Exhibit 10.13(f)
As Amended and Restated 4/9/98
RULES OF GENERAL APPLICATION UNDER
THE CYTEC INDUSTRIES INC. 1993
STOCK AWARD AND INCENTIVE PLAN
Rule 3. This Rule applies to Performance Stock Awards and related Performance
Cash Awards granted by the Compensation and Management Development Committee
(the "Committee") with respect to the 1998, 1999 and 2000 Performance Periods to
persons (as listed on Exhibits A and B to a separate document entitled "Award
Targets Non-Officers", such separate document being hereinafter called the
"Target Document") who are not, as of the date of grant, Executive Officers of
the Corporation. This rule is adopted by the Executive Committee pursuant to
Paragraph (f) of Rule No. 1 under the Plan.
(a) Definitions. As used in this Rule, the following terms shall have the
following respective meanings:
(i) "EBIT" means, with respect to any business unit for any fiscal year
constituting a Performance Period, the earnings before interest and taxes of
such business unit, determined on a basis consistent with the accounting
principles used in determining EBIT in the Corporation's audited financial
statements for such year; provided, that in the event of an acquisition by a
business unit of another company or business, pro forma financing charges as
determined by the Executive Committee, representing a financing charge for the
purchase price, will be subtracted from the business unit's actual EBIT in
determining EBIT for purposes of the Target Document; provided, further, that
the setting of new EBIT targets will not be affected by such financing charges.
(ii) "Performance Period" means January 1-December 31, 1998, January 1-December
31, 1999, or January 1-December 31, 2000, as the context requires.
(iii) "Plan" means the 1993 Stock Award and Incentive Plan of the Corporation,
as amended.
(iv) Terms defined in the Plan and used, but not defined, in this rule shall
have the respective meanings ascribed thereto in the Plan.
(b) Staff Personnel. Set forth on Exhibit A to the Target Document are the
names of certain Participants who have been granted Performance Stock Awards and
Performance Cash Awards. Subject to Paragraph (d) below ("Right to Change
Targets") and subject to Paragraph (e) below ("Deferred Stock Awards"), and
subject to the terms of the Performance Stock Award and Performance Cash Award
Grant Letters, lapsing of the restrictions on the Performance Stock Awards and
payment of the cash provided for in
the related Performance Cash Awards for the 1998, 1999 and 2000 Performance
Periods for these Participants, as applicable, shall be governed, as to 100% of
such Awards, by the targets established under Rule No. 1 under the Plan, as
adopted by the Committee ("Rule No. 1"), such targets being adopted by the
Executive Committee for purposes of this Rule and incorporated herein by
reference.
(c) Business Group Personnel. Set forth on Exhibit B to the Target Document are
the names and business units of certain other Participants who have been granted
Performance Stock Awards and Performance Cash Awards. As to these Participants,
Performance Stock Awards and related Performance Cash Awards for the 1998, 1999
and 2000 Performance Periods shall each be divided into two portions: the "30%
Portion," consisting of 30% of each Award (rounded up to the nearest whole
dollar or the nearest whole share, as the case may be), and the "70% Portion,"
consisting of the remaining portion of each such Award. Subject to Paragraph
(d) below ("Right to Change Targets") and subject to Paragraph (e) below
("Deferred Stock Awards"), and subject to the terms of the Performance Stock
Award and Performance Cash Award Grant Letters:
(i) Payout Targets - 30% Portion. Lapsing of the restrictions on the 30%
Portion of these Performance Stock Awards and payment of the cash provided for
in the related 30% Portion of the Performance Cash Awards shall be governed by
the targets established under Rule No. 1, which are incorporated herein by
reference; and
(ii) Payout Targets - 70% Portion. Lapsing of restrictions on the 70% Portion
of these Performance Stock Awards and payment of the cash provided for in the
related 70% Portion of the Performance Cash Awards shall occur if and to the
extent that the respective business unit EBIT targets set forth on Exhibit B to
the Target Document are met. If business unit EBIT is, in any fiscal year,
greater than any applicable minimum amount shown on Exhibit B to the Target
Document for such fiscal year, and less than the applicable maximum amount,
then, in the case of the 70% Portion for a Participant named on such Exhibit B,
the actual number of shares of Common Stock that shall vest, and the actual
payout on the Performance Cash Award, shall be pro-rated. Any resulting
fractional shares that vest shall be rounded up to the nearest whole share. The
amount payable in respect of any Performance Cash Award shall be paid as soon as
practicable after determination that the Award is payable.
(d) Right to Change Targets. The Executive Committee (or, in the case of any
Grantee who subsequently becomes an Executive Officer of the Corporation, the
Committee) reserves the right from time to time in its sole discretion to change
the EBIT, EPS and Cash Flow Targets set forth in the Target Document, or
incorporated herein by reference, to take into account developments in the
Corporation's business, or in the business of any one or more business units,
and/or to take into account changes in the structure of any business unit or of
any Participant's responsibilities which were not fully contemplated at the time
the targets were set or last revised; provided that any such change must be made
at or prior to the end of the Performance Period to which the target relates.
(e) Deferred Stock Awards. (i) If, as of the date on which any Performance
Stock Award
is to vest, any Participant's compensation for such year is such that it would
exceed the maximum amount which is deductible by the Corporation under Section
162(m) of the Internal Revenue Code, the number of shares constituting such
Performance Stock Award, to the extent of such excess amount, shall be forfeited
and the Participant will be issued a Deferred Stock Award as defined in Section
6(h) of the Plan, equal to the number of shares so forfeited. Such Deferred
Stock Award shall accrue Dividend Equivalents which will be deferred in the form
of additional Deferred Stock Awards based on the Closing Price of the
Corporation's Common Stock in the New York Stock Exchange Consolidated Tape on
the date on which the related dividend is paid on the Corporation's Common
Stock.
(ii) The Committee may, prior to the beginning of the Performance Period with
respect to a Performance Stock Award (or during such Performance Period, with
respect to a Performance Stock Award granted during such Performance Period or
not more than one month prior thereto), offer a Participant who has been granted
such an award the opportunity to elect to defer all or a specified portion of
such award in the form of a Deferred Stock Award. If a Participant elects
deferral in accordance with the procedures established by the Committee, then,
effective as of the date on which the related award of Performance Stock is to
vest, the total award (or such lesser percentage of such total award as shall
have been elected by the Participant and accepted by the Committee) shall be
forfeited, and the Participant will be issued instead a Deferred Stock Award, as
defined in Section 6(h) of the Plan, equal to the number of shares of
Performance Stock so forfeited. Such Deferred Stock Award shall accrue Dividend
Equivalents which will be deferred in the form of additional Deferred Stock
based on the Closing Price of the Corporation's Common Stock in the New York
Stock Exchange Consolidated Tape on the date on which the related dividend is
paid on the Corporation's Common Stock. In the event that the Participant
qualifies for a Deferred Stock Award under either this sub-paragraph or under
sub-paragraph (e)(i) of this Rule No. 3, the Deferred Stock Award provided for
under this sub-paragraph shall be granted first, before any Deferred Stock Award
shall be granted under said sub-paragraph (e)(i).
(iii) Deferred Stock resulting from deferral of Dividend Equivalents will
likewise bear Dividend Equivalents.
(f) Performance Cash Awards.
(i) As provided in the Target Document, under certain circumstances the amount
of Performance Cash that vests may exceed the nominal amount of the award, as
set forth in the Grant Letter. Beginning with the Year 2000 Performance Period,
the nominal percentage of Performance Cash that vests, as set forth in the
Target Document, is multiplied by the applicable Market Value index set forth in
the target document established under Rule No. 1 in order to determine the
actual amount of Performance Cash that vests.
(ii) In the case of a "Change in Control," the amount of a Performance Cash
Award that vests in respect of any Performance Period for which a greater than
100% payout is
possible is as follows: the full potential amount of the Award (i.e. the Award
at the 200% payout level) is deemed to be the size of the Award, and shall be
multiplied by the applicable Market Value index (determined as provided in Rule
No. 1) in order to determine the amount of Performance Cash that so vests.
(g) Committee Approval. The targets set forth herein and in the Target
Document, to the extent not previously reported to the Committee, will be
reported to the Committee and, pursuant to Paragraph (f) of Rule No. 1, will be
deemed approved and ratified by such Committee. Changes made to targets (see
paragraph (d) above) may be so reported after the close of the Performance
Period without affecting the validity of any change.
(h) Additional Bonuses. The foregoing long-term incentive awards are not
intended to be exclusive, and the Corporation may grant any other additional
forms of compensation, including but not limited to annual incentive
compensation, stock options, special recognition awards, stock appreciation
rights or any other form of compensation whatsoever.