exhibit10_1.htm

Exhibit 10.1


    SECOND
AMENDED AND RESTATED

     

    CABOT MICROELECTRONICS
CORPORATION 2000 EQUITY INCENTIVE PLAN

    


    AS AMENDED AND
RESTATED SEPTEMBER 23, 2008

     

    1.           PURPOSE

     

    The purpose of this Second Amended and
Restated Cabot Microelectronics Corporation 2000 Equity Incentive Plan (the
"Plan") is to advance the interests of Cabot Microelectronics Corporation (the
"Company") and its stockholders by enhancing the Company's ability to (a)
attract and retain employees, directors, consultants and advisors who are in a
position to make significant contributions to the success of the Company and its
subsidiaries; (b) reward these individuals for these contributions; (c)
encourage these individuals to take into account the long-term interests of the
Company and its stockholders; and (d) reward individuals who have contributed to
the Company's success (including the success of the Company's initial public
offering), in the case of each of (a) through (d), through ownership of shares
of the Company's common stock, par value $.001 per share ("Stock").

     

    2.           ADMINISTRATION

     

    (a)           The
Plan shall be administered by the Compensation Committee of the Board of
Directors (the "Board") of the Company (the "Committee").  The
Committee shall hold meetings at such times as may be necessary for the proper
administration of the Plan.  The Committee shall consist of at least
two directors of the Company, each of whom shall be a "Non-Employee Director" as
defined in Rule 16b-3(b)(3) promulgated under Section 16 of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and (ii) to the extent
necessary for any Award intended to qualify as "qualified performance-based
compensation" under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), to so qualify, each member of the Committee shall be an
"outside director" (as defined in Section 162(m) and the regulations promulgated
thereunder).  Subject to applicable law, the Committee may delegate
its authority under the Plan to any other person or persons.

     

    (b)           No
member of the Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to this Plan or
any transaction hereunder.  The Company hereby agrees to indemnify
each member of the Committee for all costs and expenses and, to the fullest
extent permitted by applicable law, any liability incurred in connection with
defending against, responding to, negotiating for the settlement of or otherwise
dealing with any claim, cause of action or dispute of any kind arising in
connection with any actions in administering this Plan or in authorizing or
denying authorization to any transaction hereunder.

     

    (c)           Subject
to the express terms and conditions set forth herein, the Committee shall have
the power from time to time:

     

    (i)           to
determine the Employees, Directors and/or Advisors to whom Awards shall be
granted under the Plan and the number of shares of Stock subject to such Awards;
to prescribe the terms and conditions (which need not be identical) of each such
Award; and to make any amendment or modification to any Award Agreement
consistent with the terms of the Plan;

     

    (ii)           to
construe and interpret the Plan and the Awards granted hereunder; to establish,
amend and revoke rules and regulations for the administration of the Plan,
including, but not limited to, correcting any defect or supplying any omission,
or reconciling any inconsistency in the Plan or in any Award Agreement, in the
manner and to the extent it shall deem necessary or advisable; to interpret the
Plan and applicable Award Agreements so that the Plan and its operation complies
with Section 16 of the 1934 Act, Sections 162(m), 409A and 422 of the Code and
other applicable law; and otherwise to give full effect to the
Plan;

     

    (iii)           to
exercise its discretion with respect to the powers and rights granted to it as
set forth in the Plan; and

     

    (iv)           generally,
to exercise such powers and to perform such acts as are deemed by it necessary
or advisable to promote the best interests of the Company with respect to the
Plan.

     

    All decisions and determinations of the
Committee in the exercise of the foregoing powers shall be final, binding and
conclusive upon the Company and its subsidiaries and affiliates, all Employees,
Directors and Advisors, and all other persons claiming any interest
herein.

     

    3.           EFFECTIVE
DATE AND TERM OF PLAN

     

    The Plan will become effective on the
date on which it is adopted by the Board, subject to the approval of the
Company's stockholders at the Annual Meeting on March 9, 2004.  No
Award may be granted under the Plan after the tenth anniversary of the date on
which this Plan was adopted by the Board, but Awards previously granted may
extend beyond that date.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    4.           SHARES
SUBJECT TO THE PLAN

     

    Subject to adjustment as provided in
Section 8.6, and subject to the next following sentence and Section 6.3(a), the
maximum number of shares of Stock that may be delivered under the Plan will be
9,500,000.

     

    In addition, any Stock covered by an
Option granted under the Plan, which is forfeited, cancelled or expires in whole
or in part shall be deemed not to be delivered for purposes of determining the
maximum number of shares of Stock available for grants under the
Plan.  Any shares of Stock surrendered to the Company in payment of
the exercise price of Options issued under the Plan shall be deemed not to be
delivered for purposes of determining the maximum number of shares of Stock
available for grants under the Plan.  Upon forfeiture or termination
of Restricted Stock or Restricted Stock Units prior to vesting, the shares of
Stock subject thereto shall again be available for Awards under the
Plan.

     

    In no
event shall the Company issue ISOs (as defined in Section 6.2(a)) under the Plan
covering more than 1,750,000 shares of Stock.

     

    Awards
granted through the assumption of, or in substitution or exchange for, similar
awards in connection with the acquisition of another corporation or business
entity shall not be counted for purposes of applying the limitations of this
Section on numbers of shares of Stock available for Awards generally or any
particular kind of Award under the Plan.

     

    Stock
delivered under the Plan may be either from authorized but unissued Stock, from
treasury shares or from shares of Stock purchased in open-market transactions
and private sales.

     

    5.           ELIGIBILITY
AND PARTICIPATION

     

    Employees of the Company, its
subsidiaries and affiliates ("Employees"), non-employee members of the board of
directors of the Company, its subsidiaries or affiliates ("Directors"), and
consultants and advisors of the Company or any of its subsidiaries ("Advisors"),
who in the opinion of the Committee are in a position to make a significant
contribution to the success of the Company, its subsidiaries and affiliates, are
eligible to receive Awards under the Plan.

     

    For purposes of the Plan, "Service"
means the provision of services to the Company or its subsidiaries or affiliates
in the capacity of (i) an Employee, (ii) a Director, or (iii) an
Advisor.  An "affiliate" for purposes of the Plan is an entity that
controls, is controlled by or is under common control with, the
Company.  A "subsidiary" for purposes of the Plan is an entity in
which the Company owns, directly or indirectly, equity interests possessing a
majority of the total combined voting power of all classes of
equity.  The Committee will from time to time select the Employees,
Directors and/or Advisors who are to be granted Awards ("Participants"), but no
Participant shall receive Awards under the Plan covering more than 300,000
shares of Stock (subject to adjustment as provided in Section 8.6) in any
calendar year.

     

    6.           TYPES
OF AWARDS

     

    6.1.           RESTRICTED
STOCK AND RESTRICTED STOCK UNITS.

     

    (a)           Nature of Restricted Stock
Award.  An Award of Restricted Stock entitles the recipient to
acquire, at such time or times as the Committee may determine, shares of Stock
subject to the restrictions described in paragraph (f) below ("Restricted
Stock").

     

    (b)           Restricted Stock
Units.  An Award of Restricted Stock Units ("RSUs") entitles
the recipient to acquire, at such time or times as the Committee may determine,
shares of Stock subject to the restrictions described in paragraph (f)
below.  An RSU represents a contingent right to receive a Share or an
amount equivalent in value to a Share.

     

    (c)           Maximum
Number.  In no event shall the Company issue more than
1,900,000 shares of Restricted Stock and/or RSUs, in the aggregate, under the
Plan.

     

    (d)           Payment for Restricted
Stock.  The Committee may require, as a condition to an Award
of Restricted Stock or RSUs, that a Participant deliver to the Company a
purchase price in any amount set by the Committee for such Restricted Stock or
RSUs.  In the discretion of the Committee, an Award Agreement
evidencing an Award of Restricted Stock or RSUs may permit the Participant to
pay some or all of the purchase price thereof, or to meet any Withholding
Requirements to be met by the Participant in connection therewith, in the form
of a note from the Participant on such terms as the Committee shall
determine.  Such terms may include forgiveness of all or a portion of
any such note upon such conditions as the Committee may specify.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (e)           Rights as a
Stockholder.  A Participant who receives an Award of Restricted
Stock will have all the rights of a stockholder with respect to the Stock,
including voting and dividend rights, subject to the restrictions described in
paragraph (d) below and any other conditions imposed by the Committee in the
Award Agreement at the time of grant.  The Award Agreement evidencing
an Award of RSUs shall specify whether the Participant is entitled to any voting
rights or to receive any dividends on the shares of Stock underlying the
RSUs.  An Award of Restricted Stock or RSUs may provide for the right
to receive on the payment date for any dividend on the Stock, cash compensation
from the Company equal to the dividend that would have been paid on such shares
of Restricted Stock or RSUs (or the Fair Market Value of such dividend, if such
dividend would not have been paid in cash), if such shares had been issued and
outstanding, fully vested and held by the Participant on the record date for
payment of such dividend (a "Dividend Equivalent").

     

    (f)           Restrictions.  The
restrictions on each grant of Restricted Stock or RSUs will lapse at such time
or times, and on such terms and conditions (including obtaining pre-established
performance goals), as the Committee may specify.  Except as otherwise
specifically provided by the Plan or by the Committee in any particular case,
until these restrictions lapse, neither Restricted Stock nor RSUs may be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of, except
that Restricted Stock or RSUs may be pledged as security for the purchase price
thereof, or for loans used to fund any or all of the purchase price thereof or
Withholding Requirements met in connection with the purchase
thereof.  If the Participant's Service terminates before such
restrictions have lapsed, the Company shall have the right to repurchase the
Restricted Stock for the amount of any consideration (excluding services) it
received for the Restricted Stock plus, if the Committee shall so determine, an
amount equal to the Withholding Requirements met by the Participant in
connection with the sale of the Stock, or for such other consideration as the
Committee shall determine, including for no consideration if no consideration
other than services was paid for such Restricted Stock.  The Committee
shall not accelerate the time at which the restrictions on all or any part of a
grant of Restricted Stock will lapse, except as the Committee may determine to
be appropriate in connection with a Participant's termination of
Service.

     

    (g)           Deferral.  If
a Participant so elects in accordance with such procedures as the Committee may
specify from time to time, in accordance with the requirements of Section 409A
of the Code, the delivery of Restricted Stock and, if the deferral election so
specifies, of the Dividend Equivalents with respect thereto, shall be deferred
until the date or dates specified in such election.

     

    (h)           Section 83(b)
Election.  Under Section 83 of the Code, the difference between
the purchase price paid for the Stock and its Fair Market Value (as defined in
Section 6.2(b)) on the date any restrictions applicable to such shares lapse
will be reportable as ordinary income at that time.  A Participant may
elect to be taxed at the time the shares of Stock are acquired hereunder to the
extent the Fair Market Value of the Stock differs from the purchase price rather
than when and as such Stock ceases to be subject to restrictions, by filing an
election under Section 83(b) of the Code with the I.R.S. within thirty (30) days
after the grant date.  If the Fair Market Value of the Stock at the
grant date equals the purchase price paid (and thus no tax is payable), the
election must be made to avoid adverse tax consequences in the
future.  The form for making this election is available from the
Company.  The failure to make this filing within the thirty (30) day
period will result in the recognition of ordinary income by the Participant (in
the event the Fair Market Value of the Stock increases after the grant date) as
the restrictions lapse. IT IS THE PARTICIPANT'S SOLE RESPONSIBILITY, AND NOT THE
COMPANY'S, TO FILE A TIMELY ELECTION UNDER SECTION 83(b). A PARTICIPANT MUST
RELY SOLELY ON THE PARTICIPANT'S OWN ADVISORS WITH RESPECT TO THE DECISION AS TO
WHETHER OR NOT TO FILE AN 83(b) ELECTION.

     

    6.2.           OPTIONS.

     

    (a)           Nature of
Options.  An Option is an Award entitling the recipient on
exercise thereof to purchase shares of Stock at a specified exercise
price.  Both incentive stock options (as defined in Section 422 of the
Code) ("ISOs") and Options that are not ISOs may be granted under the Plan;
provided that the Committee may award ISOs only to Employees.

     

    (b)           Exercise
Price.  The exercise price of an Option shall be determined by
the Committee and set forth in an applicable Award Agreement; provided, however,
that the exercise price of an ISO shall not be less than the Fair Market Value
of a share of the Stock on the date the ISO is granted (110% of the Fair Market
Value of a share of Stock on the date of grant in the case of an ISO granted to
an Employee who owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company, or of a parent or a subsidiary (such person, a
"Ten Percent Shareholder")).  For purposes of this Plan, "Fair Market
Value" on any date means the closing sales price of the Stock on such date on
the principal national securities exchange on which the Stock is listed or
admitted to trading, or, if the Stock is not so listed or admitted to trading,
the average of the per share closing bid price and per share closing asked price
on such date as quoted on the National Association of Securities Dealers
Automated Quotation System or such other market in which such prices are
regularly quoted, or, if there have been no published bid or asked quotations
with respect to shares on such date, the Fair Market Value shall be the value
established by the Board in good faith and in accordance with Section 409A of
the Code and, in the case of an ISO, Section 422 of the Code.  Except
for adjustment as provided in Section 8.6, any outstanding Options shall not be
repriced.

     

    (c)           Duration of
Options.  The latest date on which an Option may be exercised
will be the tenth anniversary of the date the Option was granted (five years in
the case of an ISO granted to a Ten Percent Shareholder), or such earlier date
as may have been specified by the Committee in the Award Agreement at the time
the Option was granted.

     

    (d)           Exercise of
Options.  An Option will become exercisable at such time or
times, and on such terms and conditions (including obtaining pre-established
performance goals), as the Committee may specify in the Award Agreement for such
Option.  The Committee may at any time accelerate the time at which
all or any part of the Option may be exercised.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Subject to the next following sentence,
any exercise of an Option must be in writing, signed by the proper person and
delivered or mailed to the Company, accompanied by (1) any documents required by
the Committee and (2) payment in full for the number of shares for which the
Option is exercised.  The exercise price for any Stock purchased
pursuant to the exercise of an Option may, if permitted under the Award
Agreement applicable to the Option, be paid in the following forms: (a) cash;
(b) the transfer, either actually or by attestation, to the Company of shares of
Stock that have been held by the Participant for at least six months (or such
lesser period as may be permitted by the Committee) prior to the exercise of the
Option, such transfer to be upon such terms and conditions as determined by the
Committee; (c) such other methods as the Committee makes available to
Participants from time to time; or (d) a combination thereof.  In
addition, Options may be exercised through a registered broker-dealer pursuant
to such cashless exercise procedures which are, from time to time, deemed
acceptable by the Committee.  Any shares of Stock transferred to the
Company as payment of the exercise price under an Option shall be valued at
their Fair Market Value on the day of exercise of such Option.  If
requested by the Committee, the Participant shall deliver the Award Agreement to
the Secretary of the Company who shall endorse thereon a notation of such
exercise and return such Award Agreement to the Participant. No fractional
shares of Stock (or cash in lieu thereof) shall be issued upon exercise of an
Option, and the number of shares of Stock that may be purchased upon exercise
shall be rounded to the nearest number of whole shares.

     

    (e)           Exercise
Limit.  To the extent that the aggregate Fair Market Value
(determined as of the date of the grant) of shares of Stock with respect to
which ISOs granted under the Plan and "incentive stock options" (within the
meaning of Section 422 of the Code) granted under all other plans of the Company
or its subsidiaries (in either case determined without regard to this Section
6.2(e)) are exercisable by a Participant for the first time during any calendar
year exceeds $100,000, such ISOs shall be treated as Options that are not
ISOs.  In applying the limitation in the preceding sentence in the
case of multiple Options, Options that are intended to be ISOs shall be treated
as Options which are not ISOs according to the order in which they were granted,
such that the most recently granted Options are first treated as Options that
are not ISOs.

     

    (f)           An
ISO must be exercised, if at all, within three months after the Participant's
termination of Service for a reason other than death or Disability and within
twelve months after the Participant's termination of Service for death or
Disability.

     

    6.3.           SUBSTITUTE
AWARDS.

     

    (a)           In
connection with any acquisition by the Company or any of its subsidiaries, the
Committee may grant Awards to persons who became Employees, Directors or
Advisors in connection with such acquisition in substitution for equity
incentives held by them in the seller or acquired entity.  In such
case the Committee may set the prices and other terms of the substitute Awards
at such amounts and in such manner as it, in its sole discretion, deems
appropriate to preserve for the Participants the economic values of the equity
incentives for which such Awards are substitutes (as determined by the Committee
in its sole discretion) or otherwise to provide such incentives as the Committee
may determine are appropriate.

     

    (b)           Unless
required by applicable law, any substitute Awards granted pursuant to Section
6.3 shall not count toward the share limitations set forth in Section
4.

     

    7.           EVENTS
AFFECTING OUTSTANDING AWARDS

     

    7.1.           TERMINATION
OF SERVICE.

     

    Unless otherwise set forth in an Award
Agreement, an Award shall immediately terminate on the date a Participant's
Service terminates, and (i) any Options held by a Participant shall not be
exercisable and all rights of the Participant with respect thereto shall
immediately terminate and (ii) any shares of Restricted Stock or RSUs with
respect to which the restrictions have not lapsed shall be immediately forfeited
and must be transferred to the Company in accordance with Section
6.1.

     

    7.2           TERMINATION
OF AWARD.

     

    The Company may terminate, cancel,
rescind or recover an Award immediately under certain circumstances, including,
but not limited to a Participant's:

     

    (a)           actions
constituting "Cause", which shall have the meaning provided under an employment,
consulting or other agreement between a Participant and the Company, or if there
is no such meaning provided under such agreement or no such agreement, shall
include, but not be limited to, the: (i) conviction of or entering a guilty plea
with respect to a crime, whether or not connected with the Company; (ii)
commission of any act of fraud with respect to the Company; (iii) theft,
embezzlement or misappropriation of any property of the Company; (iv) excessive
absenteeism (other than as resulting from Disability); (v) failure to observe or
comply with any Company work rules, policies, procedures, guidelines or
standards of conduct which the Company has adopted for the regulation of the
general conduct of its employees, as generally known to the employees of the
Company or evidenced by the terms of any employee handbook, written memorandums
or written policy statements; (vi) continued willful refusal to carry out and
perform the material duties and responsibilities of a Participant's position,
excluding nonperformance resulting from Disability; or (vii) any other conduct
or act determined to be injurious, detrimental or prejudicial to any interest of
the Company (in each case as determined in good faith by the
Company);

     

    (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; or

     

    (e)           violation
of the Proprietary Rights Agreement/Cabot Microelectronics Corporation Employee
Confidentiality, Intellectual Property and Non-Competition Agreement for
Employees signed by the Participant.

     

    The existence of any such circumstances
shall be determined in good faith by the Company.

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    In the event of any termination,
cancellation, recision or revocation, the Participant shall return to the
Company any Stock received pursuant to an Award, or pay to the Company the
amount of any gain realized on the sale of any such Stock, in such manner and on
such terms and conditions as may be required, 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
Withholding Requirements.

     

    7.3           CHANGE
IN CONTROL.

     

    The Committee shall have the discretion
to provide in applicable Award Agreements that, in the event of a "Change in
Control" (as defined in Appendix A) of the Company, the following provisions
will apply:

     

    (a)           Each
outstanding Option (or such lesser portion of each Option as is set forth in an
applicable Award Agreement) will immediately become exercisable in
full.

     

    (b)           Each
outstanding share of Restricted Stock or RSU (or such lesser number of shares as
is set forth in an applicable Award Agreement) will immediately become free of
the restrictions.

     

    (c)           In
the event of a Change in Control that is a merger or consolidation in which the
Company is not the surviving corporation or that results in the acquisition of
substantially all the Company's outstanding Stock by a single person or entity
or by a group of persons or entities acting in concert, or in the event of a
sale or transfer of all or substantially all of the Company's assets (a "Covered
Transaction"), the Committee shall have the discretion to provide for the
termination of all outstanding Options as of the effective date of the Covered
Transaction; provided, that, if the Covered Transaction follows a Change in
Control or would give rise to a Change in Control, no Option will be so
terminated (without the consent of the Participant) prior to the expiration of
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.

     

    8.           GENERAL
PROVISIONS

     

    8.1.           DOCUMENTATION
OF AWARDS.

     

    Awards will be evidenced by written
instruments prescribed by the Committee from time to time (each such instrument,
an "Award Agreement").  Award Agreements may be in the form of
agreements, to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, acceptance of which will evidence
agreement to the terms thereof and hereof.

     

    8.2.           RIGHTS
AS A STOCKHOLDER; DIVIDEND EQUIVALENTS.

     

    Except as specifically provided by the
Plan, the receipt of an Award will not give a Participant rights as a
stockholder, and the Participant will obtain such rights, subject to any
limitations imposed by the Plan or the Award Agreement, upon actual receipt of
Stock.  However, the Committee may, on such conditions as it deems
appropriate, provide in an Award Agreement that a Participant will receive a
benefit in lieu of cash dividends that would have been payable on any or all
Stock subject to the Participant's Award had such Stock been
outstanding.  Without limitation, the Committee may provide for
payment to the Participant of amounts representing such dividends, either
currently or in the future, or for the investment of such amounts on behalf of
the Participant; provided that the Committee shall design such payment to be
exempt from or, in the alternative, comply with Section 409A of the Code and the
interpretive guidance thereunder.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    8.3           CONDITIONS
ON DELIVERY OF STOCK.

     

    The Company will not be obligated to
deliver any shares of Stock pursuant to the Plan or to remove any restriction
from shares of Stock previously delivered under the Plan (a) until all
conditions of the Award have been satisfied or removed, (b) until, in the
opinion of the Company's counsel, all applicable federal and state laws and
regulations have been complied with, (c) if the outstanding Stock is at the time
listed on any stock exchange, until the shares to be delivered have been listed
or authorized to be listed on such exchange upon official notice of notice of
issuance and (d) until all other legal matters in connection with the issuance
and delivery of such shares have been approved by the Company's
counsel.  If the sale of Stock has not been registered under the
Securities Act of 1933, as amended, the Company may require, as a condition to
exercise of the Award, such representations or agreements as counsel for the
Company may consider appropriate to avoid violation of such Act and may require
that the certificates evidencing such Stock bear an appropriate legend
restricting transfer.

     

    8.4.           TAX
WITHHOLDING.

     

    The Company will withhold from any
payment made pursuant to an Award an amount as may be necessary sufficient to
satisfy all minimum federal, state and local withholding tax requirements (the
"Withholding Requirements").

     

    The Committee will have the right to
require that the Participant or other appropriate person remit to the Company an
amount sufficient to satisfy the Withholding Requirements, or make other
arrangements satisfactory to the Committee with regard to such requirements,
prior to the delivery of any Stock.  If and to the extent that any
such withholding is required, the Committee may permit the Participant or such
other person to elect at such time and in such manner as the Committee provides
to have the Company hold back from the shares to be delivered, or to deliver to
the Company, Stock having a value calculated to satisfy the Withholding
Requirements.

     

    If at the time an ISO is exercised the
Committee determines that the Company could be liable for Withholding
Requirements with respect to a disposition of the Stock received upon exercise,
the Committee may require as a condition of exercise that the person exercising
the ISO agree (a) to inform the Company promptly of any disposition of Stock
received upon exercise of the ISO, and (b) to give such security as the
Committee deems adequate to meet the potential liability of the Company for the
Withholding Requirements and to augment such security from time to time in any
amount reasonably deemed necessary by the Committee to preserve the adequacy of
such security.

     

    8.5.           NONTRANSFERABILITY
OF AWARDS.

     

    No Option shall be transferable by a
Participant otherwise than by will or by the laws of descent and distribution
or, in the case of an Option other than an ISO, pursuant to a domestic relations
order (within the meaning of Rule 16a-12 promulgated under the Exchange Act),
and an Option shall be exercisable during the lifetime of such Participant only
by such Participant or such Participant's executor or administrator or by the
person or persons to whom the Option is transferred by will or the applicable
laws of descent and distribution (such person, the Participant's "Legal
Representative").  Notwithstanding the foregoing sentence, the
Committee may set forth in an Award Agreement evidencing an Option (other than
an ISO), that the Option may be transferred to members of the Participant's
immediate family, to trusts solely for the benefit of such immediate family
members and to partnerships in which such family members and/or trusts are the
only partners, and for purposes of this Plan, such a transferee of an Option
shall be deemed to be the Participant.  For this purpose, "immediate
family" shall refer only to the Participant's spouse, parents, children,
stepchildren and grandchildren and the spouses of such parents, children,
stepchildren and grandchildren.  The terms of an Option shall be
final, binding and conclusive upon the beneficiaries, executors, administrators,
heirs and successors of the Participant.

     

    8.6.           ADJUSTMENTS
IN THE EVENT OF CERTAIN TRANSACTIONS.

     

    In the event that the outstanding
shares of Stock are changed into or exchanged for a different number or kind of
shares of stock, other securities or other property of the Company, an affiliate
or another legal entity, whether through merger, consolidation, reorganization,
recapitalization, stock dividend, stock split-up or other substitution of
securities of the Company, an affiliate or another entity, the Committee shall
proportionally adjust the maximum number and kind of shares of stock or other
equity interest as to which Awards may be granted under the Plan and the number
and kind of shares of stock or other equity interest with respect to which
Awards have been granted under the Plan, the exercise prices for such shares or
other equity interest subject to Options and any other economic terms of Awards
granted under the Plan; and 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 8.6.  The Committee's adjustment shall be
final and binding for all purposes of the Plan and each Award Agreement entered
into under the Plan.  Unless the Committee otherwise determines, no
adjustment provided for in this Section 8.6 shall require the Company to issue a
fractional share and, in such event, with respect to each Award Agreement the
total adjustment as to the number of shares for which Awards have been granted
shall be effected by rounding down to the nearest whole number of
shares.

     

    8.7.           PARTICIPANT'S
RIGHTS.

     

    Neither the adoption of the Plan nor
the grant of Awards will confer upon any person any right to continued
employment or Service with the Company or any subsidiary or affiliate or affect
in any way the right of the Company any subsidiary or affiliate to terminate an
employment or Service relationship at any time.

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    8.8.           PAYMENT
FOR STOCK; LOANS.

     

    Stock awarded under this Plan as
Restricted Stock or received upon exercise of an Option may be paid for with
such legal consideration as the Committee may determine.  If and to
the extent authorized by the Committee, the Company may permit Participants to
pay for Stock with promissory notes, and may make loans to Participants of all
or a portion of any Withholding Requirements to be met in connection with the
grant, exercise or vesting of any Award. Any such extensions of credit may be
secured by Stock or other collateral, or may be made on an unsecured basis, as
the Committee may determine.

     

    8.9.           SUCCESSORS.

     

    All
obligations of the Company under the Plan or any Award Agreement will be binding
on any successor to the Company, whether the existence of the successor results
from a direct or indirect purchase of all or substantially all of the Company's
shares, or a merger, consolidation, or otherwise.

     

    8.10.                      SEVERABILITY.

     

    If any
provision of the Plan is held illegal or invalid for any reason, the illegality
or invalidity will not affect the remaining parts of the Plan, and the Plan will
be construed and enforced as if the illegal or invalid provision had not been
included.

     

    8.11.                      REQUIREMENTS
OF LAW.

     

    The
granting of Awards and the issuance of Share and/or cash payouts under the Plan
will be subject to all applicable laws, rules, and regulations, and to any
approvals by governmental agencies or national securities exchanges as may be
required.

     

    8.12.                      SECURITIES
LAW COMPLIANCE.

     

    As to any
individual who is, on the relevant date, an officer, director or ten percent
beneficial owner of any class of the Company's equity securities that is
registered pursuant to Section 12 of the Exchange Act, all as defined under
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 under the Exchange Act, or
any successor rule.  To the extent any provision of the Plan or action
by the Board fails to so comply, it will be deemed null and void, to the extent
permitted by law and deemed advisable by the Board.

     

    8.13.                      AWARDS
TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED STATES.

     

    To the
extent the Board deems it necessary, appropriate or desirable to comply with
foreign law or practice and to further the purposes of this Plan, the Board may,
without amending the Plan, (i) establish rules applicable to Awards granted to
Participants who are foreign nationals, are employed or providing Service
outside the United States, or both, including rules that differ from those set
forth in this Plan, and (ii) grant Awards to such Participants in accordance
with those rules that would require the application of the law of any other
jurisdiction.

     

    8.14.                      GOVERNING
LAW.

     

    To the
extent not preempted by federal law, the Plan and all agreements hereunder will
be construed and enforced in accordance with, and governed by, the laws of the
State of Delaware, without giving effect to its conflicts of laws principles
that would require the application of the law of any other
jurisdiction.  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).

     

    8.15           SECTION
409A COMPLIANCE.

     

    Notwithstanding
any provision of this Plan to the contrary, all Awards made under this Plan are
intended to be exempt from or, in the alternative, comply with Section 409A of
the Code and the interpretive guidance thereunder, including the exceptions for
stock rights and short-term deferrals.  The Plan shall be construed
and interpreted in accordance with such intent.

     

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    9.           PERFORMANCE
-BASED RESTRICTED STOCK AWARDS.

     

    If the Committee makes Restricted Stock
or RSU Awards that are designed to qualify for the performance-based exception
from the tax deductibility limitations of Section 162(m) of the Code and any
regulations promulgated thereunder, the Committee will determine the number of
shares awarded and/or vesting of such Restricted Stock or RSU Awards using
performance measures, which may include such measures as financial goals and
business metrics such as revenue, gross margin, net income, operating income,
earnings per share, return on operating assets or capital, cash flow (e.g., operating cash flow,
free cash flow, discounted cash flow return on investment) market share, return
to shareholders, cost management, business growth through market and technology
extension, safety, improvement in technology and quality leadership, business
processes, organizational effectiveness and operational excellence (all e.g., absolute or peer-group
comparative), and/or other performance measures set by the Board or
Committee.

     

    The
Committee shall have the discretion to adjust the determinations of the degree
of attainment of the preestablished performance objectives to reflect accounting
changes or other events.  In addition, in the event that the Committee
determines that it is advisable to grant Restricted Stock or RSU Awards that may
not qualify for the performance-based exception, the Committee may make such
grants without satisfying the requirements of Section 162(m) of the
Code.

     

    10.           DISCONTINUANCE,
CANCELLATION, AMENDMENT AND TERMINATION

     

    The Committee may at any time
discontinue granting Awards under the Plan.  The Board may at any time
or times amend the Plan and, with the consent of the holder thereof, any
outstanding Award.  The Committee may at any time terminate the Plan
as to any further grants of Awards, provided that (except to the extent
expressly required or permitted by the Plan) no such amendment will, without the
approval of the stockholders of the Company, (a) increase the maximum number of
shares available under the Plan, (b) extend the time within which Awards may be
granted, or (c) amend the provisions of this Section 10, and no amendment or
termination of the Plan may adversely affect the rights of any Participant
(without his or her consent) under any Award previously granted.

     

    Notwithstanding
any other provision in the Plan, the Committee, to the extent it deems necessary
or advisable in its sole discretion, reserves the right, but shall not be
required, to unilaterally amend or modify the Plan and any Award granted under
the Plan so that the Award qualifies for exemption from or complies with Section
409A of the Code; provided, however, that the Committee makes no representations
that Awards granted under the Plan shall be exempt from or comply with Section
409A Code and makes no undertaking to preclude Section 409A of the Code from
applying to Awards granted under the Plan.

     

    The
Committee may not amend any Award to extend the exercise period beyond a date
that is later than the earlier of the latest date upon which the Award could
have expired by its original terms under any circumstances or the tenth
anniversary of the original date of grant of the Award, or otherwise cause the
Award to become subject to Section 409A of the Code.  However, if the
exercise period of an Option is extended at a time when the exercise price of
the Option equals or exceeds the Fair Market Value of the Stock that could be
purchased (in the case of an Option) or the Fair Market Value of the Stock used
to determine the payment to the Participant (in the case of a stock appreciation
right), it is not an extension of the original Award.

     

    


     

    CABOT
MICROELECTRONICS CORPORATION

     

    


     

    By:                              
                                                                         

     

                                                       Its:                                                                           

    


                                                      Date:__________________


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    APPENDIX A TO SECOND AMENDED
AND RESTATED 2000

    EQUITY INCENTIVE
PLAN

    


    A "Change in Control" shall be deemed
to have occurred if:

    


    (a)           any
"person" as such term is used in Sections 13(d) and 14(d) of 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
consummation of 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 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.

    
      	 
      


    

    


     

    9