Exhibit 10.64
 
Cabot Microelectronics Corporation 2012 Omnibus Incentive Plan
 
[Initial][Annual] Non-Qualified Stock Option Award Agreement for Directors
 

 
[GRANT DATE]
 
[NAME]
 
[ADDRESS]
 
[CITY, STATE, ZIP]
 

 
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 Cabot Microelectronics Corporation
2012 Omnibus Incentive Plan (the “Plan”) in consideration of your annual service
as a Director of the Company. A Non-Qualified Stock Option (“NQSO”) award (the
“Award”) is hereby granted to you pursuant to the terms of the Plan and this
NQSO Agreement (the “Agreement”).  A copy of the Plan is enclosed.
 

 
Participant Name/
ID Number
Type of Award
Number of Option Shares Awarded
Exercise Price Per Share on Grant Date [GD]
 
[Director Name]
 
 
Non-Qualified Stock Option
 
 
[____]
 
$[FMV/closing price on GD] [Annual Meeting [AM] Date for Annual; Date of
Election/ Appointment for Initial [DE]]
 
Grant Date
Vesting Date
Expiration Date
Award Number
 
[GD]
 [AM Date for Annual; DE for Initial]
 
 
 
[100% 1st anniversary of GD for annual grant];
 [25% GD;
25% 1st anniv. GD
25% 2d anniv. GD
25% 3d anniv. GD
for initial grant;]
 
[Tenth anniversary of 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 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 Option shall become vested and exercisable in
accordance with the following table:

 

Installment
Vesting Date Applicable to Installment
 
[For annual grant, 100%]
 [For initial grant, 25%
25%
25%
25%]
 
 
[For annual grant, 1st anniversary of GD]
[For initial grant, GD
1st anniv. GD
2d anniv. GD
3d anniv. GD]
 

Notwithstanding the foregoing, the Option shall become fully vested and
exercisable in the event of a Change in Control.  In the event of a Change in
Control that constitutes a Covered Transaction, the Committee may, in its sole
discretion, terminate any or all outstanding portions of the Option 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 (a) the date on which the Option became fully
exercisable, and (b) 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 any portion of the Option subject to such installment shall
immediately terminate as of the date of such termination of Service.
 
2.  
Termination / Cancellation / Rescission / Recovery / Revocation.  The Company
may terminate, cancel, rescind, recover, or revoke the Option immediately under
certain circumstances, including, but not limited to, the Participant’s:

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

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

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

 
In the event of any such termination, cancellation, rescission, recovery, or
revocation, the Participant must return any Stock obtained by the Participant
pursuant to the Option, 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 Company will refund to the Participant any amount
paid for such Stock, including any withholding requirements.
 
 
 
 

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

 
(a)  
The tenth (10th) anniversary of the Grant Date;

 
(b)  
If the Participant terminates Service by reason of Cause, the date preceding the
date of such termination;

 
(c)  
If the Participant terminates Service for any reason other than (b) above, any
portion of the Option that is vested and exercisable as of the date of
termination will remain exercisable until the tenth (10th) anniversary of the
Grant Date.  In such case of termination of Service as a Director of the Company
occurring by reason of death or Disability, then any unvested portion of the
Option shall be fully vested and exercisable as of such date of termination. In
addition, upon the Participant’s termination of Service as a Director of the
Company for any reason other than by reason of Cause, death, Disability or a
Change in Control, if at such time the Participant has completed at least the
equivalent of two full terms as a Director of the Company, as defined in the
Company’s bylaws, then any unvested portion of the Option shall be fully
exercisable as of such date of termination.

 
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 Option, then the authorized representative of the Participant’s estate shall
be entitled to exercise the Option 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.
 

 

 
5.  
Taxes.

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

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

 
(c)  
If the Participant sells the shares acquired under the Option, a long-term or
short-term capital gain or loss may also result depending on:  (i) the
Participant’s holding period for the shares, and (ii) the difference between the
Fair Market Value of the shares at the time of the sale and the Participant’s
tax basis in the shares.  The holding period is determined from the date the
Option is exercised.  Under current law, the capital gain or loss is long term
if the property is held for more than one (1) year, and short term if the
property is held for less than one (1) year. If the Exercise Price of an Option
is paid in cash, the tax basis of the shares thereby acquired is the sum of (1)
the Exercise Price paid for the shares, and (2) the ordinary income, if any,
determined by the difference between the Fair Market Value of the shares when
exercised and the Exercise Price.

 
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.
 
 
 
 

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

 
7.  
Adjustment of Shares.  In the event of any transaction that is a Share Change or
a Corporate Transaction, each as described in Section 8.6 of the Plan, the terms
of this Option (including, without limitation, the number and kind of shares
subject to this Option and the Exercise Price) shall or may be adjusted, as
applicable, as set forth in Section 8.6 of the Plan.

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

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

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

 
11.  
Notices.  Except as otherwise provided in Section 12, any notices provided for
in this Agreement or the Plan must be in writing and hand delivered, sent by fax
or overnight courier, or by postage paid first class mail.  Notices are to be
sent to the Participant at the address indicated by the Company’s records and to
the Company at its principal executive office.

 
12.  
Electronic Delivery.  The Company may, in its sole discretion, decide to deliver
any documents related to the Option or other awards granted to the Participant
under the Plan by electronic means.  The Participant hereby consents to receive
such documents by electronic delivery and agrees to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or a third party designated by the Company.

 
13.  
Section 409A. The Option is intended to be exempt from the requirements of
Section 409A. The Plan and this Agreement shall be administered and interpreted
in a manner consistent with this intent. If the Company determines that this
Agreement is subject to Section 409A and that it has failed to comply with the
requirements of Section 409A, the Company may, at the Company’s sole discretion,
and without the Participant’s consent, amend this Agreement to cause it to
comply with Section 409A or be exempt from Section 409A.

 
14.  
Governing Law.  This Agreement shall be construed under the laws of the [State
of Delaware].

 
 
 

 
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
President and Chief Executive Officer