Exhibit 10.28

CABOT MICROELECTRONICS CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN
 
Cabot Microelectronics Corporation (the “Company”) desires to establish a
Directors’ Deferred Compensation Plan (the “Plan”) to assist the Company in
attracting and retaining persons of competence and stature to serve as Directors
by giving those Directors the option of deferring receipt of the fees payable to
them by the Company for their services as Directors and creating an opportunity
for appreciation of fees deferred based on appreciation of the Company’s Common
Shares.
Therefore, the Company hereby adopts the Plan as hereinafter set forth:
1.  Effective Date. The Plan is effective as of the date of its adoption by the
Board of Directors of the Company.
2.  Participation. Each Director of the Company who: (a) is duly elected to the
Company’s Board of Directors; and (b) receives fees for services as a Director,
is an “Eligible Director.” Each Eligible Director may elect to defer receipt of
fees otherwise payable to that Eligible Director, as provided for in the Plan.
Each Eligible Director who elects to defer fees will be a Participant in the
Plan.
3.  Administration. The Company’s Board of Directors appoints Matthew Neville
and H. Carol Bernstein to act as the Administrators of the Plan (the
“Administrator”). The Administrators will serve at the pleasure of the Board of
Directors and will administer, construe and interpret the Plan. The
Administrators will not be liable for any act done or determination made in good
faith. The Board of Directors has the power to designate additional or
replacement Administrators at its discretion. The expense of administering the
Plan shall be borne by the Company and shall not be charged against benefits
payable hereunder.
 
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4.  Deferrals.
(a)  Deferral Election. An Eligible Director may file with the Administrator
prior to December 1 of each year an election in writing to participate in the
Plan and to defer all or a portion of the fees otherwise payable to the Eligible
Director for succeeding periods (a “Deferral Election”). Upon adoption of the
Plan, Eligible Directors may elect to defer fees otherwise payable for the
fiscal quarter during which the Plan was adopted and subsequent periods by
making a Deferral Election. Each Eligible Director who first becomes eligible to
participate after the date of the adoption of the Plan may make a Deferral
Election for the portion of the year in which the Eligible Director first became
eligible with respect to fees to be received after the date of that election.
When a Deferral Election is filed, an amount equal to all or a portion (as
designated in the Deferral Election) of the fees otherwise payable to a
Participant for succeeding periods (as designated in the Deferral Election) will
be credited to a deferral account maintained on behalf of that Participant (the
“Deferral Account”). A Deferral Election must also state a distribution
commencement date as provided under paragraph 5, and a method of distribution
(lump sum or equal annual installments). If a Deferral Election has been filed
to participate in the Plan for succeeding periods and a Participant wishes to
discontinue such deferrals, an election in writing to terminate participation in
the Plan for any subsequent period must be filed with the Administrators prior
to the beginning of such period.
 
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(b)  Minimal Deferral. The amount of Deferral Election may not be less than
$1,000 per calendar quarter.
(c)  Accounting. The Deferral Accounts will be maintained by the Company and
will list and reflect each Participant’s credits and valuations. The
Administrator will provide each Participant an annual statement of the balance
in that Participant’s Deferral Account. The Company will credit to each
Participant’s Deferral Account an amount equivalent to the fees or portion of
those fees, that would have been paid to the Participant if the Participant had
not elected to participate in the Plan. The credit will be made on the date on
which the fee would have been paid absent a Deferral Election. No funds will be
segregated into the Deferral Account of Participants.
(d)  Valuation. Each amount credited to a Deferral Account will be assigned a
number of Share Units (including fractions thereof) determined by dividing the
amount credited to the Deferral Account, whether in lieu of payment of fees for
service as a director or as a dividend or other distribution attributable to
those Share Units, by the Fair Market Value of the Company’s Common Shares (as
defined below) on the date of credit. Fair Market Value of the Company’s Common
Shares means: (i) the closing price of the Company’s Common Shares on the
principal exchange on which the Company’s Common Shares are then trading, if
any, on the date of credit, or, if shares were not traded on the date of credit,
then on the next preceding trading day during which a sale
 
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occurred; or (ii) if the Common Shares are not traded on an exchange but are
quoted on the Nasdaq National Market System or a successor quotation system, (1)
the last sales price (if the Common Shares are then listed as a National Market
Issue under Nasdaq), or (2) the mean between the closing representative bid and
asked prices for the Common Shares on the date of credit as reported by Nasdaq
or a successor quotation system, or (iii) if the Common Shares are not publicly
traded on an exchange and not quoted on Nasdaq or a successor quotation system
the mean between the closing bid and asked prices for the Common Shares on the
date of credit, as determined in good faith by the Company’s Chief Financial
Officer; or (iv) if the Company’s Common Shares are not publicly traded, the
fair market value established by the Company’s Chief Financial Officer acting in
good faith. Each Share Unit will have the value of a Common Share of the
Company. The number of Share Units will be adjusted proportionally to reflect
stock splits, stock dividends or other capital adjustments effected without
receipt of consideration by the Company, provided, that, in the event of a
merger, acquisition or other business combination of the Company with or into
another entity, any adjustment provided for in the applicable agreement and plan
of merger (or similar document) shall be conclusively deemed to be appropriate
for purposes of this Section.
5.  Distribution. A Participant must elect in writing, at the time each Deferral
Election is made under subparagraph 4(a), the date on which distribution of the
amounts credited to the Participant’s Deferral Account to which that Deferral
Election relates will commence and
 
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the method of distribution, as permitted hereunder. The distribution date
elected by the Participant for payment of fees deferred in a given year shall be
the Scheduled Withdrawal Date. A Participant’s Scheduled Withdrawal Date with
respect to amounts deferred in a given year can be no earlier than two years
from the last day of the year in which the deferrals are made, other than for
termination of service, and will be no later than the date the Participant
terminates service as a Director. Payment will be made in the Company’s common
shares only, in one distribution or equal annual distributions based on the
number of Share Units attributable to the applicable Deferral Election
determined as of the September 30 immediately preceding commencement of
distribution. Installments may not be made more often than monthly and may not
extend for more than five years. The time of and method of distribution of
benefits may vary with each separate Deferral Election. The Deferral Accounts
represent an unsecured right to acquire the Company’s Common Shares. The
Participant may change a Scheduled Withdrawal Date by submitting a new Deferral
Election Form at least thirteen (13) months prior to the date the Participant
otherwise would have received the distribution. The new Scheduled Withdrawal
Date selected by the Participant must be at least two (2) years following the
date the new Deferral Election Form is submitted. In the event a Participant
does not elect a Scheduled Withdrawal Date, all deferred amounts will be
distributed upon termination of service. The Administrator may elect to
accelerate the distribution of any Deferral Account in its sole discretion.
6.  Early Withdrawal Election. A Participant may elect, at any time, to withdraw
all or a portion of his or her Deferral Account, calculated as if the
Participant had terminated service as of the day of the election, less an early
withdrawal penalty equal to 10% of such amount (the net amount shall be referred
to a the “Early Withdrawal Amount”). The
 
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Administrator will pay the Early Withdrawal Amount as soon as possible after
receiving the Participant’s early withdrawal election.
7.  Death or Disability.
(a)  In the event a Participant’s service is terminated by reason of death or
disability prior to the distribution of any portion of that Participant’s
Deferral Account, the Administrator will, within ninety (90) days of the date of
service termination, commence distribution of amounts credited to the Deferral
Account to the beneficiary or beneficiaries of the Participant or to the
Participant. Distribution will be made in accordance with the method of
distribution elected by the Participant or beneficiary pursuant to paragraph 5
hereof. In the event a Participant’s death or disability occurs after
distribution of amounts credited to the Deferral Account hereunder has begun,
the Administrator will continue to make distributions to the Participant (or to
the beneficiary or beneficiaries in the event of death) in accordance with the
methods of distribution elected by the Participant pursuant to paragraph 5
hereof.
(b)  Each Participant has the right to designate one or more beneficiaries to
receive distributions in the event of a Participant’s death by filing with the
Administrator a Beneficiary Designation Form. The designated beneficiary or
beneficiaries may be changed by a Participant at any time prior to that
Participant’s death by the delivery to the Administrator of a new Beneficiary
Designation Form. If no beneficiary has been designated, or if no designated
beneficiary survives the Participant,
 
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              distributions pursuant to this provision will be made to the
Participant’s estate.
8.  Assignment and Alienation of Benefits. The right of each Participant to any
account, benefit or payment hereunder will not, to the extent permitted by law,
be subject in any manner to attachment or other legal process for the debts of
that Participant; and no account, benefit or payment will be subject to
anticipation, alienation, sale, transfer, assignment or encumbrance except by
will, by the laws of descent and distribution, or by a Participant election to
satisfy a property settlement agreement pursuant to a divorce.
9.  Effect of Change of Control.  In the event of a Change of Control of the
Company, the entire unpaid balance of the Deferred Account shall be paid in a
lump sum to the Participant as of the effective date of the Change of Control.
Change of Control shall mean the first to occur of any of the following events:
(a)  any "person" as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “1934 Act”), (other than (i) the Company,
(ii) any subsidiary of the Company, (iii) any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or of any subsidiary of
the Company, or (iv) any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner" (as
defined in Section 13(d) of the 1934 Act), together with all Affiliates and
Associates (as such terms are used in Rule 12b-2 of the General Rules and
Regulations under the 1934 Act) of such person, directly or indirectly, of
securities of the Company representing
 
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              thirty percent (30%) or more of the combined voting power of the
Company's then outstanding securities; or
(b)  the stockholders of the Company approve a merger or consolidation of the
Company with any other company, other than (i) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any subsidiary of the Company, at least
sixty percent (60%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) after which no "person"
(with the method of determining "beneficial ownership" used in clause (a) of
this definition) owns more than thirty percent (30%) of the combined voting
power of the securities of the Company or the surviving entity of such merger or
consolidation; or
(c)  during any period of two (2) consecutive years (not including any period
prior to the execution of the Plan), individuals who at the beginning of such
period constitute the Board, and any new Director (other than a Director
designated by a person who has conducted or threatened a proxy contest, or has
entered into an agreement with the
 
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Company to effect a transaction described in clause (a), (b) or (d) of this
definition) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the Directors then still in office who either were Directors at the beginning of
the period or whose election or nomination for election was previously so
approved cease for any reason to constitute at least a majority thereof; or
(d)  the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
10.  Unsecured Obligation. The obligation of the Company to make distributions
of amounts credited to the Participant’s Deferred Account shall be a general
obligation of the Company, and such distribution shall be made only from general
assets and property of the Company in shares of common stock of the Company. The
Participant’s relationship to the Company under the Plan shall be only that of a
general unsecured creditor and neither this Plan, nor any agreement entered into
hereunder, or action taken pursuant hereto shall create or be construed to
create a trust for purposes of holding and investing the Deferred Account
balances. The Company reserves the right to establish such a trust, but such
establishment shall not create any rights in or against any amounts held
thereunder.
11.  Amendment or Termination. The Board of Directors of the Company may amend
or terminate this Plan at any time and from time to time. Any amendment or
termination
 
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of this Plan will not affect the rights of a Participant accrued prior thereto
without that Participant’s written consent.
12.  Taxes. The Company is not responsible for the tax consequences under
federal, state or local law of any election made by any Participant under the
Plan. All payments under the Plan are subject to withholding and reporting
requirements to the extent required by applicable law.
13.  No Right to Continued Membership on the Board. Nothing in this Plan confers
upon any director any right to continue as a director of the Company or
interferes with the rights of the Company and its shareholders, which are hereby
expressly reserved to remove any director at any time for any reason whatsoever,
with or without cause.
14.  Applicable Law. This Plan is governed under the laws of the State of
Illinois.

IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its
President and Chief Executive Officer as of this 26th day of September, 2006.
 
                        CABOT MICROELECTRONICS CORPORATION
 
                        By:  /s/ William P. Noglows
 

 

 
 

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