Second Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive Plan Non-Qualified Stock Option Grant Agreement (United States Employees)
Exhibit 10.4
Second
Amended and Restated Cabot Microelectronics Corporation 2000 Equity Incentive
Plan
(United
States Employees)
GRANT
DATE
NAME
ADDRESS
CITY,
STATE ZIP
Dear
FIRST
NAME:
I
am
pleased to inform you (the “Participant”) that the Compensation Committee of the
Board of Directors (the “Committee”) of Cabot Microelectronics Corporation (the
“Company”) has approved your participation in the Second Amended and Restated
Cabot Microelectronics Corporation 2000 Equity Incentive Plan, as amended
and
restated September 26, 2006 (the "Plan"). A Non-Qualified Stock Option (“NQSO”)
award (the “Award”) is hereby granted to the Participant pursuant to the terms
of the Plan and this Non-Qualified Stock Option Agreement (the “Agreement”). A
copy of the Plan can be electronically accessed through the CMC world directory
under “HR Information/Stock/General Plan Information”.
|
PARTICIPANT
|
Type
of Grant
|
Number
of Option Shares Granted
|
Exercise
Price Per Share on [grant
date]
|
Participant
ID Number
|
|
NAME
|
Non-qualified
Stock Option
|
[____]
|
$XX.XX
[general:
grant date (GD) fmv/close price]
|
XXX-XX-XXXX
|
|
Grant
Date
|
Vesting
Dates [general]
|
Expiration
Date
|
Grant
Number
|
|
|
[date
of grant]
|
25% 1stanniv.
GD
25% 2danniv.
GD
25% 3danniv.
GD
25% 4thanniv.
GD
|
DATE
[general: tenth anniv. GD]
|
000000XXXX
|
This
Agreement provides the Participant with the terms of the option (the “Option”)
granted to the Participant. The Option is not intended to qualify as an
incentive stock option pursuant to Section 422 of the Internal Revenue Code
(the
“Code”). The terms specified in this Agreement are governed by the provisions of
the Plan, which are incorporated herein by reference. The Committee has the
exclusive authority to interpret and apply the Plan and this Agreement.
Any
interpretation of the Agreement by the Committee and any decision made by
it
with respect to the Agreement are final and binding on all persons. To the
extent that there is any conflict between the terms of this Agreement and
the
Plan, the Plan shall govern. Capitalized terms used herein will have the
same
meaning as under the Plan, unless stated otherwise.
In
consideration of the foregoing and the mutual covenants hereinafter set forth,
it is agreed by and between the Company and the Participant as follows:
NAME
-
employee (including executive officer) NQSO Grant Agreement
GRANT
DATE Page 2
of 6
|
1.
|
Vesting
and Exercise.
The Award shall become vested and exercisable in accordance with
the
following table:
|
|
Installment
|
Vesting
Date Applicable to Installment [general]
|
|
25%
25%
25%
25%
|
[1st
anniv. GD]
[2d
anniv. GD]
[3d
anniv. GD]
[4th
anniv. GD]
|
The
Award
will be fully vested and exercisable in the event of a Change in Control,
as
defined in the Plan. In the event of a Change in Control that constitutes
a
Covered Transaction (as defined in Section 7.3(c) of the Plan), the Committee
may, in its sole discretion, terminate any or all outstanding Options as
of the
effective date of the Covered Transaction;
provided that the Committee may not terminate an Option outstanding under
this
Agreement earlier than 20 days following the later of (i) the date on which
the
Award became fully exercisable, and (ii) the date on which the Participant
received written notice of the Covered Transaction.
|
Unless
otherwise provided in this Agreement or the Plan, if the date of
Participant’s termination of Service with the Company, as defined in the
Plan, precedes the relevant Vesting Date, an installment shall
not vest on
the otherwise applicable Vesting Date and all Options subject to
such
installment shall immediately terminate as of the date of such
termination
of Service.
|
|
2.
|
Termination
/ Cancellation / Rescission.
The Company may terminate, cancel, rescind or recover an Award
immediately
under certain circumstances, including, but not limited to, the
Participant’s:
|
| (a) |
actions
constituting Cause, as defined in the Plan and as otherwise enforceable
under local law;
|
(b) rendering
of services for a competitor prior to, or within six (6) months after, the
exercise of any Option or the termination of Participant's Service with the
Company;
(c) unauthorized
disclosure of any confidential/proprietary information of the Company to
any
third party;
(d) failure
to comply with the Company’s policies regarding the identification, disclosure
and protection of intellectual property;
(e) violation
of the Cabot Microelectronics Corporation Employee Confidentiality, Intellectual
Property and Non-Competition Agreement.
|
In
the event of any such termination, cancellation, rescission or
revocation,
the Participant must return any Stock obtained by the Participant
pursuant
to the Award, or pay to the Company the amount of any gain realized
on the
sale of such Stock, and the Company shall be entitled to set-off
against
the amount of any such gain any amount owed to the Participant
by the
Company. To the extent applicable, the purchase price for such
Stock shall
be returned to the Participant, including any withholding requirements.
|
|
3.
|
Purpose
of Award.
The Award is intended to promote goodwill between the Participant
and the
Company and shall not be considered as salary or other remuneration
for
any employment or other services the Participant may perform for
the
Company or any of its affiliates. The Company’s grant of the Option does
not confer any contractual or other rights of employment or service
with
the Company. Benefits granted under the Plan shall not be considered
as
part of the Participant’s salary in the event of severance, redundancy or
resignation. Granting of the Award shall also not be construed
as creating
any right on the part of Participant to receive any additional
benefits
including awards in the future, it being expressly understood and
agreed
that any future awards shall be made solely at the discretion of
the
Company.
|
NAME
-
employee (including executive officer) NQSO Grant Agreement
GRANT
DATE Page
3 of 6
|
4.
|
Expiration.
The Option, including vested Options, shall not be exercisable
after the
Company’s close of business on the last business day that occurs on or
prior to the Expiration Date. The “Expiration Date” shall be the
earliest
to
occur of:
|
| (a) |
[general:
tenth anniv. GD];
|
|
(b)
|
If
the Participant’s termination of Service occurs by reason of death or
Disability, the three (3) year anniversary of the date of such
termination
or the ten (10) year anniversary of the Grant Date, whichever is
sooner.
In such case of termination of Service occurring by reason of death
or
Disability, then any unvested portion of the Option shall be fully
vested
and exercisable as of such date of termination. For purposes hereof,
“Disability” shall have the meaning provided under: (i) first, an
employment agreement between the Participant and the Company; (ii)
second,
if no such employment agreement exists, the long-term disability
program
maintained by the Company or any governmental entity covering the
Participant; or (iii) third, if no such agreement or program exists,
permanent and total disability within the meaning of Section 22
(e)(3) of
the Code;
|
|
(c)
|
If
the Participant’s termination of Service occurs by reason of Cause, the
date preceding the date of such
termination;
|
|
(d)
|
If
the Participant’s termination of Service occurs by reason of Change in
Control, three (3) months after the date of such termination;
|
(e)
If
the Participant’s termination of Service occurs by reason of Retirement, all
Options vested and exercisable as of the date of such termination will remain
exercisable until the ten (10) year anniversary of the Grant Date. For purposes
hereof, “Retirement” shall mean the termination of the Participant’s Service
following the Participant’s attainment of at least (i) five years of employment
with the Company and
(ii) 55
years of age, provided,
however,
that
the Participant’s termination of Service will not be deemed to have occurred by
reason of Retirement if the Participant’s Service has been terminated by reason
of Cause, as determined by the Company in its sole discretion; or
|
(f)
|
If
the Participant’s termination of Service is for any reason other than (b),
(c), (d) or (e) above, all Options vested and exercisable as of
the date
of termination will remain exercisable for one (1) month after
the
termination date, after which all unexercised Options are terminated.
|
In
the
event that the Participant dies on or following the Participant’s termination
date and prior to the Expiration Date without having fully exercised the
Participant’s Options, then the authorized representative of the Participant’s
estate shall be entitled to exercise the Award within such limits specified
in
subparagraphs (b), (d) or (e).
To
the
extent that the Participant does not exercise the Option to the extent the
Participant is entitled within the time specified in subparagraphs (a), (b),
(d)
or (e) above, the Option shall immediately terminate.
5.
Method
of Option Exercise.
Subject
to the terms of this Agreement and the Plan, the Participant may exercise,
in
whole or in part, the vested portion of the Option at any time by complying
with
any exercise procedures established by the Company in its sole discretion.
The
Participant shall pay the exercise price for the portion of the Option being
exercised to the Company in full, at the time of exercise, either:
NAME
-
employee (including executive officer) NQSO Grant Agreement
GRANT
DATE Page
4 of 6
| (a) |
in
cash;
|
| (b) |
in
shares of Stock having a Fair Market Value equal to the aggregate
exercise
price for the shares of Stock being purchased and satisfying such
other
requirements as may be imposed by the Committee; provided, that,
such
shares of Stock have been held by the Participant for no less than
six
months;
|
| (c) |
partly
in cash and partly in such shares of Stock;
or
|
| (d) |
through
the delivery of irrevocable instructions to a broker to deliver promptly
to the Company an amount equal to the aggregate exercise price for
the
shares of Stock being purchased (“cashless exercise”).
|
Anything
to the contrary herein notwithstanding, the Option cannot be exercised and
the
Company shall not be obligated to issue any shares of Stock hereunder if
the
Company determines that the issuance of such shares would violate the provision
of any applicable law, including the rules and regulations of any securities
exchange on which the Stock is traded. Please refer to Section 6.2(d) of
the
Plan for additional information.
| 6. |
Taxes.
|
(a) All
deliveries and distributions under this Agreement are subject to withholding
of
all applicable taxes based on country specific tax requirement. Please refer
to
electronic copy of “Taxes” for your individual circumstances based on your
location. The various methods and manner by which the tax withholding may
be
satisfied are set forth in Section 8.4 of the Plan. If the Participant is
subject to Section 16 (an “Insider”), of the Securities Exchange Act of 1934
(“Exchange Act”) and other securities laws, any surrender of previously owned
shares to satisfy tax withholding obligations arising upon exercise of an
Option
must comply with the requirements of Rule 16b-3 promulgated under the Exchange
Act (“Rule 16b-3”) and other relevant rules and regulations.
(b) If
the
Fair Market Value of a share of stock on the date the Participant exercises
the
Option is greater than the Exercise Price, the Participant will be taxed
on the
difference multiplied by the number of shares purchased with cash at the
date of
exercise. This income is taxed as ordinary income and subject to various
withholding taxes. The Company is required to withhold and remit these taxes
to
the appropriate tax authorities. If the exercise of the Option results in
no
cash payment to the Participant from which the Company could withhold the
income
and FICA taxes, the Participant will be required to provide the Company with
an
amount of cash sufficient to satisfy the Participant’s tax withholding
obligations or to make arrangements satisfactory to the Company with regard
to
such taxes, which in most instances can be done through the services provided
by
a broker. If the Participant does not pay the amount of required withholding
to
the Company, the Company will withhold from the shares delivered or from
other
amounts payable to the Participant, the minimum amount of funds required
to
cover all applicable federal, state and local income and employment taxes
required to be withheld by the Company by reason of such exercise of the
Option.
The income will be reported to the Participant as part of the Participant’s
employment compensation on the Participant’s annual earnings statement.
(c) If
the
Participant sells the shares acquired under the Option, a long-term or
short-term capital gain or loss may also result depending on: (i) the
Participant’s holding period for the shares, and (ii) the difference between the
Fair Market Value of the shares at the time of the sale and the Participant’s
tax basis in the shares. The holding period is determined from the date the
Option is exercised. Under current law, the capital gain or loss is long
term if
the property is held for more than one year, and short term if the property
is
held for less than one year. If the Exercise Price of an Option is paid in
cash,
the tax basis of the shares thereby acquired is the sum of (i) the Exercise
Price paid for the shares, and (ii) the ordinary income, if any, determined
by
the difference between the Fair Market Value of the shares when exercised
and
the Exercise Price.
NAME
-
employee (including executive officer) NQSO Grant Agreement
GRANT
DATE Page 5
of 6
|
EACH
PARTICIPANT IS URGED TO REVIEW THE U.S. TAX COMMUNICATION INFORMATION
AND
TO CONSULT WITH HIS OR HER OWN TAX ADVISOR TO DETERMINE THE PARTICULAR
TAX
CONSEQUENCES INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL,
LOCAL AND
OTHER TAX LAWS.
|
|
7.
|
Transferability.
The
Option is not transferable other than: (a) by will or by the laws
of
descent and distribution; (b) pursuant to a domestic relations
order; or
(c) to members of the Participant’s immediate family, to trusts solely for
the benefit of such immediate family members or to partnerships
in which
family members and/or trusts are the only partners, all as provided
under
the terms of the Plan. After any such transfer, the Option shall
remain
subject to the terms of the Plan.
|
|
8.
|
Adjustment
of Shares.
In the event of any transaction described in Section 8.6 of the
Plan, the
terms of this Option (including, without limitation, the number
and kind
of shares subject to this Option and the Exercise Price) shall
be adjusted
as set forth in Section 8.6 of the
Plan.
|
|
9.
|
Shareholder
Rights.
Participant shall have no rights as a stockholder with respect
to any
shares of Stock subject to the Option until the Option is exercised
and
the shares are issued and transferred on the books of the Company
to the
Participant. No adjustment shall be made for dividends, distributions
or
other rights for which the record date is prior to such date, except
as
provided under the Plan.
|
|
10.
|
Data
Privacy.
In order to perform its requirements under this Plan, the Company
may
process sensitive personal data about the Participant. Such data
includes
but is not limited to the information provided in this grant package
and
any changes thereto, other appropriate personal and financial data
about
the Participant, and information about the Participant’s participation in
the Plan and shares exercised under the Plan from time to time.
By signing
the attached acceptance form, the Participant hereby gives explicit
consent to the Company to process any such data. The Participant
also
hereby gives explicit consent to the Company to
transfer any personal data outside the country in which the Participant
is
employed and to the United States. The legal persons for whom the
personal
data is intended includes the Company and any of its subsidiaries,
the
outside plan administrator as selected by the Company from time
to time
and any other person that the Company may find appropriate in its
administration of the Plan. The Participant may review and correct
any
personal data by contacting his local Human Resources Representative.
The
Participant understands that the transfer of the information outlined
here
is important to the administration of the Plan and failure to consent
to
the transmission of such information may limit or prohibit participation
in the Plan.
|
|
11.
|
Severability.
In the event that any provision of this Agreement is found to be
invalid,
illegal or incapable of being enforced by any court of competent
jurisdiction for any reason, in whole or in part, the remaining
provisions
of this Agreement shall remain in full force and effect to the
fullest
extent permitted by law.
|
|
12.
|
Waiver.
Failure to insist upon strict compliance with any of the terms
and
conditions of this Agreement or the Plan shall not be deemed a
waiver of
such term or condition.
|
|
13.
|
Notices.
Any notices provided for in this Agreement or the Plan must be
in writing
and hand delivered, sent by fax or overnight courier, or by postage
paid
first class mail. Notices are to be sent to the Participant at
the address
indicated by the Company’s records and to the Company at its principal
executive office.
|
|
14.
|
Governing
Law.
This Agreement shall be construed under the laws of the State of
Illinois.
|
NAME
-
employee (including executive officer) NQSO Grant Agreement
GRANT
DATE Page 6
of 6
IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed in
its
name and on its behalf, all as of the Grant Date.
CABOT
MICROELECTRONICS CORPORATION
/s/
Xxxxxxx X. Xxxxxxx
Xxxxxxx
X. Xxxxxxx
Chairman
and Chief Executive Officer
