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                                                                   EXHIBIT 10.37

                             APPLIED MATERIALS, INC.
                           1995 EQUITY INCENTIVE PLAN
                   (SHOWING CHANGES THROUGH DECEMBER 31, 2003)

         APPLIED MATERIALS, INC., having adopted the Applied Materials, Inc.
1995 Equity Incentive Plan (the "Plan") effective as of December 7, 1994, and
having amended and restated the Plan most recently effective as of August 1,
2001, hereby again amends and restates the Plan in its entirety, effective as of
April 16, 2002, as follows:

                                   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
shareholders.

                                    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      "Affiliated SAR" means an SAR that is granted in connection
with a related Option, and which automatically will be deemed to be exercised at
the same time that the related Option is exercised.

         2.4      "Annual Revenue" means the Company's or a business unit's net
sales for the Fiscal Year, determined in accordance with generally accepted
accounting principles; provided, however, that prior to the Fiscal Year, the
Committee shall determine whether any significant item(s) shall be excluded or
included from the calculation of Annual Revenue with respect to one or more
Participants.

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         2.5      "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.

         2.6      "Award Agreement" means the written agreement setting forth
the terms and provisions applicable to each Award granted under the Plan.

         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 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     "Controllable Profits" means as to any Fiscal Year, a business
unit's Annual Revenue minus (a) cost of sales, (b) research, development, and
engineering expense, (c) marketing and sales expense, (d) general and
administrative expense, (e) extended receivables expense, and (f) shipping
requirement deviation expense.

         2.13     "Customer Satisfaction MBOs" means as to any Participant, 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.

         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.

         2.16     "Earnings Per Share" means as to any Fiscal Year, the
Company's Net Income or a business unit's Pro Forma Net Income, divided by a
weighted average number of common shares outstanding and dilutive common
equivalent shares deemed outstanding.

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         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 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     "Freestanding SAR" means a SAR that is granted independently
of any Option.

         2.22     "Grant Date" means, with respect to an Award, the date that
the Award was granted.

         2.23     "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.

         2.24     "Individual MBOs" means as to a Participant, the objective and
measurable goals set by a "management by objectives" process and approved by the
Committee (in its discretion).

         2.25     "Net Income" means as to any Fiscal Year, the income after
taxes of the Company for the Fiscal Year determined in accordance with generally
accepted accounting principles, provided that prior to the Fiscal Year, the
Committee shall determine whether any significant item(s) shall be included or
excluded from the calculation of Net Income with respect to one or more
Participants.

         2.26    "New Orders" means as to any Fiscal Year, 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     "Option" means an Incentive Stock Option or a Nonqualified
Stock Option.

         2.30     "Participant" means an Employee, Consultant, or Nonemployee
Director who has an outstanding Award.

         2.31     "Performance Goals" means the goal(s) (or combined goal(s))
determined by the Committee (in its discretion) to be applicable to a
Participant with respect to an Award. As determined by the Committee, the
Performance Goals applicable to an Award may provide for a

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targeted level or levels of achievement using one or more of the following
measures: (a) Annual Revenue, (b) Controllable Profits, (c) Customer
Satisfaction MBOs, (d) Earnings Per Share, (e) Individual MBOs, (f) Net Income,
(g) New Orders, (h) Pro Forma Net Income, (i) Return on Designated Assets, and
(j) Return on Sales. The Performance Goals may differ from Participant to
Participant and from Award to Award.

         2.32     "Performance Share" means an Award granted to a Participant
pursuant to Section 8.

         2.33     "Performance Unit" means an Award granted to a Participant
pursuant to Section 8.

         2.34     "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, each Period of Restriction shall have a duration
of not less than three years from the Grant Date unless otherwise approved by
the holders of a majority of the Shares which are present in person or by proxy
and entitled to vote at any Annual or Special Meeting of Stockholders, or unless
approved by the Committee at its discretion solely by reason of death,
Disability, Retirement or major capital change.

         2.35    "Plan" means the Applied Materials, Inc. 1995 Equity Incentive
Plan, as set forth in this instrument and as hereafter amended from time to
time.

         2.36     "Pro Forma Net Income" means as to any business unit for any
Fiscal Year, the Controllable Profits of such business unit, minus allocations
of designated corporate expenses.

         2.37     "Restricted Stock" means an Award granted to a Participant
pursuant to Section 7.

         2.38     "Retirement" means, in the case of an Employee or 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) Years of Service. Notwithstanding the preceding, in
the case of any Option granted to any Employee prior to December 10, 1998,
"Retirement" means a Termination of Service by reason of the Employee's
retirement at or after his or her normal retirement date under the Applied
Materials, Inc. Employee Savings and Retirement Plan, or any successor plan.
With respect to a Consultant, no Termination of Service shall be deemed to be on
account of "Retirement."

         2.39     "Return on Designated Assets" means as to any Fiscal Year, the
Pro Forma Net Income of a business unit, divided by the average of beginning and
ending business unit designated assets, or Net Income of the Company, divided by
the average of beginning and ending designated corporate assets.

         2.40     "Return on Sales" means as to any Fiscal Year, the percentage
equal to the Company's Net Income or the business unit's Pro Forma Net Income,
divided by the Company's or the business unit's Annual Revenue.

         2.41     "Rule 16b-3" means Rule 16b-3 promulgated under the 1934 Act,
and any future regulation amending, supplementing or superseding such
regulation.

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         2.42     "Section 16 Person" means a person who, with respect to the
Shares, is subject to Section 16 of the 1934 Act.

         2.43     "Shares" means the shares of common stock of the Company.

         2.44     "Stock Appreciation Right" or "SAR" means an Award, granted
alone or in connection with a related Option, that pursuant to Section 7 is
designated as an SAR.

         2.45     "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.

         2.46     "Tandem SAR" means an SAR that is granted in connection with a
related Option, the exercise of which shall require forfeiture of the right to
purchase an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).

         2.47     "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.

         2.48     "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 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.

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         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) adopt rules for the administration, interpretation and application of the
Plan as are consistent therewith, and (f) interpret, amend or revoke any such
rules.

         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.

         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 297,200,000. Shares granted under the Plan may be either authorized but
unissued Shares or treasury Shares.

         4.2      Lapsed Awards. If an Award is settled in cash, or is
cancelled, terminates, expires, or lapses for any reason (with the exception of
the termination of a Tandem SAR upon exercise of the related Option, or the
termination of a related Option upon exercise of the corresponding Tandem SAR),
any Shares subject to such Award again shall be available to be the subject of
an Award.

         4.3      Adjustments in Awards and Authorized Shares. In the event of
any merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered 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, in such manner as the
Committee (in its sole discretion) shall determine to be appropriate 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.

         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 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; or

                           (b)      The expiration of ten (10) years from the
Grant Date; or

                           (c)      The expiration of one (1) year 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. However, in no event may any Option granted to a
Section 16 Person be exercisable until at least six (6) months following the
Grant Date (or such shorter period as may be permissible while maintaining
compliance with Rule 16b-3).

         5.6      Payment. Options shall be exercised by the Participant's
delivery of a written notice of exercise 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 written notification
of exercise 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.

         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

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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 ten (10) 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 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.
The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any
combination thereof.

                  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. However, the
exercise price of a Freestanding SAR shall be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date. The exercise price
of Tandem or Affiliated SARs shall equal the Exercise Price of the related
Option. In no event shall an SAR granted to a Section 16 Person become
exercisable until at least six (6) months after the Grant Date (or such shorter
period as may be permissible while maintaining compliance with Rule 16b-3).

         6.2      Exercise of Tandem SARs. Tandem SARs may be exercised for all
or part of the Shares subject to the related Option upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR may
be exercised only with respect to the Shares for which its related Option is
then exercisable. With respect to a Tandem SAR granted in connection with an
Incentive Stock Option: (a) the Tandem SAR shall expire no later than the
expiration of the underlying Incentive Stock Option; (b) the value of the payout
with respect to the Tandem SAR shall

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be for no more than one hundred percent (100%) of the difference between the
Exercise Price of the underlying Incentive Stock Option and the Fair Market
Value of the Shares subject to the underlying Incentive Stock Option at the time
the Tandem SAR is exercised; and (c) the Tandem SAR shall be exercisable only
when the Fair Market Value of the Shares subject to the Incentive Stock Option
exceeds the Exercise Price of the Incentive Stock Option.

         6.3      Exercise of Affiliated SARs. An Affiliated SAR shall be deemed
to be exercised upon the exercise of the related Option. The deemed exercise of
an Affiliated SAR shall not necessitate a reduction in the number of Shares
subject to the related Option.

         6.4      Exercise of Freestanding SARs. Freestanding SARs shall be
exercisable on such terms and conditions as the Committee, in its sole
discretion, shall determine. However, no SAR granted to a Section 16 Person
shall be exercisable until at least six (6) months after the Grant Date (or such
shorter period as may be permissible while maintaining compliance with Rule
16b-3).

         6.5      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.

         6.6      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.

         6.7      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

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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. However, in no event may the restrictions on Restricted Stock
granted to a Section 16 Person lapse prior to six (6) months following the Grant
Date (or such shorter period as may be permissible while maintaining compliance
with Rule 16b-3).

         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 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. 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. 1995 Equity 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 2.35, 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.

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<PAGE>

         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.

                  With respect to Restricted Stock granted to a Section 16
Person, any dividend or distribution that constitutes a "derivative security" or
an "equity security" under Section 16 of the 1934 Act shall be subject to a
Period of Restriction equal to the longer of: (a) the remaining Period of
Restriction on the Shares of Restricted Stock with respect to which the dividend
or distribution is paid; or (b) six (6) months.

         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.

                                    SECTION 8
                    PERFORMANCE UNITS AND PERFORMANCE SHARES

         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 in its discretion which, depending on the extent to
which they are met, will determine the number or value of Performance
Units/Shares that will be paid out to the Participants. The time period during
which the performance objectives must be met shall be called the "Performance
Period." Performance Periods of Awards granted to Section 16 Persons shall, in
all cases, exceed six (6) months in length (or such shorter period as may be
permissible while maintaining compliance with Rule 16b-3). 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.

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<PAGE>

                  8.3.1    General Performance Objectives. The Committee may set
performance objectives based upon the achievement of Company-wide, divisional,
or individual goals, 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
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 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; provided, however, that Performance Periods of Awards granted to
Section 16 Persons shall not be less than six (6) months (or such shorter period
as may be permissible while maintaining compliance with Rule 16b-3).

         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 OPTIONS

         The provisions of this Section 9 are applicable only to Options granted
to Nonemployee Directors. The provisions of Section 5 are applicable to Options
granted to Employees and Consultants (and to the extent provided in Section
9.2.8, to Options granted to Nonemployee Directors).

         9.1      Granting of Options.

                  9.1.1    Initial Grants. Each Nonemployee Director who first
becomes a Nonemployee Director on or after the effective date of this Plan,
automatically shall receive, as of

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<PAGE>

the date that the individual first is appointed or elected as a Nonemployee
Director, an Option to purchase 30,000 Shares.

                  9.1.2    Ongoing Grants. Each Nonemployee Director who both
(a) is a Nonemployee Director on the last business day of a Fiscal Year, and (b)
has served as a Nonemployee Director for the entire Fiscal Year which includes
such last business day, automatically shall receive, as of such last business
day only, an Option to purchase 15,000 Shares.

         9.2      Terms of Options.

                  9.2.1    Option Agreement. Each Option granted pursuant to
this Section 9 shall be evidenced by a written Award Agreement between the
Participant and the Company.

                  9.2.2    Exercise Price. The Exercise Price for the Shares
subject to each Option granted pursuant to this Section 9 shall be 100% of the
Fair Market Value of such Shares on the Grant Date.

                  9.2.3    Exercisability.

                           (a)      Each Option granted pursuant to Section
9.1.1 shall become exercisable as to 9,000 Shares on the first anniversary of
the Grant Date, as to an additional 8,250 Shares on the second anniversary of
the Grant Date, as to an additional 7,500 Shares on the third anniversary of the
Grant Date, and as to the remaining 5,250 Shares on the fourth anniversary of
the Grant Date.

                           (b)      Each Option granted pursuant to Section
9.1.2 shall become exercisable as to 3,750 Shares on the first anniversary of
the Grant Date, and as to an additional 3,750 Shares on each succeeding
anniversary until 100% of the Shares subject to such Option have become
exercisable.

Notwithstanding the preceding, once a Participant ceases to be a Director, his
or her Options which are not then exercisable shall never become exercisable and
shall be immediately forfeited, except to the limited extent provided in the
Sections 9.2.4 and 9.2.6.

                  9.2.4    Retirement of Participant. In the event that a
Participant is age sixty (60) or over and has completed 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 his or her Options that
remain unexercisable immediately prior to such Retirement shall accrue on the
date of Retirement in accordance with the following rules. If the Participant
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
Participant remained a Nonemployee Director throughout such 12 month period)
shall vest on the Retirement date. If the Participant 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 Participant
remained a Nonemployee Director throughout such 12 month period) shall vest on
the Retirement date. If the Participant has at least twenty (20) (but less than
twenty-five (25)) Years of Service as of the date of the Retirement, (a) one
hundred percent (100%) of the Shares that otherwise

                                       14

<PAGE>

would have vested during the twelve (12) months immediately following the
Retirement (had the Participant remained a Nonemployee Director throughout such
12 month period) shall vest on the Retirement date, and (b) fifty percent (50%)
of the Shares that otherwise would have vested during the second twelve (12)
months following the Retirement (had the Participant remained a Nonemployee
Director throughout such 12 month period) shall vest on the Retirement date. If
the Participant 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 Participant remained a Nonemployee Director throughout such
24 month period) shall vest on the Retirement date.

                  9.2.5    Expiration of Options. Each Option granted pursuant
to this Section 9 shall terminate upon the first to occur of the following
events:

                           (a)      The expiration of five (5) years or (in the
case of any Option granted after October 10, 2000) seven (7) years from the
Grant Date; or

                           (b)      The expiration of seven (7) months from the
date of the Participant's Termination of Service for any reason other than the
Participant's death, Disability or Retirement; or

                           (c)      The expiration of one (1) year from the date
of the Participant's Termination of Service by reason of Disability or
Retirement.

                  9.2.6    Death of Participant. Notwithstanding the provisions
of Section 9.2.5, if a Participant dies prior to the expiration of his or her
Options in accordance with Section 9.2.5, then (a) one hundred percent (100%) of
the Shares covered by his or her Options shall immediately become one hundred
percent (100%) exercisable, and (b) his or her Options shall terminate one (1)
year after the date of his or her death.

                  9.2.7    Not Incentive Stock Options. Options granted pursuant
to this Section 9 shall not be designated as Incentive Stock Options.

                  9.2.8    Other Terms. All provisions of the Plan not
inconsistent with this Section 9 shall apply to Options granted to Nonemployee
Directors.

                                   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 and procedures as shall be
determined by the Committee in its sole discretion.

         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.

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<PAGE>

         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.

         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. 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. 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, (a) 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 (b) 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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<PAGE>

         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 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 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 April 16, 2002, 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 December 6, 2004.

                                   SECTION 12
                                 TAX WITHHOLDING

         12.1     Withholding Requirements. Prior to the delivery of any Shares
or cash pursuant to an Award (or exercise thereof), 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 federal, state, and local taxes
(including the Participant's FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).

         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 withholding obligation, 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. The amount of the
withholding requirement 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 with respect to the Award on the
date that the amount of tax to be withheld 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 taxes 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.

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<PAGE>

         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.

         13.6     Captions. Captions are provided herein for convenience only,
and shall not serve as a basis for interpretation or construction of the Plan.

                                       18