DELAWARE
|
36-4324765
|
(State of Incorporation)
|
(I.R.S. Employer Identification No.)
|
870 NORTH COMMONS DRIVE
|
60504
|
AURORA, ILLINOIS
|
(Zip Code)
|
(Address of principal executive offices)
|
YES
|
X
|
NO
|
YES
|
X
|
NO
|
Large accelerated filer
|
X
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
YES
|
NO
|
X
|
Part I. Financial Information
|
Page
|
|
Item 1.
|
||
3 | ||
4 | ||
5 | ||
6
|
||
Item 2.
|
23 | |
Item 3.
|
32
|
|
Item 4.
|
33
|
|
Part II. Other Information
|
||
Item 1.
|
34
|
|
Item 1A.
|
34
|
|
Item 2.
|
39
|
|
Item 6.
|
40
|
|
41
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Revenue
|
$ | 115,678 | $ | 111,846 | $ | 317,036 | $ | 335,711 | ||||||||
Cost of goods sold
|
60,462 | 58,821 | 166,747 | 172,522 | ||||||||||||
Gross profit
|
55,216 | 53,025 | 150,289 | 163,189 | ||||||||||||
Operating expenses:
|
||||||||||||||||
Research, development and technical
|
15,415 | 14,573 | 43,241 | 43,348 | ||||||||||||
Selling and marketing
|
7,458 | 7,785 | 22,228 | 22,056 | ||||||||||||
General and administrative
|
10,695 | 11,008 | 38,773 | 34,251 | ||||||||||||
Total operating expenses
|
33,568 | 33,366 | 104,242 | 99,655 | ||||||||||||
Operating income
|
21,648 | 19,659 | 46,047 | 63,534 | ||||||||||||
Interest expense
|
955 | 30 | 1,348 | 111 | ||||||||||||
Other income (expense), net
|
(864 | ) | (281 | ) | (663 | ) | (489 | ) | ||||||||
Income before income taxes
|
19,829 | 19,348 | 44,036 | 62,934 | ||||||||||||
Provision for income taxes
|
6,587 | 6,559 | 14,849 | 20,561 | ||||||||||||
Net income
|
$ | 13,242 | $ | 12,789 | $ | 29,187 | $ | 42,373 | ||||||||
Basic earnings per share
|
$ | 0.57 | $ | 0.55 | $ | 1.28 | $ | 1.85 | ||||||||
Weighted average basic shares outstanding
|
23,120 | 23,119 | 22,778 | 22,931 | ||||||||||||
Diluted earnings per share
|
$ | 0.55 | $ | 0.54 | $ | 1.24 | $ | 1.80 | ||||||||
Weighted average diluted shares outstanding
|
23,939 | 23,797 | 23,547 | 23,525 | ||||||||||||
Dividends per share
|
$ | - | $ | - | $ | 15.00 | $ | - |
June 30,
2012
|
September 30, 2011
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 166,896 | $ | 302,546 | ||||
Accounts receivable, less allowance for doubtful accounts of $5,012 at June 30, 2012, and $1,090 at September 30, 2011
|
57,428 | 52,747 | ||||||
Inventories
|
58,795 | 56,128 | ||||||
Prepaid expenses and other current assets
|
11,160 | 14,735 | ||||||
Deferred income taxes
|
5,651 | 4,249 | ||||||
Total current assets
|
299,930 | 430,405 | ||||||
Property, plant and equipment, net
|
124,012 | 130,791 | ||||||
Goodwill
|
43,693 | 41,148 | ||||||
Other intangible assets, net
|
12,848 | 14,651 | ||||||
Deferred income taxes
|
2,805 | 862 | ||||||
Other long-term assets
|
12,452 | 10,372 | ||||||
Total assets
|
$ | 495,740 | $ | 628,229 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 17,699 | $ | 22,436 | ||||
Accrued expenses and other current liabilities
|
26,476 | 33,104 | ||||||
Current portion of long-term debt
|
10,938 | - | ||||||
Capital lease obligations
|
4 | 10 | ||||||
Total current liabilities
|
55,117 | 55,550 | ||||||
Long-term debt, net of current portion
|
164,062 | - | ||||||
Capital lease obligations, net of current portion
|
20 | 2 | ||||||
Other long-term liabilities
|
6,933 | 6,323 | ||||||
Total liabilities
|
226,132 | 61,875 | ||||||
Commitments and contingencies (Note 10)
|
||||||||
Stockholders’ equity:
|
||||||||
Common Stock: Authorized: 200,000,000 shares, $0.001 par value; Issued: 28,652,833 shares at June 30, 2012, and 27,652,336 shares at September 30, 2011
|
29 | 28 | ||||||
Capital in excess of par value of common stock
|
320,793 | 278,360 | ||||||
Retained earnings
|
117,802 | 435,429 | ||||||
Accumulated other comprehensive income
|
27,111 | 24,127 | ||||||
Treasury stock at cost, 5,373,623 shares at June 30, 2012, and 4,715,577 shares at September 30, 2011
|
(196,127 | ) | (171,590 | ) | ||||
Total stockholders’ equity
|
269,608 | 566,354 | ||||||
Total liabilities and stockholders’ equity
|
$ | 495,740 | $ | 628,229 |
Nine Months Ended June 30,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 29,187 | $ | 42,373 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
17,583 | 17,968 | ||||||
Provision for doubtful accounts
|
3,876 | 11 | ||||||
Share-based compensation expense
|
10,381 | 9,921 | ||||||
Deferred income tax expense (benefit)
|
(2,268 | ) | 8,713 | |||||
Non-cash foreign exchange (gain) loss
|
1,495 | (459 | ) | |||||
Loss on disposal of property, plant and equipment
|
225 | 38 | ||||||
Impairment of property, plant and equipment
|
893 | - | ||||||
Other
|
(181 | ) | (1,075 | ) | ||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(9,292 | ) | 1,515 | |||||
Inventories
|
(3,142 | ) | (1,899 | ) | ||||
Prepaid expenses and other assets
|
1,692 | (10,264 | ) | |||||
Accounts payable
|
(113 | ) | (3,898 | ) | ||||
Accrued expenses, income taxes payable and other liabilities
|
(6,214 | ) | (3,298 | ) | ||||
Net cash provided by operating activities
|
44,122 | 59,646 | ||||||
Cash flows from investing activities:
|
||||||||
Additions to property, plant and equipment
|
(14,263 | ) | (18,369 | ) | ||||
Proceeds from the sale of investments
|
50 | 25 | ||||||
Proceeds from sales of property, plant and equipment
|
8 | 1 | ||||||
Net cash used in investing activities
|
(14,205 | ) | (18,343 | ) | ||||
Cash flows from financing activities:
|
||||||||
Dividends paid
|
(347,140 | ) | - | |||||
Issuance of long-term debt
|
175,000 | - | ||||||
Repurchases of common stock
|
(24,537 | ) | (41,387 | ) | ||||
Net proceeds from issuance of stock
|
30,487 | 37,224 | ||||||
Tax benefits associated with share-based compensation expense
|
621 | 967 | ||||||
Principal payments under capital lease obligations
|
(8 | ) | (964 | ) | ||||
Net cash provided by (used in) financing activities
|
(165,577 | ) | (4,160 | ) | ||||
Effect of exchange rate changes on cash
|
10 | 1,632 | ||||||
Increase (decrease) in cash and cash equivalents
|
(135,650 | ) | 38,775 | |||||
Cash and cash equivalents at beginning of period
|
302,546 | 254,164 | ||||||
Cash and cash equivalents at end of period
|
$ | 166,896 | $ | 292,939 |
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Purchases of property, plant and equipment in accrued liabilities and accounts payable at the end of the period
|
$ | 2,487 | $ | 5,331 | ||||
Issuance of restricted stock
|
6,374 | 6,693 | ||||||
Assets acquired under capital lease
|
20 | - |
June 30, 2012
|
Level 1
|
Level 2
|
Level 3
|
Total
Fair Value
|
||||||||||||
Cash and cash equivalents
|
$ | 166,896 | $ | - | $ | - | $ | 166,896 | ||||||||
Auction rate securities (ARS)
|
- | - | 7,991 | 7,991 | ||||||||||||
Other long-term investments
|
1,020 | - | - | 1,020 | ||||||||||||
Total
|
$ | 167,916 | $ | - | $ | 7,991 | $ | 175,907 |
September 30, 2011
|
Level 1
|
Level 2
|
Level 3
|
Total
Fair Value
|
||||||||||||
Cash and cash equivalents
|
$ | 302,546 | $ | - | $ | - | $ | 302,546 | ||||||||
Auction rate securities (ARS)
|
- | - | 8,041 | 8,041 | ||||||||||||
Other long-term investments
|
827 | - | - | 827 | ||||||||||||
Total
|
$ | 303,373 | $ | - | $ | 8,041 | $ | 311,414 |
Balance as of October 1, 2011
|
$ | 8,041 | ||
Net sales of ARS
|
(50 | ) | ||
Balance as of June 30, 2012
|
$ | 7,991 |
Balance as of September 30, 2011
|
$ | 1,090 | ||
Amounts charged to expense
|
3,876 | |||
Deductions and adjustments
|
46 | |||
Balance as of June 30, 2012
|
$ | 5,012 |
June 30,
|
September 30,
|
|||||||
2012
|
2011
|
|||||||
Raw materials
|
$ | 29,145 | $ | 26,217 | ||||
Work in process
|
4,799 | 4,964 | ||||||
Finished goods
|
24,851 | 24,947 | ||||||
Total
|
$ | 58,795 | $ | 56,128 |
June 30, 2012
|
September 30, 2011
|
|||||||||||||||
Gross Carrying
|
Accumulated
|
Gross Carrying
|
Accumulated
|
|||||||||||||
Amount
|
Amortization
|
Amount
|
Amortization
|
|||||||||||||
Other intangible assets subject to amortization:
|
||||||||||||||||
Product technology
|
$ | 8,337 | $ | 4,636 | $ | 8,266 | $ | 3,890 | ||||||||
Acquired patents and licenses
|
8,115 | 6,679 | 8,115 | 6,446 | ||||||||||||
Trade secrets and know-how
|
2,550 | 2,550 | 2,550 | 2,550 | ||||||||||||
Distribution rights, customer lists and other
|
12,406 | 5,885 | 12,154 | 4,738 | ||||||||||||
Total other intangible assets subject to amortization
|
31,408 | 19,750 | 31,085 | 17,624 | ||||||||||||
Total other intangible assets not subject to amortization*
|
1,190 | 1,190 | ||||||||||||||
Total other intangible assets
|
$ | 32,598 | $ | 19,750 | $ | 32,275 | $ | 17,624 |
Fiscal Year
|
Estimated Amortization
Expense
|
|
Remainder of 2012
|
$ 642
|
|
2013
|
2,499
|
|
2014
|
2,456
|
|
2015
|
2,415
|
|
2016
|
1,998
|
June 30,
|
September 30,
|
|||||||
2012
|
2011
|
|||||||
Auction rate securities
|
$ | 7,991 | $ | 8,041 | ||||
Other long-term assets
|
3,441 | 1,504 | ||||||
Other long-term investments
|
1,020 | 827 | ||||||
Total
|
$ | 12,452 | $ | 10,372 |
June 30,
|
September 30,
|
|||||||
2012
|
2011
|
|||||||
Accrued compensation
|
$ | 15,843 | $ | 23,922 | ||||
Goods and services received, not yet invoiced
|
3,104 | 3,457 | ||||||
Deferred revenue and customer advances
|
3,096 | 2,420 | ||||||
Warranty accrual
|
375 | 384 | ||||||
Taxes, other than income taxes
|
1,071 | 808 | ||||||
Other
|
2,987 | 2,113 | ||||||
Total
|
$ | 26,476 | $ | 33,104 |
Fiscal Year
|
Principal
Repayments
|
|
Remainder of 2012
|
$ 2,188
|
|
2013
|
10,937
|
|
2014
|
10,938
|
|
2015
|
15,312
|
|
2016
|
21,875
|
|
2017
|
113,750
|
|
Total
|
175,000
|
Asset Derivatives
|
Liability Derivatives
|
||||||||||||||||
Balance Sheet
Location
|
Fair Value at
June 30,
2012
|
Fair Value at
September 30, 2011
|
Fair Value at
June 30,
2012
|
Fair Value at
September 30, 2011
|
|||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||
Foreign exchange contracts
|
Prepaid expenses and other current assets
|
$ | 7 | $ | 48 | $ | - | $ | - | ||||||||
Accrued expenses and other current liabilities
|
$ | - | $ | - | $ | - | $ | - |
Gain (Loss) Recognized in Statement of Income
|
|||||||||||||||||
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||
Statement of Income Location
|
June 30, 2012
|
June 30, 2011
|
June 30, 2012
|
June 30, 2011
|
|||||||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||
Foreign exchange contracts
|
Other income (expense), net
|
$ | (184 | ) | $ | (186 | ) | $ | 284 | $ | (248 | ) |
Balance as of September 30, 2011
|
$ | 384 | ||
Reserve for product warranty during the reporting period
|
643 | |||
Settlement of warranty
|
(652 | ) | ||
Balance as of June 30, 2012
|
$ | 375 |
Weighted
|
||||||||
Average
|
||||||||
Stock
|
Exercise
|
|||||||
Options
|
Price
|
|||||||
Outstanding at September 30, 2011
|
3,950,537 | $ | 39.52 | |||||
Granted
|
477,444 | 39.57 | ||||||
Exercised
|
(803,892 | ) | 36.15 | |||||
Forfeited or canceled
|
(88,982 | ) | 37.60 | |||||
Mandatory proportional adjustment due to recapitalization
|
1,780,394 | - | ||||||
Outstanding at June 30, 2012
|
5,315,501 | $ | 26.83 |
Restricted
|
Weighted
|
|||||||
Stock
|
Average
|
|||||||
Awards and
|
Grant Date
|
|||||||
Units
|
Fair Value
|
|||||||
Nonvested at September 30, 2011
|
369,681 | $ | 34.29 | |||||
Granted
|
164,170 | 39.77 | ||||||
Vested
|
(166,457 | ) | 34.63 | |||||
Forfeited
|
(8,219 | ) | 31.91 | |||||
Mandatory proportional adjustment due to recapitalization
|
37,674 | - | ||||||
Nonvested at June 30, 2012
|
396,849 | $ | 34.10 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Cost of goods sold
|
$ | 407 | $ | 307 | $ | 1,154 | $ | 920 | ||||||||
Research, development and technical
|
284 | 250 | 829 | 804 | ||||||||||||
Selling and marketing
|
311 | 274 | 1,080 | 854 | ||||||||||||
General and administrative
|
1,960 | 1,892 | 7,318 | 7,343 | ||||||||||||
Total share-based compensation expense
|
2,962 | 2,723 | 10,381 | 9,921 | ||||||||||||
Tax benefit
|
874 | 969 | 3,230 | 3,521 | ||||||||||||
Total share-based compensation expense, net of tax
|
$ | 2,088 | $ | 1,754 | $ | 7,151 | $ | 6,400 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Interest income
|
$ | 41 | $ | 53 | $ | 120 | $ | 194 | ||||||||
Other income (expense)
|
(905 | ) | (334 | ) | (783 | ) | (683 | ) | ||||||||
Total other income (expense), net
|
$ | (864 | ) | $ | (281 | ) | $ | (663 | ) | $ | (489 | ) |
|
The components of comprehensive income were as follows:
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Net income
|
$ | 13,242 | $ | 12,789 | $ | 29,187 | $ | 42,373 | ||||||||
Other comprehensive income:
|
||||||||||||||||
Foreign currency translation adjustment
|
3,356 | 2,529 | 2,984 | 8,046 | ||||||||||||
Minimum pension liability adjustment
|
- | 5 | - | 15 | ||||||||||||
Total comprehensive income
|
$ | 16,598 | $ | 15,323 | $ | 32,171 | $ | 50,434 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Numerator:
|
||||||||||||||||
Earnings available to common shares
|
$ | 13,242 | $ | 12,789 | $ | 29,187 | $ | 42,373 | ||||||||
Denominator:
|
||||||||||||||||
Weighted average common shares
|
23,120,147 | 23,118,698 | 22,778,056 | 22,931,178 | ||||||||||||
(Denominator for basic calculation)
|
||||||||||||||||
Weighted average effect of dilutive securities:
|
||||||||||||||||
Share-based compensation
|
818,868 | 678,382 | 768,913 | 594,255 | ||||||||||||
Diluted weighted average common shares
|
23,939,015 | 23,797,080 | 23,546,969 | 23,525,433 | ||||||||||||
(Denominator for diluted calculation)
|
||||||||||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$ | 0.57 | $ | 0.55 | $ | 1.28 | $ | 1.85 | ||||||||
Diluted
|
$ | 0.55 | $ | 0.54 | $ | 1.24 | $ | 1.80 |
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
|||||||||||||||
Revenue:
|
2012
|
2011
|
2012
|
2011
|
||||||||||||
Tungsten slurries
|
$ | 42,162 | $ | 40,889 | $ | 121,108 | $ | 123,094 | ||||||||
Dielectric slurries
|
32,544 | 30,998 | 87,760 | 91,926 | ||||||||||||
Copper slurries
|
17,896 | 20,103 | 49,997 | 60,119 | ||||||||||||
Polishing pads
|
9,039 | 7,561 | 23,908 | 23,650 | ||||||||||||
Data storage slurries
|
5,314 | 6,863 | 16,040 | 20,948 | ||||||||||||
Engineered Surface Finishes
|
8,723 | 5,432 | 18,223 | 15,974 | ||||||||||||
Total revenue
|
$ | 115,678 | $ | 111,846 | $ | 317,036 | $ | 335,711 |
·
|
Research related to fundamental CMP technology;
|
·
|
Development and formulation of new and enhanced CMP consumable products, including collaborating on joint development projects with our customers;
|
·
|
Process development to support rapid and effective commercialization of new products;
|
·
|
Technical support of CMP products in our customers’ manufacturing facilities; and
|
·
|
Evaluation and development of new polishing and metrology applications outside of the semiconductor industry.
|
CONTRACTUAL OBLIGATIONS
|
Less Than
|
1-3 | 3-5 |
After 5
|
||||||||||||||||
(In millions)
|
Total
|
1 Year
|
Years
|
Years
|
Years
|
|||||||||||||||
Long-term debt
|
$ | 175.0 | $ | 8.7 | $ | 26.3 | $ | 140.0 | $ | - | ||||||||||
Interest expense and fees on long-term debt
|
14.4 | 3.8 | 6.6 | 4.0 | - | |||||||||||||||
Purchase obligations
|
45.5 | 41.3 | 3.4 | 0.3 | 0.5 | |||||||||||||||
Operating leases
|
9.1 | 2.9 | 3.6 | 1.9 | 0.7 | |||||||||||||||
Other long-term liabilities
|
6.9 | - | - | - | 6.9 | |||||||||||||||
Total contractual obligations
|
$ | 250.9 | $ | 56.7 | $ | 39.9 | $ | 146.2 | $ | 8.1 |
Period
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands)
|
||||
Apr. 1 through
Apr. 30, 2012
|
75
|
$39.82
|
-
|
$150,000
|
||||
May 1 through
May 31, 2012
|
299,762
|
$33.36
|
299,762
|
$140,000
|
||||
Jun. 1 through
Jun. 30, 2012
|
-
|
-
|
-
|
$140,000
|
||||
Total
|
299,837
|
$33.36
|
299,762
|
$140,000
|
|
The exhibit numbers in the following list correspond to the number assigned to such exhibits in the Exhibit Table of Item 601 of Regulation S-K:
|
Exhibit
Number
|
Description
|
10.62
|
Form of Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan Non-Qualified Stock Option Grant Agreement (employees (including executive officers)).
|
10.63
|
Form of Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan Restricted Stock Award Agreement (employees (including executive officers)).
|
10.64
|
Form of Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan Non-Qualified Stock Option Grant Agreement (non-employee directors).
|
10.65
|
Form of Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan Restricted Stock Units Award Agreement (non-employee directors).
|
31.1
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
CABOT MICROELECTRONICS CORPORATION
|
|
Date: August 8, 2012
|
/s/ WILLIAM S. JOHNSON
|
William S. Johnson
|
|
Vice President and Chief Financial Officer
|
|
[Principal Financial Officer]
|
|
Date: August 8, 2012
|
/s/ THOMAS S. ROMAN
|
Thomas S. Roman
|
|
Corporate Controller
|
|
[Principal Accounting Officer]
|
PARTICIPANT
|
Type of Grant
|
Number of Option Shares Granted
|
Exercise Price Per Share on [GD, __/__/__]
|
Participant ID Number
|
«FIRST_NAME» «LAST_NAME»
|
Non-Qualified Stock Option
|
«APPROVED_GRANT NUMBER»
|
[fmv/closing price on Grant Date, __/__/__]
|
«SOCIAL_SECURITY»
|
Grant Date
|
Vesting Dates
|
Expiration Date
|
Grant Number
|
|
[GD, __/__/____]
|
25% [1
st
anniv. GD]
25% [2d anniv. GD]
25% [3d anniv. GD]
25% [4
th
anniv. GD]
|
[10 yrs from GD, __/__/____]
|
«GRANT_ID»
|
1.
|
Vesting and Exercise
. The Award shall become vested and exercisable in accordance with the following table:
|
Installment
|
Vesting Date Applicable to Installment
|
25%
25%
25%
25%
|
[1
st
anniv. GD]
[2d anniv. GD]
[3d anniv. GD]
[4
th
anniv. GD]
|
|
Unless otherwise provided in this Agreement or the Plan, if the date of Participant’s termination of Service, as defined in the Plan, with the Company precedes the relevant Vesting Date, an installment shall not vest on the otherwise applicable Vesting Date and all Options subject to such installment shall immediately terminate as of the date of such termination of Service.
|
2.
|
Termination / Cancellation / Rescission.
The Company may terminate, cancel, rescind or recover an Award immediately under certain circumstances, including, but not limited to, the Participant’s:
|
(a)
|
actions constituting Cause, as defined in the Plan and as otherwise enforceable under local law;
|
|
(b)
|
rendering of services for a competitor prior to, or within six (6) months after, the exercise of any Option or the termination of Participant's Service with the Company;
|
|
(c)
|
unauthorized disclosure of any confidential/proprietary information of the Company to any third party;
|
|
(d)
|
failure to comply with the Company’s policies regarding the identification, disclosure and protection of intellectual property;
|
|
(e)
|
violation of the Cabot Microelectronics Corporation Employee Confidentiality, Intellectual Property and Non-Competition Agreement;
|
(f)
|
violation of the Cabot Microelectronics Corporation Code of Business Conduct, including those provisions related to financial reporting.
|
|
In the event of any such termination, cancellation, rescission or revocation, the Participant must return any Stock obtained by the Participant pursuant to the Award, or pay to the Company the amount of any gain realized on the sale of such Stock, and the Company shall be entitled to set-off against the amount of any such gain any amount owed to the Participant by the Company. To the extent applicable, the purchase price for such Stock shall be returned to the Participant, including any withholding requirements.
|
3.
|
Purpose of Award
. The Award is intended to promote goodwill between the Participant and the Company and shall not be considered as salary or other remuneration for any employment or other services the Participant may perform for the Company or any of its affiliates. The Company’s grant of the Option does not confer any contractual or other rights of employment or service with the Company. Benefits granted under the Plan shall not be considered as part of the Participant’s salary in the event of severance, redundancy or resignation. Granting of the Award shall also not be construed as creating any right on the part of Participant to receive any additional benefits including awards in the future, it being expressly understood and agreed that any future awards shall be made solely at the discretion of the Company.
|
4.
|
Expiration
. The Option, including vested Options, shall not be exercisable after the Company’s close of business on the last business day that occurs on or prior to the Expiration Date. The “Expiration Date” shall be the
earliest
to occur of:
|
(a)
|
[Expiration Date: 10 years from GD];
|
(b)
|
If the Participant’s termination of Service occurs by reason of death or Disability, the three (3) year anniversary of the date of such termination or the ten (10) year anniversary of the Grant Date, whichever is sooner. In such case of termination of Service occurring by reason of death or Disability, then any unvested portion of the Option shall be fully vested and exercisable as of such date of termination. For purposes hereof, “Disability” shall have the meaning provided under: (i) first, an employment agreement between the Participant and the Company; (ii) second, if no such employment agreement exists, the long-term disability program maintained by the Company or any governmental entity covering the Participant; or (iii) third, if no such agreement or program exists, permanent and total disability within the meaning of Section 22 (e)(3) of the Code;
|
(c)
|
If the Participant’s termination of Service occurs by reason of Cause, the date preceding the date of such termination;
|
(d)
|
If the Participant’s termination of Service occurs by reason of Change in Control, three (3) months after the date of such termination;
|
(e)
|
If the Participant’s termination of Service occurs by reason of Retirement, all Options vested and exercisable as of the date of such termination will remain exercisable until the ten (10) year anniversary of the Grant Date. For purposes hereof, “Retirement” shall mean the termination of the Participant’s Service following the Participant’s attainment of at least (i) five (5) years of employment with the Company
and
(ii) fifty-five (55) years of age,
provided, however
, that the Participant’s termination of Service will not be deemed to have occurred by reason of Retirement if the Participant’s Service has been terminated by reason of Cause, as determined by the Company in its sole discretion; or
|
|
(f)
|
If the Participant’s termination of Service is for any reason other than (b), (c), (d) or (e) above, all Options vested and exercisable as of the date of termination will remain exercisable for one (1) month after the termination date, after which all unexercised Options are terminated.
|
5.
|
Method of Option Exercise
. Subject to the terms of this Agreement and the Plan, the Participant may exercise, in whole or in part, the vested portion of the Option at any time by complying with any exercise procedures established by the Company in its sole discretion. The Participant shall pay the exercise price for the portion of the Option being exercised to the Company in full, at the time of exercise, either:
|
(b)
|
in shares of Stock having a Fair Market Value equal to the aggregate exercise price for the shares of Stock being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that, such shares of Stock have been held by the Participant for no less than six (6) months;
|
(c)
|
partly in cash and partly in such shares of Stock; or
|
(d)
|
through the delivery of irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the aggregate exercise price for the shares of Stock being purchased (“cashless exercise”).
|
|
Anything to the contrary herein notwithstanding, the Option cannot be exercised and the Company shall not be obligated to issue any shares of Stock hereunder if the Company determines that the issuance of such shares would violate the provision of any applicable law, including the rules and regulations of any securities exchange on which the Stock is traded. Please refer to Section 6.2(d) of the Plan for additional information.
|
6.
|
Taxes.
|
(a)
|
All deliveries and distributions under this Agreement are subject to withholding of all applicable taxes based on country specific tax requirement. Please refer to electronic copy of “Taxes” for your individual circumstances based on your location. The various methods and manner by which the tax withholding may be satisfied are set forth in Section 8.4 of the Plan. If the Participant is subject to Section 16 (an “Insider”), of the Securities Exchange Act of 1934 (“Exchange Act”) and other securities laws, any surrender of previously owned shares to satisfy tax withholding obligations arising upon exercise of an Option must comply with the requirements of Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”) and other relevant rules and regulations.
|
(b)
|
If the Fair Market Value of a share of stock on the date the Participant exercises the Option is greater than the Exercise Price, the Participant will be taxed on the difference multiplied by the number of shares purchased with cash at the date of exercise. This income is taxed as ordinary income and subject to various withholding taxes. The Company is required to withhold and remit these taxes to the appropriate tax authorities. If the exercise of the Option results in no cash payment to the Participant from which the Company could withhold the income and FICA taxes, the Participant will be required to provide the Company with an amount of cash sufficient to satisfy the Participant’s tax withholding obligations or to make arrangements satisfactory to the Company with regard to such taxes, which in most instances can be done through the services provided by a broker. If the Participant does not pay the amount of required withholding to the Company, the Company will withhold from the shares delivered or from other amounts payable to the Participant, the minimum amount of funds required to cover all applicable federal, state and local income and employment taxes required to be withheld by the Company by reason of such exercise of the Option. The income will be reported to the Participant as part of the Participant’s employment compensation on the Participant’s annual earnings statement.
|
(c)
|
If the Participant sells the shares acquired under the Option, a long-term or short-term capital gain or loss may also result depending on: (i) the Participant’s holding period for the shares, and (ii) the difference between the Fair Market Value of the shares at the time of the sale and the Participant’s tax basis in the shares. The holding period is determined from the date the Option is exercised. Under current law, the capital gain or loss is long term if the property is held for more than one (1) year, and short term if the property is held for less than one (1) year. If the Exercise Price of an Option is paid in cash, the tax basis of the shares thereby acquired is the sum of (i) the Exercise Price paid for the shares, and (ii) the ordinary income, if any, determined by the difference between the Fair Market Value of the shares when exercised and the Exercise Price.
|
|
EACH PARTICIPANT IS URGED TO REVIEW THE U.S. TAX COMMUNICATION INFORMATION AND TO CONSULT WITH HIS OR HER OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, LOCAL AND OTHER TAX LAWS.
|
7.
|
Transferability
. The Option is not transferable other than: (a) by will or by the laws of descent and distribution; (b) pursuant to a domestic relations order; or (c) to members of the Participant’s immediate family, to trusts solely for the benefit of such immediate family members or to partnerships in which family members and/or trusts are the only partners, all as provided under the terms of the Plan. After any such transfer, the Option shall remain subject to the terms of the Plan.
|
8.
|
Adjustment of Shares
. In the event of any transaction described in Section 8.6 of the Plan, the terms of this Option (including, without limitation, the number and kind of shares subject to this Option and the Exercise Price) shall be adjusted as set forth in Section 8.6 of the Plan.
|
9.
|
Shareholder Rights.
Participant shall have no rights as a stockholder with respect to any shares of Stock subject to the Option until the Option is exercised and the shares are issued and transferred on the books of the Company to the Participant. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to such date, except as provided under the Plan.
|
10.
|
Data Privacy
. In order to perform its requirements under this Plan, the Company may process sensitive personal data about the Participant. Such data includes but is not limited to the information provided in this grant package and any changes thereto, other appropriate personal and financial data about the Participant, and information about the Participant’s participation in the Plan and shares exercised under the Plan from time to time. By signing the attached acceptance form, the Participant hereby gives explicit consent to the Company to process any such data. The Participant also hereby gives explicit consent to the Company
to transfer any personal data outside the country in which the Participant is employed and to the United States. The legal persons for whom the personal data is intended includes the Company and any of its subsidiaries, the outside plan administrator as selected by the Company from time to time and any other person that the Company may find appropriate in its administration of the Plan. The Participant may review and correct any personal data by contacting his local Human Resources Representative. The Participant understands that the transfer of the information outlined here is important to the administration of the Plan and failure to consent to the transmission of such information may limit or prohibit participation in the Plan.
|
11.
|
Severability
. In the event that any provision of this Agreement is found to be invalid, illegal or incapable of being enforced by any court of competent jurisdiction for any reason, in whole or in part, the remaining provisions of this Agreement shall remain in full force and effect to the fullest extent permitted by law.
|
12.
|
Waiver
. Failure to insist upon strict compliance with any of the terms and conditions of this Agreement or the Plan shall not be deemed a waiver of such term or condition.
|
13.
|
Notices
. Any notices provided for in this Agreement or the Plan must be in writing and hand delivered, sent by fax or overnight courier, or by postage paid first class mail. Notices are to be sent to the Participant at the address indicated by the Company’s records and to the Company at its principal executive office.
|
14.
|
Governing Law
. This Agreement shall be construed under the laws of the State of Illinois.
|
|
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its name and on its behalf, all as of the Grant Date.
|
Participant
|
Type of Award
|
Number of Restricted Shares Awarded
|
Fair Market Value of Restricted Shares on Date of Award
|
Participant ID Number
|
NAME
|
Restricted Stock
|
[_________]
|
$XX.XX
[general: award date (AD) fmv/close price]
|
[xxx-xx-xxxx]
|
Date of Award
|
Date Restrictions Lapse (Vesting Date(s))
|
Award Number
|
||
[award date]
|
25%1
st
anniv. AD
25%2danniv. AD
25%3danniv. AD
25%4
th
anniv. AD
|
[xxxxx]
|
1.
|
Vesting Dates and Lapse of Restrictions
. The Award shall become vested and the restrictions will lapse in accordance with the following table:
|
Number of Shares
[general]
|
Vesting Date
[general]
|
25%
25%
25%
25%
|
[1
st
anniv. AD]
[2d anniv. AD]
[3d anniv. AD]
[4
th
anniv. AD]
|
2.
|
Termination / Cancellation / Rescission.
The Company may terminate, cancel, rescind or recover the Award immediately under certain circumstances, including, but not limited to, the Participant’s:
|
(a)
|
actions constituting Cause, as defined in the Plan and as otherwise enforceable under local law;
|
(b)
|
rendering of services for a competitor prior to, or within six (6) months after, the exercise of any Award or the termination of Participant's Service with the Company;
|
(c)
|
unauthorized disclosure of any confidential/proprietary information of the Company to any third party;
|
(d)
|
failure to comply with the Company’s policies regarding the identification, disclosure and protection of intellectual property;
|
(e)
|
violation of the Cabot Microelectronics Corporation Employee Confidentiality, Intellectual Property and Non-Competition Agreement.
|
(f)
|
violation of the Cabot Microelectronics Corporation Code of Business Conduct, including those provisions related to financial reporting.
|
3.
|
Purpose of Award
. The Award is intended to promote goodwill between the Participant and the Company and shall not be considered as salary or other remuneration for any employment or other services the Participant may perform for the Company or any of its affiliates. The Company’s grant of the Award does not confer any contractual or other rights of employment or service with the Company. Benefits granted under the Plan shall not be considered as part of the Participant’s salary in the event of severance, redundancy or resignation. Granting of the Award shall also not be construed as creating any right on the part of Participant to receive any additional benefits including awards in the future, it being expressly understood and agreed that any future awards shall be made solely at the discretion of the Company.
|
4.
|
Rights and Restrictions Governing Restricted Stock
. As of the Date of Award, one or more certificates representing the appropriate number of shares of Stock granted to the Participant shall be registered in the Participant’s name but shall be held by the Company for the Participant’s account. The Participant shall have all rights of a holder as to such shares of Stock (including, to the extent applicable, the right to receive dividends and to vote), subject to the following restrictions: (a) the Participant has executed a valid stock power on behalf of the Company for such Stock; (b) the Participant shall be entitled to delivery of certificates representing shares of Stock when restrictions lapse; and (c) none of the Stock may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of until the restrictions have lapsed.
|
5.
|
Delivery of Restricted Stock
. As soon as reasonably practicable following the date on which restrictions lapse, one or more stock certificates for the appropriate number of shares of Stock, free of the restrictions set forth in the Agreement, shall be delivered to the Participant or such shares shall be credited to a brokerage account if the Participant so directs; provided however, that such certificates shall bear such legends as the Committee, in its sole discretion, may determine to be necessary or advisable in order to comply with applicable federal and state securities laws.
|
6.
|
Tax Treatment
. The Participant will be taxed on the difference between any purchase price and the Fair Market Value of the Stock on the date the restrictions lapse. This income will be taxed as ordinary income and subject to income and FICA withholding taxes. The Company is required to withhold and remit these taxes to the appropriate tax authorities. The Participant will be required to provide the Company with an amount of cash sufficient to satisfy the Participant’s tax withholding obligations or to make arrangements satisfactory to the Company with regard to such taxes. The income will be reported to the Participant as part of the Participant's employment compensation on the Participant's annual earnings statement Form W-2.
|
7.
|
Tax Withholding
. All deliveries and distributions under this Agreement are subject to withholding of all applicable taxes. The various methods and manner by which tax withholding may be satisfied are set forth in Section 8.4 of the Plan. If the Participant is subject to Section 16 (an “Insider”), of the Securities Exchange Act of 1934 (“Exchange Act”), any surrender of previously owned shares to satisfy tax withholding obligations arising under an Award must comply with the requirements of Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”).
|
8.
|
Transferability
. The Award Stock is not transferable other than: (a) by will or by the laws of descent and distribution; (b) pursuant to a domestic relations order; or (c) to members of the Participant’s immediate family, to trusts solely for the benefit of such immediate family members or to partnerships in which family members and/or trusts are the only partners, all as provided under the terms of the Plan. After any such transfer, the Award Stock shall remain subject to the terms of the Plan.
|
9.
|
Adjustment of Shares
. In the event of any transaction described in Section 8.6 of the Plan, the terms of this Award (including, without limitation, the number and kind of shares subject to this Award) shall be adjusted as set forth in Section 8.6 of the Plan.
|
10.
|
Severability
. In the event that any provision of this Agreement is found to be invalid, illegal or incapable of being enforced by any court of competent jurisdiction for any reason, in whole or in part, the remaining provisions of this Agreement shall remain in full force and effect to the fullest extent permitted by law.
|
11.
|
Waiver
. Failure to insist upon strict compliance with any of the terms and conditions of this Agreement or the Plan shall not be deemed a waiver of such term or condition.
|
12.
|
Notices
. Any notices provided for in this Agreement or the Plan must be in writing and hand delivered, sent by fax or overnight courier, or by postage paid first class mail. Notices are to be sent to the Participant at the address indicated by the Company’s records and to the Company at its principal executive office.
|
13.
|
Governing Law
. This Agreement shall be construed under the laws of the State of Illinois.
|
Participant Name/
ID Number
|
Type of Award
|
Number of Option Shares Awarded
|
Exercise Price Per Share on Grant Date [GD]
|
|
[Director Name]
|
Non-Qualified Stock Option
|
[____]
|
$[
FMV/closing price on GD] [Annual Meeting [AM] Date for Annual; Date of Election/ Appointment for Initial [DE]]
|
|
Grant Date
|
Vesting Date
|
Expiration Date
|
Award Number
|
|
[GD]
[AM Date for Annual; DE for Initial]
|
[100% 1st anniversary of GD
for annual grant];
[25% GD;
25% 1
st
anniv. GD
25% 2d anniv. GD
25% 3d anniv. GD
for initial grant;]
|
[Tenth anniversary of GD]
|
[xxxxx]
|
1.
|
Vesting and Exercise. The Option shall become vested and exercisable in accordance with the following table:
|
Installment
|
Vesting Date Applicable to Installment
|
[For annual grant, 100%]
[For initial grant, 25%
25%
25%
25%]
|
[For annual grant, 1st anniversary of GD]
[For initial grant, GD
1
st
anniv. GD
2d anniv. GD
3d anniv. GD]
|
2.
|
Termination / Cancellation / Rescission / Recovery / Revocation
. The Company may terminate, cancel, rescind, recover, or revoke the Option immediately under certain circumstances, including, but not limited to, the Participant’s:
|
(a)
|
actions constituting Cause, as defined in the Plan, or the Company’s By-laws or Articles of Incorporation, as applicable;
|
(b)
|
rendering of services for a competitor prior to, or within six (6) months after, the exercise of any Option or the termination of Participant’s Service with the Company;
|
(c)
|
unauthorized disclosure of any confidential/proprietary information of the Company to any third party;
|
3.
|
Expiration
. The Option, including the vested portion of an Option, shall not be exercisable after the Company’s close of business on the last business day that occurs on or prior to the Expiration Date. The “Expiration Date” shall be the
earliest
to occur of:
|
(a)
|
The tenth (10th) anniversary of the Grant Date;
|
(b)
|
If the Participant terminates Service by reason of Cause, the date preceding the date of such termination;
|
(c)
|
If the Participant terminates Service for any reason other than (b) above, any portion of the Option that is vested and exercisable as of the date of termination will remain exercisable until the tenth (10th) anniversary of the Grant Date. In such case of termination of Service as a Director of the Company occurring by reason of death or Disability, then any unvested portion of the Option shall be fully vested and exercisable as of such date of termination. In addition, upon the Participant’s termination of Service as a Director of the Company for any reason other than by reason of Cause, death, Disability or a Change in Control, if at such time the Participant has completed at least the equivalent of two full terms as a Director of the Company, as defined in the Company’s bylaws, then any unvested portion of the Option shall be fully exercisable as of such date of termination.
|
4.
|
Method of Option Exercise
. Subject to the terms of this Agreement and the Plan, the Participant may exercise, in whole or in part, the vested portion of the Option at any time by complying with any exercise procedures established by the Company in its sole discretion. The Participant shall pay the exercise price for the portion of the Option being exercised to the Company in full, at the time of exercise, either:
|
(a)
|
in cash;
|
(b)
|
in shares of Stock having a Fair Market Value equal to the aggregate exercise price for the shares of Stock being purchased and satisfying such other requirements as may be imposed by the Committee; provided, that, such shares of Stock have been held by the Participant for no less than six (6) months;
|
(c)
|
partly in cash and partly in such shares of Stock; or
|
(d)
|
through the delivery of irrevocable instructions to a broker to deliver promptly to the Company an amount equal to the aggregate exercise price for the shares of Stock being purchased (“cashless exercise”).
|
5.
|
Taxes
.
|
(a)
|
All deliveries and distributions under this Agreement are subject to all applicable taxes. As a Director of the Company, the Participant is subject to Section 16 (an “Insider”), of the Securities Exchange Act of 1934 (“Exchange Act”), as well as other relevant securities laws, and any surrender of previously owned shares to satisfy tax withholding obligations arising upon exercise of an Option, or a ‘cashless exercise’ must comply with the requirements of Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”), and other relevant law, regulations and Company guidelines.
|
(b)
|
If the Fair Market Value of a share of Stock on the date the Participant exercises the Option is greater than the Exercise Price, the Participant will generally be taxed on the difference multiplied by the number of shares purchased with cash at the date of exercise. This income will be taxed as ordinary income and subject to various taxes. The income will be reported to the Participant as part of the Participant’s fees on the Participant’s annual Form 1099 issued by the Company.
|
(c)
|
If the Participant sells the shares acquired under the Option, a long-term or short-term capital gain or loss may also result depending on: (i) the Participant’s holding period for the shares, and (ii) the difference between the Fair Market Value of the shares at the time of the sale and the Participant’s tax basis in the shares. The holding period is determined from the date the Option is exercised. Under current law, the capital gain or loss is long term if the property is held for more than one (1) year, and short term if the property is held for less than one (1) year. If the Exercise Price of an Option is paid in cash, the tax basis of the shares thereby acquired is the sum of (1) the Exercise Price paid for the shares, and (2) the ordinary income, if any, determined by the difference between the Fair Market Value of the shares when exercised and the Exercise Price.
|
6.
|
Transferability
. The Option is not transferable other than: (a) by will or by the laws of descent and distribution; (b) pursuant to a domestic relations order; or (c) to members of the Participant’s immediate family, to trusts solely for the benefit of such immediate family members or to partnerships in which family members and/or trusts are the only partners, all as provided under the terms of the Plan. After any such transfer, the Option shall remain subject to the terms of the Plan.
|
7.
|
Adjustment of Shares
. In the event of any transaction that is a Share Change or a Corporate Transaction, each as described in Section 8.6 of the Plan, the terms of this Option (including, without limitation, the number and kind of shares subject to this Option and the Exercise Price) shall or may be adjusted, as applicable, as set forth in Section 8.6 of the Plan.
|
8.
|
Not an Employment Contract; Shareholder Rights
. The grant of an Option does not confer on the Participant any shareholder rights or any contractual or other rights of service or employment with the Company. The Participant will not have shareholder rights with respect to any shares of stock subject to the Option until the Option is exercised and the shares are issued and transferred on the books of the Company to the Participant. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to such date, except as provided under the Plan.
|
9.
|
Severability
. In the event that any provision of this Agreement is found to be invalid, illegal or incapable of being enforced by any court of competent jurisdiction for any reason, in whole or in part, the remaining provisions of this Agreement shall remain in full force and effect to the fullest extent permitted by law.
|
10.
|
Waiver
. Failure to insist upon strict compliance with any of the terms and conditions of this Agreement or the Plan shall not be deemed a waiver of such term or condition.
|
11.
|
Notices
. Except as otherwise provided in Section 12, any notices provided for in this Agreement or the Plan must be in writing and hand delivered, sent by fax or overnight courier, or by postage paid first class mail. Notices are to be sent to the Participant at the address indicated by the Company’s records and to the Company at its principal executive office.
|
12.
|
Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to the Option or other awards granted to the Participant under the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
|
13.
|
Section 409A
. The Option is intended to be exempt from the requirements of Section 409A. The Plan and this Agreement shall be administered and interpreted in a manner consistent with this intent. If the Company determines that this Agreement is subject to Section 409A and that it has failed to comply with the requirements of Section 409A, the Company may, at the Company’s sole discretion, and without the Participant’s consent, amend this Agreement to cause it to comply with Section 409A or be exempt from Section 409A.
|
14.
|
Governing Law
. This Agreement shall be construed under the laws of the [State of Delaware].
|
Participant Name/
ID Number
|
Type of Award
|
Number of Shares Subject to RSUs
|
Fair Market Value of Shares Subject to RSUs on Award Date [AD]
|
[Name]
[xxx-xx-xxxx]
|
Restricted Stock Units
|
[____]
|
$[FMV/closing price on AD]
[Annual Meeting Date for Annual; Date of Election/Appointment [DE] for Initial]
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Award Date
|
Vesting Date[100% on first anniversary, for annual; equally over 3 yrs., beginning on AD, for initial]]
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Award Number
|
|
[AD]
[Annual Meeting Date for Annual] [DE for Initial]
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[100% 1st anniversary of AD
for annual award];
[25% AD;
25% 1
st
anniv. AD
25% 2d anniv. AD
25% 3d anniv. AD
for initial award]
|
[xxxxx]
|
1.
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Award
. The Award shall become vested and the Participant shall be entitled to receive one share of Stock for each vested RSU in accordance with the following table:
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2.
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Termination / Cancellation / Rescission / Recovery / Revocation
. The Company may terminate, cancel, rescind, recover, or revoke the Award immediately under certain circumstances, including, but not limited to, the Participant’s:
|
(a)
|
actions constituting Cause, as defined in the Plan, or the Company’s By-laws or Articles of Incorporation, as applicable;
|
(b)
|
rendering of services for a competitor prior to, or within six (6) months after, the exercise of any Award or the termination of Participant’s Service with the Company; or,
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(c)
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unauthorized disclosure of any confidential/proprietary information of the Company to any third party.
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3.
|
Rights and Restrictions Governing Underlying Stock
. As of the Award Date, and until such time as the Participant becomes vested in a RSU and receives a share of Stock as provided in Section 4 of this Agreement, the Participant shall have no rights of a shareholder (including, to the extent applicable, voting and dividend rights) as to each share of Stock subject to a RSU.
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4.
|
Delivery of Stock
. As soon as reasonably practicable following each vesting date, one or more stock certificates for the appropriate number of shares of Stock shall be delivered to the Participant or such shares shall be credited to a brokerage account if the Participant so directs; provided however, that such certificates shall bear such legends as the Committee, in its sole discretion, may determine to be necessary or advisable in order to comply with applicable federal and state securities laws.
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5.
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Tax Treatment/Tax Withholding
. The Participant will generally be taxed on the Fair Market Value of the shares of Stock subject to the Award on the date(s) such shares of Stock are payable to the Participant according to the vesting terms above. This income will be taxed as ordinary income but will not be subject to any withholding taxes unless required under applicable law. Instead, the Participant is required to pay any applicable taxes to the appropriate tax authorities directly. The income will be reported to the Participant as part of the Participant’s fees on the Participant’s annual Form 1099 issued by the Company. As a Director of the Company, the Participant is subject to Section 16 (an “Insider”), of the Securities Exchange Act of 1934 (“Exchange Act”), and any surrender of previously owned shares to satisfy tax withholding obligations arising under an Award must comply with the requirements of Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”), and any other relevant law, regulations and Company guidelines.
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6.
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Transferability
. The Award is not transferable other than: (a) by will or by the laws of descent and distribution; (b) pursuant to a domestic relations order; or (c) to members of the Participant’s immediate family, to trusts solely for the benefit of such immediate family members or to partnerships in which family members and/or trusts are the only partners, all as provided under the terms of the Plan. After any such transfer, the Award shall remain subject to the terms of the Plan.
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7.
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Adjustment of Shares
. In the event of any transaction that is a Share Change or a Corporate Transaction, each as described in Section 8.6 of the Plan, the terms of this Award (including, without limitation, the number and kind of shares subject to this Award) shall or may be adjusted, as applicable, as set forth in Section 8.6 of the Plan.
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8.
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Not an Employment Contract
. The Company’s grant of the Award does not confer any contractual or other rights of employment or service with the Company.
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9.
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Severability
. In the event that any provision of this Agreement is found to be invalid, illegal or incapable of being enforced by any court of competent jurisdiction for any reason, in whole or in part, the remaining provisions of this Agreement shall remain in full force and effect to the fullest extent permitted by law.
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10.
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Waiver
. Failure to insist upon strict compliance with any of the terms and conditions of this Agreement or the Plan shall not be deemed a waiver of such term or condition.
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11.
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Notices
. Except as otherwise provided in Section 12, any notices provided for in this Agreement or the Plan must be in writing and hand delivered, sent by fax or overnight courier, or by postage paid first class mail. Notices are to be sent to the Participant at the address indicated by the Company’s records and to the Company at its principal executive office.
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12.
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Electronic Delivery
. The Company may, in its sole discretion, decide to deliver any documents related to the RSUs or other awards granted to the Participant under the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
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13.
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Section 409A
. The RSUs are intended to be exempt from the requirements of Section 409A. The Plan and this Agreement shall be administered and interpreted in a manner consistent with this intent. If the Company determines that this Agreement is subject to Section 409A and that it has failed to comply with the requirements of Section 409A, the Company may, at the Company’s sole discretion, and without the Participant’s consent, amend this Agreement to cause it to comply with Section 409A or be exempt from Section 409A.
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14.
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Governing Law
. This Agreement shall be construed under the laws of the State of Delaware.
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1.
|
I have reviewed this quarterly report on Form 10-Q of Cabot Microelectronics Corporation;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 8, 2012
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/s/ WILLIAM P. NOGLOWS
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William P. Noglows
|
|
Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Cabot Microelectronics Corporation;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 8, 2012
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/s/ WILLIAM S. JOHNSON
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William S. Johnson
|
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Chief Financial Officer
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Date: August 8, 2012
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/s/ WILLIAM P. NOGLOWS
|
William P. Noglows
|
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Chief Executive Officer
|
|
Date: August 8, 2012
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/s/ WILLIAM S. JOHNSON
|
William S. Johnson
|
|
Chief Financial Officer
|