SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Cytec Industries Inc.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
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[LOGO] CYTEC
CYTEC INDUSTRIES INC.
5 GARRET MOUNTAIN PLAZA
WEST PATERSON, NJ 07424
Notice of Annual Meeting
of Common Stockholders to be held
May 11, 1998
March 20, 1998
To the Holders of Common Stock
The Annual Meeting of Common Stockholders of Cytec Industries Inc. will be
held at the Sheraton Crossroads Hotel, Crossroads Corporate Center, Mahwah, NJ
07495, on Monday, May 11, 1998, at 11:00 a.m., for the purpose of electing two
directors for terms ending in the year 2001, and to transact such other
business as may properly come before the meeting or any adjournment thereof.
Only holders of Common Stock of record at the close of business on March 12,
1998, are entitled to notice of and to vote at the meeting or any adjournment
thereof.
Since no action can be taken at the meeting unless a majority of the
outstanding shares of Common Stock is represented, it is important, regardless
of the number of shares which you hold, that you be personally present or
represented by proxy at the meeting.
Accordingly, if you cannot attend the meeting, it is requested that you
promptly sign and date the enclosed proxy and mail it in the enclosed
envelope, which requires no postage if mailed in the United States.
By Order of the Board of Directors,
E. F. Jackman
Secretary
[LOGO] CYTEC
CYTEC INDUSTRIES INC.
5 GARRET MOUNTAIN PLAZA
WEST PATERSON, NJ 07424
Proxy Statement for
Annual Meeting of Common Stockholders
to be held May 11, 1998
March 20, 1998
The enclosed proxy is solicited by the Board of Directors of Cytec
Industries Inc. (the "Company") and is revocable at any time before it is
exercised. Revocation may be by written notice or by furnishing a proxy
subsequent in time. The shares represented by all properly executed proxies
received by the Company in time to be voted will be voted as specified on the
proxies, and in the absence of specific direction will be voted for the
election of directors. For persons who participate in the Cytec Employees'
Savings and Profit Sharing Plan, those shares held for the participant's
account under this plan will automatically be voted in accordance with the
proxy returned by the participant.
The cost of soliciting proxies will be borne by the Company, including
reimbursement of banks, brokerage firms, custodians, nominees and fiduciaries
for their expenses in sending proxy material to the beneficial owners of
Common Stock. In addition to the use of the mail, proxies may be solicited by
employees of the Company personally, by telephone or by telefax. The Company
has engaged Georgeson & Company Inc. to assist in the solicitation of proxies
from stockholders at a fee of $6,500 plus reimbursement of its out-of-pocket
expenses.
Only holders of Common Stock of record at the close of business on March 12,
1998, are entitled to notice of and to vote at the meeting or any adjournment
thereof. On such date, there were outstanding 45,257,826 shares of Common
Stock, each share of which is entitled to one vote.
If no specific direction is given, but the proxy is otherwise properly
executed and dated, it will be voted FOR Election of Directors.
ELECTION OF DIRECTORS
At the meeting, the Board of Directors will nominate Mr. D. Lilley and Mr.
W. P. Powell for election as directors for three-year terms ending in the year
2001. Messrs. Lilley and Powell are currently directors of the Company. The
affirmative vote of the holders of a plurality of the shares of Common Stock
present at the meeting in person or by proxy and voting on the election of
directors will be required to elect the directors. Accordingly, an abstention
or a broker non-vote constitutes neither an affirmative nor a negative vote,
and hence will have no effect on the outcome of the election.
If at the time of the meeting either or both of the nominees is not
available to serve as director--an event which the Board does not anticipate--
the proxies will be voted for a substitute nominee or nominees designated by
or at the direction of the Board, unless the Board has taken prior action to
reduce its membership. After the elections of the directors at the meeting,
the Company will have seven directors, including Mr. Armstrong, Mr. Burns, Mr.
Fry, and Mr. Satrum whose terms currently extend beyond the date of the
meeting to 2000, 2000, 1999, and 1999, respectively, and one director who will
be elected by the holder of the Series C Preferred Stock for a term of one
year.
The following information is submitted concerning the nominees and other
directors of the Company whose terms of office will continue after the
meeting.
Frederick W. Armstrong, age 67, retired from American Cyanamid Company
("Cyanamid") in 1992. Prior to his retirement he served for many years as
Director of Cyanamid's Corporate Development and Planning Division and, from
1985 until his retirement, as a Vice President of Cyanamid. He is a director
of MGI Pharma, Inc.
Gene A. Burns, age 72, served as Executive Vice President, Chief Financial
Officer and Director of CPC International Inc., before retiring in 1988.
Darryl D. Fry, age 59, has been the Chairman of the Board and Chief
Executive Officer of the Company since December, 1993. He also was President
of the Company from December, 1993, until January 8, 1997. From January 1991
to December 1993, he was an Executive Vice President of Cyanamid and President
of the Chemicals Group of Cyanamid. From August 1989 to January 1991, he was a
Group Vice President of Cyanamid responsible for the global agricultural
businesses.
L. L. Hoynes, Jr., age 62, is Senior Vice-President and General Counsel of
American Home Products Corporation, having served in that capacity since 1990.
Prior to that he was a partner in the law firm of Willkie Farr & Gallagher. He
serves as the Director of the Company elected by Cyanamid as holder of the
Company's outstanding Series C Preferred Stock.
David Lilley, age 51, was elected President and Chief Operating Officer and
a member of the Board of Directors effective January 8, 1997. From 1994 until
that date, he was a Vice President of American Home Products Corporation,
responsible for the Global Medical Device business. Prior to that time, he was
Vice President and a member of the Executive Committee of Cyanamid. The Board
has announced its intention to appoint Mr. Lilley as Chief Executive Officer
at the time of the Annual Meeting.
William P. Powell, age 42, has been a Managing Director of SBC Warburg
Dillon Read Inc., and its predecessor, Dillon, Read & Co. Inc., since January
1991, and prior thereto was employed by Dillon Read since 1982 in a number of
other capacities.
Jerry R. Satrum, age 53, has served as Chief Executive Officer of Georgia
Gulf Corporation since February 1991, having also served as its President from
1989 until 1997 and its Vice President--Finance and Treasurer from its
inception until 1989. Mr. Satrum has been a director of Georgia Gulf
Corporation since its inception.
Each person named above became a director of the Company on December 17,
1993, the date the Company was incorporated, except for Mr. Hoynes, who was
elected by Cyanamid on December 2, 1994; Mr. Satrum, who was elected by
stockholders at the 1996 Annual Meeting; and Mr. Lilley, who was elected by
the Board effective January 8, 1997.
----------------
The Audit Committee among other things considers the overall scope and
approach and recommendations of the audit performed by the independent
accountants; recommends the appointment of independent accountants; reviews
procedures for internal controls; and considers significant accounting methods
adopted or proposed to be adopted. Messrs. Burns and Powell are members of
this Committee, which held three meetings during 1997.
2
The Compensation and Management Development Committee approves compensation
arrangements for the Company's officers, administers certain compensation
plans and makes recommendations thereunder. Messrs. Armstrong, Burns, and
Satrum are members of this Committee, which held six meetings during 1997.
The Pension Committee reviews on behalf of the Board actions taken by the
Committee on Investment of Pension Funds (which oversees investments of the
Company's funded benefit plans). Messrs. Armstrong and Powell are members of
this Committee, which held two meetings during 1997.
The Environmental, Health and Safety Committee serves as the environmental
oversight committee referred to under "Certain Relationships and Related
Transactions." It reviews, monitors and, as it deems appropriate, advises the
Board of Directors with respect to the policies and practices of the Company
in the areas of occupational health and safety and environmental affairs.
Messrs. Hoynes and Fry are members of this Committee, which held two meetings
during 1997.
The Board of Directors held ten meetings during 1997. All members of the
Board attended at least 75% of the meetings of the Board and of the Committees
on which they serve. The Company has no Nominating Committee.
3
SECURITY OWNERSHIP OF MANAGEMENT
As of February 1, 1998, Mr. Fry owned beneficially 2%, no other officer or
director individually owned beneficially as much as 1%, and all officers and
directors as a group owned beneficially approximately 5%, of the total shares
of outstanding Common Stock. The following table sets forth, as of February 1,
1998, the total beneficial ownership of the Company's Common Stock by the
Company's directors, nominees for directorships, the Chief Executive Officer
and the five other most highly compensated executive officers named in the
Summary Compensation table (see "Executive Compensation" elsewhere in this
proxy statement):
SHARES
BENEFICIALLY
NAME OWNED(1)
---- ------------
F. W. Armstrong.............................................. 37,641
G. A. Burns.................................................. 21,000
J. P. Cronin................................................. 272,526
S. M. Crum................................................... 141,833
D. D. Fry.................................................... 1,017,968
L. L. Hoynes, Jr. ........................................... 0
E. F. Jackman................................................ 228,752
D. Lilley.................................................... 120,750
H. Porosoff.................................................. 205,488
W. P. Powell................................................. 21,000
J. R. Satrum................................................. 4,395
All directors and officers as a group (15 persons)........... 2,492,995
- --------
(1) Included as beneficially owned are shares held by the Cytec Employees'
Savings and Profit Sharing Plan, as to which shares the named individual
possesses the right to vote (Mr. Cronin, 21,863 shares; Mr. Crum, 2,322
shares; Mr. Fry, 18,684 shares; Mr. Jackman, 39,038 shares; Mr. Lilley,
1,784 shares; Mr. Porosoff, 1,254 shares; and all officers and directors
as a group, 109,291 shares); performance shares granted in 1996, 1997 and
1998 under the 1993 Stock Award and Incentive Plan (the "1993 Plan"), as
to which shares the named individual possesses the right to vote (Mr.
Cronin, 9,418 shares; Mr. Crum, 7,470 shares; Mr. Fry, 29,185 shares; Mr.
Jackman 7,324 shares; Mr. Lilley, 8,800 shares; Mr. Porosoff, 4,226
shares; and all officers and directors as a group, 80,110 shares);
deferred stock awards (i.e., unsecured grants of common stock payable,
generally after termination of employment) granted under the 1993 Plan
(Mr. Cronin, 38,949 shares; Mr. Crum, 52,875 shares; Mr. Fry, 134,316
shares; Mr. Jackman 15,293 shares; Mr. Porosoff, 30,075 shares; and all
directors and officers as a group, 327,733 shares); restricted shares
granted to non-employee directors and to Mr. Lilley in order to induce him
to join the Company as to which shares the named individual possesses the
right to vote (Mr. Armstrong 6,000 shares, Mr. Burns and Mr. Powell, 3,000
shares each; Mr. Satrum, 1,116 shares; Mr. Lilley 42,000 shares; all
directors as a group, 55,116 shares); and shares which the following have
the right to acquire within 60 days through the exercise of vested stock
options (Mr. Armstrong, 13,500 shares; Mr. Burns, 1,500 shares; Mr.
Powell, 13,500 shares; Mr. Satrum, 3,000 shares; Mr. Cronin, 149,466
shares; Mr. Crum, 79,166 shares; Mr. Fry, 728,233 shares; Mr. Jackman,
132,200 shares; Mr. Lilley, 66,666 shares; Mr. Porosoff, 155,533 shares;
and all directors and officers as a group, 1,593,990 shares). No voting or
investment power exists with respect to stock option shares prior to
acquisition.
(2) The table does not include any shares of Common Stock or Preferred Stock
beneficially owned by Cyanamid. See "Security Ownership of Certain
Beneficial Owners". Mr. L. L. Hoynes, Jr., Senior Vice President and
General Counsel of American Home Products Corporation and a Director of
the Company, disclaims beneficial ownership of any shares of Common Stock
and Preferred Stock beneficially owned by Cyanamid.
(3) The number of shares shown includes the following shares as to which
beneficial ownership is disclaimed: 1,050 shares owned by Mr. Porosoff's
wife, individually and as custodian for a minor child; 500 shares owned by
Mr. Lilley as custodian for a minor child; and 15,796 shares for all
directors and officers as a group.
Based solely on its review of the copies of the forms received by it, the
Company believes that during 1997 all filing requirements required under
Section 16(a) of the Securities Exchange Act of 1934 were complied with by its
directors, officers and greater than ten-percent beneficial owners.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AS OF FEBRUARY 1, 1998
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER OWNERSHIP CLASS
-------------- ------------------- ----------------- ----------
Series C Cumulative American Cyanamid Co.(1) Direct 4,000 Shares 100%
Preferred Stock c/o American Home
Products Corporation
Five Giralda Farms,
Madison, NJ 07940
Common Stock FMR Corp.(2) Direct 6,435,915 Shares 14.34%
82 Devonshire Street,
Boston, MA 02109
Common Stock Janus Capital Indirect 7,088,380 Shares 15.8%
Corporation(3)
100 Fillmore Street
Suite 300
Denver, CO 80206-4923
Common Stock Vanguard Fiduciary Trust Direct 3,225,111 Shares 7.4%
Company
on behalf of the Cytec
Employees'
Savings and Profit
Sharing Plan (4)
500 Admiral Nelson
Blvd.,
Malvern, PA 19355
- --------
(1) American Home Products Corporation, Five Giralda Farms, Madison, New
Jersey 07940, is the beneficial owner of 100% of the Common Stock of
Cyanamid.
(2) Information taken from Schedule 13G, Amendment No. 8, dated February 14,
1998 filed on behalf of a group consisting of FMR Corp., Mr. Edward C.
Johnson 3d, and Abigail P. Johnson. The Schedule reports sole power to
vote as to 1,061,050 shares, shared power to vote as to none, and sole
power to dispose as to all.
(3) Information taken from Amendment No. 3 to Schedule 13G dated February 13,
1998 filed on behalf of a group consisting of Janus Capital Corporation,
Mr. Thomas H. Bailey and Janus Fund. The Schedule reports sole voting
power as to none, shared voting power as to all, sole dispositive power as
to none and shared power to dispose as to all.
(4) Schedule 13G, Amendment No. 4, dated February 12, 1998 reports shared
power to vote and dispose as to all shares.
5
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 17, 1993 (the "Effective Date"), in connection with a spin-off
of Cyanamid's chemical businesses to it, the Company issued to Cyanamid all of
the Company's common stock (which Cyanamid in turn distributed to its
stockholders), 3,820,895 shares of its Series A Cumulative Adjustable
Preferred Stock and 4,175,105 shares of its Series B Cumulative Convertible
Preferred Stock (both of which Series have since been repurchased by the
Company), and 4,000 shares of its Series C Cumulative Preferred Stock.
Aggregate liquidation and redemption value of the Series C Stock is
$100,000. The Series C Stock, which is not transferable, gives Cyanamid the
right to elect one director and contains certain restrictive covenants,
violation of which would give the holder the right, among others, to approve
capital expenditures and elect a majority of the Board. The Company has agreed
not to redeem the Series C Stock prior to December 16, 1999.
In connection with the spin-off, financial responsibility for substantially
all the liabilities of Cyanamid's chemicals businesses was assumed by the
Company, including substantially all environmental liabilities related to the
chemicals businesses and plants used in that business (except the remediation
of the plant located at Bound Brook, NJ), including plants and businesses
disposed of prior to the Effective Date, and disposal sites owned by third
parties to which wastes of the chemical businesses were sent. The Company is
required to establish an environmental oversight committee of the Board of
Directors, consisting of two members, both of whom must concur in any action
and one of whom is the Director appointed by Cyanamid as holder of the Series
C Preferred Stock; this committee reviews and approves the Company's annual
environmental remediation plan and reviews compliance with the plan and
environmental administration standards and makes recommendations to the Board
concerning, and reviews and approves proposed challenges to governmental
requirements relating to, environmental liabilities assumed from Cyanamid. The
Company must also pay an annual fee, $327,000 in 1997, for oversight services
rendered by Cyanamid's environmental affairs department.
In connection with the spinoff, the Company and Cyanamid entered into a
number of administrative, consulting, manufacturing and other service
agreements pursuant to which one party renders to the other, both in the U.S.
and in foreign locations, services for a period of time after the spinoff. In
addition, there were certain leases and supply agreements. Pursuant to these
agreements, in 1997 the Company paid $4.8 million to Cyanamid and received
$7.8 million. Most of these agreements are subject to termination by either
party on six months' or less notice.
Certain intellectual property relating to the chemicals businesses (such as
patent rights, trade secrets and know-how) was assigned to the Company by
Cyanamid, and Cyanamid received back an exclusive license to use such rights
in the medical and agricultural business and a right to a non-exclusive
license to use them in other businesses to the extent not already used for
such purposes by the Company. Cyanamid granted to the Company an exclusive
license to use in the chemicals businesses intellectual property rights
retained by Cyanamid and a right to a non-exclusive license for uses other
than medical and agricultural to the extent not already used by Cyanamid.
Trademarks relating to the chemicals businesses were also assigned to the
Company.
SBC Warburg Dillon Read Inc. (including its predecessor Dillon, Read and
Co., Inc.), of which Mr. William Powell, a Director of the Company, is a
Managing Director, has provided investment banking and consulting services to
the Company during 1997.
6
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, Messrs. Armstrong, Burns, and Satrum, all outside directors,
served on the Compensation and Management Development Committee.
EXECUTIVE COMPENSATION
The following tabulation summarizes compensation paid to the Chief Executive
Officer and the five other most highly compensated executive officers for
services rendered in all capacities in 1995, 1996, and 1997 to the Company and
its subsidiaries:
SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM
COMPENSATION(1)(2) COMPENSATION
---------------------- ----------------------
AWARDS PAYOUTS
---------------------- ----------
RESTRICTED STOCK LONG-TERM
NAME AND STOCK OPTIONS/ INCENTIVE ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS AWARDS(3) SARS(4) PAYOUTS(5) COMPENSATION(6)
------------------ ---- -------- -------- ---------- -------- ---------- ---------------
D. D. Fry 1997 $510,000 $751,246 $ 355,469 100,000 $220,000 $31,350
Chairman of the Board, 1996 $480,000 $587,520 $ 322,753 150,000 $290,067 $43,200
Chief Executive Officer 1995 $450,000 $485,100 $ 193,750 150,000 $275,100 $33,750
and (until January
1997) President
D. Lilley 1997 $365,000 $373,510 $1,883,469(8) 300,000(8) -- $20,075
President and Chief
Operating Officer
(since January 1997)
J. P. Cronin 1997 $272,000 $228,891 $ 121,895 35,000 $ 61,666 $17,070
Executive Vice 1996 $240,000 $217,464 $ 95,968 44,250 $ 85,166 $15,340
President and Chief 1995 $206,000 $167,280 $ 52,766 36,000 $ 80,150 $12,360
Financial Officer
S. M. Crum (9) 1997 $272,000 $228,891 $ 121,875 35,000 $ 75,000 $17,070
Executive Vice 1996 $260,000 $217,464 $ 111,191 52,500 $110,250 $20,800
President 1995 $240,000 $200,900 $ 71,953 52,500 $110,250 $14,400
(until Sept. 1997)
E.F. Jackman 1997 $220,000 $160,815 $ 89,375 24,000 $ 51,666 $13,950
Vice President, General 1996 $202,000 $140,107 $ 80,819 36,000 $ 68,250 $18,180
Counsel 1995 $185,000 $138,780 $ 43,172 28,500 $ 62,300 $12,998
and Secretary
H. Porosoff (10) 1997 $221,000 $128,422 $ 69,063 19,000 $ 45,000 $14,010
Vice President & Chief 1996 $213,000 $130,356 $ 62,834 28,500 $ 62,300 $19,170
Technology Officer 1995 $205,000 $120,540 $ 43,172 28,500 $ 62,300 $15,262
since June
1995; from December
1993 to
June 1995, Vice
President-
Research & Development
- --------
(1) Includes amounts earned with respect to fiscal year, whether paid in that
year or deferred.
(2) There was no disclosable "Other Annual Compensation" paid, payable or
accrued to any of the named officers during 1995-1997.
7
(3) Represents the value at the date of grant of Performance Shares and
Restricted Shares granted under the Company's 1993 Plan. Performance
shares vest, in the case of the 1995, 1996 and 1997 grants, after
completion of the respective 1997, 1998 and 1999 performance periods,
depending upon the achievement of earnings targets; the target for the
1997 performance period was exceeded; the shares granted in 1995 which
would thereupon have vested were canceled in whole or in part and, in
lieu thereof, the participants received grants of deferred shares, equal
to the canceled Performance Shares, which become payable after
retirement. See Footnote 8 concerning the grant of Restricted Shares to
Mr. Lilley. At December 31, 1997, after giving effect to vestings and
forfeitures occurring in January 1998 with respect to the 1997
performance period, the total Performance Shares, Restricted Shares and
deferred shares held had values as follows (deferred shares are in
parenthesis): Mr. Fry 21,725 shares--$1,019,717 (134,316 shares--
$6,304,457); Mr. Lilley 46,750 shares--$2,194,328; Mr. Cronin 6,858
shares--$321,897 (38,949 shares--$1,828,169); Mr. Crum 7,470 shares--
$350,623 (52,875 shares--$2,481,820); Mr. Jackman 5,449 shares--$255,762
(15,293 shares--$717,815); and Mr. Porosoff 4,226 shares -- $198,358
(30,075 shares--$1,411,650). Holders of Performance Shares and Restricted
Shares are entitled to vote and receive dividends on such shares; holders
of deferred shares are not entitled to vote but are entitled to receive
dividend equivalents.
(4) Options granted by the Company in 1995, 1996, and 1997 were granted
without tandem SARs. 1995 and 1996 option amounts are adjusted for three-
for-one stock split in July 1996.
(5) Amounts for 1995, 1996 and 1997 represent Performance Cash received for
the 1995, 1996 and 1997 performance periods for grants under the 1993
Plan, based upon achievement of earnings and cash flow targets. See text
following Long-Term Incentive Plans--Awards in Last Fiscal Year table.
(6) The amounts listed for each named officer consist of matching
contributions and profit sharing contributions to the Cytec Employees'
Savings and Profit Sharing Plan and the Cytec Supplemental Savings and
Profit Sharing Plan plus a $750 cash award made to each U.S. employee in
recognition of 1997 Company performance.
(7) The Company has adopted a Deferred Compensation Plan pursuant to which
compensation in any year which exceeds the limits imposed by Section
162(m) of the Internal Revenue Code on deductibility of compensation
which is not performance related within the meaning of that Section will
be deferred until the year following retirement or death (or upon an
earlier change of control of the Company). Amounts so deferred will bear
interest at a rate equal to the rate paid on 10-year U.S. Treasury Notes,
plus 1%. Mr. Fry deferred $50,000 in 1997.
(8) In January, 1997, in order to induce Mr. Lilley to join the Company, he
was granted 42,000 Restricted Shares which vest in one third installments
on each of the third, fourth and fifth anniversaries of his date of hire,
and he was also granted a stock option covering 150,000 shares. Also in
January, 1997, Mr. Lilley was granted an additional stock option covering
50,000 shares as part of grants of options to all officers, and in
August, 1997, he was granted an option covering 100,000 shares in
recognition of the transition plan for the Chief Executive Officer.
(9) Mr. Crum resigned as an officer of the Company (but not as an employee)
effective September 12, 1997. In that connection, the Company agreed to
continuation of his employment until December 31, 2000, at current levels
of salary and bonus, but without additional long-term compensation
awards.
(10) Mr. Porosoff resigned as an officer and employee of the Company effective
January 31, 1998. In connection with the termination of his employment,
(i) pursuant to the Executive Income Continuity Plan, he will receive
$289,510, an amount equal to one year's salary and target bonus, (ii) all
of his stock options were declared by the Committee to be exercisable,
(iii) his performance stock and performance cash awards made in 1996 and
1997 were partially forfeited, (iv) he was granted a supplemental pension
benefit which is included under "Compensation Under Retirement Plans" and
(v) he agreed to perform consulting services for the Company for two
years at a cost of $110,500 per year to the Company.
8
The following tabulation shows, as to the executive officers named,
information with respect to employee stock options.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF STOCK
TOTAL PRICE APPRECIATION
OPTIONS/SARS EXERCISE FOR
OPTIONS/SARS GRANTED TO PRICE OPTION TERM
GRANTED EMPLOYEES IN PER EXPIRATION ---------------------
NAME (SHARES) FISCAL YEAR SHARE DATE 5% 10%
- ---- ------------ ------------ -------- ---------- ---------- ----------
D. D. Fry............... 100,000 11.4 $40.125 1/26/07 $2,523,440 $6,394,892
D. Lilley............... 150,000 17.1 $40.25 1/6/07 $3,796,951 $9,622,220
50,000 5.7 $40.125 1/26/07 $1,261,720 $3,197,446
100,000 11.4 $40.8125 8/13/07 $2,566,676 $6,504,461
J. P. Cronin............ 35,000 4.0 $40.125 1/26/07 $ 833,204 $2,238,212
S. M. Crum.............. 35,000 4.0 $40.125 1/26/07 $ 833,204 $2,238,212
E.F. Jackman............ 24,000 2.7 $40.125 1/26/07 $ 605,626 $1,534,774
H. Porosoff............. 19,000 2.2 $40.125 1/26/07 $ 479,454 $1,215,029
- --------
Options become exercisable in cumulative amounts of one-third of the amount of
the grant one year after the date of grant and each year thereafter. All
options were granted without tandem stock appreciation rights.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS HELD IN-THE-MONEY OPTIONS/SARS
SHARES AT FISCAL YEAR END AT FISCAL YEAR END(3)
ACQUIRED VALUE ------------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE(2) UNEXERCISABLE(2) EXERCISABLE(2) UNEXERCISABLE(2)
- ---- ----------- ---------- -------------- ---------------- -------------- ----------------
D.D. Fry................ -- -- 594,900 250,000 $22,946,564 $4,557,295
D. Lilley............... -- -- -- 300,000 -- $1,862,500
J. P. Cronin............ -- -- 111,050 76,500 $ 4,130,028 $1,288,886
S.M. Crum............... 154,500 $6,823,152 52,500 87,500 $ 1,565,886 $1,595,053
E.F. Jackman............ -- -- 102,700 57,500 $ 3,821,729 $1,009,220
H. Porosoff............. -- -- 130,200 47,500 $ 5,072,718 $ 865,886
- --------
(1) None of the options were issued with tandem stock appreciation rights.
(2) Options become exercisable in cumulative amounts of one-third of the
amount of the grant one year after the date of grant and each year
thereafter.
(3) Total value of options based on fair market value of Company stock of $46
15/16 as of December 31, 1997.
9
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
PERFORMANCE OR ESTIMATED FUTURE
NUMBER OF OTHER PERIOD UNTIL PAYOUTS
SHARES, UNITS OR MATURATION OR ------------------
NAME OTHER RIGHTS PAYOUT TARGET MAXIMUM
---- ---------------- ------------------ ------ ----------
D. D. Fry.............. 8,750 3 years 0 $ 350,000
D. Lilley.............. 4,750 3 years 0 $ 190,000
J. P. Cronin........... 3,000 3 years 0 $ 120,000
S. M. Crum............. 3,000 3 years 0 $ 120,000
E.F. Jackman........... 2,200 3 years 0 $ 88,000
H. Porosoff............ 1,700 3 years 0 $ 68,000
Long-term incentive plan awards are made under the Company's 1993 Plan.
Awards were made in January, 1997. The awards to which this table relates are
Performance Cash Awards for the 1999 performance period. These awards are paid
dependent upon the extent to which specified earnings targets for full vesting
of Performance Stock are exceeded for 1999 and certain additional cash flow
objectives are attained for 1998 and 1999. At target performance levels, none
of the Performance Cash vests. For 1997, the targets were exceeded to the
extent that 100% of the Performance Cash was earned and is reported under "Long
Term Incentive Payouts" in the Summary Compensation Table. Estimated Future
Payouts relate to 1999.
EMPLOYMENT AND SEVERANCE ARRANGEMENTS
All salaried Company employees in the United States, including the named
officers, have signed employment agreements either on Cyanamid's standard form,
which have been assigned to the Company, or on Cytec's standard form. The
agreements provide for the initial salary paid to the employee for services
performed by the employee, the confidentially and non-use of proprietary
information, assignment of inventions and improvements, a non-competition
clause and termination of employment. The notice of termination period for
salaried employees, including the named officers, ranges from one month to six
months (depending on the standard form in use at the time), except in the case
of termination for cause, when no prior notice is required.
In the event of a "change of control" (as defined in the 1993 Plan), (i) any
Award under that Plan, including non-employee directors' Awards, carrying a
right to exercise that was not previously exercisable and vested will become
fully exercisable and vested, (ii) the restrictions, deferral limitations,
payment conditions and forfeiture applicable to any other Award, including non-
employee directors' Awards, granted under the 1993 Plan will lapse and such
Awards will be deemed fully vested and (iii) any performance conditions imposed
with respect to Awards shall be deemed to be fully achieved.
The Board of Directors has adopted an executive income continuity plan to aid
in the retention of key employees and to reinforce and encourage the continuing
attention, dedication and loyalty of executives in the senior management group
without the distraction of concern over the possibility of involuntary or
constructive termination of employment resulting from unforeseen developments,
by providing income continuity for a limited period. The plan provides for
payments to members upon termination of employment, unless such termination is
(i) on account of death or retirement, (ii) by the Company for disability or
cause, or (iii) by the member without good reason (as defined in the plan),
generally, actions by the Company inconsistent with the participant's status or
with the Company's traditional compensation policies. Members of the plan
consist of the chairman, president, corporate vice presidents, and such other
employees as are designated by the Compensation
10
and Management Development Committee. In general, the plan provides for
payments upon termination of employment, in the case of the executive
officers, and in the case of other members meeting certain age and service
requirements, of an amount equal to annual salary and bonus (two times annual
salary and two times bonus after a "change in control" as defined in the
plan). The plan also provides for certain miscellaneous payments, including
relocation payments, legal fees, and expenses incurred in seeking new
employment. The benefits of this Plan are not available to any employee who is
then currently eligible to retire with a pension based on credited service to
age 65 or, in any event, for any period beyond the employee's sixty-fifth
birthday.
Under the Company's Executive Supplemental Employees Retirement Plan, in the
event of a change in control, the Treasurer, the Controller and each officer
of corporate vice president rank or higher is automatically elected a member
of the plan. In this event, each such officer will be credited with five
additional years of service (but not beyond age 65), there will be included in
pensionable compensation the amount, if any, by which such officer's target
incentive compensation exceeds one third of base compensation and, under
certain conditions the value of the benefit under this plan, as well as the
benefit under other non-qualified pension plans, would be paid immediately as
a lump-sum distribution.
The Board of Directors has adopted a Compensation Taxation Equalization Plan
providing for the payment to any employee, officer or director who becomes
subject to the tax imposed by Section 4999 of the Internal Revenue Code of
1986 of reimbursement for the tax, plus all taxes imposed upon the
reimbursement. A 20% excise tax applies to compensatory payments (i) the
present value of which equals or exceeds three times the "base amount" of the
recipient and (ii) that are contingent upon change "in the ownership or
effective control" of the Company. The "base amount" is the average annual
compensation included in taxable income over the five-year period ending
before the year during which the change in the ownership or effective control
occurs.
----------------
The Compensation and Management Development Committee Report and the
Performance Graph that follow do not constitute soliciting material and shall
not be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the extent that
the Company specifically incorporates the information by reference, and shall
not otherwise be deemed "filed" under said Acts.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE REPORT
The Compensation and Management Development Committee of the Company's Board
of Directors (the "Committee") is composed entirely of independent outside
directors. Their responsibilities include the administration of the
compensation program for the Company's executive officers, currently
consisting of nine executives. Specific duties include determining the
executive salaries, setting the performance criteria for annual and long-term
incentive plans, determining their awards under the annual incentive program,
and administering the Company's 1993 Stock Award and Incentive Plan.
The Company's executive compensation program consists of four elements:
. BASE SALARY: Base compensation set to attract and retain qualified
management, when combined with the other components of the compensation
program.
. ANNUAL BONUS: An opportunity to earn additional cash reward for yearly
business success and individual efforts.
11
. PERFORMANCE STOCK AND PERFORMANCE CASH: Long-term incentives which
provide a reward for business success in future years and, being based on
performance, are linked to stockholders' interests.
. STOCK OPTIONS: Grants which will encourage stock ownership and reward
executives for increases in stockholder value.
The annual bonus, performance stock and performance cash are all "at risk"
forms of compensation in that they do not become payable except to the extent
that the Company's business objectives are attained. Similarly, stock options
are "at risk" in that their value depends upon success in enhancing
stockholder value.
The compensation program is designed to contribute to the viability and
long-term success of the Company by meeting the following objectives:
. To compensate fairly for financial and strategic success and the
enhancement of stockholder value.
. To attract and retain competent managers and professionals who are
performance-oriented.
. To reinforce a commitment to take action which will contribute to the
long-term success of the Company.
. To encourage the ownership of Cytec stock so that management's long-term
financial interests are closely linked with success in serving the long-
term interests of the Company's stockholders.
There is strong emphasis in the compensation program on long-term
performance and success as exemplified by the program's structure. The
Company's philosophy is to maintain lower fixed costs associated with its
compensation program and correspondingly offer significant upside potential
based upon achievement of individual, financial and stock-based performance.
The Company's executive base salaries, therefore, are generally set somewhat
below median salaries paid at comparable companies. Therefore, the combination
of base salaries and annual bonus targets are also somewhat below the median
at comparable companies. The objective in setting long-term compensation,
consisting of long-term performance stock awards payable upon attainment of
target objectives and stock option grants, is to be above the median level for
comparable companies. The overall objective is to set total compensation for
target performance slightly above the median of the compensation group, with
an above-average portion of total cash compensation, including performance
cash awards and additional annual bonus, payable if target performance is
exceeded. As an example, for the chief executive officer ("CEO"), at target
compensation levels, more than 75% of total potential compensation is at risk
for performance.
The comparison group for compensation purposes is a group of mid-size
specialty and commodity chemical companies which the Company views as
competitors for business, employee talent and stockholder investments.
Base Salaries -- Base salaries are reviewed annually using competitive
compensation information provided by an independent nationally-recognized
executive compensation consulting firm. Increases in base salaries are granted
after considering relative competitive positions, individual performance and
general salary increases within the Company and the comparable industry group.
Annual Bonus -- The Committee determines an annual incentive target for each
officer, expressed as a percentage of the mid-point of the salary range for
the officer's grade level, also after reviewing competitive compensation
information, and also determines the amounts by which annual bonuses will
increase or decrease depending on the degree of attainment or non-attainment
of corporate performance goals. Also, at the beginning of each year, the
Committee approves the performance goals for the officers for the year. The
goals for 1997
12
target bonuses consisted of specific components weighted as follows: earnings
per share (60%); and other specific factors which are measured subjectively
(40%). After the end of the year, the Committee evaluates the Company's and
individuals' performances, as described above, and awards incentive
compensation based on that evaluation.
Long-Term Incentives -- Long-term incentives granted in 1997 and payable in
future years consist of two types of grants: (1) performance stock (shares of
Company stock) and related performance cash, which may be earned at the end of
the 1999 performance period assuming attainment of specific earnings per share
and cash flow goals set by the Committee, and (2) stock options which
encourage executives to enhance the value of the Company's Common Stock by
offering them an opportunity to buy the shares at a pre-set price over the
term of the option contract. The Committee determines for each officer the
amount and proportion of each type of long-term incentive after reviewing
competitive information.
Performance stock is the Company's Common Stock registered in the
executive's name, carrying dividends (if declared) and voting rights, but
restricted from resale until earned by achievement of performance targets, and
forfeited if performance targets are not achieved during the performance
period. The performance stock grants are accompanied by related grants of
performance cash, which become payable only if the targets for full
performance stock vesting are exceeded.
CEO Compensation -- In 1997 the Committee took the following actions
regarding the compensation of Cytec's CEO, Darryl D. Fry. Mr. Fry's salary was
increased from $480,000 to $510,000, and his target bonus was changed so that
it is now equal to 60% of the midpoint of his salary range, rather than, as
previously, 60% of his salary, which is below the midpoint. Both salary and
target bonus are below the competitive median, based upon the competitive
data. The annual bonus target for Mr. Fry is designed, in combination with his
salary, to provide compensation which, at target levels, is below-median
against the group, with the opportunity to earn additional annual bonus if
certain performance objectives are exceeded. Based upon the level of
achievement of the Company's earnings and other factors weighted as described
earlier in this report, the Committee awarded Mr. Fry an annual bonus for 1997
of $751,246, which is 147.3% of his base salary.
In 1997 Mr. Fry was awarded a stock option award, a performance stock award,
and a related performance cash award. In the aggregate, these grants were
believed to be above the median levels for comparable companies. Based upon
the level of earnings and positive cash flow achieved in 1997, the performance
stock and cash previously awarded to Mr. Fry for 1997 performance was earned
at the maximum level.
Tax-Deductibility of Compensation -- The Committee's policy on the tax
deductibility of compensation for the CEO and other executive officers is to
maximize the deductibility, to the extent possible and under normal
conditions, while preserving the Committee's flexibility to maintain
competitive compensation programs and to deal with extraordinary situations.
Some compensation may be mandatorily deferred if it is not currently
deductible, and in other cases affected executives may be encouraged to elect
deferral of compensation that would not be currently deductible. All executive
compensation paid and awarded in 1997 is expected to be fully tax deductible
either currently or in the future by the Company under the Revenue
Reconciliation Act of 1993.
The Committee believes that the compensation program established for the
Company has contributed to retaining and motivating highly qualified
management personnel, and to the significant increases in stockholder value
achieved by the Company during the past four years.
COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEE
F. W. Armstrong, Chairman
G. A. Burns
J. R. Satrum
January 26, 1998
13
PERFORMANCE GRAPH
The graph set forth below is based on the assumption that $100 had been
invested in the Company's Common Stock and in each index on December 31, 1993,
with reinvestment of dividends at market prices. The total cumulative dollar
returns represent the value such investments would have had on December 31,
1997.
CYTEC INDUSTRIES INC.
FOUR-YEAR CUMULATIVE TOTAL STOCKHOLDER RETURN
- --------------------------------------------------------------------------
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
- --------------------------------------------------------------------------
Cytec $100.00 $294.30 $470.70 $919.70 $1,062.70
- --------------------------------------------------------------------------
S&P 500 $100.00 $101.40 $139.30 $171.20 $228.50
- --------------------------------------------------------------------------
S&P Chemicals $100.00 $115.80 $151.20 $196.20 $242.30
- --------------------------------------------------------------------------
The Common Stock of the Company began "when issued" trading on December 22,
1993 and "regular-way" trading on January 25, 1994. Accordingly, it is not
possible to include in the performance graph a comparison of the yearly
percentage change in the Company's cumulative total stockholder return with
indexes for 1993. The high and low prices in 1993 on a "when issued" basis
were $4.66 per share on December 22, 1993, the first day on which the stock
traded, and $4.50 per share and $4.42 per share, respectively, on December 30,
1993, the last day on which the stock traded (all figures are adjusted for the
July, 1996 stock split).
14
COMPENSATION UNDER RETIREMENT PLANS
The Cytec employees' retirement program provides Cytec employees, including
the officers named in the Summary Compensation Table, with an annual defined
pension benefit upon retirement which is made up of the sum of three
components: (i) a benefit which, in general, is equal to 1.67% of the
retiree's average base salary plus actual annual bonus (up to one-third of
base salary) during the highest five of the last ten years of service (but not
beyond the year 2003) times the number of years of service at Cyanamid,
subject to certain adjustments including a social security offset (this
benefit component does not apply in the case of Mr. Lilley), plus (ii) a
benefit which, in general, is equal to 1.33% of the retiree's base salary plus
actual annual bonus (up to one-third of base salary) for each year of service
at Cytec (for any Cytec employee whose pension calculated as provided in (i)
and (ii) above would exceed the limit on benefits payable from a pension plan
qualified under the Internal Revenue Code, such excess is payable from the
general funds of the Company), plus (iii) for persons whom the Compensation
and Management Development Committee has elected to membership in the
Executive Supplemental Employees Retirement Plan, in case of retirement on or
after age 60 (or earlier in certain circumstances) a supplemental benefit
(also payable from general funds of the Company) calculated by (x) determining
the benefit under the formula under (i) above based on the highest three of
the last ten years of service and utilizing target bonus (not limited to one
third of base salary) instead of actual bonus and (y) crediting to the retiree
additional years of service under the formula described in (ii) above (but not
more than five and not beyond age 65) at a rate of compensation equal to base
salary plus target bonus for the final year of actual service.
The estimated annual pensions payable under this program upon retirement at
age 65 and reflecting the normal form of benefit which includes a 50% joint
and survivor annuity in favor of the retiree's spouse to the six officers
named in the Summary Compensation Table, based upon their current salaries and
annual bonuses, with years of actual service projected to age 65, (in the case
of Mr. Porosoff, to January 31, 1998) are: Mr. Cronin, $165,205; Mr. Crum,
$178,796; Mr. Fry, $474,049; Mr. Lilley, $84,134; Mr. Jackman, $136,240; and
Mr. Porosoff, $118,381.
COMPENSATION OF DIRECTORS
Directors who are employees or who are elected by the holders of Preferred
Stock are not entitled to extra compensation by reason of their directorships
or their attendance at meetings of the Board of Directors of the Company, any
committee thereof, or of the stockholders. Directors who are not employees of
the Company or of any of its subsidiaries (provided that they are not elected
by the holders of Preferred Stock) are paid a retainer of $20,000 per year.
Such directors also receive annual retainers while chairmen ($3,000) or
members ($1,500) of committees of the Board of Directors of the Company on
which such directors serve. Each such director is also paid a fee of $1,500
for attendance at a meeting of the Board of Directors and stockholders of the
Company and a fee of $2,000 (in the case of Committee Chairman) or $1,000 (in
the case of other Committee members) for attending committee meetings.
Pursuant to the 1993 Plan, the original non-employee directors (for purposes
of the 1993 Plan, a non-employee director does not include any employee of the
Company or its subsidiaries or affiliates or any director elected by the
holders of the Preferred Stock) received a grant of 7,500 restricted shares of
Common Stock. Each non-employee director who thereafter is elected to serve as
a director of the Company for the first time, will automatically receive a
grant of restricted shares of Common Stock equal to the lesser of (a) 7,500
shares and (b) the nearest number of whole shares determined by multiplying
7,500 by a fraction the numerator of which is
15
the fair market value of the Common Stock upon which the initial grants to
non-employee directors were made and the denominator of which is the fair
market value of the Common Stock on the date on which the director is duly
elected and qualified. The restrictions on the shares of Common Stock granted
to non-employee directors will lapse one-fifth each year over a five-year
period commencing on the date of grant if the non-employee director continues
to be a director of the Company on each such date. If a non-employee
director's service on the Board terminates before the award is entirely
vested, any portion of the award that is not vested will revert to the
Company; provided, however, that if the non-employee director's service
terminates by reason of death or disability (as defined in the 1993 Plan),
then any installment with respect to which the grantee had commenced (but not
completed) serving the requisite amount of time to vest in such installment,
will become vested. If a director elects to defer vesting until the year
following his or her 70th birthday, as permitted by the 1993 Plan, then during
the extended deferral period there exist certain additional grounds upon which
reversion can be waived. In addition, each original non-employee director has
received a grant of options to purchase 4,500 shares of Common Stock. Each
non-employee director who is elected in the future to serve as a director of
the Company for the first time will, at the time such director is elected and
duly qualified, automatically receive an option to purchase 4,500 shares of
Common Stock. In addition, on the date of each annual meeting of stockholders,
each continuing non-employee director will automatically receive an option to
purchase 4,500 shares of Common Stock, unless the Board acts to reduce the
number of shares. Such options will have an exercise price per share equal to
the fair market value of a share of Common Stock on the date of grant.
Generally, options granted to a non-employee director will become exercisable
as to one-third of the shares covered by such options on the first anniversary
of the date of grant, and with respect to an additional one-third of the
shares covered by such options on each of the next two succeeding
anniversaries of the date of grant if the optionee continues to be a director
of the Company on each such date. All options held by non-employee directors,
to the extent exercisable but not exercised, expire on the earlier of (i) the
tenth anniversary of the date of grant or (ii) three years following the
optionee's termination of his or her directorship with the Company. Upon the
occurrence of a "Change in Control" (as defined in the 1993 Plan), all
outstanding options held by non-employee directors will become immediately
exercisable and all restricted stock awards will become immediately
nonforfeitable in full.
Other personal benefit-type compensation for the entire group of directors
and officers is not individually significant or reportable.
The Company has entered into a Deferred Compensation Agreement with Mr. F.
W. Armstrong, pursuant to which receipt of his retainer and attendance fee
amounts is deferred until the year after his 70th birthday or until an earlier
change of control of the Company. Amounts so deferred will bear interest at a
rate equal to the rate paid on ten-year U.S. Treasury Notes, plus 1%. Vesting
of Mr. Armstrong's Restricted Stock is also deferred until the same time, and
is conditioned upon his continuing to serve as a director until such time,
subject to certain exceptions.
INFORMATION CONCERNING INDEPENDENT PUBLIC ACCOUNTANTS
The independent certified public accounting firm of KPMG Peat Marwick LLP
has audited the Company's accounts for the fiscal year ended December 31,
1997. The audit services include examination of annual financial statements
and review of quarterly financial information. A representative of KPMG Peat
Marwick LLP is expected to be present at the meeting, and will have an
opportunity to make a statement and to respond to appropriate questions. The
Board of Directors expects to select the independent certified public
accounting firm for the 1998 fiscal year at its July meeting.
16
TIMELY SUBMISSION OF STOCKHOLDER PROPOSALS
It is anticipated that the 1999 annual meeting of stockholders will be held
on May 10, 1999. Proposals which stockholders intend to present at such
meeting must be received by the Company at its executive offices in West
Paterson, New Jersey, by November 20, 1998, for inclusion in its notice, proxy
statement and proxy relating to that meeting. In addition, the Company's By-
Laws provide that in order for any business not specified in the notice of
meeting to be properly brought before a stockholders' meeting by a
stockholder, the stockholder must have given written notice to the Secretary
of the Company which must be received at the principal office of the Company
not less than 60 nor more than 90 days prior to the meeting. (If less than 75
days notice or public disclosure of the date of the meeting was given, then
such notice must be received by the close of business on the 15th day
following the date of notice or public disclosure of the date of the meeting).
The notice must describe the business desired to be brought before the
meeting, the name, record address and number and class and series of shares
owned by the stockholder and any material interest of the stockholder in such
business.
ATTENDANCE AT ANNUAL MEETING
The 1998 Annual Meeting of Stockholders will be held at 11:00 a.m. on May
11, 1998 at the Sheraton Crossroads Hotel, Crossroads Corporate Center,
Mahwah, NJ 07495. Admission to the meeting is limited to stockholders of the
Company or their designated representatives. One admission ticket to the
meeting is attached to each proxy used. If you intend to attend the meeting,
please detach and retain the admission ticket and check the "will attend" box
on the form of proxy itself to validate the admission ticket. Only ticket-
holders will be admitted to the Annual Meeting.
OTHER MATTERS
The management knows of no further business intended to be presented to the
meeting, but if any further business properly comes before the meeting, the
persons named in the enclosed form of proxy will vote all proxies in
accordance with their best judgment.
E. F. Jackman
Secretary
17
[FORM OF PROXY]
[FRONT] For Edgar Filing Only
CYTEC INDUSTRIES INC.
ANNUAL MEETING OF COMMON STOCKHOLDERS
May 11, 1998
THIS PROXY IS SOLICITED ON BEHALF OF
THE COMPANY'S BOARD OF DIRECTORS
The undersigned hereby appoints D. D. Fry, J. P. Cronin and E. F. Jackman,
and each of them jointly and severally, Proxies with full power of substitution,
to vote as designated on the reverse side and, in their discretion, upon such
other business as may properly come before the meeting, all shares of Common
Stock of Cytec Industries Inc. held of record by the undersigned on March 12,
1998 at the Annual Meeting of Common Stockholders to be held on May 11, 1998 or
any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
TO SERVE AS DIRECTORS. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS
SPECIFIED ON THE REVERSE SIDE. IF NO DIRECTION IS GIVEN IN THE SPACE PROVIDED ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF THE DIRECTORS.
(Continue on reverse side)
[REVERSE OF PROXY]
Please mark [X]
Your votes as
Indicated in
This example.
ELECTION OF DIRECTORS:
FOR WITHHOLD To withhold authority to vote
the election of AUTHORITY for the election of any
D. Lilley, to vote for the individual candidate, write that
W. P. Powell election of Directors person's name on this line.
[_] [_] _______________________________
Will Attend [_]
Annual Meeting
PLEASE MARK, SIGN, DATE AND
RETURN THIS PROXY PROMPTLY
USING THE ENCLOSED ENVELOPE.
SIGNATURE(S)________________SIGNATURE(S)__________________ DATE___________, 1998
Please sign exactly as your name appears hereon. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such. If a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.