exv10w63






EXHIBIT 10.63


[EMPL_NAME]

Employee ID: [EMPLID]

Grant Number: [GRANT_ID]


APPLIED MATERIALS, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

NOTICE OF GRANT


Applied Materials, Inc. (the “Company”) hereby grants you, [EMPL_NAME] (the “Employee”), an Option under the
Company’s Employee Stock Incentive Plan (the “Plan”) to purchase shares of common stock of the Company (the
“Option”). The date of this Non-Qualified Stock Option Agreement (the “Agreement”) is [GRANT_DT] (the “Grant
Date”). The terms used and not defined in this Agreement have the meaning set forth in the Plan. Subject to
the provisions of the Terms and Conditions of the Non-Qualified Stock Option Grant (the “Terms and
Conditions”), which constitute part of this Agreement and of the Plan, the principal features of this Option
are as follows:



	 	 	 	 	 
	Maximum
Number of Shares Purchasable with this
	 	Exercise Price per Share:	 	 
	
 

Option: [MAX_SHARES]
	 	 

US[PRICE]





Vesting
of Option: Please refer to the UBS One Source website for the vesting schedule related to this
Option grant (click on the specific grant under the tab labeled “Grants/Awards/Units”) or its successor, as
well as the Terms and Conditions.*





 




	*	 	Except as otherwise provided in the Terms and Conditions, on any scheduled vesting date, vesting actually
will occur only if the Employee has been continuously employed by the Company or one of its Affiliates from
the Grant Date through the scheduled vesting date.




Expiration Date of Option: In general, the latest date this Option will terminate is (a) [EXPR_DT], provided
that [EXPR_DT] is a day on which the Nasdaq U.S. stock trading market is open for trading (a “Nasdaq trading
day”) or (b) if [EXPR_DT] is not a Nasdaq trading day, then the Nasdaq trading day immediately preceding
[EXPR_DT] (the “Expiration Date”). However, this Option may terminate earlier than the Expiration Date, as
set forth immediately below and in the Terms and Conditions.




	 	 	 	 	 
	Event Triggering Option Termination:
	 	Maximum Time to Exercise
After Triggering Event**
	
 
	 	 
	Termination of Service (except as shown below)
	 	30 days	 	 
	 
	 	 	 	 
	Termination of Service due to Retirement

(Age 65 or age 60 or over, with at least 10 Years of Service)
	 	1 year	 	 
	 
	 	 	 	 
	Termination of Service due to Death

	 	1 year (6 months for Employees in
France)	 	 






 



**  This Option may not be exercised after the Expiration Date (except in
certain cases of the death of the Employee). In addition, the maximum
time to exercise this Option may be further limited by the Company where
required by applicable law.



For Employees employed in Belgium on the Grant Date: Depending
on when
you formally accept the Option, the taxable event for the Option will be
either on the Grant Date or the date of exercise of the Option, if any.
If you accept the Option during the 60-day period following your receipt
of the Option information, you will be taxed as of the Grant Date. If
you accept the Option after the 60-day period following your receipt of
the Option information, you will be taxed on the exercise date, if any.
To obtain the deferred taxable event (i.e., at exercise), you must
accept the



 








 




Option as
described below after the 60-day period following
receipt of the Option information has passed.



For Employees employed in China, Indonesia, Italy, and Korea on the
Exercise Date: Your Option only may be exercised through a “cashless
exercise” (also known as a “same-day-sale” or “immediate sale”).



For Employees employed in France on the Grant Date: Your Option is
granted under a tax-qualified plan. Certain restrictions apply to the
Option. Except in the event of your death, the Shares acquired upon any
exercise of the Option may not be sold or transferred until the
expiration of the holding period provided by article 163 bis C of the
French Tax Code, which is currently four years after the Grant Date.



For Employees employed in Israel on the Grant Date: Your Option is
granted under a tax-qualified plan, called a Section 102 capital gains
tax route plan. Information regarding the Section 102 capital gains tax
route plan and related forms will be provided to you by your manager.
In order to qualify for favorable tax treatment, the Shares acquired
upon any exercise of your Option generally must not be sold until the
expiration of the holding period provided by Section 102 of the Israel
Income Tax Ordinance [New Version], 1961 (“Section 102”), which is
currently two years from the Grant Date. Your acceptance of this
Option, if done timely, will also indicate your acceptance of the
capital gains tax route under Section 102, as more specifically set
forth below. Further, upon receipt of the Shares issued upon any
exercise of this Option grant, you authorize and direct UBS Financial
Services, Inc. (“UBS”) to transfer to the Section 102 Trustee (as
described below) all net proceeds of cash or Shares resulting from any
transaction involving this Option grant and to share information about
your UBS brokerage account pursuant to the terms of the UBS Letter of
Authorization as more specifically set forth below.



For Employees employed in the United Kingdom (U.K.) on the Grant Date:
As a condition to your acceptance of this Option, you agree to sign an
election under which you will be obligated to pay all National Insurance
Contributions (“NICs”) that may become due on any gains realized upon
exercise of the Option (with certain exceptions). The NICs include the
“primary” NIC payable by an employee as well as the “secondary” NIC
payable by the employer in the absence of any election (referred to as
the Secondary Contributions under paragraph 3B(4) of Schedule 1 to the
Social Security Contributions and Benefits Act of 1992).






IMPORTANT:

IT IS YOUR RESPONSIBILITY TO EXERCISE THIS OPTION, IF VESTED, BEFORE IT 

OTHERWISE TERMINATES.


Your electronic signature below indicates your agreement
and understanding that this Option is subject to all of
the rules and other provisions contained in the Terms
and Conditions to this Agreement and the Plan. For
example, important additional information on vesting and
termination of this Option is contained in Paragraphs 1
through 5 of the Terms and Conditions. PLEASE BE SURE
TO READ ALL OF THE TERMS AND CONDITIONS, WHICH CONTAINS
THE SPECIFIC TERMS AND CONDITIONS OF THIS OPTION,
INCLUDING INFORMATION CONCERNING CANCELLATION AND
TERMINATION OF THIS OPTION. CLICK HERE TO READ THE
TERMS AND CONDITIONS.



By clicking the “ACCEPT” button below, you agree that:





“This electronic contract contains my
electronic signature, which I have executed
with the intent to sign this Agreement.”


For Employees in Israel: By clicking the “ACCEPT”
button below, you agree to all the provisions of this
electronic contract and the Declaration of Employee as
set forth below:






 








 













“This electronic contract contains my
electronic signature, which I have executed
with the intent to sign this Agreement.
Further, I have read and accept the terms
and conditions of the Trust Deed executed
between the Company and the Plan Trustee
under Section 102 of the Israeli Income Tax
ordinance [New Version], 1961 (“Section
102”). I declare that I am familiar with
the provisions of Section 102 and the
Capital Gains Route under Section 102. I
undertake not to sell or transfer from the
Trustee any Shares or any rights issued in
respect of such Shares prior to the lapse of
the requisite period under the Capital Gains
Route of Section 102 unless I pay all taxes,
which may arise in connection with such sale
and/or transfer.”


Upon receipt of the Shares issued upon exercise of this
Grant, you also agree to the following Letter of
Authorization:





“I authorize and direct UBS Financial
Services Inc. (“UBS”) to transfer to Tamir
Fishman (the “Section 102 Trustee”), or its
designee, as soon as practicable after
settlement all net proceeds of cash or
shares resulting from any transactions
involving Stock Options pursuant to the
following bank wire and depository trust
company instructions for such transfers to
the Section 102 Trustee:



	 	 	 	 	 	 	 
	 

	 	Bank
Wire Instructions:	 	 	 	 
	 

	 	Bank Name
	 	[WIRE INSTRUCTIONS INFORMATION]
	 	 
	 

	 	Branch
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	Account Name
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 
	 	 Account Number 
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	SWIFT
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	Bank Address
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 
	 	 	 	 	 	 
	 	 	Depository Trust
Company Instructions:	 	 
	 

	 	Bank Name
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	DTC Number
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	Account Name
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	Account Number
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	F/F/C
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 
	 

	 	Bank Address
	 	[WIRE INSTRUCTIONS INFORMATION]	 	 







I further authorize UBS to share information
about me and about transactions in my
account with Applied Materials, Inc., its
subsidiaries and the Section 102 Trustee as
may be reasonably necessary for Applied
Materials, Inc., its subsidiaries and the
Section 102 Trustee to meet tax withholding
and reporting obligations and otherwise to
administer the trust agreement(s) between
Applied Materials, Inc. and the Section 102
Trustee.




I authorize Applied Materials, Inc. to
provide a copy of this Letter of
Authorization to UBS and the Section 102
Trustee. This Letter of Authorization
supersedes any earlier Letter of
Authorization that I have provided to UBS
concerning the transfer of proceeds.”



[VIEW_ACCEPT_STATEMENT]







 








 




Please be sure to print and retain a copy of your electronically signed Agreement
(although the electronic version will be available for you to access at any time). You
may obtain a paper copy at any time and at the Company’s expense by requesting one from
Stock Programs (see Paragraph 13 of the Terms and Conditions). If you prefer not to
electronically sign this Agreement, you may accept this Option by signing a paper copy
of the Agreement and delivering it to Stock Programs.



For Employees in Israel: If you prefer not to electronically sign this Agreement, or
do not wish to elect to receive preferential Section 102 capital gains tax treatment,
please see your local Human Resources representative to obtain a paper copy of this
Agreement and indicate your acceptance of the Option and your acceptance or rejection
of Section 102’s provisions. Note: Failure to timely accept Section 102’s provisions
will automatically result in a rejection of such preferential tax treatment. Please
see your Human Resources representative for details.





 









 








TERMS AND CONDITIONS OF

NONQUALIFIED STOCK OPTION GRANT



1. Vesting Schedule. Except as provided in Paragraphs 2, 3, and 5 below, this Option is
scheduled to become exercisable (vest) as to the number of Shares, and on the dates shown, in
accordance with the vesting schedule set forth on the UBS One Source website (click on the
specific grant under the tab labeled “Grants/Awards/Units”) or its successor (the “Vesting
Schedule”). However, on any such scheduled vesting date, vesting actually will occur only if the
Employee has been continuously employed by the Company or an Affiliate from the Grant Date until
the scheduled vesting date (except to the limited extent provided in Paragraphs 3 and 5 below).



2. Modifications to Vesting Schedule. In the event that the Employee takes a personal
leave of absence (“PLOA”), the Shares subject to this Option that are scheduled to become
exercisable shall be modified as follows:




          (a) if the duration of the Employee’s PLOA is six (6) months or less, the Vesting Schedule
shall not be affected by the Employee’s PLOA.




          (b) if the duration of the Employee’s PLOA is greater than six (6) months but not more than
twelve (12) months, the scheduled exercisability of any Shares subject to this Option that are not
then exercisable shall be deferred for a period of time equal to the duration of the Employee’s
PLOA less six (6) months.




          (c) if the duration of the Employee’s PLOA is greater than twelve (12) months, any Shares
subject to this Option that are not then exercisable immediately will terminate.




          (d) Examples.




               (i) Example 1. Assume Shares subject to the Option are scheduled to vest on January 1, 2010.
On May 1, 2009, Employee begins a 6-month PLOA. Such Shares still will be scheduled to vest on
January 1, 2010.



               (ii) Example 2. Assume Shares subject to the Option are scheduled to vest on January 1, 2010.
On May 1, 2009, Employee begins a 9-month PLOA. The Shares subject to the Option that are
scheduled to vest after November 2, 2009 will be modified (November 2, 2009 is the date on which
Employee’s PLOA exceeds 6 months). Such Shares now will be scheduled to vest on April 1, 2010
(or 3 months after the originally scheduled date).



               (iii) Example 3. Assume Shares subject to the Option are scheduled to vest on January 1,
2010. On May 1, 2009, Employee begins a 13-month PLOA. Such Shares will terminate on May 2, 2010
(which is the date on which Employee’s PLOA exceeds 12 months).



     In general, a PLOA does not include any legally required leave of absence. The duration of
the Employee’s PLOA, if any, will be determined over a rolling twelve (12) month measurement
period. Shares subject to this Option that are scheduled to vest during the first six (6) months
of the Employee’s PLOA will continue to vest as scheduled. However, Shares subject to this Option
that are scheduled to vest after the first six (6) months of the Employee’s PLOA will be deferred
or terminated depending on the length of the Employee’s PLOA. The Employee’s right to exercise all
Shares subject to this Option that remain unexercisable shall be modified as soon as the duration
of the Employee’s PLOA exceeds six (6) months.


3. Accelerated Vesting upon Retirement of Employee. In the event that the Employee is age
sixty (60) or over and completes at least ten (10) Years of Service and then incurs a Termination
of Service due to Retirement, the right to exercise all or a portion of any Shares subject to this
Option that remain unexercisable immediately prior to such Retirement shall vest on the date on
which the Retirement occurs as follows:




          (a) if the Employee has less than fifteen (15) Years of Service as of the date of his or her
Retirement, fifty percent (50%) of the Shares that otherwise would have vested during the twelve
(12) months immediately following the Retirement (had the Employee remained an Employee throughout
such twelve (12) month period) shall vest on the Retirement date;




 









 








          (b) if the Employee has at least fifteen (15) (but less than twenty (20)) Years of Service as
of the date of the Retirement, one hundred percent (100%) of the Shares that otherwise would have
vested during the twelve (12) months immediately following the Retirement (had the Employee
remained an Employee throughout such twelve (12) month period) shall vest on the Retirement date;




          (c) if the Employee has at least twenty (20) (but less than twenty-five (25)) Years of Service
as of the date of the Retirement, (i) one hundred percent (100%) of the Shares that otherwise would
have vested during the twelve (12) months immediately following the Retirement (had the Employee
remained an Employee throughout such twelve (12) month period) shall accrue on the Retirement date,
and (ii) fifty percent (50%) of the Shares that otherwise would have vested during the second
twelve (12) months following the Retirement (had the Employee remained an Employee throughout such
second twelve (12) month period) shall vest on the Retirement date; and




          (d) if the Employee has at least twenty-five (25) Years of Service as of the date of the
Retirement, one hundred percent (100%) of the Shares that otherwise would have vested during the
twenty-four (24) months immediately following the Retirement (had the Employee remained an Employee
throughout such twenty-four (24) month period) shall vest on the Retirement date.




     “Retirement” and “Years of Service” are defined in the Plan. In general, “Retirement” means
a Termination of Service by an Employee after he or she is at least age sixty (60) and has
completed at least ten (10) Years of Service, and for purposes of this Agreement also means a
Termination of Service by an Employee on or after the date he or she turns age sixty-five (65).
In general, “Years of Service” means full years of employment since the Employee’s last hire date
with the Company or an Affiliate (but giving credit for prior service under the non-401(k) Plan
principles of the Company’s U.S. Human Resources Policy No. 2-06, or any successor thereto). In
the event that any applicable law limits the Committee’s ability to provide accelerated vesting
upon the Employee’s Retirement, this Paragraph 3 shall be limited to the extent required to comply
with applicable law. Notwithstanding any contrary provision of this Agreement, if the Employee is
subject to Hong Kong’s ORSO provisions, this Paragraph 3 shall not apply to this Option.


4. Termination of Option. In the event of the Employee’s Termination of Service for any
reason other than Retirement or death, the Employee may, within thirty (30) days after
the date of the Termination, or prior to the Expiration Date, whichever shall first occur,
exercise any vested but unexercised portion of this Option. However, in the event the date that
is thirty (30) days after the date of the Termination of Service is not a Nasdaq trading day, the
Employee may exercise the vested but unexercised portion of this Option only until the Nasdaq
trading day immediately preceding such date or prior to the Expiration Date, whichever shall first
occur. In the event of the Employee’s Termination of Service due to Retirement, the Employee may,
within one (1) year after the date of such Termination, or prior to the Expiration Date, whichever
shall first occur, exercise any vested but unexercised portion of this Option. However, in the
event the date that is one (1) year after the date of the Termination of Service due to Retirement
is not a Nasdaq trading day, the Employee may exercise the vested but unexercised portion of this
Option only until the Nasdaq trading day immediately preceding such date or prior to the
Expiration Date, whichever shall first occur. Upon the Employee’s Termination of Service, any unvested portion of this Option (after applying
the rules of Paragraphs 3 and 5) shall immediately terminate.


5. Death of Employee. In the event that the Employee incurs a Termination of Service due
to his or her death, the right to exercise one hundred percent (100%) of the Shares subject to
this Option shall vest on the date of the Employee’s death. In the event that the Employee incurs
a Termination of Service due to his or her death or in the event the Employee dies after incurring
a Termination of Service but before any vested portion of this Option terminates in accordance
with Paragraph 4 above, the administrator or executor of the Employee’s estate, may, within one
(1) year after the date of the Employee’s death, exercise any vested but unexercised portion of
this Option. However, in the event the date that is one (1) year after the date of a death
described in the preceding sentence is not a Nasdaq trading day, the administrator or



 









 






executor of the Employee’s estate may exercise the vested but unexercised portion of this Option
only until the Nasdaq trading day immediately preceding such date. Notwithstanding any contrary
provision of this Agreement, if the Employee is a resident of France and the Employee incurs a
Termination of Service due to his or her death or in the event the Employee dies after incurring a
Termination of Service but before any vested portion of this Option terminates in accordance with
Paragraph 4 above, the administrator or executor of the Employee’s estate, may, within six (6)
months after the date of the Employee’s death, exercise any vested but unexercised portion of this
Option; however, if the date that is six (6) months after the date of such a death is not a Nasdaq
trading day, the administrator or executor of the Employee’s estate may exercise the vested but
unexercised portion of this Option only until the Nasdaq trading day immediately preceding such
date. Any transferee under this Paragraph 5 must furnish the Company in such form or manner as
the Company may designate (a) written notice of his or her status as a transferee, (b) evidence
satisfactory to the Company to establish the validity of the transfer of this Option and
compliance with any applicable law pertaining to the transfer, and (c) written acceptance of the
terms and conditions of this Option as set forth in this Agreement. In the event that any
applicable law limits the Committee’s ability to accelerate the vesting of this Option or to
extend the exercise period of this Option, this Paragraph 5 shall be limited to the extent
required to comply with applicable law. Notwithstanding any contrary provision of this Agreement,
if the Employee is subject to Hong Kong’s ORSO provisions, the first sentence of this Paragraph 5
(relating to accelerated vesting upon death) shall not apply to this Option.



6. Persons Eligible to Exercise Option. Except as provided in Paragraph 5 above or as
otherwise determined by the Committee in its discretion, this Option shall be exercisable during
the Employee’s lifetime only by the Employee.



7. Option is Not Transferable. Except as provided in Paragraph 5 above or in the Plan,
this Option and the rights and privileges conferred hereby shall not be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be
subject to sale under execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of this Option, or of any right or privilege
conferred hereby, or upon any attempted sale under any execution, attachment or similar process,
this Option and the rights and privileges conferred hereby immediately shall become null and void.



8. Exercise of Option. This Option may be exercised by the person then entitled to do so
as to any Shares which may then be purchased by (a) giving notice in such form or manner as the
Company may designate, (b) providing full payment of the Exercise Price and any applicable fees
and required Tax Obligations (as defined in Paragraph 11 below), and (c) giving satisfactory
assurances in the form or manner requested by the Company that the Shares to be purchased upon the
exercise of this Option are being purchased for investment and not with a view to the distribution
thereof. Exercise of this option will be permitted only in the form and manner specified by the
Company’s Stock Programs department in Santa Clara, California (or such successor as the Company
may later designate) from time to time. This Option may be exercised only on Nasdaq trading days.
However, if Nasdaq is scheduled to be open for trading on a particular day but does not so open
or closes substantially early due to an unforeseen event (for example, a natural or man-made
catastrophic event), as determined by the Committee, and that day otherwise would be the last day
this Option is exercisable, the Option shall remain exercisable through the next Nasdaq trading
day. If the Employee receives a hardship withdrawal from his or her account (if any) under the
Company’s Employee Savings and Retirement Plan (the “401(k) Plan”), this Option may not be
exercised during the six (6) month period following the hardship withdrawal (unless the Company
determines that such exercise would not jeopardize the tax-qualification of the 401(k) Plan).



9. Cashless Exercise Required. If the Committee determines that a cashless exercise of
this Option is necessary or advisable, any Shares to be acquired pursuant to the exercise of the
Option shall be sold immediately upon exercise and the Employee shall receive the proceeds from
the sale, less the Exercise Price and any applicable fees and required Tax Obligations (as defined
in Paragraph 11 below).



10. Conditions to Exercise. Except as provided in Paragraph 9 above or as otherwise
required as a matter of law, the Exercise Price for this Option may be paid in one (1) (or a
combination of two (2) or more) of the following forms:




          (a) Personal check, a cashier’s check or a money order.




 









 








          (b) Irrevocable directions to a securities broker approved by the Company to sell all or part
of the Shares subject to the Option and to deliver to the Company from the sale proceeds an amount
sufficient to pay the Exercise Price and any applicable fees and required Tax Obligations (as
defined in Paragraph 11 below). (The balance of the sale proceeds, if any, will be delivered to
Employee.)




          (c) Irrevocable directions to a securities broker or lender approved by the Company to pledge
all or part of the Shares subject to the Option as security for a loan and to deliver to the
Company from the loan proceeds an amount sufficient to pay the Exercise Price and any applicable
fees and required Tax Obligations (as defined in Paragraph 11 below).



11. Tax Withholding and Payment Obligations. Before the delivery of any Shares or cash
pursuant to the exercise of this Option or at such earlier time as the Tax Obligations (as defined
below) are due, the Employee acknowledges and agrees that the Company shall have the power and the
right to deduct or withhold, or require the Employee to remit to the Company, an amount sufficient
to satisfy all Tax Obligations. “Tax Obligations” for this purpose means all taxes and social
insurance liability obligations and other requirements in connection with this Option, including,
without limitation, (a) all federal, state and local income, employment and any other applicable
taxes that are required to be withheld by the Company (or the employing Affiliate), (b) the
Employee’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 exercise of the Option or the sale or other transfer of Shares acquired pursuant to the
exercise of the Option, and (c) all other taxes or social insurance liabilities with respect to
which the Employee has agreed to bear responsibility.




     The Employee agrees as a condition of the grant of this Option to make arrangements
satisfactory to the Company to enable it to satisfy all withholding or remitting requirements
related to any and all Tax Obligations. The Employee authorizes the Company (or the employing
Affiliate) to withhold all applicable Tax Obligations from the Employee’s wages. Furthermore, the
Employee agrees to pay the Company (or the employing Affiliate) any amount of Tax Obligations the
Company (or the employing Affiliate) may be required to withhold or with respect to which the
Employee has agreed to bear as a result of the Employee’s participation in the Plan that cannot be
satisfied by deduction from the Employee’s wages or other amounts payable to the Employee. All Tax
Obligations related to this Option grant are the sole responsibility of the Employee and the
Employee acknowledges that he or she may not exercise this Option unless all Tax Obligations are
satisfied. Further, the Employee shall be bound by any additional withholding requirements included
in the Notice of Grant of this Agreement.


12. Suspension of Exercisability. If at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of Shares upon any securities exchange
or under any applicable law, or the consent or approval of any governmental regulatory authority,
is necessary or desirable as a condition of the purchase of Shares hereunder, this Option may not
be exercised, in whole or in part, unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of any conditions not acceptable to
the Company. The Company shall make reasonable efforts to meet the requirements of any applicable
law or securities exchange and to obtain any required consent or approval of any governmental
authority.



13. Address for Notices. Any notice to be given to the Company under the terms of this
Agreement shall be addressed to the Company, in care of Stock Programs, at Applied Materials,
Inc., 2881 Scott Blvd., M/S 2023, P.O. Box 58039, Santa Clara, CA 95050, U.S.A. or at such other
address as the Company may hereafter designate in writing.



14. No Rights of Stockholder. Neither the Employee (nor any transferee) shall be or have
any of the rights or privileges of a stockholder of the Company in respect of any of the Shares
issuable pursuant to the exercise of this Option, 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 Employee (or transferee)
(including through electronic delivery to a brokerage account). Nothing in the Plan or this
Agreement shall create an obligation on the part of the Company to repurchase any Shares purchased
hereunder.



15. No Effect on Employment. Subject to any employment contract with the Employee, the
terms of the Employee’s employment with the Company and its Affiliates shall be determined from
time to time by the Company or the Affiliate employing the Employee (as the case may be), and the
Company or the Affiliate employing the Employee, as the case may



 









 






be, shall have the right, which is hereby expressly reserved, to terminate or change the terms of
the employment of the Employee at any time for any reason whatsoever, with or without good cause
(subject to the provisions of applicable law). The transactions contemplated hereunder and the
Option’s Vesting Schedule do not constitute any express or implied promise of continued employment
for any period of time. A leave of absence or an interruption in service (including an
interruption during military service) authorized or acknowledged by the Company or the Affiliate
employing the Employee, as the case may be, will not be deemed a Termination of Service for
purposes of this Agreement.



16. Plan Governs. This Agreement is subject to all terms and provisions of the Plan. In
the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan shall govern. Terms used and not defined in
this Agreement shall have the meaning set forth in the Plan. This Option is not an incentive
stock option as defined in Section 422 of the U.S. Internal Revenue Code. The Company may, in its
discretion, issue newly issued Shares or treasury Shares pursuant to this Option.



17. Maximum Term of Option. Except as provided in Paragraph 5 above, this Option is not
exercisable after the Expiration Date.



18. Binding Agreement. Subject to the limitation on the transferability of this Option
contained herein, this Agreement shall be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.



19. Committee Authority. The Committee shall have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret or revoke any such rules. The Committee may
delegate certain of its authority and powers with respect to the Plan and this Agreement in
accordance with the terms of the Plan. All actions taken and all interpretations and
determinations made by the Committee or its delegates in good faith shall be final and binding
upon the Employee, the Company and all other interested persons, and shall be given the maximum
deference permitted by law. The Committee and its delegates shall not be personally liable for
any action, determination or interpretation made in good faith with respect to the Plan or this
Agreement.



20. Restrictions on Share Transferability. The Committee may impose such restrictions on
any Shares acquired pursuant to the exercise of this 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. The Employee’s sale or other transfer of the Shares may be
subject to any market blackout period that may be imposed by the Company and must comply with the
Company’s insider trading policies and any other applicable securities laws.



21. Captions. Captions provided herein are for convenience only and are not to serve as a
basis for interpretation or construction of this Agreement.



22. Agreement Severable. In the event that any provision in this Agreement shall be held
invalid or unenforceable, such provision shall be severable from, and such invalidity or
unenforceability shall not be construed to have any effect on, the remaining provisions of this
Agreement.



23. Modifications to the Agreement. This Agreement constitutes the entire understanding
of the parties on the subjects covered. The Employee expressly warrants that he or she is not
accepting this Agreement in reliance on any promises, representations, or inducements other than
those contained herein. Modifications to this Agreement can be made only in an express written
contract executed by a duly authorized officer of the Company.



24. Amendment, Suspension, Termination. By accepting this Option, the Employee expressly
warrants that he or she has received an Option to purchase Shares under the Plan as set forth in
this Agreement, and has received, read and understood a description of the Plan. The Employee
understands that the Plan is discretionary in nature and may be modified, suspended or terminated
by the Company at any time in accordance with the terms of the Plan.




 









 







25. Labor Law. By accepting this Option, the Employee acknowledges that: (a) the grant
of this Option is a one-time benefit which does not create any contractual or other right to
receive any future grants of stock options or other awards, or any benefits in lieu of such
awards; (b) all determinations with respect to any future grants, including, but not limited to,
the times when any awards shall be granted, the number of Shares subject to any awards, the
Exercise Price or purchase price of any awards, and the time or times when any awards shall be
exercisable or vested, will be at the sole discretion of the Committee; (c) the Employee’s
participation in the Plan is voluntary; (d) the value of this Option is an extraordinary item of
compensation which is outside the scope of the Employee’s employment contract, if any; (e) this
Option is not part of the Employee’s normal or expected compensation for purposes of calculating
any severance, resignation, redundancy, end of service payments, bonuses, long-service awards,
pension or retirement benefits or any similar payments; (f) the vesting of this Option shall cease
upon the Employee’s termination of employment for any reason except as may otherwise be explicitly
provided in the Plan or this Agreement; (g) the future value of the underlying Shares is unknown
and cannot be predicted with any certainty; (h) if the underlying Shares do not increase in value
during term of this Option, the Option will have no value; (i) this Option has been granted to the
Employee in the Employee’s status as an employee of the Company or its Affiliate; (j) any claims
resulting from this Option shall be enforceable, if at all, solely against the Company; and (k)
there shall be no additional obligations for any Affiliate employing the Employee as a result of
this Option.



26. Disclosure of Employee Information. By accepting this Option, the Employee consents
to the collection, use and transfer of personal data as described in this Paragraph. The Employee
understands that the Company and its Affiliates hold certain personal information about him or
her, including his or her name, home address and telephone number, date of birth, social security
or identity number, salary, nationality, job title, any shares of stock or directorships held in
the Company, details of all stock options or any other entitlement to shares of stock awarded,
canceled, exercised, vested, unvested or outstanding in his or her favor, for the purpose of
managing and administering the Plan (collectively, “Data”).



The Employee further understands that the Company and/or its Affiliates will transfer Data amongst
themselves as necessary for the purpose of implementation, administration and management of his or
her participation in the Plan, and that the Company and/or any of its Affiliates may each further
transfer Data to any third parties assisting the Company in the implementation, administration and
management of the Plan. The Employee understands that these recipients may be located in the
European Economic Area, or elsewhere, such as in the U.S. or Asia.



The Employee authorizes the Company to receive, possess, use, retain and transfer the Data in
electronic or other form, for the purposes of implementing, administering and managing his or her
participation in the Plan, including any requisite transfer to a broker or other third party with
whom he or she may elect to deposit any Shares acquired upon exercise of this Option of such Data
as may be required for the administration of the Plan and/or the subsequent holding of Shares on
his or her behalf. The Employee understands that he or she may, at any time, view the Data,
require any necessary amendments to the Data or withdraw the consent herein in writing by
contacting the Human Resources department and/or the Stock Programs Administrator for the Company
and/or its applicable Affiliates.



27. Notice of Governing Law. This Option shall be governed by, and construed in
accordance with, the laws of the State of California in the U.S.A. without regard to principles of
conflict of laws.