PFPC Daily - April 28, 2005

Environmental, labor group ideas rejected Protesters picket DuPont
shareholders meeting

The News Journal, April 28, 2005

By RICHARD SINE

DuPont shareholders filing out of Wednesday's annual meeting in
Wilmington's DuPont theater confronted a raucous scene:

A 10-foot-tall inflatable rat carrying the sign "C-8 Killed Me!" A
woman in a skeleton mask with a sign reading "DuPont Move Your Dioxin
Pile." And a man shouting "Don't eat the fish!" - a reference to his
belief DuPont was poisoning the Delaware River.

The messages were mostly lost on shareholders like Dave Frantz, a
retired DuPont engineer from Hockessin who had affixed a company
button on his blue suit.

"I agree with management," Frantz said, adding, "DuPont has the
scientific expertise to handle environmental issues."

Proposals by environmental, labor and faith-based groups were
rejected Wednesday, as shareholders accepted chief executive Charles
O. Holliday Jr.'s assurance that the company was acting responsibly as
it sought growth.

All board nominees were re-elected by greater than 95 percent
margins, according to preliminary vote results. Six
shareholder-sponsored resolutions that management opposed were
defeated by margins topping 90 percent.

Such margins are not unusual, as shareholders typically side with
management at annual meetings. But the meetings are still a key forum
for corporate critics. Protests over environmental and human-rights
issues marked the Coca-Cola Co.'s annual meeting in Wilmington last
week.

Capturing the most attention at DuPont's meeting Wednesday was a
first-time proposal requiring more disclosure of the costs related to
the controversial chemical known as PFOA, or C-8.

"We believe the health and environmental concerns about PFOA are
raising huge financial concerns for our company," proposal backer
Sanford Lewis said at the meeting. "In my opinion, investors need to
know more."

Lewis, spokesman for a labor-led group called DuPont Shareholders for
Fair Value, said the company should disclose what actions it is
taking to monitor health or environmental effects at the plants where
PFOA is used.

In a news conference outside the meeting, Jim Rowe, an employee at
the Deepwater, N.J., plant, said DuPont was testing for PFOA levels
in workers' blood. The testing should be done by an independent
organization, he said.

PFOA, a processing agent used in production of Teflon and other
products, has been found to cause cancer in laboratory animals and to
be widely present in humans' blood. The U.S. Environmental Protection
Agency is studying its effects on humans.

Holliday said the chemical has no effect on human health. He said
DuPont had reduced PFOA emissions from plants by 98 percent since
2000.

So far, most information about the company's use of PFOA has been
revealed in lawsuits, Lewis said. Shareholders deserve to know how
DuPont is handling potential liabilities before litigation arises, he
said.

Liabilities over PFOA are already piling up. Earlier this year,
DuPont agreed to pay nearly $108 million to settle a class-action
lawsuit filed by Ohio and West Virginia residents who said their
drinking water was contaminated with PFOA. And last year, the U.S.
Environmental Protection Agency sued DuPont, alleging the company
withheld information about the chemical. Fines could exceed $300
million.

The resolution garnered slightly less than 9 percent of the votes
cast Wednesday. Lewis called the figure "a very high vote for a
first-time resolution."

In other voting Wednesday, shareholders rejected proposals to tie
executive compensation and stock options to company performance.

The company said it already does this. But a proposal backer noted
that Holliday has received millions of dollars in options even though
the stock has declined about 13 percent in the past 5 years.

Labor leaders took advantage of the meeting to protest reductions in
pension benefits.

"DuPont hasn't increased pensions in 15 years, but health care
payments have increased and that's why pension checks have been
reduced," said Jim Briggs, an official with United Steelworkers.

Anne Cole, benefits manager for DuPont, said pensions were last
increased in 1996. Pension levels are comparable with other large
companies, Cole said.

Company retirees were first asked to pay health insurance premiums in
1994, Cole said. While saying premiums had increased over the years,
she declined to quantify the increase, saying benefits changes made a
true comparison impossible.

After introducing some of DuPont's newest products to shareholders
Wednesday, Holliday spent most of his brief presentation defending
DuPont's labor and environmental policies.

Holliday "took a lot of abuse" during the shareholders' meeting, said
shareholder Anne Kratzer of Hockessin, widow of a DuPont engineer.
She rated his performance as "perfect."

Shareholder Bill Callahan, a retired DuPont engineer from Radnor,
Pa., voted for the review of executive pay and options. "Like many
people in America, I'm impatient with the affluence of the corporate
executive," he said.