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
|
Part I. Financial Information
|
Page
|
|
Item 1.
|
Unaudited Financial Statements
|
|
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
Item 2.
|
24
|
|
Item 3.
|
31
|
|
Item 4.
|
33
|
|
Part II. Other Information
|
||
Item 1.
|
34
|
|
Item 1A.
|
34
|
|
Item 2.
|
39
|
|
Item 3.
|
39
|
|
Item 4.
|
39
|
|
Item 6.
|
40
|
|
41
|
Three Months Ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Revenue
|
$
|
100,369
|
$
|
111,934
|
||||
Cost of goods sold
|
50,174
|
54,960
|
||||||
Gross profit
|
50,195
|
56,974
|
||||||
Operating expenses:
|
||||||||
Research, development and technical
|
14,828
|
15,018
|
||||||
Selling and marketing
|
6,749
|
7,639
|
||||||
General and administrative
|
14,263
|
11,751
|
||||||
Total operating expenses
|
35,840
|
34,408
|
||||||
Operating income
|
14,355
|
22,566
|
||||||
Interest expense
|
1,167
|
906
|
||||||
Other income, net
|
190
|
1,057
|
||||||
Income before income taxes
|
13,378
|
22,717
|
||||||
Provision for income taxes
|
2,069
|
2,801
|
||||||
Net income
|
$
|
11,309
|
$
|
19,916
|
||||
Basic earnings per share
|
$
|
0.46
|
$
|
0.83
|
||||
Weighted average basic shares outstanding
|
24,142
|
23,651
|
||||||
Diluted earnings per share
|
$
|
0.46
|
$
|
0.80
|
||||
Weighted average diluted shares outstanding
|
24,549
|
24,486
|
Three Months Ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Net income
|
$
|
11,309
|
$
|
19,916
|
||||
Other comprehensive income (loss), net of tax:
|
||||||||
Foreign currency translation adjustments
|
197
|
(8,332
|
)
|
|||||
Minimum pension liability adjustment
|
372
|
-
|
||||||
Net unrealized losses on cash flow hedges
|
559
|
(169
|
)
|
|||||
Other comprehensive income (loss), net of tax
|
1,128
|
(8,501
|
)
|
|||||
Comprehensive income
|
$
|
12,437
|
$
|
11,415
|
December 31, 2015
|
September 30, 2015
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
218,118
|
$
|
354,190
|
||||
Accounts receivable, less allowance for doubtful accounts of $1,231 at December 31, 2015, and $1,224 at September 30, 2015
|
54,998
|
49,405
|
||||||
Inventories, net
|
76,179
|
70,678
|
||||||
Prepaid expenses and other current assets
|
15,163
|
12,840
|
||||||
Deferred income taxes
|
-
|
7,395
|
||||||
Total current assets
|
364,458
|
494,508
|
||||||
Property, plant and equipment, net
|
101,537
|
93,743
|
||||||
Goodwill
|
95,703
|
40,442
|
||||||
Other intangible assets, net
|
63,757
|
4,565
|
||||||
Deferred income taxes
|
15,615
|
12,212
|
||||||
Other long-term assets
|
15,615
|
15,004
|
||||||
Total assets
|
$
|
656,685
|
$
|
660,474
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
13,802
|
$
|
15,448
|
||||
Accrued expenses, income taxes payable and other current liabilities
|
29,464
|
36,446
|
||||||
Current portion of long-term debt
|
8,750
|
8,750
|
||||||
Total current liabilities
|
52,016
|
60,644
|
||||||
Long-term debt, net of current portion
|
153,125
|
155,313
|
||||||
Deferred income taxes
|
64
|
76
|
||||||
Other long-term liabilities
|
15,368
|
15,477
|
||||||
Total liabilities
|
220,573
|
231,510
|
||||||
Commitments and contingencies (Note 10)
|
||||||||
Stockholders' equity:
|
||||||||
Common Stock: Authorized: 200,000,000 shares, $0.001 par value; Issued: 33,619,961 shares at December 31, 2015, and 33,489,181 shares at September 30, 2015
|
33
|
33
|
||||||
Capital in excess of par value of common stock
|
503,091
|
495,673
|
||||||
Retained earnings
|
295,397
|
284,088
|
||||||
Accumulated other comprehensive income
|
(4,962
|
)
|
(6,090
|
)
|
||||
Treasury stock at cost, 9,342,227 shares at December 31, 2015, and 9,041,678 shares at September 30, 2015
|
(357,447
|
)
|
(344,740
|
)
|
||||
Total stockholders' equity
|
436,112
|
428,964
|
||||||
Total liabilities and stockholders' equity
|
$
|
656,685
|
$
|
660,474
|
Three Months Ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
11,309
|
$
|
19,916
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
6,033
|
4,731
|
||||||
Provision for doubtful accounts
|
20
|
(12
|
)
|
|||||
Share-based compensation expense
|
4,467
|
3,407
|
||||||
Deferred income tax expense
|
1,509
|
3,531
|
||||||
Non-cash foreign exchange gain
|
(280
|
)
|
(50
|
)
|
||||
(Gain)/loss on disposal of property, plant and equipment
|
37
|
(150
|
)
|
|||||
Impairment of long-lived assets
|
79
|
-
|
||||||
Other
|
273
|
(105
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(2,308
|
)
|
(2,846
|
)
|
||||
Inventories
|
(2,860
|
)
|
243
|
|||||
Prepaid expenses and other assets
|
(67
|
)
|
(6,763
|
)
|
||||
Accounts payable
|
(2,801
|
)
|
(906
|
)
|
||||
Accrued expenses, income taxes payable and other liabilities
|
(8,193
|
)
|
656
|
|||||
Net cash provided by operating activities
|
7,218
|
21,652
|
||||||
Cash flows from investing activities:
|
||||||||
Additions to property, plant and equipment
|
(5,120
|
)
|
(2,527
|
)
|
||||
Proceeds from the sale of property, plant and equipment
|
17
|
160
|
||||||
Acquisition of business, net of cash acquired
|
(126,455
|
)
|
-
|
|||||
Net cash used in investing activities
|
(131,558
|
)
|
(2,367
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayment of long-term debt
|
(2,188
|
)
|
(2,188
|
)
|
||||
Repurchases of common stock
|
(12,707
|
)
|
(17,230
|
)
|
||||
Net proceeds from issuance of stock
|
2,622
|
11,424
|
||||||
Tax benefits associated with share-based compensation expense
|
424
|
1,886
|
||||||
Net cash used in financing activities
|
(11,849
|
)
|
(6,108
|
)
|
||||
Effect of exchange rate changes on cash
|
117
|
(1,903
|
)
|
|||||
Increase/(decrease) in cash and cash equivalents
|
(136,072
|
)
|
11,274
|
|||||
Cash and cash equivalents at beginning of period
|
354,190
|
284,155
|
||||||
Cash and cash equivalents at end of period
|
$
|
218,118
|
$
|
295,429
|
||||
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
|
$
|
1,886
|
$
|
648
|
Total purchase consideration
|
$
|
141,716
|
||
Cash
|
$
|
15,261
|
||
Accounts receivable
|
3,427
|
|||
Inventories
|
2,768
|
|||
Prepaid expenses and other current assets
|
1,712
|
|||
Property, plant and equipment
|
6,296
|
|||
Intangible assets
|
61,000
|
|||
Deferred tax assets
|
19,642
|
|||
Other long-term assets
|
1,458
|
|||
Accounts payable
|
(1,057
|
)
|
||
Accrued expenses and other current liabilities
|
(1,692
|
)
|
||
Deferred tax liabilities
|
(22,289
|
)
|
||
Total identifiable net assets
|
86,526
|
|||
Goodwill
|
55,190
|
|||
$
|
141,716
|
Preliminary
|
Useful
|
|||||
Fair Value
|
Life
|
|||||
Trade name
|
$
|
8,000
|
7 years
|
|||
Customer relationships
|
8,000
|
11 years
|
||||
Developed technology - product family A
|
25,000
|
7 years
|
||||
Developed technology - product family B
|
8,000
|
8 years
|
||||
In-process technology
|
12,000
|
|||||
Total preliminary intangible assets
|
$
|
61,000
|
Three Months Ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Revenues
|
$
|
101,776
|
$
|
117,569
|
||||
Net income
|
12,372
|
16,815
|
||||||
Earnings per share - basic
|
0.51
|
0.70
|
||||||
Earnings per share - diluted
|
$
|
0.50
|
$
|
0.68
|
3. | FAIR VALUE OF FINANCIAL INSTRUMENTS |
December 31, 2015
|
Level 1
|
Level 2
|
Level 3
|
Total
Fair Value
|
||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
218,118
|
$
|
-
|
$
|
-
|
$
|
218,118
|
||||||||
Other long-term investments
|
1,489
|
-
|
-
|
1,489
|
||||||||||||
Derivative financial instruments
|
-
|
130
|
-
|
130
|
||||||||||||
Total assets
|
$
|
219,607
|
$
|
130
|
$
|
-
|
$
|
219,737
|
||||||||
Liabilities:
|
||||||||||||||||
Derivative financial instruments
|
-
|
653
|
-
|
653
|
||||||||||||
Total liabilities
|
$
|
-
|
$
|
653
|
$
|
-
|
$
|
653
|
September 30, 2015
|
Level 1
|
Level 2
|
Level 3
|
Total
Fair Value
|
||||||||||||
Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
354,190
|
$
|
-
|
$
|
-
|
$
|
354,190
|
||||||||
Other long-term investments
|
1,720
|
-
|
1,720
|
|||||||||||||
Derivative financial instruments
|
-
|
14
|
-
|
14
|
||||||||||||
Total assets
|
$
|
355,910
|
$
|
14
|
$
|
-
|
$
|
355,924
|
||||||||
Liabilities:
|
||||||||||||||||
Derivative financial instruments
|
-
|
1,406
|
-
|
1,406
|
||||||||||||
Total liabilities
|
$
|
-
|
$
|
1,406
|
$
|
-
|
$
|
1,406
|
4. | INVENTORIES, NET |
December 31, 2015
|
September 30, 2015
|
|||||||
Raw materials
|
$
|
48,412
|
$
|
42,603
|
||||
Work in process
|
4,919
|
5,487
|
||||||
Finished goods
|
22,848
|
22,588
|
||||||
Total
|
$
|
76,179
|
$
|
70,678
|
5. | GOODWILL AND OTHER INTANGIBLE ASSETS |
December 31, 2015
|
September 30, 2015
|
|||||||||||||||
Gross
Carrying
Amount
|
Accumulated
Amortization
|
Gross
Carrying
Amount
|
Accumulated
Amortization
|
|||||||||||||
Other intangible assets subject to amortization:
|
||||||||||||||||
Product technology
|
$
|
41,060
|
$
|
8,612
|
$
|
8,053
|
$
|
7,490
|
||||||||
Acquired patents and licenses
|
8,270
|
7,922
|
8,270
|
7,845
|
||||||||||||
Trade secrets and know-how
|
2,550
|
2,550
|
2,550
|
2,550
|
||||||||||||
Customer relationships, distribution rights and other
|
27,412
|
9,641
|
11,392
|
9,005
|
||||||||||||
Total other intangible assets subject to amortization
|
79,292
|
28,725
|
30,265
|
26,890
|
||||||||||||
In-process technology
|
12,000
|
-
|
||||||||||||||
Other indefinite-lived intangibles*
|
1,190
|
1,190
|
||||||||||||||
Total other intangible assets not subject to amortization
|
13,190
|
1,190
|
||||||||||||||
Total other intangible assets
|
$
|
92,482
|
$
|
28,725
|
$
|
31,455
|
$
|
26,890
|
Fiscal Year
|
Estimated
Amortization
Expense
|
||||
Remainder of 2016
|
$
|
6,142
|
|||
2017
|
7,508
|
||||
2018
|
6,861
|
||||
2019
|
6,453
|
||||
2020
|
6,448
|
6. | OTHER LONG-TERM ASSETS |
December 31, 2015
|
September 30, 2015
|
|||||||
Auction rate securities (ARS)
|
$
|
5,694
|
$
|
5,694
|
||||
Other long-term assets
|
4,672
|
3,595
|
||||||
Long-term contract asset
|
3,760
|
3,995
|
||||||
Other long-term investments
|
1,489
|
1,720
|
||||||
Total
|
$
|
15,615
|
$
|
15,004
|
7. | ACCRUED EXPENSES, INCOME TAXES PAYABLE AND OTHER CURRENT LIABILITIES |
December 31, 2015
|
September 30, 2015
|
|||||||
Accrued compensation
|
$
|
14,599
|
$
|
23,793
|
||||
Goods and services received, not yet invoiced
|
1,501
|
1,830
|
||||||
Deferred revenue and customer advances
|
636
|
538
|
||||||
Warranty accrual
|
411
|
209
|
||||||
Income taxes payable
|
7,186
|
4,276
|
||||||
Taxes, other than income taxes
|
1,211
|
975
|
||||||
Other accrued expenses
|
3,920
|
4,825
|
||||||
Total
|
$
|
29,464
|
$
|
36,446
|
Fiscal Year
|
Principal
Repayments
|
||||
Remainder of 2016
|
$
|
6,562
|
|||
2017
|
7,656
|
||||
2018
|
14,219
|
||||
2019
|
133,438
|
||||
Total
|
$
|
161,875
|
Asset Derivatives
|
Liability Derivatives
|
||||||||||||||||
|
Balance Sheet Location
|
December 31, 2015
|
September 30, 2015
|
December 31, 2015
|
September 30, 2015
|
||||||||||||
Derivatives designated as hedging instruments
|
|||||||||||||||||
Interest rate swap contracts
|
Other noncurrent assets
|
$
|
114
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
|
Accrued expenses and other current liabilities |
$
|
-
|
$
|
-
|
$
|
645
|
$
|
885
|
||||||||
|
Other long-term liabilities |
$
|
-
|
$
|
-
|
$
|
-
|
$
|
513
|
||||||||
Derivatives not designated as hedging instruments
|
|||||||||||||||||
Foreign exchange contracts
|
Prepaid expenses and other current
assets
|
$
|
16
|
$
|
14
|
$
|
-
|
$
|
-
|
||||||||
|
Accrued expenses and other current liabilities |
$
|
-
|
$
|
-
|
$
|
8
|
$
|
8
|
Gain (Loss) Recognized in Statement of Income
|
|||||||||
|
Three Months Ended
|
||||||||
|
Statement of Income Location
|
December 31, 2015
|
December 31, 2014
|
||||||
Derivatives not designated as hedging instruments
|
|||||||||
Foreign exchange contracts
|
Other income, net
|
$
|
(186
|
)
|
$
|
(1,336
|
)
|
10. | COMMITMENTS AND CONTINGENCIES |
Balance as of September 30, 2015
|
$
|
209
|
||
Reserve for product warranty during the reporting period
|
143
|
|||
Reserve acquired through business combination
|
220
|
|||
Settlement of warranty
|
(161
|
)
|
||
Balance as of December 31, 2015
|
$
|
411
|
11. | ACCUMULATED OTHER COMPREHENSIVE INCOME |
Foreign
Currency
Translation
|
Cash Flow
Hedges
|
Pension and
Other
Postretirement
Liabilities
|
Total
|
|||||||||||||
Balance at September 30, 2015
|
$
|
(4,011
|
)
|
$
|
(901
|
)
|
$
|
(1,178
|
)
|
$
|
(6,090
|
)
|
||||
Foreign currency translation adjustment, net of tax of $187
|
197
|
-
|
-
|
197
|
||||||||||||
Unrealized gain (loss) on cash flow hedges:
|
||||||||||||||||
Change in fair value, net of tax of $211
|
-
|
383
|
-
|
383
|
||||||||||||
Reclassification adjustment into earnings, net of tax of $97
|
-
|
176
|
-
|
176
|
||||||||||||
Change in pension and other postretirement, net of tax of $372
|
-
|
-
|
372
|
372
|
||||||||||||
Balance at December 31, 2015
|
$
|
(3,814
|
)
|
$
|
(342
|
)
|
$
|
(806
|
)
|
$
|
(4,962
|
)
|
Foreign
Currency
Translation
|
Cash Flow
Hedges
|
Pension and
Other
Postretirement
Liabilities
|
Total
|
|||||||||||||
Balance at September 30, 2014
|
$
|
10,115
|
$
|
-
|
$
|
(860
|
)
|
$
|
9,255
|
|||||||
Foreign currency translation adjustment, net of tax of $(1,626)
|
(8,332
|
)
|
-
|
-
|
(8,332
|
)
|
||||||||||
Unrealized gain (loss) on cash flow hedges:
|
||||||||||||||||
Change in fair value, net of tax of tax benefit of $0
|
-
|
(275
|
)
|
-
|
(275
|
)
|
||||||||||
Reclassification adjustment into earnings, net of tax of $0
|
-
|
106
|
-
|
106
|
||||||||||||
Change in pension and other postretirement, net of tax of $0
|
-
|
-
|
-
|
-
|
||||||||||||
Balance at December 31, 2014
|
$
|
1,783
|
$
|
(169
|
)
|
$
|
(860
|
)
|
$
|
754
|
12. | SHARE-BASED COMPENSATION PLANS |
Three Months Ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Cost of goods sold
|
$
|
534
|
$
|
498
|
||||
Research, development and technical
|
418
|
415
|
||||||
Selling and marketing
|
404
|
320
|
||||||
General and administrative
|
3,716
|
2,174
|
||||||
Total share-based compensation expense
|
5,072
|
3,407
|
||||||
Tax benefit
|
(1,714
|
)
|
(1,122
|
)
|
||||
Total share-based compensation expense, net of tax
|
$
|
3,358
|
$
|
2,285
|
13. | OTHER INCOME, NET |
Three Months Ended December 31,
|
||||||||
2015
|
2014
|
|||||||
Interest income
|
$
|
209
|
$
|
103
|
||||
Other income (expense)
|
(19
|
)
|
954
|
|||||
Total other income, net
|
$
|
190
|
$
|
1,057
|
15. | EARNINGS PER SHARE |
Three Months Ended December,
|
||||||||
2015
|
2014
|
|||||||
Numerator:
|
||||||||
Net Income
|
$
|
11,309
|
$
|
19,916
|
||||
Less: income attributable to participating securities
|
(127
|
)
|
(231
|
)
|
||||
Earnings available to common shares
|
$
|
11,182
|
$
|
19,685
|
||||
Denominator:
|
||||||||
Weighted average common shares
|
24,141,726
|
23,651,405
|
||||||
(Denominator for basic calculation)
|
||||||||
Weighted average effect of dilutive securities:
|
||||||||
Share-based compensation
|
407,039
|
834,197
|
||||||
Diluted weighted average common shares
|
24,548,765
|
24,485,602
|
||||||
(Denominator for diluted calculation)
|
||||||||
Earnings per share:
|
||||||||
Basic
|
$
|
0.46
|
$
|
0.83
|
||||
Diluted
|
$
|
0.46
|
$
|
0.80
|
16. | FINANCIAL INFORMATION BY INDUSTRY SEGMENT AND PRODUCT LINE |
Three Months Ended December 31,
|
||||||||
Revenue:
|
2015
|
2014
|
||||||
Tungsten slurries
|
$
|
44,412
|
$
|
45,144
|
||||
Dielectric slurries
|
23,018
|
28,183
|
||||||
Other Metals slurries
|
16,358
|
19,897
|
||||||
Polishing pads
|
10,509
|
8,762
|
||||||
Engineered Surface Finishes
|
3,952
|
5,582
|
||||||
Data Storage slurries
|
2,120
|
4,366
|
||||||
Total revenue
|
$
|
100,369
|
$
|
111,934
|
·
|
Research related to fundamental CMP technology;
|
·
|
Development of new and enhanced CMP consumable products, including collaboration on joint development projects with technology-leading customers and suppliers;
|
·
|
Process development to support rapid and effective commercialization of new products;
|
·
|
Technical support of CMP products in our customers' research, development and 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
|
$
|
161.9
|
$
|
8.8
|
$
|
24.1
|
$
|
129.0
|
$
|
-
|
||||||||||
Interest expense and fees on long-term debt
|
12.2
|
4.1
|
6.6
|
1.5
|
-
|
|||||||||||||||
Purchase obligations
|
34.6
|
31.7
|
1.8
|
1.1
|
-
|
|||||||||||||||
Operating leases
|
11.1
|
2.6
|
3.3
|
2.2
|
3.0
|
|||||||||||||||
Severance agreements
|
0.8
|
0.8
|
-
|
-
|
-
|
|||||||||||||||
Other long-term liabilities
|
15.5
|
-
|
4.2
|
1.5
|
9.8
|
|||||||||||||||
Total contractual obligations
|
$
|
236.1
|
$
|
48.0
|
$
|
40.0
|
$
|
135.3
|
$
|
12.8
|
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)
|
||||||||||||
Oct. 1 through
Oct. 31, 2015
|
-
|
-
|
-
|
$
|
84,975
|
|||||||||||
Nov. 1 through
Nov. 30, 2015
|
148,398
|
$
|
42.11
|
148,398
|
$
|
78,725
|
||||||||||
Dec. 1 through
Dec. 31, 2015
|
152,151
|
$
|
42.44
|
89,217
|
$
|
74,968
|
||||||||||
Total
|
300,549
|
$
|
42.28
|
237,615
|
$
|
74,968
|
CABOT MICROELECTRONICS CORPORATION
|
||
[Registrant]
|
||
Date: February 8, 2016
|
By:
|
/s/ WILLIAM S. JOHNSON
|
William S. Johnson
|
||
Executive Vice President and Chief Financial Officer
|
||
[Principal Financial Officer]
|
||
Date: February 8, 2016
|
By:
|
/s/ THOMAS S. ROMAN
|
Thomas S. Roman
|
||
Corporate Controller
|
||
[Principal Accounting Officer]
|
Participant Name / ID Number
|
Type of Award
|
Number of Shares
Subject to RSUs
|
Fair Market Value of Shares Subject to RSUs on Award Date
|
«
FIRST_NAME» «LAST_NAME»
«SOCIAL_SECURITY»
|
Restricted Stock Units
|
X,XXX
|
$[FMV / closing price on Award Date]
|
Award Date
|
Vesting Date(s)
|
Award Number
|
|
[Award Date]
|
25% 1st anniversary of Award Date
25% 2nd anniversary of Award Date
25% 3rd anniversary of Award Date
25% 4th anniversary of Award Date
|
«GRANT_ID»
|
1.
|
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:
|
Number of Shares
|
Vesting Date(s)
|
25%
25%
25%
25%
|
1st anniversary of Award Date
2nd anniversary of Award Date
3rd anniversary of Award Date
4th anniversary of Award Date
|
2.
|
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, 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
; or
|
(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 Underlying Stock
.
|
(a)
|
As of the Award Date, and until such time as the Participant becomes vested in an RSU and receives a share of Stock as provided in Section 5 of this Agreement, the Participant shall have no
rights of a shareholder as to each share of Stock subject to an RSU, except as provided in Section 4(b) of this Agreement.
|
(b)
|
If the Company declares a cash dividend on its shares of Stock, then, on the payment date of the dividend, the Participant will be credited with dividend equivalents equal to the amount of such cash dividend per share of Stock, multiplied by the number of RSUs credited to the Participant through the record date. The dollar amount credited to the Participant under the preceding sentence will be credited to an account ("Account") established for the Participant for bookkeeping purposes only on the books of the Company. The balance in the Account will be subject to the same terms regarding vesting and forfeiture as the Participant's RSUs awarded under this Agreement, and will be paid in cash at the time(s) that the corresponding shares of Stock associated with the Participant's RSUs are delivered (or forfeited at the time that the Participant's RSUs are forfeited).
|
5.
|
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.
|
6.
|
Tax Treatment
. 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 and will be 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 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.
|
9.
|
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.
|
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
. Except as provided in Section 13, 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.
|
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.
|
14.
|
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.
|
15.
|
Governing Law
. This Agreement shall be construed under the laws of the State of Delaware.
|
|
David H. Li
President and Chief Executive Officer
|
Participant Name / ID Number
|
Type of Award
|
Number of Shares
Subject to RSUs
|
Fair Market Value of Shares Subject to RSUs on Award Date
|
«FIRST_NAME» «LAST_NAME»
«SOCIAL_SECURITY»
|
Restricted Stock Units
|
X,XXX
|
$[FMV / closing price on Award Date]
|
Award Date
|
Vesting Date(s)
|
Award Number
|
|
[Award Date]
|
25% 1st anniversary of Award Date
25% 2nd anniversary of Award Date
25% 3rd anniversary of Award Date
25% 4th anniversary of Award Date
|
«GRANT_ID»
|
·
|
Providing a personal check, bank draft or money order payable to the Company at the time of each of the four vesting dates (instructions for doing so will be provided in advance of each vesting date) ___________.
|
·
|
Selling enough shares of those that vest from the Award at the time of each of the four vesting dates ("withhold to cover") to satisfy my tax liability ___________. My initialed election of this option confirms that at the time that I am making this election, I am not in possession of any material non-public information regarding the Company and am in compliance with the Company's Insider Trading Guidelines.
|
·
|
I prefer to decide whether to "withhold to cover" or pay my tax obligation through personal check, bank draft or money order payable to the Company in advance of each vesting date (instructions for doing so will be provided in advance of each vesting date) ___________.
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cabot Microelectronics Corporation;
|
|
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;
|
|
3.
|
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;
|
|
4.
|
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)
|
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
|
|
(d)
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5.
|
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
|
|
(b)
|
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.
|
Date: February 8, 2016
|
/s/ DAVID H. LI
|
|
David H. Li
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cabot Microelectronics Corporation;
|
|
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;
|
|
3.
|
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;
|
|
4.
|
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)
|
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
|
|
(d)
|
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 (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5.
|
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
|
|
(b)
|
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.
|
Date: February 8, 2016
|
/s/ WILLIAM S. JOHNSON
|
|
William S. Johnson
|
|
Chief Financial Officer
|
Date: February 8, 2016
|
/s/ DAVID H. LI
|
||
David H. Li
|
|||
Chief Executive Officer
|
|||
Date: February 8, 2016
|
/s/ WILLIAM S. JOHNSON
|
||
William S. Johnson
|
|||
Chief Financial Officer
|