Cabot Microelectronics Declares $15.00 Special Dividend Boost

Cabot Microelectronics Corporation (CCMP), the world’s leading supplier of chemical mechanical planarization (CMP) polishing slurries and a growing CMP pad supplier to the semiconductor industry, today announced that its Board of Directors has declared a special cash dividend of $15 per share, or approximately $345 million in total, payable to shareholders of record on February 23, 2012, that will be paid on March 1, 2012. Approximately half of the special cash dividend, along with related fees, will be funded from the company’s available cash balance, and the remainder will be funded from a new five-year secured credit facility.

The company’s declaration of the special cash dividend follows the announcement on December 13, 2011 of its new capital management initiative, intended to provide additional value to its stockholders, which includes a leveraged recapitalization with the special cash dividend. At $15 per share, the special cash dividend represents approximately 30 percent of the company’s closing stock price today. Pursuant to the rules of the Nasdaq stock market, when a dividend is declared in an amount that exceeds 25 percent of a company’s stock price, Nasdaq must determine the date on which that company’s shares will begin to trade without the dividend, or ex-dividend. Applying this rule to Cabot Microelectronics’ declaration of its special cash dividend, Nasdaq has advised the company that the ex-dividend date has been set as March 2, 2012, which is the first business day following the payable date for the special cash dividend.

The company understands that this will mean that stockholders who purchase the company’s stock after the record date of February 23, 2012 and before the ex-dividend date of March 2, 2012 will be entitled to receive the special cash dividend, and stockholders who sell the company’s stock during that same time period will not be entitled to the special cash dividend.Investors who enter into trades to purchase the company’s stock on or after the ex-dividend date of March 2, 2012 will not be entitled to the special cash dividend payable on March 1, 2012.

The portion of the company’s special cash dividend that will be treated as a qualified dividend for U.S. tax purposes will depend upon the amount of the company’s accumulated earnings and profits as of September 30, 2012, the end of the company’s current fiscal year, as determined by the Internal Revenue Code. Therefore, at this time the company is not able to determine the portion of the special cash dividend that will be treated as a qualified dividend. However, based on its analysis and indications to date, the company expects that the entire dividend will be treated as a qualified dividend for U.S. tax purposes.