exhibit10_2.htm


    Exhibit
10.2

    


    Second
Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive
Plan

    [Initial]
[Annual] Non-Qualified Stock Option Grant Agreement for Directors

    


    


    [Award
Date]

    


    


    [Director
Name]

    [Director
Address]

    


    Dear
[Director First Name]:

    


    I am
pleased to inform you (the “Participant) that the Board of Directors (the
“Board”) of Cabot Microelectronics Corporation (the “Company”), based on the
recommendation of the Nominating and Corporate Governance Committee of the
Board, has approved your participation in the Second Amended and Restated Cabot
Microelectronics Corporation 2000 Equity Incentive Plan, as amended and restated
September 23, 2008 (the "Plan") in consideration of your [initial][annual]
service as a Director of the Company. 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 is enclosed.

    


    
      	
               

              Participant

            	
               

              Type
      of Grant

            	
               

              Number
      of Option Shares Granted

            	
               

              Exercise
      Price Per Share on Grant Date

            	
               

              Optionee
      ID Number

               

               

            
	
               

               

              [Director
      Name]

               

            	
               

              Non-Qualified
      Stock Option

               

            	
               

              [_____]

            	
               

              FMV/closing
      price on Grant Date [Annual Meeting Date for Annual; Date of Election/
      Appointment for Initial]

               

            	
               

              xxx-xx-xxxx

            
	
              Grant
      Date

              [GD]

            	
              Vesting
      Dates

            	
              Expiration
      Date

            	
               

              Grant
      Number

            
	
              [Date
      of grant]

              [Annual
      Meeting Date for Annual; Date of Election/ Appointment for
      Initial]

               

            	
              [for
      annual grant;

              25%
      1st
      anniv. GD

              25%  2nd
      anniv. GD

              25%  3rd
      anniv. GD

              25%  4th
      anniv. GD]; [for initial grant; 25% GD;

              25%
      1st
      anniv. GD

              25%
      2d anniv. GD

              25%
      3d anniv. GD]

            	
               

              10th
      anniv. GD

               

            	
               

              [xxxxx]

            


    

    


    This
Agreement provides the Participant with the terms of the option (the “Option”)
granted to the Participant.  The Option is not intended to qualify as
an incentive stock option pursuant to Section 422 of the Internal Revenue Code
(the “Code”).  The terms specified in this Agreement are governed by
the provisions of the Plan, which are incorporated herein by reference. The
Compensation Committee of the Board (the “Committee”) has the exclusive
authority to interpret and apply the Plan and this Agreement.  Any
interpretation of the Agreement by the Committee and any decision made by it
with respect to the Agreement are final and binding on all
persons.  To the extent that there is any conflict between the terms
of this Agreement and the Plan, the Plan shall govern. Capitalized terms used
herein will have the same meaning as under the Plan, unless stated
otherwise.

    


    In
consideration of the foregoing and the mutual covenants hereinafter set forth,
it is agreed by and between the Company and the Participant as
follows:

    


    
      	
               
      

            	
              1.

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

            


    

    


    
      	
              Installment

            	
              Vesting
      Date Applicable to Installment

            
	
               

              25%

              25%

              25%

              25%

               

            	
              For
      annual/initial:

              1st
      anniv. GD/GD

              2nd
      anniv. GD/1st
      anniv. GD

              3rd
      anniv. GD/2d anniv. GD

              4th
      anniv. GD/3d 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 twenty (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 as a Director of the Company 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, or the Company’s By-laws or
      Articles of Incorporation, as
applicable;

            


    

    


    
      	
              (b)  
      

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

            


    

    


    
      	
              (c)  
      

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

            


    

    


    In the
event of any such termination, cancellation, rescission 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.

            	
              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)  

            	
              [Ten
      Years from GD];

            


    

    


    
      	
              (b)  

            	
              If
      the Participant’s termination of Service as a Director of the Company
      occurs by reason of Cause, the date preceding the date of such
      termination;

            


    

    


    
      	
              (c)  

            	
              If
      the Participant’s termination of Service as a Director of the Company is
      for any reason other than (b) above, all Options vested and exercisable as
      of the date of termination will remain exercisable until [ten years from
      GD].  In such case of termination of Service as a Director of
      the Company occurring by reason of death or Disability, then any Options
      unvested prior to the date of such termination shall be fully vested and
      exercisable as of such date of termination. For purposes hereof,
      Disability shall have the meaning of permanent and total disability
      provided within the meaning of Section 22 (e)(3) of the Internal Revenue
      Code. In addition,
      upon the Participant’s termination of Service as a Director of the Company
      for any reason other than by reason of Cause, death, Disability or a
      Change in Control, if at such time the Participant has completed at least
      the equivalent of two full terms as a Director of the Company, as defined
      in the Company’s bylaws, then any Options unvested prior to the date of
      such termination shall be fully exercisable as of such date of
      termination.

            


    

    


    In the
event that the Participant dies on or following the Participant’s termination
date and prior to the Expiration Date without having fully exercised the
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 (a) or (c).

    


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

    


    
      	
                     
      4.

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

            


    

    


    
      	
              (a)  

            	
              in
      cash;

            


    

     

    
      	
              (b)  

            	
              in
      shares of Stock having a Fair Market Value equal to the aggregate exercise
      price  for the shares of Stock being purchased and satisfying
      such other requirements as may be imposed by the Committee; provided,
      that, such shares of Stock have been held by the Participant for no less
      than six (6) months;

            


    

     

    
      	
              (c)  

            	
              partly
      in cash and partly in such shares of Stock;
or

            


    

    


    
      	
              (d)  

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

            


    

     

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

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
               
      

            	
              5.

            	
              Taxes.

            


    

    


    
      	
               
      

            	
              (a)  
      

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

            


    

    


    
      	
               
      

            	
              (b)  
      

            	
              If
      the Fair Market Value of a share of stock on the date the Participant
      exercises the Option is greater than the Exercise Price, the Participant
      will 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 taxes.  The
      income will be reported to the Participant as part of the Participant’s
      compensation on the Participant’s annual Form 1099 issued by the
      Company.

            


    

    


    
      	
               
      

            	
              (c)  
      

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

            


    

    


    EACH
PARTICIPANT IS URGED TO CONSULT WITH HIS OWN TAX ADVISOR TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL,
LOCAL AND OTHER TAX LAWS.

    


    
      	
               
      

            	
              6.

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

            


    

    


    
      	
               
      

            	
              7.

            	
              Adjustment of
      Shares.  In the event of any transaction 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.

            


    

    


    
      	
               
      

            	
              8.

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

            


    

    


    
      	
               
      

            	
              9.

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

            


    

    


    
      	
                     
      10.

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

            


    

    


    
      	
                     
      11.

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

            


    

    


    
      	
                     
      12.

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

            


    

    


    IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed in its
name and on its behalf, all as of the Grant Date.

    


    CABOT
MICROELECTRONICS CORPORATION

     

    William
P. Noglows

    Chairman
and Chief Executive Officer