shall not require the grantee to tender the full purchase price of the shares he or she has elected to purchase, the Company's obligation to issue or deliver such shares shall be null and void, and the right to purchase such number of shares subject to option shall be terminated. Such payment by the Company shall be deemed to be an exercise of a stock option and the purchase of shares thereunder for purposes of paragraph 3 of Article II and Article III. X. NONTRANSFERABILITY OF GRANTS During a grantee's lifetime no stock option or stock appreciation right granted under this Plan shall be transferable, and stock options and stock appreciation rights may be exercised only by the grantee. XI. TERMINATION OF EMPLOYMENT 1. The Compensation and Benefits Committee shall, subject to the provisions of the Plan, determine the rules relating to rights under stock options, stock appreciation rights and restricted stock grants upon a grantee's termination of employment. 2. A grantee shall forfeit all rights under stock options, stock appreciation rights and restricted stock grants - (a) if the grantee is dismissed or leaves the service of the plan companies for any reason other than his or her death, or retirement pursuant to the provisions of the pension or retirement plan or policy of a plan company, or 23 (b) if the grantee retires pursuant to the pro- visions of the pension or retirement plan or policy of a plan company, and if thereafter the Compensation and Benefits Committee, after a hearing at which the grantee shall be entitled to be present, shall find that he or she has willfully engaged in any activity which is harm- ful to the interest of any of such companies; provided, however, that such stock options, stock appreciation rights and restricted stock grants may continue in effect to such extent and under such conditions as the Compensation and Benefits Committee may determine; and provided, further, that the Compensation and Benefits Committee may accelerate or waive any restrictions or conditions applicable to restricted stock grants, in whole or in part, based on such factors and criteria as the Compensation and Benefits Committee may determine. 3. Upon the death of the grantee or his or her retire- ment pursuant to the provisions of the pension or retirement plan or policy of a plan company, which- ever shall first occur, the number of shares subject to option and the number of stock appreciation rights shall be limited to that number of shares and rights which the grantee could have acquired or exercised under the terms of his or her grant or grants on the date of such death or retirement, and the options or rights representing the remainder of the grant or grants shall terminate. XII. ADJUSTMENTS 1. In the event of any stock dividend, split-up, reclassification or other analogous change in capitalization, the Compensation and Benefits Committee shall make such adjustments, in the light of the change, as it deems to be equitable, both to the grantees and to the Company, in - (a) the number of shares and prices per share applicable to outstanding stock options, (b) the number of outstanding stock appreciation rights and their price, (c) the number of shares applicable to outstanding restricted stock grants, 24 (d) the aggregate limitation set forth in Article III with respect to the number of shares which may be made subject to options and restricted stock grants. Furthermore, in the event of a distribution to common stockholders other than interim or year-end dividends declared as such by the Board of Directors, the Compensation and Benefits Committee shall make such adjustments, in the light of the distribution, as it deems to be equitable, both to the grantees and to the Company, in respect of the items described in (a), (b) and (c) above. 2. Any fractional shares or fractional stock apprecia- tion rights resulting from adjustments made pursuant to this Article shall be eliminated. XIII. AMENDMENTS 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 grants either temporarily or permanently; provided, however, that no modification of this Plan shall operate to annul, without the consent of the grantee, a grant already made hereunder; provided, also, that no modification without approval of the stockholders shall - (a) increase the number of shares which may be made subject to stock options or restricted stock grants, or the number of stock appreciation rights which may be granted under this Plan in the aggregate, except by way of adjustments as provided in Article XII, (b) permit grant of stock options and stock appreciation rights at a price less than fair market value, (c) extend the maximum term of stock options and stock appreciation rights, or (d) permit a grant under this Plan to a member of the Compensation and Benefits Committee; except that the Board of Directors may take any action it deems advisable to ensure that qualified stock options may be granted under this Plan in accordance with the provisions of the Internal Revenue Code, as it may be amended. 25 XIV. MISCELLANEOUS 1. The Compensation and Benefits Committee may adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of countries other than the United States in which the Company or a plan company may operate to assure the viability of the benefits of grants made to employees in such countries and to meet the purposes of the Plan. 2. Grantees may use shares of the Company's common stock to satisfy withholding taxes relating to grants under this Plan to the extent provided in terms and conditions established by the Compensation and Benefits Committee. 26 EX-10.8 3 EXHIBIT 10.8 EXHIBIT 10.8 VARIABLE COMPENSATION PLAN Originally Adopted - February 3, 1905 Last Amended - November 24, 1993 E. I. DU PONT DE NEMOURS AND COMPANY 27 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 and Benefits 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 and Benefits Committee. This amount shall not exceed 20% of the "variable net income." 2. The term "variable net income" for any year, as used in this Plan, shall mean the amount of net income as shown in the Consolidated Income Statement of this Company and its subsidiaries set forth in the Annual Report to the Stockholders for such year, with adjustments for any significant items of income or loss which the Compensation and Benefits Committee in its discretion may deem appropriate; further adjusted by 28 (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. IV. ADMINISTRATION 1. Except as otherwise specifically provided, the Plan shall be administered by the Compensation and Benefits Committee of the Company's Board of Directors. The Compensation and Benefits 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 and Benefits Committee with respect to any questions arising as to interpretation of this Plan, including the sever- ability of any and all of the provisions thereof, shall be final, conclusive and binding. 29 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. Except in special cases, any employee receiving a grant shall have been in the continuous employ of a plan company at least two years on January 1st of the year in which the grant is being made. 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 and Benefits 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. 30 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 and Benefits 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 and Benefits Committee. Recommendations for grants to employees who are not members of the Board of Directors shall be made to the Compensation and Benefits Committee by the Office of the Chairman. 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 and Benefits 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 and Benefits 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. 31 3. Action to establish a minimum liability for variable compensation grants under this Plan, if deemed appropriate, shall be taken by the Compensation and Benefits Committee prior to year-end of the calendar year for which grants are to be made. VIII. 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 and Benefits Committee may determine. If it is determined that the grant be delivered promptly to the bene- ficiary, 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 and Benefits Committee. IX. 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. 32 EX-12 4 EXHIBIT 12 Exhibit 12 E. I. DU PONT DE NEMOURS AND COMPANY COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (Dollars in millions)
Three Months Ended Years Ended December 31 March 31, 1994 1993 1992 1991 1990 1989 Income Before Extraordinary Item and Transition Effect of Accounting Changes ........................ $ 642 $ 566 $ 975 $1,403 $2,310 $2,480 Provision for Income Taxes ............................ 510 392 836 1,415 1,844 1,844 Minority Interests in Earnings of Consolidated Subsidiaries ........................................ 4 5 10 6 3 24 Adjustment for Companies Accounted for by the Equity Method ................................ 15 41 6 35 29 38 Capitalized Interest .................................. (35) (194) (194) (197) (161) (108) Amortization of Capitalized Interest .................. 31 144 101 94 84 78 1,167 954 1,734 2,756 4,109 4,356 Fixed Charges: Interest and Debt Expense - Borrowings .............. 142 594 643 752 773 586 Adjustment for Companies Accounted for by the Equity Method - Interest and Debt Expense ......... 12 42 62 11 9 23 Capitalized Interest ................................ 35 194 194 197 161 108 Rental Expense Representative of Interest Factor .... 36 143 151 162 163 149 225 973 1,050 1,122 1,106 866 Total Adjusted Earnings Available for Payment of Fixed Charges ....................................... $1,392 $1,927 $2,784 $3,878 $5,215 $5,222 ====== ====== ====== ====== ====== ====== Number of Times Fixed Charges are Earned .............. 6.2 2.0 2.7 3.5 4.7 6.0 ====== ====== ====== ====== ====== ======
33 -----END PRIVACY-ENHANCED MESSAGE-----