Document:

exv10wxyy

 

Exhibit 10(y)

Description of Chairman/CEO Retirement Policy

For 3 years following the date of retirement, a retiring management Chairman of the Board or CEO of
Wells Fargo & Company may be provided with office space, an administrative assistant, and part-time
driver at the Company’s expense. These services will be provided with the agreement of the Board of
Directors or the Human Resources Committee of the Board and the retiree on the condition that the
retiree continues to be available for consultation with management and to represent Wells Fargo
with customers, the community, and team members during this period. At the end of the 3 years, if
the retiree is still considered to be effective and is spending a reasonable amount of time
representing Wells Fargo with customers, the community, and team members, then, with the
recommendation of the Company’s current CEO and approval by the Human Resources Committee, these
services may be extended for a maximum of an additional two years.exv10w9

 

Exhibit
10.9

NOVELLUS SYSTEMS, INC.

2001 STOCK INCENTIVE PLAN

(Amended and Restated February 15, 2007)

     1. Purposes of the Plan. The purposes of this Stock Incentive Plan are to attract and
retain the best available personnel, to provide additional incentive to Employees, Directors and
Consultants and to promote the success of the Company’s business.

     2. Definitions. As used herein, the following definitions shall apply:

          (a) “Administrator” means the Board or any of the Committees appointed to administer
the Plan.

          (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.

          (c) “Applicable Laws” means the legal requirements relating to the administration of
stock incentive plans, if any, under applicable provisions of federal securities laws, state
corporate and securities laws, the Code, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction applicable to Awards granted to residents
therein.

          (d) “Award” means the grant of an Option, Restricted Stock or Restricted Stock Unit
under the Plan.

          (e) “Award Agreement” means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.

          (f) “Board” means the Board of Directors of the Company.

          (g) “Code” means the Internal Revenue Code of 1986, as amended.

          (h) “Committee” means any committee appointed by the Board to administer the Plan.

          (i) “Common Stock” means the common stock of the Company.

          (j) “Company” means Novellus Systems, Inc., a California corporation.

          (k) “Consultant” means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity.

          (l) “Continuous Service” means that the provision of services to the Company or a
Related Entity in any capacity of Employee, Director or Consultant is not interrupted or
terminated. In jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity notwithstanding any required
notice period that must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the entity for which the
Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the
Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in
the Award Agreement). An approved leave of absence shall include sick leave, military leave, or
any other authorized personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds three (3) months, and reemployment

upon expiration of such leave is not guaranteed by statute or contract, then the Incentive Stock
Option shall be treated as a Nonstatutory Stock Option on the day three (3) months and one (1) day
following the expiration of such three (3) month period.

 

 

          (m) “Corporate Transaction” means any of the following transactions:

               (i) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the Company is
incorporated;

               (ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company (including the capital stock of the Company’s subsidiary corporations);

               (iii) approval by the Company’s shareholders of any plan or proposal for the complete
liquidation or dissolution of the Company;

               (iv) any reverse merger or series of related transactions culminating in a reverse merger
(including, but not limited to, a tender offer followed by a reverse merger) in which the Company
is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such
merger are converted or exchanged by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities are transferred to
a person or persons different from those who held such securities immediately prior to such merger
or the initial transaction culminating in such merger; or

               (v) acquisition in a single or series of related transactions by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction.

          (n) “Covered Employee” means an Employee who is a “covered employee” under Section
162(m)(3) of the Code.

          (o) “Director” means a member of the Board or the board of directors of any Related
Entity.

          (p) “Disability” means a Grantee would qualify for benefit payments under the
long-term disability policy of the Company or the Related Entity to which the Grantee provides
services regardless of whether the Grantee is covered by such policy. If the Company or the
Related Entity to which the Grantee provides service does not have a long-term disability plan in
place, “Disability” means that a Grantee is permanently unable to carry out the responsibilities
and functions of the position held by the Grantee by reason of any medically determinable physical
or mental impairment. A Grantee will not be considered to have incurred a Disability unless he or
she furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.

          (q) “Employee” means any person, including an Officer or Director, who is an employee
of the Company or any Related Entity. The payment of a director’s fee by the Company or a Related
Entity shall not be sufficient to constitute “employment” by the Company.

          (r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (s) “Fair Market Value” means, that as of any date, the value of Common Stock
determined as follows:

               (i) If the Common Stock is listed on one or more established stock exchanges or national
market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ Global
Market or The NASDAQ Capital Market of The NASDAQ Stock Market LLC, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on
the principal exchange or system on which the Common Stock is listed (as determined by the
Administrator) on the date of

determination (or, if no closing sales price or closing bid was reported on that date, as
applicable, on the last trading date such closing sales price or closing bid was reported), as
reported in The Wall Street Journal or such other source as the Administrator deems reliable;

               (ii) If the Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the

 

 

closing sales price for such stock as quoted on such system or by such securities dealer on
the date of determination, but if selling prices are not reported, the Fair Market Value of a share
of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on
the date of determination (or, if no such prices were reported on that date, on the last date such
prices were reported), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

               (iii) In the absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good
faith.

          (t) “Grantee” means an Employee, Director or Consultant who receives an Award pursuant
to an Award Agreement under the Plan.

          (u) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

          (v) “Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

          (w) “Officer” means a person who is an officer of the Company or a Related Entity
within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

          (x) “Option” means an option to purchase Shares pursuant to an Award Agreement granted
under the Plan.

          (y) “Outside Director” means a Director who is not an Employee.

          (z) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (aa) “Performance — Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.

          (bb) “Plan” means this 2001 Stock Incentive Plan.

          (cc) “Related Entity” means any Parent, Subsidiary and any business, corporation,
partnership, limited liability company or other entity in which the Company, a Parent or a
Subsidiary holds a substantial ownership interest, directly or indirectly.

          (dd) “Related Entity Disposition” means the sale, distribution or other disposition by
the Company, a Parent or a Subsidiary of all or substantially all of the interests of the Company,
a Parent or a Subsidiary in any Related Entity effected by a sale, merger or consolidation or other
transaction involving that Related Entity or the sale of all or substantially all of the assets of
that Related Entity, other than any Related Entity Disposition to the Company, a Parent or a
Subsidiary.

          (ee) “Restricted Stock” means Shares issued under the Plan to the Grantee for such
consideration, if any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as established by the
Administrator.

          (ff) “Restricted Stock Units” means an Award which may be earned in whole or in part
upon the passage of time or the attainment of performance criteria established by the Administrator
and which may be settled for cash, Shares or other securities or a combination of cash, Shares or
other securities as established by the Administrator.

          (gg) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

          (hh) “Share” means a share of the Common Stock.

          (ii) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code.

     3. Stock Subject to the Plan.

          (a) Subject to the provisions of Section 10, below, the maximum aggregate number of Shares
which may be issued pursuant to all Awards is 14,860,000 Shares, plus the number of Shares that
remain

 

 

available for grants of awards under the Company’s 2001 Non-Qualified Stock Option Plan (the
2001 NQ Plan) as of May 11, 2007, plus any Shares that would otherwise return to the 2001 NQ Plan
as a result of forfeiture, termination or expiration of awards previously granted under the 2001 NQ
Plan; provided, however, that the maximum aggregate number of Shares which may be issued pursuant
to all Awards of Restricted Stock and Restricted Stock Units is 4,636,000 and that the maximum
aggregate number of Shares which may be issued pursuant to all Awards of Incentive Stock Options is
14,000,000 Shares (with all such Share amounts and limits subject to the provisions of Section 10,
below). The Shares to be issued pursuant to Awards may be authorized, but unissued, or reacquired
Common Stock.

          (b) Any Shares covered by an Award (or portion of an Award) which is forfeited or canceled,
expires or is settled in cash, shall be deemed not to have been issued for purposes of determining
the maximum aggregate number of Shares which may be issued under the Plan. Shares that actually
have been issued under the Plan pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance under the Plan, except that if unvested Shares are
forfeited, or repurchased by the Company at the lower of their original purchase price or their
Fair Market Value at the time of repurchase, such Shares shall become available for future grant
under the Plan. Notwithstanding anything to the contrary contained herein: (i) Shares tendered or
withheld in payment of an Option exercise price shall not be returned to the Plan and shall not
become available for future issuance under the Plan; and (ii) Shares withheld by the Company to
satisfy any tax withholding obligation shall not be returned to the Plan and shall not become
available for future issuance under the Plan.

     4. Administration of the Plan.

          (a) Plan Administrator.

               (i) Administration with Respect to Directors and Officers. With respect to grants of
Awards to Directors or Employees who are also Officers or Directors of the Company, the Plan shall
be administered by (A) the Board or (B) a Committee designated by the Board, which Committee shall
be constituted in such a manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the Exchange Act in
accordance with Rule 16b-3. Once appointed, such Committee shall continue to serve in its
designated capacity until otherwise directed by the Board.

               (ii) Administration With Respect to Consultants and Other Employees. With respect to
grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board.

               (iii) Administration With Respect to Covered Employees. Notwithstanding the
foregoing, grants of Awards to any Covered Employee intended to qualify as Performance-Based
Compensation shall be made only by a Committee (or subcommittee of a Committee) which is comprised
solely of two or more Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered Employees,
references to the “Administrator” or to a “Committee” shall be deemed to be references to such
Committee or subcommittee.

 

 

               (iv) Administration Errors. In the event an Award is granted in a manner inconsistent
with the provisions of this subsection (a), such Award shall be presumptively valid as of its grant
date to the extent permitted by the Applicable Laws.

          (b) Powers of the Administrator. Subject to Applicable Laws and the provisions of the
Plan (including any other powers given to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the authority, in its discretion:

               (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time
to time hereunder;

               (ii) to determine whether and to what extent Awards are granted hereunder;

               (iii) to determine the number of Shares or the amount of other consideration to be covered by
each Award granted hereunder;

               (iv) to approve forms of Award Agreements for use under the Plan;

               (v) to determine the terms and conditions of any Award granted hereunder;

               (vi) to amend the terms of any outstanding Award granted under the Plan, provided that (A) any
amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be
made without the Grantee’s written consent, provided, however, that an amendment or modification
that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee, (B) the reduction of the exercise price
of any Option awarded under the Plan shall be subject to shareholder approval and (C) canceling an
Option at a time when its exercise price exceeds the Fair Market Value of the underlying Shares, in
exchange for another Option, Restricted Stock or other Award shall be subject to shareholder
approval, unless the cancellation and exchange occurs in connection with a Corporate Transaction;

               (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan,
including without limitation, any notice of Award or Award Agreement, granted pursuant to the Plan;

               (viii) to grant Awards to Employees, Directors and Consultants employed outside the United
States on such terms and conditions different from those specified in the Plan as may, in the
judgment of the Administrator, be necessary or desirable to further the purpose of the Plan; and

               (ix) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

     The express grant in the Plan of any specific power to the Administrator shall not be
construed as limiting any power or authority of the Administrator; provided that the Administrator
may not exercise any right or power reserved to the Board. Any decision made, or action taken, by
the Administrator or in connection with the administration of this Plan shall be final, conclusive
and binding on all persons having an interest in the Plan.

     5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of
the Company, a Parent or a Subsidiary. An Employee, Director or Consultant who has been granted an
Award may, if otherwise eligible, be granted additional Awards. Awards may be granted to such
Employees, Directors or Consultants who are residing in foreign jurisdictions as the Administrator
may determine from time to time.

     6. Terms and Conditions of Awards.

          (a) Type of Awards. The Administrator is authorized under the Plan to award Options,
Restricted Stock and Restricted Stock Units with a fixed or variable price related to the Fair
Market Value of the Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance criteria or other
conditions.

 

 

          (b) Designation of Award. Each Award shall be designated in the Award Agreement. In
the case of an Option, the Option shall be designated as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, an Option will qualify as an
Incentive Stock Option under the Code only to the extent the $100,000 dollar limitation of Section
422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code is
calculated based on the aggregate Fair Market Value of the Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a Grantee during any
calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For
purposes of this calculation, Incentive Stock Options shall be taken into account in the order in
which they were granted, and the Fair Market Value of the Shares shall be determined as of the
grant date of the relevant Option.

          (c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall
determine the provisions, terms, and conditions of each Award including, but not limited to, the
Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form
of payment (cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, the following: (i) increase in
share price, (ii) earnings per share, (iii) total shareholder return, (iv) operating margin, (v)
gross margin, (vi) return on equity, (vii) return on assets, (viii) return on investment, (ix)
operating income, (x) net operating income, (xi) pre-tax profit, (xii) cash flow, (xiii) revenue,
(xiv) expenses, (xv) earnings before interest, taxes and depreciation, (xvi) economic value added
and (xvii) market share. For Awards that are not intended to qualify as Performance-Based
Compensation, the performance criteria established by the Administrator may be based on personal
management objectives, or other measures of performance selected by the Administrator. The
performance criteria may be applicable to the Company, Related Entities and/or any individual
business units of the Company or any Related Entity. Partial achievement of the specified criteria
may result in a payment or vesting corresponding to the degree of achievement as specified in the
Award Agreement.

          (d) Acquisitions and Other Transactions. The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant
future awards in connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.

          (e) Deferral of Award Payment. The Administrator may establish one or more programs
under the Plan to permit selected Grantees the opportunity to elect to defer receipt of
consideration upon exercise of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish the election procedures, the timing
of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if
any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules
and procedures that the Administrator deems advisable for the administration of any such deferral
program.

          (f) Separate Programs. The Administrator may establish one or more separate programs
under the Plan for the purpose of issuing particular forms of Awards to one or more classes of
Grantees on such terms and conditions as determined by the Administrator from time to time.

          (g) Individual Limitations on Awards.

               (i) Individual Limit for Options. The maximum number of Shares with respect to which
Options may be granted to any Grantee in any fiscal year of the Company shall be 600,000 Shares.
In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options
for up to an additional 1,200,000 Shares which shall not count against the limit set forth in the
previous sentence. The foregoing limitations shall be adjusted proportionately in connection with
any change in the Company’s capitalization pursuant to Section 10, below. To the extent required
by Section 162(m) of the Code or the regulations thereunder, in applying the foregoing limitations
with respect to a Grantee, if any Option is

 

 

canceled, the canceled Option shall continue to count against the maximum number of Shares with
respect to which Options may be granted to the Grantee. For this purpose, the repricing of an
Option shall be treated as the cancellation of the existing Option and the grant of a new Option
(if approved by shareholders).

               (ii) Individual Limit for Restricted Stock and Restricted Stock Units. For awards of
Restricted Stock and Restricted Stock Units that are intended to be Performance-Based Compensation,
the maximum number of Shares with respect to which such Awards may be granted to any Grantee in any
fiscal year of the Company shall be 600,000 Shares. The foregoing limitation shall be adjusted
proportionately in connection with any change in the Company’s capitalization pursuant to Section
10, below.

               (iii) Deferral. If the vesting or receipt of Shares under an Award is deferred to a
later date, any amount (whether denominated in Shares or cash) paid in addition to the original
number of Shares subject to such Award will not be treated as an increase in the number of Shares
subject to the Award if the additional amount is based either on a reasonable rate of interest or
on one or more predetermined actual investments such that the amount payable by the Company at the
later date will be based on the actual rate of return of a specific investment (including any
decrease as well as any increase in the value of an investment).

          (h) Early Exercise. The Award Agreement may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any
part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.

          (i) Term of Award. The term of each Award shall be the term stated in the Award
Agreement provided, however, that the term shall be no more than ten (10) years from the date of
grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee who, at the
time the Option is granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary of the Company, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term
as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified term of
any Award shall not include any period for which the Grantee has elected to defer the receipt of
the Shares or cash issuable pursuant to the Award.

          (j) Transferability of Awards. Incentive Stock Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the
Grantee. Other Awards shall be transferable (i) by will and by the laws of descent and
distribution and (ii) during the lifetime of the Grantee, to the extent and in the manner
authorized by the Administrator, but only to the extent such transfers are made to family members,
to family trusts, to family controlled entities, to charitable organizations, and pursuant to
domestic relations orders or agreements, in all cases without payment for such transfers to the
Grantee. Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the
Grantee’s Award in the event of the Grantee’s death on a beneficiary designation form provided by
the Administrator.

          (k) Time of Granting Awards. The date of grant of an Award shall for all purposes be
the date on which the Administrator makes the determination to grant such Award, or such other date
as is determined by the Administrator. Notice of the grant determination shall be given to each
Employee, Director or Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.

     7. Award Exercise or Purchase Price, Consideration and Taxes.

          (a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award
shall be as follows:

               (i) In the case of an Incentive Stock Option granted to an Employee who, at the time of the
grant of such Incentive Stock Option owns stock representing more than ten percent (10%) of the
voting

 

 

power of all classes of stock of the Company or any Parent or Subsidiary, the per Share
exercise price shall be not less than one hundred ten percent (110%) of the Fair Market Value per
Share on the date of grant.

               (ii) In cases other than the case described in the preceding paragraph, the per Share exercise
price of an Option shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.

               (iii) In the case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

               (iv) In the case of a Restricted Stock or Restricted Stock Units grant, such price, if any,
shall be determined by the Administrator.

               (v) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award
issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be
determined in accordance with the provisions of the relevant instrument evidencing the agreement to
issue such Award.

          (b) Consideration. Subject to Applicable Laws, the consideration to be paid for the
Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined
at the time of grant). In addition to any other types of consideration the Administrator may
determine, the Administrator is authorized to accept as consideration for Shares issued under the
Plan the following:

               (i) cash;

               (ii) check;

               (iii) surrender of Shares or delivery of a properly executed form of attestation of ownership
of Shares as the Administrator may require (including withholding of Shares otherwise deliverable
upon exercise of the Award) which have a Fair Market Value on the date of surrender or attestation
equal to the aggregate exercise price of the Shares as to which said Award shall be exercised (but
only to the extent that such exercise of the Award would not result in an accounting compensation
charge with respect to the Shares used to pay the exercise price unless otherwise determined by the
Administrator);

               (iv) with respect to Options, payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (A) shall provide written instructions to a Company designated
brokerage firm to effect the immediate sale of some or all of the purchased Shares and remit to the
Company sufficient funds to cover the aggregate exercise price payable for the purchased Shares and
(B) shall provide written directives to the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale transaction;

               (v) with respect to Options, payment through a “net exercise” such that, without the payment
of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i)
the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the
numerator of which is the Fair Market Value per Share (on such date as is determined by the
Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market
Value per Share (the number of net Shares to be received shall be rounded down to the nearest whole
number of Shares); or

               (vi) any combination of the foregoing methods of payment.

     The Administrator may at any time or from time to time, by adoption of or by amendment to the
standard forms of Award Agreement described in Section 4(b)(iv), or by other means, grant Awards
which do not permit all of the foregoing forms of consideration to be used in payment for the
Shares or which otherwise restrict one or more forms of consideration.

          (c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person
until such Grantee or other person has made arrangements acceptable to the Administrator for the
satisfaction of any foreign, federal, state, or local income and employment tax withholding
obligations, including, without

 

 

limitation, obligations incident to the receipt of Shares or the disqualifying disposition of
Shares received on exercise of an Incentive Stock Option. Upon exercise of an Award, the Company
shall withhold or collect from Grantee an amount sufficient to satisfy such tax obligations.

     8. Exercise of Award.

          (a) Procedure for Exercise; Rights as a Shareholder.

               (i) Any Award granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Award
Agreement.

               (ii) An Award shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Award by the person entitled to exercise
the Award and full payment for the Shares with respect to which the Award is exercised, including,
to the extent selected, use of the broker-dealer sale and remittance procedure to pay the purchase
price as provided in Section 7(b)(v).

          (b) Exercise of Award Following Termination of Continuous Service.

               (i) An Award may not be exercised after the termination date of such Award set forth in the
Award Agreement and may be exercised following the termination of a Grantee’s Continuous Service
only to the extent provided in the Award Agreement.

               (ii) Where the Award Agreement permits a Grantee to exercise an Award following the
termination of the Grantee’s Continuous Service for a specified period, the Award shall terminate
to the extent not exercised on the last day of the specified period or the last day of the original
term of the Award, whichever occurs first.

               (iii) Any Award designated as an Incentive Stock Option to the extent not exercised within the
time permitted by law for the exercise of Incentive Stock Options following the termination of a
Grantee’s Continuous Service shall convert automatically to a Nonstatutory Stock Option and
thereafter shall be exercisable as such to the extent exercisable by its terms for the period
specified in the Award Agreement.

     9. Conditions Upon Issuance of Shares.

          (a) If at any time the Administrator determines that the delivery of Shares pursuant to the
exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws,
the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of
an Award shall be suspended until the Administrator determines that such delivery is lawful and
shall be further subject to the approval of counsel for the Company with respect to such
compliance. The Company shall have no obligation to effect any registration or qualification of
the Shares under federal or state laws.

          (b) As a condition to the exercise of an Award, the Company may require the person exercising
such Award to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is required by any Applicable
Laws.

     10. Adjustments Upon Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding Award, and the number
of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet
been granted or which have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, the maximum number of Shares with respect to which Awards may be granted to any
Grantee in any fiscal year of the Company, as well as any other terms that the Administrator
determines require adjustment shall be proportionately adjusted for (i) any increase or decrease in
the number of issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or similar event affecting the Shares, (ii) any
other increase or decrease in the number of issued Shares effected without receipt of consideration
by the Company, or (iii) any other transaction with respect to Common Stock including a corporate
merger, consolidation, acquisition of property or stock, separation (including a spin-off or other
distribution of stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible securities of the
Company shall not be

 

 

deemed to have been “effected without receipt of consideration.” In connection with the
foregoing adjustments, the Administrator may, in its discretion, prohibit the exercise of Awards or
other issuance of Shares, cash or other consideration

pursuant to Awards during certain periods of time. Except as the Administrator determines, no
issuance by the Company of shares of any class, or securities convertible into shares of any class,
shall affect, and no adjustment by reason hereof shall be made with respect to, the number or price
of Shares subject to an Award.

     11. Corporate Transactions and Related Entity Dispositions. Except as may be provided
in an Award Agreement:

          (a) The Administrator shall have the authority, exercisable either in advance of any actual or
anticipated Corporate Transaction or Related Entity Disposition or at the time of an actual
Corporate Transaction or Related Entity Disposition and exercisable at the time of the grant of an
Award under the Plan or any time while an Award remains outstanding, to provide for the full or
partial automatic vesting and exercisability of one or more outstanding unvested Awards under the
Plan and the full or partial release from restrictions on transfer and repurchase or forfeiture
rights of such Awards in connection with a Corporate Transaction or Related Entity Disposition, on
such terms and conditions as the Administrator may specify. The Administrator also shall have the
authority to condition any such Award vesting and exercisability or release from such limitations
upon the subsequent termination of the Continuous Service of the Grantee within a specified period
following the effective date of the Corporate Transaction or Related Entity Disposition. The
Administrator may provide that any Awards so vested or released from such limitations in connection
with a Related Entity Disposition, shall remain fully exercisable until the expiration or sooner
termination of the Award. Effective upon the consummation of a Corporate Transaction, all
outstanding Awards under the Plan shall terminate unless assumed by the successor company or its
parent.

          (b) The portion of any Incentive Stock Option accelerated under this Section 11 in connection
with a Corporate Transaction or Related Entity Disposition shall remain exercisable as an Incentive
Stock Option under the Code only to the extent the $100,000 dollar limitation of Section 422(d) of
the Code is not exceeded. To the extent such dollar limitation is exceeded, the accelerated excess
portion of such Option shall be exercisable as a Nonstatutory Stock Option.

     12. Effective Date and Term of Plan. The Plan became effective in 2001. It shall
continue in effect for a term of ten (10) years unless sooner terminated. Subject to Applicable
Laws, Awards may be granted under the Plan upon its becoming effective.

     13. Amendment, Suspension or Termination of the Plan.

          (a) The Board may at any time amend, suspend or terminate the Plan; provided, however, that no
such amendment shall be made without the approval of the Company’s shareholders to the extent such
approval is required by Applicable Laws, or if such amendment would:

               (i) lessen the shareholder approval requirements of Section 4(b)(vi) or this Section 13(a);

               (ii) increase the benefits accrued to participants under the Plan;

               (iii) increase the number of securities which may be issued under the Plan; or

               (iv) modify the requirements for participation in the Plan.

          (b) No Award may be granted during any suspension of the Plan or after termination of the
Plan.

          (c) No suspension or termination of the Plan (including termination of the Plan under Section
11 above) shall adversely affect any rights under Awards already granted to a Grantee.

     14. Reservation of Shares.

          (a) The Company, during the term of the Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

 

          (b) The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful
issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of
the failure to issue or sell such Shares as to which such requisite authority shall not have been
obtained.

     15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the Company’s right to terminate the Grantee’s
Continuous Service at any time, with or without cause.

     16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided
in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be
deemed compensation for purposes of computing benefits or contributions under any retirement plan
of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the availability or amount of
benefits is related to level of compensation. The Plan is not a “Retirement Plan” or “Welfare
Plan” under the Employee Retirement Income Security Act of 1974, as amended.

     17. Plan History. The Plan was initially approved by the Board and shareholders of
the Company in 2001. In February 2003, the Board approved an amendment to the Plan to increase the
automatic option grant to Outside Directors under Section 6(e) of the Plan from 10,000 shares to
18,000 shares, which amendment was not subject to shareholder approval. In March 2005, subject to
shareholder approval, the Board approved an amendment to the Plan in order to (i) increase the
number of shares available for issuance thereunder by 4,500,000 shares from 6,360,000 shares to
10,860,00 shares, (ii) provide that the maximum number of Shares which may be issued pursuant to
all Awards of Restricted Stock is 2,136,000 Shares, (iii) remove the automatic option grant program
for Outside Directors under Section 6(e) in order to permit greater flexibility in the granting of
awards to Outside Directors under the Plan and (iv) amend certain other administrative provisions
of the Plan. On July 20, 2006, the Board approved an amendment to the Plan to permit the grant of
Restricted Stock Units and to make such other changes to reflect current Applicable Laws. On
February 15, 2007, the Board approved an amendment and restatement of the Plan, subject to the
approval of the Company’s shareholders, (i) to increase the maximum number of Shares available
under the Plan; (ii) to impose a per person limit on the number of Shares subject to Awards of
Restricted Stock and Restricted Stock Units intended to qualify as Performance-Based Compensation
in any fiscal year of the Company; and (iii) to expand the definition of Corporate Transaction,
which shall take effect only for Awards granted on and after the date on which the Company’s
shareholders approve the amendment and restatement of the Plan.

     18. Unfunded Obligation. Grantees shall have the status of general unsecured
creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded
and unsecured obligations for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations. The Company shall retain at all
times beneficial ownership of any investments, including trust investments, which the Company may
make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance
of any trust or any Grantee account shall not create or constitute a trust or fiduciary
relationship between the Administrator, the Company or any Related Entity and a Grantee, or
otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any
assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or
any Related Entity for any changes in the value of any assets that may be invested or reinvested by
the Company with respect to the Plan.

     19. Construction. Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.

 

 

NOVELLUS SYSTEMS, INC. 2001 STOCK INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

     1. Grant of Option. Novellus Systems, Inc., a California corporation (the “Company”),
hereby grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award (the
“Notice”), an option (the “Option”) to purchase the number of Shares of Common Stock subject to the
Option (the “Shares”) set forth in the Notice, at the exercise price per Share set forth in the
Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this Stock Option
Award Agreement (the “Option Agreement”) and the Company’s 2001 Stock Incentive Plan, as amended
from time to time (the “Plan”), which are incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this Option
Agreement.

     If designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as
an Incentive Stock Option as defined in Section 422 of the Code. However, notwithstanding such
designation, to the extent that the aggregate Fair Market Value of Shares subject to Options
designated as Incentive Stock Options which become exercisable for the first time by the Grantee
during any calendar year (under all plans of the Company or any Parent or Subsidiary of the
Company) exceeds $100,000, such excess Options, to the extent of the Shares covered thereby in
excess of the foregoing limitation, shall be treated as Nonstatutory Stock Options. For this
purpose, Incentive Stock Options shall be taken into account in the order in which they were
granted, and the Fair Market Value of the Shares shall be determined as of the date the Option with
respect to such Shares is awarded.

     2. Exercise of Option.

          (a) Right to Exercise. The Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and
this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan
relating to the exercisability or termination of the Option in the event of a Corporate Transaction
or Related Entity Disposition. The Grantee shall be subject to reasonable limitations on the
number of requested exercises during any monthly or weekly period as determined by the
Administrator. In no event shall the Company issue fractional Shares.

          (b) Vesting. THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL, ONLY DURING THE
PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE
OPTION OR ACQUIRING SHARES HEREUNDER). NOTHING IN THE NOTICE, THIS OPTION AGREEMENT, OR THE PLAN
SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE
GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE
RIGHT OF THE GRANTEE’S EMPLOYER TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH OR WITHOUT
CAUSE, AND WITH OR WITHOUT NOTICE. UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE
COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS
IS AT WILL. IN THE EVENT OF THE TERMINATION OF THE GRANTEE’S

1

 

CONTINUOUS SERVICE WITH THE
COMPANY OR ANY RELATED ENTITY FOR ANY REASON, THE COMPANY SHALL NOT BE LIABLE FOR THE LOSS OF
EXISTING OR POTENTIAL PROFIT FROM THIS OPTION OR ANY OTHER OPTION GRANTED UNDER THE PLAN OR
OTHERWISE. THE GRANTEE SHALL HAVE NO CLAIM TO BE GRANTED ANY OPTION UNDER THE PLAN EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, AND THERE IS NO OBLIGATION ON THE PART OF THE COMPANY AND
ANY RELATED ENTITY FOR UNIFORMITY OF TREATMENT OF THE GRANTEE WITH OTHER EMPLOYEES OF THE COMPANY
AND ANY RELATED ENTITY OR OTHER PARTICIPANTS UNDER THE PLAN.

          (c) Post-Termination Exercise Period. The Post-Termination Exercise Period
shall be three (3) months except in the event of death or Disability. In such cases, the
Post-Termination Exercise Period shall be extended to twelve (12) months provided in Section 6 and
Section 7 below.

          (d) Leave of Absence. During any authorized leave of absence, the continued vesting
of the Shares shall be determined in accordance with the Company’s leave of absence policy as may
be amended from time to time.

          (e) Change in Status. In the event of the Grantee’s change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or more per week to an
Employee whose customary employment is fewer than 20 hours per week, the Option shall continue to
vest unless affirmatively determined otherwise by the Administrator.

          (f) Method of Exercise. The Option shall be exercisable only by delivery of an
Exercise Notice in such form as determined by the Administrator (including an Exercise Notice in
electronic form) which shall state the election to exercise the Option, the whole number of Shares
in respect of which the Option is being exercised, such other representations and agreements as to
the holder’s investment intent with respect to such Shares and such other provisions as may be
required by the Administrator. The Exercise Notice shall be delivered in person, by certified
mail, or by such other method (including electronic transmission) as determined from time to time
by the Administrator to the Company accompanied by payment of the Exercise Price. The Option shall
be deemed to be exercised upon receipt by the Company of such notice accompanied by the Exercise
Price, which, to the extent selected, shall be deemed to be satisfied by use of the broker-dealer
sale and remittance procedure to pay the Exercise Price provided in Section 3(d), below.

          (g) Taxes. No Shares will be delivered to the Grantee or other person pursuant to the
exercise of the Option until the Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of applicable income tax, employment tax, and social security
tax withholding obligations, including, without limitation, such other tax obligations of the
Grantee incident to the receipt of Shares. Upon exercise of the Option, the Company or the
Grantee’s employer may offset or withhold (from any amount owed by the Company or the Grantee’s
employer to the Grantee) or collect from the Grantee or other person an amount sufficient to
satisfy such tax obligations and/or the employer’s withholding obligations.

2

 

     3. Method of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination thereof, at the election of the Grantee; provided, however, that such exercise
method does not then violate any Applicable Law:

          (a) cash;

          (b) check;

          (c) surrender of Shares or delivery of a properly executed form of attestation of ownership of
Shares as the Administrator may require which have a Fair Market Value on the date of surrender or
attestation equal to the aggregate Exercise Price of the Shares as to which the Option is being
exercised, provided, however, that Shares acquired under the Plan or any other equity compensation
plan or agreement of the Company must have been held by the Grantee for a period of more than six
(6) months (and not used for another option exercise by attestation during such period); or

          (d) payment through a broker-dealer sale and remittance procedure pursuant to which the
Grantee (i) shall provide written instructions to a Company-designated brokerage firm to effect the
immediate sale of some or all of the purchased Shares and remit to the Company sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and (ii) shall provide written
directives to the Company to deliver the certificates for the purchased Shares directly to such
brokerage firm in order to complete the sale transaction.

     4. Restrictions on Exercise. The Option may not be exercised if the issuance of the
Shares subject to the Option upon such exercise would constitute a violation of any Applicable
Laws.

     5. Termination of Continuous Service. In the event the Grantee’s Continuous Service
terminates, the Grantee may, but only during the Post-Termination Exercise Period, exercise the
portion of the Option that was vested at the date of such termination (the “Termination Date”). In
no event shall the Option be exercised later than the Expiration Date set forth in the Notice.
Except as provided in Sections 6 and 7 below, to the extent that the Option was unvested on the
Termination Date, or if the Grantee does not exercise the vested portion of the Option within the
Post-Termination Exercise Period, the Option shall terminate.

     6. Disability of Grantee. In the event the Grantee’s Continuous Service terminates as
a result of his or her Disability, the Grantee may, but only within twelve (12) months from the
Termination Date (and in no event later than the Expiration Date), exercise the portion of the
Option that was vested on the Termination Date; provided, however, that if such Disability is not a
“disability” as such term is defined in Section 22(e)(3) of the Code and the Option is an Incentive
Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock Option
and shall be treated as a Nonstatutory Stock Option on the day three (3) months and one (1) day
following the Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option within the time
specified herein, the Option shall terminate. Section 22(e)(3) of the Code provides that an
individual is permanently and totally disabled if he or she is unable to engage in any substantial
gainful activity
by reason of any medically determinable physical or mental impairment which

3

 

can be expected to
result in death or which has lasted or can be expected to last for a continuous period of not less
than twelve (12) months.

     7. Death of Grantee. In the event of the termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the Grantee’s death during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s
termination of Continuous Service as a result of his or her Disability, the person who acquired the
right to exercise the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months from the date of death (but in no event
later than the Expiration Date). To the extent that the Option was unvested on the date of death,
or if the vested portion of the Option is not exercised within the time specified herein, the
Option shall terminate.

     8. Transferability of Option. The Option, if an Incentive Stock Option, may not be
transferred in any manner other than by will or by the laws of descent and distribution and may be
exercised during the lifetime of the Grantee only by the Grantee. The Option, if a Nonstatutory
Stock Option, may not be transferred in any manner other than by will or by the laws of descent and
distribution, provided, however, that a Nonstatutory Stock Option may be transferred during the
lifetime of the Grantee by gift and pursuant to a domestic relations order to members of the
Grantee’s Immediate Family to the extent and in the manner determined by the Administrator.
Notwithstanding the foregoing, the Grantee may designate a beneficiary of the Grantee’s Incentive
Stock Option or Nonstatutory Stock Option in the event of the Grantee’s death on a beneficiary
designation form provided by the Administrator. Following the death of the Grantee, the Option, to
the extent provided in Section 7, may be exercised (a) by the person or persons designated under
the deceased Grantee’s beneficiary designation or (b) in the absence of an effectively designated
beneficiary, by the Grantee’s legal representative or by any person empowered to do so under the
deceased Grantee’s will or under the then applicable laws of descent and distribution. The terms
of the Option shall be binding upon the executors, administrators, heirs, successors and
transferees of the Grantee.

     9. Term of Option. The Option must be exercised no later than the Expiration Date set
forth in the Notice or such earlier date as otherwise provided herein. After the Expiration Date
or such earlier date, the Option shall be of no further force or effect and may not be exercised.

     10. Tax Consequences. The Grantee may incur tax liability as a result of the
Grantee’s purchase or disposition of the Shares. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE
EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

     11. Entire Agreement: Governing Law. The Notice, the Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties. The Notice,
the Plan and this Option Agreement are to be construed in accordance with and governed

4

 

by the
internal laws of the State of California without giving effect to any choice of law rule that would
cause the application of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined to be illegal or unenforceable, such provision shall be
enforced to the fullest extent allowed by law and the other provisions shall nevertheless remain
effective and shall remain enforceable.

     12. Headings. The captions used in the Notice and this Option Agreement are inserted
for convenience and shall not be deemed a part of the Option for construction or interpretation.

     13. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution of such question
or dispute by the Administrator shall be final and binding on all persons.

     14. Venue. The Company, the Grantee, and the Grantee’s assignees pursuant to Section
8 (the “parties”) agree that any suit, action, or proceeding arising out of or relating to the
Notice, the Plan or this Option Agreement shall be brought in the United States District Court for
the Northern District of California (or should such court lack jurisdiction to hear such action,
suit or proceeding, in a California state court in the County of Santa Clara) and that the parties
shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest
extent permitted by law, any objection the party may have to the laying of venue for any such suit,
action or proceeding brought in such court. If any one or more provisions of this Section 14 shall
for any reason be held invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its application valid
and enforceable.

     15. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

END OF AGREEMENT

5

 

NOVELLUS SYSTEMS, INC.

2001 STOCK INCENTIVE PLAN

NOTICE OF STOCK OPTION AWARD

	 	 	 
	Grantee’s Name and Address

	 	%%FIRST_NAME%-%
	 

	 	%%LAST_NAME%%
	 

	 	%%ADDRESS_LINE1%-%
	 

	 	%%ADDRESS_LINE2%-%
	 

	 	%%ADDRESS_LINE3%-%
	 

	 	%%CITY%-% %%STATE%-%
	 

	 	%%ZIPCODE%-%
	 

	 	%%COUNTRY%-%

     You (the “Grantee”) have been granted an option to purchase shares of Common Stock, subject to
the terms and conditions of this Notice of Stock Option Award (the “Notice”), the Novellus Systems,
Inc. 2001 Stock Incentive Plan, as amended from time to time (the “Plan”) and the Stock Option
Award Agreement (the “Option Agreement”) attached hereto, as follows. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in this Notice.

	 	 	 
	Option Number

	 	%%OPTION_NUMBER%-%
	Date of Grant

	 	%%OPTION_DATE,’MM/DD/YYYY’%-%
	Vesting Commencement Date

	 	%%VEST_BASE_DATE, ‘MM/DD/YYYY’%-%
	Exercise Price per Share

	 	%%OPTION_PRICE,’$999,999,999.99’%-%
	Total Number of Shares Subject
to the Option (the “Shares”)

	 	%%TOTAL_SHARES_GRANTED,’999,999,999’%-%
	Total Exercise Price

	 	%%TOTAL_OPTION_PRICE’$999,999,999.99’%-%
	Type of Option:

	 	                    Incentive Stock Option
	 

	 	                    Non-Qualified Stock Option

1

 

	 	 	 
	Expiration Date:

	 	%%EXPIRE_DATE_PERIOD1’MM/DD/YYYY’%-%

Vesting Schedule:

     Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance
with the following schedule:

	 	 	 	 	 
	Shares	 	Vest Type	 	Vest Date
	 
	 	 	 	 
	%%SHARES_PERIOD1,’999,999,999’%-%

	 	%%VEST_TYPE_PERIOD1%-%
	 	%%VEST_DATE_PERIOD1’MM/DD/YYYY’%-%
	%%SHARES_PERIOD2,’999,999,999’%-%

	 	%%VEST_TYPE_PERIOD2%-%
	 	%%VEST_DATE_PERIOD2’MM/DD/YYYY’%-%
	%%SHARES_PERIOD3,’999,999,999’%-%

	 	%%VEST_TYPE_PERIOD3%-%
	 	%%VEST_DATE_PERIOD3’MM/DD/YYYY’%-%
	%%SHARES_PERIOD4,’999,999,999’%-%

	 	%%VEST_TYPE_PERIOD4%-%
	 	%%VEST_DATE_PERIOD4’MM/DD/YYYY’%-%
	%%SHARES_PERIOD5,’999,999,999’%-%

	 	%%VEST_TYPE_PERIOD5%-%
	 	%%VEST_DATE_PERIOD5’MM/DD/YYYY’%-%

     By the Grantee’s electronic acceptance of this Option and by the acceptance of the Company’s
representative below, the Company and the Grantee have executed this Notice and agree that the
Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option
Agreement.

	 	 	 	 	 
	 	Novellus Systems, Inc.,

a California corporation

 	 
	 	By:  	Martin J. Collins
 	 
	 	 	Title: 	Senior Vice President, General  Counsel and Corporate Secretary 	 
	 	 	 	 
	 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL,
ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND
AGREES

2

 

THAT NOTHING IN THIS NOTICE, IN THE AGREEMENT OR IN THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN
ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR ANY RELATED ENTITY TO WHICH THE
GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE AT ANY TIME, WITH OR
WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A
WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S EMPLOYMENT STATUS IS
AT WILL. IN THE EVENT OF THE TERMINATION OF THE GRANTEE’S CONTINUOUS SERVICE FOR ANY REASON, THE
COMPANY SHALL NOT BE LIABLE FOR THE LOSS OF EXISTING OR POTENTIAL PROFIT FROM THIS AWARD OR ANY
OTHER AWARD GRANTED UNDER THE PLAN OR OTHERWISE. THE GRANTEE SHALL HAVE NO CLAIM TO BE GRANTED ANY
AWARD UNDER THE PLAN EXCEPT AS EXPRESSLY SET FORTH IN THIS NOTICE AND THE AGREEMENT, AND THERE IS
NO OBLIGATION ON THE PART OF THE COMPANY OR ANY RELATED ENTITY FOR UNIFORMITY OF TREATMENT OF THE
GRANTEE WITH OTHER EMPLOYEES OF THE COMPANY AND ANY RELATED ENTITY OR OTHER PARTICIPANTS UNDER THE
PLAN.

     The Grantee understands that the Option is subject to the Grantee’s consent to access, and
acknowledgement of having accessed, the Plan prospectus in connection with the Form S-8
registration statement for the Plan, any updates thereto, the Plan, the Option Agreement and this
Notice (collectively, the “Plan Documents”) in electronic form through the E*Trade Financial web
page at the following address: www.etrade.com or such other address as is provided by notification
from time to time. By accepting the grant of the Option, the Grantee hereby: (i) consents to
access electronic copies (instead of receiving paper copies) of the Plan Documents via the E*Trade
Financial web page or such other web page as is provided by notification from time to time, (ii)
represents that the Grantee has access to the internet generally; (iii) acknowledges receipt of
electronic copies, or that the Grantee is already in possession of paper copies, of the Plan
Documents and the Company’s most recent annual report to shareholders; and (iv) represents that the
Grantee is familiar with the terms and provisions of the Plan Documents and accepts the Option
subject to all of the terms and provisions of the Plan Documents.

     The Grantee may receive, without charge, upon written or oral request, paper copies of any or
all of the Plan Documents, documents incorporated by reference in the Form S-8 registration
statement for the Plan, and the Company’s most recent annual report to shareholders by requesting
them from Stock Administration at Novellus Systems, Incorporated, 4000 North First Street, San
Jose, CA 95134, Attn. Stock Administration M/S 90-2B. Telephone (408) 570-6336, email:
stock.administration@novellus.com.

3

 

     The Grantee has reviewed this Notice, the Plan, and the Option Agreement in their entirety,
has had an opportunity to obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement. The Grantee hereby
agrees that all questions of interpretation and administration relating to this Notice, the Plan
and the Option Agreement shall be resolved by the Administrator in accordance with Section 13 of
the Option Agreement. The Grantee further agrees to the venue selection in accordance with Section
14 of the Option Agreement. The Grantee further agrees to notify the Company upon any change in the
residence address indicated in this Notice.

* * *

4

 

NOVELLUS SYSTEMS, INC. 2001 STOCK INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK BONUS AWARD

	 	 	 
	Grantee’s Name and Address:
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     You (the “Grantee”) have been granted shares of Common Stock of the Company (the “Award”),
subject to the terms and conditions of this Notice of Restricted Stock Bonus Award (the “Notice”),
the Novellus Systems, Inc. 2001 Stock Incentive Plan, as amended from time to time (the “Plan”) and
the Restricted Stock Bonus Award Agreement (the “Agreement”) attached hereto, as follows. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.

	 	 	 
	Award Number
	 	 
	 

	 	 
	 
	 	 
	Date of Award
	 	 
	 

	 	 
	 
	 	 
	Total Number of Shares
of Common Stock Awarded
	 	 
	 

	 	 
	 
	 	 
	Fair Market Value per Share
	 	$
	 

		 

     Vesting Schedule:

     Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Agreement and the Plan, the Shares will “vest” in accordance with the following conditions:

     [INSERT VESTING SCHEDULE]

     Notwithstanding the foregoing, 50% of the Total Number of Shares of Common Stock Awarded shall
vest if the Grantee’s Continuous Service is terminated as a result of the Grantee’s death or
Disability.

     In the event of the Grantee’s change in status from Employee to Consultant or Director or from
an Employee whose customary employment is 20 hours or more per week to an Employee whose customary
employment is fewer than 20 hours per week, vesting of the Shares shall continue in accordance with
the Vesting Schedule set forth above and terms of this Notice, the Agreement and the Plan, unless
affirmatively determined otherwise by the Administrator.

     For purposes of this Notice and the Agreement, the term “vest” shall mean, with respect to any
Shares, that such Shares are no longer subject to forfeiture to the Company. Shares that have not
vested are deemed “Restricted Shares.” If the Grantee would become vested in a fraction of a
Restricted Share, such Restricted Share shall not vest until the Grantee becomes vested in the
entire Share.

     Vesting shall cease upon the date of termination of the Grantee’s Continuous Service for any
reason, other than death or Disability. If the Grantee’s Continuous Service is terminated as a

1

 

result of the Grantee’s death or Disability, 50% of the Total Number of Shares of Common Stock
Awarded shall vest upon the Grantee’s termination of Continuous Service. In the event the
Grantee’s Continuous Service is terminated for any reason, including death or Disability, any
Restricted Shares held by the Grantee immediately following such termination of Continuous Service
shall be deemed reconveyed to the Company and the Company shall thereafter be the legal and
beneficial owner of the Restricted Shares and shall have all rights and interest in or related
thereto without further action by the Grantee. The foregoing forfeiture provisions set forth in
this Notice as to Restricted Shares shall apply to the new capital stock or other property
(including cash paid other than as a regular cash dividend) received in exchange for the Shares in
consummation of any transaction described in Section 10 or 11 of the Plan and such stock or
property shall be deemed Additional Securities (as defined in the Agreement) for purposes of the
Agreement, but only to the extent the Shares are at the time covered by such forfeiture provisions.

     By the Grantee’s electronic acceptance of this Award and by the acceptance of the Company’s
representative below, the Company and the Grantee have executed this Notice and agree that the
Award is to be governed by the terms and conditions of this Notice, the Plan, and the Agreement.

	 	 	 	 	 
	 	Novellus Systems, Inc.,

a California corporation

 	 
	 	By:  	 	 
	 	Title: 	 	 
	 	Date: 	 	 
	 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD
OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD
OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE AGREEMENT, NOR IN THE PLAN, SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE
GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE AT ANY TIME,
WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE
GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS
IS AT WILL.

     IN THE EVENT OF THE TERMINATION OF THE GRANTEE’S CONTINUOUS SERVICE FOR ANY REASON, THE
GRANTEE ACKNOWLEDGES AND AGREES THAT THE COMPANY SHALL NOT BE LIABLE TO THE GRANTEE FOR THE LOSS OF
ANY EXISTING OR POTENTIAL GAIN FROM THIS AWARD OR ANY OTHER AWARD GRANTED UNDER THE PLAN OR
OTHERWISE. THE GRANTEE FURTHER

2

 

ACKNOWLEDGES AND AGREES THAT GRANTEE SHALL HAVE NO RIGHT OR CLAIM TO ANY AWARDS UNDER THE PLAN
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT OR OTHER AGREEMENT WITH THE COMPANY. THERE IS NO
OBLIGATION ON THE PART OF THE COMPANY OR ANY RELATED ENTITY FOR UNIFORMITY OF TREATMENT OF THE
GRANTEE WITH OTHER PARTICIPANTS IN THE PLAN OR WITH OTHER EMPLOYEES OF THE COMPANY OR ANY RELATED
ENTITY.

     The Grantee understands that the Award is subject to the Grantee’s consent to access, and
acknowledgement of having accessed: the Plan, the Agreement and this Notice (collectively, the
“Plan Documents”) in electronic form through the E*Trade Financial web page at the following
address: [www.etrade.com] or such other address as is provided by notification from time to time.
By accepting the grant of the Award, the Grantee hereby: (i) consents to access electronic copies
of the Plan Documents via the E*Trade Financial web page or such other web page as is provided by
notification from time to time, (ii) represents that the Grantee has access to the internet
generally; (iii) acknowledges receipt of electronic copies of the Plan Documents; and (iv)
represents that the Grantee is familiar with the terms and provisions of the Plan Documents and
accepts the Award subject to all of the terms and provisions of the Plan Documents.

     The Grantee may receive, without charge, upon written or oral request, paper copies of any or
all of the Plan Documents by requesting them from Stock Administration at Novellus Systems,
Incorporated, 4000 North First Street, San Jose, CA 95134, Attn. Stock Administration M/S 90-2B.
Telephone (408) 943-9700, email: stock.administration@novellus.com.

     The Grantee has reviewed this Notice, the Plan, and the Agreement in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Agreement. The Grantee hereby agrees
that all questions of interpretation and administration relating to this Notice, the Plan and the
Agreement shall be resolved by the Administrator in accordance with Section 12 of the Agreement.
The Grantee further agrees to the venue selection in accordance with Section 13 of the Agreement.
The Grantee further agrees to notify the Company upon any change in the residence address indicated
in this Notice.

3

 

NOVELLUS SYSTEMS, INC. 2001 STOCK INCENTIVE PLAN

RESTRICTED STOCK BONUS AWARD AGREEMENT

     1. Issuance of Shares. Novellus Systems, Inc., a California corporation (the
“Company”), hereby issues to the Grantee (the “Grantee”) named in the Notice of Restricted Stock
Bonus Award (the “Notice”), the Total Number of Shares of Common Stock Awarded set forth in the
Notice (the “Shares”), subject to the Notice, this Restricted Stock Bonus Award Agreement (the
“Agreement”) and the terms and provisions of the Company’s 2001 Stock Incentive Plan, as amended
from time to time (the “Plan”), which is incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this
Agreement. All Shares issued hereunder will be deemed issued to the Grantee as fully paid and
nonassessable shares, and the Grantee will have the right to vote the Shares at meetings of the
Company’s shareholders. The Company shall pay any applicable stock transfer taxes imposed upon the
issuance of the Shares to the Grantee hereunder.

     2. Transfer Restrictions. The Shares issued to the Grantee hereunder may not be sold,
transferred by gift, pledged, hypothecated, or otherwise transferred or disposed of by the Grantee
prior to the date when the Shares become vested pursuant to the Vesting Schedule set forth in the
Notice. Any attempt to transfer Restricted Shares in violation of this Section 2 will be null and
void and will be disregarded.

     3. Escrow of Stock. For purposes of facilitating the enforcement of the provisions of
this Agreement and the payment of withholding taxes (if any) pursuant to Section 5 of this
Agreement, the Grantee agrees, immediately upon receipt of the certificate(s) for the Restricted
Shares, to deliver such certificate(s), together with an Assignment Separate from Certificate in
the form attached hereto as Exhibit A, executed in blank by the Grantee with respect to
each such stock certificate, to the Secretary or Assistant Secretary of the Company, or their
designee, to hold in escrow for so long as such Restricted Shares have not vested pursuant to the
Vesting Schedule set forth in the Notice, with the authority to take all such actions and to
effectuate all such transfers and/or releases as may be necessary or appropriate to accomplish the
objectives of this Agreement in accordance with the terms hereof. The Grantee hereby acknowledges
that the appointment of the Secretary or Assistant Secretary of the Company (or their designee) as
the escrow holder hereunder with the stated authorities is a material inducement to the Company to
make this Agreement and that such appointment is coupled with an interest and is accordingly
irrevocable. The Grantee agrees that such escrow holder shall not be liable to any party hereto
(or to any other party) for any actions or omissions unless such escrow holder is grossly negligent
relative thereto. The escrow holder may rely upon any letter, notice or other document executed by
any signature purported to be genuine and may resign at any time. Upon the vesting of the
Restricted Shares, the escrow holder will, without further order or instruction, transmit to the
Grantee the certificate evidencing such Shares, subject, however, to satisfaction of any
withholding obligations provided in Section 5 below.

     4. Distributions. The Company shall disburse to the Grantee all regular cash
dividends with respect to the Shares and Additional Securities (whether vested or not), less any
applicable withholding obligations.

1

 

     5. Withholding of Taxes.

          (a) General. The Grantee is ultimately liable and responsible for all taxes owed by
the Grantee in connection with the Award, regardless of any action the Company or any Related
Entity takes with respect to any tax withholding obligations that arise in connection with the
Award. Neither the Company nor any Related Entity makes any representation or undertaking
regarding the treatment of any tax withholding in connection with the grant or vesting of the Award
or the subsequent sale of Shares subject to the Award. The Company and its Related Entities do not
commit and are under no obligation to structure the Award to reduce or eliminate the Grantee’s tax
liability.

          (b) Payment of Withholding Taxes. Prior to any event in connection with the Award
(e.g., vesting) that the Company determines may result in any tax withholding obligation, whether
United States federal, state, local or non-U.S., including any employment tax obligation (the “Tax
Withholding Obligation”), the Grantee must arrange for the satisfaction of the minimum amount of
such Tax Withholding Obligation in a manner acceptable to the Company.

               (i) By Share Withholding. To the extent the vesting of any Shares occurs during a “blackout
period” of the Company wherein certain Employees are precluded from selling Shares and unless the
Grantee determines to satisfy the Tax Withholding Obligation by some other means in accordance with
clause (iii) below, the Grantee authorizes the Company to withhold from those Shares issuable to
the Grantee the whole number of Shares sufficient to satisfy the minimum applicable Tax Withholding
Obligation. The Grantee acknowledges that the withheld Shares may not be sufficient to satisfy the
Grantee’s minimum Tax Withholding Obligation. Accordingly, the Grantee agrees to pay to the
Company or any Related Entity as soon as practicable, including through additional payroll
withholding, any amount of the Tax Withholding Obligation that is not satisfied by the withholding
of Shares described above.

               (ii) By Sale of Shares. Unless the Grantee determines to satisfy the Tax Withholding
Obligation by some other means in accordance with clause (iii) below, the Grantee’s acceptance of
this Award constitutes the Grantee’s instruction and authorization to the Company and any brokerage
firm determined acceptable to the Company for such purpose to sell on the Grantee’s behalf a whole
number of Shares from those Shares issuable to the Grantee as the Company determines to be
appropriate to generate cash proceeds sufficient to satisfy the minimum applicable Tax Withholding
Obligation. Such Shares will be sold on the day such Tax Withholding Obligation arises (e.g., a
vesting date) or as soon thereafter as practicable. The Grantee will be responsible for all
broker’s fees and other costs of sale, and the Grantee agrees to indemnify and hold the Company
harmless from any losses, costs, damages, or expenses relating to any such sale. To the extent the
proceeds of such sale exceed the Grantee’s minimum Tax Withholding Obligation, the Company agrees
to pay such excess in cash to the Grantee. The Grantee acknowledges that the Company or its
designee is under no obligation to arrange for such sale at any particular price, and that the
proceeds of any such sale may not be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation. Accordingly, the Grantee agrees to pay to the Company or any Related Entity as soon as
practicable, including through additional payroll withholding, any amount of the Tax Withholding
Obligation that is not satisfied by the sale of Shares described above.

2

 

               (iii) By Check, Wire Transfer or Other Means. At any time not less than five (5) business days
before any Tax Withholding Obligation arises (e.g., a vesting date), the Grantee may elect to
satisfy the Grantee’s Tax Withholding Obligation by delivering to the Company an amount that the
Company determines is sufficient to satisfy the Tax Withholding Obligation by (x) wire transfer to
such account as the Company may direct, (y) delivery of a certified check payable to the Company,
or (z) such other means as specified from time to time by the Administrator.

     6. Additional Securities. Any securities or cash received (other than a regular cash
dividend) as the result of ownership of the Restricted Shares (the “Additional Securities”),
including, but not by way of limitation, warrants, options and securities received as a stock
dividend or stock split, or as a result of a recapitalization or reorganization or other similar
change in the Company’s capital structure, shall be retained in escrow in the same manner and
subject to the same conditions and restrictions as the Restricted Shares with respect to which they
were issued, including, without limitation, the Vesting Schedule set forth in the Notice. The
Grantee shall be entitled to direct the Company to exercise any warrant or option received as
Additional Securities upon supplying the funds necessary to do so, in which event the securities so
purchased shall constitute Additional Securities, but the Grantee may not direct the Company to
sell any such warrant or option. If Additional Securities consist of a convertible security, the
Grantee may exercise any conversion right, and any securities so acquired shall constitute
Additional Securities. In the event of any change in certificates evidencing the Shares or the
Additional Securities by reason of any recapitalization, reorganization or other transaction that
results in the creation of Additional Securities, the escrow holder is authorized to deliver to the
issuer the certificates evidencing the Shares or the Additional Securities in exchange for the
certificates of the replacement securities.

     7. Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Agreement, the Notice or the Plan, the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, and, if the Company transfers its own
securities, it may make appropriate notations to the same effect in its own records.

     8. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

     9. Restrictive Legends. The Grantee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto, to be placed upon
any certificate(s) evidencing ownership of the Shares together with any other legends that may be
required by the Company or by state or federal securities laws:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE

RESTRICTED BY THE TERMS OF THAT CERTAIN

RESTRICTED STOCK BONUS AWARD AGREEMENT

BETWEEN THE COMPANY AND THE NAMED

SHAREHOLDER. THE SHARES REPRESENTED BY THIS

3

 

CERTIFICATE MAY BE TRANSFERRED ONLY IN

ACCORDANCE WITH SUCH AGREEMENT, A COPY OF

WHICH IS ON FILE WITH THE SECRETARY OF THE

COMPANY.

     10. Entire Agreement: Governing Law. The Notice, the Plan and this Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. These agreements are
to be construed in accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California to the rights and duties of
the parties. Should any provision of the Notice or this Agreement be determined to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     11. Headings. The captions used in this Agreement are inserted for convenience and
shall not be deemed a part of this Agreement for construction or interpretation.

     12. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Agreement shall be submitted by
the Grantee or by the Company to the Administrator. The resolution of such question or dispute by
the Administrator shall be final and binding on all persons.

     13. Venue. The parties agree that any suit, action, or proceeding arising out of or
relating to the Notice, the Plan or this Agreement shall be brought in the United States District
Court for the Northern District of California (or should such court lack jurisdiction to hear such
action, suit or proceeding, in a California state court in the County of San Mateo) and that the
parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying of venue for any
such suit, action or proceeding brought in such court. If any one or more provisions of this
Section 13 shall for any reason be held invalid or unenforceable, it is the specific intent of the
parties that such provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.

     14. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

END OF AGREEMENT

4

 

EXHIBIT A

STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

[Please print out and sign this document but do not date it. The date and information of
the transferee will be completed if and when the shares are assigned.]

          FOR VALUE RECEIVED,                                         hereby sells, assigns and
transfers unto                                         ,                                          (          ) shares of the Common
Stock of Novellus Systems, Inc., a California Company (the “Company”), standing in his name
on the books of, the Company represented by Certificate No.                     
                    herewith, and does hereby irrevocably constitute and appoint the Secretary of the
Company attorney to transfer the said stock in the books of the Company with full power of
substitution.

DATED:                                        

	 	 	 	 	 
	 	By:  	 	 
	 	Award Number 	 	 	 
	 	Grantee's Name and Address 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 

1

 

NOVELLUS SYSTEMS, INC.

2001 STOCK INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK BONUS AWARD

	 	 	 	 	 	 
	 	 Grantee’s Name and Address:
	 	 
	 	 
	 	 
	 
	 	 	 
	 	 
	 
	 	 	 

     You (the “Grantee”) have been granted shares of Common Stock of the Company (the “Award”),
subject to the terms and conditions of this Notice of Restricted Stock Bonus Award (the “Notice”),
the Novellus Systems, Inc. 2001 Stock Incentive Plan, as amended from time to time (the “Plan”) and
the Restricted Stock Bonus Award Agreement (the “Agreement”) attached hereto, as follows. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.

	 	 	 	 	 	 
	 	Award Number	 	 	 	 
	 
	 	Date of Award	 	 	 	 
	 
	 	Total Number of Shares
of Common Stock Awarded	 	 	 	 
	 
	 	Aggregate Fair Market
Value of the Shares
	$	 	 	 

Vesting Schedule:

     Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Agreement and the Plan, the Shares will “vest” in accordance with the following schedule:

     [INSERT VESTING SCHEDULE]

     In the event of a Corporate Transaction, one hundred percent (100%) of the Shares shall become
vested immediately prior to the effective date of such Corporate Transaction.

     At the time of the termination of the Grantee’s Continuous Service, the Board of Directors
may, in the exercise of its sole discretion, accelerate the vesting of all or some portion of the
remaining unvested Shares as the Board of Directors determines is appropriate taking into account
the circumstances of such termination.

     For purposes of this Notice and the Agreement, the term “vest” shall mean, with respect to any
Shares, that such Shares are no longer subject to forfeiture to the Company. Shares that have not
vested are deemed “Restricted Shares.” If the Grantee would become vested in a fraction of a
Restricted Share, such Restricted Share shall not vest until the Grantee becomes vested in the
entire Share.

1

 

     Except as set forth above, vesting shall cease upon the date of termination of the Grantee’s
Continuous Service for any reason, including death or Disability. Except as set forth above, in
the event the Grantee’s Continuous Service is terminated for any reason, including death or
Disability, any Restricted Shares held by the Grantee immediately following such termination of
Continuous Service shall be deemed reconveyed to the Company and the Company shall thereafter be
the legal and beneficial owner of the Restricted Shares and shall have all rights and interest in
or related thereto without further action by the Grantee. The foregoing forfeiture provisions set
forth in this Notice as to Restricted Shares shall apply to the new capital stock or other property
(including cash paid other than as a regular cash dividend) received in exchange for the Shares in
consummation of any transaction described in Section 10 of the Plan and such stock or property
shall be deemed Additional Securities (as defined in the Agreement) for purposes of the Agreement,
but only to the extent the Shares are at the time covered by such forfeiture provisions.

     By the Grantee’s electronic acceptance of this Award and by the acceptance of the Company’s
representative below, the Company and the Grantee have executed this Notice and agree that the
Award is to be governed by the terms and conditions of this Notice, the Plan, and the Agreement.

	 	 	 	 	 
	 	Novellus Systems, Inc.,

a California corporation

 	 
	 	By:  	
 	 
	 	 	Title: 	 	 
	 	 	Date: 	 	 
	 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD
OF THE GRANTEE’S CONTINUOUS SERVICE.

     The Grantee understands that the Award is subject to the Grantee’s consent to access, and
acknowledgement of having accessed, the Plan prospectus in connection with the Form S-8
registration statement for the Plan, any updates thereto, the Plan, the Agreement and this Notice
(collectively, the “Plan Documents”) in electronic form through the E*Trade Financial web page at
the following address: [www.etrade.com] or such other address as is provided by notification from
time to time. By accepting the grant of the Award, the Grantee hereby: (i) consents to access
electronic copies (instead of receiving paper copies) of the Plan Documents via the E*Trade
Financial web page or such other web page as is provided by notification from time to time, (ii)
represents that the Grantee has access to the internet generally; (iii) acknowledges receipt of
electronic copies, or that the Grantee is already in possession of paper copies, of the Plan
Documents and the Company’s most recent annual report to shareholders; and (iv) represents that the
Grantee is familiar with the terms and provisions of the Plan Documents and accepts the Award
subject to all of the terms and provisions of the Plan Documents.

2

 

     The Grantee may receive, without charge, upon written or oral request, paper copies of any or
all of the Plan Documents, documents incorporated by reference in the Form S-8 registration
statement for the Plan, and the Company’s most recent annual report to shareholders by requesting
them from Stock Administration at Novellus Systems, Incorporated, 4000 North First Street, San
Jose, CA 95134, Attn. Stock Administration M/S 90-2B. Telephone (408) 943-9700, email:
stock.administration@novellus.com.

     The Grantee has reviewed this Notice, the Plan, and the Agreement in their entirety, has had
an opportunity to obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Agreement. The Grantee hereby agrees
that all questions of interpretation and administration relating to this Notice, the Plan and the
Agreement shall be resolved by the Administrator in accordance with Section 12 of the Agreement.
The Grantee further agrees to the venue selection in accordance with Section 13 of the Agreement.
The Grantee further agrees to notify the Company upon any change in the residence address indicated
in this Notice.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Signed:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 

3

 

NOVELLUS SYSTEMS, INC.

2001 STOCK INCENTIVE PLAN

RESTRICTED STOCK BONUS AWARD AGREEMENT

     1. Issuance of Shares. Novellus Systems, Inc., a California corporation (the
“Company”), hereby issues to the Grantee (the “Grantee”) named in the Notice of Restricted Stock
Bonus Award (the “Notice”), the Total Number of Shares of Common Stock Awarded set forth in the
Notice (the “Shares”), subject to the Notice, this Restricted Stock Bonus Award Agreement (the
“Agreement”) and the terms and provisions of the Company’s 2001 Stock Incentive Plan, as amended
from time to time (the “Plan”), which is incorporated herein by reference. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined meanings in this
Agreement. All Shares issued hereunder will be deemed issued to the Grantee as fully paid and
nonassessable shares, and the Grantee will have the right to vote the Shares at meetings of the
Company’s shareholders. The Company shall pay any applicable stock transfer taxes imposed upon the
issuance of the Shares to the Grantee hereunder.

     2. Transfer Restrictions. The Shares issued to the Grantee hereunder may not be sold,
transferred by gift, pledged, hypothecated, or otherwise transferred or disposed of by the Grantee
prior to the date when the Shares become vested pursuant to the Vesting Schedule set forth in the
Notice. Any attempt to transfer Restricted Shares in violation of this Section 2 will be null and
void and will be disregarded.

     3. Escrow of Stock. For purposes of facilitating the enforcement of the provisions of
this Agreement and the payment of withholding taxes (if any) pursuant to Section 5 of this
Agreement, the Grantee agrees, immediately upon receipt of the certificate(s) for the Restricted
Shares, to deliver such certificate(s), together with an Assignment Separate from Certificate in
the form attached hereto as Exhibit A, executed in blank by the Grantee with respect to
each such stock certificate, to the Secretary or Assistant Secretary of the Company, or their
designee, to hold in escrow for so long as such Restricted Shares have not vested pursuant to the
Vesting Schedule set forth in the Notice, with the authority to take all such actions and to
effectuate all such transfers and/or releases as may be necessary or appropriate to accomplish the
objectives of this Agreement in accordance with the terms hereof. The Grantee hereby acknowledges
that the appointment of the Secretary or Assistant Secretary of the Company (or their designee) as
the escrow holder hereunder with the stated authorities is a material inducement to the Company to
make this Agreement and that such appointment is coupled with an interest and is accordingly
irrevocable. The Grantee agrees that such escrow holder shall not be liable to any party hereto
(or to any other party) for any actions or omissions unless such escrow holder is grossly negligent
relative thereto. The escrow holder may rely upon any letter, notice or other document executed by
any signature purported to be genuine and may resign at any time. Upon the vesting of the
Restricted Shares, the escrow holder will, without further order or instruction, transmit to the
Grantee the certificate evidencing such Shares, subject, however, to satisfaction of any
withholding obligations provided in Section 5 below.

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     4. Distributions. The Company shall disburse to the Grantee all regular cash
dividends with respect to the Shares and Additional Securities (whether vested or not), less any
applicable withholding obligations.

     5. Withholding of Taxes.

          (a) General. The Grantee is ultimately liable and responsible for all taxes owed by
the Grantee in connection with the Award, regardless of any action the Company or any Related
Entity takes with respect to any tax withholding obligations that arise in connection with the
Award. Neither the Company nor any Related Entity makes any representation or undertaking
regarding the treatment of any tax withholding in connection with the grant or vesting of the Award
or the subsequent sale of Shares subject to the Award. The Company and its Related Entities do not
commit and are under no obligation to structure the Award to reduce or eliminate the Grantee’s tax
liability.

          (b) Payment of Withholding Taxes. Prior to any event in connection with the Award
(e.g., vesting) that the Company determines may result in any tax withholding obligation, whether
United States federal, state, local or non-U.S., including any employment tax obligation (the “Tax
Withholding Obligation”), the Grantee must arrange for the satisfaction of the minimum amount of
such Tax Withholding Obligation in a manner acceptable to the Company.

               (i) By Share Withholding. To the extent the vesting of any Shares occurs during a “blackout
period” of the Company wherein certain Employees are precluded from selling Shares and unless the
Grantee determines to satisfy the Tax Withholding Obligation by some other means in accordance with
clause (iii) below, the Grantee authorizes the Company to withhold from those Shares issuable to
the Grantee the whole number of Shares sufficient to satisfy the minimum applicable Tax Withholding
Obligation. The Grantee acknowledges that the withheld Shares may not be sufficient to satisfy the
Grantee’s minimum Tax Withholding Obligation. Accordingly, the Grantee agrees to pay to the
Company or any Related Entity as soon as practicable, including through additional payroll
withholding, any amount of the Tax Withholding Obligation that is not satisfied by the withholding
of Shares described above.

               (ii) By Sale of Shares. Unless the Grantee determines to satisfy the Tax Withholding
Obligation by some other means in accordance with clause (iii) below, the Grantee’s acceptance of
this Award constitutes the Grantee’s instruction and authorization to the Company and any brokerage
firm determined acceptable to the Company for such purpose to sell on the Grantee’s behalf a whole
number of Shares from those Shares issuable to the Grantee as the Company determines to be
appropriate to generate cash proceeds sufficient to satisfy the minimum applicable Tax Withholding
Obligation. Such Shares will be sold on the day such Tax Withholding Obligation arises (e.g., a
vesting date) or as soon thereafter as practicable. The Grantee will be responsible for all
broker’s fees and other costs of sale, and the Grantee agrees to indemnify and hold the Company
harmless from any losses, costs, damages, or expenses relating to any such sale. To the extent the
proceeds of such sale exceed the Grantee’s minimum Tax Withholding Obligation, the Company agrees
to pay such excess in cash to the Grantee. The Grantee acknowledges that the Company or its
designee is under no obligation to arrange for such sale at any particular price, and that the
proceeds of any such sale may not be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation. Accordingly, the Grantee agrees to

2

 

pay to the Company or any Related Entity as soon as practicable, including through additional
payroll withholding, any amount of the Tax Withholding Obligation that is not satisfied by the sale
of Shares described above.

               (iii) By Check, Wire Transfer or Other Means. At any time not less than five (5) business days
before any Tax Withholding Obligation arises (e.g., a vesting date), the Grantee may elect to
satisfy the Grantee’s Tax Withholding Obligation by delivering to the Company an amount that the
Company determines is sufficient to satisfy the Tax Withholding Obligation by (x) wire transfer to
such account as the Company may direct, (y) delivery of a certified check payable to the Company,
or (z) such other means as specified from time to time by the Administrator.

     6. Additional Securities. Any securities or cash received (other than a regular cash
dividend) as the result of ownership of the Restricted Shares (the “Additional Securities”),
including, but not by way of limitation, warrants, options and securities received as a stock
dividend or stock split, or as a result of a recapitalization or reorganization or other similar
change in the Company’s capital structure, shall be retained in escrow in the same manner and
subject to the same conditions and restrictions as the Restricted Shares with respect to which they
were issued, including, without limitation, the Vesting Schedule set forth in the Notice. The
Grantee shall be entitled to direct the Company to exercise any warrant or option received as
Additional Securities upon supplying the funds necessary to do so, in which event the securities so
purchased shall constitute Additional Securities, but the Grantee may not direct the Company to
sell any such warrant or option. If Additional Securities consist of a convertible security, the
Grantee may exercise any conversion right, and any securities so acquired shall constitute
Additional Securities. In the event of any change in certificates evidencing the Shares or the
Additional Securities by reason of any recapitalization, reorganization or other transaction that
results in the creation of Additional Securities, the escrow holder is authorized to deliver to the
issuer the certificates evidencing the Shares or the Additional Securities in exchange for the
certificates of the replacement securities.

     7. Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Agreement, the Notice or the Plan, the Company may issue appropriate
“stop transfer” instructions to its transfer agent, if any, and, if the Company transfers its own
securities, it may make appropriate notations to the same effect in its own records.

     8. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay
dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

3

 

     9. Restrictive Legends. The Grantee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto, to be placed upon
any certificate(s) evidencing ownership of the Shares together with any other legends that may be
required by the Company or by state or federal securities laws:

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE
TERMS OF THAT CERTAIN RESTRICTED STOCK BONUS AWARD AGREEMENT BETWEEN
THE COMPANY AND THE NAMED SHAREHOLDER. THE SHARES REPRESENTED BY
THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH SUCH
AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.

     10. Entire Agreement: Governing Law. The Notice, the Plan and this Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. These agreements are
to be construed in accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California to the rights and duties of
the parties. Should any provision of the Notice or this Agreement be determined to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     11. Headings. The captions used in this Agreement are inserted for convenience and
shall not be deemed a part of this Agreement for construction or interpretation.

     12. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Agreement shall be submitted by
the Grantee or by the Company to the Administrator. The resolution of such question or dispute by
the Administrator shall be final and binding on all persons.

     13. Venue. The parties agree that any suit, action, or proceeding arising out of or
relating to the Notice, the Plan or this Agreement shall be brought in the United States District
Court for the Northern District of California (or should such court lack jurisdiction to hear such
action, suit or proceeding, in a California state court in the County of San Mateo) and that the
parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying of venue for any
such suit, action or proceeding brought in such court. If any one or more provisions of this
Section 13 shall for any reason be held invalid or unenforceable, it is the specific intent of the
parties that such provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.

4

 

     14. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

END OF AGREEMENT

5

 

EXHIBIT A

STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

[Please print out and sign this document but do not date it. The date and information of
the transferee will be completed if and when the shares are assigned.]

          FOR VALUE RECEIVED, _______________hereby sells, assigns and
transfers unto __________________, _________(______) shares of the Common Stock
of Novellus Systems, Inc., a California Company (the “Company”), standing in his name on
the books of, the Company represented by Certificate No. _________ _________
herewith, and does hereby irrevocably constitute and appoint the Secretary of the Company
attorney to transfer the said stock in the books of the Company with full power of
substitution.

DATED: ____________________

	 	 	 	 	 
	 	 	 
	 	By 	 	 
	 
	 	Award Number 	 
	 
	 	Grantee’s Name and Address 	 
	 	 	 
	 	 	 
	 	 	 
	 

1

 

NOVELLUS SYSTEMS, INC.

2001 STOCK INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

	 	 	 	 	 	 	 
	 

	 	Grantee’s Name and Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

     You (the “Grantee”) have been granted an award of Restricted Stock Units (the “Award”),
subject to the terms and conditions of this Notice of Restricted Stock Unit Award (the “Notice”),
the Novellus Systems, Inc. 2001 Stock Incentive Plan, as amended from time to time (the “Plan”) and
the Restricted Stock Unit Agreement (the “Agreement”) attached hereto, as follows. Unless
otherwise provided herein, the terms in this Notice shall have the same meaning as those defined in
the Plan.

	 	 	 	 	 	 	 
	 

	 	Award Number
	 	 

	 	 
	 

	 	Date of Award
	 	 

	 	 
	 

	 	Vesting Commencement Date
	 	 

	 	 
	 

	 	Total Number of Restricted Stock

Units Awarded (the “Units”)
	 	 

	 	 
	 

	 	 
	 	 

	 	 

     Vesting Schedule:

     Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Agreement and the Plan, the Units will “vest” in accordance with the following schedule (the
“Vesting Schedule”):

     [INSERT VESTING SCHEDULE]

     In the event the Grantee’s Continuous Service terminates due to death or Disability, fifty
percent (50%) of the total number of Units awarded will accelerate and vest immediately prior to
such termination of Continuous Service.

     In the event of the Grantee’s change in status from Employee to Consultant or Director, or
from an Employee whose customary employment is 20 hours or more per week to an Employee whose
customary employment is fewer than 20 hours per week, vesting of the Units shall continue in
accordance with the Vesting Schedule set forth above and terms of this Notice, the Agreement and
the Plan, unless affirmatively determined otherwise by the Administrator; provided, however, that
the determination of whether such change in status results in a termination of Continuous Service
(resulting in forfeiture of unvested Units) will be determined in accordance with Section 409A of
the Code.

     During any authorized leave of absence, the vesting of the Units as provided in this schedule
shall be suspended (to the extent permitted under Section 409A of the Code) after the leave of
absence exceeds a period of three (3) months. The Vesting Schedule of the Units shall be extended
by the length of the suspension. Vesting of the Units shall resume upon the

 

 

Grantee’s termination of the leave of absence and return to service to the Company or a
Related Entity; provided, however, that if the leave of absence exceeds six (6) months, and a
return to service upon expiration of such leave is not guaranteed by statute or contract, then (a)
the Grantee’s Continuous Service shall be deemed to terminate on the first date following such
six-month period and (b) the Grantee will forfeit the Units that are unvested on the date of the
Grantee’s termination of Continuous Service. An authorized leave of absence shall include sick
leave, military leave, or other bona fide leave of absence (such as temporary employment by the
government).

     For purposes of this Notice and the Agreement, the term “vest” shall mean, with respect to any
Units, that such Units are no longer subject to forfeiture to the Company. If the Grantee would
become vested in a fraction of a Unit, such Unit shall not vest until the Grantee becomes vested in
the entire Unit.

     Vesting shall cease upon the date the Grantee terminates Continuous Service for any reason,
excluding death or Disability. In the event the Grantee terminates Continuous Service for any
reason, excluding death or Disability, any unvested Units held by the Grantee immediately following
such termination of the Grantee’s Continuous Service shall be forfeited and deemed reconveyed to
the Company and the Company shall thereafter be the legal and beneficial owner of such reconveyed
Units and shall have all rights and interest in or related thereto without further action by the
Grantee. In the event the Grantee terminates Continuous Service due to death or Disability, fifty
percent (50%) of the total number of Units awarded will accelerate and vest immediately prior to
such termination and all remaining unvested Units, if any, shall be forfeited and deemed reconveyed
to the Company and the Company shall thereafter be the legal and beneficial owner of such
reconveyed Units and shall have all rights and interest in or related thereto without further
action by the Grantee.

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the
Award is to be governed by the terms and conditions of this Notice, the Plan, and the Agreement.

	 	 	 	 	 
	 	Novellus Systems, Inc.,

a California corporation

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	Date: 	 	 
	 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE UNITS SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF
THE GRANTEE’S CONTINUOUS SERVICE OR AS OTHERWISE SPECIFICALLY PROVIDED HEREIN (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE AGREEMENT, NOR IN THE PLAN, SHALL CONFER
UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH

2

 

THE GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE AT ANY
TIME, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE
GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS
IS AT WILL.

Grantee Acknowledges and Agrees:

     The Grantee acknowledges receipt of a copy of the Plan and the Agreement and represents that
he or she is familiar with the terms and provisions thereof, and hereby accepts the Award subject
to all of the terms and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Notice and fully understands all provisions of this Notice, the Agreement
and the Plan. The Grantee further agrees and acknowledges that this Award is a non-elective
arrangement pursuant to Section 409A of the Code.

     The Grantee further acknowledges that, from time to time, the Company may be in a “blackout
period” and/or subject to applicable federal securities laws that could subject the Grantee to
liability for engaging in any transaction involving the sale of the Company’s Shares. The Grantee
further acknowledges and agrees that, prior to the sale of any Shares acquired under this Award, it
is the Grantee’s responsibility to determine whether or not such sale of Shares will subject the
Grantee to liability under insider trading rules or other applicable federal securities laws.

     The Grantee understands that the Award is subject to the Grantee’s consent to access, and
acknowledgement of having accessed, the Plan prospectus in connection with the Form S-8
registration statement for the Plan, any updates thereto, the Plan, the Agreement and this Notice
(collectively, the “Plan Documents”) in electronic form through the E*Trade Financial web page at
the following address: [www.etrade.com] or such other address as is provided by notification from
time to time. By accepting the grant of the Award, the Grantee hereby: (i) consents to access
electronic copies (instead of receiving paper copies) of the Plan Documents via the E*Trade
Financial web page or such other web page as is provided by notification from time to time, (ii)
represents that the Grantee has access to the internet generally; (iii) acknowledges receipt of
electronic copies, or that the Grantee is already in possession of paper copies, of the Plan
Documents and the Company’s most recent annual report to shareholders; and (iv) represents that the
Grantee is familiar with the terms and provisions of the Plan Documents and accepts the Award
subject to all of the terms and provisions of the Plan Documents.

     The Grantee may receive, without charge, upon written or oral request, paper copies of any or
all of the Plan Documents, documents incorporated by reference in the Form S-8 registration
statement for the Plan, and the Company’s most recent annual report to shareholders by requesting
them from Stock Administration at Novellus Systems, Incorporated, 4000 North First Street, San
Jose, CA 95134, Attn. Stock Administration M/S 90-2B. Telephone (408) 943-9700, email:
stock.administration@novellus.com.

     The Grantee hereby agrees that all questions of interpretation and administration relating to
this Notice, the Plan and the Agreement shall be resolved by the Administrator in accordance

3

 

with Section 8 of the Agreement. The Grantee further agrees to the venue and jurisdiction
selection in accordance with Section 9 of the Agreement. The Grantee further agrees to notify the
Company upon any change in his or her residence address indicated in this Notice.

	 	 	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 

Grantee’s Signature
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Grantee’s Printed Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

Address
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

4

 

Award Number:                                          

NOVELLUS SYSTEMS, INC.

2001 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

     1. Issuance of Units. Novellus Systems, Inc., a California corporation (the
“Company”), hereby issues to the Grantee (the “Grantee”) named in the Notice of Restricted Stock
Unit Award (the “Notice”) an award (the “Award”) of the Total Number of Restricted Stock Units
Awarded set forth in the Notice (the “Units”), subject to the Notice, this Restricted Stock Unit
Agreement (the “Agreement”) and the terms and provisions of the Novellus Systems, Inc. 2001 Stock
Incentive Plan, as amended from time to time (the “Plan”), which is incorporated herein by
reference. Unless otherwise provided herein, the terms in this Agreement shall have the same
meaning as those defined in the Plan.

     2. Transfer Restrictions. The Units may not be transferred in any manner other than
by will or by the laws of descent and distribution.

     3. Conversion of Units and Issuance of Shares.

          (a) General. Subject to Section 3(b), one share of Common Stock shall be issuable for
each Unit subject to the Award (the “Shares”) upon the earlier of: (i) vesting; or (ii) immediately
prior to the specified effective date of a Change in Control or a Corporate Transaction (each as
defined in the Plan) which also constitutes a “change in the ownership or effective control, or in
the ownership of a substantial portion of the assets” (as defined in Section 409A of the Code) of
the Company. Immediately thereafter, or as soon as administratively feasible, the Company will
transfer the appropriate number of Shares to the Grantee after satisfaction of any required tax or
other withholding obligations. Any fractional Unit remaining after the Award is fully vested shall
be discarded and shall not be converted into a fractional Share. Effective upon the consummation
of a Corporation Transaction, the Award shall terminate unless it is Assumed in connection with the
Corporate Transaction.

          (b) Delay of Conversion. The conversion of the Units into the Shares under Section
3(a), above, shall be delayed in the event the Company reasonably anticipates that the issuance of
the Shares would constitute a violation of federal securities laws or other Applicable Law. If the
conversion of the Units into the Shares is delayed by the provisions of this Section 3(b), the
conversion of the Units into the Shares shall occur at the earliest date at which the Company
reasonably anticipates issuing the Shares will not cause a violation of federal securities laws or
other Applicable Law. For purposes of this Section 3(b), the issuance of Shares that would cause
inclusion in gross income or the application of any penalty provision or other provision of the
Code is not considered a violation of Applicable Law.

          (c) Delay of Issuance of Shares. The Company shall have the authority to delay the
issuance of any Shares under this Section 3 to the extent it deems necessary or

 

 

appropriate to comply with Section 409A(a)(2)(B)(i) of the Code (relating to payments made to
certain “key employees” of certain publicly-traded companies); in such event, any Shares to which
the Grantee would otherwise be entitled during the six (6) month period following the date of the
Grantee’s termination of Continuous Service will be issuable on the first business day following
the expiration of such six (6) month period.

     4. Right to Shares. The Grantee shall not have any right in, to or with respect to
any of the Shares (including any voting rights or rights with respect to dividends paid on the
Common Stock) issuable under the Award until the Award is settled by the issuance of such Shares to
the Grantee.

     5. Taxes.

          (a) Tax Liability. The Grantee is ultimately liable and responsible for all taxes
owed by the Grantee in connection with the Award, regardless of any action the Company or any
Related Entity takes with respect to any tax withholding obligations that arise in connection with
the Award. Neither the Company nor any Related Entity makes any representation or undertaking
regarding the treatment of any tax withholding in connection with the grant or vesting of the Award
or the subsequent sale of Shares issuable pursuant to the Award. The Company does not commit and
is under no obligation to structure the Award to reduce or eliminate the Grantee’s tax liability.

          (b) Payment of Withholding Taxes. Prior to any event in connection with the Award
(e.g., vesting) that the Company determines may result in any tax withholding obligation, whether
United States federal, state, local or non-U.S., including any employment tax obligation (the “Tax
Withholding Obligation”), the Grantee must arrange for the satisfaction of the minimum amount of
such Tax Withholding Obligation in a manner acceptable to the Company.

               (i) By Share Withholding. The Grantee authorizes the Company to, upon the exercise of its
sole discretion, withhold from those Shares issuable to the Grantee the whole number of Shares
sufficient to satisfy the minimum applicable Tax Withholding Obligation. The Grantee acknowledges
that the withheld Shares may not be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation. Accordingly, the Grantee agrees to pay to the Company or any Related Entity as soon as
practicable, including through additional payroll withholding, any amount of the Tax Withholding
Obligation that is not satisfied by the withholding of Shares described above.

               (ii) By Sale of Shares. Unless the Grantee determines to satisfy the Tax Withholding
Obligation by some other means in accordance with clause (iii) below, the Grantee’s acceptance of
this Award constitutes the Grantee’s instruction and authorization to the Company and any brokerage
firm determined acceptable to the Company for such purpose to, upon the exercise of Company’s sole
discretion, sell on the Grantee’s behalf a whole number of Shares from those Shares issuable to the
Grantee as the Company determines to be appropriate to generate cash proceeds sufficient to satisfy
the minimum applicable Tax Withholding Obligation. Such Shares will be sold on the day such Tax
Withholding Obligation arises (e.g., a vesting date) or as soon thereafter as practicable. The
Grantee will be responsible for all broker’s fees and other costs of sale, and the Grantee agrees
to indemnify and hold the Company harmless from

2

 

any losses, costs, damages, or expenses relating to any such sale. To the extent the proceeds
of such sale exceed the Grantee’s minimum Tax Withholding Obligation, the Company agrees to pay
such excess in cash to the Grantee. The Grantee acknowledges that the Company or its designee is
under no obligation to arrange for such sale at any particular price, and that the proceeds of any
such sale may not be sufficient to satisfy the Grantee’s minimum Tax Withholding Obligation.
Accordingly, the Grantee agrees to pay to the Company or any Related Entity as soon as practicable,
including through additional payroll withholding, any amount of the Tax Withholding Obligation that
is not satisfied by the sale of Shares described above.

               (iii) By Check, Wire Transfer or Other Means. At any time not less than five (5) business days
(or such fewer number of business days as determined by the Administrator) before any Tax
Withholding Obligation arises (e.g., a vesting date), the Grantee may elect to satisfy the
Grantee’s Tax Withholding Obligation by delivering to the Company an amount that the Company
determines is sufficient to satisfy the Tax Withholding Obligation by (x) wire transfer to such
account as the Company may direct, (y) delivery of a certified check payable to the Company, or (z)
such other means as specified from time to time by the Administrator.

Notwithstanding the foregoing, the Company or a Related Entity also may satisfy any Tax Withholding
Obligation by offsetting any amounts (including, but not limited to, salary, bonus and severance
payments) payable to the Grantee by the Company and/or a Related Entity.

     6. Entire Agreement; Governing Law. The Notice, the Plan and this Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. These agreements are
to be construed in accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of California to the rights and duties of
the parties. Should any provision of the Notice or this Agreement be determined to be illegal or
unenforceable, the other provisions shall nevertheless remain effective and shall remain
enforceable.

     7. Construction. The captions used in the Notice and this Agreement are inserted for
convenience and shall not be deemed a part of the Award for construction or interpretation. Except
when otherwise indicated by the context, the singular shall include the plural and the plural shall
include the singular. Use of the term “or” is not intended to be exclusive, unless the context
clearly requires otherwise.

     8. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Agreement shall be submitted by
the Grantee or by the Company to the Administrator. The resolution of such question or dispute by
the Administrator shall be final and binding on all persons.

     9. Venue and Jurisdiction. The parties agree that any suit, action, or proceeding
arising out of or relating to the Notice, the Plan or this Agreement shall be brought exclusively
in the

3

 

United States District Court for the Northern District of California (or should such court
lack jurisdiction to hear such action, suit or proceeding, in a California state court in the
County of San Mateo) and that the parties shall submit to the jurisdiction of such court. The
parties irrevocably waive, to the fullest extent permitted by law, any objection the party may have
to the laying of venue for any such suit, action or proceeding brought in such court. If any one
or more provisions of this Section 9 shall for any reason be held invalid or unenforceable, it is
the specific intent of the parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.

     10. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

     11. Data Privacy. The Grantee hereby explicitly and unambiguously consents to the
collection, use and transfer, in electronic or other form, of the Grantee’s personal data as
described in this Agreement by and among, as applicable, the Grantee’s employer, the Company, and
any Related Entity for the exclusive purpose of implementing, administering and managing the
Grantee’s participation in the Plan. The Grantee understands that the Company or any Related
Entity may hold certain personal information about the Grantee, including, but not limited to, the
Grantee’s name, home address and telephone number, date of birth, social security/insurance number
or other identification number, salary, nationality, job title, any shares of Common Stock or
directorships held in the Company, details of all awards or any other entitlement to shares
awarded, canceled, vested, unvested or outstanding in the Grantee’s favor, for the purpose of
implementing, administering and managing the Plan (“Data”). The Grantee understands that Data may
be transferred to any third parties assisting in the implementation, administration and management
of the Plan, that these recipients may be located in the Grantee’s country, or elsewhere, and that
the recipient’s country may have different data privacy laws and protections than the Grantee’s
country. The Grantee understands that the Grantee may request a list with the names and addresses
of any potential recipients of the Data by contacting the Grantee’s local human resources
representative. The Grantee authorizes the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of implementing, administering and
managing the Grantee’s participation in the Plan, including any requisite transfer of such Data as
may be required to a broker, escrow agent or other third party with whom the Shares received upon
vesting of the Units may be deposited. The Grantee understands that Data will be held pursuant to
this Section 11 only as long as is necessary to implement, administer and manage the Grantee’s
participation in the Plan. The Grantee understands that the Grantee may, at any time, view Data,
request additional information about the storage and processing of Data, require any necessary
amendments to Data or refuse or withdraw the consents herein, in any case without cost, by
contacting in writing the Grantee’s local human resources representative. The Grantee understands
that refusal or withdrawal of consent may affect the Grantee’s ability to participate in the Plan.
For more information on the consequences of the Grantee’s refusal to consent or withdrawal of
consent, the Grantee understands that the Grantee may contact the Grantee’s local human resources
representative.

4

 

     12. Amendment and Delay to Meet the Requirements of Section 409A. The Grantee
acknowledges that the Company, in the exercise of its sole discretion and without the consent of
the Grantee, may amend or modify this Agreement in any manner and delay the issuance of any Shares
issuable pursuant to this Agreement to the minimum extent necessary to meet the requirements of
Section 409A of the Code as amplified by any Treasury regulations or guidance from the Internal
Revenue Service as the Company deems appropriate or advisable.

END OF AGREEMENT

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