Exhibit 10.2

Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity
Incentive Plan
[Initial] [Annual] Non-Qualified Stock Option Grant Agreement for Directors

[Award Date]

[Director Name]
[Director Address]

Dear [Director First Name]:

I am pleased to inform you (the “Participant) that the Board of Directors (the
“Board”) of Cabot Microelectronics Corporation (the “Company”), based on the
recommendation of the Nominating and Corporate Governance Committee of the
Board, has approved your participation in the Second Amended and Restated Cabot
Microelectronics Corporation 2000 Equity Incentive Plan, as amended and restated
September 23, 2008 (the "Plan") in consideration of your [initial][annual]
service as a Director of the Company. A Non-qualified Stock Option (“NQSO”)
award (the “Award”) is hereby granted to the Participant pursuant to the terms
of the Plan and this Non-Qualified Stock Option Agreement (the “Agreement”).  A
copy of the Plan is enclosed.

 
Participant
 
Type of Grant
 
Number of Option Shares Granted
 
Exercise Price Per Share on Grant Date
 
Optionee ID Number
 
 
 
 
[Director Name]
 
 
Non-Qualified Stock Option
 
 
[_____]
 
FMV/closing price on Grant Date [Annual Meeting Date for Annual; Date of
Election/ Appointment for Initial]
 
 
xxx-xx-xxxx
Grant Date
[GD]
Vesting Dates
Expiration Date
 
Grant Number
[Date of grant]
[Annual Meeting Date for Annual; Date of Election/ Appointment for Initial]
 
[for annual grant;
25% 1st anniv. GD
25%  2nd anniv. GD
25%  3rd anniv. GD
25%  4th anniv. GD]; [for initial grant; 25% GD;
25% 1st anniv. GD
25% 2d anniv. GD
25% 3d anniv. GD]
 
10th anniv. GD
 
 
[xxxxx]

This Agreement provides the Participant with the terms of the option (the
“Option”) granted to the Participant.  The Option is not intended to qualify as
an incentive stock option pursuant to Section 422 of the Internal Revenue Code
(the “Code”).  The terms specified in this Agreement are governed by the
provisions of the Plan, which are incorporated herein by reference. The
Compensation Committee of the Board (the “Committee”) has the exclusive
authority to interpret and apply the Plan and this Agreement.  Any
interpretation of the Agreement by the Committee and any decision made by it
with respect to the Agreement are final and binding on all persons.  To the
extent that there is any conflict between the terms of this Agreement and the
Plan, the Plan shall govern. Capitalized terms used herein will have the same
meaning as under the Plan, unless stated otherwise.

In consideration of the foregoing and the mutual covenants hereinafter set
forth, it is agreed by and between the Company and the Participant as follows:

 
1.
Vesting and Exercise. The Award shall become vested and exercisable in
accordance with the following table:

Installment
Vesting Date Applicable to Installment
 
25%
25%
25%
25%
 
For annual/initial:
1st anniv. GD/GD
2nd anniv. GD/1st anniv. GD
3rd anniv. GD/2d anniv. GD
4th anniv. GD/3d anniv. GD
 

The Award will be fully vested and exercisable in the event of a Change in
Control, as defined in the Plan.  In the event of a Change in Control that
constitutes a Covered Transaction (as defined in Section 7.3(c) of the Plan),
the Committee may, in its sole discretion, terminate any or all outstanding
Options as of the effective date of the Covered Transaction; provided that the
Committee may not terminate an Option outstanding under this Agreement earlier
than twenty (20) days following the later of (i) the date on which the Award
became fully exercisable, and (ii) the date on which the Participant received
written notice of the Covered Transaction.

Unless otherwise provided in this Agreement or the Plan, if the date of
Participant’s termination of Service as a Director of the Company precedes the
relevant Vesting Date, an installment shall not vest on the otherwise applicable
Vesting Date and all Options subject to such installment shall immediately
terminate as of the date of such termination of Service.
 
 
 
 

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

 

 
 
2.
Termination/Cancellation/Rescission.  The Company may terminate, cancel, rescind
or recover an Award immediately under certain circumstances, including, but not
limited to, the Participant’s:

 
 
(a)  
actions constituting Cause, as defined in the Plan, or the Company’s By-laws or
Articles of Incorporation, as applicable;

(b)  
rendering of services for a competitor prior to, or within six (6) months after,
the exercise of any Option or the termination of Participant’s Service with the
Company;

(c)  
unauthorized disclosure of any confidential/proprietary information of the
Company to any third party;

In the event of any such termination, cancellation, rescission or revocation,
the Participant must return any Stock obtained by the Participant pursuant to
the Award, or pay to the Company the amount of any gain realized on the sale of
such Stock, and the Company shall be entitled to set-off against the amount of
any such gain any amount owed to the Participant by the Company.  To the extent
applicable, the purchase price for such Stock shall be returned to the
Participant, including any withholding requirements.

 
3.
Expiration.  The Option, including vested Options, shall not be exercisable
after the Company’s close of business on the last business day that occurs on or
prior to the Expiration Date. The “Expiration Date” shall be the earliest to
occur of:

(a)  
[Ten Years from GD];

(b)  
If the Participant’s termination of Service as a Director of the Company occurs
by reason of Cause, the date preceding the date of such termination;

(c)  
If the Participant’s termination of Service as a Director of the Company is for
any reason other than (b) above, all Options vested and exercisable as of the
date of termination will remain exercisable until [ten years from GD].  In such
case of termination of Service as a Director of the Company occurring by reason
of death or Disability, then any Options unvested prior to the date of such
termination shall be fully vested and exercisable as of such date of
termination. For purposes hereof, Disability shall have the meaning of permanent
and total disability provided within the meaning of Section 22 (e)(3) of the
Internal Revenue Code. In addition, upon the Participant’s termination of
Service as a Director of the Company for any reason other than by reason of
Cause, death, Disability or a Change in Control, if at such time the Participant
has completed at least the equivalent of two full terms as a Director of the
Company, as defined in the Company’s bylaws, then any Options unvested prior to
the date of such termination shall be fully exercisable as of such date of
termination.

In the event that the Participant dies on or following the Participant’s
termination date and prior to the Expiration Date without having fully exercised
the Participant’s Options, then the authorized representative of the
Participant’s estate shall be entitled to exercise the Award within such limits
specified in subparagraphs (a) or (c).

To the extent that the Participant does not exercise the Option to the extent
the Participant is entitled within the time specified in subparagraph (a) or (c)
above, the Option shall immediately terminate.

        4.
Method of Option Exercise.  Subject to the terms of this Agreement and the Plan,
the Participant may exercise, in whole or in part, the vested portion of the
Option at any time by complying with any exercise procedures established by the
Company in its sole discretion.  The Participant shall pay the exercise price
for the portion of the Option being exercised to the Company in full, at the
time of exercise, either:

(a)  
in cash;

 
(b)  
in shares of Stock having a Fair Market Value equal to the aggregate exercise
price  for the shares of Stock being purchased and satisfying such other
requirements as may be imposed by the Committee; provided, that, such shares of
Stock have been held by the Participant for no less than six (6) months;

 
(c)  
partly in cash and partly in such shares of Stock; or

(d)  
through the delivery of irrevocable instructions to a broker to deliver promptly
to the Company an amount equal to the aggregate exercise price for the shares of
Stock being purchased (“cashless exercise”).

 
Anything to the contrary herein notwithstanding, the Option cannot be exercised
and the Company shall not be obligated to issue any shares of Stock hereunder if
the Company determines that the issuance of such shares would violate the
provision of any applicable law, including the rules and regulations of any
securities exchange on which the Stock is traded.  Please refer to Section
6.2(d) of the Plan for additional information.
 
 
 
 

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

 

 
 
5.
Taxes.

 
(a)  
All deliveries and distributions under this Agreement are subject to all
applicable taxes.  As a Director of the Company, the Participant is subject to
Section 16 (an “Insider”), of the Securities Exchange Act of 1934 (“Exchange
Act”), as well as other relevant securities laws, and any surrender of
previously owned shares to satisfy tax withholding obligations arising upon
exercise of an Option, or a ‘cashless exercise’ must comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act (“Rule 16b-3”),
and other relevant law, regulations and Company guidelines.

 
(b)  
If the Fair Market Value of a share of stock on the date the Participant
exercises the Option is greater than the Exercise Price, the Participant will be
taxed on the difference multiplied by the number of shares purchased with cash
at the date of exercise.  This income is taxed as ordinary income and subject to
various taxes.  The income will be reported to the Participant as part of the
Participant’s compensation on the Participant’s annual Form 1099 issued by the
Company.

 
(c)  
If the Participant sells the shares acquired under the Option, a long-term or
short-term capital gain or loss may also result depending on:  (i) the
Participant’s holding period for the shares, and (ii) the difference between the
Fair Market Value of the shares at the time of the sale and the Participant’s
tax basis in the shares.  The holding period is determined from the date the
Option is exercised.  Under current law, the capital gain or loss is long term
if the property is held for more than one (1) year, and short term if the
property is held for less than one (1) year. If the Exercise Price of an Option
is paid in cash, the tax basis of the shares thereby acquired is the sum of (i)
the Exercise Price paid for the shares, and (ii) the ordinary income, if any,
determined by the difference between the Fair Market Value of the shares when
exercised and the Exercise Price.

EACH PARTICIPANT IS URGED TO CONSULT WITH HIS OWN TAX ADVISOR TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL,
LOCAL AND OTHER TAX LAWS.

 
6.
Transferability.  The Option is not transferable other than: (a) by will or by
the laws of descent and distribution; (b) pursuant to a domestic relations
order; or (c) to members of the Participant’s immediate family, to trusts solely
for the benefit of such immediate family members or to partnerships in which
family members and/or trusts are the only partners, all as provided under the
terms of the Plan.  After any such transfer, the Option shall remain subject to
the terms of the Plan.

 
7.
Adjustment of Shares.  In the event of any transaction described in Section 8.6
of the Plan, the terms of this Option (including, without limitation, the number
and kind of shares subject to this Option and the Exercise Price) shall be
adjusted as set forth in Section 8.6 of the Plan.

 
8.
Not an Employment Contract; Shareholder Rights.  The grant of an Option does not
confer on the Participant any contractual employment or shareholder rights.  The
Participant will not have shareholder rights with respect to any shares of stock
subject to the Option until the Option is exercised and the shares are issued
and transferred on the books of the Company to the Participant.  No adjustment
shall be made for dividends, distributions or other rights for which the record
date is prior to such date, except as provided under the Plan.

 
9.
Severability.  In the event that any provision of this Agreement is found to be
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction for any reason, in whole or in part, the remaining provisions of
this Agreement shall remain in full force and effect to the fullest extent
permitted by law.

        10.
Waiver.  Failure to insist upon strict compliance with any of the terms and
conditions of this Agreement or the Plan shall not be deemed a waiver of such
term or condition.

        11.
Notices.  Any notices provided for in this Agreement or the Plan must be in
writing and hand delivered, sent by fax or overnight courier, or by postage paid
first class mail.  Notices are to be sent to the Participant at the address
indicated by the Company’s records and to the Company at its principal executive
office.

        12.
Governing Law.  This Agreement shall be construed under the laws of the State of
Illinois.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in its
name and on its behalf, all as of the Grant Date.

CABOT MICROELECTRONICS CORPORATION
 
William P. Noglows
Chairman and Chief Executive Officer