UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006 and 2005
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number 1-12372
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Cytec Employees' Savings and Profit Sharing Plan.
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Cytec Industries Inc.
Five Garret Mountain Plaza
West Paterson, New Jersey 07424
This Annual Report, including exhibits, contains 20 pages, numbered
sequentially, including this cover page. The exhibit index is on page 19.
Item 4. Required Information
Page
----
Report of Independent Registered Public Accounting Firm 3
Financial Statements
Statements of Net Assets Available for Benefits
as of December 31, 2006 and 2005 4
Statements of Changes in Net Assets Available for Benefits
For the years ended December 31, 2006 and 2005 5
Notes to Financial Statements 6 - 15
Supplementary Information
Schedule H, Line 4i - Schedule of Assets Held for Investment
Purposes as of December 31, 2006 16
Schedule H, Line 4j - Schedule of 5% Reportable Transactions
for the year ended December 31, 2006 17
2
Report of Independent Registered Public Accounting Firm
To Members and Plan Administrator of
Cytec Employees' Savings and Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits
of Cytec Employees' Savings and Profit Sharing Plan (the "Plan") as of December
31, 2006 and 2005, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. We were not engaged to
perform an audit of the Plan's internal control over financial reporting. An
audit includes consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Plan's internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of Cytec Employees'
Savings and Profit Sharing Plan as of December 31, 2006 and 2005, and the
changes in net assets available for benefits for the years then ended, in
conformity with accounting principles generally accepted in the United States of
America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 2006 and 5% reportable transactions
for the year then ended are presented for the purpose of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
AMPER, POLITZINER & MATTIA, P.C.
June 26, 2007
Bridgewater, New Jersey
3
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31,
------------------
2006 2005
---- ----
Investments, at fair value $ 479,515,567 $ 458,823,139
----------------- -----------------
Loans to members 5,334,711 6,090,205
Receivables:
Members contributions 542,280 1,500,000
Company contributions 7,802,262 4,557,136
----------------- -----------------
Total receivables 8,344,542 6,057,136
----------------- -----------------
Net assets available for benefits at fair value 493,194,820 470,970,480
----------------- -----------------
Adjustment from fair value to contract value for
fully benefit-responsive investment contract 1,224,000 1,697,000
----------------- -----------------
Total net assets available for benefits $ 494,418,820 $ 472,667,480
================= =================
The accompanying Notes are an integral part of these statements.
4
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
Years Ended December 31,
------------------------
2006 2005
---- ----
Additions:
Members contributions $ 18,641,474 $ 18,869,328
Company contributions 15,060,371 11,610,795
Rollover contributions from members 1,160,906 4,322,747
Interest on loans to members 360,632 307,843
Interest and dividends 15,534,745 12,212,788
Net appreciation/(depreciation)
in fair value of investments 42,855,041 (4,417,187)
----------------- -----------------
Total additions 93,613,169 42,906,314
----------------- -----------------
Deductions:
Benefit payments to members 51,282,292 29,765,975
----------------- -----------------
Total deductions 51,282,292 29,765,975
----------------- -----------------
Net increase prior to transfer 42,330,877 13,140,339
Assets transferred out - business divestiture (20,579,537) -
----------------- -----------------
Net increase 21,751,340 13,140,339
Net assets available for benefits:
Beginning of year 472,667,480 459,527,141
----------------- -----------------
End of year $ 494,418,820 $ 472,667,480
================= =================
The accompanying Notes are an integral part of these statements.
5
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(1) Summary of Significant Accounting Policies
------------------------------------------
(a) Basis of Presentation and Accounting Estimates
----------------------------------------------
The accompanying financial statements have been prepared on the accrual
basis in conformity with accounting principles generally accepted in the
United States of America ("GAAP") as applied to defined contribution plans
and in accordance with the terms of the trust agreement. GAAP requires
management to make significant estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent
assets and liabilities as of the date of the financial statements and the
reported amounts of additions and deductions during the reporting periods.
Actual results could materially differ from those estimates.
(b) New Pronouncement
-----------------
As described in Financial Accounting Standards Board Staff Position, FSP
AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment
Contracts Held By certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined Contribution Health and Welfare and
Pension Plans (the FSP), investment contracts held by a defined
contribution plan are required to be reported at fair value. However,
contract value is the relevant measurement attribute for that portion of
the net assets available for benefits of a defined contribution plan
attributable to fully benefit-responsive investment contracts because
contract value is the amount participants would receive if they were to
initiate permitted transactions under the terms of the Plan. As required by
the FSP, the Statement of Net Assets Available for Benefits presents the
fair value of the investment contract as well as the adjustment of the
fully benefit-responsive investment contract from fair value to contract
value. The Statement of Changes in Net Assets Available for Benefits is
prepared on a contract value basis.
The FSP guidance was adopted for the year ended December 31, 2006 and
applied retroactively to 2005. The financial statement presentation for
2005 has been changed to conform to the presentation for 2006.
(c) Investment Valuation and Income Recognition
-------------------------------------------
Investments, with the exception of investments in the Interest Income Fund
as noted in footnote 10(c), are stated at fair value. Shares of mutual
funds are valued at the quoted net asset value of shares held at year-end.
The Cytec Stock Fund is valued at its year-end unit closing price
(comprised of the year-end market price of shares of Cytec common stock
owned by the Cytec Stock Fund plus 0.88% and 0.23% as of December 31, 2006
and 2005, respectively, of cash invested in money market fund assets).
Loans are valued at cost which approximates fair value.
6
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(c) Investment Valuation and Income Recognition (cont'd)
----------------------------------------------------
Purchases and sales of investments are recorded on a trade-date basis.
Interest income is accrued when earned. Dividend income is recorded on the
ex-dividend date. Capital gain distributions are included in dividend
income.
(d) Payment of Benefits
-------------------
Benefit payments are recorded when paid.
(2) Plan Description
----------------
(a) Organization
------------
The Cytec Employees' Savings and Profit Sharing Plan (the "Plan") is a
defined contribution plan and was established effective January 1, 1994 for
the benefit of employees of Cytec Industries Inc. ("Cytec" or "the
Company") and employees of its participating subsidiaries. The following is
some general information regarding the Plan:
The purpose of the Plan is to provide eligible employees with the
opportunity to accumulate personal savings and to share in the growth and
ownership of Cytec through receipt of profit sharing contributions and the
allocations of Cytec common stock. The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974, (as amended).
For a more complete description of the Plan provisions, refer to the
Summary Plan Description and Plan Document.
(b) Members' Contributions
----------------------
Participating employees ("Members") may contribute to the Plan after the
first of the month following their one month anniversary (as defined in the
Plan). Contributions are made through payroll deductions (subject to IRS
limitations) which may range from 1% to 50% of such Member's earnings (as
defined), on a before-tax basis, an after-tax basis or a combination
thereof. Members who are at least age 50 or older during a Plan year may
make an additional "catch-up contribution" equal to a specified dollar
amount on a before tax basis.
An employee, who is covered by a collective bargaining agreement which
allows for participation in the Plan, may be eligible to become a Member.
7
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(b) Members' Contributions (cont'd)
-------------------------------
Members may elect to make before-tax contributions which defers federal
income taxes (and, generally, similar local and/or state income taxes) on
their contributions (subject to IRS limitations) until the withdrawal or
distribution of those contributions from the Plan.
The Plan accepts eligible rollover contributions from Members. If a Member
has been a participant in a plan subject to the provisions of Section 403
(b), 457 or 401(a) of the Internal Revenue Code of 1986, as amended, such
Member may, within sixty days of receiving a distribution from that
previous employer's plan, transfer his or her eligible account balance into
the Plan without tax implications.
(c) Company Contributions
---------------------
To be eligible for a Company matching contribution, a Member must have
completed one year of service, as defined in the Plan.
Matching contributions made by the Company are equal to 100% of such
Members' contributions up to the first 3% of the Members' earnings, and 50%
of Members' contributions up to the next 2% of the Members' earnings. For
purposes of employee contributions and matched contributions, member
earnings are defined by the Plan.
In addition to matching contributions, at the discretion of the Company,
the Company may make a profit sharing contribution equal to a percentage of
each Member's earnings and the percentage is determined by a defined
formula based on the percentage growth in the Company's earnings per share.
To be eligible for a profit sharing contribution, the Member must have been
an active employee on December 31 of the respective Plan year and completed
at least one year of service. Profit sharing contributions of $7,595,686
and $3,904,828 were made in 2006 and 2005, respectively. The Company can
also make an additional discretionary profit sharing contribution to
Members who are employed on December 31 of the respective Plan year and who
have completed at least one year of service, generally excluding those
Members who are corporate officers. The additional discretionary profit
sharing contribution is allocated based on each such Members' earnings to
the earnings of all such Members. No such additional discretionary profit
sharing contributions were made in 2006 or 2005. Profit sharing
contributions are recorded by the Plan in the year such contributions are
earned, and are credited to the accounts of Members in the early part of
the following year. For purposes of each profit sharing contribution,
member earnings are the annualized base pay on September 1 in the year for
which the contribution is being made.
All Company matching contributions for Members are invested in the Cytec
Stock Fund, which invests in the common stock of Cytec Industries Inc.
Profit sharing contributions are invested in the Interest Income Fund,
unless specified differently by the Member, (participant directed).
8
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(c) Company Contributions (cont'd)
------------------------------
The Plan was amended effective May 4, 2004 to designate the portion of the
Plan invested in the Cytec Stock Fund as of May 3, 2004, and all subsequent
contributions made thereto, as an employee stock ownership plan ("ESOP").
The portion of the Members account invested in the Cytec Stock Fund plus
all contributions made thereafter are held in the ESOP Account ("ESOP
Account"). Prior to May 4, 2004, a Member who had attained age 55 could
only elect to transfer up to 20% of the number of shares of Company Stock
credited to his matching account to any other Funds offered under the Plan.
Effective May 4, 2004, a Member who has attained the age of 55 may elect to
transfer up to 25% of the number of shares of Company Stock credited to his
ESOP Account to any other fund offered by the Plan. Each year thereafter,
the Member may annually transfer an additional 25% of the number of shares
of Company Stock credited to his ESOP Account to any other Funds offered
under the Plan.
If a Member who is eligible to make this diversification election decides
not to transfer, or to transfer less than the maximum percentage available
for transfer in any particular calendar year, the amount which the Member
can transfer in the following calendar year shall be increased by the
percentage of the transfer foregone in the previous year.
Notwithstanding the foregoing, a Member who attains age 60 may elect to
transfer 100% of the number of shares of Company Stock in his ESOP Account
to one or more other funds. Prior to May 4, 2004, a Member who had attained
age 62 could elect to transfer 100% of the value in his matching account to
one or more other funds. Members have the option to re-invest cash
dividends on ESOP assets or to have the cash dividends distributed. If no
election is made, cash dividends are re-invested.
The Pension Protection Act of 2006 mandates that employers provide
retirement plan participants with greater flexibility for investing in
company stock, for selling it and for investing the proceeds from the sale
of company stock in other assets. Effective January 1, 2007, the plan was
amended to allow participants with three or more years of service to
immediately diversify the portion of their accounts that are invested in
company stock obtained as a result of employer matching contributions made
on or after January 1, 2007. For matching employer contributions made in
company stock prior to January 1, 2007, participants with three years of
service may diversify up to 33% of such stock fund balances in 2007, up to
66% in 2008, and 100% in 2009 and thereafter.
(d) Rollover Contributions
----------------------
On February 28, 2005, the Company completed the acquisition of the Surface
Specialties business ("Surface Specialties") of UCB SA ("UCB"). Eligible
former Surface Specialties employees had the option to rollover their
account balances with UCB's retirement savings plan and participate in the
Company's Plan. In 2005, $4,322,747 rollover contributions were made,
$3,140,547 of which were attributable to the rollover contributions made by
former Surface Specialties employees. $ 1,160,906 rollover contributions
were made in 2006.
9
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(e) Vesting
-------
All units representing employee contributions, Company match and profit
sharing contributions, and earnings or losses thereon are fully vested at
all times.
(f) Withdrawals
-----------
During employment, a Member may make withdrawals in cash (or common stock
of the Company in the case of withdrawals from the Cytec Stock Fund) of
amounts applicable to employee and employer contributions and earnings or
losses thereon, subject to certain restrictions. A Member can make hardship
withdrawals of employee before-tax contributions which will preclude the
Member from making additional employee before-tax contributions to the Plan
for a six-month period. Employee before-tax contributions and matching
contributions can be withdrawn after attainment of age 59 1/1/2. Company
matching contributions made before January 1, 2001 and employee after-tax
contributions can also be withdrawn.
(g) Benefit Payments
----------------
A Member's account balance under the Plan may be distributed in any one of
two ways: lump-sum distribution, or in monthly installments over a period
of 60, 120, 180, 240, 300, or 360 months, as elected (subject to limits
imposed by the Internal Revenue Code).
Minimum distributions are required to begin by April 1 of the calendar year
following the later of:
o The calendar year in which the Member attains 70 1/2 years of age; or
o The calendar year in which the Member terminates employment from the
Company.
(h) Loan Provision
--------------
An eligible Member may borrow up to fifty percent of the value of his
before-tax and after-tax account balance, subject to a minimum of $1,000
and a maximum of $50,000 reduced by the highest loan balance outstanding
during the prior twelve months. Loans for the purchase of a "principal
residence" must be repaid in one to fifteen years, at the Member's option.
Loans for all other purposes must be repaid in one to five years, at the
Member's option. These loans are made at the prevailing market interest
rates equal to prime rate plus one percent. In both 2006 and 2005, the
applicable loan rates ranged from 4.00% to 10.50%. No more
10
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(h) Loan Provisions (cont'd)
------------------------
than one loan from the Plan to a Member shall be permitted at any time. All
principal and interest payments made by the Member are credited back to the
Member's account.
(3) Fund Management
---------------
Under the terms of a trust agreement the Plan assets are held and managed
by the Vanguard Fiduciary Trust Company (the "Trustee"), which has full
discretionary power over investments in the Funds subject to the
limitations thereon imposed by the investment objectives of the various
funds and the provisions of the Employee Retirement Income Security Act of
1974, (as amended).
The Plan Administrator, who is an officer of the Company and the Named
Fiduciary, has full authority to control and manage the operation and
administration of the Plan.
(4) Party-in-Interest Transactions
------------------------------
The Plan invests in mutual funds managed by an affiliate of Vanguard
Fiduciary Trust Company. Vanguard Fiduciary Trust Company is a trustee and
thus transactions qualify as party-in-interest transactions.
(5) Non-Participant Directed Funds
------------------------------
All funds are Member directed with the exception of Cytec matching
contributions which are solely invested in, and remain in, the Cytec Stock
Fund; provided, however, those Members who are at least age 55 may elect an
investment change with regards to their ESOP account (which includes all
matching contributions), subject to certain restrictions (see Note 2c).
Additionally, profit sharing contributions are invested in a Member's
Interest Income Fund in the event that Member has not specified into which
fund the contribution should be directed.
11
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(5) Non-Participant Directed Funds (cont'd)
---------------------------------------
Information about the net assets and the significant components of the
changes in net assets relating to the nonparticipant-directed investments
is as follows:
Year Ended
December 31,
------------
2006 2005
---- ----
Cytec Stock Fund $ 76,213,506 $ 67,090,611
Year Ended
December 31,
------------
2006 2005
---- ----
Balance at beginning of year $ 67,090,611 $ 68,231,598
Changes in net assets available for benefits:
Contributions 7,924,463 7,660,682
Net appreciation/(depreciation) 12,570,598 (4,904,467)
Benefits paid to participants (4,656,700) (3,382,263)
Transfer to participant directed investments (6,715,466) (514,939)
----------------- -----------------
Balance at end of year $ 76,213,506 $ 67,090,611
================= =================
(6) Plan Expenses
-------------
Administrative expenses of the Plan are currently paid by the Company.
However, the Company has the right to charge future expenses to the Trust.
Investment advisory fees for portfolio management of Vanguard funds are
paid directly from fund earnings. Investment expenses related to the
investment contracts in the Interest Income Fund are deducted from the
assets in the fund.
(7) Plan Termination
----------------
The Plan has no termination date and it is the Company's current intention
to continue the Plan indefinitely. However, the Company may terminate,
amend, modify or suspend the Plan at any time.
12
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(8) Tax Status of the Plan
----------------------
The Internal Revenue Service issued a determination letter on May 20, 2004
which stated that the Plan and its underlying Trust qualify under the
provisions of Section 401(a) of the Internal Revenue Code and therefore,
are exempt from federal income taxes under provisions of Section 501(a) of
the Internal Revenue Code. The Plan has been amended since receiving the
determination letter, however the Company believes that the Plan is
designed and is currently being operated in compliance with applicable
requirements of the Internal Revenue Code.
(9) Risks and Uncertainties
-----------------------
The Plan provides for investments in various investment securities, which
in general, investment securities are exposed to various risks, such as
interest rate, credit, and overall market volatility risks. Due to the
level of risk associated with certain investment securities, it is
reasonably possible that changes in the value of investment securities will
occur in the near term and that such changes could materially affect the
amounts reported in the statements of net assets available for benefits and
participant account balances.
(10) Investments
(a) Investment Holdings
-------------------
The Plan's investments, which exceed 5% of net assets available for
Plan benefits, consisted of the following at December 31:
2006 2005
---- ----
Cytec Stock Fund* $ 136,044,166 $ 136,132,263
Interest Income Fund (contract value) 127,916,308 128,160,230
Vanguard Balanced Index Fund 33,341,397 31,995,288
Vanguard 500 Index Fund 81,582,887 79,001,375
Vanguard Explorer Fund 25,925,096 24,692,561
* Includes participant and non-participant directed funds.
13
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(b) Net Appreciation (Depreciation) in Fair Value of Investments
------------------------------------------------------------
During 2006 and 2005, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year), appreciated
(depreciated) in value as follows:
2006 2005
---- ----
Cytec Stock Fund $ 24,383,771 $ (10,069,717)
Mutual Funds 18,471,270 5,652,530
----------------- -----------------
$ 42,855,041 $ (4,417,187)
================= =================
(c) Interest Income Fund
--------------------
The Interest Income Fund (The Fund) is intended to provide fixed income
with minimal risk. The Fund invests primarily in the Vanguard Retirement
Savings Trust (VRST) which is a collective investment trust. The VRST
invests solely in the Vanguard Retirement Savings Master Trust, which
invests primarily in a pool of investment contracts issued by insurance
companies and commercial banks, and in contracts backed by high quality
bonds, bond trusts and bond mutual funds. The Fund's investment in the VRST
Master Trust is valued at the unit value of the VRST. The Fund is a fully
benefit-responsive investment, and therefore valued at fair value with an
adjustment to contract value as required by the new disclosure guideline
(refer to the previous New Pronouncement section). Contract value
represents contributions made plus interest accrued at the respective
contract rate, less withdrawals. The underlying contracts are
nontransferable, but provide for benefit responsive withdrawals.
The average yield was 4.32% and 4.05% for 2006 and 2005, respectively. The
credited interest rate was 4.38% and 4.05% for 2006 and 2005, respectively.
Investments, at contract value, in the Interest Income Fund at December 31,
2006 and 2005 were:
2006 2005
---- ----
Vanguard Federal Money Market $ - $ 144,165
Vanguard Retirement Savings Trust 127,916,308 128,016,065
----------------- -----------------
127,916,308 128,160,230
================= =================
Events that limit the ability of the VRST to transact at contract value
with the issuer include premature termination of the contracts by the VRST,
plant closings, layoffs, plan termination, bankruptcy, mergers and early
retirement incentives. The Company does not believe that the occurrence of
any such event which would limit the Plan's ability to transact at contract
value with participants is probable.
14
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
December 31, 2006 and 2005
(Continued)
(11) Mutual Fund Fees
----------------
Underlying investments in mutual funds are subject to sales charges in the
form of front-end loads, back-end loads or 12b-1 fees, which are allowable
under Section 12b-1 of the Investment Company Act of 1940 and which may be
deducted annually to pay marketing and distribution costs of mutual funds.
These fees are deducted prior to the allocation of the Plan's investment
earnings activity and thus not separately identifiable as an expense.
(12) Business Divestiture
--------------------
In July 2006, Cytec announced a definitive agreement to sell its water
treatment chemicals and acrylamide product lines to Kemira Group
("Kemira"). In October 2006, the Company completed the first of the three
phases of the closing. Kemira offered employment to employees who were
involved in the product lines that were transferred. In accordance with
this transaction, participant accounts in the amount of $20,579,537 were
transferred to a savings plan sponsored by Kemira.
(13) Subsequent Event
----------------
In March 2007, Cytec announced its intent to freeze certain of its U.S.
pension plans effective December 31, 2007 (the "Frozen Date"). In
conjunction, the Company plans to freeze participation of salaried and
nonbargaining employees in the Plan (the "Existing Savings Plan") on the
Frozen Date.
Cytec anticipates that it will offer all U.S. salaried and nonbargaining
unit employees the opportunity to participate in an enhanced savings plan
(the "New Savings Plan") effective on the Frozen Date. The Company
anticipates that the New Savings Plan will provide for Company
contributions of 3% of annual pay and additional matching contributions of
up to 6% of annual pay.
The New Savings Plan will also provide for a ten year transition benefit
ranging from 1.0% to 10% of an employee's annual pay per year for all
employees with more than 10 years of service at the Frozen Date. The
transition benefit is intended to compensate long service employees for a
limited period for the loss of the accrual of future benefits under the
Company's defined benefit pension plans.
15
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Schedule H, Line 4 (i)
Schedule of Assets Held for Investment Purposes
As of December 31, 2006
Description of
Identity of issuer, borrower, lessor, or similar party investment Cost Fair Value
------------------------------------------------------ ---------- ---- ----------
Vanguard 500 Index Fund (1) Mutual fund (3) $ 81,582,887
Vanguard Balanced Index Fund (1) Mutual fund (3) 33,341,397
Vanguard Explorer Fund (1) Mutual fund (3) 25,925,096
Vanguard International Growth Fund (1) Mutual fund (3) 21,135,065
Vanguard LifeStrategy Conservative Growth Fund (1) Mutual fund (3) 8,916,921
Vanguard LifeStrategy Growth Fund (1) Mutual fund (3) 20,172,805
Vanguard Prime Money Market (1) Money market fund (3) 59,387
Vanguard PRIMECAP Fund (1) Mutual fund (3) 18,323,530
Vanguard Total Bond Market Index Fund (1) Mutual fund (3) 7,322,005
Cytec Stock Fund (4) $ 75,116,653 136,044,166
Loan Fund (2) Participant loans (3) 5,334,711
Interest Income Fund (5) Collective investment trust (3) 127,916,308
-----------
$ 486,074,278
===========
(1) Party-in-interest
(2) Rates ranged from 4.0% to 10.5% for loans outstanding during 2006.
(3) Cost of participant-directed investments is not required.
(4) Party-in-interest and includes both participant and non-participant
directed funds.
(5) Party-in-interest and invests 100% in the Vanguard Retirement Savings
Master Trust
See Accompanying Report of Independent Registered Public Accounting Firm
16
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN Schedule H, Line 4 (j)
Schedule of 5% Reportable Transactions
For the Year Ended December 31, 2006
Identity of Party Involved Description of Assets Purchase Price Selling Price Cost of Assets Net Gain or (Loss)
-------------------------- --------------------- -------------- ------------- -------------- ------------------
The Vanguard Group Cytec Stock Fund 20,830,476 N/A N/A N/A
The Vanguard Group Cytec Stock Fund N/A 45,302,343 28,204,480 17,097,863
See Accompanying Report of Independent Registered Public Accounting Firm
17
Signature
---------
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Cytec Employees' Savings and Profit Sharing Plan
By: /s/ Joseph E. Marosits
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Joseph E. Marosits
Plan Administrator
June 26, 2007
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EXHIBIT INDEX
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23.1 Consent of Amper, Politziner & Mattia, P.C.
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