Exhibit 10.4

Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity
Incentive Plan
Non-Qualified Stock Option Grant Agreement
(United States Employees)

GRANT DATE

NAME
ADDRESS
CITY, STATE ZIP

Dear FIRST NAME:
 
I am pleased to inform you (the “Participant”) that the Compensation Committee
of the Board of Directors (the “Committee”) of Cabot Microelectronics
Corporation (the “Company”) has approved your participation in the Second
Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive
Plan, as amended and restated September 26, 2006 (the "Plan"). 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 can be electronically accessed through the
CMC world directory under “HR Information/Stock/General Plan Information”.
 
 
PARTICIPANT
 
Type of Grant
Number of Option Shares Granted
Exercise Price Per Share on [grant date]
Participant ID Number
 
 
 
NAME
 
 
Non-qualified Stock Option
 
[____]
$XX.XX
[general: grant date (GD) fmv/close price]
 
XXX-XX-XXXX
 
Grant Date
 
 
Vesting Dates [general]
 
Expiration Date
 
 
Grant Number
 
[date of grant]
 
25% 1stanniv. GD
25% 2danniv. GD
25% 3danniv. GD
25% 4thanniv. GD
 
DATE [general: tenth anniv. GD]
 
000000XXXX

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
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:

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NAME - employee (including executive officer) NQSO Grant Agreement
GRANT DATE Page 2 of 6

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

Installment
Vesting Date Applicable to Installment [general]
25%
25%
25%
25%
[1st anniv. GD]
[2d anniv. GD]
[3d anniv. GD]
[4th 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 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 with the Company, as defined in the Plan,
precedes the relevant Vesting Date, an installment shall not vest on the
otherwise applicable Vesting Date and all Options subject to such installment
shall immediately terminate as of the date of such termination of Service.

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

(a)  
actions constituting Cause, as defined in the Plan and as otherwise enforceable
under local law;

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

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

(d) failure to comply with the Company’s policies regarding the identification,
disclosure and protection of intellectual property;
 
(e) violation of the Cabot Microelectronics Corporation Employee
Confidentiality, Intellectual Property and Non-Competition Agreement.

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

3.
Purpose of Award. The Award is intended to promote goodwill between the
Participant and the Company and shall not be considered as salary or other
remuneration for any employment or other services the Participant may perform
for the Company or any of its affiliates. The Company’s grant of the Option does
not confer any contractual or other rights of employment or service with the
Company. Benefits granted under the Plan shall not be considered as part of the
Participant’s salary in the event of severance, redundancy or resignation.
Granting of the Award shall also not be construed as creating any right on the
part of Participant to receive any additional benefits including awards in the
future, it being expressly understood and agreed that any future awards shall be
made solely at the discretion of the Company.

 

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GRANT DATE Page 3 of 6
 
4.
Expiration. The Option, including vested Options, shall not be exercisable after
the Company’s close of business on the last business day that occurs on or prior
to the Expiration Date. The “Expiration Date” shall be the earliest to occur of:

(a)  
[general: tenth anniv. GD];

 
(b)
If the Participant’s termination of Service occurs by reason of death or
Disability, the three (3) year anniversary of the date of such termination or
the ten (10) year anniversary of the Grant Date, whichever is sooner. In such
case of termination of Service occurring by reason of death or Disability, then
any unvested portion of the Option shall be fully vested and exercisable as of
such date of termination. For purposes hereof, “Disability” shall have the
meaning provided under: (i) first, an employment agreement between the
Participant and the Company; (ii) second, if no such employment agreement
exists, the long-term disability program maintained by the Company or any
governmental entity covering the Participant; or (iii) third, if no such
agreement or program exists, permanent and total disability within the meaning
of Section 22 (e)(3) of the Code;

 
(c)
If the Participant’s termination of Service occurs by reason of Cause, the date
preceding the date of such termination;

 
(d)
If the Participant’s termination of Service occurs by reason of Change in
Control, three (3) months after the date of such termination;

(e) If the Participant’s termination of Service occurs by reason of Retirement,
all Options vested and exercisable as of the date of such termination will
remain exercisable until the ten (10) year anniversary of the Grant Date. For
purposes hereof, “Retirement” shall mean the termination of the Participant’s
Service following the Participant’s attainment of at least (i) five years of
employment with the Company and (ii) 55 years of age, provided, however, that
the Participant’s termination of Service will not be deemed to have occurred by
reason of Retirement if the Participant’s Service has been terminated by reason
of Cause, as determined by the Company in its sole discretion; or

 
(f)
If the Participant’s termination of Service is for any reason other than (b),
(c), (d) or (e) above, all Options vested and exercisable as of the date of
termination will remain exercisable for one (1) month after the termination
date, after which all unexercised Options are terminated.

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 (b), (d) or (e).

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

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

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NAME - employee (including executive officer) NQSO Grant Agreement
GRANT DATE Page 4 of 6
 

(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 months;

 

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

 

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

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

6.  
Taxes. 

(a) All deliveries and distributions under this Agreement are subject to
withholding of all applicable taxes based on country specific tax requirement.
Please refer to electronic copy of “Taxes” for your individual circumstances
based on your location. The various methods and manner by which the tax
withholding may be satisfied are set forth in Section 8.4 of the Plan. If the
Participant is subject to Section 16 (an “Insider”), of the Securities Exchange
Act of 1934 (“Exchange Act”) and other securities laws, any surrender of
previously owned shares to satisfy tax withholding obligations arising upon
exercise of an Option must comply with the requirements of Rule 16b-3
promulgated under the Exchange Act (“Rule 16b-3”) and other relevant rules and
regulations.

(b) If the Fair Market Value of a share of stock on the date the Participant
exercises the Option is greater than the Exercise Price, the Participant will be
taxed on the difference multiplied by the number of shares purchased with cash
at the date of exercise. This income is taxed as ordinary income and subject to
various withholding taxes. The Company is required to withhold and remit these
taxes to the appropriate tax authorities. If the exercise of the Option results
in no cash payment to the Participant from which the Company could withhold the
income and FICA taxes, the Participant will be required to provide the Company
with an amount of cash sufficient to satisfy the Participant’s tax withholding
obligations or to make arrangements satisfactory to the Company with regard to
such taxes, which in most instances can be done through the services provided by
a broker. If the Participant does not pay the amount of required withholding to
the Company, the Company will withhold from the shares delivered or from other
amounts payable to the Participant, the minimum amount of funds required to
cover all applicable federal, state and local income and employment taxes
required to be withheld by the Company by reason of such exercise of the Option.
The income will be reported to the Participant as part of the Participant’s
employment compensation on the Participant’s annual earnings statement.
 
(c) If the Participant sells the shares acquired under the Option, a long-term
or short-term capital gain or loss may also result depending on: (i) the
Participant’s holding period for the shares, and (ii) the difference between the
Fair Market Value of the shares at the time of the sale and the Participant’s
tax basis in the shares. The holding period is determined from the date the
Option is exercised. Under current law, the capital gain or loss is long term if
the property is held for more than one year, and short term if the property is
held for less than one 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.

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NAME - employee (including executive officer) NQSO Grant Agreement
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EACH PARTICIPANT IS URGED TO REVIEW THE U.S. TAX COMMUNICATION INFORMATION AND
TO CONSULT WITH HIS OR HER OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, LOCAL AND OTHER
TAX LAWS.

7.
Transferability. The Option is not transferable other than: (a) by will or by
the laws of descent and distribution; (b) pursuant to a domestic relations
order; or (c) to members of the Participant’s immediate family, to trusts solely
for the benefit of such immediate family members or to partnerships in which
family members and/or trusts are the only partners, all as provided under the
terms of the Plan. After any such transfer, the Option shall remain subject to
the terms of the Plan.

8.
Adjustment of Shares. In the event of any transaction described in Section 8.6
of the Plan, the terms of this Option (including, without limitation, the number
and kind of shares subject to this Option and the Exercise Price) shall be
adjusted as set forth in Section 8.6 of the Plan.

9.
Shareholder Rights. Participant shall have no rights as a stockholder with
respect to any shares of Stock subject to the Option until the Option is
exercised and the shares are issued and transferred on the books of the Company
to the Participant. No adjustment shall be made for dividends, distributions or
other rights for which the record date is prior to such date, except as provided
under the Plan.

   

10.
Data Privacy. In order to perform its requirements under this Plan, the Company
may process sensitive personal data about the Participant. Such data includes
but is not limited to the information provided in this grant package and any
changes thereto, other appropriate personal and financial data about the
Participant, and information about the Participant’s participation in the Plan
and shares exercised under the Plan from time to time. By signing the attached
acceptance form, the Participant hereby gives explicit consent to the Company to
process any such data. The Participant also hereby gives explicit consent to the
Company to transfer any personal data outside the country in which the
Participant is employed and to the United States. The legal persons for whom the
personal data is intended includes the Company and any of its subsidiaries, the
outside plan administrator as selected by the Company from time to time and any
other person that the Company may find appropriate in its administration of the
Plan. The Participant may review and correct any personal data by contacting his
local Human Resources Representative. The Participant understands that the
transfer of the information outlined here is important to the administration of
the Plan and failure to consent to the transmission of such information may
limit or prohibit participation in the Plan.

11.
Severability. In the event that any provision of this Agreement is found to be
invalid, illegal or incapable of being enforced by any court of competent
jurisdiction for any reason, in whole or in part, the remaining provisions of
this Agreement shall remain in full force and effect to the fullest extent
permitted by law.

12.
Waiver. Failure to insist upon strict compliance with any of the terms and
conditions of this Agreement or the Plan shall not be deemed a waiver of such
term or condition.

13.
Notices. Any notices provided for in this Agreement or the Plan must be in
writing and hand delivered, sent by fax or overnight courier, or by postage paid
first class mail. Notices are to be sent to the Participant at the address
indicated by the Company’s records and to the Company at its principal executive
office.

14.
Governing Law. This Agreement shall be construed under the laws of the State of
Illinois.

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NAME - employee (including executive officer) NQSO Grant Agreement
GRANT DATE Page 6 of 6

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
 
                        /s/ William P. Noglows 
 
                        William P. Noglows
                        Chairman and Chief Executive Officer

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