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 23, 2008 (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”.
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PARTICIPANT
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Type
of Grant
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Number
of Option Shares Granted
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Exercise
Price Per Share on [grant date]
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Participant
ID Number
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NAME
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Non-qualified
Stock Option
|
[____]
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$XX.XX
[general:
grant date (GD) fmv/close price]
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XXX-XX-XXXX
|
|
Grant
Date
|
Vesting Dates
[general]
|
Expiration
Date
|
Grant
Number
|
|
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[date
of grant]
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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:
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1.
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Vesting and
Exercise. The Award shall become vested and exercisable
in accordance with the following
table:
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Installment
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Vesting
Date Applicable to Installment [general]
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|
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.
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1
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2.
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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:
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(a)
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actions
constituting Cause, as defined in the Plan and as otherwise enforceable
under local law;
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(b)
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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;
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(c)
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unauthorized
disclosure of any confidential/proprietary information of the Company to
any third party;
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(d)
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failure
to comply with the Company’s policies regarding the identification,
disclosure and protection of intellectual
property;
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(e)
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violation
of the Cabot Microelectronics Corporation Employee Confidentiality,
Intellectual Property and Non-Competition
Agreement.
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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.
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3.
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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.
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4.
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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:
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(a)
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[general:
tenth anniv. GD];
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(b)
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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;
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(c)
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If
the Participant’s termination of Service occurs by reason of Cause, the
date preceding the date of such
termination;
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(d)
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If
the Participant’s termination of Service occurs by reason of Change in
Control, three (3) months after the date of such
termination;
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(e)
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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
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(f)
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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.
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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.
2
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:
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(a)
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in
cash;
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(b)
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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;
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(c)
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partly
in cash and partly in such shares of Stock;
or
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(d)
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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”).
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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.
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6.
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Taxes.
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(a)
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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.
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(b)
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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.
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(c)
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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.
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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.
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7.
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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.
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8.
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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.
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9.
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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.
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10.
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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.
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3
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11.
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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.
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12.
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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.
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13.
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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.
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14.
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Governing
Law. This Agreement shall be construed under the laws of
the State of Illinois.
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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.
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CABOT
MICROELECTRONICS CORPORATION
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
4