Exhibit 10.34

Cabot Microelectronics Corporation Code of Business Conduct

0.0  
CABOT MICROELECTRONICS CORPORATION’S VISION AND VALUES

1.0  
A LETTER FROM THE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

2.0  
INTRODUCTION

3.0  
YOU AND YOUR JOB AT CABOT MICROELECTRONICS

3.1  
Communications Channels

3.2  
Personal Conduct

3.3  
Work Environment

3.4  
Employee Privacy

3.5  
Protecting CMC’s Assets

3.5.1  
Physical Assets

3.5.2  
Financial Assets

3.5.3  
CMC Information and Communication Systems

3.5.4  
Proprietary Information

3.5.4.1  
Inadvertent Disclosure

3.5.4.2  
Direct Requests for Information and Contacts with the Press, Analysts, Attorneys
and Others

3.5.4.3  
Using Proprietary Information

3.5.5  
CMC Intellectual Property Rights

3.5.6  
Leaving CMC

3.5.7  
Legal Remedies

3.6  
Recording, Reporting and Retaining Information

3.7  
Authority to Make Commitments on Behalf of CMC

4.0  
DEALING WITH OTHERS OUTSIDE OF CABOT MICROELECTRONICS

4.1  
Bribes, Gifts and Entertainment

4.1.1  
Business Amenities

4.1.2  
Receiving Gifts

4.1.3  
Referral Fees

4.1.4  
Giving Gifts

4.1.5  
Relationships with Government Employees

4.1.6  
Public Official and Campaign Visits, Speaking Engagements and Honoraria

4.2  
Complying with Laws

4.2.1  
Competition

4.2.2  
Export

4.2.3  
Antiboycott

4.2.4  
Import

4.2.5  
The Environment

4.2.6  
Lobbying

4.2.7  
Accounting, Financial Reporting and Disclosure Obligations

5.0  
FURTHER GUIDANCE REGARDING WORKING WITH CUSTOMERS, SUPPLIERS AND OTHER OUTSIDE
PARTIES

5.1  
Avoiding Misrepresentation

5.2  
Dealing with Suppliers

5.2.1  
Avoiding Reciprocal Dealing

5.3  
Competing in the Field

5.3.1  
 Working with Customers and Avoiding False and Misleading Statements about
Competitors

5.4  
Relationships with Other Organizations Related to Our Industry or Business

5.4.1  
Complementary Third Parties

5.4.2  
Business Contacts with Competitors

5.4.3  
Prohibitions

5.5  
Acquiring and Using Information about Others

5.6  
Information Owned by Others

5.6.1  
Receiving Information that May Be Confidential or Have Restrictions on Its Use

5.6.2  
Acquiring Software

5.7  
Using Trademarks

6.0  
YOUR OWN ACTIVITIES

6.1  
Conflicts of Interest

6.1.1  
Assisting a Competitor

6.1.2  
Competing against CMC

6.1.3  
Supplying CMC

6.1.4  
Personal Financial Interests

6.1.4.1  
Publicly Traded Securities

6.1.4.2  
Closely Held Organizations

6.2  
Using Inside Information and Insider Trading

6.3  
Using CMC's Time and Assets

6.4  
Public Service

6.5  
Participation in Political Life

6.5.1  
Speaking Out

6.6  
Someone Close to You Working in the Industry

7.0  
SOME ADDITIONAL GUIDANCE

8.0  
CODE OF BUSINESS CONDUCT CERTIFICATION

 
 
1

--------------------------------------------------------------------------------

 

0.0  
CABOT MICROELECTRONICS CORPORATION’S VISION AND VALUES

Vision

Be the trusted industry partner, providing high quality solutions with speed,
and delivering superior cost of ownership.  Our mission is to create value by
developing reliable and innovative solutions, through close customer
collaboration, that solve today’s challenges and help enable tomorrow’s
technology.  Our purpose is perfecting the surfaces of tomorrow.

Values

Integrity
·  
We are honest and ethical in all of our dealings with all of our employees,
customers, business partners, suppliers, competitors, and other stakeholders.

·  
We adhere to all laws, regulations, and our business practices.

Respect
·  
We value people’s differences.

·  
We value diverse opinions, we listen and learn.

·  
We treat people fairly and respect their need for work/life balance.

·  
We provide honest, constructive, and discreet feedback.

Courage
·  
We have the strength and willingness to take risks and do what is right.

Accountability
·  
We admit mistakes, we learn from our mistakes, we ask for help.

·  
We take ownership and responsibility for our actions and performance.

·  
We take initiative to make a difference and to help.

·  
We focus on results.

·  
We recognize and celebrate our successes.

Excellence
·  
We value the talent, ambition, and drive of each employee to be his or her best
and to achieve superior results.

1.0 A LETTER FROM THE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

Dear Fellow CMC Employee:

This Code of Business Conduct essentially is about Cabot Microelectronics’
Vision and Values, which are the foundation of our company.  We have recently
revised our Vision, after thoughtful analysis by a team of our fellow employees
throughout the business, to more comprehensively reflect our business
today.  Our Values, which include Integrity, Respect and Accountability, remain
the same, and along with our Vision, act as the starting point for all of our
actions.

Each employee has the responsibility to act according to our Vision and
Values.  CMC operates in one of the most competitive and fast-moving industries,
and this environment emphasizes the importance of each employee's responsibility
to exercise sound business judgment and act ethically. This Code of Business
Conduct gives you the basic guidelines for understanding your responsibilities.

While we each know that ethical behavior is important in its own right, it also
is essential to our business success because it fosters our relationships with
our customers, suppliers, communities in which we operate, and other
stakeholders.

We ask you to read our Code of Business Conduct, follow it, and continue to
exhibit the Vision and Values and ethical conduct that have been a fundamental
principle of our company since our beginning.

William P. Noglows
Chairman, President and Chief Executive Officer
December, 2009

2.0 INTRODUCTION

At Cabot Microelectronics Corporation, the Chief Executive Officer and other
executive officers, along with CMC’s Board of Directors, are responsible for
setting standards of business ethics and overseeing compliance with these
standards for CMC and its subsidiaries (“CMC”). It is the individual
responsibility of each employee (including directors and officers) of CMC and
its subsidiaries (“CMC employees”) to comply with these standards.

As CMC employees, we frequently encounter a variety of ethical and legal
questions. We should decide these situations in ways that are consistent with
CMC’s Vision and Values. CMC expects all employees to obey the law and to act
ethically. CMC’s Code of Business Conduct provides general guidance for
resolving a variety of legal and ethical questions for CMC employees.

Because rapid changes in our business and industry present new ethical and legal
issues on an ongoing basis, no one set of guidelines should be considered the
definitive statement for all circumstances. If you have any questions about
interpreting or applying this Code of Business Conduct--or about guidelines and
procedures published by CMC or its subsidiaries or operating units --it is your
responsibility to consult your manager, the Human Resources Department or the
Office of the CMC General Counsel.  A violation of any CMC guidelines or this
Code of Business Conduct can result in disciplinary action, including dismissal.

Each section of this Code of Business Conduct covers an area in which we have
responsibilities to CMC as employees:
-  
Personal conduct and protection of CMC’s assets

-  
Obligations in conducting CMC’s business with other people and organizations

-  
Conflicts of interest and other considerations affecting CMC that may arise from
our own activities

Our responsibilities as CMC employees generally can be summarized as:
-  
Acting according to CMC’s Vision and Values

-  
Acting honestly

-  
Treating others fairly

-  
Protecting CMC’s physical and intellectual property

-  
Avoiding conflicts of interest

-  
Complying with laws

While CMC employees are expected to comply with all of the provisions of CMC’s
Code of Business Conduct, certain sections of the Code will be more applicable
to certain of our employees, depending on their job responsibilities (for
example, Section 5 will be especially informative for those CMC employees whose
jobs involve working with our customers, suppliers or other outside
organizations, like research universities or laboratories).
 
 
 
2

--------------------------------------------------------------------------------

 

 
3.0 YOU AND YOUR JOB AT CMC

3.1 Communications Channels

If you know of an unlawful or unethical situation, or become aware of or are
concerned about any violation or potential violation of the Code of Business
Conduct, you should immediately tell CMC whatever you know or have heard about
it; you can do so in one of several ways.  Contacting your manager is the best
place to start, but you can also contact CMC’s Human Resources Department, CMC
counsel, including CMC’s General Counsel, who has been designated CMC’s
Compliance Officer, CMC’s Director of Internal Audit, or any other CMC manager.

To report any concern you may have, you may contact us in person, on the phone,
through email, or in writing, either by identifying yourself or anonymously:

-  
You may call the CMC Ethics Line at 630/499-2702 (either direct or collect);

-  
You may send an email to Ethics_Email@cabotcmp.com;

-  
You may contact directly any member of our Board of Directors, including any
member of our Board’s Audit Committee by sending an email to
Audit_Committee@cabotcmp.com;

-  
We also have instituted an independent, multi-language contact that you may
access from the places in which we do business in a wide variety of languages:

-  
 via email to www.listenupreports.com

-  
via letter to Listen Up Reports, Box 274, Highland Park, IL, USA, 60035

-  
via phone, per country:

China: 10-800-130-0614
France: 0800-909-260
Germany: 0800-182-4524
Japan: 0053-113-0898
Korea: 0030-813-1350
Singapore: 0800-130-1147
Taiwan: 0800-114-8528
United Kingdom: 0800-032-5546
United States: 866-398-0010

CMC will promptly review your report of unlawful or unethical conduct, and CMC
will not tolerate threats or acts of retaliation against you for notifying us of
your concerns.

3.2 Personal Conduct

We should never take for granted CMC's reputation for integrity and business
ethics – it’s in each of our hands.  To maintain that reputation, you must
follow all of CMC’s Code of Business Conduct and exercise good judgment in your
decisions and actions.

If CMC finds that your conduct on or off the job adversely affects your
performance, that of other employees, or CMC’s legitimate business interests,
you can be subject to disciplinary measures, including dismissal.

3.3 Work Environment

CMC strives to maintain a healthy, safe and productive work environment that is
free from discrimination or harassment based on race, color, religion, sex,
sexual orientation, age, national origin, disability, genetic information or
other factors that are unrelated to CMC’s legitimate business interests. CMC
will not tolerate sexual advances, actions or comments or racial or religious
slurs, jokes or any other comments or conduct in the workplace that creates,
encourages or permits an offensive, intimidating or inappropriate work
environment.

If you believe that you are subject to such conduct, or have observed others
subject to such conduct, you should tell CMC through any of the communication
channels that you feel most comfortable in using – your manager, the Human
Resources Department, CMC counsel, or any of the communications channels
referenced above. Your complaint of such conduct will be reviewed
promptly.  Employees who are found to have engaged in harassment or
discrimination, or to have misused their positions of authority in this regard,
will be subject to disciplinary measures, including dismissal.

Other conduct that is prohibited because of its adverse impact on the work
environment includes: (1) threats; (2) violent behavior; (3) the possession of
weapons of any type; (4) the use of recording devices, including videophones and
Web cameras, for other than management approved purposes; and (5) the use,
distribution, sale or possession of illegal drugs or any other controlled
substance, except for approved medical purposes. In addition, employees should
not be on CMC premises, in the CMC work environment or at CMC-sponsored events
if they are under the influence of or affected by illegal drugs, controlled
substances used for nonmedical purposes or alcoholic beverages. Consumption of
alcoholic beverages on CMC premises is only permitted, with prior management
approval, for company-sponsored events.

3.4 Employee Privacy

CMC and CMC authorized companies and individuals collect and maintain personal
information that relates to your employment, including compensation, medical and
benefit information. Because CMC is a global organization with business
processes, management structures and technical systems that cross country
borders, you acknowledge that, to run its business, CMC and its authorized
companies may transfer personal information about you as a CMC employee to any
of the countries where we do business. While not all countries have a data
protection law, CMC has world-wide policies that are intended to protect
information wherever it is stored or processed. For example, access to your
personal information is restricted to people with a need to know. Personal
information is normally released to outside parties only with employee approval,
except that CMC and authorized companies and individuals may also release
personal information to verify employment, to satisfy the legitimate
requirements of a company or other entity which is considering acquiring some of
CMC's business operations, or for appropriate investigatory, business or legal
reasons. Employees who have access to personal information must ensure that the
information is not disclosed in violation of CMC's policies or practices.

Personal items, messages or information that you consider personal or private
should not be placed or kept anywhere in the CMC workplace, such as in
computers, laptops, handheld devices (e.g., blackberrys), telephone systems,
office systems, electronic files, desks, credenzas, cubicles, lockers, or
offices.  CMC’s management has the right to access those areas and any other CMC
furnished facilities. Additionally, in order to protect its employees and
assets, CMC may ask to search an employee's personal property, including
briefcases and bags, located on or being removed from CMC locations; the
employee is expected to cooperate with such a request. Employees, however,
should not access another employee's workspace, including laptops or electronic
files, without prior approval from management.
 
 
 
3

--------------------------------------------------------------------------------

 

 
3.5 Protecting CMC's Assets

CMC has a large variety of assets. Many are of great value to CMC's
competitiveness and success as a business. They include our physical, financial
and information assets and our extremely valuable proprietary information, such
as CMC's intellectual property and CMC’s confidential information.

Protecting all of these assets is critical. Their loss, theft or misuse
jeopardizes the future of CMC.

You are personally responsible for protecting CMC’s property entrusted to you
and for helping to protect the company's assets in general. To do this, you
should be aware of and understand CMC's security and information protection
procedures. You should be alert to any situations or incidents that could lead
to the loss, misuse or theft of company assets and property. You should report
all such situations to your manager or the Office of the General Counsel as soon
as they come to your attention.

Let’s review the types of assets you should be concerned about protecting, and
your related responsibilities.

3.5.1 Physical Assets

CMC's physical assets, such as equipment, systems, facilities, corporate charge
cards and supplies, must be used only for conducting CMC's business or for
purposes authorized by management.

3.5.2 Financial Assets

CMC’s financial assets and funds must be used properly, accurately, and only for
conducting CMC’s business.  No undisclosed or unrecorded fund or asset of CMC
may be established for any purpose.  No entity, fund or asset of CMC may be
created or maintained for any purpose that is not properly reflected in CMC’s
books and records.  No payment on behalf of CMC may be approved or made with the
intention, understanding or awareness that any part of such payment is to be
used for any purpose other than that described by the documents supporting the
payment.

3.5.3 CMC Information and Communication Systems

CMC's information and communication systems, including CMC connections to the
Internet, are vital to CMC's business; you should only use them for appropriate
purposes. You can use them for conducting CMC business or for other incidental
purposes authorized by your management or by applicable CMC guidelines, such as
those on Internet use. For example, it is inappropriate to use CMC systems to
visit Internet sites that feature sexual content or that advocate intolerance of
others. It is also inappropriate to use them in a manner that interferes with
your productivity or the productivity of others. You are responsible to ensure
that your use of CMC systems is appropriate; inappropriate use of our systems is
a misuse of CMC assets.

3.5.4 Proprietary Information

CMC proprietary information is any information that is owned by CMC, including
information in CMC databases. Much, but not all, of CMC proprietary information
is confidential. It may also be subject to copyright, patent or other
intellectual property or legal rights. Proprietary information includes such
things as: CMC's technical, manufacturing or scientific information relating to
current and future products, offerings, and research; formulas and formulations;
work instructions; business or marketing plans or projections; merger and
acquisition plans or materials; earnings and other financial data; personnel
information including organizational changes; and software.

CMC's proprietary information is the result of the ideas and hard work of many
of your fellow employees and of substantial investments by CMC in planning,
research and development. This information, particularly CMC confidential
information, gives CMC a competitive advantage in the marketplace, and CMC would
be damaged if its competitors learned of it.

The value of CMC's proprietary information is well known not only to CMC's
competitors but also to others in the industry, such as security analysts,
members of the press, and consultants. CMC would be harmed by unauthorized
disclosures of its proprietary information to, or the unauthorized use of that
information by, any of those people. For example, unauthorized disclosure of an
unannounced CMC product can hurt us by giving competitors more time to match our
product. Or, unauthorized disclosure of financial information or issues with
particular suppliers or customers, or potential or existing partners, whether
positive or negative, can impact our stock and our responsibilities with respect
to securities laws.  Another example is unauthorized disclosure of an
unannounced organizational or personnel change that can adversely affect
employee morale and can interfere with our plans.

As a CMC employee, you will have access to information that CMC considers
proprietary. Given outside interest in CMC and the increasingly competitive
nature of our industry, you might come into contact with someone who is
interested in acquiring CMC proprietary information.  It is critical that you do
not disclose or distribute that information except as authorized by CMC and that
you follow all CMC safeguards for protecting that information.

3.5.4.1 Inadvertent Disclosure

You should be careful to avoid the inadvertent disclosure of proprietary
information.

To avoid inadvertent disclosure, never discuss with any unauthorized person
proprietary information that CMC considers confidential or which CMC has not
made public. Furthermore, you should not discuss such information even with
authorized CMC employees if you are in the presence of others who are not
authorized—for example, at a trade show reception or in a public area, such as
an airplane, or when using a cellular or wireless telephone or an electronic
bulletin board or database.  You should also not discuss such information with
family members or with friends, who might innocently or unintentionally pass the
information on to someone else.

Finally, keep in mind that a harmful disclosure may start with the smallest leak
of bits of information. Fragments of information you disclose may be pieced
together with fragments from other sources to form a fairly complete picture.

3.5.4.2 Direct Requests for Information and Contacts with the Press, Analysts,
Attorneys and Others

CMC’s business activities are monitored closely by reporters, industry
consultants and securities analysts. You should not initiate contact with these
individuals or groups or respond to their inquiries without authorization as
follows:

Reporters – CMC Chief Financial Officer
Consultants – CMC Chief Financial Officer
Securities or Financial Analysts - CMC Investor Relations

Similarly, if you receive a request for information on CMC from an attorney,
investigator, law enforcement official, or government official or agency, you
should not respond to their inquiries and instead refer the request to CMC’s
General Counsel or Associate General Counsel – Intellectual Property.

If you do not know what functional area a questioner should be referred to, ask
your manager before responding.
 
 
 
4

--------------------------------------------------------------------------------

 

 
3.5.4.3 Using Proprietary Information

Besides your obligation to protect CMC proprietary information from unauthorized
disclosure or distribution, you are also required as an employee to use such
information only in connection with CMC's business. This obligation applies
whether or not you developed the information yourself, and it applies by law in
virtually all countries in which CMC does business.

3.5.5 CMC Intellectual Property Rights

When you joined CMC or its predecessor in interest (or a subsidiary before it
became part of CMC), you were required to sign an agreement under which you, as
an employee of CMC, assumed specific obligations relating to intellectual
property as well as the treatment of confidential information. Among other
things in the agreement, you assign to CMC all of your right, title, and
interest in intellectual property you develop. The intellectual property you
assign includes such things as ideas, inventions, computer programs and
documents which relate to CMC's actual or anticipated business, research or
development or that are suggested by, or result from, work or tasks you perform
for, or on behalf of, CMC.  Subject to the laws of each country, this obligation
applies no matter where or when--at work or after hours--such intellectual
property is created. You must report that intellectual property to CMC, and
protect it like any other proprietary information of the company. However, if
you believe that your idea, invention, computer program, or other material
neither falls within the area of CMC's actual or anticipated business interests,
nor resulted from, nor was suggested by, any of your work assignments at CMC,
you should discuss it with CMC’s Associate General Counsel – Intellectual
Property. Throughout your employment with CMC, you should receive advice and
direction from CMC’s Associate General Counsel – Intellectual Property before
taking any action with respect to an invention that may be patentable, and
provide her with copies of any patent you have applied for or obtained outside
of CMC.

3.5.6 Leaving CMC

If you cease to be an employee of CMC for any reason, you must return all CMC
property, including documents, media and devices which contain CMC proprietary
information, and you may not disclose or use CMC proprietary information,
including CMC confidential information. Also, CMC's ownership of intellectual
property that you created while you were a CMC employee continues after you
leave the company.

3.5.7 Legal Remedies

Regrettably, there have been cases in which CMC's physical, financial or
intellectual property assets have been wrongfully taken or misused, or employees
or former employees have violated their agreements with CMC with respect to
protecting our property or refraining from competing against CMC. In some of
these instances, CMC has not limited its response to disciplinary action against
offending employees or former employees, but has taken legal action as well.
Also, individuals can be subject to prosecution for their actions by government
authorities and convicted of crimes for their part in stealing CMC assets.

CMC will continue to take every step necessary, including legal measures, to
protect its assets.

3.6 Recording, Reporting and Retaining Information

You must record and report all information accurately and honestly.

Every employee records information of some kind and submits it to the company.
For example: an engineer fills out a product test report; a marketing
representative reports orders; an accountant records revenues and costs; a
scientist prepares a research report; a quality technician completes a
time-card; and, a product line manager makes an employee benefit claim. Each
employee must accurately and honestly fill in reports.

One important report that many employees use is the expense account. Employees
are entitled to reimbursement for reasonable expenses--but only if those
expenses were actually incurred. To submit an expense account for meals not
eaten, miles not driven, airline tickets not used or for any other expense not
incurred is dishonest reporting and is prohibited.

Under various laws, such as tax and securities laws, environmental laws, or the
Foreign Corrupt Practices Act, CMC is required to maintain books and records
reflecting CMC's transactions. It is essential that these books and records are
accurate. Regardless of whether reporting is required by law, dishonest
reporting within CMC, for example to CMC management or internal auditors or
during an internal investigation, or to CMC’s independent auditors or outside
counsel, or to organizations and people outside the company, is strictly
prohibited. This includes not only reporting information inaccurately but also
organizing it in a way that is intended to mislead or misinform those who
receive it. Employees must ensure that they do not make false or misleading
statements in external financial reports, environmental monitoring reports and
other documents submitted to or maintained for government agencies. Dishonest
reporting can lead to civil or even criminal liability for you or
CMC.  Employees who are found to have engaged in dishonest reporting, or to have
misused their positions of authority in this regard, will be subject to
disciplinary measures, including dismissal.

Employees must also comply with CMC’s Document Retention Policy in their
retention and disposal of CMC documents, including information in any media,
whether hard copy or electronic formats (e.g., email, word processing program,
“pdf”, “world drive”, “thumb drive”, etc.).  Information whose retention period
has expired pursuant to our Document Retention Policy should be disposed of as
soon as possible, unless it is subject to a retention instruction from CMC
counsel.

3.7 Authority to Make Commitments on Behalf of CMC

CMC’s management and contracting processes are designed to help CMC protect its
assets and to provide the appropriate controls needed for CMC to run its
business appropriately and effectively with its customers, suppliers, and other
third parties.  These processes contain well-defined authority and delegations
to certain organizations and levels of management for pricing and certain other
contract terms and conditions, such as the provision of samples to customers
without charge, customer credits, return material authorizations, and barter
arrangements.  Making business commitments outside of these processes, through
side arrangements or otherwise, is not acceptable; specifically, you should not
make any oral or written commitments that create a new agreement or that
modifies an existing agreement with a third party without approval, consistent
with delegation levels, from the appropriate CMC organizations, such as Finance,
Legal, Supplier Management, Global Business Team management and/or other line
management.  In addition, all such commitments must be communicated to CMC
Finance (Accounting) to help us ensure the accuracy of CMC’s books and
records.  If you have any questions about a specific situation, you can contact
CMC Finance or Legal personnel.
 
 
 
5

--------------------------------------------------------------------------------

 

 
4.0 DEALING WITH OTHERS OUTSIDE OF CMC

4.1 Bribes, Gifts and Entertainment

Gifts offered by employees of different companies vary widely. They can range
from widely distributed advertising novelties of nominal value, which you may
give or accept, to bribes, which you  unquestionably may not give or accept.

Gifts include not only material goods, but also services, promotional premiums
and discounts.

The following are CMC's guidelines on giving and receiving gifts and business
amenities. Exceptions may be approved by an executive officer, but those
exceptions must not be prohibited by law or known customer business practice.

4.1.1 Business Amenities

With management approval, you may give or accept customary business amenities,
such as meals and entertainment, provided the expenses involved are kept at a
reasonable level and are not prohibited by law or known customer business
practice; in general, each CMC country entity has work rules that set forth
these requirements. Suppliers, including CMC, frequently find it appropriate to
provide education and briefings for their customers or suppliers. It is all
right to provide or accept some services in connection with this type of
activity, such as transportation, and food and lodging, if you have prior
management approval.

4.1.2 Receiving Gifts

Neither you nor any member of your family may solicit or accept from a supplier
or customer money or a gift that could influence or could reasonably give the
appearance of influencing CMC's business relationship with that supplier or
customer. However, unless CMC has specified to the contrary, you may accept
promotional premiums and discounts offered by transportation companies, hotels,
auto rental agencies and restaurants if they are based upon membership in bonus
programs for individuals and are offered to travelers generally. Furthermore,
you may accept a gift of nominal value, such as an advertising novelty, when it
is customarily offered to others having a similar relationship with the customer
or supplier. If you have any doubts about a particular situation, you should
consult your manager.

If you are offered a gift which has more than nominal value or which is not
customarily offered to others, or money, or if either arrives at your home or
office, tell your manager immediately. Appropriate arrangements will be made to
return or dispose of what has been received, and the supplier or customer will
be reminded of CMC’s policy in this regard.

4.1.3 Referral Fees

When authorized by CMC, you may refer customers to third party vendors, such as
CMC’s distributors, transportation and shipping entities, or support
organizations. However, CMC employees may not accept or provide any fee,
commission or other compensation for this type of activity from or to anyone.

4.1.4 Giving Gifts

You may not give money or any gift to an executive, official or employee (or
related person) of any supplier, customer or any other organization if doing so
would influence or could reasonably give the appearance of influencing the
organization's relationship with CMC. You may, however, provide a gift of
nominal value, such as a CMC advertising novelty, if it is not prohibited by law
or the customer's, supplier’s or other organization’s known business practices;
in general, each CMC country entity has work rules that set forth these
requirements

4.1.5 Relationships with Government Employees

When we are dealing with government employees or those who act on the
government's behalf, practices that are acceptable in the commercial business
environment, such as providing education, transportation, meals, entertainment
or other things of value, may be entirely unacceptable, and may even violate
certain federal, state, local or foreign laws and regulations. Therefore, you
must be aware of, and adhere to, the relevant laws and regulations governing
relations between government employees and business entities in every country
where you conduct business. You should contact the Office of the CMC General
Counsel for guidance.

You must not give money or a gift to an official or an employee of a
governmental entity if doing so could be reasonably construed as having any
connection with CMC’s business relationship. U.S. and foreign laws often
prohibit such actions: for example, the Foreign Corrupt Practices Act (FCPA), a
U.S. law, makes it a crime to pay money or to give anything of value to a
foreign official to assist the company or another to obtain or retain business
with the government, whether the improper payment or gift is made directly by a
company or indirectly through someone acting for the company. Any proposed
payment or gift to a foreign official, political party or candidate must have
prior review and approval by the CMC General Counsel, even if such payment or
gift is common in that country. Keep in mind that foreign officials, under the
FCPA, can include executives and employees of government-owned or sponsored
corporations, such as universities, research laboratories and other entities
such as industrial or science parks. Always ask if you have some doubt regarding
government ownership or participation. If you are involved in a public sector or
government-sponsored procurement, whether for goods or services (e.g., research
and development services), you should not try to improperly influence the
decisions of the customer or entity or obtain restricted information about the
procurement; if you have questions about this, you should contact the Office of
the General Counsel for guidance.

In countries where local customs call for giving gifts to customers or others on
special occasions, you may, with prior approval from management and the CMC
General Counsel, present gifts that are lawful, appropriate, and of nominal
value, provided the action cannot be seen as seeking special favor (see above).

Furthermore, certain legal or ethical restrictions may exist with respect to the
hiring by CMC of current or former employees of the government or their family
members. You should consult with the CMC General Counsel before any attempts,
even preliminary discussions, are made to hire any such persons.

4.1.6 Public Official and Campaign Visits, Speaking Engagements and Honoraria

CMC encourages public officials to make non-partisan visits to CMC locations to
better understand our company, products, programs and our views on public policy
issues.  However, political campaigning is not allowed on CMC property or on
CMC’s behlaf.

Likewise, public officials, candidates and prominent former officials may
request or be invited to speak at various CMC events. We generally do not pay
honoraria or travel expenses since in many instances such a payment would not be
lawful. You should review any matters in this area with CMC’s Office of the
General Counsel.
 
 
 
6

--------------------------------------------------------------------------------

 

 
4.2 Complying with Laws

CMC’s policy is to comply with all laws and regulations that apply to its
business. As you conduct CMC's business, you may encounter a variety of legal
issues, particularly in the areas described below. If you have questions on
specific laws or regulations, contact CMC’s Office of the General Counsel.

4.2.1 Competition

Laws governing competition exist in most of the countries in which CMC does
business. The purpose of competition laws, which also may be known as antitrust,
monopoly, fair trade or cartel laws, is to prevent interference with the
functioning of a competitive market system. While the purpose of such laws is
primarily economic, their effect is often seen as going beyond consumer or
customer welfare to protecting other values of society, including individual
freedoms.

Under these laws, companies may not enter into agreements with other companies,
including their distributors and competitors, however informally, that
unreasonably restrict the functioning of the competitive system, such as price
fixing, or dividing customers or territories.

Companies also may violate competition laws without acting jointly with other
companies by, for example, illegally monopolizing or attempting to monopolize an
industry or unlawfully abusing a dominant position through arrangements such as
“tie-in”, certain pricing, or exclusive dealing arrangements.
CMC's policy is to comply fully with competition laws throughout the world. You
can help by adhering to CMC’s Code of Business Conduct and related policies and
procedures, by being sensitive to legal concerns under competition laws, and by
raising any such concerns with CMC’s General Counsel.

4.2.2 Export

It is CMC’s policy to comply with the export control laws and regulations of all
countries in which we do business. When certain CMC products and technical data
are exported, CMC may have to obtain an export authorization from the U.S. or
appropriate foreign government.

It is against the law to export without authorization or to facilitate the
unauthorized export of CMC technology. Penalties for failure to comply with
export laws and regulations are severe and can result in fines, loss of export
privileges for our products and imprisonment.  If you have questions on
export-related issues, talk with your manager or the CMC General Counsel.

4.2.3 Antiboycott

U.S. law prohibits CMC and its subsidiaries and affiliates and their agents from
complying with or supporting a foreign country's boycott of a country that is
"friendly" to the United States. CMC is also required to report promptly to the
U.S. Government any request to support a boycott or to furnish information
concerning a boycott. A foreign country or an entity associated with the country
could make such a request in writing, orally in connection with a transaction or
in a number of other ways. Examples of improper boycott requests are requests
that we refuse to do business with a boycotted country, including its
corporation and citizens, or with so-called blacklisted companies who do
business with the boycotted country or that we provide information about
activities in a boycotted country or implement letters of credit with boycott
conditions. If you hear of a boycott or receive a request to support a boycott
or to provide information related to a boycott, you should contact CMC’s General
Counsel.

4.2.4 Import

As an importer, CMC must comply with import regulations and requirements when
engaging in international trade. Because of the continued globalization of CMC's
business, there are many situations, some of them very subtle, in which your
work may have import implications. For example, in addition to the obvious one
in which you are importing raw materials, parts or products into the U.S. or
another country, there may be import implications in activities, -- such
as  development process activity requiring non-U.S. sourcing, customer activity
requiring the shipment of products to another country, or the shipment of
samples.  In addition, experience has shown that designing parts and ensuring
accuracy of inventory of parts will have import implications whenever those
parts will cross international borders. You need to be aware of import
regulations and requirements, especially if you are involved in importing. A
failure to comply with the law can result in fines, penalties, imprisonment
and/or a loss of import privileges. If you have questions about imports, contact
your manager, Director of Logistics, or the Office of the General Counsel.

4.2.5 Safety, Health and the Environment

CMC is committed to leadership in safety, health and environmental protection.
Not only will we comply with all safety, health and environmental laws in the
countries in which we operate, but if there is no law or if the law does not
protect the safety and health of our employees and the environment, we will set
and adhere to stringent standards of our own. Each of us must comply with
safety, health and environmental laws and CMC's related policies.

If you are involved with processes that affect the environment, such as
measuring, recording or reporting discharges and emissions to the environment or
handling hazardous wastes, you must be sure to comply with environmental
regulations and permits. You must also maintain CMC standards and ensure that
reports are accurate and complete.

As an employee, you have a role to play in working in a manner that supports
your own safety and health and that of others, as well as in protecting the
environment. If you become aware of any violation of safety, health or
environmental law or any action that may appear to conceal such a violation, you
should immediately report the matter to your manager, CMC’s Director, Safety,
Health and Environment, or to CMC’s General Counsel.

4.2.6 Lobbying

Any contact with government personnel for the purpose of influencing legislation
or rule making, including how CMC operates in a particular country or locality,
is considered lobbying. Some laws also define lobbying even more broadly to
include our normal marketing activities. You are responsible for knowing and
adhering to all the relevant lobbying laws and associated gift laws, if
applicable, and for compliance with all reporting requirements.
In general, any and all lobbying activity related to CMC is coordinated through
CMC’s General Counsel.  You must obtain the prior approval of CMC’s General
Counsel to lobby or authorize anyone else (for example, a consultant or agent)
to lobby on CMC's behalf.
 
 
 
7

--------------------------------------------------------------------------------

 

 
4.2.7 Accounting, Financial Reporting and Disclosure Obligations

As a public company, CMC is required to follow strict accounting principles and
standards, to report financial information accurately and completely, and to
have appropriate internal controls and processes to ensure that our accounting
and financial reporting and disclosure comply with relevant law.  Each of us has
an obligation to comply with these requirements and to do what is needed to help
CMC comply.

To this end, the rules for accounting and financial reporting require the proper
recording of, and accounting for, revenues, costs, expenses, and other assets
and liabilities; if you have involvement in or responsibility for these matters,
you need to understand and follow these rules. Similarly, each of us needs to
ensure that we comply with related rules, such as those that prohibit anyone
from assisting others to account improperly or make false or misleading
financial reports.

You must accurately and completely record and report all information, and you
must not assist anyone to record or report any information inaccurately or in a
way that could be misleading.  In addition, you must never provide advice to
anyone outside of CMC, including customers, suppliers or business partners,
about how they should record or report their own revenues, costs, expenses and
other assets and liabilities.  If you become aware of any action related to
accounting or financial reporting that you believe may be improper, you are
encouraged and expected to contact CMC’s General Counsel, CEO, CFO, Controller,
Director of Internal Audit, or other CMC manager by using the various
communications channels described in this Code of Business Conduct.

Furthermore, CMC’s policy is to provide full, fair, accurate, timely and
understandable disclosure in reports and documents that CMC submits to or files
with the Securities and Exchange Commission, other regulatory bodies, and in
other public communications made by us.  The accuracy and timeliness of public
disclosure can have an impact on the investment decisions of hundreds of
investors.  CMC's executive, financial, and accounting officers are responsible
for assuring that the information we release to the public is free from material
misstatements, omissions, or inaccuracies, but you must also do your part.  Your
first responsibility is to assure that all of our business is conducted in
accordance with our Vision and Values and with this Code of Business
Conduct.  If you become aware of any facts or circumstances that cause you to
believe that any information that has been or will be released to the public
contains material misstatements, omissions, or inaccuracies, you are encouraged
and expected to contact CMC’s General Counsel, CEO, or CFO to discuss the
matter.  See Section 3.1.  Communications Channels, for a complete description
of the channels open to you to express any concerns about this or other matters
covered by the Code of Business Conduct or otherwise.

In certain situations and pursuant to and in compliance with relevant law, CMC
in its discretion may recover, cancel or rescind equity incentive program or
annual incentive program bonus awards where certain material misstatements,
omissions or inaccuracies have occurred subsequent and in relation to such
awards being delivered.

5.0 FURTHER GUIDANCE REGARDING WORKING WITH CUSTOMERS, SUPPLIERS AND OTHER
OUTSIDE PARTIES

You must be ethical and lawful in all of your business dealings whether you are
selling, buying or representing CMC in any other capacity.

Today CMC is engaged in a variety of business relationships with other companies
and organizations, including customers, suppliers, distributors, and
co-suppliers/original equipment manufacturers. No matter what type of
organization you are dealing with or what its relationship is to CMC, you should
always observe the following general standards.

5.1 Avoiding Misrepresentation

Never make misrepresentations or dishonest statements to anyone. If you believe
that the other person may have misunderstood you, promptly correct any
misunderstanding. Honesty based on clear communication is integral to ethical
behavior. The resulting trustworthiness is essential to forming and maintaining
sound, lasting relationships.

5.2 Dealing with Suppliers

In deciding among competing suppliers, we weigh the facts impartially to
determine the best supplier. You should do so whether you are in a purchasing
job, a local office or any other part of our business, and without regard to the
type or volume of transaction.

Whether or not you are in a position to influence decisions involving the
evaluation or selection of suppliers, you must not exert or attempt to exert
influence to obtain "special treatment" for a particular supplier. Even to
appear to do so can undermine the integrity of our established procedures.  CMC
uses an evaluation process to select the best suppliers. Prices and other
information submitted by suppliers and our evaluation of that information are
confidential to CMC. Employees and former employees may not use any of this
information outside of CMC without written permission from management. It is
essential that suppliers competing for our business have confidence in the
integrity of not only our selection process but also our working relationship
with them once they have been selected as a supplier.

5.2.1 Avoiding Reciprocal Dealing

Seeking reciprocity is contrary to CMC policy and may also be unlawful. You
should not tell a prospective supplier that your decision to buy its goods or
services is conditioned on the supplier's agreement to buy CMC products or
services.

This does not mean that a customer of CMC cannot be a supplier to CMC or that
CMC can never consider its other relationships with the supplier when it is
evaluating the supplier. It simply means that CMC's decision to buy from a
supplier must be made independently from that supplier's decision to buy from
CMC.

5.3 Competing in the Field

CMC will compete vigorously for business. If circumstances require modified
pricing or service or support terms, the modifications must be specifically
approved by the appropriate level of management. Never extend any modified
contract terms to any customer without prior authorization.
 
 
If you are performing a marketing or customer service or support activity, CMC
expects you to compete not just vigorously and effectively, but lawfully and
ethically as well.
 
 
 
8

--------------------------------------------------------------------------------

 

 
5.3.1           Working with Customers and Avoiding False and Misleading
Statements about Competitors

It is CMC’s policy to sell our products and offerings on their merits, enabling
our customers to make their choices in an unrestrained manner, based on accurate
information. Never force or suggest that it is a requirement that our customers
take other CMC products or offerings as a condition of delivery of the desired
product or offering.  In addition, we will not sell a product on the condition
that the customer will not use or purchase the products of a particular
competitor.  Also, false or misleading statements and innuendoes about
competitors, their products or their offerings are improper. All of this type of
conduct only invites disrespect from customers and complaints from competitors.

Be sure that all comparisons to competitors and their products and offerings are
substantiated, and that they are complete, accurate and not misleading whenever
they are made. Certain countries prohibit comparative advertising. Advice on
this subject is available from the Office of the General Counsel.

5.4 Relationships with Other Organizations

Frequently, other organizations have multiple relationships with CMC. For
example, a co-supplier/original equipment manufacturer may be both an end user
and a competitor.  Another organization may be a CMC supplier and customer at
the same time, or a supplier to us in one aspect of its business and a
competitor in another. Still another organization may be an agent for our
customer (for example, a third party chemical manager), and also a competitor to
us.  In any dealings, it is important that you understand each one of the
relationships involved, and act accordingly.

5.4.1 Complementary Third Parties

CMC has various relationships with complementary third parties, such as
distributors and sales representatives, to help CMC market and support CMC’s
products and offerings, and those relationships are governed by the arrangements
we have with those third parties as well as relevant law in many countries. If
your responsibilities bring you into contact with these third parties, and you
have questions about how to work with them, please contact the Office of the
General Counsel.

5.4.2 Business Contacts with Competitors

It is important to recognize when a company you are dealing with, as a supplier,
customer, or agent to a customer of ours, is also a CMC competitor. Such
relationships require extra care. It is inevitable that you and competitors
will, from time to time, meet, talk and attend the same industry or association
meetings. Many of these contacts are perfectly acceptable as long as you follow
established procedures. Acceptable contacts include: sales to other companies in
our industry and purchases from them; approved participation in joint meetings
or interactions with mutual customers; and attendance at business shows,
standards organizations and trade associations. But even these contacts require
caution. If in doubt, you should seek advice from the Office of the General
Counsel.

5.4.3 Prohibitions

In all contacts with competitors, do not discuss pricing policy, contract terms,
costs, inventories, marketing and product plans, market surveys and studies,
production plans and capabilities, arrangements with, or identity of, suppliers
-- and, of course, any other proprietary or confidential information.

Discussion of these subjects or collaboration on them with competitors can be
illegal. If a competitor raises any of them, even lightly or with apparent
innocence, you should object, stop the conversation immediately, and tell the
competitor that under no circumstances will you discuss these matters. If
necessary, you should leave the meeting.

In summary, disassociate yourself and CMC from participation in any possibly
illegal activity with competitors; confine your communication to what is clearly
legal and proper. Finally, report immediately to the CMC General Counsel any
incident involving a prohibited subject.

5.5 Acquiring and Using Information about Others

In the normal course of business, it is not unusual to acquire information about
many other organizations, including competitors. Doing so is a normal business
activity and is not unethical in itself. In fact, CMC quite properly gathers
this kind of information for such purposes as evaluating suppliers and
creditworthiness. We also collect information on competitors from a variety of
legitimate sources to evaluate the relative merits of their products, services,
and marketing methods. This activity is proper and necessary in a competitive
system.

There are, however, limits to the ways that information should be acquired and
used, especially information about competitors. No company should use improper
means to acquire a competitor's trade secrets or other confidential information.
Illegal practices such as trespassing, burglary, wiretapping, bribery and
stealing are obviously wrong; so is attempting to acquire a competitor's
confidential information from the competitor's employees or CMC’s customers. CMC
will not tolerate any form of questionable intelligence-gathering.

Information about other companies, especially that of our customers and
suppliers, should be treated with sensitivity and discretion. Such information
is often about individuals. Other companies are rightly concerned about their
proprietary information, reputations and the privacy of their people.

In addition, individuals, such as the employees of customers and suppliers, are
also concerned about their privacy, especially now that internet use is so
widespread. CMC remains committed to protecting the privacy of personal
information of others. CMC will only collect, use, process, and disclose an
individual's personal information in accordance with our privacy policies and
guidelines.

When working with sensitive information about other companies and individuals,
you should use that information in the proper context and make it available only
to other CMC employees with a legitimate need to know. In presenting such
information, you should disclose the identity of the organization or individuals
only if necessary. If disclosure is not necessary, you should present the
information in the aggregate or by some other means.
 
 
 
9

--------------------------------------------------------------------------------

 

 
5.6 Information Owned by Others

Like CMC, other organizations and some individuals have intellectual property,
including confidential information, they want to protect. They are sometimes
willing to disclose and allow others to use their proprietary information for a
particular purpose. If you receive another party's proprietary information, you
must proceed with caution to prevent any accusations that CMC misappropriated or
misused the information.

5.6.1 Receiving Information that May Be Confidential or Have Restrictions on Its
Use

To avoid the risk of CMC being accused of misappropriating or misusing someone's
confidential or restricted information, there are certain steps you must take
before receiving such information. The receipt of confidential or restricted
information (whether oral, visual or written) must not take place until the
terms of its use have been formally agreed to by CMC and the other party in a
written agreement approved by CMC’s Associate General Counsel – Intellectual
Property. Once another party's confidential or restricted information is
properly in your hands, you must not use, copy, distribute or disclose that
information unless you do so in accordance with the terms of the agreement.

In any case, do not take the status of information for granted. If you have
information in your possession that you believe may be confidential to a third
party or may have restrictions on its use, you should consult immediately with
CMC’s Associate General Counsel – Intellectual Property.
5.6.2 Acquiring Software

Special care should be taken in acquiring software from others. As intellectual
property, software is protected by copyright, and may also be protected by
patent or trade secret laws. Software includes computer programs in "beta" or
finished form, databases and related documentation. The software may be on
CD-ROMs or diskettes or it may reside on electronic online bulletin boards or
databases or be available through the internet. Before you accept software,
access software or data on or from a network, or accept a license agreement, you
must review the matter with CMC’s Associate General Counsel – Intellectual
Property.  The terms and conditions of any license agreement--such as provisions
not to copy or distribute programs--must also be strictly followed. If you
acquire software for your personally owned equipment, you should not copy any
part of such software in any work you do for CMC or place such software on any
CMC-owned computer system. This includes any copies of software which reside on
any electronic online bulletin boards or databases.

It is your responsibility to make sure that all third party software you are
using is appropriately licensed and that you use it only in accordance with the
terms of its license.

5.7 Using Trademarks

CMC and many other companies have trademarks--words, names, symbols or
devices--that are used to identify and distinguish the company's products. Two
of CMC’s most prominent trademarks are our logo and name, Cabot
Microelectronics.  Some trademarks are registered in the U.S. Patent and
Trademark Office; others are not. For example,  “iCue” and “Epic” are registered
trademarks of CMC, indicated by an "(R)". There are other trademarks of CMC that
are not yet registered, for example, “LUSTRA”. Its trademark status is indicated
by "TM". There may be additional or different trademark designations outside of
the U.S.

In all countries, it is important that you properly acknowledge and use CMC
trademarks and the trademarks of other companies. Specifically, you should
always ensure that the trademark is spelled correctly and written the way the
owner of the trademark writes it. You should not use the trademark as a generic
name and should use the trademark only as an adjective.  Also, you should
indicate the first time the trademark is mentioned in a publication that it is a
trademark of CMC or of the company who owns it.

You should consult CMC’s Associate General Counsel – Intellectual Property if
you have questions on the proper use of a trademark.

6.0 YOUR OWN ACTIVITIES

6.1 Conflicts of Interest

Your private life is very much your own. Still, a conflict of interest may arise
if you engage in any activities or advance any personal interests, at the
expense of CMC's interests. It's up to you to avoid situations in which your
loyalty may become divided. Each individual's situation is different, and in
evaluating your own, you will have to consider many factors. The most common
types of conflicts are addressed here to help you make informed decisions.  You
should consult with CMC’s General Counsel if you have any questions about these
matters.

6.1.1 Assisting a Competitor or Other Organizations Related to Our Industry or
Business

An obvious conflict of interest is providing assistance, services or information
to an organization that markets products and offerings in competition with CMC’s
current or potential products or offerings. Similarly, another conflict of
interest is providing assistance, services or information related to our
industry or business to an organization that is in the business of
information-gathering for financial, investment or industry assessment or
analysis purposes (e.g., “expert networks”, industry consulting, or investment
analysis firms).  You may not work for or provide services to any such
organizations in any capacity, such as an employee, a consultant, an information
source, an “expert”, or as a member of its board of directors; you may not hold
more than a nominal financial interest in such an organization if it is publicly
traded, and not hold any interest if it is privately held.  Such activities are
prohibited because they could divide your loyalty between CMC and that
organization.   In addition, they could involve your disclosing inside or other
information of CMC or a third party such as a customer or a supplier.

In addition, you may not serve as a member of the board of directors of any
for-profit entity, whether publicly or privately held, without prior approval
from the CMC General Counsel.

 
 
10

--------------------------------------------------------------------------------

 
 
6.1.2 Competing against CMC

Employees should be careful to avoid activities that conflict with CMC’s
business interests.

Obviously, you may not commercially market or develop products or services in
competition with CMC's current or potential products or offerings. Such
activities are "commercial" if you receive direct or indirect remuneration of
any kind.  In addition, certain non-commercial activity, such as research
collaborations with universities or consortiums, also might conflict with CMC’s
business interests.

Because CMC is expanding into new lines of business and new areas of interest,
the company will redraw lines of acceptable activity on an ongoing basis. It is
unlikely that you will find definitive answers to many of your questions
regarding the boundaries of acceptable activity in published guidelines. It is
therefore your responsibility to consult with your management or the Office of
the General Counsel to determine whether your planned activity will compete with
any of CMC’s actual or potential businesses. This should be done before you
pursue any activity that might create a conflict of interest or the appearance
of a conflict of interest with CMC.

6.1.3 Supplying to or Other Relationships with CMC

Unless approved in advance by an executive officer and CMC’s General Counsel,
you may not be a supplier of any kind of product or services to CMC, represent a
supplier to CMC, work for a supplier to CMC, hold more than a nominal financial
interest in a supplier, or be a member of its board of directors while you are
an employee of CMC. In addition, you may not accept money or benefits of any
kind for any advice or services you may provide to a supplier in connection with
its business with CMC.  These same prohibitions also apply to your dealings with
any entity with whom CMC does business.

6.1.4 Other Personal Financial Interests

In addition to the restrictions discussed above, you should not have any
financial interest in any organization with whom CMC does business or competes
if that interest would give you or would appear to give you a conflict of
interest with CMC. Such organizations include suppliers, competitors, customers,
distributors and co-suppliers/original equipment manufacturers.  You should
consult with CMC’s General Counsel if you have any questions remaining after
considering the following:

6.1.4.1 Publicly Traded Securities

To determine whether an improper interest exists, ask yourself the following
questions:

-  
What is the extent of the competition or the nature of the relationship between
CMC and the other company?

-  
If the other company is in more than one line of business, how significant is
the part that competes with or supplies CMC?

-  
What is the size of my investment in relation to my salary and other family
income, including income from other investments?

-  
Is it significant enough to cause me to take some action as a CMC employee to
protect or enhance my investment?

-  
Given the nature of my job in CMC, could my actions as a CMC employee affect the
value of my investment in the other company (for example, do you have anything
to do, either directly or indirectly, in deciding whether CMC does business with
that company)?

-  
Could my actions significantly enhance my investment, even if it is a relatively
modest one?

A financial interest is improper if your job, the amount of your investment, or
the particular company in which you invested could--when viewed objectively by
another person--influence your actions as a CMC employee.

Additionally, from time to time, an existing or prospective CMC supplier,
distributor or customer may offer stock options or other securities to a select
small group of investors in connection with the company's initial public
offering. You should not accept or buy any of that company's securities in such
a situation without receiving prior approval from CMC’s General Counsel.

You should not evade these guidelines on investments by acting indirectly
through anyone else.

6.1.4.2 Privately Held Organizations

Investments in privately (sometimes referred to as “closely”) held
organizations--typically, privately held corporations, partnerships or even sole
proprietorships--raise additional concerns over those in publicly traded
companies because of the closer ties of investors to most privately held
organizations. For example, there are generally relatively few investors or
owners of such companies, giving each a greater stake in ownership; the
investors often have a chance to participate in the company's day-to-day
operations; and the investors may be perceived to be closely identified with the
company.

This relatively close relationship may give the appearance to competitors of the
privately held organization that it derives some benefit from CMC. Such a
relationship may also give the appearance to CMC employees that the investing
employee is using CMC's time, facilities or confidential information for the
benefit of the privately held company. For these reasons, employees may not make
any investment in a privately held organization that is a competitor, supplier,
distributor, customer or other organization with whom CMC does business.

 
 
11

--------------------------------------------------------------------------------

 
 
6.2 Using Inside Information and Insider Trading

In the course of your employment with CMC, you may become aware of information
about CMC or other companies that has not been made public. The use of such
nonpublic or "inside" information about CMC or another company for your
financial or other benefit not only is unethical, but also may be a violation of
law. U.S. law makes it unlawful for any person who has "material" nonpublic
information about a company to trade the stock or other securities of the
company or to disclose such information to others who may trade. Violation of
such laws may result in civil and criminal penalties, including fines and jail
sentences. CMC will not tolerate the improper use of inside information. These
prohibitions also apply outside the U.S.

Material inside information is information which is not available to the general
public and which could influence a reasonable investor to buy, sell or hold
stock or securities. While it is not possible to identify in advance all
information that could be viewed as material inside information, some examples
might include nonpublic information about: CMC’s financial performance including
earnings and actions related to its stock; acquisitions or other business
combinations; divestitures; major new product announcements; significant
advances in research; significant contracts or the loss of them; and, other
significant activities affecting CMC. Here are some examples of how you can
avoid the improper use of inside information:

-  
If you know that CMC is considering an alliance or is about to announce a new
product or make a purchasing decision that could affect the price of the stock
of a CMC supplier or other company, you should not buy or sell the stock of that
company until after the information becomes public.

-  
Similarly, if you know that CMC is about to make an announcement that could
affect the price of its own stock, you should not buy or sell CMC stock on the
open market until after the announcement.

-  
You should not buy or sell the stock of a customer,supplier or other company
with whom CMC does business based on any inside information you have about that
company.

-  
If you have nonpublic information that CMC is about to build a new facility or
expand an existing facility, you should not invest in land or in any business
near the new site.

-  
You should not disclose inside information to CMC employees who do not have a
business need to know or to anyone outside of CMC.

CMC’s directors, officers, and other key employees are also subject to
additional responsibilities and guidelines with respect to trading in CMC’s
stock, such as a prohibition on trading during quarterly “blackout” periods.

As with investments, you should not evade these guidelines by acting through
anyone else or by giving inside information to others for their use even if you
will not financially benefit from it.

If you have any doubt about what you can or cannot do in this area, you should
consult with CMC’s General Counsel.

6.3 Using CMC's Time and Assets

You may not perform non-CMC work or solicit such business on CMC premises or
while working on CMC time, including time you are given with pay to handle
personal matters. Also, you are not permitted to use CMC assets, including
equipment, information systems, telephones, materials, resources or proprietary
information for any outside work.

6.4 Public Service

CMC encourages employees to be active in the civic life of their communities.
However, such service may, at times, place you in a situation that poses a
conflict of interest with CMC. As a board or committee member, you may, for
example, be confronted with a decision involving CMC. It might be a decision by
a board of tax assessors or a zoning board that affects CMC property. In such
circumstances, your interest in CMC and your obligation to the civic
organization might pull you in opposite directions. The law may require you to
abstain, depending on your position in CMC and whether you stand to gain
personally from the decision. On the other hand, there may be circumstances in
which the law does not permit you to abstain. While you are in the best position
to make the decision and bear the responsibility for the decision, before making
your decision, you should get advice from the civic organization's lawyer and
from the Office of the General Counsel. In order to protect CMC from
embarrassment or other issues, whether or not you finally abstain, you should
make it clear that you are a CMC employee and thereby head off any charges of
trying to conceal your association with CMC.  If you decide to abstain, state
clearly that you are doing so because there would be a conflict of interest--or
the appearance of one--if you did not.
6.5 Participation in Political Life

CMC will not make contributions or payments or otherwise give any endorsement of
support which would be considered a contribution directly or indirectly to
political parties or candidates, including through intermediary organizations,
such as political action committees or campaign funds. For example, CMC will not
purchase tickets or pay fees for you or anyone else to attend any event where
any portion of the funds will be used for election campaigns. In many countries,
political contributions by corporations are illegal. CMC will not make such
contributions, even in countries where they are legal. Also, the company will
not provide any other form of support that may be considered a contribution.

You must not make any political contribution as a representative of CMC. You may
not request reimbursement from CMC, nor will CMC reimburse you, for any personal
contributions you make. In addition, you should recognize that your work time or
use of CMC assets is the equivalent of such a contribution. Therefore, you will
not be paid by CMC for any time spent running for public office, serving as an
elected official or campaigning for a political candidate, unless required by
law.  You can, however, take reasonable time off without pay for such activities
if your CMC duties permit the time off and it is approved by your manager. You
also may use vacation time for political activity.

6.5.1 Speaking Out

When you speak out on public issues, make sure that you do so as an individual.
Don't give the appearance that you are speaking or acting on CMC's behalf.

6.6 Someone Close to You Working in the Industry

With the growth in two-career families and the expansion of our industry, you
may find yourself in a situation where your spouse, another member of your
immediate family or someone else you are close to is a competitor or supplier of
CMC or is employed by one. While everyone is entitled to choose and pursue a
career, such situations call for extra sensitivity to security, confidentiality
and conflicts of interest. The closeness of the relationship might lead you to
inadvertently compromise CMC's interests.

There are several factors to consider in assessing such a situation. Among them
are the relationship between CMC and the other company, the nature of your
responsibilities as a CMC employee and those of the person close to you, and the
access each of you has to your respective employer's confidential information.

If you have any questions about your situation, you should review it with your
manager to assess the nature and extent of any concern and how it can be
resolved. Frequently, any risk to CMC's interests is sufficiently remote that
your manager need only remind you to guard against inadvertently disclosing CMC
confidential information. However, in some instances, a change in the job
responsibilities of one of the people involved may be necessary.

 
12

--------------------------------------------------------------------------------

 

7.0 SOME ADDITIONAL GUIDANCE

As already stated, while this Code of Business Conduct provides you with basic
guidelines for performing your responsibilities as a CMC employee in a lawful
and ethical way and in conjunction with CMC’s Vision and Values, it cannot serve
as a definitive statement for each situation that you may encounter as a CMC
employee.  If you are in doubt about a particular business conduct situation,
you might ask yourself the following questions:
 
-  
Is it legal?

-  
Does it violate CMC’s policy?

-  
Is it consistent with CMC’s Vision and Values?

-  
Is it fair and just? How does it make me feel about myself?

-  
What would my family think about it?

-  
How would it look in a newspaper article?

-  
Will I sleep soundly tonight?

-  
What would I tell a child to do?

If you are unsure about what to do, ask questions – contact your manager, a more
senior-level manager, the Human Resources Department or the Office of the
General Counsel.

To keep pace with the complexity and change that is an ongoing part of our
business and industry, we will maintain this Code of Business Conduct online and
update it on an ongoing basis as necessary.  Employees also need to comply with
CMC’s employee policies and procedures, and employees who work with particular
matters – for example, safety, health and environment, human resources, finance,
export/import – also may have additional guidelines to follow.
Any exceptions to CMC’s Code of Business Conduct for CMC employees other than
Directors or Executive Officers must be specifically approved by CMC’s Chief
Compliance Officer, who is CMC’s General Counsel; any exceptions for Directors
or Executive Officers must be specifically approved by the Board of Directors of
CMC.

 

 
13

--------------------------------------------------------------------------------

 

CODE OF BUSINESS CONDUCT CERTIFICATION

I acknowledge that I have received and will comply with Cabot Microelectronics
Corporation’s Code of Business Conduct.  I understand that if I have questions
related to the Code of Business Conduct, or become aware of any violations or
potential violations of it, I need to discuss them promptly with my manager, any
other CMC manager, the Human Resources Department, CMC counsel, including CMC’s
General Counsel, who is CMC’s Compliance Officer, or CMC’s Director of Internal
Audit, call the Ethics Line at 630/499-2702, send an email to
Ethics_Email@cabotcmp.com, contact any member of CMC’s Board of Directors,
including any member of the Audit Committee of the Board, by sending an email to
Audit_Committee@cabotcmp.com, or contact the independent, multilanguage service
Listen Up via either phone, email (listenupreports.com) or letter, as detailed
in Section 3.1 of the Code of Business Conduct.  I understand I can make any
inquiry or notification either anonymously or by identifying myself.
 

Signature

Name

Date

 

 
14