THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Cabot Corporation (CBT)

1/30/2006 Proxy Information

Cabot makes loans to certain of its employees in connection with their purchases of restricted common stock under CabotÕs long-term incentive compensation program. Until 2002, such loans were available to all recipients of restricted stock grants under these programs. Beginning with awards made under the 2002 long-term incentive compensation program, because of restrictions set forth in Section 402 of the Sarbanes-Oxley Act of 2002, CabotÕs executive officers are not eligible to participate in CabotÕs loan program. Mr. Paintal received $129,600 in loans in connection with his 2003 and 2004 long-term incentive awards, which he repaid prior to becoming an executive officer of Cabot in January 2005. Accordingly, no loans to Mr. Paintal were outstanding at September 30, 2005. None of CabotÕs other executive officers had any loans outstanding under CabotÕs loan program in fiscal year 2005.

Under CabotÕs long-term equity incentive program, employees are permitted to satisfy any federal, state, Medicare and Social Security tax that may be due upon the vesting of shares of restricted stock by selling such vested stock back to the Company. The amounts listed opposite each executive officerÕs name in the table below show the dollar value of Cabot common stock sold to the Company by such executive officer to satisfy his withholding tax obligations on shares of Cabot restricted stock, and for Messrs. Berube, Brady and Cordeiro on shares of Cabot Microelectronics Corporation restricted stock, that vested during fiscal year 2005: (Table on page 34 of proxy)

1/28/2005 Proxy Information

John G. L. Cabot retired from Cabot Corporation in September 1995, having served as Chief Financial Officer from October 1992 to September 1995 and Vice Chairman from October 1988 to September 1995.

In January 2002, the Company made a loan in the principal amount of $300,000 to John A. Shaw, CabotÕs Executive Vice President and Chief Financial Officer, in connection with his relocation to Boston, Massachusetts. Mr. Shaw repaid the outstanding principal on the loan and accrued interest, which by that time had been reduced to $200,000, in February 2004. While the loan was not interest bearing, interest on the loan was imputed for income tax purposes at a rate of 4.4% per annum. Repayment of the loan was secured by a mortgage on real property owned by Mr. Shaw. Mr. Shaw was required to make principal payments on the loan equal to 50% (pre-tax) of any increases in his salary and 50% of his bonuses. Unless otherwise accelerated pursuant to its terms, the note was due and payable in full in January 2007. The largest amount outstanding at any time under the loan during fiscal year 2004 was $245,000.

Under the Cabot Loan Program, Cabot made loans to certain of its employees in connection with their purchases of restricted common stock under CabotÕs long-term incentive compensation programs in 2002, 2003 and 2004. Until 2002, such loans have been available to all recipients of restricted stock grants under these programs. Beginning with awards made under the 2002 long-term incentive compensation program, because of restrictions set forth in Section 402 of the Sarbanes-Oxley Act of 2002 (ŌSOxĶ), CabotÕs executive officers are not eligible to participate in the Cabot Loan Program, although loans to CabotÕs executive officers outstanding as of July 30, 2002 were grandfathered under SOx and, to the extent they were not otherwise due and payable to Cabot, remained outstanding. The amounts listed opposite each executive officerÕs name in the table below indicate (i) the largest amount outstanding at any one time during fiscal year 2004 pursuant to loans made under the Cabot Loan Program, and (ii) the aggregate amount outstanding as of September 30, 2004. For Messrs. Berube, Brady, Burnes, Cordeiro and Gormisky, the loans reported below were made in connection with the 2001 long-term incentive awards. For Mr. Shaw, the loan was made in connection with a grant of restricted stock made to him on January 2, 2002. Interest accrued on all of these loans at a rate of 5.5% per annum and the shares of restricted stock purchased with the funds borrowed from Cabot were pledged to Cabot as collateral for the loans. All of these loans were repaid in May 2004, in the case of Messrs. Berube, Brady, Burnes, Cordeiro and Gormisky, upon the vesting of their 2001 awards, and in the case of Mr. Shaw, upon the vesting of the award granted to him in January 2002.

Mr. Blevi participated in the Cabot Loan Program in connection with the grant of restricted stock made to him under the 2003 long-term incentive compensation program, and borrowed $392,000 from Cabot in that year, which represented 70% of the purchase price of the restricted stock. Mr. Blevi paid 30% of the purchase price with his own funds. Under the terms of the 2003 long-term incentive compensation program Cabot agreed to pay a bonus to Mr. Blevi in an amount equal to $392,000 at the time the shares of restricted stock vest in May 2006. Prior to Mr. BleviÕs election as a director and his designation as an executive officer of Cabot, the Compensation Committee of the Board of Directors authorized the acceleration of the payment of the $392,000 bonus. Mr. Blevi used this bonus to repay the $392,000 loan.

1/28/2004 Proxy Information

Certain Relationships and Related Transactions

Roderick C.G. MacLeodÕs spouse is a first cousin once removed of John G.L. Cabot.

In January 2002, the Company made a loan in the principal amount of $300,000 to John A. Shaw, Executive Vice President and Chief Financial Officer of the Company, in connection with his relocation to Boston, Massachusetts. While the loan is not interest-bearing, interest on the loan is imputed for income tax purposes at a rate of 4.4% per annum. Repayment of the loan is secured by a mortgage on real property owned by Mr. Shaw. Mr. Shaw is required to make principal payments on the loan equal to 50% (pre-tax) of any cash bonuses paid to him by the Company, plus 50% (pre-tax) of any increases in his salary. Unless otherwise accelerated pursuant to its terms, the note is due and payable in full in January 2007. The largest amount outstanding at any one time under this loan during fiscal year 2003 was $300,000, and the outstanding principal amount of the loan on January 8, 2004 was $200,000.

Under the Cabot Loan Program (see note 1 to the Summary Compensation Table above), the Company made loans to certain of its employees in connection with their purchases of restricted Common Stock under the CompanyÕs long-term incentive compensation programs in 2001, 2002 and 2003. Until 2002, such loans have been available to all recipients of restricted stock grants under these programs. Beginning with awards made under the 2002 long-term incentive compensation program, because of restrictions set forth in Section 402 of the Sarbanes-Oxley Act of 2002 (ŌSOxĶ), the CompanyÕs executive officers are not eligible to participate in the Cabot Loan Program, although loans to the CompanyÕs executive officers outstanding as of July 30, 2002 were grandfathered under SOx and, to the extent they were not otherwise due and payable to the Company, remain outstanding. The amounts listed opposite each executive officerÕs name in the table below indicate (i) the largest amount outstanding at any one time during fiscal year 2003 pursuant to loans made under the Cabot Loan Program, and (ii) the aggregate amount outstanding as of September 30, 2003.

Loans to Executive Officers in Connection with Long-Term Incentive Program Largest Amount Amount Outstanding Outstanding at During September 30, Fiscal Year 2003 -------------------------------------------------------------------------------- Brian A. Berube $ 218,205 $ 94,140 William J. Brady $ 512,575 $ 366,100 Kennett F. Burnes $ 1,882,975 $ 1,150,600 Eduardo E. Cordeiro $ 145,288 $ 104,600 Paul Gormisky $ 257,038 $ 104,600 Thomas H. Odle $ 0 $ 0 John A. Shaw $ 315,600 $ 315,600

On June 18, 2003, Mr. Berube sold 3,000 shares Company Common Stock to the Company at a price of $29.63 per share, the closing price of the CompanyÕs Common Stock on that date. Similarly, on June 27, 2003, Mr. Cordeiro sold 3,000 shares of Company Common Stock to the Company at a price of $28.44 per share, the closing price of the CompanyÕs Common Stock on that date.

Under the CompanyÕs equity incentive program, employees are permitted to satisfy any federal, state, Medicare and Social Security tax that may be due upon the vesting of shares of restricted stock by selling such vested Cabot stock back to the Company. The amounts listed opposite each executive officerÕs name in the table below show the dollar value of Company Common Stock sold to the Company by such executive officer to satisfy his withholding tax obligations on shares of Cabot restricted stock, and on shares of Cabot Microelectronics Corporation restricted stock, that vested during fiscal year 2003:

$ Value of Shares Sold to the Company

-------------------------------------------------------------------------------- Brian A. Berube $ 93,158 William J. Brady $ 358,998 Kennett F. Burnes $ 1,395,065 Eduardo E. Cordeiro $ 105,771 Paul Gormisky $ 103,936 Thomas H. Odle $ 288,795 John A. Shaw $ 26,773