COMPENSATION & MANGEMENT DEVELOPMENT COMMITTEE CHARTER
Cytec Industries Inc.

 

Adopted by resolution of
the Board of Directors
January 22, 2004

Committee’s Purpose

The Committee reviews and approves compensation arrangements for the Company’s officers (other than the Chief Executive Officer) and reviews and recommends to the full Board compensation arrangements for the Chief Executive Officer and directors. The Committee administers certain compensation plans (such as the Company’s 1993 Stock Award and Incentive Plan). The Committee at various times makes recommendations for shareholder approval on these plans and also produces an annual report on executive compensation for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations.

Additionally, in the interest of orderly management of the Company, the Committee periodically reviews management development and succession plans, including establishing policies regarding succession in the event of an emergency or the retirement of the CEO.

Composition of Committee

The Compensation and Management Development Committee shall be composed entirely of non-employee directors, one of whom acts as its chairman. The Committee members shall be elected by the Board and each Committee member shall be free from any relationship to the Company that, in the opinion of the Board, may interfere with the exercise of his or her independence from management and the Company. In addition to the general independence requirements set forth above, membership on the Committee will be further limited by excluding the following: current or former employees; directors having a significant business relationship with the Company; directors who are members of the immediate family of an individual who is an executive officer of the Company or its affiliates; and directors who do not qualify as an "outside director" as defined in the regulations under Section 162(m) of the Internal Revenue Code as from time to time in effect.

Meetings

The Committee shall meet at least three (3) times annually, or more frequently as circumstances dictate. Meetings of the Committee may be called by the Chairman of the Committee or the Chairman of the Board of Directors. The Committee shall establish its own agenda and shall maintain minutes of its meetings. The Chairman of the Committee or his designate, shall periodically report to the Board of Directors on significant results of the Committee’s activities.

Duties and Responsibilities

To fulfill its responsibilities and duties the Committee shall:

  • Review and approve annually, or more frequently if needed, the corporate goals and objectives relevant to CEO and other officer compensation.
     
  • Recommend to the full Board a compensation plan for the CEO and determine the compensation plan for other officers (not including assistant officers), in each case consistent with the corporate goals and objectives. The compensation plans include salaries, benefits, and annual and long-term incentives plans. In development and application of such plans, the Committee shall consider the Company’s performance and relative shareholder return and the value of similar plans at comparable companies.
     
  • Evaluate the CEO’s and other officer’s performance against the established goals and objectives and recommend to the full Board the CEO’s award and determine the awards of the other officers in accordance with the compensation plans.
     
  • Recommend to the full board the compensation plan for the non-executive directors. In development and application of such plan, the Committee shall consider the relative value of director compensation plans at comparable companies.
     
  • Make recommendations, when appropriate, to the Board of Directors with respect to incentive compensation plans and equity-based plans (e.g. Stock Award and Incentive Plan) and administer such plans.
     
  • Conduct on at least an annual basis a review of executive management development and succession plans, and establish policies regarding succession in the event of an emergency or the retirement of the CEO.
     
  • Conduct an annual self-evaluation of the Committee’s performance.

If a compensation consultant is to assist in the evaluation of director, CEO or other senior executive compensation, the Committee shall have the sole authority to retain and terminate such consultant, as well as the authority to approve the firm’s fees and other compensation.
 

 
 
  © 2003 Cytec Industries Inc. All Rights Reserved.