<PAGE>
Form 11-K - For Annual Reports of
Employee Stock Purchase, Savings and
Similar Plans Pursuant to Section 15(d)
of the Securities Exchange Act of 1934
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 [FEE REQUIRED]
For the fiscal year end December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition 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 22 pages, numbered
sequentially, including this cover page. The exhibit index is on page 21.
(1)
<PAGE>
Item 4.
Financial Statements and Exhibits
Independent Auditors' Report
Financial Statements
Statements of Net Assets as of December 31, 1996 and 1995
Statements of Changes in Net Assets for the
years ended December 31, 1996 and 1995
Notes to financial statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment
Purposes at December 31, 1996
Item 27d - Schedule of 5% Reportable Transactions for the
year ended December 31, 1996
(2)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Financial Statements and Schedules
December 31, 1996 and 1995
(With Independent Auditors' Report thereon)
(3)
<PAGE>
Independent Auditors' Report
Plan Administrator
Cytec Employees' Savings and Profit Sharing Plan:
We have audited the accompanying statements of net assets of the Cytec
Employees' Savings and Profit Sharing Plan as of December 31, 1996 and 1995 and
the related statements of changes in net assets 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit 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 of the Cytec Employees' Savings and Profit
Sharing Plan as of December 31, 1996 and 1995, and the changes in net assets for
the years then ended in conformity with generally accepted accounting
principles.
Our audit was performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Schedule of Assets Held For
Investment Purposes at December 31, 1996 and Schedule of 5% Reportable
Transactions for year ended December 31, 1996 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 Fund Information in the statements
of net assets and the statements of changes in net assets is presented for
purposes of additional analysis rather than to present the net assets and
changes in net assets of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in the audits
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.
KPMG Peat Marwick LLP
Short Hills, New Jersey
June 13, 1997
(4)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Statement of Net Assets
December 31, 1996
<TABLE>
<CAPTION>
Vanguard
Vanguard LIFEStrategy
Vanguard LIFEStrategy Portfolios' Vanguard
Cytec Interest International Portfolios' Conservative Balanced
Stock Income Growth Growth Growth Index
Fund Fund Portfolio Portfolio Portfolio Fund
---------------- ------------- --------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Marketable
Investments
at Fair Value $166,819,765 $78,410,140 1,907,489 2,355,503 480,855 22,190,805
------------ ---------- --------- --------- ------- ----------
Loans to Members - - - - - -
------------ ---------- --------- --------- ------- ----------
Receivables:
Company Cont. 1,898,024 4,506,934 73,731 79,867 23,458 288,954
Members Cont. 265,593 362,021 13,519 13,629 3,600 128,308
Loans to Members 32,107 44,429 948 1,537 14,040 14,040
------------ ---------- --------- --------- ------- ----------
Total Receivables 2,195,724 4,913,384 88,198 95,033 41,098 431,302
Total Net Assets $169,015,489 83,323,524 1,995,687 2,450,536 521,953 22,622,107
============ ========== ========= ========= ======= ==========
</TABLE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Vanguard
Vanguard VMMR Vanguard Total Bond Total
Explorer Prime Index 500 Market Loan (including
Fund Portfolio Portfolio Portfolio Fund table above)
----------- --------- ---------- ----------- --------- ------------
<S> <C> <C> <C> <C> <C>
Marketable
Investments
at Fair Value 1,951,744 57,534 31,232,537 - - $305,406,372
--------- ------ ---------- ---------- --------- ------------
Loans to Members - - - - 3,650,747 3,650,747
--------- ------ ---------- ---------- --------- ------------
Receivables:
Company Cont. 106,515 - 918,123 - - 7,895,606
Members Cont. 20,763 - 213,641 - - 1,021,074
Loans to Members 1,571 - 19,509 - 114,372 242,553
--------- ------ ---------- ---------- --------- ------------
Total Receivables 128,849 - 1,151,273 - 114,372 9,159,233
Total Net Assets 2,080,593 57,534 32,383,810 - 3,765,119 $318,216,352
========= ====== ========== ========== ========= ============
</TABLE>
See accompanying notes to financial statements.
(5)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Statement of Net Assets
December 31, 1995
<TABLE>
<CAPTION>
Vanguard
Cytec Frozen Interest Balanced VMMR
Stock Stock Income Index Prime
Fund Fund Fund Fund Portfolio
----------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Marketable Investments
at Fair Value $87,400,087 - 68,349,053 21,040,895 35,409
----------- --------- ---------- ---------- -------
Loans to Members - - - - -
----------- --------- ---------- ---------- -------
Receivables:
Company Contributions 1,195,542 - 3,892,579 178,538 (7,531)
Member Contributions 185,138 - 427,713 150,950 -
Loans to Members 13,538 - 46,348 15,410 -
----------- --------- ---------- ---------- -------
Total Receivables 1,394,218 - 4,366,640 344,898 (7,531)
Total Net Assets $88,794,305 - 72,715,693 21,385,793 27,878
=========== ========= ========== ========== ========
</TABLE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Vanguard
Vanguard Total Bond Total
Index 500 Market Loan (including
Portfolio Portfolio Fund table above)
---------- ----------- --------- ------------
<S> <C> <C> <C> <C>
Marketable Investments
at Fair Value 21,735,910 2,763,697 - $201,325,051
---------- --------- --------- ------------
Loans to Members - - 2,976,030 2,976,030
---------- --------- --------- ------------
Receivables:
Company Contributions 541,394 41,173 - 5,841,695
Member Contributions 185,802 20,234 - 969,837
Loans to Members 8,099 1,109 119,113 203,617
---------- --------- --------- ------------
Total Receivables 735,295 62,516 119,113 7,015,149
Total Net Assets 22,471,205 2,826,213 3,095,143 $211,316,230
========== ========= ========= ============
</TABLE>
See accompanying notes to financial statements.
(6)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Statement of Changes in Net Assets
For The Year Ended December 31, 1996
<TABLE>
<CAPTION>
Vanguard
Vanguard LIFEStrategy
Vanguard LIFEStrategy Portfolios' Vanguard
Cytec Interest International Portfolios' Conservative Balanced
Stock Income Growth Growth Growth Index
Fund Fund Portfolio Portfolio Portfolio Fund
------------ ----------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Members' $2,983,897 4,639,080 44,726 49,582 8,718 1,750,194
Company 5,773,111 4,515,686 73,774 80,184 23,563 291,541
------------ ----------- ---------- ---------- ------- ------------
Total Contributions 8,757,008 9,154,766 118,500 129,766 32,281 2,041,735
------------ ---------- --------- --------- ------- ----------
Other Receipts:
Rollovers 53,860 77,477 36,877 - - 24,252
Miscellaneous 4,734 3,071 - - - 47
------------ ---------- --------- --------- ------- ----------
58,594 80,548 36,877 - - 24,299
------------ ---------- --------- --------- ------- ----------
Interest on Loans - - - - - -
------------ ---------- --------- --------- ------- ----------
Earnings:
Interest & Dividends - 4,407,569 74,965 73,725 16,997 967,345
Net Appreciation
(Depreciation) in
Fair Value of
Investments 86,268,023 59 14,825 24,241 (3,088) 1,808,001
------------ ---------- --------- --------- ------- ----------
86,268,023 4,407,628 89,790 97,966 13,909 2,775,346
Less Withdrawals Paid
to Participants and
Other Providers 6,680,296 6,023,004 5,893 3,422 - 1,786,663
------------ ---------- --------- --------- ------- ----------
Fund Transfers (8,182,145) 2,987,893 1,756,413 2,226,226 475,763 (1,818,403)
------------ ---------- --------- --------- ------- ----------
Change in Net Assets 80,221,184 10,607,831 1,995,687 2,450,536 521,953 1,236,314
------------ ---------- --------- --------- ------- ----------
Net Asset at Beginning
of Year 88,794,305 72,715,693 - - - 21,385,793
------------ ---------- --------- --------- ------- ----------
Net Assets at End of
Year $169,015,489 83,323,524 1,995,687 2,450,536 521,953 22,622,107
============ ========== ========= ========= ======= ==========
</TABLE>
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Vanguard
Vanguard VMMR Vanguard Total Bond Total
Explorer Prime Index 500 Market Loan (including
Fund Portfolio Portfolio Portfolio Fund table above)
--------- --------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Contributions:
Members' 73,277 - 2,542,159 175,704 - $12,267,337
Company 106,713 7,531 920,851 1,374 - 11,794,328
--------- ------ ---------- --------- --------- ------------
Total Contributions 179,990 7,531 3,463,010 177,078 - 24,061,665
--------- ------ ---------- --------- --------- ------------
Other Receipts:
Rollovers - - 139,686 1,067 - 333,219
Miscellaneous - 1,058 252 19 - 9,181
--------- ------ ---------- --------- --------- ------------
- 1,058 139,938 1,086 - 342,400
--------- ------ ---------- --------- --------- ------------
Interest on Loans - - - - 269,521 269,521
--------- ------ ---------- --------- --------- ------------
Earnings:
Interest & Dividends 103,356 1,972 650,215 132,005 - 6,428,149
Net Appreciation
(Depreciation) in
Fair Value of
Investments (37,858) - 4,532,449 (116,053) - 92,490,599
--------- ------ ---------- --------- --------- ------------
65,498 1,972 5,182,664 15,952 - 98,918,748
Less Withdrawals Paid
to Participants and
Other Providers 7,099 546 1,926,114 139,582 119,593 16,692,212
--------- ------ ---------- --------- --------- ------------
Fund Transfers 1,842,204 19,641 3,053,107 (2,880,747) 520,048 -
--------- ------ ---------- --------- --------- ------------
Change in Net Assets 2,080,593 29,656 9,912,605 (2,826,213) 669,976 106,900,122
--------- ------ ---------- --------- --------- ------------
Net Asset at Beginning
of Year - 27,878 22,471,205 2,826,213 3,095,143 211,316,230
--------- ------ ---------- --------- --------- ------------
Net Assets at End of
Year 2,080,593 57,534 32,383,810 - 3,765,119 $318,216,352
========= ====== ========== ========= ========= ============
</TABLE>
See accompanying notes to financial statements.
(7)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT SHARING PLAN
Statement of Changes in Net Assets
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Vanguard
Cytec Interest Balanced VMMR
Stock Frozen Income Index Prime
Fund Stock Fund Fund Fund Portfolio
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Contributions:
Members' $ 2,110,938 - 5,680,428 1,838,270 -
Company 4,944,758 - 3,969,892 181,402 (7,531)
------------ ------------ ------------ ------------ ------------
Total Contributions 7,055,696 - 9,650,320 2,019,672 (7,531)
------------ ------------ ------------ ------------ ------------
Other Receipts:
Rollovers 161,897 - 248,958 102,939 -
Miscellaneous 3,104 3,518 355 43 2,107
------------ ------------ ------------
165,001 3,518 249,313 102,982 2,107
------------ ------------ ------------ ------------ ------------
Interest on Loans - - - - -
------------ ------------ ------------ ------------ ------------
Earnings:
Interest and Dividends - - 4,528,557 769,551 815
Net Appreciation
(Depreciation) in
Fair Value of Investments 32,647,033 84,207 (11) 3,571,252 -
------------ ------------ ------------ ------------ ------------
32,647,033 84,207 4,528,546 4,340,803 815
------------ ------------ ------------ ------------ ------------
Less Withdrawals Paid to
Participants and
Other Providers 3,583,768 511,573 10,105,719 1,656,157 -
------------ ------------ ------------ ------------ ------------
Fund Transfers (4,437,917) (9,675,824) 2,788,406 1,840,220 32,475
------------ ------------ ------------ ------------ ------------
Change in Net Assets 31,846,045 (10,099,672) 7,110,866 6,647,520 27,866
Net Assets at
Beginning of Year 56,948,260 10,099,672 65,604,827 14,738,273 12
------------ ------------ ------------ ------------ ------------
Net Assets at End of Year $ 88,794,305 - 72,715,693 21,385,793 27,878
============ ============ ============ ============ ============
<PAGE>
</TABLE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Total
Vanguard Bond Total
Index 500 Market Loan (including
Portfolio Portfolio Fund table above)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Contributions:
Members' 1,847,693 221,700 - $ 11,699,029
Company 550,205 41,815 - 9,680,541
------------ ------------ ------------ ------------
Total Contributions 2,397,898 263,515 - 21,379,570
------------ ------------ ------------ ------------
Other Receipts:
Rollovers 267,770 56,473 - 838,037
Miscellaneous 215 19 - 9,361
------------ ------------ ------------ ------------
267,985 56,492 - 847,398
------------ ------------ ------------ ------------
Interest on Loans - - 200,870 200,870
------------ ------------ ------------ ------------
Earnings:
Interest and Dividends 429,388 121,505 - 5,849,816
Net Appreciation
(Depreciation) in
Fair Value of Investments 3,898,168 171,321 - 40,371,970
------------ ------------ ------------ ------------
4,327,556 292,826 - 46,221,786
------------ ------------ ------------ ------------
Less Withdrawals Paid to
Participants and
Other Providers 1,189,040 189,730 84,469 17,320,456
------------ ------------ ------------ ------------
Fund Transfers 7,635,102 1,310,021 507,517 -
------------ ------------ ------------ ------------
Change in Net Assets 13,439,501 1,733,124 623,918 51,329,168
Net Assets at
Beginning of Year 9,031,704 1,093,089 2,471,225 159,987,062
------------ ------------ ------------ ------------
Net Assets at End of Year 22,471,205 2,826,213 3,095,143 $211,316,230
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
(8)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
December 31, 1996 and 1995
(1) Summary of Significant Accounting Policies
(a) Basis of Presentation
The accompanying financial statements have been prepared on the
accrual basis.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. Actual results could differ from
those estimates.
(c) Marketable Investments
Direct investments by the Cytec Employees' Savings and Profit Sharing
Plan Trust (the Trust) in securities traded on national securities
exchanges (solely Cytec Industries Inc. common stock) are valued at
the year-end closing market price. The current values of other
marketable investments and of investments in the Trustee's commingled
trust funds are determined by the Trustee based upon estimated market
values.
The Interest Income Fund is valued at its fair value which
approximates cost/contract value. The investment contracts provide for
interest rates and returns of principal over various periods of time
on an annuity type basis. The interest rate is guaranteed through the
date of the last principal payment.
Securities transactions are recorded on the trade date and dividend
income is recorded on the ex-dividend date. Interest income is
recognized when earned. Realized gains and losses on securities
transactions are calculated based upon the average cost of the
securities sold.
(9)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
2) Plan Description
(a) Organization
The Cytec Employees' Savings and Profit Sharing Plan (the Plan) 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 (currently Cytec Engineered Materials Inc.
and D Aircraft Products, Inc.). The following is some general
information regarding the Plan. For a more complete description of the
Plan provisions, participants should refer to the Plan Document.
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 common stock. The Plan is intended to be a
profit sharing plan. The Plan is subject to the provisions of the
Employee Retirement Income Security Act of 1974.
(b) Employee Contributions
Participating employees may contribute to the Plan after one month of
service (as defined), through payroll deductions, 1% to 15% (subject
to IRS limitations) of such member's earnings (as defined), on a
before-tax basis, an after-tax basis or a combination of the two.
Member contributions may be invested in (i) the Interest Income Fund,
(ii) Vanguard International Growth Portfolio (of the Vanguard World
Fund), (iii) Vanguard LIFEStrategy Portfolios' Growth Portfolio (of
the Vanguard STAR Fund), (iv) Vanguard LIFEStrategy Portfolios'
Conservative Growth Portfolio (of the Vanguard STAR Fund), (v)
Vanguard Explorer Fund, (vi) Vanguard Balanced Index Fund, (vii) the
Vanguard Index Trust-500 Portfolio and (viii) the Cytec Stock Fund.
The Vanguard Total Bond Market Portfolio, in which participants of the
Plan were previously able to invest contributions, was closed as an
investment vehicle of the Plan effective October 15, 1996, due to a
lack of significant participation, with each applicable participant
reallocating any investment balance held therein to other funds within
the Plan as that participant deemed appropriate. The VMMR Prime
Portfolio Fund functions as a holding mechanism for forfeitures or
other items not yet offset by future sponsor contributions. The
Frozen Stock Fund (comprised entirely of cash) was a fund which was
invested in common stock of American Cyanamid Company (Cyanamid), the
former parent company of Cytec, and Cytec common stock distributed in
January 1994. When Cyanamid was purchased by American Home Products
Corporation, the shares in Cyanamid were exchanged for cash.
(10)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
Prior to December 31, 1994, the member's Cytec position in the Frozen
Stock Fund was transferred to their individual account in the Cytec
Stock Fund. In early 1995 members were asked to transfer their balance
in the Frozen Stock Fund to other available funds. Any balance not
transferred by February 28, 1995 was automatically transferred to the
Interest Income Fund.
Members may elect to make before-tax contributions which defer federal
income taxes (and, generally, similar local and/or state 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 new members. If
a member has been a participant in a plan which meets the requirements
of Section 401 or covered by a trust qualified under Section 501 with
a previous employer, that member may, within sixty days of receiving a
distribution from that previous employer's plan, transfer their
eligible account balance into the Plan without tax implications.
(c) Employer Contributions
Normal contributions are made by the Company in amounts equal to 75%
of most member's contributions up to 4% of the member's earnings, as
defined, ("Matched Contributions"). For a member's contribution
exceeding the aforementioned limits ("Unmatched Contributions"), there
are no employer contributions. To be eligible for a Company normal
contribution, a plan member must complete one year of service, as
defined. In addition, if the Company's net after-tax earnings
available to common stockholders meets or exceeds a defined formula,
the Company may make an additional profit sharing contribution. To be
eligible for a Company profit sharing contribution, a Plan member must
have been an active employee on December 31 of the respective year and
have one year of service. Profit sharing contributions of $7,574,217
and $5,502,971 were earned in 1996 and 1995, respectively. Profit
sharing contributions are recorded by the Plan in the year such
contributions are earned, and are credited to the accounts of eligible
members during the early part of the following year.
All employer matching contributions for plan participants under the
age of 58 are invested in the Cytec Stock Fund, which invests in Cytec
Industries Inc. common stock. Profit sharing contributions are
invested in the Interest Income Fund, unless specified differently by
the member.
Members who are at least age 58, can reallocate Company matching
contributions invested in the Cytec Stock Fund at a cumulative rate of
20% per year to any other investment option offered under the Plan.
Additionally, members who are at least age 62
(11)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
and have five years of service, may reallocate up to 100% of Company
matching contributions invested in the Cytec Stock Fund.
(d) Unit Values
The value of a member's investment in each Fund, and the value of the
employer contributions, are represented by units credited to the
member's accounts. The value of such units vary based on the value of
the net assets of the respective Funds. The unit values were
determined by the Trustee, Vanguard Fiduciary Trust Company (see note
3). The units and unit values (to the nearest whole unit and cent) of
each Fund at December 31, 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
1996 1995
---------------------------- -----------------------------
Number of Unit/Share Number of Unit/Share
Units/Shares Values Units/Shares Values
<S> <C> <C> <C> <C>
Cytec Stock Fund 2,234,094 $74.67 2,274,695 $38.42
Interest Income Fund 7,936,249 9.88 6,917,920 9.88
Vanguard Balanced Index Fund 1,594,167 13.92 1,647,682 12.77
Vanguard Index 500 Portfolio 451,598 69.16 377,230 57.62
VMMR Prime Portfolio 57,534 1.00 35,409 1.00
Vanguard Total Bond Market Portfolio - - 272,497 10.14
Vanguard International Growth Portfolio 115,886 16.46 - -
Vanguard LIFEStrategy Portfolios' Growth Portfolio 172,186 13.68 - -
Vanguard LIFEStrategy Portfolios' Conservative
Growth Portfolio 39,609 12.14 - -
Vanguard Explorer Fund 36,257 53.83 - -
</TABLE>
Loans to members and their respective units are excluded in the
computation of the unit values above.
(12)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
The number of participants invested in each fund at December 31, 1996
and 1995 respectively was:
1996 1995
---- ----
Cytec Stock Fund 3,398 3,380
Interest Income Fund 2,972 3,355
Vanguard Balanced Index Fund 1,225 1,340
Vanguard Index 500 Portfolio 1,453 1,290
Vanguard Total Bond Market Portfolio - 327
Loan Fund 662 587
Vanguard International Growth Portfolio 191 -
Vanguard LIFEStrategy Portfolios' Growth Portfolio 110 -
Vanguard LIFEStrategy Portfolios' Conservative
Growth Portfolio 36 -
Vanguard Explorer Fund 218 -
Members may elect to invest in more than one fund. A total of 3,799
and 3,902 active and former employees have investments in the Plan at
December 31, 1996 and 1995, respectively.
(e) Vesting
All units representing employee contributions and earnings or losses
thereon are fully vested at all times. Units representing employer and
profit sharing contributions and earnings or losses thereon vest at
the rate of 20% for each year of service (as defined), including years
of service with Cyanamid. After being credited with five years of
service, a member is vested in all past and future employer and profit
sharing contributions pertaining to their account, including all
earnings or losses thereon. Units representing employer and profit
sharing contributions and earnings or losses thereon vest immediately
to a member in case of death, retirement, as defined in the Plan, at
or after age 60, or total and permanent disability.
(f) Withdrawals
During employment, a member may make withdrawals in cash (or common
stock of the Company in the case of withdrawals from the Company Stock
Fund) of amounts applicable to member and vested employer
contributions and earnings or losses thereon, subject to certain
restrictions. Vested employer contributions may not be withdrawn
earlier than 24 months after being contributed. Withdrawals of
before-tax contributions preclude the member from making contributions
to the Plan or from receiving further
(13)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
normal employer contributions under the Plan for various periods of
time, as defined in the Plan document, unless the participant has
attained age 59 1/2.
(g) Benefit Payments
Upon termination of employment, a member's vested values under the
Plan may be distributed in any one of four ways: lump-sum
distribution, single life annuity, joint and survivor annuity, or
monthly payments up to 360 months (subject to limits imposed by the
Internal Revenue Code). Upon the death of an active member, such
member's vested value under the Plan can be distributed in any one of
three ways: lump sum distribution, single life annuity, or monthly
payments up to 360 months. Annuity payments and monthly payments
commence as soon as practicable following a request from the
participant.
Effective January 1, 1997 minimum distributions are required to begin
by April 1 of the calendar year following the later of:
o the calendar year in which the participant attains 70 1/2 years
of age (provided that such participant has retired from service
with the Company) or;
o the calendar year in which the participant retires from service
with the Company.
(h) Loan Provisions
Eligible members may borrow up to fifty percent of the value of
employee contributions, 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 market interest rates equal
to the prevailing rates charged by lenders for similar loans.
(3) Fund Management
Under the terms of a trust agreement dated January 1, 1994, the Plan assets
are held and managed by the Trustee, Vanguard Fiduciary Trust Company,
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.
(14)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
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) Participant and Non-Participant Directed Funds
All funds are participant directed with the exception of Cytec matching
contributions which are solely invested in, and remain in, the Cytec Stock
Fund; provided, however, that participants who are at least age 58 may
elect an investment change with regards to the matching contributions,
subject to certain restrictions (see Note 2c). Additionally, profit sharing
contributions are also directed by the participants. If no fund is
specified the Profit sharing contributions are invested in the Interest
Income Fund and can be redirected to another fund at the discretion of the
participant. As of December 31, 1996 and 1995 the Cytec Stock Fund included
non-participant directed investments of $31,203,296 and $14,046,257 and
contributions receivable of $354,322 and $329,762, respectively.
(5) Distributions and Forfeitures
Forfeitures of non-vested employer contributions, amounting to $9,510 and
$369 in 1996 and 1995, respectively, were used to reduce employer
contributions.
(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 are deducted from the values of the contracts.
(7) Plan Termination
The Plan has no termination date and it is the Company's intention to
continue the Plan indefinitely. However, the Company may terminate, amend,
modify or suspend the Plan at any time. Upon termination of the Plan or
upon complete discontinuance of employer contributions, all of the units in
member accounts that are attributable to employer contributions or net
income thereon would become immediately vested.
(15)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
(8) Qualification Under the Internal Revenue Code
The Internal Revenue Service issued its determination letter on May 4, 1995
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. In the opinion of the Plan Administrator and the
Plan's tax advisor, the Plan and its underlying Trust have operated within
the terms of the Plan and remain qualified under the applicable provisions
of the Internal Revenue Code.
(9) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 107, "Disclosures about
Fair Value of Financial Instruments" (SFAS No. 107), was adopted
prospectively by the Plan on January 1, 1995. This statement requires all
entities to disclose the fair value of financial instruments, both assets
and liabilities recognized and not recognized in the Statement of Net
Assets, for which it is practicable to estimate fair value. If estimating
fair value is not practicable, this statement requires disclosure of
descriptive information pertinent to estimating the value of a financial
instrument.
The fair value of financial instruments represents the estimated amounts at
which the asset or liability could be exchanged in a current transaction
between willing parties, other than in a forced liquidation sale. These
estimates are subjective in nature and involve uncertainties and matters of
judgment; therefore, they cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
The assets of the Plan are primarily financial instruments which are
monetary in nature. As a result, interest rates may have a more significant
impact on the Plan's performance than the effects of general levels of
inflation. Interest rates do not necessarily move in the same direction or
in the same magnitude as the prices of goods and services as measured by
the consumer price index. Investments in funds are subject to risk
conditions of individual mutual fund objectives, stock market, interest
rates, economic conditions and world affairs. The estimated fair market
value of the investment funds are determined by use of market prices
determined by the Plan Trustee. The carrying amount of the Interest Income
Fund is considered to approximate fair value.
(16)
<PAGE>
CYTEC EMPLOYEES' SAVINGS AND PROFIT
SHARING PLAN
Notes to Financial Statements
The estimated fair values of the Plan's financial instruments at December
31, 1996 and 1995 are summarized as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
Estimated Estimated
Carrying Fair Carrying Fair
Assets Amount Value Amount Value
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Cytec Stock Fund $166,819,765 $166,819,765 $87,400,087 $87,400,087
Interest Income Fund 78,410,140 78,410,140 68,349,053 68,349,053
Vanguard Balanced Index Fund 22,190,805 22,190,805 21,040,895 21,040,895
VMMR Prime Portfolio 57,534 57,534 35,409 35,409
Vanguard Index 500 Portfolio 31,232,537 31,232,537 21,735,910 21,735,910
Vanguard Total Bond Market Portfolio - - 2,763,697 2,763,697
Vanguard International Growth Portfolio 1,907,489 1,907,489 - -
Vanguard LIFEStrategy Portfolios' Growth Portfolio 2,355,503 2,355,503 - -
Vanguard LIFEStrategy Portfolios' Conservative Growth
Portfolio 480,855 480,855 - -
Vanguard Explorer Fund 1,951,744 1,951,744 - -
Loan Fund 3,650,747 3,650,747 2,976,030 2,976,030
=========== ========== ========== ==========
</TABLE>
The receivable balances as recorded in the 1996 and 1995 Statements of Net
Assets equal the estimated Fair Values.
(17)
<PAGE>
Cytec Employees' Savings and Profit Sharing Plan
Item 27a - Schedule of Assets Held for
Investment Purposes at December 31, 1996
<TABLE>
<CAPTION>
Market
Investment Units Cost Value
---------- ----- ---- -----
<S> <C> <C> <C>
Cytec Stock Fund 2,234,094 61,091,377 $166,819,765
Interest Income Fund 7,936,249 78,593,084 78,410,140
Vanguard Balanced Index Fund 1,594,167 18,778,805 22,190,805
VMMR Prime Portfolio 57,534 57,534 57,534
Vanguard Index 500 Portfolio 451,598 24,872,964 31,232,537
Vanguard International Growth 115,886 1,900,285 1,907,489
Portfolio
Vanguard LIFEStrategy Portfolios' 172,186 2,332,688 2,355,503
Growth Portfolio
Vanguard LIFEStrategy Portfolios' 39,609 485,017 480,855
Conservative Growth Portfolio
Vanguard Explorer Fund 36,257 1,997,358 1,951,744
Loan Fund - 3,650,747 3,650,747
------------- -------------
$193,759,859 $309,057,119
============ =============
</TABLE>
(18)
<PAGE>
Cytec Employees' Savings and Profit
Item 27d - Schedule of 5% Reportable Transactions
Individual Transactions in Excess of 5%
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
Identity of Description Purchase Selling Cost of Net Gain
Party Involved of Assets Price Price Assets or Loss
-------------- --------- ----- ----- ------ -------
<S> <C> <C> <C> <C> <C>
The Vanguard Group Cytec Stock Fund 40,560,640 N/A N/A N/A
The Vanguard Group Cytec Stock Fund N/A 47,402,459 26,536,023 20,866,436
The Vanguard Group Interest Income Fund 48,210,368 N/A N/A N/A
The Vanguard Group Interest Income Fund N/A 38,149,472 38,208,657 (59,185)
The Vanguard Group Balanced Index Fund 7,933,035 N/A N/A N/A
The Vanguard Group Balanced Index Fund N/A 8,591,124 7,660,784 930,340
The Vanguard Group Index 500 Portfolio 17,637,805 N/A N/A N/A
The Vanguard Group Index 500 Portfolio N/A 12,666,142 11,129,737 1,536,405
</TABLE>
(19)
<PAGE>
Exhibit:
23.1 Consent of KPMG Peat Marwick LLP
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
/s/ J.W. Hirsch
---------------------
J. W. Hirsch
Administrator
Date June 13, 1997
(20)
<PAGE>
EXHIBIT INDEX
23.1 Consent of KPMG Peat Marwick LLP
(21)
<PAGE>
EXHIBIT 23.1
Accountants' Consent
Board of Directors
Cytec Industries Inc.
We consent to incorporation by reference in registration statements (Nos.
33-80710, 33-83576, 33-85666 and 333-11121) on Form S-8 and (No. 333-3808) on
Form S-3 of Cytec Industries Inc. of our report dated June 13, 1997 relating to
the statement of net assets of the Cytec Employees' Savings and Profit Sharing
Plan as of December 31, 1996 and 1995, the related statement of changes in net
assets for the years then ended, and the schedules of assets held for investment
and reportable transactions, which report appears in the annual report on Form
11-K of the Cytec Employees' Savings and Profit Sharing Plan.
KPMG Peat Marwick LLP
Short Hills, New Jersey
June 23, 1997
(22)
