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 years ended December 31, 2007, and 2006
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 19 pages, numbered
sequentially, including this cover page. The exhibit index is on page 18.
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, 2007, and 2006 4
Statements of Changes in Net Assets Available for Benefits
For the years ended December 31, 2007, and 2006 5
Notes to Financial Statements 6 - 16
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, 2007 and 2006, 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. 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, 2007 and 2006, 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.
By: /s/ AMPER, POLITZINER & MATTIA, P.C.
------------------------------------
AMPER, POLITZINER & MATTIA, P.C.
June 20, 2008
Bridgewater, New Jersey
3
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31,
-------------------
2007 2006
---- ----
Plan's investment in Master Trust, at fair
value $ 254,954,264 $ -
Investments, at fair value - 479,515,567
Loans to members 3,512,436 5,334,711
Receivables:
Members contributions - 542,280
Company contributions 2,426,803 7,802,262
-------------- --------------
Total receivables 2,426,803 8,344,542
-------------- --------------
Net assets available for benefits at fair
value 260,893,503 493,194,820
-------------- --------------
Adjustment from fair value to contract value
for interest in Master Trust related to
fully benefit-responsive investment contract (626,000) 1,224,000
-------------- --------------
Total net assets available for benefits $ 260,267,503 $ 494,418,820
============== ==============
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
As of December 31,
------------------
2007 2006
---- ----
Additions:
Members contributions $ 19,256,732 $ 18,641,474
Company contributions 9,892,593 15,060,371
Rollover contributions from members 1,036,946 1,160,906
Interest on loans to members 401,575 360,632
Interest and dividends 2,352,302 15,534,745
Net appreciation in fair value of
investments 1,969,315 42,855,041
Plan's interest in Master Trust investment 31,353,786 -
-------------- --------------
Total additions 66,263,249 93,613,169
-------------- --------------
Deductions:
Benefit payments to members 44,298,190 51,282,292
-------------- --------------
Total deductions 44,298,190 51,282,292
-------------- --------------
Net increase prior to transfers 21,965,059 42,330,877
Assets transferred out due to business
divestiture - (20,579,537)
Assets transferred out to Cytec Employees'
Savings Plan due to plan changes (256,116,376) -
-------------- --------------
Net (decrease)/increase (234,151,317) 21,751,340
Net assets available for benefits:
Beginning of year 494,418,820 472,667,480
-------------- --------------
End of year $ 260,267,503 $ 494,418,820
============== ==============
The accompanying notes are an integral part of these statements.
5
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(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 Pronouncements
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. The Plan
invests in investment contracts through the Master Trust. 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. This FSP guidance was adopted for the
year ended December 31, 2006.
In September 2006, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 establishes
a single authoritative definition of fair value, sets out a framework for
measuring fair value, and requires additional disclosures about fair value
measurements. SFAS 157 applies only to fair value measurements that are
already required or permitted by other accounting standards (except for
measurements of share-based payments) and is intended to increase the
consistency of those measurements. Accordingly, SFAS 157 does not require
any new fair value measurements. SFAS 157 is effective January 1, 2008, for
the Plan. The adoption of the statement is expected to have no material
impact on the financial statements of the Cytec Employees' Savings and
Profit Sharing Plan.
6
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(c) Investment Valuation and Income Recognition
As discussed in footnote ("Note") 2(a), the Master Trust Agreement for
Cytec Industries Inc. Savings Plans (the "Master Trust") was established
for the Cytec Employees' Savings and Profit Sharing Plan (the "Plan") and
the Cytec Employees' Savings Plan (the "New Plan") on April 2, 2007.
Investments of the Plan consist of the Plan's interest in the Master
Trust's investments.
Quoted market prices are used to value investments in the Master Trust.
Investments, with the exception of investments in the Vanguard Retirement
Savings Trust as discussed in Note 7(b), are stated at fair value. The fair
value of the Plan's interest in the Master Trust is based on the underlying
fair values of the specific investments held by the Master Trust and
allocated using the Plan's interest in the Master Trust plus actual
contributions and allocated investment income less actual distributions.
The fair value of cash equivalents approximates cost.
The Cytec Stock Fund is valued at its year-end unit closing price. The
year-end unit closing price is comprised of the year-end market price of
shares of Cytec common stock owned by the Cytec Stock Fund, plus a small
amount invested in a money market fund for purposes of liquidity (the money
market fund represents 0.56% and 0.88% of total value of the Cytec Stock
Fund as of December 31, 2007, and 2006, respectively). Loans are valued at
cost which approximates fair value.
Purchases and sales of investments are recorded on a trade-date basis.
Related realized gains and losses on securities transactions are calculated
based upon the average cost of securities sold. 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 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.
7
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(a) Organization (cont'd)
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).
The Company froze certain of its existing U.S. pension plans effective
December 31, 2007 (the "Frozen Date"). In conjunction with this, all
salaried and nonbargaining unit employees who participated in the Plan were
entered into the New Plan on the Frozen Date, on which date the account
balances of these participants were transferred to the New Plan from the
Plan.
Pursuant to the above changes, on April 2, 2007, the Company established
the Master Trust in the custody of Vanguard Fiduciary Trust Company (the
"Trustee"). The Master Trust consists of the assets of Cytec Employees'
Savings and Profit Sharing Plan and Cytec Employees' Savings Plan.
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 in the Plan), 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.
Members may elect to make before-tax contributions which defers federal
income taxes (and, generally, local and/or state income taxes) on their
contributions (subject to IRS limitations) until the withdrawal or
distribution of those contributions from the Plan.
8
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(b) Members' Contributions (cont'd)
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, then
such Member may, within sixty days of receiving a distribution from that
previous employer's plan, transfer such Member's 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 as of such date. Profit sharing contributions
of $7,741,632 and $7,595,686 were made in 2007 and 2006, respectively.
Pursuant to certain plan changes as discussed in Note 2(a), $2,426,803 of
the 2007 total contribution was made to the Plan on behalf of the
participants whose account balances remained in the Plan. The remaining
$5,314,829 of the 2007 profit sharing contribution was made to the New Plan
on behalf of the participants whose account balances were transferred to
the New Plan.
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 as of such
date, generally excluding those Members who are corporate officers. The
additional discretionary profit sharing contribution is allocated based on
each such Member's earnings to the earnings of all such Members. No such
additional discretionary profit sharing contributions were made in 2007 or
2006. 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.
9
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(c) Company Contributions (cont'd)
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 Vanguard Retirement
Savings Trust, unless specified differently by the Member (participant
directed).
The Plan was amended effective May 1, 2004 to provide that the portion of
the Plan invested in the Cytec Stock Fund as of April 30, 2004, was
designated as an employee stock ownership plan ("ESOP"), and that all
Member and Company contributions made to the Plan on or after May 1, 2004,
were made to the ESOP portion of the Plan ("ESOP Account"). Prior to May 1,
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 such Member's
matching account to any other Funds offered under the Plan.
Effective May 1, 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 the
Member's ESOP Account to any other fund offered by the Plan. Each year
thereafter, the Member may annually transfer an additional 20% of the
number of shares of Company Stock credited to such Member's 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 vested Member who attains age 62 may elect
to transfer 100% of the number of shares of Company Stock in such Member's
ESOP Account to one or more other funds. Prior to May 1, 2004, a vested
Member who had attained age 62 could elect to transfer 100% of the value in
such Member's 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.
10
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(d) Vesting
All units representing employee contributions, Company match and profit
sharing contributions, and earnings or losses thereon are fully vested at
all times. Forfeitures are used to reduce company matching contributions.
(e) 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 1/2. Company matching contributions
made before January 1, 2001, and employee after-tax contributions can also
be withdrawn without age limitation.
(f) 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.
(g) Loan Provision
An eligible Member may borrow up to fifty percent of the value of the
Member's 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 with such rate
fixed for the term of the loan at the time the loan is approved. In 2007,
the applicable loan rates ranged from 4.75% to 10.50%; in 2006, 4.00% to
10.50%. No more 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.
11
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(3) Fund Management
Under the terms of a trust agreement, the Master Trust Plan assets are held
and managed by 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 the Trustee,
and thus these transactions qualify as party-in-interest transactions.
(5) Interest in Master Trust
Plan investments are in the Master Trust, which was established for the
investment of assets of the Plan and Cytec Employees' Savings Plan. Each
participating retirement plan has an undivided interest in the Master
Trust. The assets of the Master Trust are held by the Trustee. At December
31, 2007, the Plan's interest in the net assets of the Master Trust was
approximately 50.1%. Investment income or loss related to the Master Trust
is allocated to each plan based upon the individual plan's interest in the
Master Trust. Below are the fair values of investments for the Master Trust
and investment income and related activity of the Master Trust:
For the Initial Period of the Master Trust
Ended December 31, 2007
(April 2, 2007 through December 31, 2007)
-----------------------------------------------------------
Net Realized Interest Total
and Unrealized and Investment
Investments Appreciation Dividends Income
-------------- ---------------- ------------- -------------
Cytec Stock Fund, at fair value $ 133,909,099 $ 12,741,661 $ 13,338 $ 12,754,999
Common/Collective Trust, at fair value 127,773,936 10,665 4,373,416 4,384,081
Mutual Funds, at fair value 247,154,217 3,594,434 10,616,869 14,211,303
-------------- ---------------- ------------- -------------
Total Master Trust 508,837,252 $ 16,346,760 $ 15,003,623 $ 31,350,383
================ ============= =============
Adjustment from fair value to contract value for
fully benefit-responsive investment contracts (965,088)
--------------
Total Master Trust, net $ 507,872,164
==============
12
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(6) Non-Participant Directed Funds
All funds under the Master Trust 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 2(c)).
Additionally, 2007 profit sharing contributions are invested in the
Vanguard Retirement Savings Trust in the event that a Member has not
specified into which fund the contribution should be directed.
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,
------------
2007 (1) 2006
---- ----
Cytec Stock Fund $ 37,747,049 $ 76,213,506
Year Ended
December 31,
------------
2007 (2) 2006
---- ----
Balance at beginning of year $ 76,213,506 $ 67,090,611
Changes in net assets available for benefits:
Contributions 7,794,729 7,924,463
Net appreciation 7,017,111 12,570,598
Benefits paid to participants (4,470,240) (4,656,700)
Transfer to participant directed investments (7,622,313) (6,715,466)
Transfer to Cytec Employees' Savings Plan, at
market value (41,185,744) -
------------- -------------
Balance at end of year $ 37,747,049 $ 76,213,506
============= =============
(1) Cytec Stock Fund investment value for 2007 represents the Plan's
proportional interest in the Master Trust's investment in the Cytec
Stock Fund
(2) Transactions consist of investment activities under the Plan for the
period from January 1 to April 1, 2007, and the Plan's proportional
interest in the Master Trust's investment activities for the period
from April 2, 2007, to December 31, 2007.
13
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(7) Investments
(a) Net Appreciation in Fair Value of Investments
During 2007 and 2006, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year), appreciated
in value as follows:
2007(1) 2006
---- ----
Cytec Stock Fund $ (453,454) $ 24,383,771
Mutual Funds 2,422,769 18,471,270
------------ -------------
$ 1,969,315 $ 42,855,041
============ =============
(1) For the period from January 1, 2007, to April 1, 2007
(b) Vanguard Retirement Savings Trust
In 2006, the Plan invested in the Vanguard Retirement Savings Trust (VRST),
which is a collective investment trust, through the Interest Income Fund.
In 2007, prior to the establishment of the Master Trust, the Plan directly
invested in the VRST. Subsequently, the Plan, through the Master Trust,
invests in the VRST.
The VRST is intended to provide fixed income with minimal risk. 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. Investment in the VRST Master
Trust is valued at the unit value of the VRST. The investment 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.
Investments, at contract value, in the VRST at December 31, 2007, and 2006
were $82,254,822 and $127,916,308, respectively. The average yields were
4.54% and 4.32% for 2007 and 2006, respectively.
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
(Continued)
(8) 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
charged to the Master Trust and subsequently allocated to the Plan.
Investment expenses related to the investment contracts in the Vanguard
Retirement Savings Trust and Interest Income Fund are deducted from the
assets in the fund.
(9) Plan Termination
The Plan has no termination date. Although the Company currently intends to
continue the Plan indefinitely, the Company may terminate, amend, modify or
suspend the Plan at any time.
(10) 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.
(11) 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.
(12) 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.
15
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Notes to Financial Statements
(Continued)
(13) 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.
(14) Plan Changes
In accordance with the plan changes as discussed in Note 2(c), eligible
participant accounts in the amount of $256,116,376 were transferred to the
New Plan from the Plan at December 31, 2007.
16
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/ Marilyn R. Charles
-----------------------
Marilyn R. Charles
Plan Administrator
June 20, 2008
17
EXHIBIT INDEX
-------------
23.1 Consent of Amper, Politziner & Mattia, P.C.
18