Cytec Industries Inc. David Lilley
Five Garret Mountain Plaza Chairman of the Board,
West Paterson, NJ 07424 President and
Chief Executive Officer
March 13, 2008
Ms. M. Regina Charles
102 St. Andrews Drive
Avondale, PA 19311
Dear Regina,
We are very pleased to confirm to you our offer for the position of Vice
President of Human Resources for Cytec Industries Inc. This position will report
directly to the Chairman and CEO of the company, and will be based at our
corporate headquarters in West Paterson, New Jersey. In addition, you will
become a member of the Cytec Executive Leadership team and we look forward to
your contributions as we seek to continue the growth of Cytec and reward our
shareholders for their investment.
On joining Cytec, it is expected that the full Board will elect you as an
officer of the company. As we discussed, it is anticipated that your starting
date will be in the middle of April.
The specific terms of our offer are as follows:
|X| An annual salary of $310,000. You will be eligible for annual salary
adjustments and you will be considered by the Compensation Committee of
the Board of Directors for the first adjustment in January 2009.
|X| An annual target incentive bonus of 50% of your earned salary; the payout
range is 0-200% of target. The criteria adopted to determine payouts are
EPS (60%) and major missions (40%) and we will be pleased to share the
specific information on major missions with you when you join Cytec.
However, I would like to highlight that these measures are the same for
all the executive participants, including the CEO, as we seek to have full
alignment on our objectives and financial measures. For 2008, your payout
will be prorated for your time in the position, but will be guaranteed to
be a minimum of $125,000 and the payment will be made in the first quarter
of 2009.
|X| An initial award of 10,000 stock settled stock appreciation rights (SARs)
with a ten year term. The exercise price will be the closing price of the
stock on your first day of employment. One third of these SARs will vest
each year on the first three anniversaries of your date of employment.
|X| A special restricted stock grant equal to 3,000 shares, 50% of which will
vest after twelve months and the remainder after 24 months. No dividends
will be paid on this stock until it vests.
|X| As part of the Cytec Executive Long Tem Incentive Plan, we have a rolling
three year Performance Cash/Stock program. Goals are set three years out
for EPS and ROIC measures. For example, the 2008 goals were set at the end
of 2005, and recently the Compensation Committee set the 2010 goals. There
is a payout range of 0-200% depending on the Company's performance against
these pre-established goals for the respective performance period.
You will be eligible for this program as follows:
$50,000 for the 2008 performance period
$150,000 for the 2009 performance period
$150,000 for the 2010 performance period
We will share the specific goals with you when you join and they are the
same for all executives in the program.
|X| We anticipate that going forward you will also receive annual awards of
long term incentive compensation under our executive compensation program.
These awards typically consist of annual grants of SARs and performance
cash/stock and are typically made by the Compensation and Management
Development Committee at its first meeting each calendar year. The target
level awards for your position in January 2008 were 15,000 SARs and
$150,000 of performance cash/stock.
|X| Participation in the Executive Income Continuity plan which includes full
vesting of restricted stock and stock appreciation rights in the event of
a change of control. In addition it provides for a one year pay and bonus
termination benefit if employment is terminated by the company without
"Cause" and three year's pay and bonus termination benefit if employment
is terminated after a change in control. We enclose a copy of the policy.
|X| Participation in Ayco's Financial /Tax preparation services program as you
may require.
|X| You are eligible for the Cytec employee relocation policy which includes
assistance in selling your existing house through a potential company
sponsored purchase. We understand that you may choose to have two
residences for a while so this aspect will remain available to you for two
years after you join Cytec. You will require 3 months of temporary
accommodation in the NJ area and this will be at Cytec expense.
|X| As of one month of hire, you will be eligible to participate in the
employee benefits program including medical, dental, life insurance,
vision care and defined contribution plan. The company match in the
defined contribution plan begins after one month in accordance with the
plan terms, and we enclose a brochure giving details on the various plans.
|X| You will have 20 days of vacation annually.
As a senior executive, you are expected to meet Cytec stock ownership guidelines
reflecting both the confidence we have in Cytec and our continuing commitment to
enhance shareholder value. The guideline for your position is that within 5
years, you will have beneficial stock ownership equivalent to 3 years salary.
This requirement should be met before you sell any Cytec stock or exercise stock
appreciation rights for cash. You can utilize the defined contribution plan to
build up your stock holding and also convert performance cash to deferred stock.
Information on our executive compensation philosophy, programs and practices are
set forth in the Compensation Discussion and Analysis section of our 2008 Proxy
Statement, a copy of which is enclosed. Needless to say, the Compensation and
Management Development Committee can change the executive compensation program
at any time.
In accordance with company policy, this offer is contingent upon you signing our
standard employment agreement, a copy of which is enclosed. In order to maintain
a drug free work environment for its employees, it is the policy of Cytec
Industries and its subsidiaries that abusers of drugs will not be hired. We ask
that you attend an examination to test a urine sample for the presence of drugs.
If the result of this test is positive, you will not be offered employment. If
you are taking drugs under a doctor's prescription, it is very important that
you notify the examining physician. The drug test is taken at our expense and
may be taken at any time after accepting our offer and prior to beginning work
at Cytec. We will send you guidance shortly that will enable you to take the
test. In addition, this offer is contingent upon receiving satisfactory
employment references.
Please respond in writing acknowledging that the above terms are agreeable.
All of us who met you are very excited about your joining us at Cytec. We feel
that you can make a tremendous contribution to Cytec through raising the
professional standards of the Human Resource function as well as being totally
engaged in our strategic and operational initiatives. I also believe that you
will enjoy the challenges that the position offers and the success that you can
create. Should you have any questions about this offer, please feel free to
contact me at 973 357 3315.
Yours sincerely.
/s/ David Lilley
Accepted /s/ Marilyn R. Charles Date: March 14, 2008
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