Exhibit 10.55
APPLIED MATERIALS, INC.
EMPLOYEE STOCK INCENTIVE PLAN
(as amended and restated on September 16, 2008)
SECTION 1
BACKGROUND AND PURPOSE
     1.1 Background.  The Plan permits the grant of Nonqualified Stock Options,
Incentive Stock Options, SARs, Restricted Stock, Performance Units, and
Performance Shares.
     1.2 Purpose of the Plan.  The Plan is intended to attract, motivate, and
retain (a) employees of the Company and its Affiliates, (b) consultants who
provide significant services to the Company and its Affiliates, and
(c) directors of the Company who are employees of neither the Company nor any
Affiliate. The Plan also is designed to encourage stock ownership by
Participants, thereby aligning their interests with those of the Company’s
stockholders.
SECTION 2
DEFINITIONS
     The following words and phrases shall have the following meanings unless a
different meaning is plainly required by the context:
     2.1 “1934 Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
     2.2 “Affiliate” means any corporation or any other entity (including, but
not limited to, partnerships and joint ventures) controlling, controlled by, or
under common control with the Company. 
     2.3 “Annual Meeting” means the Company’s annual meeting of stockholders.
     2.4 “Award” means, individually or collectively, a grant under the Plan of
Nonqualified Stock Options, Incentive Stock Options, SARs, Restricted Stock,
Performance Units, or Performance Shares.
     2.5 “Award Agreement” means the written agreement (which may be in
electronic form) setting forth the terms and provisions applicable to each Award
granted under the Plan.
     2.6 “Award Transfer Program” means any program instituted by the Committee
which would permit Participants the opportunity to transfer any outstanding
Awards to a financial institution or other person or entity approved by the
Committee.
     2.7 “Board” or “Board of Directors” means the Board of Directors of the
Company.
     2.8 “Code” means the Internal Revenue Code of 1986, as amended. Reference
to a specific section of the Code or regulation thereunder shall include such
section or regulation, any

 

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valid regulation promulgated under such section, and any comparable provision of
any future legislation or regulation amending, supplementing or superseding such
section or regulation.
     2.9 “Committee” means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan.
     2.10 “Company” means Applied Materials, Inc., a Delaware corporation, or
any successor thereto. With respect to the definitions of the Performance Goals,
the Committee may determine that “Company” means Applied Materials, Inc. and its
consolidated subsidiaries.
     2.11 “Consultant” means any consultant, independent contractor, or other
person who provides significant services to the Company or its Affiliates, but
who is neither an Employee nor a Director.
     2.12 “Customer Satisfaction MBOs” means as to any Participant for any
Performance Period, the objective and measurable individual goals set by a
“management by objectives” process and approved by the Committee, which goals
relate to the satisfaction of external or internal customer requirements and/or
ratings.
     2.13 “Determination Date” means the latest possible date that will not
jeopardize the qualification of an Award granted under the Plan as
“performance-based compensation” under Section 162(m) of the Code.
     2.14 “Director” means any individual who is a member of the Board of
Directors of the Company.
     2.15 “Disability” means a permanent and total disability within the meaning
of Section 22(e)(3) of the Code, provided that in the case of Awards other than
Incentive Stock Options, the Committee in its discretion may determine whether a
permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time.
“Disabled” means an individual has a Disability.
     2.16 “Earnings Per Share” means as to any Performance Period, Net Income,
divided by a weighted average number of common shares outstanding and dilutive
common equivalent shares deemed outstanding.
     2.17 “Employee” means any employee of the Company or of an Affiliate,
whether such employee is so employed at the time the Plan is adopted or becomes
so employed subsequent to the adoption of the Plan.
     2.18 “Exercise Price” means the price at which a Share may be purchased by
a Participant pursuant to the exercise of an Option.
     2.19 “Fair Market Value” means the last quoted per share selling price for
Shares on the relevant date, or if there were no sales on such date, the
arithmetic mean of the highest and lowest quoted selling prices on the nearest
day before and the nearest day after the relevant date, as determined by the
Committee. Notwithstanding the preceding, for federal, state, and local income

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tax reporting purposes, fair market value shall be determined by the Committee
(or its delegate) in accordance with uniform and nondiscriminatory standards
adopted by it from time to time.
     2.20 “Fiscal Year” means the fiscal year of the Company.
     2.21 “Grant Date” means, with respect to an Award, the date that the Award
was granted.
     2.22 “Incentive Stock Option” means an Option to purchase Shares which is
designated as an Incentive Stock Option and is intended to meet the requirements
of Section 422 of the Code.
     2.23 “Individual MBOs” means as to a Participant for any Performance
Period, the objective and measurable goals set by a “management by objectives”
process and approved by the Committee, in its discretion.
     2.24 “Market Share” means as to any Performance Period, the Company’s or a
business unit’s percentage of a market segment with respect to a product or
business. 
     2.25 “Net Income” means as to any Performance Period, the income after
taxes for the Performance Period determined in accordance with generally
accepted accounting principles.
     2.26 “New Orders” means as to any Performance Period, the firm orders for a
system, product, part, or service that are being recorded for the first time as
defined in the Company’s Order Recognition Policy.
     2.27 “Nonemployee Director” means a Director who is an employee of neither
the Company nor of any Affiliate.
     2.28 “Nonqualified Stock Option” means an option to purchase Shares which
is not intended to be an Incentive Stock Option.
     2.29 “Operating Profit” means as to any Performance Period, the difference
between revenue and related costs and expenses, excluding income derived from
sources other than regular activities and before income deductions.
     2.30 “Option” means an Incentive Stock Option or a Nonqualified Stock
Option.
     2.31 “Participant” means an Employee, Consultant, or Nonemployee Director
who has an outstanding Award.
     2.32 “Performance Goals” means the goal(s) (or combined goal(s)) determined
by the Committee in its discretion to be applicable to a Participant for a
Performance Period. As determined by the Committee, the Performance Goals
applicable to each Participant shall provide for a targeted level or levels of
achievement using one or more of the following measures: (a) Customer
Satisfaction MBOs, (b) Earnings Per Share, (c) Individual MBOs, (d) Market
Share, (e) Net Income, (f) New Orders, (g) Operating Profits, (h) Return on
Designated Assets, (i) Return on Equity, (j) Return on Sales, (k) Revenue, and
(l) Total Shareholder Return. Any criteria used may be measured, as applicable,
(i) in absolute terms, (ii) in relative terms (including, but not limited, the
passage of time and/or against other companies or financial metrics), (iii) on a
per share and/or share

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per capita basis, (iv) against the performance of the Company as a whole or
against particular segments or products of the Company and/or (v) on a pre-tax
or after-tax basis. Prior to the Determination Date, the Committee shall
determine whether any element(s) (for example, but not by way of limitation, the
effect of mergers or acquisitions) shall be included in or excluded from the
calculation of any Performance Goal with respect to any Participants (whether or
not such determinations result in any Performance Goal being measured on a basis
other than generally accepted accounting principles).
     2.33 “Performance Period” means the time period during which the
performance objectives or continued status as an Employee, Director or
Consultant must be met pursuant to Section 8 or Section 9, as applicable.
     2.34 “Performance Share” means an Award granted to a Participant pursuant
to Section 8.
     2.35 “Performance Unit” means an Award granted to a Participant pursuant to
Section 8. 
     2.36 “Period of Restriction” means the period during which the transfer of
Shares of Restricted Stock are subject to restrictions and therefore, the Shares
are subject to a substantial risk of forfeiture. As provided in Section 7, such
restrictions may be based on the passage of time, the achievement of target
levels of performance, or the occurrence of other events as determined by the
Committee, in its discretion. Notwithstanding any contrary provision of the
Plan, (i) a Period of Restriction that expires solely as the result of continued
employment or service shall expire in full no earlier than the three (3) year
anniversary of the Grant Date, and (ii) a Period of Restriction that does not
expire solely as the result of continued employment or service shall expire in
full no earlier than the one (1) year anniversary of the Grant Date, unless
determined otherwise by the Committee at its discretion solely by reason of
death, Disability, Retirement or major capital change.
     2.37 “Plan” means the Applied Materials, Inc. Employee Stock Incentive
Plan, as set forth in this instrument and as hereafter amended from time to
time. The Plan formerly was named the Applied Materials, Inc. 1995 Equity
Incentive Plan.
     2.38 “Reload Option” means an Option that automatically is granted if a
Participant pays the exercise price of an Option by tendering Shares.
     2.39 “Restricted Stock” means an Award granted to a Participant pursuant to
Section 7.
     2.40 “Retirement” means, in the case of an Employee and, with respect to
each Award granted prior to October 27, 2008, in the case of a Nonemployee
Director: (a) a Termination of Service occurring on or after age sixty-five
(65), or (b) a Termination of Service occurring on or after age sixty (60) with
at least ten (10) full Years of Service. With respect to each Award granted on
or after October 27, 2008 under Section 9, “Retirement” means a Termination of
Service by the Nonemployee Director after the Nonemployee Director has attained
(a)  age seventy (70), or (b) age sixty (60) with at least ten (10) full Years
of Service.
     2.41 “Return on Designated Assets” means as to any Performance Period, Net
Income divided by the average of beginning and ending designated Company or
business unit assets.

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     2.42 “Return on Equity” means as to any Performance Period, the percentage
equal to Net Income divided by average stockholder’s equity, determined in
accordance with generally accepted accounting principles.
     2.42 “Return on Sales” means as to any Performance Period, the percentage
equal to Net Income, divided by Revenue.
     2.44 “Revenue” means net sales for the Performance Period, determined in
accordance with generally accepted accounting principles.
     2.45 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any
future regulation amending, supplementing or superseding such regulation.
     2.46 “Section 16 Person” means a person who, with respect to the Shares, is
subject to Section 16 of the 1934 Act.
     2.47 “Shares” means the shares of common stock of the Company.
     2.48 “Stock Appreciation Right” or “SAR” means an Award, granted alone or
in connection with a related Option, that pursuant to Section 6 is designated as
an SAR. 
     2.49 “Subsidiary” means any corporation in an unbroken chain of
corporations beginning with the Company if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
     2.50 “Tax Obligations”means tax and social insurance liability obligations
and requirements in connection with the Awards, including, without limitation,
(a) all federal, state, and local taxes (including the Participant’s FICA
obligation) that are required to be withheld by the Company or the employing
Affiliate, (b) the Participant’s and, to the extent required by the Company (or
the employing Affiliate), the Company’s (or the employing Affiliate’s) fringe
benefit tax liability, if any, associated with the grant, vesting, or sale of
Shares, and (c) any other Company (or employing Affiliate) taxes the
responsibility for which the Participant has agreed to bear with respect to such
Award (or exercise thereof or issuance of Shares thereunder).
     2.51 “Termination of Service” means (a) in the case of an Employee, a
cessation of the employee-employer relationship between the Employee and the
Company or an Affiliate for any reason, including, but not by way of limitation,
a termination by resignation, discharge, death, Disability, Retirement, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous reemployment by the Company or an Affiliate, (b) in the case
of a Consultant, a cessation of the service relationship between the Consultant
and the Company or an Affiliate for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability, or the
disaffiliation of an Affiliate, but excluding any such termination where there
is a simultaneous re-engagement of the consultant by the Company or an
Affiliate, and (c) in the case of a Nonemployee Director, a cessation of the
Director’s service on the Board for any reason, including, but not by way of
limitation, a termination by resignation, death, Disability, Retirement or
non-reelection to the Board.

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     2.52 “Total Shareholder Return” means as to any Performance Period, the
total return (change in share price plus reinvestment of any dividends) of a
share of the Company’s common stock.
     2.53 “Years of Service” means, in the case of an Employee, the number of
full months from the Employee’s latest hire date with the Company or an
Affiliate to the date in question, divided by twelve (12). The Employee’s latest
hire date shall be determined after giving effect to the non-401(k) Plan
principles of North American Human Resources Policy No. 2-06, Re-Employment of
Former Employees/Bridging of Service, as such Policy may be amended or
superseded from time to time. With respect to a Nonemployee Director, “Years of
Service” means the number of years of continuous service on the Board of
Directors.
SECTION 3
ADMINISTRATION
     3.1 The Committee.  The Plan shall be administered by the Committee. The
Committee shall consist of not less than two (2) Directors who shall be
appointed from time to time by, and shall serve at the pleasure of, the Board of
Directors. The Committee shall be comprised solely of Directors who both are (a)
“non-employee directors” under Rule 16b-3, and (b) “outside directors” under
Section 162(m) of the Code.
     3.2 Authority of the Committee.  It shall be the duty of the Committee to
administer the Plan in accordance with the Plan’s provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) determine which Employees and Consultants shall be granted Awards,
(b) prescribe the terms and conditions of the Awards, (c) interpret the Plan and
the Awards, (d) adopt such procedures and subplans as are necessary or
appropriate to permit participation in the Plan by Employees, Consultants and
Directors who are foreign nationals or employed outside of the United States,
(e) to implement an Award Transfer Program in accordance with Section 10.7,
(f) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (g) interpret, amend or revoke any such
rules. Except as provided in Section 4.3, the Committee may not reprice
outstanding Options or institute a program whereby outstanding Awards are
surrendered or cancelled in exchange for Awards of the same type (which may have
a lower exercise price or purchase price), of a different type and/or cash
(other than pursuant to an Award Transfer Program) without first obtaining
stockholder approval.
     3.3 Delegation by the Committee.  The Committee, in its sole discretion and
on such terms and conditions as it may provide, may delegate all or any part of
its authority and powers under the Plan to one or more Directors or officers of
the Company; provided, however, that the Committee may not delegate its
authority and powers (a) with respect to Section 16 Persons, or (b) in any way
which would jeopardize the Plan’s qualification under Section 162(m) of the Code
or Rule 16b-3.

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     3.4 Decisions Binding.  All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
     4.1 Number of Shares .  Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan shall not exceed
367,200,000. Shares granted under the Plan may be either authorized but unissued
Shares or treasury Shares. The total number of Shares that may be granted
pursuant to awards of Restricted Stock, Performance Shares and Performance Units
may not exceed 90,000,000 Shares.
     4.2 Lapsed Awards.  If an Award is settled in cash, or is cancelled,
terminates, expires, or lapses for any reason, any Shares subject to such Award
again shall be available to be the subject of an Award. With respect to Stock
Appreciation Rights, Shares actually issued pursuant to a Stock Appreciation
Right as well as the Shares that represent payment of the exercise price and tax
related to the Award shall cease to be available under the Plan. Shares that
have actually been issued under the Plan under any Award shall not be returned
to the Plan and shall not become available for future distribution under the
Plan; provided, however, that if unvested Shares of Restricted Stock,
Performance Shares or Performance Units are repurchased by the Company or are
forfeited to the Company, such Shares shall become available for future grant
under the Plan. To the extent an Award under the Plan is paid out in cash rather
than Shares, such cash payment shall not result in reducing the number of Shares
available for issuance under the Plan. Notwithstanding anything in the Plan, or
any Award Agreement to the contrary, Shares actually issued pursuant to Awards
transferred under any Award Transfer Program shall not be again available for
grant under the Plan. Notwithstanding the foregoing and, subject to adjustment
provided in Section 4.3, the maximum number of Shares that may be issued upon
the exercise of Incentive Stock Options shall equal the aggregate Share number
stated in Section 4.1, plus, to the extent allowable under Section 422 of the
Code, any Shares that become available for issuance under the Plan under this
Section 4.2.
     4.3 Adjustments in Awards and Authorized Shares.  In the event that any
dividend or other distribution (whether in the form of cash, Shares, other
securities, or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Shares or other securities of the Company, or other
change in the corporate structure of the Company affecting the Shares occurs,
the Committee shall adjust the number and class of Shares that may be issued
under the Plan, the number, class, and price of Shares subject to outstanding
Awards and the numerical limits of Sections 5.1, 6.1, 7.1, 8.1 and 9.1, to
prevent the dilution or diminution of such Awards. Notwithstanding the
preceding, the number of Shares subject to any Award always shall be a whole
number.
SECTION 5
STOCK OPTIONS
     5.1 Grant of Options.  Subject to the terms and provisions of the Plan,
Options may be granted to Employees and Consultants at any time and from time to
time as determined by the

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Committee in its sole discretion. The Committee, in its sole discretion, shall
determine the number of Shares subject to each Option, provided that during any
Fiscal Year, no Participant shall be granted Options covering more than
1,400,000 Shares. The Committee may grant Incentive Stock Options, Nonqualified
Stock Options, or a combination thereof. The Committee may not grant Reload
Options.
     5.2 Award Agreement.  Each Option shall be evidenced by an Award Agreement
that shall specify the Exercise Price, the expiration date of the Option, the
number of Shares to which the Option pertains, any conditions to exercise of the
Option, and such other terms and conditions as the Committee, in its discretion,
shall determine. The Award Agreement shall also specify whether the Option is
intended to be an Incentive Stock Option or a Nonqualified Stock Option.
     5.3 Exercise Price.  Subject to the provisions of this Section 5.3, the
Exercise Price for each Option shall be determined by the Committee in its sole
discretion.
          5.3.1 Nonqualified Stock Options. In the case of a Nonqualified Stock
Option, the Exercise Price shall be not less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date.
          5.3.2 Incentive Stock Options. In the case of an Incentive Stock
Option, the Exercise Price shall be not less than one hundred percent (100%) of
the Fair Market Value of a Share on the Grant Date; provided, however, that if
on the Grant Date, the Employee (together with persons whose stock ownership is
attributed to the Employee pursuant to Section 424(d) of the Code) owns stock
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or any of its Subsidiaries, the Exercise Price
shall be not less than one hundred and ten percent (110%) of the Fair Market
Value of a Share on the Grant Date.
          5.3.3 Substitute Options. Notwithstanding the provisions of
Sections 5.3.1 and 5.3.2, in the event that the Company or an Affiliate
consummates a transaction described in Section 424(a) of the Code (e.g., the
acquisition of property or stock from an unrelated corporation), persons who
become Employees or Consultants on account of such transaction may be granted
Options in substitution for options granted by their former employer. If such
substitute Options are granted, the Committee, in its sole discretion and
consistent with Section 424(a) of the Code, may determine that such substitute
Options shall have an exercise price less than one hundred percent (100%) of the
Fair Market Value of the Shares on the Grant Date.
     5.4 Expiration of Options.
          5.4.1 Expiration Dates. Each Option shall terminate no later than the
first to occur of the following events:
               (a) The date for termination of the Option set forth in the
written Award Agreement (which may be in electronic form); or
               (b) The expiration of seven (7) years from the Grant Date; or
               (c) The expiration of three (3) years from the date of the
Participant’s Termination of Service for a reason other than the Participant’s
death, Disability or Retirement; or

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               (d) The expiration of three (3) years from the date of the
Participant’s Termination of Service by reason of Disability; or
               (e) The expiration of three (3) years from the date of the
Participant’s Retirement (except as provided in Section 5.8.2 regarding
Incentive Stock Options).
          5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if a
Participant dies prior to the expiration of his or her Options, the Committee,
in its discretion, may provide that his or her Options shall be exercisable for
up to three (3) years after the date of death.
          5.4.3 Committee Discretion. Subject to the limits of Sections 5.4.1
and 5.4.2, the Committee, in its sole discretion, (a) shall provide in each
Award Agreement when each Option expires and becomes unexercisable, and (b) may,
after an Option is granted, extend the maximum term of the Option (subject to
Section 5.8.4 regarding Incentive Stock Options).
     5.5 Exercisability of Options.  Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its sole discretion. After an Option is
granted, the Committee, in its sole discretion, may accelerate the
exercisability of the Option.
     5.6 Payment.  Options shall be exercised by the Participant’s delivery of a
notice of exercise (in such form and manner as the Company may designate) to the
Secretary of the Company (or its designee), setting forth the number of Shares
with respect to which the Option is to be exercised, accompanied by full payment
for the Shares.
          Upon the exercise of any Option, the Exercise Price shall be payable
to the Company in full in cash or its equivalent. The Committee, in its sole
discretion, also may permit exercise (a) by tendering previously acquired Shares
having an aggregate Fair Market Value at the time of exercise equal to the total
Exercise Price, or (b) by any other means which the Committee, in its sole
discretion, determines to both provide legal consideration for the Shares, and
to be consistent with the purposes of the Plan.
          As soon as practicable after receipt of a notification of exercise (in
such form and manner as the Company may designate) and full payment for the
Shares purchased, the Company shall deliver to the Participant (or the
Participant’s designated broker), Share certificates (which may be in book entry
form) representing such Shares.
     5.7 Restrictions on Share Transferability.  The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.

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     5.8 Certain Additional Provisions for Incentive Stock Options.
          5.8.1 Exercisability. The aggregate Fair Market Value (determined on
the Grant Date(s)) of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by any Employee during any calendar year
(under all plans of the Company and its Subsidiaries) shall not exceed $100,000.
          5.8.2 Termination of Service. No Incentive Stock Option may be
exercised more than three (3) months after the Participant’s Termination of
Service for any reason other than Disability or death, unless (a) the
Participant dies during such three-month period, and (b) the Award Agreement or
the Committee permits later exercise. No Incentive Stock Option may be exercised
more than one (1) year after the Participant’s Termination of Service on account
of Disability, unless (a) the Participant dies during such one-year period, and
(b) the Award Agreement or the Committee permit later exercise.
          5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be
granted only to persons who are employees of the Company or a Subsidiary on the
Grant Date.
          5.8.4 Expiration. No Incentive Stock Option may be exercised after the
expiration of seven (7) years from the Grant Date; provided, however, that if
the Option is granted to an Employee who, together with persons whose stock
ownership is attributed to the Employee pursuant to Section 424(d) of the Code,
owns stock possessing more than ten percent (10%) of the total combined voting
power of all classes of the stock of the Company or any of its Subsidiaries, the
Option may not be exercised after the expiration of five (5) years from the
Grant Date.
SECTION 6
STOCK APPRECIATION RIGHTS
     6.1 Grant of SARs.  Subject to the terms and conditions of the Plan, an SAR
may be granted to Employees and Consultants at any time and from time to time as
shall be determined by the Committee, in its sole discretion.
          6.1.1 Number of Shares. The Committee shall have complete discretion
to determine the number of SARs granted to any Participant, provided that during
any Fiscal Year, no Participant shall be granted SARs covering more than 700,000
Shares.
          6.1.2 Exercise Price and Other Terms. The Committee, subject to the
provisions of the Plan, shall have complete discretion to determine the terms
and conditions of SARs granted under the Plan, provided, however, that the
exercise price shall be not less than one hundred percent (100%) of the Fair
Market Value of a Share on the date of grant. After a SAR is granted, the
Committee, in its sole discretion, may accelerate the exercisability of the SAR.
     6.2 SAR Agreement.  Each SAR grant shall be evidenced by an Award Agreement
that shall specify the exercise price, the term of the SAR, the conditions of
exercise, and such other terms and conditions as the Committee, in its sole
discretion, shall determine.

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     6.3 Expiration of SARs.  An SAR granted under the Plan shall expire upon
the date determined by the Committee, in its sole discretion, and set forth in
the Award Agreement. Notwithstanding the foregoing, the rules of Section 5.4
also shall apply to SARs.
     6.4 Payment of SAR Amount.  Upon exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
               (a) The difference between the Fair Market Value of a Share on
the date of exercise over the exercise price; times
               (b) The number of Shares with respect to which the SAR is
exercised.
               At the discretion of the Committee, the payment upon SAR exercise
may be in cash, in Shares of equivalent value, or in some combination thereof.
SECTION 7
RESTRICTED STOCK
     7.1 Grant of Restricted Stock.  Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Employees and Consultants in such amounts as the Committee,
in its sole discretion, shall determine. The Committee, in its sole discretion,
shall determine the number of Shares to be granted to each Participant, provided
that during any Fiscal Year, no Participant shall receive more than 350,000
Shares of Restricted Stock.
     7.2 Restricted Stock Agreement.  Each Award of Restricted Stock shall be
evidenced by an Award Agreement that shall specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the
Committee, in its sole discretion, shall determine. Unless the Committee
determines otherwise, Shares of Restricted Stock shall be held by the Company as
escrow agent until the restrictions on such Shares have lapsed.
     7.3 Transferability.  Except as provided in this Section 7, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable Period of Restriction.
     7.4 Other Restrictions.  The Committee, in its sole discretion, may impose
such other restrictions on Shares of Restricted Stock as it may deem advisable
or appropriate, in accordance with this Section 7.4.
          7.4.1 General Restrictions. The Committee may set restrictions based
upon the Participant’s continued status as an Employee or Consultant, the
achievement of specific performance objectives (Company-wide, divisional, or
individual), applicable federal or state securities laws, or any other basis
determined by the Committee in its discretion.
          7.4.2 Section 162(m) Performance Restrictions. For purposes of
qualifying grants of Restricted Stock as “performance-based compensation” under
Section 162(m) of the Code, the Committee, in its discretion, may set
restrictions based upon the achievement of Performance Goals.

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The Performance Goals shall be set by the Committee on or before the latest date
permissible to enable the Restricted Stock to qualify as “performance-based
compensation” under Section 162(m) of the Code. In granting Restricted Stock
which is intended to qualify under Section 162(m) of the Code, the Committee
shall follow any procedures determined by it from time to time to be necessary
or appropriate to ensure qualification of the Restricted Stock under Section
162(m) of the Code (e.g., in determining the Performance Goals).
          7.4.3 Legend on Certificates. The Committee, in its discretion, may
legend the certificates representing Restricted Stock to give appropriate notice
of such restrictions. For example, the Committee may determine that some or all
certificates representing Shares of Restricted Stock shall bear the following
legend:
     “The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is subject
to certain restrictions on transfer as set forth in the Applied Materials, Inc.
Employee Stock Incentive Plan, and in a Restricted Stock Agreement. A copy of
the Plan and such Restricted Stock Agreement may be obtained from the Secretary
of Applied Materials, Inc.”
     7.5 Removal of Restrictions.  Except as otherwise provided in this
Section 7, Shares of Restricted Stock covered by each Restricted Stock grant
made under the Plan shall be released from escrow as soon as practicable after
the last day of the Period of Restriction. Subject to the minimum Period of
Restriction specified in Section 2.36, the Committee, in its discretion, may
accelerate the time at which any restrictions shall lapse or be removed. After
the restrictions have lapsed, the Participant shall be entitled to have any
legend or legends under Section 7.4.3 removed from his or her Share certificate,
and the Shares shall be freely transferable by the Participant.
     7.6 Voting Rights.  During the Period of Restriction, Participants holding
Shares of Restricted Stock granted hereunder may exercise full voting rights
with respect to those Shares, unless the Committee determines otherwise.
     7.7 Dividends and Other Distributions.  During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement. If any such dividends or
distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted
Stock with respect to which they were paid.
     7.8 Return of Restricted Stock to Company.  On the date set forth in the
Award Agreement, the Restricted Stock for which restrictions have not lapsed
shall revert to the Company and again shall become available for grant under the
Plan.

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SECTION 8
PERFORMANCE UNITS AND PERFORMANCE SHARES
     The provisions of this Section 8 are applicable only to Performance Units
and Performance Shares granted to Employees and Consultants (and to the extent
provided in Section 9.2.11, to Performance Shares granted to Nonemployee
Directors).
     8.1 Grant of Performance Units/Shares.  Performance Units and Performance
Shares may be granted to Employees and Consultants at any time and from time to
time, as shall be determined by the Committee, in its sole discretion. The
Committee shall have complete discretion in determining the number of
Performance Units and Performance Shares granted to each Participant provided
that during any Fiscal Year, (a) no Participant shall receive Performance Units
having an initial value greater than $3,000,000, and (b) no Participant shall
receive more than 350,000 Performance Shares.
     8.2 Value of Performance Units/Shares.  Each Performance Unit shall have an
initial value that is established by the Committee on or before the Grant Date.
Each Performance Share shall have an initial value equal to the Fair Market
Value of a Share on the Grant Date.
     8.3 Performance Objectives and Other Terms.  The Committee shall set
performance objectives (including, without limitation, continued status as an
Employee or Consultant) in its discretion which, depending on the extent to
which they are met, shall determine the number or value of Performance
Units/Shares that shall be paid out to the Participants. Each Award of
Performance Units/Shares shall be evidenced by an Award Agreement that shall
specify the Performance Period, and such other terms and conditions as the
Committee, in its sole discretion, shall determine. Notwithstanding the
foregoing, and except as otherwise provided in the Plan, (i) Performance
Units/Shares that vest solely as a result of continued employment or service
shall vest in full no earlier than the three (3) year anniversary of the Grant
Date, and (ii) Performance Units/Shares that do not vest solely based on
continued employment or service shall vest in full no earlier than the one (1)
year anniversary of the Grant Date. Notwithstanding the foregoing sentence, the
Committee, in its sole discretion, may provide at the time of or following the
date of grant for accelerated vesting for an Award of Performance Units/Shares
solely by reason of death, Disability, Retirement or major capital change.
          8.3.1 General Performance Objectives. The Committee may set
performance objectives based upon the achievement of Company-wide, divisional,
and/or individual goals (including, but not limited to, continued status as an
Employee or Consultant), applicable federal or state securities laws, or any
other basis determined by the Committee in its discretion.
          8.3.2 Section 162(m) Performance Objectives. For purposes of
qualifying grants of Performance Units/Shares as “performance-based
compensation” under Section 162(m) of the Code, the Committee, in its
discretion, may determine that the performance objectives applicable to
Performance Units/Shares shall be based on the achievement of Performance Goals.
The Performance Goals shall be set by the Committee on or before the latest date
permissible to enable the Performance Units/Shares to qualify as
“performance-based compensation” under Section 162(m) of the Code. In granting
Performance Units/Shares which are intended to qualify under Section 162(m) of
the Code, the Committee shall follow any procedures determined by it from time

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to time to be necessary or appropriate to ensure qualification of the
Performance Units/Shares under Section 162(m) of the Code (e.g., in determining
the Performance Goals).
     8.4 Earning of Performance Units/Shares.  After the applicable Performance
Period has ended, the holder of Performance Units/Shares shall be entitled to
receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the
extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit/Share, the
Committee, in its sole discretion, may reduce or waive any performance
objectives for such Performance Unit/Share.
     8.5 Form and Timing of Payment of Performance Units/Shares.  Payment of
earned Performance Units/Shares shall be made as soon as practicable after the
expiration of the applicable Performance Period. The Committee, in its sole
discretion, may pay earned Performance Units/Shares in the form of cash, in
Shares (which have an aggregate Fair Market Value equal to the value of the
earned Performance Units/Shares at the close of the applicable Performance
Period) or in a combination thereof.
     8.6 Cancellation of Performance Units/Shares.  On the date set forth in the
Award Agreement, all unearned or unvested Performance Units/Shares shall be
forfeited to the Company, and again shall be available for grant under the Plan.
SECTION 9
NONEMPLOYEE DIRECTOR AWARDS
     The provisions of this Section 9 are applicable only to Performance Shares
granted to Nonemployee Directors.
     9.1 Granting of Performance Shares.
          9.1.1 Initial Awards. Each Nonemployee Director who first becomes a
Nonemployee Director on or after October 27, 2008, automatically shall receive,
as of the date that the individual first is appointed or elected as a
Nonemployee Director, an Award of Performance Shares (the “Initial Award”). The
number of Performance Shares subject to the Initial Award will be equal to
(a) the value obtained by multiplying (x) $200,000 times (y) a fraction, the
numerator of which is the actual number of days between the date of the
Nonemployee Director’s appointment or election and the scheduled date of the
next following Annual Meeting, and the denominator of which is 365, which such
resulting value divided by (b) the Fair Market Value of a Share on the date of
grant, rounded down to the nearest whole Performance Share. The Nonemployee
Director shall not receive an Initial Award if he or she is first appointed or
elected as a Nonemployee Director on the date of an Annual Meeting and instead
shall receive an Ongoing Award pursuant to Section 9.1.2 on that date.
          9.1.2 Ongoing Awards. On the date of each Annual Meeting beginning in
2009, but after any stockholder votes taken on such date, each Nonemployee
Director who is appointed or elected as a Nonemployee Director on the date of
the Annual Meeting automatically shall receive, as of such date, an Award of the
number of Performance Shares equal to $200,000 divided by the Fair Market Value
of a Share on the date of grant, rounded down to the nearest whole Performance
Share

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(the “Ongoing Award”). Notwithstanding the foregoing, each Nonemployee Director
who is required to tender a resignation following such Annual Meeting in
accordance with the Company’s majority voting policy for election of directors
shall not receive an Ongoing Award, unless the Board determines not to accept
his or her resignation in accordance with the Company’s policy, in which case
such Nonemployee Director automatically shall receive the Ongoing Award on the
date the Board makes a determination not to accept such resignation.
     9.2 Terms of Initial Award and Ongoing Awards. 
          9.2.1 Award Agreement. Each Award of Performance Shares granted
pursuant to this Section 9 shall be evidenced by a written Award Agreement
(which may be in electronic form) between the Participant and the Company.
          9.2.2 Value of Performance Shares. Each Performance Share shall have
an initial value equal to the Fair Market Value of a Share on the Grant Date.
          9.2.3 Performance Objectives and Other Terms. Subject to the other
provisions of Section 9.2, each Initial Award shall be earned and paid out as to
twenty-five percent (25%) of the Shares subject to the Initial Award on each of
the first four (4) annual anniversaries of the Grant Date. Each Ongoing Award
shall be earned and paid out as to twenty-five percent (25%) of the Shares
subject to the Ongoing Award on March 1 of each year following the year in which
the Grant Date occurs. Notwithstanding the preceding, once a Participant ceases
to be a Director, his or her Performance Shares which are not then earned shall
never be earned or paid out and shall be immediately forfeited, except to the
extent provided in Section 9.2.4, Section 9.2.5 and Section 9.2.6.
          9.2.4 Retirement of Participant. Unless otherwise determined by the
Committee, if a Participant has a Termination of Service due to Retirement prior
to the vesting of Performance Shares granted on or after October 27, 2008, such
Performance Shares shall continue to vest in accordance with the schedule set
forth in Section 9.2.3.
          9.2.5 Disability of Participant. If a Participant has a Termination of
Service due to Disability prior to the vesting of Performance Shares granted on
or after October 27, 2008, then one hundred percent (100%) of the Performance
Shares shall immediately become vested and, subject to the terms and conditions
of any deferral pursuant to Section 9.2.8, payable.
          9.2.6 Death of Participant. If a Participant dies while serving as a
Director prior to the vesting of his or her Performance Shares, then one hundred
percent (100%) of the Performance Shares shall immediately become vested and,
subject to the terms and conditions of any deferral pursuant to Section 9.2.8,
payable.
          9.2.7 Earning of Performance Shares. After the applicable Performance
Period has ended, the holder of Performance Shares shall be entitled to receive
a payout of the number of Performance Shares earned by the Participant over the
Performance Period, to be determined as a function of the extent to which the
corresponding vesting provisions have been achieved.
          9.2.8 Form and Timing of Payment of Performance Shares. Payment of
earned Performance Shares shall be made as soon as practicable after the
expiration of the applicable

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Performance Period. The Committee, in its sole discretion, may pay earned
Performance Shares in the form of cash, in Shares (which have an aggregate Fair
Market Value equal to the value of the earned Performance Shares at the close of
the applicable Performance Period) or in a combination thereof. Notwithstanding
the foregoing, the Committee may, in its sole discretion, provide a Nonemployee
Director with the opportunity to defer the receipt of earned Performance Shares
that would otherwise be delivered to such Nonemployee Director under this
Section 9. Any such deferral shall be subject to such rules, conditions and
procedures as shall be determined by the Committee in its sole discretion, which
rules, conditions and procedures shall comply with the requirements of
Section 409A of the Code, unless otherwise specifically determined by the
Committee.
          9.2.9 Cancellation of Performance Shares. On the date set forth in the
Award Agreement, all unearned or unvested Performance Shares shall be forfeited
to the Company, and again shall be available for grant under the Plan.
          9.2.10 Dividends. The Committee may, in its sole discretion, authorize
the payment of stock dividends on deferred Performance Shares granted under this
Section 9 on a current, deferred or contingent basis. Any payment of such stock
dividends shall be subject to such rules, conditions and procedures as shall be
determined by the Committee in its sole discretion, which rules, conditions and
procedures shall comply with the requirements of Section 409A of the Code,
unless otherwise specifically determined by the Committee.
          9.2.11 Other Terms. All provisions of the Plan not inconsistent with
this Section 9 shall apply to Performance Shares granted to Nonemployee
Directors, including but not limited to the provisions of Section 8.
     9.3 Amendments. The Committee, in its sole discretion, may change the
number of Performance Shares subject to future grants of the Initial Award and
Ongoing Awards at any time.
SECTION 10
MISCELLANEOUS
     10.1 Deferrals.  The Committee, in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award. Any such
deferral elections shall be subject to such rules, conditions and procedures as
shall be determined by the Committee in its sole discretion, which rules,
conditions and procedures shall comply with the requirements of Section 409A of
the Code, unless otherwise specifically determined by the Committee.
     10.2 No Effect on Employment or Service.  Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant’s employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment with the Company and its Affiliates
is on an at-will basis only.
     10.3 Participation.  No Employee or Consultant shall have the right to be
selected to receive an Award under this Plan, or, having been so selected, to be
selected to receive a future Award.

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     10.4 Indemnification.  Each person who is or shall have been a member of
the Committee, or of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Award Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company’s approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.
     10.5 Successors.  All obligations of the Company under the Plan, with
respect to Awards granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business or assets of the Company.
     10.6 Beneficiary Designations. If permitted by the Committee, a Participant
under the Plan may name a beneficiary or beneficiaries to whom any vested but
unpaid Award shall be paid in the event of the Participant’s death. Each such
designation shall revoke all prior designations by the Participant and shall be
effective only if given in a form and manner acceptable to the Committee. In the
absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death shall be paid to the Participant’s estate and, subject to
the terms of the Plan and of the applicable Award Agreement, any unexercised
vested Award may be exercised by the administrator or executor of the
Participant’s estate.
     10.7 Limited Transferability of Awards. 
          10.7.1 General. No Award granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will, by the laws of descent and distribution, or to the limited extent
provided in Section 10.6 and this Section 10.7. All rights with respect to an
Award granted to a Participant shall be available during his or her lifetime
only to the Participant. Notwithstanding the foregoing, the Participant may, in
a manner specified by the Committee, if the Committee (in its discretion) so
permits, (a) transfer an Award to in accordance with an Award Transfer Program
instituted by the Committee, (b) transfer a Nonqualified Stock Option to a
Participant’s spouse, former spouse or dependent pursuant to a court-approved
domestic relations order which relates to the provision of child support,
alimony payments or marital property rights, and (c) transfer a Nonqualified
Stock Option by bona fide gift and not for any consideration, to (i) a member or
members of the Participant’s immediate family, (ii) a trust established for the
exclusive benefit of the Participant and/or member(s) of the Participant’s
immediate family, (iii) a partnership, limited liability company of other entity
whose only partners or members are the Participant and/or member(s) of the
Participant’s immediate family, or (iv) a foundation in which the Participant
an/or member(s) of the Participant’s immediate family control the management of
the foundation’s assets.

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          10.7.2 Award Transfer Program. Notwithstanding any contrary provision
of the Plan, the Committee shall have all discretion and authority to determine
and implement the terms and conditions of any Award Transfer Program instituted
pursuant to this Section 10.7 and shall have the authority to amend the terms of
any Award participating in the Award Transfer Program, including (but not
limited to) the authority to (i) amend (including to extend) the expiration
date, post-termination exercise period and/or forfeiture conditions of a
participating Award, (ii) amend or remove any provisions of the Award relating
to the Award holder’s continued service to the Company, (iii) amend the
permissible payment methods for the exercise or purchase such Award, (iv) amend
the adjustments to be implemented in the event of changes in capitalization and
other similar events, and (v) make such other changes to the terms of such Award
as the Committee deems necessary or appropriate, in its sole discretion.
     10.8 No Rights as Stockholder.  Except to the limited extent provided in
Sections 7.6 and 7.7, no Participant (nor any beneficiary) shall have any of the
rights or privileges of a stockholder of the Company with respect to any Shares
issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares (which may be in book entry form) shall
have been issued, recorded on the records of the Company or its transfer agents
or registrars, and delivered to the Participant (or beneficiary).
SECTION 11
AMENDMENT, TERMINATION, AND DURATION
     11.1 Amendment, Suspension, or Termination.  The Board, in its sole
discretion, may amend, suspend or terminate the Plan, or any part thereof, at
any time and for any reason. The Company will obtain stockholder approval of any
Plan amendment to the extent necessary and desirable to comply with applicable
laws. In addition, an amendment will be subject to stockholder approval if the
Committee or the Board, in their sole discretion, deems such amendment to be a
material amendment, except with respect to such an amendment which will impact
Awards covering, in the aggregate, no more than five percent (5%) of the shares
reserved for issuance under the Plan. The following amendments shall be deemed
material amendments for purposes of the preceding sentence (i) material
increases to the benefits accrued to Participants under the Plan; (ii) increases
to the number of securities that may be issued under the Plan; (iii) material
modifications to the requirements for participation in the Plan, and (iv) the
addition of a new provision allowing the Board or the Committee to lapse or
waive restrictions at its discretion. The amendment, suspension, or termination
of the Plan shall not, without the consent of the Participant, alter or impair
any rights or obligations under any Award theretofore granted to such
Participant. No Award may be granted during any period of suspension or after
termination of the Plan.
     11.2 Duration of the Plan.  The amended and restated Plan shall be
effective as of September 16, 2008, and subject to Section 11.1 (regarding the
Board’s right to amend or terminate the Plan), shall remain in effect
thereafter. However, without further stockholder approval, no Incentive Stock
Option may be granted under the Plan after January 16, 2017.

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SECTION 12
TAX WITHHOLDING
     12.1 Withholding Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), or at such earlier time as the Tax
Obligations are due, the Company shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy all Tax Obligations.
     12.2 Withholding Arrangements.  The Committee, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a
Participant to satisfy such Tax Obligations, in whole or in part by (a) electing
to have the Company withhold otherwise deliverable Shares, or (b) delivering to
the Company already-owned Shares having a Fair Market Value equal to the amount
required to be withheld or remitted. The amount of the Tax Obligations shall be
deemed to include any amount which the Committee agrees may be withheld at the
time the election is made, not to exceed the amount determined by using the
maximum federal, state or local marginal income tax rates applicable to the
Participant or the Company, as applicable, with respect to the Award on the date
that the amount of tax or social insurance liability to be withheld or remitted
is to be determined. The Fair Market Value of the Shares to be withheld or
delivered shall be determined as of the date that the Tax Obligations are
required to be withheld.
SECTION 13
LEGAL CONSTRUCTION
     13.1 Gender and Number.  Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
     13.2 Severability.  In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
     13.3 Requirements of Law.  The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
     13.4 Securities Law Compliance.  With respect to Section 16 Persons,
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any provision of the Plan, Award
Agreement or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
     13.5 Governing Law.  The Plan and all Award Agreements shall be construed
in accordance with and governed by the laws of the State of California,
excluding its conflict of laws provisions.
     13.6 Captions.  Captions are provided herein for convenience only, and
shall not serve as a basis for interpretation or construction of the Plan.

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