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E. I. du Pont de Nemours and Company
Notes to the Consolidated Financial Statements (continued)
(Dollars in millions, except per share)
F-48
The company's contributions to the Plan were $219, $262 and $208 for the years ended December 31, 2015, 2014 and 2013,
respectively. The company's matching contributions vest immediately upon contribution. The 3 percent nonmatching company
contribution vests after employees complete three years of service. In addition, the company made contributions to other defined
contribution plans of $57, $66 and $105 for the years ended December 31, 2015, 2014 and 2013, respectively. Included in the
company's contributions are amounts related to discontinued operations of $32, $57 and $59 for the years ended December 31,
2015, 2014 and 2013, respectively. The company expects to contribute about $230 to its defined contribution plans in 2016.
19. COMPENSATION PLANS
The total stock-based compensation cost included in continuing operations within the Consolidated Income Statements was $128,
$136 and $117 for 2015, 2014 and 2013, respectively. The income tax benefits related to stock-based compensation arrangements
were $42, $45 and $39 for 2015, 2014 and 2013, respectively.
In connection with the completed separation of the Performance Chemicals segment through the spin-off of all of the issued and
outstanding stock of Chemours, the provisions of our existing compensation plans required adjustments to the number and terms
of outstanding employee stock options, stock appreciation rights (SARs), time-vested restricted stock units (RSUs) and
performance-based restricted stock units (PSUs) to preserve the intrinsic value of the awards immediately before and after the
separation. The outstanding awards will continue to vest over the original vesting period, which is generally three years from the
grant date. Outstanding awards at the time of the spin-off were converted into awards of the holder’s employer following separation.
The stock awards held as of July 1, 2015 were adjusted as follows:
• The number of stock options and stock appreciation rights were increased and the exercise price was decreased to maintain
the intrinsic value of outstanding options and rights immediately before and after the spin-off. A comparison of the fair
value of the outstanding option awards immediately before and after the spin-off resulted in $3 of incremental expense
related to fully vested stock option awards and was expensed immediately.
• The number of RSUs and PSUs were increased to preserve the intrinsic value of such awards immediately prior to
separation. The company did not record any incremental compensation expense related to the conversion of these awards.
In April 2011, the shareholders approved amendments to the DuPont Equity and Incentive Plan (EIP). The EIP provides for equity-
based and cash incentive awards to certain employees, directors, and consultants. Under the amended EIP, the maximum number
of shares reserved for the grant or settlement of awards is 110 million shares, provided that each share in excess of 30 million that
is issued with respect to any award that is not an option or stock appreciation right will be counted against the 110 million share
limit as four and one-half shares. At December 31, 2015, approximately 40 million shares were authorized for future grants under
the company's EIP. The company satisfies stock option exercises and vesting of RSUs and PSUs with newly issued shares of
DuPont common stock.
The company's Compensation Committee determines the long-term incentive mix, including stock options, RSUs and PSUs and
may authorize new grants annually.
Stock Options
The exercise price of shares subject to option is equal to the market price of the company's stock on the date of grant. Options
granted prior to 2004 expire 10 years from date of grant; options granted between 2004 and 2008 serially vested over a three-year
period and carry a six-year option term. Stock option awards granted between 2009 and 2015 expire seven years after the grant
date. The plan allows retirement eligible employees to retain any granted awards upon retirement provided the employee has
rendered at least six months of service following grant date.
For purposes of determining the fair value of stock options 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 2015, 2014 and 2013
was $11.57, $13.68 and $10.40, respectively.
2015 2014 2013
Dividend yield 2.5% 2.9% 3.6%
Volatility 22.52% 31.33% 34.86%
Risk-free interest rate 1.4% 1.7% 1.0%
Expected life (years) 5.3 5.3 5.3