exhibit10_28.htm

Exhibit 10.28

    CABOT
MICROELECTRONICS CORPORATION

     

    DIRECTORS' DEFERRED
COMPENSATION PLAN

    


    AS AMENDED AND RESTATED
SEPTEMBER 23, 2008

    


     

    Cabot
Microelectronics Corporation (the "Company") desires to amend and restate the
Directors' Deferred Compensation Plan (the "Plan").  The Plan as
originally adopted March 13, 2001 and as amended as of June 17, 2003 (attached
hereto as Exhibit A) remains in effect for amounts deferred prior to January 1,
2005.  The Plan was previously amended and restated as of September
26, 2006, and is further amended and restated effective September 23, 2008 as
set forth herein.

     

    The Plan
is designed 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 amended and restated effective as of the
date executed as set forth below.

     

    2. Eligibility
and Participation.  Each Director of
the Company who: (a) is duly elected to the Company's Board of Directors (the
"Board of Directors" or the "Board"); (b) receives fees, stipends, awards, or
other remuneration ("Directors' Fees") from the Company for services as a
Director; and (c) is not an employee of the Company, is an "Eligible
Director."  Each Eligible Director may defer receipt of Directors'
Fees otherwise payable to that Eligible Director, as provided for in the Plan,
beginning on the date he or she is first elected to the Company's
Board.  Each Eligible Director who elects to defer Directors' Fees
under the Plan is a "Participant" in the Plan.

     

    3. Administration.  The Board
appoints the Company's Chief Executive Officer and the Company's General Counsel
to act as the administrators of the Plan (separately and collectively referred
to herein as the "Administrator").  The Administrator will serve at
the pleasure of the Board of Directors and will administer, construe and
interpret the Plan.  The Administrator will not be liable for any act
done or determination made in good faith.  The Board of Directors has
the power to designate an additional or replacement Administrator at its
discretion. The expense of administering the Plan shall be borne by the Company
and shall not be charged against benefits payable hereunder.

     

    4. Deferrals.

     

    (a) Deferral
Election.  An Eligible
Director may file with the Administrator, on or before December 31 of each year,
an election in writing to defer all or a portion of the Directors' Fees to be
earned by the Eligible Director in the following calendar year (a "Deferral
Election").  The Deferral Election shall remain in effect until
changed or revoked, but as of each December 31 it shall be irrevocable with
respect to Directors Fees to be earned by the Director in the immediately
following year. In
the year in which a Director first becomes eligible to participate in the Plan,
a Deferral Election may be made with respect to services to be performed
subsequent to the date of the Deferral Election, if it is filed with the
Administrator within thirty (30) days after the date the Director becomes
eligible to participate in the Plan.  When a Deferral Election is
filed, an amount equal to all or a portion (as designated in the Deferral
Election) of the Directors' Fees earned by the Participant for the following
calendar year (or the remainder of the calendar year, in the case of new
Directors) will be credited to a deferral account maintained on behalf of that
Participant (the "Deferral Account").  Each Deferral Election must
also specify a distribution commencement date and a method of distribution (lump
sum or equal installments), consistent with the terms of paragraph
5.

     

    (b) Minimum
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 Directors' Fees or
portion thereof, as designated in the Deferral Election, that would have been
paid to the Participant if the Participant had not elected to defer such
compensation under the Plan.  The credit will be made on the date on
which the Directors' Fees would have been paid absent a Deferral
Election.  The Plan is unfunded and no funds will be segregated into
the Deferral Account of Participants.

     

    (d) Valuation. Each Deferral Account will
be credited a number of Share Units (including fractions thereof) determined by
dividing the amount to be credited to the Deferral Account, whether in lieu of
payment of Directors' Fees 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 such Share Units are to be credited, or, if Shares
were not traded on the date of crediting, then on the next preceding trading day
during which a sale 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.

     

     

    
      
         

      

      
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    5. Distribution.  A Participant
must elect in writing, at the time each Deferral Election is made under
paragraph 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 the method of distribution, as permitted hereunder.  A
Participant's distribution election must specify that distribution will occur on
the event or date set forth in paragraph (a)(i) or (ii) below.  The
distribution date elected by the Participant for Directors' Fees deferred in a
given year shall be the Scheduled Withdrawal Date and may vary with each year,
pursuant to the terms of the Deferral Election.  A Participant's
Scheduled Withdrawal Date with respect to Directors' Fees 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 "Separation from Service" (as described in
paragraph 5(a) below), and will be no later than the date the Participant
experiences a Separation from Service as a Director.  Payment will be
made in the Company's Common Shares only, in one distribution or equal
installment distributions based on the number of Share Units attributable to the
applicable Deferral Election.  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. In the event a
Participant does not elect a Scheduled Withdrawal Date, all deferred amounts
will be distributed within thirty (30) days following the Participant's
Separation from Service (as described in paragraph 5(a) below).

     

    (a) Time of
Distribution.  A Participant's
Accounts under the Plan may be paid only upon an event or at a time set forth in
this paragraph 5(a):

     

    (i) The
Participant's "Separation from Service" (as defined in Treas. Reg. §1.409A-1(h)
and in accordance with Treas. Reg. §1.409A-1(i)(2)).

     

    (ii) On a
specified date prior to the Participant's Separation from Service, but no
earlier than two years from the last day of the year in which the Directors'
Fees are deferred, or according to a fixed schedule of equal installments not
more frequent than monthly and over a period of not longer than five years (in
accordance with Treas. Reg. §1.409A-1(i)(1)).

     

    (iii) The
Participant's "Disability" (in accordance with Treas. Reg.
§1.409A-3(i)(4)).

     

    (iv) The
Participant's death.

     

    (v) A change
in the ownership or effective control of the corporation, or in the ownership of
a substantial portion of the assets of the corporation (in accordance with
Treas. Reg. §1.409A-3(i)(5)).

     

    (vi) The
occurrence of an "Unforeseeable Emergency," in accordance with Treas. Reg.
§1.409A-3 (i)(3), and paragraph 6 of the Plan.

     

    (b) Method of
Distribution.  Deferred amounts
will be paid in the Company's Common Shares.  Payments will be made in
a lump sum or in equal installments not more frequent than monthly and over a
period of not longer than five years.  A Participant must elect in
writing, at the time each Deferral Election is made, the method of distribution
of the Participant's Deferral Account, as permitted hereunder, to which that
Deferral Election relates.  The method of distribution of benefits may
vary with each year, pursuant to the terms of the Deferral
Election.  In the event a Participant does not elect a method of
distribution with respect to a particular year’s deferrals, the deferred amounts
for such year will be distributed in a single lump sum. The Participant shall
receive Common Shares equal to the number of Share Units in the Deferral
Accounts as of the occurrence of the event upon which the Participant's Accounts
are payable. Fractional Share Units may be settled in cash or otherwise as the
Company determines.

     

    (c) Changes
to Time or Method of Distribution.  Except as
provided in this paragraph 5(c) or in paragraph 5(d), no Participant may change
a Scheduled Withdrawal Date or a method of distribution designated in a Deferral
Election, and in no case shall such change be made if it would result in the
deferral of any amount in the Participant's Deferral Account later than that
Participant's Separation from Service.  Any change in a Scheduled
Withdrawal Date that is not the Participant's Separation from Service must be
made by the Participant by submitting a new Deferral Election at least twelve
(12) months prior to the Scheduled Withdrawal Date.  Any deferred
amounts for which the Scheduled Withdrawal Date or the method of distribution is
changed shall be deferred for an additional period of not less than five (5)
years from the date the Participant otherwise would have received the
distribution, except with regard to payments made due to the Participant's death
or Disability or an Unforeseeable Emergency.  A new Scheduled
Withdrawal Date may not take effect until at least twelve (12) months after the
date on which it is elected.

     

    6. Unforeseeable
Emergency.  Distribution of a
Participant's Deferral Account may be made to a Participant prior to his or her
Separation from Service in the event an "Unforeseeable Emergency," as that term
is defined for purposes of Code Section 409A and the regulations issued
thereunder.  An Unforeseeable Emergency is generally a severe
financial hardship resulting from an illness or accident of the Participant, the
Participant's spouse or a dependent of the Participant, loss of the
Participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the Participant.  Consistent with the Code, any distributions from a
Participant's Deferral Account made in the event of an Unforeseeable Emergency
may not exceed the amount required to satisfy such emergency plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution,
after taking into account the extent to which such hardship is or may be
relieved through reimbursement or compensation by insurance or otherwise by
liquidation of the Participant's assets (to the extent liquidation of such
assets would not itself cause severe financial hardship).

     

     

    
      
         

      

      
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    7. Separation from Service due
to Death or Disability.

     

    (a) In the
event of a Participant's Separation from Service 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
Separation from Service, 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 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 such 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, 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 that also
constitutes a “change in the ownership or effective control” within the meaning
of Code Section 409A and Treas. Regs. 1.409A-3(i)(5), 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 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 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.

     

     

    
      
         

      

      
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    10. Section
409A Compliance.  Notwithstanding
any provision of this Agreement to the contrary, this Plan is intended to comply
with Code Section 409A and the interpretive guidance thereunder.  The
Plan shall be construed and interpreted in accordance with such
intent.  If any provision of this Plan shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.

     

    11. 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.

     

    12. Amendment
or Termination.  The Board of Directors may amend this Plan at
any time and from time to time.  The Board of Directors may terminate
this Plan, to the extent such termination is permissible according to Treasury
Regulations or other published guidance issued by the U.S. Department of
Treasury or the Internal Revenue Service under Code Section 409A.  The
time and form of a payment to a Participant under the Plan may be accelerated
where the right to the payment arises due to a termination and liquidation of
the Plan, in accordance with the provisions of Treas. Reg. §1.409A-3(j)(4)(ix)
or any successor provisions thereto.  Any amendment or termination of
this Plan will not adversely affect the rights of a Participant accrued prior
thereto without that Participant's written consent, except to the extent
required by law.

     

    13. 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.

     

    14. 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.

     

    15. Applicable
Law.  To the extent not preempted by federal law, this Plan
shall be construed, administered and governed in all respects under and by the
laws of the State of Illinois, without giving effect to its conflict of laws
principles.  All references to statutory provisions and related
regulatory provisions used herein shall include any similar or successor
provisions.  The jurisdiction and venue for any disputes arising
under, or any action brought to enforce (or otherwise relating to), this Plan
shall be exclusively in the courts in the State of Illinois, County of Cook,
including the Federal Courts located therein (should Federal jurisdiction
exist).

     

     

    IN
WITNESS WHEREOF, the Company has caused this Plan to be executed by its
____________________________________ this _______ day of _______
2008.

     

    CABOT
MICROELECTRONICS CORPORATION

     

    


     

    By:                                                                               

     

    


     

    
      
         

      

      
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    EXHIBIT
A

     

    


     

    CABOT
MICROELECTRONICS CORPORATION

     

    DIRECTORS'
DEFERRED COMPENSATION PLAN

     

    


     

    (Adopted
as of March 13, 2001 and Amended as of June 17, 2003)

     

    
      	 
      


    

    


    
 

     

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