exv10w46



 





Exhibit 10.46




[EMPL_NAME]

Employee ID: [EMPLID]

Grant Number: [GRANT_ID]




APPLIED MATERIALS, INC.

NON-QUALIFIED STOCK OPTION GRANT AGREEMENT (“Agreement”)




Applied Materials, Inc. (the “Company”) hereby grants you, [EMPL_NAME] (the “Employee”), an Option under the Company’s 2000 Global Equity Incentive Plan (the
“Plan”) to purchase shares of common stock of the Company. The date of this 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 Agreement (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 Option:	 	Exercise Price per Share:
	[MAX_SHARES]

	 	US[SHARE_PRICE]






Number of Shares and Vesting of Stock Options: Please refer to the UBS One Source website for the number of Shares and their respective vesting dates related
to this Option grant (click on the specific grant under the tab labeled “Grants/Awards/Units”).



Expiration Date: 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 Disability

	 	6 months
	 
	 	 
	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: The taxable event for the Option may be on the Grant Date or the exercise
date, depending on when you accept the Option. If you accept the
Option during the 60 day period following receipt of the Option
information, you will be taxed at Grant. If you accept the Option
after the 60 day period following the receipt of the Option
information, you will be taxed when you exercise the Option. To obtain the deferred taxable event (i.e., at exercise), click your
acceptance below after the 60-day period following receipt of the Option information has passed.



For Employees employed in France on the Grant Date:





	A.	 	The Exercise Price per Share is the greater of (i) the Fair Market Value of the Company’s common stock on the Grant Date, or
(ii) 95% of the average Fair Market Value of the





 









 







	 	 	Company’s common stock for the 20 trading days preceding the Grant Date.
	 
	B.	 	In addition to the foregoing, except in the event of the death of the Employee, the Shares acquired upon exercise of this 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,
currently four years after the Grant Date of the Option.





For Employees employed in Israel on the Grant Date: Options for Israeli employees are 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 the Israeli employees by their managers. In addition to the foregoing, in order to qualify for favorable tax
treatment, the Shares acquired upon exercise of this 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, currently two years from the Grant Date of the
Option. Clicking your acceptance of this electronic agreement will also indicate your acceptance of the capital gains tax route
under Section 102, as more specifically set forth below and authorize and direct UBS Financial Services, Inc. to transfer to the
Section 102 Trustee all net proceeds of cash or shares resulting from any transaction involving this Option grant.



For Employees employed in Italy on the Grant Date: The Exercise Price per Share is the greater of (i) the Fair Market Value of the
Company’s common stock on the Grant Date, or (ii) the average of the Fair Market Value of the Company’s common stock during the one
month period preceding the Grant Date.



For Employees employed in the United Kingdom (U.K.) on the Grant Date:




A. Inland Revenue Approved Options. If this Option is granted under the Inland Revenue approved sub-plan, the Exercise Price per
Share is the Fair Market Value on the trading day preceding the Grant Date. The maximum aggregate value of all Inland Revenue
approved Options held by the Employee at any one time may not exceed £30,000. If the £30,000 threshold is met, any additional
Options granted to the Employee will be standard non-qualified Options.



B. National Insurance Contribution (“NIC”). As a condition to your acceptance of this Option (both Inland Revenue approved
Options and non-qualified Options), you must sign an election under which you agree to pay all 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). Payment of secondary NIC will be
through deduction at source, if practicable, in the form of withholding from (1) Employee’s salary or (2) the proceeds of a
“cashless” exercise or “same-day-sale” of shares issued upon exercise of the Option. If withholding is not practicable, you may
elect to make the secondary NIC payment either (a) directly to the Company by cash or check or (b) through the transfer of proceeds
to the Company from the sale of shares held by you.








IMPORTANT:




IT IS YOUR RESPONSIBILITY TO EXERCISE THIS OPTION BEFORE IT 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 your acceptance of this electronic contract 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.”



If you elect the Capital Gains Route under Section 102, by clicking your acceptance of this electronic
contract, 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]
	 

	 	[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 Agreement 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 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 Agreement and 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 AGREEMENT




1. Vesting Schedule. As of the date of this Agreement, this option is scheduled to
become exercisable (vest) as to the number of shares, and on the dates shown, on the first page of
the Nonqualified Stock Option Grant Agreement. In all cases, 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).



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 set
forth on the UBS One Source website (click on the specific grant under the tab labeled
“Grants/Awards/Units”) 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 unless otherwise recommended by the Company’s VP of HR.



          (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 unless otherwise
recommended by the Company’s VP of HR and approved by the Company’s Chief Executive Officer (the
“CEO”).



          (d) Example 1. Employee is scheduled to vest in shares on January 1, 2007. On May 1, 2006,
Employee begins a 6-month PLOA. Employee’s shares still will be scheduled to vest on January 1,
2007.



          (e) Example 2. Employee is scheduled to vest in shares on January 1, 2007. On May 1, 2006,
Employee begins a 9-month PLOA. Employee’s shares subject to this option that are scheduled to
become exercisable after November 2, 2006 will be modified (this is the date on which the
Employee’s PLOA exceeds 6 months). Employee’s shares now will be scheduled to vest on April 1,
2007 (3 months after the originally scheduled date).



          (f) Example 3. Employee is scheduled to vest in shares on January 1, 2007. On May 1, 2006,
Employee begins a 13-month PLOA. Employee’s shares will terminate on May 2, 2007 unless otherwise
recommended by the Company’s VP of HR and approved by the CEO.



     In general, a “personal leave of absence” does not include any legally required leave of
absence. The duration of the Employee’s PLOA 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. Additional 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:



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          (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 North American Human Resources Policy No. 2-06, or any successor
thereto). In the event that any applicable law limits the Company’s ability to provide additional
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, Disability 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 (or after
attaining age 65), 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. In the event of
the Employee’s Termination of Service due to Disability, the Employee may, within six (6) months
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 six (6) months after the date of the Termination of Service due to Disability 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. For
purposes of this Agreement, “Disability” means a permanent and total disability that would qualify
the Employee for benefits under the Company’s long-term disability benefit plan, as amended from
time to time.



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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 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 death , exercise any 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 Company’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, 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 the amount of any
income tax the Company determines is required to be withheld by reason of the exercise of this
option or as is otherwise required under 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, CA (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) and that day otherwise would be the last day this option is exercisable, the option shall
remain exercisable through the next Nasdaq trading day. Whether a closure is due to an unforeseen
event shall be determined by the Committee or its designee. 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”) for U.S. employees, this option may not be exercised during the six (6)
month period following the hardship withdrawal (unless the Company determines that exercise would
not jeopardize the tax-qualification of the 401(k) Plan).



9. Cashless Exercise Required. If the Company determines that a cashless exercise of this
option is necessary or advisable, the shares subject to this 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 taxes or other required withholding.



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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 made 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 option shares and to deliver to the Company from the sale proceeds an amount sufficient to
pay the Exercise Price and any required tax-related items (as defined 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
option shares 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 required tax-related items (as defined below).



11. Tax Withholding and Payment Obligations. The Company will assess its requirements
regarding tax, social insurance and any other payroll tax withholding and reporting in connection
with this option, including the grant, vesting or exercise of this option or sale of shares
acquired pursuant to the exercise of this option (“tax-related items”). These requirements may
change from time to time as laws or interpretations change. Regardless of the Company’s actions
in this regard, the Employee hereby acknowledges and agrees that the ultimate liability for any
and all tax-related items is and remains his or her responsibility and liability and that the
Company (a) makes no representations or undertaking regarding treatment of any tax-related items
in connection with any aspect of this option grant, including the grant, vesting or exercise of
this option and the subsequent sale of shares acquired pursuant to the exercise of this option;
and (b) does not commit to structure the terms of the grant or any aspect of this option to reduce
or eliminate the Employee’s liability regarding tax-related items. In the event the Company
determines that it and/or an Affiliate must withhold any tax-related items as a result of the
Employee’s participation in the Plan, 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
requirements. The Employee authorizes the Company and/or an Affiliate to withhold all applicable
withholding taxes from the Employee’s wages. Furthermore, the Employee agrees to pay the Company
and/or an Affiliate any amount of taxes the Company and/or an Affiliate may be required to
withhold as a result of the Employee’s participation in the Plan that cannot be satisfied by
deduction from the Employee’s wages or other cash compensation paid to the Employee by the Company
and/or an Affiliate. The Employee acknowledges that he or she may not exercise this option unless
the tax withholding obligations of the Company and/or any Affiliate are satisfied.



12. Suspension of Exercisability. If at any time the Company shall determine, in its
discretion, that the listing, registration or qualification of the 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 shall have been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered to the Employee (or transferee). Nothing in the Plan or this option
shall create an obligation on the part of the Company to repurchase any shares purchased
hereunder.



15. No Effect on Employment. The Employee’s employment with the Company and its
Affiliates is on an at-will basis only, subject to the provisions of applicable law. Accordingly,
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 shall have the right, which is hereby expressly reserved, to
terminate or



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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).



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. All actions taken
and all interpretations and determinations made by the Committee in good faith shall be final and
binding upon the Employee, the Company and all other interested persons. The Committee shall not
be personally liable for any action, determination or interpretation made in good faith with
respect to the Plan or this Agreement.



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



21. 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.



22. 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 or the Plan can be made only in an
express written contract executed by a duly authorized officer of the Company.



23. Amendment, Suspension, Termination. By accepting this option, the Employee expressly
warrants that he or she has received an option to purchase stock under the Plan, 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.



24. 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 future grants of options, or benefits in lieu of options; (b) all determinations with
respect to any future grants, including, but not limited to, the times when the stock options
shall be granted, the number of shares subject to each stock option, the Exercise Price, and the
time or times when each stock option shall be exercisable, will be at the sole discretion of the
Company; (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 similar payments; (f) the vesting
of this option ceases upon 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 certainty; (h) if the underlying shares do not increase in
value, this 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 Affiliates; (j) any claims resulting from
this option shall be enforceable, if at all, against the Company; and (k) there shall be no
additional obligations for any Affiliate employing the Employee as a result of this option.



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25. 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 (“Data”). The Employee further understands that the Company
and/or its Affiliates will transfer Data among 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 of stock
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 of stock 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.



26. 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.



27. Notice to Directors. If the Employee is a director or shadow director of a U.K.
Affiliate, the Employee agrees to notify the U.K. Affiliate in writing of his or her interest in
the Company and the number of shares or rights to which the interest relates. The Employee agrees
to notify the U.K. Affiliate when this option is exercised and when shares acquired under the Plan
are sold. This disclosure requirement also applies to any rights or shares acquired by the
Employee’s spouse or child (under the age of 18).



28. Private Offer. This offering is part of a private transaction; this is not an offer
to the public.




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