DEF 14A 1 w29465def14a.htm PROXY STATEMENT def14a
Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.       )
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o    Preliminary Proxy Statement
 
o    Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
þ    Definitive Proxy Statement
 
o    Definitive Additional Materials
 
o     Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
E. I. du Pont de Nemours and Company
 
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
             
þ   No fee required.
 
           
o   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
 
           
 
  (1)     Title of each class of securities to which transaction applies:
 
           
 
           
   
 
 
           
 
  (2)     Aggregate number of securities to which transaction applies:
 
           
 
           
   
 
 
           
 
  (3)     Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined):
 
           
 
           
   
 
 
           
 
  (4)     Proposed maximum aggregate value of transaction:
 
           
 
           
   
 
 
           
 
  (5)     Total fee paid:
 
           
 
           
   
 
 
           
o   Fee paid previously with preliminary materials.
 
           
o   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
           
 
  (1)     Amount Previously Paid:
 
           
 
           
   
 
 
           
 
  (2)     Form, Schedule or Registration Statement No.:
 
           
 
           
   
 
 
           
 
  (3)     Filing Party:
 
           
 
           
   
 
 
           
 
  (4)     Date Filed:
 
           
 
           
   
 


Table of Contents

 
     
     

 
 
 
Annual Meeting — April 25, 2007
 
March 19, 2007
 
Dear Stockholder:
 
You are invited to attend the Company’s 2007 Annual Meeting on Wednesday, April 25, 2007, at 10:30 a.m. local time in the DuPont Theatre, DuPont Building, Wilmington, Delaware.
 
The enclosed Notice of Annual Meeting and Proxy Statement provide information about the governance of our Company and 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 make it easier for you to vote your shares, you have the choice of voting over the Internet, by telephone, or by completing and returning the enclosed proxy card. The proxy card describes your voting options in more detail.
 
If you are a registered stockholder or if you hold DuPont Common Stock through a Company savings plan, your admission ticket for the Annual Meeting is included on your proxy card. If you hold shares in a brokerage account, please refer to page 1 of the Proxy Statement for information on how to attend the meeting. If you need special assistance, please contact the DuPont Stockholder Relations Office at 302-774-3034.
 
In 2006, DuPont remained focused on our three growth strategies: putting our science to work, going where the growth is, and capitalizing on the power of One DuPont. The Annual Meeting gives us an opportunity to review our progress. We appreciate your ownership of DuPont, and I hope you will be able to join us on April 25.
 
Sincerely,
 
C. O. Holliday, Jr.
 
E. I. du Pont de Nemours and Company


Table of Contents

March 19, 2007                    
 
 
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 25, 2007, at 10:30 a.m. local time, in the DuPont Theatre in the DuPont Building, 1007 Market Street, Wilmington, Delaware. The meeting will be held to consider and act upon the election of directors, the ratification of the Company’s independent registered public accounting firm, a management proposal on the Company’s Equity and Incentive Plan, 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 2, 2007, are entitled to vote at the meeting.
 
This notice and the accompanying proxy materials are sent to you by order of the Board of Directors.
 
Mary E. Bowler
Secretary
 

YOUR VOTE IS IMPORTANT. THERE ARE THREE WAYS TO VOTE:
 
  n By Internet, or
 
  n By telephone, or
 
  n Sign, date and return your proxy card in the enclosed envelope as soon as possible.
 
Registered stockholders and holders of shares in the Company’s U.S. employee benefit plans may request their proxy materials electronically in 2008 by visiting www.computershare.com/us/ecomms. Stockholders with brokerage accounts can determine if their brokers offer electronic delivery by visiting www.icsdelivery.com.


Table of Contents

 
2007 ANNUAL MEETING OF STOCKHOLDERS
Proxy Statement
 
     
  1
     
  3
     
  3
  3
  7
  8
  8
  9
  9
  10
  10
  11
     
  15
     
  15
     
  18
     
  19
     
  19
     
  20
     
  20
  20
  21
  21
  28
  28
  28
  29
  29
  29
     
  32
     
  32
  34
  36
  38
  39
  41
  43
  47


Table of Contents


Table of Contents

 
Proxy Statement
 
 
The enclosed proxy materials are being sent at the request of the Board of Directors of
E. I. du Pont de Nemours and Company to encourage you to vote your shares at the Annual Meeting of Stockholders to be held April 25, 2007. This Proxy Statement contains information on matters that will be presented at the meeting and is provided to assist you in voting your shares.
 
The Company’s 2006 Annual Report on Form 10-K, containing management’s discussion and analysis of financial condition and results of operations of the Company and the audited financial statements, and this Proxy Statement were distributed together beginning March 19, 2007.
 
General Information
 
Who May Vote
 
All holders of record of DuPont Common Stock as of the close of business on March 2, 2007 (the record date) are entitled to vote at the meeting. Each share of stock is entitled to one vote. As of the record date, 924,596,782 shares of DuPont Common Stock were outstanding. A majority of the shares voted in person or by proxy is required for the approval of each of the proposals described in this Proxy Statement. Abstentions and broker non-votes are not counted in the vote. At least a majority of the holders of shares of DuPont Common Stock as of the record date must be present either in person or by proxy at the meeting in order for a quorum to be present.
 
 
How to Vote
 
Even if you plan to attend the meeting you are encouraged to vote by proxy. You may vote by proxy in one of the following ways:
 
•   By Internet at the address listed on the proxy card.
 
•   By telephone using the toll-free number listed on the proxy card.
 
•   By returning the enclosed proxy card (signed and dated) in the envelope provided.
 
When you vote by proxy, your shares will be voted according to your instructions. If you sign your proxy card but do not specify how you want your shares to be voted, they will be voted as the Board of Directors recommends. You can change or revoke your proxy by Internet, telephone or mail at any time before the polls close at the Annual Meeting.
 
 
How to Attend the Annual Meeting
 
If you are a stockholder of record or if you hold stock through one of the savings plans listed below, your admission ticket is attached to your proxy card. You will need to bring your admission ticket, along with picture identification, to the meeting. If you own shares in street name, please bring your most recent brokerage statement, along with picture identification, to the meeting. The Company will use your brokerage statement to verify your ownership of DuPont Common Stock and admit you to the meeting.
 
Please note that cameras, sound or video recording equipment, or other similar equipment, electronic devices, large bags or packages will not be permitted in the DuPont Theatre.
 
1


Table of Contents

 
Shares Held In Savings Plans
 
If you participate in one of the following plans, your voting instruction card will include the shares you hold in the plan:
 
DuPont 401(k) and Profit Sharing Plan for:
DuPont Holographics, Inc.,
DuPont Display Solutions, Inc.,
DuPont Displays, Inc.,
Inpaco Corporation, and
Liqui-Box Corporation
DuPont Powder Coatings USA Profit Sharing Plan
DuPont Retirement Savings Plan
DuPont Savings and Investment Plan
Pioneer Hi-Bred International, Inc. Savings Plan
Solae Savings Investment Plan
Thrift Plan for Employees of Sentinel Transportation, LLC
 
The plan trustees will vote according to the instructions received on your proxy. If proxies for shares in savings plans are not received by Internet, telephone or mail, those shares will be voted by the trustees as directed by the plan sponsor or by an independent fiduciary selected by the plan sponsor.
 
Proxy Statement Proposals
 
At each annual meeting stockholders are asked to elect directors to serve on the Board of Directors and to ratify the appointment of the Company’s independent registered public accounting firm for the year. Other proposals may be submitted by the Board of Directors or stockholders to be included in the proxy statement. To be considered for inclusion in the 2008 Annual Meeting Proxy Statement, stockholder proposals must be received by the Company no later than November 17, 2007.
 
For any proposal that is not submitted for inclusion in next year’s proxy statement, but is instead sought to be considered as timely and presented directly at the 2008 Annual Meeting, Securities and Exchange Commission rules permit management to vote proxies in its discretion if the Company: (1) receives notice of the proposal before the close of business on January 31, 2008 and advises stockholders in the 2008 Annual Meeting Proxy Statement about the nature of the matter and how management intends to vote on such matter; or (2) does not receive notice of the proposal prior to the close of business on January 31, 2008.
 
Stockholder Nominations for Election of Directors
 
The Corporate Governance Committee recommends nominees to the Board of Directors for election as directors at each annual meeting. The Committee will consider nominations submitted by stockholders of record and received by the Secretary of the Company by the first Monday in December. Nominations must include a statement by the nominee indicating a willingness to serve if elected and disclosing principal occupations or employment for 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. Proxies 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.
 
Solicitation of Proxies
 
The Company will pay all costs relating to the solicitation of proxies. Innisfree M&A Incorporated has been retained to assist in soliciting proxies at a cost of $10,000 plus reasonable expenses. Proxies may be solicited by officers, directors and employees of the Company personally, by mail, or by telephone or other electronic
2


Table of Contents

means. The Company will also reimburse brokers, custodians, nominees and fiduciaries for reasonable expenses in forwarding proxy materials to beneficial owners of DuPont Common Stock.
 
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 independent tabulation agents, the independent inspectors of election 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.
 
Governance of the Company
 
Strong corporate governance is an integral part of the Company’s core values, supporting the Company’s sustainable growth mission. DuPont is committed to having sound corporate governance principles and practices. Please visit the Company’s website at www.dupont.com, under the “Investor Center” caption, for the Board’s Corporate Governance Guidelines, the Board-approved Charters for the Audit, Compensation and Corporate Governance Committees and related information. These Guidelines and Charters may also be obtained free of charge by writing to the Corporate Secretary.
 
 
DUPONT BOARD OF DIRECTORS
 
 
These Guidelines serve as an important framework for the Board’s corporate governance practices and to assist the Board in carrying out its responsibilities effectively. The Board reviews these Guidelines periodically and may modify them as appropriate to reflect the evolution of its governance practices.
 
The Board
 
Responsibility
 
The Board has an active responsibility for broad corporate policy and overall performance of the Company through oversight of management and stewardship of the Company to enhance the long-term value of the Company for its stockholders and the vitality of the Company for its other stakeholders.
 
Role
 
In carrying out its responsibility, the Board has specific functions, in addition to the general oversight of management and the Company’s business performance, including providing input and perspective in evaluating alternative strategic initiatives; reviewing and, where appropriate, approving fundamental financial and business strategies and major corporate actions; ensuring processes are in place to maintain the integrity of the Company; evaluating and compensating the CEO; and planning for CEO succession and monitoring succession planning for other key positions.
 
Duties
 
Directors are expected to expend sufficient time, energy and attention to assure diligent performance of their responsibility. Directors are expected to attend meetings of the Board, its Committees on which they serve, and the Annual Meeting of Stockholders; review materials distributed in advance of the meetings; and make themselves available for periodic updates and briefings with management via telephone or one-on-one meetings.
 
Leadership
 
The positions of Chairman of the Board and CEO are held by the same person, except in specific circumstances.
3


Table of Contents

 
Independence
 
A majority of the Board are independent directors in accordance with the standards of independence of the New York Stock Exchange and as described in the Guidelines. See pages 5-6. The Corporate Governance Committee as well as the Board annually reviews relationships that Directors may have with the Company to make a determination of whether there are any material relationships that would preclude a Director being independent.
 
Qualifications
 
Directors are selected for their integrity and character; sound, independent judgment; breadth of experience, insight and knowledge; and business acumen. Leadership skills, scientific or technology expertise, familiarity with issues affecting global businesses in diverse industries, prior government service, and diversity are among the relevant criteria, which will vary over time depending on the needs of the Board. The Corporate Governance Committee considers candidates for potential nomination to recommend for approval by the full Board.
 
The Board does not limit the number of other public company boards that a Director may serve on. However, the Corporate Governance Committee considers the number of boards a Director sits on. Directors are encouraged to limit the number of other public company boards to take into account their time and effectiveness and are expected to advise the Chairman in advance of serving on another board.
 
When a Director’s principal responsibilities or business association changes significantly, the Director will tender his or her resignation to the Chairman for consideration by the Corporate Governance Committee of the continued appropriateness for Board service.
 
No Director may stand for reelection to the Board after reaching age 70. An employee Director retires from the Board when retiring from employment with the Company, with the exception of the former CEO. The Board may in unusual circumstances and for a limited period ask a Director to stand for reelection after the prescribed retirement date.
 
Orientation and Continuing Education
 
New Directors participate in an orientation process to become familiar with the Company and its strategic plans and businesses, significant financial matters, core values including ethics, compliance programs, corporate governance practices and other key policies and practices through a review of background materials, meetings with senior executives and visits to Company facilities. The Corporate Governance Committee is responsible for providing guidance on Directors’ continuing education.
 
Compensation
 
The Board believes that compensation for outside Directors should be competitive. DuPont Common Stock is a key component with payment of a portion of Director compensation as DuPont stock, options or similar form of equity-based compensation, combined with stock ownership guidelines requiring all outside Directors to hold DuPont stock equal to at least two times the annual retainer within five years. The Compensation Committee reviews periodically the level and form of Director compensation and, if appropriate, proposes changes for consideration by the full Board.
 
Annual Self-Evaluation
 
The Board and each Committee make an annual self-evaluation of its performance with a particular focus on overall effectiveness. The Corporate Governance Committee is responsible for overseeing the self-evaluation process.
 
Access to Management and Advisors
 
Directors have access to the Company’s management and, in addition, are encouraged to visit the Company’s facilities. As necessary and appropriate, the Board and its Committees may retain outside legal, financial or other advisors.
4


Table of Contents

 
Board Meetings
 
Selection of Agenda Items
 
The Chairman establishes the agenda for Board meetings, in conjunction with Chairs of the Committees. Directors are encouraged to suggest items for inclusion on the agenda and may raise subjects not specifically on the agenda.
 
Attendance of Senior Executives
 
The Board welcomes regular attendance of senior executives to be available to participate in discussions. Presentation of matters to be considered by the Board are generally made by the responsible executive.
 
Executive Sessions
 
Regularly scheduled Board meetings include a session of all Directors and the CEO. In addition, the Board meets in regularly scheduled executive sessions without the participation of the CEO or other senior executives. The Presiding Director is generally the Chair of the Corporate Governance Committee, unless there is a matter within the responsibility of another Committee, such as CEO evaluation and compensation, when the Chair of that Committee presides.
 
Leadership Assessment
 
Succession Planning
 
The Board plans for succession to the position of CEO. The Compensation Committee oversees the succession planning process. To assist the Board, the CEO periodically provides the Board with an assessment of senior executives and their potential to succeed to the position of CEO, as well as perspective on potential candidates from outside the Company. The Board has available on a continuing basis the CEO’s recommendation should he/she be unexpectedly unable to serve. The CEO also provides the Board with an assessment of potential successors to key positions.
 
CEO Evaluation and Compensation
 
Through an annual process overseen and coordinated by the Compensation Committee, independent Directors evaluate the CEO’s performance and set the CEO’s compensation.
 
* * *
 
Guidelines for Determining the Independence
of DuPont Directors
 
It is the expectation and practice of the Board that, in their roles as members of the Board, all members will exercise their independent judgment diligently and in good faith, and in the best interests of the Company and its stockholders as a whole, notwithstanding any member’s other activities or affiliations.
 
However, in addition, the Board has determined that a majority of its members should be “independent” in that they are free of any material relationship with the Company or Company management, whether directly or as a partner, shareholder or officer of an organization that has a material relationship with the Company. In furtherance of this objective, the Board has adopted the following Guidelines for determining whether a member is considered “independent.”
 
The Board will re-examine the independence of each of its members once per year and again if a member’s outside affiliations change substantially during the year.
 
For purposes of these Guidelines, “members of his/her immediate family” and similar phrases will mean a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers-and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than an employee) who shares the person’s home. “The Company” means the Company and all of its consolidated subsidiaries.
5


Table of Contents

 
  1.  Regardless of other circumstances, a Board member will not be deemed independent if s/he does not meet the independence standards adopted by the New York Stock Exchange (see below), or any applicable legal requirement.
 
  2.  Except in special circumstances, as determined by a majority of the independent members of the Board, the following relationships will be considered not to be material relationships that would affect a Board member’s independence:
 
  (a)  If the Board member is an executive officer or employee, or any member of his/her immediate family is an executive officer, of a bank to which the Company is indebted, and the total amount of the indebtedness does not exceed one percent (1%) of the total assets of the bank for any of the past three (3) years.
 
  (b)  If the Board member or any member of his/her immediate family serves as an officer, director or trustee of a charitable or educational organization, and contributions by the Company do not exceed the greater of one million dollars (US $1,000,000) or two percent (2%) of such organization’s annual consolidated gross revenues, including annual charitable contributions, for any of the past three (3) years.
 
  3.  If a Board member has a relationship that exceeds the thresholds described in Section 2 above, or another significant relationship with the Company or its management that is not described in Section 2 above, then the Board will determine by a majority of the independent members whether that member’s relationship would affect the Board member’s independence.
 
4. The Board will consider all relevant facts and circumstances in determining independence.
 
  5.  Any determinations of independence made pursuant to Section 3 above will be disclosed in the Company’s annual meeting proxy statement.
 
Current New York Stock Exchange standards state that a director will not be independent:
 
  (a)  If the Board member is, or has been within the last three (3) years, an employee or any member of his/her immediate family is, or has been within the last three (3) years, an executive officer of the Company;
 
  (b)  If the Board member is a current employee/partner, or if any member of his/her immediate family is a current partner or a current employee of the Company’s auditor that participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice, or the Board member or his/her immediate family was within the last three (3) years (but is no longer) a partner or employee of the firm and personally worked on the Company’s audit within that time;
 
  (c)  If the Board member or any member of his/her immediate family is, or in the last three (3) years has been, employed as an executive officer of another company where the Company’s present executive officers at the same time serve/served on that company’s compensation committee;
 
  (d)  If the Board member is a current employee, or if any member of his/her family is a current executive officer, of another company that makes payments to, or receives payments from, the Company for property or services which exceed the greater of one million dollars (US $1,000,000) or two percent (2%) of the other company’s annual consolidated gross revenues for any of the last three (3) years; or
 
  (e)  If the Board member, or a member of his/her immediate family, has received more than one hundred thousand dollars (US $100,000) in direct compensation from the Company (other than director and committee fees and pension or other forms of deferred compensation for prior service which are not contingent in any way on continued service) during any twelve-month period within the last three (3) years.
 
6


Table of Contents

 
Committees of the Board
 
       
 
 
       
       
Audit
Committee
    Responsibilities include:
     
n    Employs the Company’s independent registered public accounting firm, subject to stockholder ratification, to audit the Company’s consolidated financial statements.
     
n    Pre-approves all services performed by the Company’s independent registered public accounting firm.
     
n    Provides oversight on the external reporting process and the adequacy of the Company’s internal controls.
     
n    Reviews the scope of the audit activities of the independent registered public accounting firm and the Company’s internal auditors and appraises audit efforts of both.
     
n    Reviews services provided by the Company’s independent registered public accounting firm and other disclosed relationships as they bear on the independence of the Company’s independent registered public accounting firm.
     
n    Establishes procedures for the receipt, retention and resolution of complaints regarding accounting, internal controls or auditing matters.
 
     
       
      All members of the Audit Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards. The Board has determined that all members of the Audit Committee (C. J. Crawford, J. T. Dillon, L. D. Juliber and S. O’Keefe) are audit committee financial experts within the meaning of applicable Securities and Exchange Commission rules.
       
 
     
       
      See the Audit Committee Report on page 10. The Audit Committee Charter is available on the Company’s website (www.dupont.com). A summary of The Audit Committee Policy on Pre-approval of Services Performed by the Independent Registered Public Accounting Firm is attached at Appendix “A.”
       
Compensation Committee     Responsibilities include:
     
n    Establishes executive compensation policy consistent with corporate objectives and stockholder interests.
     
n    Oversees process for evaluating CEO performance against Board-approved goals and objectives and recommends to the Board compensation for the CEO.
     
n    Reviews and approves grants under the Company’s compensation plans.
     
n    Works with management to develop the Compensation Discussion and Analysis (CD&A).
     
n    Oversees succession planning process for the CEO and key leadership.
       
 
     
       
      All members of the Compensation Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards.
       
      See the Compensation Committee Report on page 19. See also the CD&A beginning on page 20. The Compensation Committee Charter is available on the Company’s website (www.dupont.com).
       
Corporate     Responsibilities include:
Governance    
n    Recommends to the Board nominees for election to the Board of Directors.
Committee    
n    Reviews principles, policies and procedures affecting directors and the Board’s operation and effectiveness.
     
n    Oversees evaluation of the Board and its effectiveness.
       
 
     
       
      All members of the Corporate Governance Committee are independent directors under the Board’s Corporate Governance Guidelines and applicable regulatory and listing standards
       
 
     
       
      The Corporate Governance Charter is available on the Company’s website (www.dupont.com). A description of the Director Nomination Process is attached at Appendix “B.”
7


Table of Contents

     
Environmental   Responsibilities include:
Policy  
n    Reviews the Company’s environmental policies and practices.
Committee  
n    Provides support for the Company’s sustainable growth mission.
     
Science and
Technology
Committee
  Responsibilities include:
n    Monitors state of science and technology capabilities within the Company.
n    Oversees the development of key technologies essential to the long-term success of
   
the Company.
     
Strategic
Direction
Committee
  Responsibilities include:
n    Reviews the strategic direction of the Company’s major business segments.
n    Reviews significant trends in technology and their anticipated impact on the
   
Company.
     
 
Committee Membership
 
The following chart shows the current committee membership and the number of meetings that each committee held in 2006.
 
                                                 
   
                            Science
       
                Corporate
    Environmental
    and
    Strategic
 
    Audit
    Compensation
    Governance
    Policy
    Technology
    Direction
 
Director   Committee     Committee     Committee     Committee     Committee     Committee  
   
 
Alain J.P. Belda *
            X                               X  
Richard H. Brown
            X       C                       X  
 
 
Curtis J. Crawford
    X       X                       C          
John T. Dillon
    X       C                               X  
 
 
Eleuthère I. du Pont
            X                       X          
Charles O. Holliday, Jr. 
                                            C  
 
 
Lois D. Juliber
    C               X                       X  
Masahisa Naitoh
                    X       X                  
 
 
Sean O’Keefe
    X                       X                  
William K. Reilly
                    X       C       X          
 
 
Charles M. Vest *
                            X       X          
 
 
Number of Meetings in 2006
    9       8       6       4       5       3  
 
 
C = Chair
*Not standing for election
 
Directors fulfill their responsibilities not only by attending Board and committee meetings but also through communication with the Chairman and Chief Executive Officer and other members of management relative to matters of mutual interest and concern to the Company.
 
In 2006, eight meetings of the Board were held. Each director attended at least 86% of the aggregate number of meetings of the Board and the committees of the Board on which the director served. Attendance at these meetings averaged 96% among all directors in 2006.
 
As provided in the Board’s Corporate Governance Guidelines, directors are expected to attend the Company’s Annual Meeting of Stockholders. All directors, except Alain J.P. Belda, attended the 2006 Annual Meeting.
 
Review and Approval of Transactions with Related Persons
 
The Board of Directors has adopted written policies and procedures relating to the approval or ratification of “Related Person Transactions.” Under the policies and procedures, the Corporate Governance Committee (“Committee”) (or its Chair, under some circumstances) reviews the relevant facts of all proposed Related
8


Table of Contents

Person Transactions and either approves or disapproves of the entry into the Related Person Transaction, by taking into account, among other factors it deems appropriate:
 
•   the commercial reasonableness of the transaction,
•   the materiality of the Related Person’s direct or indirect interest in the transaction,
•   whether the transaction may involve an actual or the appearance of a conflict of interest, and
•   the impact of the transaction on the Related Person’s independence under the Corporate Governance Guidelines and applicable regulatory and listing standards.
 
No director may participate in any discussion or approval of a Related Person Transaction for which he or she or any of his or her immediate family members is the Related Person. Related Person Transactions are approved or ratified only if they are determined to be in the best interests of DuPont and its stockholders.
 
If a Related Person Transaction that has not been previously approved or previously ratified is discovered, the Related Person Transaction will be presented to the Committee for ratification. If such Related Person Transaction is not ratified by the Committee, then the Company shall either ensure all appropriate disclosures regarding the transaction are made or, if appropriate, take all reasonable actions to attempt to terminate the Company’s participation in such transaction.
 
Under the Company’s policies and procedures, a “Related Person Transaction” is generally any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which DuPont was, is or will be a participant and the aggregate amount involved exceeds $120,000 in any fiscal year, and in which any Related Person had, has or will have a direct or indirect material interest. A “Related Person” is generally any person who is, or at any time since the beginning of DuPont’s last fiscal year was, (i) a director or executive officer of DuPont or a nominee to become a director of DuPont; (ii) any person who is known to be the beneficial owner of more than 5% of any class of DuPont’s outstanding Common Stock; or (iii) any immediate family member of any of the foregoing persons.
 
Certain Relationships and Related Transactions
 
As discussed above, the Corporate Governance Committee is charged with reviewing issues involving independence and all Related Person Transactions. DuPont and its subsidiaries purchase products and services from and/or sell products and services to companies of which certain of the directors of DuPont are executive officers. The Corporate Governance Committee and the Board have reviewed such transactions and relationships and do not consider the amounts involved in such transactions material. Such purchases from and sales to each company involve less than either $1 million or 2% of the consolidated gross revenues of each of the purchaser and the seller and all such transactions are in the ordinary course of business. Some such transactions are continuing, and it is anticipated that similar transactions will occur from time to time. The spouse of Ms. Kullman, an executive officer, is Marketing Director-Innovation at DuPont and received total compensation in 2006 valued at $312,000, which is commensurate with that of his peers.
 
Communications with the Board and Directors
 
Stockholders and other parties interested in communicating directly with the Board, presiding director or other outside director may do so by writing in care of the Corporate Secretary. The Board’s independent directors have approved procedures for handling correspondence received by the Company and addressed to the Board, presiding director or other outside director. Concerns relating to accounting, internal controls or auditing matters are immediately brought to the attention of the Company’s internal audit function and handled in accordance with procedures established by the Audit Committee with respect to such matters, which include an anonymous toll-free hotline (1-800-476-3016) and a website through which to report issues (https://reportanissue.com/dupont/welcome).
 
Code of Business Conduct and Ethics
 
The Board has adopted a Code of Business Conduct and Ethics for Directors with provisions specifically applicable to directors. In addition, the Company has a long-standing Business Ethics Policy and Business Conduct Guide applicable to all employees of the Company, including executive officers. The Business Ethics
9


Table of Contents

Policy, Business Conduct Guide and Code of Business Conduct and Ethics for Directors are available on the Company’s website (www.dupont.com). Copies of these documents may also be obtained free of charge by writing to the Corporate Secretary.
 
Office of the Chief Executive
 
The Office of the Chief Executive (OCE) has responsibility for the overall direction and operations of all the businesses of the Company and broad corporate responsibility in such areas as corporate financial performance, environmental leadership and safety, development of global talent, research and development and global effectiveness. All seven members are executive officers.
 
Audit Committee Report
 
The Audit Committee of the Board of Directors (the “Committee”) assists the Board in fulfilling its oversight responsibilities with respect to the external reporting process and the adequacy of the Company’s internal controls. Specific responsibilities of the Committee are set forth in the Audit Committee Charter adopted by the Board and last amended and restated effective February 1, 2004. The Charter is available on the Company’s website (www.dupont.com).
 
The Committee is comprised of four directors, all of whom meet the standards of independence adopted by the New York Stock Exchange and the Securities and Exchange Commission. Subject to stockholder ratification, the Committee appoints the Company’s independent registered public accounting firm. The Committee approves in advance all services to be performed by the Company’s independent registered public accounting firm in accordance with the Committee’s Policy on Pre-approval of Services Performed by the Independent Registered Public Accounting Firm. A summary of the Policy is attached to this Proxy Statement at Appendix “A.”
 
Management is responsible for the Company’s financial statements and reporting process, for establishing and maintaining an adequate system of internal control over financial reporting, and for assessing the effectiveness of the Company’s internal control over financial reporting. PricewaterhouseCoopers LLP (PwC), the Company’s independent registered public accounting firm, is responsible for auditing the Company’s consolidated financial statements, for attesting to Management’s Report on Internal Control over Financial Reporting, and for assessing the effectiveness of internal control over financial reporting. The Committee has reviewed and discussed the Company’s 2006 Annual Report on Form 10-K, including the audited consolidated financial statements of the Company and Management’s Report on Internal Control over Financial Reporting, for the year ended December 31, 2006 with management and with representatives of PwC.
 
The Committee has also discussed with PwC matters required to be discussed by Statement on Auditing Standards No. 61 (Communications with Audit Committees), as amended. The Committee has received from PwC the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and has discussed with PwC its independence.
 
The Committee has considered whether the provision to the Company by PwC of limited nonaudit services is compatible with maintaining the independence of PwC. The Committee has satisfied itself as to the independence of PwC.
 
Based on the Committee’s review of the audited consolidated financial statements of the Company, and on the Committee’s discussions with management of the Company and with PwC, the Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.
 
AUDIT COMMITTEE
 
Lois D. Juliber, Chair
Curtis J. Crawford
John T. Dillon
Sean O’Keefe
10


Table of Contents

 
Directors’ Compensation
 
Nonemployee directors receive compensation for Board service which is designed to fairly compensate directors for their Board responsibilities and align their interests with the long-term interests of stockholders. An employee director receives no additional compensation for Board service.
 
The Compensation Committee, which consists solely of independent directors, has the primary responsibility to review and consider any revisions to directors’ compensation. The process for setting director pay is guided by the following principles:
 
•   Transparency
  -   Director compensation is reviewed annually by the Compensation Committee, with recommendation to the full Board which approves changes to director pay.
  -   Details of director compensation are disclosed in the proxy statement annually.
 
•   Alignment with stockholders
  -   Significant portion of annual retainer is paid in restricted stock units that vest over a three-year period.
  -   Stock Ownership Guidelines exist to encourage ownership.
 
•   Fair and competitive compensation that aligns director behavior with the best interests of stockholders
  -   DuPont’s goal is to recognize the new realities of Board service while assuring competitive levels of director pay, reflective of the significant time commitment expected.
  -   Directors must act in the best interest of the Company and its stockholders. DuPont’s stock ownership requirements and use of restricted stock units support and reinforce this commitment.
  -   Director compensation is monitored closely against trends in the marketplace and external practices, as well as against changes at the Peer Group companies. “Peer Group” is defined on page 20.
  -   DuPont’s director compensation program is built upon an annual retainer and committee fees (in lieu of meeting fees), as directors are expected to contribute significant time to their responsibilities outside of meetings.
 
With the assistance of Mercer Human Resource Consulting (“Mercer” or the “Consultant”), the compensation consultant retained by the Compensation Committee, the Committee closely monitors trends in director compensation in the marketplace.
 
The compensation program for nonemployee directors for 2006 and 2007 is described in detail in the chart set forth below:
 
         
     Compensation
       
         Element   2006   2007
 
Annual Retainer
  $85,000 (cash)   $85,000 (cash)
         
(Cash and
Long-Term
Incentive)
  $115,000 — delivered in the form of 2,930
Time-Vested Restricted Stock Units
  $115,000 — delivered in the form of 2,260
Time-Vested Restricted Stock Units
    (Granted February 1, 2006; provide for dividend equivalents; vest in three equal annual installments; payable in cash)   (Granted February 7, 2007; provide for dividend equivalents; vest in three equal annual installments; payable in cash)
 
 
Annual Committee
Member Fee
  Audit $15,000   Audit $15,000
    All Other Committees $9,000   All Other Committees $9,000
 
 
Annual Committee
Chair Fee
  Audit $25,000   Audit $25,000
    All Other Committees $18,000   All Other Committees $18,000
 
 
Stock Ownership
Guidelines
  2 × Total Annual Retainer = $400,000   2 × Total Annual Retainer = $400,000
 
 
11


Table of Contents

The Company does not pay meeting fees, but it does pay for or reimburses directors for reasonable travel expenses related to attending Board, Committee, educational, and Company business meetings. Spouses are invited occasionally to accompany directors to Board-related events. In such situations, the Company pays or reimburses travel expenses for spouses. These travel expenses are imputed as income to the directors and are grossed up to cover taxes. In 2005, the Company held a Board of Directors meeting in Asia to which spouses of directors were invited. Amounts representing imputed income and associated tax gross-up amounts in connection with this trip were paid in 2006 and ranged from $0 to $27,585 per director. Details are reflected in the following Directors’ Compensation table:
 
2006 DIRECTORS’ COMPENSATION
 
                                                                       
                                      Change in
                 
                                      Pension Value
                 
                                      and
                 
                                      Nonqualified
                 
      Fees Earned
                      Non-Equity
      Deferred
                 
      or Paid in
      Stock
      Option
      Incentive Plan
      Compensation
      All Other
         
Name     Cash(1)       Awards(2)*       Awards(3)*       Compensation       Earnings(4)       Compensation(5)       Total  
A. J.P. Belda
    $ 103,000       $ 169,158       $ 24,741               $       $ 1,788       $ 298,687  
R. H. Brown
      121,000         169,158         24,741                 976         8,427         324,302  
C. J. Crawford
      127,000         169,158         24,741                 106,634         8,795         436,328  
J. T. Dillon
      124,000         169,158         24,041                         1,829         319,028  
E. I. du Pont
      97,000         142,720                                 130,175         369,895  
L. D. Juliber
      130,667         169,158         24,741                 90,653         9,143         424,362  
M. Naitoh
      103,000         169,158         24,741                 1,212         2,147         300,258  
S. O’Keefe
      109,000         171,135                                         280,135  
W. K. Reilly
      121,000         169,158         24,741                 104,591         9,672         429,162  
C. M. Vest
      111,333         169,158         24,741                 131,780         9,814         446,826  
Former Directors
                                                                     
L. C. Duemling
      37,333         57,572         26,695                         41,542         163,142  
H. R. Sharp, III
      39,333         57,572         26,695                         12,237         135,837  
                                                                       
 
(1) The term of office for directors begins immediately following election at the Company’s Annual Meeting of Stockholders and ends upon the election of directors at the annual meeting held the following year. Cash retainers and Committee fees are paid monthly.
 
(2) Stock awards are settled in cash. Awards that vested in 2006 are valued at the fair market value on the date of vesting. Awards that have not vested are valued at the fair market value as of December 31, 2006.
 
(3) Represents Statement of Financial Accounting Standards (“SFAS”) No. 123(R) expense in 2006 for stock option awards granted in 2003 and 2004. Assumptions used in determining the SFAS No. 123(R) values can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, in footnote 23 Compensation Plans — Stock Options.
12


Table of Contents

 
Outstanding equity award data for individual directors is noted below:
 
                 
    Outstanding Stock
    Outstanding Option
 
    Awards at 12/31/06(a)     Awards at 12/31/06  
 
A. J.P. Belda
    4,294       20,000  
R. H. Brown
    4,294       20,000  
C. J. Crawford
    4,294       20,000  
J. T. Dillon
    4,294       8,700  
E. I. du Pont
    3,033        
L. D. Juliber
    4,294       20,000  
M. Naitoh
    4,294       20,000  
S. O’Keefe
    4,460        
W. K. Reilly
    4,294       20,000  
C. M. Vest
    4,294       20,000  
L. C. Duemling(b)
    1,260       20,000  
H. R. Sharp, III(b)
    1,261       20,000  
 
(a) Includes dividend equivalent units. Does not include deferred units.
 
(b) 5,860 stock awards were forfeited in 2006 upon termination of service.
 
(4) The Stock Accumulation and Deferred Compensation Plan for Directors allows for deferrals of cash fees and restricted stock units to a date in the future or until retirement. Amounts that have been deferred as cash are credited quarterly with interest at the Prime Rate of Morgan Guaranty Trust Company of New York. During 2006, the Prime Rate was between 1.7% and 2.5% above the applicable Federal market rate. Above applicable Federal market rate interest rates have been credited to the following Directors: R. H. Brown: $976; C. J. Crawford: $14,147; L. D. Juliber: $1,819; M. Naitoh: $1,212.
 
Includes change in pension value under the Company’s discontinued retirement income plan for nonemployee directors for the following directors: C. J. Crawford: $92,487; L. D. Juliber: $88,834; W. K. Reilly: $104,591; C M. Vest: $131,780 resulting from increase in annual cash retainer from $50,000 to $85,000.
 
(5) Includes accruals made in 2006 under the Directors’ Charitable Gift Plan. During first year of participation on the Board, reflects the full initial accrual required. Accordingly, reflects $130,175 for E. I. du Pont who joined the Board in 2006. For continuing directors, reflects the additional accrual required over the previous year’s accrual.
 
 
Also includes pension payments of $28,333 for L. C. Duemling.
 
Reflects tax gross-up payments made in 2006 for a Board of Directors meeting in Asia in 2005 as follows: A. J.P. Belda: $974; R. H. Brown: $8,427; C. J. Crawford: $8,795; L. D. Juliber: $9,143; W. K. Reilly: $8,137; C. M. Vest: $8,727; L C. Duemling: $11,754; H. R. Sharp, III: $9,519.
 
Stock Ownership Guidelines
 
Stock ownership guidelines require each nonemployee director to hold DuPont Common Stock equal to a multiple of two times the annual retainer. Directors have up to five years from date of election to achieve the required ownership. As of the end of 2006, seven of ten directors met or exceeded the ownership requirements. The three remaining directors have several more years to achieve the guideline level.
 
Deferred Compensation
 
Under the DuPont Stock Accumulation and Deferred Compensation Plan for Directors, a director may defer all or part of the Board and Committee fees in cash or stock units until a specified year, until retirement as a director, or until death. Interest accrues on deferred cash payments and dividend equivalents accrue on deferred stock units. This deferred compensation is an unsecured obligation of the Company.
13


Table of Contents

 
Retirement Income Plan
 
The Company’s retirement income plan for nonemployee directors was discontinued in 1998. Nonemployee directors who began their service on the Board before the plan’s elimination continue to be eligible to receive benefits under the plan. Annual benefits payable under the plan equal one-half of the annual Board retainer (exclusive of any Committee compensation and stock, restricted stock units or option grants) in effect at the director’s retirement. Benefits are payable for the lesser of life or ten years.
 
Directors’ Charitable Gift Plan
 
The Directors’ Charitable Gift Plan was established in 1993. After the death of a director, the Company will donate five consecutive annual installments of up to $200,000 each to tax-exempt educational institutions or charitable organizations recommended by the director and approved by the Company.
 
A director is fully vested in the Plan after five years of service as a director or upon death or disability. The Plan is unfunded; the Company does not purchase insurance policies to satisfy its obligations under the Plan. The directors do not receive any personal financial or tax benefit from this program because any charitable, tax-deductible donations accrue solely to the benefit of the Company. Employee directors may participate in the Plan if they pay their allocable cost.
 
Accidental Death and Disability Insurance
 
The Company also maintains $300,000 accidental death and disability insurance on nonemployee directors.
14


Table of Contents

 
1 — ELECTION OF DIRECTORS
 
The 11 nominees for election as directors are identified on pages 15 through 17. All nominees are now members of the Board of Directors with the exception of Robert A. Brown and Bertrand P. Collomb. Two current directors, Alain J.P. Belda and Charles M. Vest, are not standing for election.
 
The Board has determined that, except for C. O. Holliday, Jr., the Chairman and CEO, each of the nominees is independent within the independence requirements of the NYSE listing standards and in accordance with the Guidelines for Determining the Independence of DuPont Directors set forth in the Board’s Corporate Governance Guidelines. See pages 3-5.
 
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, other directorships, and age as of the 2007 Annual Meeting.
 
     
     
RICHARD H. BROWN
 
RICHARD H. BROWN, 59                                                             Director since 2001

Former chairman and chief executive officer of Electronic Data Systems Corporation, a leading global services company. Mr. Brown is a director of Browz Group, LC. He also serves on the Advisory Board of Mitsui & Co. Venture Partners. He is a former member of The Business Council; The Business Roundtable; U.S.-Japan Business Council; the French-American Business Council; the President’s Advisory Committee on Trade and Policy Negotiations and the President’s National Security Telecommunications Advisory Committee.
     
ROBERT A. BROWN
 
ROBERT A. BROWN, 55

President of Boston University. He is a former provost and professor at the Massachusetts Institute of Technology. Dr. Brown is a member of the National Academy of Sciences, the American Academy of Arts and Sciences, the National Academy of Engineering and the President’s Council of Advisors on Science and Technology.
     
BERTRAND P. COLLOMB
 
BERTRAND P. COLLOMB, 64

Chairman and former chief executive officer of Lafarge, a global manufacturer of building materials, headquartered in Paris, France. He is also a director of Total and ATCO Ltd. Mr. Collomb is chairman of Association Française des Entreprises Privées (AFEP) and the French Institute of International Relations (IFRI). He is vice chairman of the Global Business Coalition Against HIV/AIDS. Mr. Collomb is founder of the Center for Management Research at the Ecole Polytechnique, former chairman of the World Business Council for Sustainable Development and a member of the Institut de France.
15


Table of Contents

     
CURTIS J. CRAWFORD
 
CURTIS J. CRAWFORD, 59                                                        Director since 1998

President and Chief Executive Officer of XCEO, Inc., a consulting firm specializing in leadership and corporate governance, and author of two books on these subjects. He formerly served as president and chief executive officer of Onix Microsystems, Inc. Dr. Crawford is a director of Agilysys, Inc., ITT Corporation and ON Semiconductor Corporation. He also serves as a trustee of DePaul University.
     
JOHN T. DILLON
 
JOHN T. DILLON, 68                                                                  Director since 2004

Retired chairman and chief executive officer, president and chief operating officer and executive vice president — packaging of International Paper, a global paper and paper distribution, packaging and forest products company. He is vice chairman of Evercore Capital Partners, and a director of Caterpillar, Inc., Kellogg Company, and Vertis Inc.
A member of The Business Council, Mr. Dillon is a former chairman of The Business Roundtable, was a member of the President’s Advisory Council on Trade Policy and Negotiations and served as chairman of the National Council on Economic Education.
     
ELEUTHERE I. DU PONT
 
ELEUTHÈRE I. DU PONT, 40                                                      Director since 2006

Former president and chief financial officer of Wawa, Inc., a chain of food markets in the mid-Atlantic region. Mr. du Pont serves as a trustee of the Children’s Hospital of Philadelphia and the Longwood Foundation.
     
CHARLES O. HOLLIDAY, JR.
 
CHARLES O. HOLLIDAY, JR., 59                                               Director since 1997

Chairman and Chief Executive Officer of DuPont. He is a former president, executive vice president, president and chairman — DuPont Asia Pacific and senior vice president. He is chairman of The Business Roundtable’s Task Force for Environment, Technology and Economy and the U.S. Council on Competitiveness. Mr. Holliday is a founding member of the International Business Council, and a member of the National Academy of Engineering. He also serves as Chairman of Catalyst.
16


Table of Contents

     
 
LOIS D. JULIBER, 58                                                                  Director since 1995

Retired vice chairman of Colgate-Palmolive Company, the principal business of which is the production and marketing of consumer products. She formerly served as chief operating officer, executive vice president — Developed Markets, president, Colgate-Palmolive North America and chief technological officer of Colgate-Palmolive. Ms. Juliber is a director of Goldman Sachs, Chairman of the MasterCard Foundation and a member of the board of trustees of Wellesley College, Girls Inc. and Women’s World Banking.
     
MASAHISA NAITOH
 
MASAHISA NAITOH, 69                                                             Director since 2000

Chairman and Chief Executive Officer of the Institute of Energy Economics, Japan. He formerly served as Executive Vice Chairman of ITOCHU Corporation, an international trading company headquartered in Tokyo, Japan, and executive vice president, senior managing director and advisor of ITOCHU. Prior to joining ITOCHU, Mr. Naitoh served in a number of senior policy positions in the Japanese government’s Ministry of International Trade and Industry.
     
SEAN O'KEEFE
 
SEAN O’KEEFE, 51                                                                     Director since 2005

Chancellor of Louisiana State University and former administrator of the U.S. National Aeronautics and Space Administration (NASA). He was appointed secretary of the Navy, and served as the comptroller and chief financial officer of the Department of Defense during the presidency of George H.W. Bush. Mr. O’Keefe is a director of Battelle Memorial Institute and Sensis Corporation, and a fellow of the National Academy of Public Administration and the International Academy of Astronautics.
     
WILLIAM K. REILLY
 
WILLIAM K. REILLY, 67                                                             Director since 1993

Founding Partner of Aqua International Partners, L.P., which finances water supply and renewable energy. He formerly served as administrator of the United States Environmental Protection Agency, president of the World Wildlife Fund and The Conservation Foundation. Mr. Reilly is a director of AgraQuest, ConocoPhillips, Enviance, Evergreen Holding Inc., Royal Caribbean International, National Geographic Society, the Packard Foundation and the American Academy in Rome. He also serves as chairman emeritus of the board of the World Wildlife Fund, chairman of the Advisory Board of the Nicholas Institute for Environmental Policy Solutions of Duke University, and co-chair of the National Commission on Energy Policy.
17


Table of Contents

 
Ownership of Company Stock
 
Set forth below is certain information, as of December 31, 2006, concerning beneficial owners known to DuPont of more than five percent of DuPont’s outstanding Common Stock:
 
                 
    Number of Shares
    Percent of Shares
 
Name and Address of Beneficial Owner
  Beneficially Owned     Outstanding  
Capital Research and Management Company
and certain of its affiliates
    54,343,000 (1)     5.9 %(1)
333 South Hope Street
               
Los Angeles, CA 90071
               
 
(1)  Based solely on a Schedule 13G filed with the Securities and Exchange Commission on February 12, 2007 by Capital Research and Management Company and certain of its affiliates (“Capital Research”). Capital Research reported that it possessed sole voting power over 12,758,000 shares and sole dispositive power over 54,343,000 shares. Capital Research also reported that it did not possess shared voting or shared dispositive power over any shares beneficially owned.
 
The following table includes shares in DuPont beneficially owned by each director and nominee, by each executive officer named in the Summary Compensation Table on page 32 and by all directors and executive officers as a group as of December 31, 2006. Also included are shares of DuPont Common Stock granted in 2007 under the Variable Compensation Plan.
 
Under rules of the Securities and Exchange Commission, “beneficial ownership” includes shares for which the individual, directly or indirectly, has or shares voting or investment power, whether or not the shares are held for the individual’s benefit.
 
                                         
      Amount and Nature of Beneficial Ownership          
      (Number of Shares)          
              Voting or
                 
              Investment
      Right to
      Percent of
 
      Direct(1)       Power(2)       Acquire(3)       Class(4)  
A. J.P. Belda
      13,615                 20,000          
R. H. Brown
      9,503                 20,000          
T. M. Connelly, Jr. 
      43,849                 398,560          
C. J. Crawford
      5,410                 20,000          
J. T. Dillon
      2,629                 5,800          
E. I. du Pont
      501         3,132,262                  
R. R. Goodmanson
      88,637                 992,934          
C. O. Holliday, Jr. 
      219,202                 3,596,600          
L. D. Juliber
      18,577         600         20,000          
J. L. Keefer
      23,623                 197,211          
E. J. Kullman
      43,860         4,759         427,387          
M. Naitoh
      14,012                 20,000          
S. O’Keefe
                               
G. M. Pfeiffer
      55,674                 678,723          
W. K. Reilly
      25,422                 20,000          
C. M. Vest
      21,785                 20,000          
Directors and Executive Officers
as a Group
      735,167         3,137,978         7,636,376         1.2 %
                                         
18


Table of Contents

  (1)   These shares are held individually or jointly with others, or in the name of a bank, broker or nominee for the individual’s account. Also included 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, vested restricted stock units and shares resulting from option exercises for which delivery is deferred.
 
  (2)   This column includes other shares over 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)   This column includes shares which directors and executive officers have a right to acquire through the exercise of stock options granted under DuPont’s stock option plans.
 
  (4)   Unless otherwise indicated, beneficial ownership of any named individual does not exceed 0.5% of the outstanding shares of the class.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
Directors and executive officers are required 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. In 2006, one report for S. J. Mobley covering one transaction was filed late because of an administrative error.
 
Compensation Committee Interlocks and Insider Participation
 
No member of the Compensation Committee was at any time during 2006 an officer or employee of DuPont or any of the Company’s subsidiaries nor was any such person a former officer of DuPont or any of the Company’s subsidiaries. In addition, no Compensation Committee member is an executive officer of another entity at which one of the Company’s executive officers serves on the board of directors.
 
Compensation Committee Report
 
The Compensation Committee of the Board of Directors has reviewed the Compensation Discussion and Analysis (“CD&A”) section included in this Proxy Statement.
 
The Compensation Committee has also reviewed and discussed the CD&A with management.
 
Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the CD&A be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006 and this Proxy Statement.
 
The members of the Compensation Committee of the Board of Directors have provided this report:
 
COMPENSATION COMMITTEE
 
John T. Dillon, Chair
Alain J.P. Belda
Richard H. Brown
Curtis J. Crawford
Eleuthère I. du Pont
19


Table of Contents

 
Compensation Discussion and Analysis (CD&A)
 
Executive Compensation Philosophy and Core Principles
 
The Company believes its ability to recruit, reward and retain senior executives is influenced by the quality of its compensation and benefit programs. The following principles guide the design and administration of DuPont’s compensation programs:
 
•   Programs should include a strong link between pay and performance, measured at all levels (corporate, business segment or functional level as well as individual level).
  A significant portion of compensation should be “at risk” based on Company and individual performance. When performance is stronger than the market or comparison companies, total target compensation should be above market median and when performance is weaker than the market or comparison companies, total compensation should be below market median.
 
•   Programs should align executives with stockholders.
  Incentives should facilitate stock ownership and include performance measures that drive long-term sustained stockholder value growth.
 
•   Programs should reinforce business strategy and reflect and reinforce the Company’s values.
  Incentives should reward improved business growth and performance and reinforce desired competencies and behaviors. They should recognize contributions to business success that are consistent with core values.
 
•   Programs should assure access to needed talent and protect talent from recruitment by competitors.
  To attract and retain senior executives, compensation opportunities should be market competitive. An executive’s compensation opportunity should be commensurate with the executive’s responsibilities, experience and demonstrated performance.
 
Determining Executive Compensation
 
An important aspect of the Compensation Committee’s (the “Committee”) annual work relates to the determination of compensation for Company executives, including the Chief Executive Officer (“CEO”). The Committee has retained Mercer Human Resource Consulting (“Mercer” or the “Consultant”) as a third party advisor to provide independent advice, research, and evaluation related to executive compensation. In this capacity, Mercer reports directly to the Committee and meets regularly with the Committee Chair and Committee without management present.
 
Competitive and Pay-for-Performance Analysis
 
To assure that executive compensation is market competitive, the Company benchmarks against a select group of peer companies (“Peer Group”) as well as against compensation survey information that represents industrial companies in the ten billion dollar and above revenue category (“Survey Information”).
 
The Peer Group includes the following companies: Alcoa, BASF, Dow Chemical, Eastman Kodak, Ford, General Electric, Hewlett-Packard, Minnesota Mining and Manufacturing, Monsanto, Motorola, PPG Industries, Rohm & Haas and United Technologies.
 
In 2005, the Committee retained Mercer to conduct a detailed analysis of all elements of executive compensation. Compensation data was collected for the Peer Group as well as from compensation surveys. The analysis in aggregate confirmed that the Company’s compensation practices support its compensation philosophy of enhancing stockholder value through programs that attract, motivate and retain key executives. Overall, executive target total cash compensation is comparable to the market median.
 
The analysis also included a pay-for-performance review comparing DuPont’s performance to the Peer Group, based on four financial metrics: revenue growth, earnings per share growth, return on invested capital, and total stockholder return. Based on these four measures, DuPont compensation for the officers included in the Summary Compensation Table on page 32 (the “Named Executive Officers”) is aligned with Company performance.
20


Table of Contents

 
Total Compensation Review
 
In addition to reviewing external compensation practices and alignment of pay-for-performance, the Committee reviews all components (including perquisites) of the current and historic compensation of the CEO and other Named Executive Officers. The Committee uses tally sheets to analyze the current target opportunity and the consequences of decisions made by the Committee in the past. Future compensation actions are made within the context of this detailed analysis.
 
Pay Equity Multiple
 
During the Company’s 13-year practice of monitoring CEO target total cash compensation against the second level executive, CEO pay multiples have remained stable. As part of the Committee’s annual review of executive compensation programs and processes, the Committee reviewed the practice. The Committee assessed whether the existing program and multiples continue to be valid given the current challenges facing the Company and the current leadership team, as well as the organization structure and culture.
 
To create stronger program parameters, the Committee revised the practice to expand the comparison group from the second level executive to include all active Named Executive Officers, and to apply a pay equity multiple of two to three times total cash compensation, to reflect the broader target compensation levels of this expanded group.
 
In addition, given the significant role long-term incentives play in CEO pay, the Committee specifically monitors long-term incentives and has established a pay equity multiple of three to four times total direct compensation, which includes long-term equity awards. It is the Company’s intent to be generally competitive with market long-term incentive levels over time, as well as to preserve this internal relationship.
 
A historic review of the internal relationship between the CEO and the new, expanded comparison group of all active Named Executive Officers shows a year-over-year stable relationship between the CEO and the Named Executive Officers total cash compensation as well as total direct compensation.
 
The Company will strive for consistency of both multiples over the long term, with the understanding that the Committee may need latitude to address any potential concerns. This flexibility to respond to specific situations may have a short-term impact on the multiples.
 
Executive Compensation Overview
 
DuPont is focused on accomplishing its mission of sustainable growth, which the Company has defined as increasing stockholder and societal value while decreasing environmental footprint throughout the value chains in which the Company operates. DuPont strives to accomplish growth and innovation within its core values, which include: safety and health, environmental stewardship, highest ethical behavior, and respect for people. The Company’s executive compensation programs are designed to attract, motivate, reward and retain the high quality executives necessary for the leadership of the Company and accomplishment of its strategy.
 
DuPont’s executive compensation programs support the business strategy by providing incentives to executives to grow the business, increase earnings, improve return on investments, and grow stockholder value, all in a manner consistent with its values. In addition to aligning executives’ interests with those of the stockholders, DuPont recognizes the individual and team performance of each executive in meeting the business objectives of the Company.
 
The Committee is responsible for approving executive compensation policies and programs to support the Company’s corporate objectives and stockholder interests.
 
Components of the Executive Compensation Program
 
The executive compensation components are structured to support DuPont’s philosophy and core principles. The Company believes a performance-oriented program that maintains internal equity and cost effectiveness while providing competitive compensation allows the Company to attract and retain superior executive talent.
21


Table of Contents

 
DuPont’s executive compensation program consists of the following components: base salary; annual variable compensation; long-term incentive awards consisting of stock options, performance-based and time-vested restricted stock units; benefits; and limited perquisites.
 
Base Salary
 
Base salaries serve as the foundation of the compensation program. The majority of other executive compensation elements, including annual incentives, long-term incentives, and retirement benefits are driven from base salary or the midpoint of the salary structure.
 
To determine base salary levels and salary increases, the Committee’s consultant collects competitive market data for the Peer Group and information presented in industry compensation surveys. Management reviews the market data and develops recommended salary increases based on individual responsibilities, experience and performance, as well as position relative to the competitive market and relative to internal peers. The Committee reviews management’s recommendations and approves any compensation change for each Named Executive Officer.
 
The Committee reviews the market data provided by Mercer and, in executive session without management present, develops a recommended salary increase for the CEO, based on performance, competitiveness and internal equity. Final compensation actions for the CEO are approved by the independent Board members.
 
Consistent with the Company’s policy for all employees, base salaries are compared to the median of the Peer Group and against the Survey Information.
 
Annual Variable Compensation
 
The Variable Compensation (“VC”) plan is designed to align participants with the annual objectives and goals of the Company and with the interests of the stockholders. The VC program provides approximately 6,400 DuPont employees, including executive officers, with total annual compensation that is closely linked to DuPont’s financial and operational performance for the year. Typically, 25% of variable compensation is paid in DuPont Common Stock, and senior executives have the choice of receiving up to 100% in stock. This provision increases executive stock ownership and further aligns executives with stockholder interests.
 
Management recommends variable compensation targets for each participating level of responsibility within the Company, based on Mercer’s evaluation of variable compensation levels at the median of the Peer Group as well as the Survey Information. The Committee reviews and approves incentive targets for all participants. In addition, at the beginning of each performance year, the incentive target for the CEO is reviewed by the Committee and approved by the independent Board members based on competitive market data and DuPont’s philosophy to set targets comparable to the market median. At the conclusion of each performance period, the CEO’s incentive award is reviewed by the Compensation Committee and approved by the independent Board members.
 
Over the past several years the formula to calculate variable compensation awards has been:
 
[(Corporate Performance x 50%) + (Business Unit Performance x 50%)] x Individual Performance x VC Target
 
In developing the performance measures and weightings, the Committee has determined that internal measurements of performance which are not calculated in accordance with Generally Accepted Accounting Principles in the United States (“Non-GAAP measures”) are valuable in determining performance of individual businesses. Accordingly, the measures of earnings per share, return on invested capital and business unit after-tax income that are used for calculation of variable compensation exclude significant items as defined by the Company for internal reporting. The Company believes that these measures are appropriate for the variable compensation calculation as they provide a more realistic view of operating performance of the individual business units of the Company.
22


Table of Contents

 
At the beginning of each fiscal year the Committee approves the performance measures and weightings assigned to each measure:
 
  •   Corporate performance
 
  n   25% earnings per share (EPS) excluding significant items compared to prior year’s performance
 
  n   25% return on invested capital (ROIC) compared to average of the Peer Group
 
  •   Business unit performance
 
  n   CEO and other corporate positions:
  -   50% weighted average performance for the various business units (see below)
 
  n   Business unit positions:
  -   17% business unit after-tax operating income (excluding significant items) versus financial commitments for the year
  -   16.5% business unit free cash flow versus financial commitments for the year
  -   16.5% business unit revenue versus financial commitments for the year
 
  •   Individual performance
 
  n   0% to 200% based on performance versus objectives
 
In addition to the employee’s contribution to the Company results, a factor in determining individual performance is a qualitative assessment of performance on the Company’s core values: safety and health; environmental stewardship; highest ethical behavior; and respect for people.
 
These performance measures were selected to drive sustainable, profitable growth and return on investment in the business markets in which the Company competes.
 
DuPont’s values are a critical part of the Company’s history and future. DuPont expects executives to meet business objectives in a manner that is consistent with the Company’s values.
 
For Named Executive Officers, the final performance determination for 2006 was as follows:
 
                   
      2005 EPS     2006 EPS     Payout Factor
Earnings Per Share (EPS) — year over year (excl. significant items)
    $2.34     $2.88     123%
      2006 DuPont
ROIC
    2006 Peer Group
Average
    Payout Factor
ROIC — versus Peer Group
    15.7%     14.60%     108%
Corporate Factor(1)
                115%
Weighted Average Business Unit Factor
                98%
Overall Payout Factor(2)
                107%
                   
 
  (1)   Average of EPS and ROIC Factor.
 
  (2)   Average of Corporate and Weighted Average Business Unit Factor.
 
Under the plan previously approved by stockholders, total annual corporate VC is limited to 20% of consolidated net income before significant items after deducting six percent of net capital employed. Each year the Committee reviews operating results, excluding all significant 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. Over the past ten years, the Committee has approved payments on average of 47% of the maximum available. The final 2006 VC payout pool of $153 million was 33% of this maximum available amount.
23


Table of Contents

 
Long-Term Incentives
 
Objectives
 
The Company also provides long-term and “at risk” incentive compensation under the Stock Performance Plan to accomplish the following objectives:
 
•   Provide more significant incentive for individuals who are responsible for the long-term growth and success of the Company
 
•   Link pay and performance — accelerate growth and balance this growth with productivity, profitability, and capital management
 
•   Align the interests of executives with stockholders
Increase stockholder value
Incorporate key metrics that drive stockholder value
 
•   Attract, retain and motivate executive talent
Competitive market practice
Motivate higher levels of performance
 
•   Balance plan costs, such as accounting and dilution, with employee-perceived value, potential wealth creation opportunity and employee share ownership expectations
 
•   Ensure rewards pay out over multiple years to keep executives focused on longer-term results
 
Methodology
 
To ensure consistency and increased understanding of the long-term incentive grant process, the Company developed a framework/methodology, which guides long-term incentive award determination. The guidelines were developed in 2005 for the 2006 grant cycle and are intended to be in place for 2007 and 2008. Target levels are established as a number of shares by salary level. The stock price used to develop the number of shares is based on a long-term average, with the price rounded to the nearest whole dollar.
 
Equity Grant Practices
 
All grants must be approved by the full Board or the appropriate Board Committee. Individual awards to executive officers are recommended by the CEO and approved by the Compensation Committee. Awards to the CEO are recommended by the Compensation Committee and approved by the independent Board members. Since 1998, annual grants to all employees including executives have been made at a pre-established Compensation Committee meeting in early February. This allows sufficient time for the market to absorb announcement of annual earnings, which is typically made during the fourth week of January. The Company does not time its equity grants in coordination with the release of material nonpublic information. The grant price historically has been the average of the high and low prices on the date of grant. In 2007, the Board of Directors amended the Stock Performance Plan to change the exercise price for stock options to the closing price on the date of grant.
 
Any occasional special grants to employees who are not executive officers are approved by the Special Stock Performance Committee (consisting of the Chairman of the Board and the Chair of the Compensation Committee), to which the Board of Directors has delegated the authority to approve special equity awards. Grants are effective on the date of Special Stock Performance Committee approval.
 
Equity Vehicle Mix
 
Different long-term incentive vehicles satisfy different objectives, and in combination, the Committee believes, create an equally balanced portfolio of long-term incentives, consisting of one-third each of stock options, performance-based restricted stock units (“PSUs”) and time-vested restricted stock units (“RSUs”).
 
The Company has a long history of stock option grants (since 1957) and continues to appreciate the leveraged incentive of stock options to drive share value and provide direct alignment with stockholders. With the increased accounting cost under SFAS No. 123(R), a program that consists entirely of stock options may
24


Table of Contents

not balance the expense of options with the perceived and incentive value to employees. Additionally, stock options alone do not address all of the long-term incentive objectives outlined above.
 
In 2004 (with further revisions in 2006), the Company redesigned the long-term incentive plan and began augmenting long-term incentive opportunity with other vehicles to create a more balanced program that reinforces specific business objectives, addresses business circumstances, talent needs and philosophical considerations, and supports DuPont’s culture. The following table summarizes the performance drivers, mix and objectives for the Company’s long-term incentive components:
 
Long-Term Incentive Mix
 
                   
            Performance-Based
    Time-Vested Restricted
      Stock Options     Restricted Stock Units     Stock Units
CEO and Other Named Executive Officers
    1/3     1/3     1/3
Performance Drivers
   
 • Stock price appreciation (longer-term)
    • ROIC
• Revenue growth (intermediate-term)
   
• Stock price appreciation (intermediate-term)
Objectives
   
 • Stockholder alignment and alignment with long-term business objectives
 • Stock ownership
 • Lead/support business strategy as it changes
   
• Drive operating and financial performance
• Stock ownership
    • Capital accumulation
• Retention incentive
• Stock ownership
                   
 
Participation
 
About 2,200 employees, including executive officers, key global leaders, and middle management, received long-term incentive awards in 2006.
 
Target Levels
 
The Committee establishes long-term incentive (“LTI”) targets for each participating level within the Company, based on an evaluation of long-term incentive levels for the Peer Group and overall Survey Information practices. Long-term incentive awards for DuPont are targeted to be near the median long-term incentive opportunity granted by the group of companies surveyed.
 
An analysis of LTI target levels conducted with the assistance of Mercer in 2006 confirmed overall DuPont’s LTI levels are within the competitive market range.
 
Given the potential volatility of long-term incentive compensation levels externally, the Company closely monitors the competitive market for target LTI levels and also for eligibility and participation levels. Recommended changes to the Company’s target levels are deliberate and thoughtful. The intent is to be generally competitive with market levels over time, but not to attempt to match the market every year.
 
Consistent with an overall compensation philosophy to attract, motivate, reward and retain high quality executives, special awards of stock options, time-vested restricted stock units and/or performance-based restricted stock units may be made to key senior management employees from time to time. For executive officers, these awards are approved by the Compensation Committee, or, in the case of the CEO, by the independent members of the Board of Directors.
 
Stock Options
 
Stock options are typically granted annually and individual grants can range from 0% to 200% of the target for each level of responsibility. This range reflects employees’ future potential to create value for the Company and individual performance, including achievement of critical operating tasks in such areas as organizational capacity and strategic positioning. Annual nonqualified stock option grants are made at market price on the date of grant, vest in one-third increments over three years, and carry a term of six years, which the Company believes creates a strong performance and retention incentive.
25


Table of Contents

 
Beginning with grants made in 2003, the Company has expensed stock options. The Company has never repriced stock options and has no intent to reprice options in the future.
 
A reload feature is available for options granted from 1997 through 2003 to facilitate stock ownership by management. Effective with options granted in 2004, option grants do not include a reload feature and the Company does not intend to add this feature in the future.
 
Performance-Based Restricted Stock Units (“PSUs”)
 
The PSU program ensures both stockholder alignment and focus on business priorities, by clearly communicating what is most important in driving business performance and ultimately creating stockholder value. The Company believes a PSU program focusing on revenue growth and ROIC creates specific alignment with objectives for balanced growth, profitability and capital management. Given the longer-term nature of DuPont’s goals and the limitations inherent in setting targets into the future, the Company measures results against the Peer Group (as defined on page 20).
 
Annual PSU awards are limited to DuPont corporate officers, including the Named Executive Officers, who drive the development and execution of business strategy. One-third of the overall LTI award is delivered in PSUs.
 
A target number of units is awarded at the beginning of a three-year performance cycle. All executives at a particular level will receive the target amount. The Company does not differentiate the target award based on individual performance.
 
At the conclusion of the performance cycle, payouts can range from 0% to 200% of the target grant based on pre-established, performance-based corporate objectives in both revenue growth and ROIC versus the Peer Group over the three-year performance period. Potential payout scenarios are presented in the table below.
 
                                                         
            DuPont Annualized Revenue Growth vs. Peers  
                    25th to
      40th to
      60th to
         
            <25th
      40th
      60th
      75th
      >75th
 
            Percentile       Percentile       Percentile       Percentile       Percentile   
DuPont     >75th Percentile       50 %       90 %       135 %       165 %       200 %
ROIC     60th to 75th Percentile       0 %       65 %       110 %       135 %       165 %
vs.     40th to 60th Percentile       0 %       40 %       90 %       110 %       135 %
Peers     25th to 40th Percentile       0 %       25 %       40 %       65 %       90 %
      <25th Percentile       0 %       0 %       0 %       0 %       0 %
                                                         
 
In the fourth quarter of 2006, the Company adopted SFAS No. 158 — Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of Financial Accounting Standards Board (“FASB”) Statements No. 87, 88, 106, and 132(R), which affected the Company’s ability to measure ROIC (as defined by the Company) on a relative basis as compared to the Peer Group.
 
In addressing the impact of these accounting changes, the Company’s primary objective was to stay true to the original goals of the PSU program yet eliminate the impact of an accounting change that has no relation to pay and performance. For the outstanding PSU programs, the Committee approved a change to an absolute ROIC target starting with the performance year 2007, rather than the ROIC target relative to the Peer Group. No changes have been made to the way the Company measures revenue growth.
 
2004 PSU Program
 
The 2004 — 2006 performance cycle ended with year-end 2006. DuPont’s performance against the Peer Group was at the 46th percentile for Revenue Growth and at the 46th percentile for ROIC. The combination of the Company’s performance relative to the Peer Group performance resulted in a payout factor of 90% of target, which is applied equally to all PSU holders.
26


Table of Contents

 
2005 and 2006 PSU Programs
 
Pursuant to the program design, the 2005 and 2006 PSU programs are based on revenue growth and ROIC relative to the Peer Group. The 2005 and 2006 performance cycles will end on December 31, 2007 and 2008, respectively. See discussions above regarding changes in accounting related to the metrics and ROIC performance goals.
 
2007 PSU Program
 
Awards made under the 2007 PSU program will be measured against revenue growth relative to the Peer Group as well as an absolute ROIC target for each year in the performance period.
 
Time-Vested Restricted Stock Units (“RSUs”)
 
Time-vested restricted stock units (“RSUs”) offer a retentive feature to the Company’s LTI program that satisfies an important program objective by providing continuity through business cycles as well as smoothing payout volatility. RSUs also provide further alignment with stockholders through increased ownership levels.
 
RSUs typically are granted annually. Individual grants generally range from 0% to 200% of the target for each level of responsibility to reflect employees’ future potential and individual performance, including achievement of critical operating tasks in such areas as organizational capacity and strategic positioning. RSUs generally vest over a three-year period.
 
Benefits
 
The Company’s global benefit philosophy for employees, including the Named Executive Officers and other executive officers, is to provide a package of benefits consistent with local practices and competitive within individual markets.
 
The Company’s executive officers participate in the same health and welfare programs on the same terms and conditions as other employees. In the U.S., this offering consists of the standard range of medical, dental and vacation benefits, as well as life insurance and disability coverage.
 
Executive officers also participate in Company retirement programs on the same terms and conditions as other employees. Executive officers in the U.S. participate in the DuPont Pension and Retirement Plan (“DPRP”) and the Savings and Investment Plan (“SIP”). The DPRP is a tax-qualified defined benefit plan under which benefits are based primarily on an employee’s years of service and final average pay. The SIP is a tax-qualified defined contribution plan that includes a 401(k) feature.
 
In addition to the DPRP, the Company offers a Pension Restoration Plan. The Pension Restoration Plan is a nonqualified pension plan that restores those benefits that cannot be paid by the DPRP as a result of Internal Revenue Code (“IRC”) limits applicable to tax-qualified pension plans. The program applies to all employees who exceed the IRC limits. Pension benefits in excess of these limits are paid from the Company’s operating cash flows.
 
In addition to the SIP, the Company offers a nonqualified Salary Deferral and Savings Restoration Plan. The purpose of the plan is to provide eligible employees the opportunity to defer salary and receive a Company match on compensation that is ineligible to be considered in calculating benefits under the SIP due to IRC limits on compensation. All employees who are impacted by the IRC limits are eligible. A Company match is credited in an equivalent amount to what would have been provided under the tax-qualified savings plan absent IRC limits.
 
In August 2006, the Company announced major changes to the U.S. retirement programs. Effective January 1, 2008, eligible employees (including executives) as of December 31, 2006, will participate in an enhanced savings plan and will continue to accrue benefits in the pension plans, at one-third of the current rate and without continued growth of the Company-paid post-retirement survivor benefit.
27


Table of Contents

 
Perquisites and Personal Benefits
 
As a matter of business philosophy, DuPont provides very limited perquisites or personal benefits to senior executive officers (including the CEO). All employees in the Stock Performance Plan (approximately 2,200 employees) are provided financial education services such as seminars which are focused on assisting employees to achieve the highest value from Company compensation and benefits programs. In addition, personal financial counseling (excluding tax counseling) is provided to senior leaders.
 
Company Aircraft
 
The Company aircraft are dedicated primarily to senior management support and are intended for business travel only. An exception is provided to the Chairman and CEO, who is required, under the Company’s personal security policy, to use Company aircraft for all air travel needs, including non-business air travel. Costs associated with non-business travel are treated as personal benefits for Mr. Holliday and are disclosed as such in the “All Other Compensation” column in the Summary Compensation Table on page 32.
 
The Company’s policy with regard to corporate aircraft usage is reviewed regularly to assure that it continues to be appropriate.
 
Employment/Severance Arrangements
 
DuPont generally does not enter into employment agreements (including severance agreements) with executives. The Company’s Career Transition Financial Assistance Plan currently provides termination benefits equal to one month’s pay for each two years of service, with a maximum of 12 months’ pay. For purposes of the Plan, pay equals base salary plus last actual variable compensation. The program applies to substantially all U.S. parent company employees terminated for lack of work, including executives. On occasion, the Company may negotiate individual arrangements for senior executives and has entered into agreements with R. R. Goodmanson and G. M. Pfeiffer. For details of those agreements, see Employment Agreements on page 47.
 
Change in Control Arrangements
 
DuPont does not currently have Change in Control Arrangements in place. As part of the overall review of compensation policies and programs, this subject is periodically reviewed against market place practices and business strategy.
 
Section 162(m) of the Internal Revenue Code of 1986
 
The federal tax laws impose requirements in order for compensation payable to the CEO and certain executive officers to be fully deductible. The Company believes it has taken appropriate actions to maximize its income tax deduction.
 
Section 162(m) of the IRC (the “Code”) generally precludes a public corporation from taking a deduction for compensation in excess of $1 million for its CEO or any of its four other highest-paid executive officers, unless certain specific and detailed criteria are satisfied.
 
Annually, the Company reviews all compensation programs and payments to determine the tax impact on the Company as well as on the executive officers. In addition, the Company reviews the impact of its programs against other considerations, such as accounting impact, stockholder alignment, market competitiveness, effectiveness and perceived value to employees. Because many different factors influence a well-rounded, comprehensive executive compensation program, some compensation may not be deductible under Section 162(m) of the Code.
 
The Company will continue to monitor developments and assess alternatives for preserving the deductibility of compensation payments and benefits to the extent reasonably practicable, consistent with its compensation policies and as determined to be in the best interests of DuPont and its stockholders.
28


Table of Contents

 
In order to allow annual and long-term incentive payments to be fully deductible under Section 162(m) of the Code, DuPont is seeking stockholder approval of the Equity and Incentive Plan at the 2007 Annual Meeting of Stockholders. See the discussion beginning on page 49 of this Proxy Statement for information on this plan.
 
Stock Ownership Guidelines
 
The Company believes senior leadership should have a significant equity position in the Company. Stock ownership guidelines are in place to align executive officers and other senior leaders with the interests of stockholders and to encourage a longer-term focus in managing the Company. The guidelines specify a number of shares (as a multiple of base pay) executive officers must accumulate and hold within three years of the date of achieving the various executive levels. Specific requirements are set forth below:
 
         
Chief Executive Officer
    5x  
Executive Vice President
    4x  
Senior Vice President / Group Vice President
    3x  
Vice President
    1.5x  
 
An annual review is conducted to assess compliance with the guidelines. The CEO and other Named Executive Officers exceed the ownership guidelines.
 
DuPont stock may be held in various forms to achieve the applicable ownership guidelines. These forms include: shares owned outright, shares held in the Savings and Investments Plan, shares held in the Salary Deferral and Savings Restoration Plan, deferred variable compensation shares, restricted stock units, and deferred restricted stock units. Unexercised stock options, including vested options, as well as unvested performance-based restricted stock units are not included in determining whether an executive has achieved the ownership levels set forth above.
 
Compensation Recovery Policy (Clawbacks)
 
All options and restricted stock units are granted under the Company’s Stock Performance Plan, previously approved by stockholders. The Plan provides that a grantee forfeits rights under stock options, stock appreciation rights or restricted stock grants if the Compensation Committee determines, after a hearing, that the grantee willfully has engaged in any activity harmful to the interest of the Company.
 
At the 2007 Annual Meeting of Stockholders, the Company will seek approval of a new Equity and Incentive Plan (“EIP”) described in detail beginning on page 49 of this Proxy Statement. The EIP contains a “clawback” provision under which (1) a grantee forfeits the right to receive future awards under the EIP, and (2) the Company may demand repayment of awards if the grantee engages in misconduct.
 
Compensation of the Chief Executive Officer (“CEO”)
 
The evaluation of the CEO is one of the fundamental duties of the Board of Directors. At DuPont, the evaluation process is led by the Compensation Committee. Following a self-assessment by Mr. Holliday against his pre-established criteria for the year, as well as on multi-year objectives, the independent Board members review the CEO’s performance in executive sessions.
 
Preliminary discussions are held in October and December, with final discussions in January and February, resulting in compensation decisions recommended by the Compensation Committee and approved by the independent Board members.
 
In addition to assessing performance, the Committee considers the competitive compensation of CEOs of the Peer Group and pay equity multiples when determining CEO pay recommendations.
 
In reaching its recommendation on Mr. Holliday’s 2007 base pay, 2006 variable compensation and 2007 long-term incentive grants, the Committee evaluated Mr. Holliday based on the Company’s overall financial
29


Table of Contents

and operational performance for 2006, progress on long-term strategic objectives, and against the Company’s core values. Specifically, the Committee considered the following factors:
 
•   Financial Performance
 
      EPS, before significant items, grew 23%, over two times the long-term goal of 10%.
 
      ROIC, before significant items, increased three percentage points, or three times the Company goal of one percentage point per year until reaching the “high teens.”
 
      Revenue grew 3% or half the Company’s long-term goal of 6%.
 
•   Safety, Environment, and Compliance
 
      Established high standards of performance, including a 24% reduction in total recordable injuries.
 
•   Strategic Direction Performance
 
      Significant advancement of new products with 34% of the Company’s revenue from products less than five years old.
 
      13% revenue growth in developing countries.
 
      Highly effective cost management. Fixed cost as a percentage of sales improved two percentage points to 42%.
 
•   Competitive Market
 
      In addition to reviewing specific performance criteria, the Committee assessed Mr. Holliday’s compensation against the competitive market.
 
      Mr. Holliday’s compensation falls near the median of the Peer Group.
 
•   Pay Equity Multiple
 
      Lastly, the Committee reviewed Mr. Holliday’s 2006 actual as well as 2007 targeted pay levels against the compensation levels of Named Executive Officers, to assure that compensation decisions are consistent with the Company’s pay equity philosophy.
 
Based on this careful evaluation and in recognition of Mr. Holliday’s strong leadership in strategically positioning the Company for future growth and success, the independent members of the Board of Directors approved the following compensation actions:
 
1.  Base Pay
 
For 2006, the Board approved a 3% increase in salary to $1,293,000. This increase was consistent with the salary adjustments for the Company and placed Mr. Holliday’s base pay at about the expected 2005 median pay for the Peer Group chief executive officers.
 
For 2007, the Board approved a 2% increase in salary to $1,320,000. This increase places CEO base salary near the median of the Peer Group.
 
2.  Variable Compensation
 
Mr. Holliday’s variable compensation grant for 2006 was $2,103,000. The computation of Mr. Holliday’s variable compensation grant was consistent with the formula for other corporate employees, reflecting the 107% final performance factor based on corporate and business unit financial results. In addition, the Committee recommended an Individual Performance Factor (“IPF”) of 110% to reflect Mr. Holliday’s contribution to strong Company performance.
 
3.  Long-term Incentives
 
In 2006, Mr. Holliday received 300,000 stock options, 58,000 time-vested restricted stock units and 58,000 performance-based restricted stock units.
30


Table of Contents

 
After careful review of the market data, the Committee approved a 2007 long-term incentive award, delivered in an equal mix in value of 228,000 stock options, 42,500 time-vested restricted stock units and 42,500 performance-based restricted stock units.
 
This action places CEO total direct compensation near the median of the Peer Group.
 
Overall, the CEO compensation actions result in a 2007 compensation package that is targeted to be competitive with the median of the Peer Group and also within the established Pay Equity Multiple ranges.
 
In addition, the program creates appropriate focus on stockholder value creation and on operational and Company performance.
31


Table of Contents

 
Compensation of Executive Officers
 
2006 SUMMARY COMPENSATION TABLE
 
The following table summarizes the compensation of the Named Executive Officers for the fiscal year ending December 31, 2006. The Named Executive Officers are the Company’s Chief Executive Officer, Chief Financial Officer, and three other most highly compensated executive officers ranked by their total compensation in the table below (reduced by the amount of change in pension value and nonqualified deferred earnings). In addition, one officer (G. M. Pfeiffer), who retired from the Company in 2006, is included because he served as Chief Financial Officer through June 16, 2006.
 
                                                                                           
                                                      Change in
                 
                                                      Pension
                 
                                                      Value and
                 
                                                      Nonqualified
                 
                                              Non-Equity
      Deferred
                 
Name and
                            Stock
      Option
      Incentive Plan
      Compensation
      All Other
         
Principal Position     Year       Salary(1)       Bonus(2)       Awards(3)       Awards(4)       Compensation(5)       Earnings(6)       Compensation(7)       Total  
C. O. Holliday, Jr. 
      2006       $ 1,293,000       $ —            $ 2,494,199       $ 3,839,433       $ 2,103,000       $ 896,900       $ 65,326       $ 10,691,858  
Chairman &
Chief Executive Officer
                                                                                         
                                                                                           
J. L. Keefer
      2006         451,014                 1,183,622         526,922         459,000         994,543         22,242         3,637,343  
Executive Vice President & Chief Financial Officer (Effective June 16, 2006)                                                                                          
                                                                                           
G. M. Pfeiffer
      2006         606,892         2,000,000         1,019,635         1,117,202         506,000         638,630         27,156         5,915,515  
Retired Senior Vice President & Chief Financial Officer                                                                                          
                                                                                           
E. J. Kullman
      2006         537,640                 1,944,478         843,871         596,000         416,344         26,486         4,364,819  
Executive Vice President                                                                                          
                                                                                           
R. R. Goodmanson
      2006         811,000                 766,992         835,015         850,000         316,234         33,228         3,612,469  
Executive Vice President & Chief Operating Officer                                                                                          
                                                                                           
T. M. Connelly, Jr. 
      2006         566,640                 869,059         864,739         596,000         725,555         23,664         3,645,657  
Executive Vice President & Chief Innovation Officer                                                                                          
                                                                                           
(1) Includes compensation which may have been deferred at the executive’s election. Such amounts are also included in the Nonqualified Deferred Compensation Table — “Executive Contributions in 2006” column on page 42.
 
(2) Special retention bonus payable to Mr. Pfeiffer in accordance with his retirement agreement dated June 16, 2006. See further discussion in Employment Agreements on page 47.
 
(3) Represents the compensation costs of restricted share units and performance share units under SFAS No. 123(R) reflected in the Company’s financial statements. Compensation cost for the regular restricted stock unit awards granted on February 1, 2006 were fully recognized in 2006 for those executives who are retirement eligible (C. O. Holliday, J. L. Keefer, G. M. Pfeiffer, E. J. Kullman, and T. M. Connelly). Special restricted stock unit awards are expensed ratably over the vesting period. Compensation cost for performance share units are reflected ratably over the 36-month performance period.
 
(4) Represents the compensation costs of stock options under SFAS No. 123(R) reflected in the Company’s financial statements. Assumptions used in determining the SFAS No. 123(R) values can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006, under footnote 23 Compensation Plans — Stock Options. Compensation cost for awards granted in 2006 were fully recognized in 2006 for those executives who are retirement eligible (C. O. Holliday, J. L. Keefer, G. M. Pfeiffer, E. J. Kullman, and T. M. Connelly).
32


Table of Contents

(5) Represents payouts under the Company’s variable compensation program for services performed during 2006. Includes compensation which may have been deferred at the executive’s election.
 
(6) Amounts reflect the estimated increase in the actuarial present value of accumulated benefits for each of the Named Executive Officers at age 65. Assumptions are further described under Retirement Plan Benefits and in the Pension Benefits Table on page 40.
 
This column is also intended to report above market earnings on nonqualified deferred compensation balances. Because the Company does not credit participants in the nonqualified plans with above market earnings, no such amounts are reported here.
 
(7) All Other Compensation amounts as follows:
 
                                                 
                      Registrant
    Registrant
       
                      Contributions to
    Contributions to
       
          Personal
    Company
    Defined
    Nonqualified
       
    Financial
    Use of
    Car /
    Contribution
    Contribution
       
Name   Counseling     Aircraft(a)     Parking     Plans(b)     Plans(c)     TOTAL  
   
 
C. O. Holliday, Jr.
  $ 5,000     $ 21,546     $ 85     $ 6,600     $ 32,095     $ 65,326  
J. L. Keefer
    8,712                       6,600       6,930       22,242  
G. M. Pfeiffer
    8,949                       6,600       11,607       27,156  
E. J. Kullman
    9,119       1,238               6,600       9,529       26,486  
R. R. Goodmanson
    8,898                       6,600       17,730       33,228  
T. M. Connelly, Jr. 
    8,698                       4,567       10,399       23,664  
 
 
 
(a) DuPont policy requires the CEO to use Company aircraft for security reasons whenever practicable. The amount reflected in this column represents the aggregate incremental cost to the Company of all personal travel by Mr. Holliday and his guests on Company aircraft. Incremental cost is calculated based on the variable operating costs to the Company, including fuel, mileage, trip-related maintenance, weather-monitoring costs, crew travel expenses, on-board catering, landing/ramp fees and other variable costs. Fixed costs which do not change based on usage, such as pilot salaries and the cost of maintenance not related to trips, are excluded. The benefit associated with personal use of Company aircraft is inputed as income to Mr. Holliday at SIFL (“Standard Industry Fare Level”) rates. Mr. Holliday does not receive any gross-up for payment of taxes associated with the described benefit.
 
The CEO may upon occasion approve personal use of the Company aircraft by other employees. In 2006, Ms. Kullman was accompanied by her spouse on a business trip. The associated benefit was treated as imputed income to Ms. Kullman at SIFL rates. Ms. Kullman did not receive any tax gross-up for payment of taxes in connection with this benefit.
 
(b) Amounts represent the Company’s match to the Savings and Investment Plan on the same basis as provided to all employees.
 
(c) Amounts represent the Company’s match to the Salary Deferral and Savings Restoration Plan on the same basis as provided to all employees who fall above the applicable IRC limits.
33


Table of Contents

2006 GRANTS OF PLAN-BASED AWARDS
 
The following table provides information on variable compensation, stock options, time-vested restricted stock units and performance-based restricted stock units granted in 2006 to each of the Company’s Named Executive Officers. The accounting expense taken on these awards is reflected in the Summary Compensation Table on page 32.
 
                                                                                                             
                                                            All Other
                         
                                                    All Other
      Option
                         
            Estimated Possible Payouts
      Estimated Future Payouts
      Stock
      Awards:
                         
            Under Non-Equity
      Under Equity Incentive Plan
      Awards:
      Number of
      Exercise
              Grant Date
 
            Incentive Plan Awards(1)       Awards(2)       Number
      Securities
      or Base
      Closing
      Fair Value
 
                            of Shares
      Under-
      Price of
      Price on
      of Stock
 
      Grant
    Thres-
                  Thres-
    Target
    Maximum
      of Stock
      lying
      Option
      Date of
      and Option
 
Name     Date     hold     Target     Maximum       hold (#)     (#)     (#)       or Units(3)       Options(4)       Awards       Grant       Awards(5)  
C. O. Holliday, Jr. 
    2/1/06       $ —      $ 1,786,200     $ 3,572,400               58,000       116,000                                               $ 2,279,980  
      2/1/06                                                           58,000                                       2,279,980  
      2/1/06                                                                     300,000       $ 39.31       $ 39.49         2,184,000  
J. L. Keefer
    2/1/06             428,910       857,820               7,900       15,800                                                 310,549  
      2/1/06                                                           8,700                                       341,997  
      1/23/06                                                           50,000                                       1,977,500  
      2/1/06                                                                     45,400         39.31         39.49         330,512  
G. M. Pfeiffer
    2/1/06             505,980       1,011,960               12,900       25,800                                                 507,099  
      2/1/06                                                           12,900                                       507,099  
      2/1/06                                                                     67,000         39.31         39.49         487,760  
E. J. Kullman
    2/1/06             505,980       1,011,960               10,000       20,000                                                 393,100  
      2/1/06                                                           12,500                                       491,375  
      1/23/06                                                           75,000                                       2,966,250  
      2/1/06                                                                     65,300         39.31         39.49         475,384  
R. R. Goodmanson
    2/1/06             793,800       1,587,600               19,000       38,000                                                 746,890  
      2/1/06                                                           18,100                                       711,511  
      2/1/06                                                                     94,300         39.31         39.49         686,504  
      12/20/06                                                           20,000                                       989,400  
T. M. Connelly, Jr. 
    2/1/06             505,980       1,011,960               12,900       25,800                                                 507,099  
      2/1/06                                                           12,900                                       507,099  
      2/1/06                                                                     67,000         39.31         39.49         487,760  
      12/20/06                                                           20,000                                       989,400  
                                                                                                             
 
(1) Represents the potential payout range under the 2006 variable compensation (“VC”) program. Further discussion on the variable compensation program can be found in the CD&A under Annual Variable Compensation on page 22. The VC payout range is from 0% to 200%. The final 2006 payout can be found in the Summary Compensation Table on page 32 in the column entitled “Non-Equity Incentive Plan Compensation.”
 
(2) Represents the potential payout range of performance-based restricted stock units granted in 2006. At the conclusion of the three-year performance period, payouts can range from 0% to 200% of the target based on pre-established, performance-based corporate objectives in both revenue growth vs. the Peer Group and ROIC. See further discussion in the CD&A in the section entitled Performance-Based Restricted Stock Units (“PSUs”) on page 26. The SFAS No. 123(R) grant date target value is reflected in the last column of the table based on a grant price of $39.31.
 
Any termination, including retirement, within six months of grant results in a forfeiture of the award. Subsequent to the six-month period, PSUs are prorated upon retirement for the actual number of months service was provided within the performance period. Final awards are determined and paid out for all participants, including those who receive a prorated award, after the end of the performance period and subsequent to the final performance determination and approval by the Compensation Committee. Dividend equivalents are applied after the final performance determination.
 
(3) Reflects RSUs that are paid out in shares of DuPont Common Stock upon vesting. Dividend equivalents are applied and are subject to the same restrictions as the restricted stock units. Regular annual RSU awards vest
34


Table of Contents

ratably over a three-year period, one-third on each anniversary date. Awards made on January 23, 2006 vest 100% on January 23, 2009. Awards made on December 20, 2006 vest on May 1, 2009 and on December 20, 2009. The grant date SFAS No. 123(R) value is reflected in the last column of the table based on grant prices of $39.31, $39.55 and $49.47 for the February 1, 2006, January 23, 2006 and December 20, 2006 grants, respectively.
 
Any termination, including retirement, within six months of grant results in a forfeiture of the award. Subsequent to the six-month period, upon retirement, RSUs continue vesting as if employment had continued.
 
For awards granted on January 23, 2006, and December 20, 2006, any termination, including retirement prior to vesting, results in a forfeiture of the award.
 
(4) Nonqualified stock options are granted with a six-year term, and vest ratably over a three-year period, one-third on each anniversary date. The exercise price of options granted is based on the average of the high and the low of DuPont Common Stock on the date of grant. In 2007, the Board of Directors amended the Stock Performance Plan to change the exercise price for stock options to the closing price on the date of grant.
 
Any termination, including retirement, within six months of grant results in a forfeiture of the award. Subsequent to the six-month period, upon retirement stock options continue vesting as if employment had continued.
 
(5) Reflects the aggregate grant date SFAS No. 123(R) value of the equity awards. PSUs and RSUs are valued based on the fair market value on the date of grant.
 
For purposes of determining the fair value of stock option awards, the Company uses the Black-Scholes option pricing model and the assumptions set forth in the table below. The weighted-average grant-date fair value of options granted in 2006 was $7.28. The Company determines the dividend yield by dividing the current annual dividend on the Company’s Common Stock by the option exercise price. A historical daily measurement of volatility is determined based on the expected life of the option granted. The risk-free interest rate is determined by reference to the yield on an outstanding U.S. Treasury Note with a term equal to the expected life of the option granted. Expected life is determined by reference to the Company’s historical experience.
 
           
      2006
Dividend yield
      3 .8%
Volatility
      25 .04%
Risk-free interest rate
      4 .4%
Expected life (years)
      4 .5
           
35


Table of Contents

OUTSTANDING EQUITY AWARDS
 
The following table shows the number of shares covered by exercisable and unexercisable options and unvested and, as applicable, unearned RSUs and PSUs held by the Company’s Named Executive Officers at December 31, 2006.
 
                                                                                           
      Option Awards       Stock Awards  
                                                                      Equity
 
                                                                      Incentive
 
                                                              Equity
      Plan
 
                                                              Incentive
      Awards:
 
                                                              Plan
      Market or
 
                      Equity
                                      Awards:
      Payout
 
                      Incentive
                                      Number of
      Value of
 
                      Plan Awards:
                              Market
      Unearned
      Unearned
 
      Number of
      Number of
      Number of
                      Number of
      Value of
      Shares,
      Shares,
 
      Securities
      Securities
      Securities
                      Shares or
      Shares or
      Units or
      Units or
 
      Underlying
      Underlying
      Underlying
                      Units of
      Units of
      Other
      Other
 
      Unexercised
      Unexercised
      Unexercised
      Option
      Option
      Stock That
      Stock That
      Rights That
      Rights
 
      Options
      Options
      Unearned
      Exercise
      Expiration
      Have Not
      Have Not
      Have Not
      That Have
 
Name     Exercisable       Unexercisable(1)       Options       Price       Date       Vested(2)       Vested       Vested(3)       Not Vested  
C. O. Holliday, Jr. 
      91,600                           $ 52.50         01/28/2007                                          
        200,000                             56.25         10/31/2007                                          
        230,000                             59.50         02/03/2008                                          
        300,000                             52.50         02/02/2009                                          
        700,000                             75.00         02/02/2009                                          
                300,000                   61.00         02/01/2010                                          
        525,000                             43.25         02/06/2011                                          
        540,000                             42.50         02/05/2012                                          
        464,200                             37.75         02/04/2013                                          
        163,866         81,934                   43.62         02/03/2010                                          
        100,000         200,000                   48.05         02/01/2011                                          
                  300,000                   39.31         01/31/2012         60,048       $ 2,924,934         192,000       $ 9,352,320  
                                                                                           
J. L. Keefer
      6,728                             52.50         01/28/2007                                          
        5,082                             59.50         02/03/2008                                          
        6,000                             52.50         02/02/2009                                          
                  12,900                   61.00         02/01/2010                                          
        47,300                             43.25         02/06/2011                                          
        200                             44.50         01/07/2012                                          
        32,800                             42.50         02/05/2012                                          
        31,400                             37.75         02/04/2013                                          
        16,733         8,367                   43.62         02/03/2010                                          
        13,734         27,466                   48.05         02/01/2011                                          
                  45,400                   39.31         01/31/2012         65,907         3,210,317         15,400         750,134  
                                                                                           
G. M. Pfeiffer
      20,248                             52.50         01/28/2007                                          
        13,000                             58.25         11/16/2007                                          
        30,300                             59.50         02/03/2008                                          
        608                             82.09         01/28/2007                                          
        34,800                             52.50         02/02/2009                                          
                  56,000                   61.00         02/01/2010                                          
        150,000                             43.25         02/06/2011                                          
        75,000                             37.75         10/01/2011                                          
        140,000                             42.50         02/05/2012                                          
        85,000                             37.75         02/04/2013                                          
        40,200         20,100                   43.62         02/03/2010                                          
        23,567         47,133                   48.05         02/01/2011                                          
                  67,000                   39.31         01/31/2012         22,819         1,111,525         17,933         873,533  
                                                                                           
E. J. Kullman
      21,200                             52.50         01/28/2007                                          
        16,500                             59.50         02/03/2008                                          
        17,700                             52.50         02/02/2009                                          
                  26,100                   61.00         02/01/2010                                          
        66,500                             43.25         02/06/2011                                          
        200                             44.50         01/07/2012                                          
        60,000                             42.50         02/05/2012                                          
        80,000                             37.75         02/04/2013                                          
        41,266         20,634                   43.62         02/03/2010                                          
        20,634         41,266                   48.05         02/01/2011                                          
                  65,300                   39.31         01/31/2012         113,464         5,526,841         22,000         1,071,620  
36


Table of Contents

                                                                                           
      Option Awards       Stock Awards  
                                                                      Equity
 
                                                                      Incentive
 
                                                              Equity
      Plan
 
                                                              Incentive
      Awards:
 
                                                              Plan
      Market or
 
                      Equity
                                      Awards:
      Payout
 
                      Incentive
                                      Number of
      Value of
 
                      Plan Awards:
                              Market
      Unearned
      Unearned
 
      Number of
      Number of
      Number of
                      Number of
      Value of
      Shares,
      Shares,
 
      Securities
      Securities
      Securities
                      Shares or
      Shares or
      Units or
      Units or
 
      Underlying
      Underlying
      Underlying
                      Units of
      Units of
      Other
      Other
 
      Unexercised
      Unexercised
      Unexercised
      Option
      Option
      Stock That
      Stock That
      Rights That
      Rights
 
      Options
      Options
      Unearned
      Exercise
      Expiration
      Have Not
      Have Not
      Have Not
      That Have
 
Name     Exercisable       Unexercisable(1)       Options       Price       Date       Vested(2)       Vested       Vested(3)       Not Vested  
R. R. Goodmanson
                150,000                   71.75         04/30/2009                                          
                  97,000                   61.00         02/01/2010                                          
                  50,000                   53.00         03/15/2010                                          
        315,000                             43.25         02/06/2011                                          
        300,000                             42.50         02/05/2012                                          
        174,000                             37.75         02/04/2013                                          
        69,000         34,500                   43.62         02/03/2010                                          
        34,500         69,000                   48.05         02/01/2011                                          
                  94,300                   39.31         01/31/2012         53,325         2,597,437         48,800         2,377,048  
                                                                                           
T. M. Connelly, Jr. 
      7,272                             52.50         01/28/2007                                          
        4,681                             59.50         02/03/2008                                          
        7,360                             52.50         02/02/2009                                          
        1,280                             72.44         02/03/2008                                          
                  13,500                   61.00         02/01/2010                                          
                  20,000                   47.00         09/05/2010                                          
        65,300                             43.25         02/06/2011                                          
        100,000                             42.50         02/05/2012                                          
        85,000                             37.75         02/04/2013                                          
        42,133         21,067                   43.62         02/03/2010                                          
        21,067         42,133                   48.05         02/01/2011                                          
                  67,000                   39.31         01/31/2012         42,324         2,061,620         27,900         1,359,009  
                                                                                           
 
(1) The following stock options contain a 20% price hurdle which must be met for five consecutive trading days in order for the stock options to be exercisable. As of December 31, 2006, the price hurdle had not been met.
 
     
Expiration Date   Exercise Price
 
 
04/30/2009
  $71.75
02/01/2010
  $61.00
03/15/2010
  $53.00
09/05/2010
  $47.00
 
The following provides an overview of the remaining stock options with outstanding vesting dates as of December 31, 2006:
 
     
Stock Option Expiration Date   Outstanding Vesting Dates
 
02/03/2010
  Balance vests on February 4, 2007
02/01/2011
  Equally vests on February 2, 2007 and 2008
01/31/2012
  Equally vests on February 1, 2007, 2008, 2009
37


Table of Contents

(2) The following provides an overview of restricted stock units, including dividend equivalent units, with outstanding vesting dates as of December 31, 2006:
 
     
Grant Date   Outstanding Vesting Dates
 
03/14/2003
  Total award vests March 14, 2008
02/04/2004
  Balance vests on February 4, 2007
02/02/2005
  Equally vests on February 2, 2007 and 2008
01/23/2006
  Total award vests January 23, 2009
02/01/2006
  Equally vests on February 1, 2007, 2008, 2009
12/20/2006
  Total award vests May 1, 2009
12/20/2006
  Total award vests December 20, 2009
 
(3) The following provides an overview of performance-based restricted stock units with outstanding vesting dates as of December 31, 2006:
 
     
Grant Date   Outstanding Vesting Dates
 
02/04/2004
  Performance period ended December 31, 2006
02/02/2005
  Performance period ends December 31, 2007
02/01/2006
  Performance period ends December 31, 2008
 
Represents target number of PSUs. The final number of shares earned, if any, depends on the Company’s percentile rank compared to the Peer Group over the performance period. The plan provides for a payout range of 0% to 200% and dividend equivalent units are applied subsequent to the final performance determination.
 
2006 OPTION EXERCISES AND STOCK VESTED
 
The table below shows the number of shares of DuPont Common Stock acquired during 2006 upon the exercise of options and upon vesting of restricted stock units as of fiscal year-end December 31, 2006.
 
                                         
      Option Awards       Stock Awards(1)  
      Number of Shares
              Number of Shares
         
      Acquired on
      Value Realized
      Acquired on
      Value Realized on
 
Name     Exercise       on Exercise       Vesting(2)       Vesting  
C. O. Holliday, Jr. 
                               
J. L. Keefer
                      3,065 (3)       $119,817 (3)
G. M. Pfeiffer
                      5,971         233,217  
E. J. Kullman
                      19,424         795,710  
R. R. Goodmanson
                      9,443 (3)       368,683 (3)
T. M. Connelly, Jr. 
                      5,804 (3)       226,628 (3)
                                         
 
(1) In addition, the performance period for PSUs granted in 2004 (with a performance period of 2004 — 2006) ended on December 31, 2006. The final number of shares earned, if any, depends on the Company’s percentile rank compared to the Peer Group. (See discussion in the CD&A on page 26.) The final payout was not determinable as of December 31, 2006. The final payout determination was made by the Compensation Committee after final performance determination of the Company relative to the Peer Group. The final 2004 PSU shares paid out and the value realized in March 2007 are set forth below. The target PSU numbers and 2006 year-end values are also included in the Outstanding Equity Awards table on page 36.
 
38


Table of Contents

                     
      2004 PSU
     
Name     Final Payout (#)(a)     PSU Value ($)(b)
C. O. Holliday, Jr. 
      63,550 (c)       $3,181,949  
J. L. Keefer
        2,781 (c)            139,245  
G. M. Pfeiffer
        7,448 (c)            372,921  
E. J. Kullman
        5,958              298,317  
R. R. Goodmanson
      14,796 (c)            740,836  
T. M. Connelly, Jr. 
        7,448 (c)            372,921  
                     
 
(a) Represents 90% of target award plus accumulated dividend equivalent units.
 
(b) Valued at $50.07 as of March 5, 2007, the date the final payout determination was made by the Compensation Committee.
 
(c) Named Executive Officer elected to defer receipt of award.
 
(2) Represents the number of restricted stock units vesting in 2006.
 
  (3)  100% of RSUs vested have been deferred into DuPont stock units. These are also reflected in the Nonqualified Deferred Compensation table in the column entitled “Executive Contributions in Last Fiscal Year.”
 
Retirement Plan Benefits
 
The Named Executive Officers participate in the DuPont Pension and Retirement Plan (the “Plan”), a tax-qualified defined benefit pension plan, which covers substantially all U.S. parent company employees. The Plan provides employees with a lifetime retirement income based on years of service and employees’ final average pay. Normal retirement age under the Plan is age 65 and benefits are vested after five years of service. Under the provisions of the Plan, employees are eligible for full retirement when they meet one of the following conditions:
 
•   Employee reaches age 65 and has at least 15 years of service, or
 
•   Employee retires between age 58 and 64 and age plus service is at least 85, or
 
•   Employee becomes permanently incapable of performing his or her duties and has at least 15 years of service.
 
An employee not eligible for retirement with full pension will be eligible for retirement with reduced pension once the employee reaches age 50 with at least 15 years of service. The reduction of benefits is 5% for every year that the employee’s age plus service is less than 85, but in no event will a reduction exceed 50%. All of the Named Executive Officers are currently eligible for early retirement benefits, with the exception of Mr. Goodmanson.
 
The primary pension formula that applies to the Named Executive Officers provides a monthly retirement benefit of 1.5% of Average Monthly Compensation for each year of service minus 50% of the Named Executive Officer’s primary Social Security benefits attributable to Company service and earnings. The Average Monthly Compensation includes regular monthly compensation and one-twelfth of annual variable compensation payments, but excludes other bonuses, during the employee’s three highest-paid years.
 
Where benefits provided under the Plan exceed the compensation or benefit limits under the Internal Revenue Code, the Company pays the remaining benefits from the Company’s operating cash flows under the Pension Restoration Plan (“PRP”), a nonqualified plan. In July 2006, the Company amended and adopted Rules for Lump Sum Payments (“Rules”). Additionally, the PRP was restated. These actions were taken in order to comply with the requirements of Section 409A of the Internal Revenue Code. The amended Rules, effective January 1, 2007, reflect changes in the form and timing of distributions under the PRP. The mortality tables
39


Table of Contents

and interest rates used to determine lump sum payments have also been changed to the 1994 GAR (“Group Annuity Reserving”) Mortality table and 30-Year U.S. Treasury rates. Prior to the changes, the Company used a DuPont-specific mortality table and Moody’s AAA Municipal Bond interest rates in calculating lump sum payments.
 
The Company does not grant any extra years of credited service to the Named Executive Officers.
 
Key actuarial assumptions for the present value of accumulated benefit calculation can be found in Note 22 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. All other assumptions are consistent with those used in the Employee Benefits note disclosure, except that a retirement age at which the Named Executive Officer may retire with an unreduced benefit under the Plan is assumed in compliance with applicable Securities and Exchange Commission regulations. The valuation method used for determining the present value of the accumulated benefit is the traditional unit credit cost method.
 
For additional information regarding benefits payable to Mr. Goodmanson, please see Employment Agreements on page 47.
 
The table below quantifies the benefits expected to be paid to the Named Executive Officers under the Company’s two pension plans — the Pension and Retirement Plan and the Pension Restoration Plan.
 
PENSION BENEFITS
as of Fiscal Year End December 31, 2006
 
                                     
                    Present Value
      Payments
 
            Number of Years
      of Accumulated
      During Last
 
Name     Plan Name     Credited Service       Benefit       Fiscal Year  
C. O. Holliday, Jr. 
    Pension and Retirement Plan       37       $ 1,399,577          
      Pension Restoration Plan       37         25,153,032            
J. L. Keefer
    Pension and Retirement Plan       31         984,900          
      Pension Restoration Plan       31         3,214,086            
G. M. Pfeiffer
    Pension and Retirement Plan       33         1,178,629          
      Pension Restoration Plan       33         5,854,533            
E. J. Kullman
    Pension and Retirement Plan       18         430,213          
      Pension Restoration Plan       18         1,936,331            
R. R. Goodmanson
    Pension and Retirement Plan       8         151,814          
      Pension Restoration Plan       8         1,358,657            
T. M. Connelly, Jr. 
    Pension and Retirement Plan       29         936,357          
      Pension Restoration Plan       29         4,456,867            
                                     
40


Table of Contents

 
Nonqualified Deferred Compensation
 
The Company offers several nonqualified deferred compensation programs under which participants voluntarily elect to defer some portion of salary, variable compensation, or long-term incentive compensation until a future date. Deferrals are credited to an account and interest is applied to that account on a quarterly basis. At the time of payout, the balance of the account will be distributed in a lump sum. With the exception of the Salary Deferral and Savings Restoration Plan, there are no company contributions or matches. The Salary Deferral and Savings Restoration Plan was adopted to restore the company match that would be lost due to IRC limits on compensation that could be considered under the Company’s qualified savings plan.
 
The Company’s plans are structured around the type of compensation earned. The following provides an overview of the various plans:
 
                   
            Variable
    Long-Term Incentive
      Salary Deferral and
    Compensation Deferred Under
    Compensation Deferred Under
      Savings Restoration
    Variable Compensation Plan
    Stock Performance Plan
Plan Name     Plan (SDSRP)     (DVC)     (DLTI)
Description
    Nonqualified Savings Plan     Deferral Option under VC Plan     Deferral Option under Stock Performance Plan
                   
Deferrable Compensation     Base Salary     Variable Compensation     Time-Vested and Performance-Based Restricted Stock Units
                   
Deferral Limits
    Increments of 1% up to 22% on 2006 base salary that exceeds the regulatory limits ($220,000 in 2006)     0% - 100%     0% - 100%
                   
Company Match
    50 cents on every $1 up to 6% of eligible pay, maximum match of 3% of eligible compensation     No match     No match
                   
Investment Options/ Interest Rate     N/A — Investment options mirror Savings and Investment Plan     Cash or DuPont common stock units with dividend equivalents credited as additional stock units     DuPont common stock units with dividend equivalents credited as additional stock units
                   
Distribution
    Lump sum or 1-15 annual installments after retirement     Lump sum at a specified future date prior to retirement. Lump sum or 1-15 annual installments after retirement     Lump sum at a specified future date prior to retirement. Lump sum or 1-15 annual installments after retirement
            &nb