Document:

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                                                                     EXHIBIT 4.4

                       1995 DIRECTORS' STOCK OPTION PLAN
                             OF ETEC SYSTEMS, INC.

     SECTION 1. ESTABLISHMENT AND PURPOSE.
     ------------------------------------

     The Plan was adopted by the Board on March 7, 1995, subject to approval by
the Company's stockholders at the Annual Meeting of Stockholders on September
12, 1995.  The purpose of the Plan is to promote the long-term success of the
Company by (a) encouraging Non-employee Directors to focus on critical long-
range objectives, (b) encouraging the attraction and retention or Non-employee
Directors with exceptional qualifications and (c) linking Non-employee Directors
directly to stockholder interests through increased stock ownership.  The Plan
seeks to achieve this purpose by providing for the grant of Non-statutory
options to purchase shares of Common Stock.

     SECTION 2. DEFINITIONS.
     ----------------------

          (a)  "Board of Directors" shall mean the Board of Directors of the
                ------------------
Company, as constituted from time to time.

          (b)  "Code" shall mean the internal Revenue Code of 1986, as amended.
                ----
          (c)  "Company" shall mean Etec Systems, Inc., a Nevada Corporation, or
                -------
any successor.

          (d)  "Exchange Act" shall mean the Securities and Exchange Act of
                ------------
1934, as amended.

          (e)  "Exercise Price" shall mean the amount for which one Share may be
                --------------
purchased upon exercise of an Option, as specified in Section 5(c) and in the
applicable Stock Option Agreement.

          (f)  "Fair Market Value" shall mean (a) the closing price of a share
                -----------------
of Common Stock on the principal exchange on which the shares are trading, on
the day on which the Fair Market Value is determined, or (b) if the shares of
Common Stock are not traded on an exchange but are quoted on NASDAQ or a
successor quotation system, the closing price on the day on which the Fair
Market Value is determined, or (c) if the shares are not traded on an exchange
or quoted on the NASDAQ or a successor quotation system, the Fair Market Value
of a share, as determined by the Committee in good faith.

          (g)  "Non-employee Director" shall mean a member of the Board of
                ---------------------
Directors (i) who is not and has never been an employee (within the meaning or
section 3401(c) of the Code and the regulations thereunder) (A) of the Company,
(B) of a Subsidiary of the Company or (C) of
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an affiliate of the Company the meaning of the Securities Act of 1933) and (ii)
who is not prohibited under the terms of his or her employment from accepting
the Options granted under this Plan.

          (h)   "Non-statutory Option" shall mean a stock option not described
                 --------------------
in section 422(b) or 423(b) of the Code.

          (i)   "Option" shall mean a Non-statutory Option granted under the
                 ------
Plan and entitling the holder to purchase Shares.

          (j)   "Optionee" shall mean an individual who holds an Option.
                 --------

          (k)   "Plan" shall mean this 1995 Directors' Stock Option Plan of Etec
                 ----
Systems, Inc., as amended pursuant to Section 8(b).

          (l)   "Service" shall mean service as a Non-Employee Director.
                 -------

          (m)   "Share" shall mean one share of Stock, as adjusted in accordance
                 -----
with Section 7 (if applicable).

          (n)   "Stock" shall mean the Common Stock of the Company.
                 -----

          (o)   "Stock Option Agreement" shall mean the agreement between the
                 ----------------------
Company and an Optionee which, subject to this Plan, contains the terms,
conditions and restrictions pertaining to his or her Option.

          (p)   "Subsidiary" shall mean any corporation, if the Company and/or
                 ----------
one or more other Subsidiaries own not less than 50 percent of the total
combined voting power of all classes or outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a date after the adoption
of the Plan shall he considered a Subsidiary commencing as of such date.

     SECTION 3. ADMINISTRATION.
     --------------------------

          (a)   Plan Administrator.  The Plan shall he administered by the Board
                ------------------
of Directors.

          (b)   Board Responsibilities.  Subject to the provisions of the Plan
                ----------------------
and, as of any date that the Company becomes registered under Section 12 of the
Exchange Act, the Rule 16b-3 requirements for "formula plans," the Board of
Directors shall have full authority and discretion to take the following
actions:

                (i)  To interpret the Plan and to apply its provisions;

                (ii) To adopt, amend or rescind rules, procedures and forms
relating to the Plan;

                                      -2-
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                (iii)  To authorize any person to execute, on behalf of the
Company, any instrument required to carry out the purposes of the Plan; and

                (iv)   To take any other actions deemed necessary or advisable
for the administration of the Plan.

     All decisions, interpretations and other actions of the Board of Directors
shall be final and binding on all Optionees and all other persons deriving their
rights from an Optionee.  No member of the Board of Directors shall be liable
for any action that he or she has taken or has failed to take in good faith with
respect to the Plan or any option.

     SECTION 4. STOCK SUBJECT TO PLAN.
     --------------------------------

          (a)   Basic Limitation.  Shares offered under the Plan shall be
                ----------------
treasury Shares or authorized but unissued Shares. Subject to adjustment
pursuant to Section 7, a total of 200,000 Shares are subject to Options and are
available for issuance under the Plan. The Company, during the term of the Plan,
shall at all times reserve and keep available sufficient Shares to satisfy the
purposes of the Plan.

          (b)   Additional Shares.  In the event that any outstanding option for
                -----------------
any reason expires or is canceled or otherwise terminated, the Shares allocable
to the unexercised portion of such Option shall again be available for the
purposes of this Plan.

     SECTION 5. TERMS AND CONDITIONS OF OPTIONS.
     ------------------------------------------

          (a)   Stock Option Agreement.  Each grant of an Option shall he
                ----------------------
evidenced by a Stock Option Agreement between the Optionee and the Company. Such
Option shall be subject to all applicable terms and conditions of the Plan and
may be subject to any other terms and conditions that are not inconsistent with
the Plan and that the Board of Directors deems appropriate for inclusion in a
Stock Option Agreement.

          (b)   Eligibility and Time of Grant.  Each Non-employee Director who
                -----------------------------
was a member of the Board on March 7, 1995 shall receive an Option covering
8,000 Shares on such date. Thereafter, each such Non-employee Director shall
receive an option covering 3,000 Shares on the date of each succeeding Annual
Meeting of Stockholders, on which he or she serves as a member of the Board of
Directors. Each Non-employee Director who first joins the Board of Directors
after March 7, 1995 shall receive an Option covering 8,000 Shares as of the
first business day of his or her election to the Board of Directors. Thereafter,
such Non-employee Director shall receive an Option covering 3,000 shares, on the
date of each succeeding Annual Meeting of Stockholders provided he or she serves
as a member of the Board of Directors on such date. (The number of Shares
included in an Option shall be subject to adjustment under Section 7).

          (c)   Exercise Price.  The Exercise Price under each option shall be
                --------------
100 percent of the Fair Market value of the Shares subject to such Option on the
date when such Option is granted.

                                      -3-
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The entire Exercise Price of Shares issued under the Plan shall be payable in
cash or by check when the Option is exercised, except as follows:

          (i)    Payment may be made with Shares that have already been owned by
the Optionee for more than six months and that are surrendered to the Company
(in good form for transfer) in payment of all or part of the Exercise Price and
any withholding taxes. Such Shares shall be valued at their Fair Market Value on
the date when the new Shares are purchased under the Plan.

          (ii)   As of any date that the Company becomes registered under
Section 12 of the Exchange Act, payment may be made by the delivery (on a form
prescribed by the Company) of an irrevocable direction to a securities broker
approved by the Company to sell Shares and to deliver all or part of the sales
proceeds to the Company in payment of all or part of the Exercise Price and any
withholding taxes.

          (iii)  As of any date that the Company becomes registered under
Section 12 of the Exchange Act, payment may be made by the delivery (on a form
prescribed by the Company) of an irrevocable direction to pledge Shares to a
securities broker or lender approved by the Company as security for a loan and
to deliver all or part of the loan proceeds to the Company in payment of all or
part of the Exercise Price and any withholding taxes.

     (d)  Vesting.  Subject to the stockholder approval requirement of
          -------
Subsection (h) below, each Option shall become exercisable as follows:

          (i)    With respect to the Options covering 8,000 Shares, 4,000 Shares
shall become exercisable one year from the date of grant and the remaining 4,000
Shares shall become exercisable on the second anniversary of the date of grant,
if the Optionee remains in Service on such anniversary date.

          (ii)   With respect to the Options covering 3,000 Shares, such option
shall become exercisable the day prior to the Annual Meeting of Stockholders
next following the date of grant, or, if earlier, the 365th day after the last
Annual Meeting of Stockholders.

          (iii)  Notwithstanding 5d(i) and (ii) above, all outstanding options
shall immediately vest on the death or total disability of the Optionee.

     Notwithstanding the Service conditions in Subparagraph (i) (a) or (i) (b),
if an Optionee is not in Service on the anniversary date because of removal from
the Board of Directors, any Shares scheduled to become exercisable on the
vesting date next following his or her removal shall nonetheless become
exercisable.

     (e)  Term of Options.  Each Option shall expire on the 10th anniversary of
          ---------------
the date when such Option was granted.

     (f)  Termination of Service.  If an Optionee's Service terminates for any
          ----------------------
reason, then his or her Option shall expire one year from the date of
termination. The Optionee may

                                      -4-
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exercise all or part of his or her option at any time before its expiration
under the preceding sentence, but only to the extent that such Option is
exercisable in accordance with Section 5(d). The unexercisable balance of such
Option shall lapse. In the event that the Optionee's service terminates because
of his or her death or the Optionee dies after the termination of his or her
service, but before the expiration of his or her Option, all or part of such
option may be exercised (prior to expiration) by the executors or administrators
of the Optionee's estate or by any person who has acquired such option directly
from him or her by bequest, inheritance or beneficiary designation, but only to
the extent that such Option is exercisable in accordance with Section 5(d).

          (g)  Non-transferability. During an Optionee's lifetime, his or her
               -------------------
Option shall be exercisable only by him or her and shall be non-transferable. In
the event of an Optionee's death, his or her Option shall not be transferable
other than by bequest, inheritance or beneficiary designation.

          (h)  Stockholder Approval. Subsection (d) above notwithstanding, no
               --------------------
Option shall be exercisable under any circumstances unless and until the
Company's stockholders have approved the Plan.

     SECTION 6.  MISCELLANEOUS PROVISIONS.
     ------------------------------------

          (a)  No Rights as a Stockholder. An Optionee, or a transferee of an
               --------------------------
Optionee, shall have no rights as a stockholder with respect to any Shares
covered by his or her option until such Optionee or transferee is entitled,
pursuant to the terms of the Plan, to receive such Shares. No adjustment shall
be made except as provided in Section 7.

          (b)  Restrictions on Issuance of Shares. Shares shall not be issued
               ----------------------------------
under the Plan unless the issuance and delivery of such Shares complies with (or
is exempt from) all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, state securities laws and regulations, and the
regulations of any stock exchange on which the Company's securities may then be
listed. The Company may impose restrictions upon the sale, pledge or other
transfer of such Common Shares (including the placement of appropriate legends
on stock certificates) if, in the judgment of the Company and its counsel, such
restrictions are necessary or desirable in order to achieve compliance with the
provisions of the Securities Act of 1933, as amended, the securities laws of any
state or any other law.

          (c)  No Retention Rights. No provision of the Plan, nor any Option
               -------------------
granted under the Plan, shall be construed as giving any person the right to
become or to be treated as a Non-employee Director or to remain a Non-employee
Director.

     SECTION 7.  ADJUSTMENT OF SHARES.
     --------------------------------

          (a)  General.  In the event of a subdivision of the outstanding Stock,
               -------
a declaration of a dividend payable in Shares, a declaration of a dividend
payable in a form other than Shares in an amount that has a material effect on
the value of Shares, a combination or consolidation of the outstanding Stock (by
reclassification or otherwise) into a lesser number of Shares, a
recapitalization

                                      -5-
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or a similar occurrence, the Board of Directors shall make appropriate
adjustments in one or more of (i) the number of options available for future
grants under Section 4, (ii) the number of Shares to be covered by each new
Option under Section 5(d), (iii) the number of Shares covered by each
outstanding Option or (iv) the Exercise Price under each outstanding Option.

          (b)  Reorganizations. In the event that the Company is a party to a
               ---------------
merger or consolidation, outstanding Options shall be subject to the agreement
of merger or consolidation. Such agreement may provide, without limitation, for
the assumption of outstanding Options by the surviving corporation or its
parent, for their continuation by the Company (if the Company is a surviving
corporation), for payment of a cash settlement equal to the difference between
the amount to be paid for one Share under such agreement and the Exercise Price,
or for the acceleration of their exercisability followed by the cancellation of
Options not exercised, in all cases without the Optionees' consent. Any
cancellation shall not occur earlier than 30 days after such acceleration is
effective and Optionees have been notified of such acceleration.

          (c)  Reservation of Rights. Except as provided in this Section 7, an
               ---------------------
Optionee shall have no rights by reason of any subdivision or consolidation of
shares of stock of any class, the payment of any dividend or any other increase
or decrease in the number of shares of stock of any class. Any issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number or Exercise Price of Shares subject to
an Option. The grant of an Option pursuant to the Plan shall not affect in any
way the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer all or any part of its
business or assets.

     SECTION 8.  DURATION AND AMENDMENTS.
     -----------------------------------

          (a)  Term of the Plan. The Plan, as set forth herein, shall become
               ----------------
effective on March 7, 1995 subject to approval of the Company's stockholders.
The Plan shall remain effective until it is terminated pursuant to Subsection
(b) below.

          (b)  Right to Amend or Terminate this Plan. The Board of Directors may
               -------------------------------------
amend the Plan at any time and from time to time, provided that, as of any date
                                    ------------
on which the Company becomes registered under Section 12 of the Exchange Act,
the Board of Directors may amend the Plan no more than once every six months
unless such amendment is required to comply with the Code, or the Employee
Retirement Income Security Act of 1974, as amended, or the rules thereunder.
Rights and obligations under any option granted before amendment of the Plan
shall not be materially altered, or impaired by such amendment, except with
consent of the person to whom the Option was granted. An amendment of the Plan
shall be subject to the approval of the Company's stockholders only to the
extent required by applicable laws, regulations or rules.

          (c)  Effect of Amendment or Termination. No Shares shall be issued or
               ----------------------------------
sold under the Plan after termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the Plan, or any amendment
thereof, shall not affect any Option previously granted under the Plan.

                                      -6-
<PAGE>

                            AMENDMENT NO. 1 TO THE
                              ETEC SYSTEMS, INC.
                       1995 DIRECTORS' STOCK OPTION PLAN

     ETEC SYSTEMS, INC., having established the Etec Systems, Inc. 1995
Directors' Stock Option Plan (the "Plan"), hereby amends the Plan, effective as
of March 29, 2000 as follows:

          1.  Section 8 of the Plan is hereby amended in its entirety as
     follows:

              SECTION 8  TERM OF THE PLAN.  In connection with the merger
              ---------------------------
     (the "Merger") of Etec Systems, Inc. ("Etec") and Boston Acquisition Sub,
     Inc. ("Boston"), a Nevada corporation and a wholly-owned subsidiary of
     Applied Materials, Inc. ("AMAT"), Options previously granted to Optionees
     under the Plan that remain outstanding as of March 29, 2000 (the
     "Outstanding Options"), have been modified pursuant to the Agreement and
     Plan of Reorganization and Merger dated as of January 12, 2000 (the "Merger
     Agreement"), among Etec, Boston and AMAT, so as to be exercisable only into
     shares of common stock of AMAT, par value $0.01 per share (the "Stock"),
     all as set forth in the Merger Agreement and subject to its terms and
     conditions.  Effective as of March 29, 2000, except with respect to the
     Outstanding Options, the Plan is terminated.  Accordingly no Shares remain
     available for future grant under the Plan, other than pursuant to the
     Outstanding Options.

          2. Section 2.(n) of the Plan is amended in its entirety as follows:

              2.(n) "Stock" shall mean the Common Stock of Applied Materials,
                     -----
     Inc., a Delaware company.

          3. Section 3.(a) is hereby amended in its entirety to read as follows:

             3.(a) Plan Administrator. The Plan shall be administered by the
                   ------------------
     Stock Option and Compensation Committee of the Board of Directors of AMAT.
     As used throughout this Plan, the "Board" shall mean the Stock Option and
     Compensation Committee of the Board of Directors of AMAT.

          4. Section 4 is hereby amended in its entirety to read as follows:

             SECTION 4. STOCK SUBJECT TO PLAN.
             --------------------------------

             AMAT has reserved such number of Shares as are necessary to
          satisfy the Outstanding Options.

          5. Section 5(b) is hereby amended in its entirety to read as follows:

             (b) No Further Option Grants.  Effective March 29, 2000, except
                 ------------------------
          with respect to the Outstanding Options, the Plan is terminated.
          Accordingly, no further Options shall be granted under the Plan.
          Optionees holding Outstanding Options may continue to exercise such
          Outstanding Options in accordance with their terms, subject to the
          terms and conditions of the Merger Agreement.

                                      -7-
<PAGE>

     IN WITNESS WHEREOF, Etec Systems, Inc., by the officer identified below,
who has been duly authorized by the Board of Directors of the Company, has
executed this Amendment No. 1 on the date indicated below.

                                            ETEC SYSTEMS, INC.

                                            By:_____________________

                                            Title:__________________

                                            Date:___________________

                                      -8-<PAGE>

                                                                     EXHIBIT 4.5

                          1995 OMNIBUS INCENTIVE PLAN

                             OF ETEC SYSTEMS, INC.
                             ---------------------

     ARTICLE 1.  INTRODUCTION
     ----------  ------------

     The Plan was adopted by the Board of Directors on July 18, 1995, effective
June 1, 1995.  The Company's stockholders subsequently approved the Plan at the
annual meeting of stockholders on September 12, 1995, subject to the Company
becoming a registered company under section 12 of the Exchange Act.  The Company
became a company registered under section 12 of the Exchange Act on October 27,
1995.

     The purpose of the Plan is to promote the long-term success of the Company
and the creation of shareholder value by (a) encouraging Key Employees to focus
on critical long-range objectives, (b) encouraging the attraction and retention
of Key Employees and (c) linking the interests of Key Employees directly to
those of shareholders through increased stock ownership.  The Plan provides for
Awards in the form of Restricted Shares, Stock Units, or Options (which may
constitute incentive stock options or non-statutory stock options).

     The Plan is intended to comply in all respects with Rule 16b-3 (or its
successor) under the Exchange Act and shall be construed accordingly.

     ARTICLE 2.  DEFINITIONS
     ----------  -----------

          2.1  "Affiliate" means any entity other than a subsidiary, if the
                ---------
Company and/or one or more Subsidiaries own not less than 50% of such entity.

          2.2  "Award" means any award of an Option, a Restricted Share or a
                -----
Stock Unit under the Plan. Awards may be made in any combination of NSO,
Restricted Shares or Stock Units.

          2.3  "Board of Directors" means the Company's Board of Directors, as
                ------------------
constituted from time to time.

          2.4  "Change in Control" means the shareholders of the Company approve
                -----------------
a merger or consolidation of the Company with, or the sale of substantially all
the Company's assets to, any other person or corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least 80% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation.

     Any other provision of this Section 2.4 notwithstanding, the term "Change
in Control" shall not include either of the following events, if undertaken at
the election of the Company:
<PAGE>

               (a)  A transaction, the sole purpose of which is to change the
state of the Company's incorporation; or

               (b)  A transaction, the result of which is to sell all or
substantially all of the assets of the Company to another corporation (the
"surviving corporation"); provided that the surviving corporation is owned
directly or indirectly by the shareholders of the Company immediately following
such transaction in substantially the same proportions as their ownership of the
Company's common stock immediately preceding such transaction; and provided,
further, that the surviving corporation expressly assumes this Plan and all
outstanding Awards.

          2.5  "Code" means the Internal Revenue Code of 1986, as amended.
                ----

          2.6  "Committee" means a committee of the Board of Directors, as
                ---------
described in Article 3.

          2.7  "Company" means ETEC Systems, Inc., a Nevada corporation.
                -------

          2.8  "Exchange Act" means the Securities Exchange Act of 1934, as
                ------------
amended.

          2.9  "Exercise Price" means the amount for which one Share may be
                --------------
purchased upon exercise of an Option, as specified in the applicable Stock
Option Agreement.

          2.10 "Fair Market Value" means (a) the closing price of a Share on
                -----------------
the principal exchange on which the Shares are trading, on the date on which the
Fair Market Value is determined, or (b) if the Shares are not traded on an
exchange but are quoted on NASDAQ or a successor quotation system, the closing
price on the date on which the Fair Market Value is determined, or (c) if the
Shares are not traded on an exchange or quoted on the NASDAQ or a successor
quotation system, the fair market value of a Share, as determined by the
Committee in good faith. Such determination shall be conclusive and binding on
all persons.

     Whenever possible, the determination of Fair Market Value by the Committee
shall be based on the prices reported in the Western Edition of The Wall Street
                                                                ---------------
Journal.  Determinations of Fair Market Value shall be conclusive and binding on
-------
all persons.

          2.11 "ISO" means an incentive stock option described in section 422(b)
                ---
of the Code.

          2.12 "Key Employee" means (a) a common-law employee of the Company, a
                ------------
Parent, a Subsidiary or an Affiliate or (b) a consultant or adviser who provides
services to the Company, a Parent, a Subsidiary or an Affiliate as an
independent contractor. Service as an independent contractor shall be considered
employment for all purposes of the Plan, except as provided in Section 5.3.

          2.13 "NSO" means an employee stock option not described in sections
                ---
422 or 423 of the Code.

                                      -2-
<PAGE>

          2.14 "Option" means an ISO or NSO granted under the Plan and
                ------
entitling the holder to purchase one Share.

          2.15 "Optionee" means an individual or estate who holds an Option.
                --------

          2.16 "Outside Director" shall mean a member of the Board of Directors
                ----------------
who is not a common-law employee of the Company, a Parent, a Subsidiary or an
Affiliate.

          2.17 "Parent" means any corporation (other than the Company) in an
                ------
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. A corporation that attains the status of a Parent on
a date after the adoption of the Plan shall be considered a Parent commencing as
of such date.

          2.18 "Participant" means an individual or estate who holds an Award.
                -----------

          2.19 "Plan" means this 1995 Omnibus Incentive Plan of ETEC Systems,
                ----
Inc, as it may be amended from time to time.

          2.20 "Restricted Share" means a Share awarded under the Plan.
                ----------------

          2.21 "Share" means one share of the common stock of the Company.
                -----

          2.22 "Stock Award Agreement" means the agreement between the Company
                ---------------------
and the recipient of a Restricted Share or Stock Unit which contains the terms,
conditions and restrictions pertaining to such Restricted Share or Stock Unit.

          2.23 "Stock Option Agreement" means the agreement between the Company
                ----------------------
and an Optionee which contains the terms, conditions and restrictions pertaining
to his or her Option.

          2.24 "Stock Unit" means a bookkeeping entry representing the
                ------------------------------------------------------
equivalent of one Share, as awarded under the Plan.
--------------------------------------------------

          2.25 "Subsidiary" means any corporation (other than the Company) in
                ----------
an unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains
the status of a Subsidiary on a date after the adoption of the Plan shall be
considered a Subsidiary commencing as of such date.

     ARTICLE 3.  ADMINISTRATION
     ----------

          3.1  Committee Composition. The Plan shall be administered by the
               ---------------------
Committee.

               (a)  Except as provided in Subsection (b), the Board of Directors
shall appoint a Committee to administer the Plan consisting of two or more
Outside Directors of the

                                      -3-
<PAGE>

Company and meeting such other requirements as may be established from time to
time by the Securities and Exchange Commission for plans intended to qualify for
exemption under Rule 16b3 (or its successor) under the Exchange Act.

               (b)  The Board of Directors may also appoint one or more separate
committees of the Board of Directors, each composed of one or more directors of
the company who need not be Outside Directors, who may administer the Plan with
respect to Kay Employees who are not officers or directors of the Company, may
grant Awards under the Plan to such Key Employees and may determine all terms of
such Awards.

          3.2  Committee Responsibilities.  The Committee shall (a) select the
               --------------------------
Key Employees who are to receive Awards under the Plan, (b) determine the type,
number, vesting requirements and other features and conditions of such Awards,
(c) interpret the Plan and (d) make all other decisions relating to the
operation of the Plan. The Committee may adopt such rules or guidelines, as it
deems appropriate to implement the Plan. The Committee's determinations under
the Plan shall be final and binding on all persons.

     ARTICLE 4.  SHARES AVAILABLE FOR GRANTS
     ----------  ---------------------------

          4.1  Basic Limitation.  Shares issued pursuant to the Plan shall be
               ----------------
authorized but unissued Shares and Shares acquired in the open market. The
aggregate number of Shares reserved for award as Restricted Shares, Stock Units,
and Options shall be 4,775,000 Shares, provided that no more than 10% of the
preceding amount may be awarded as Restricted Shares. Any Shares that have been
reserved but not awarded as Restricted Shares, Stock Units, and Options during
any calendar year shall remain available for award in any subsequent calendar
year. The limitations of this Section 4.1 shall be subject to adjustment
pursuant to Article 10.

          4.2  Additional Shares.  If Stock Units or Options are forfeited or if
               -----------------
Options terminate for any other reason before being exercised, then such Stock
Units or Options shall again become available for Awards under the Plan. If
Restricted Shares are forfeited before any dividends have been paid with respect
to such Restricted Shares, then such Restricted Shares shall again become
available for Awards under the Plan. In addition, any Shares previously issued
under the Plan and repurchased by the Company shall again become available for
Awards under the Plan.

          4.3  Dividend.  Any dividend equivalents distributed under the Plan
               --------
shall not be applied against the number of Restricted Shares, Stock Units, or
Options available for Awards, whether or not such dividend equivalents are
converted into Stock Units.

     ARTICLE 5.  ELIGIBILITY
     ----------  -----------

          5.1  General Rules.  Only Key Employees shall be eligible for
               -------------
designation as Participants by the Committee.

          5.2  Outside Directors.  Outside Directors are not eligible for Awards
               -----------------
under this Plan.

                                      -4-
<PAGE>

          5.3  Incentive Stock Options.  Only Key Employees who are common-law
               -----------------------
employees of the Company, a Parent or a Subsidiary shall be eligible for the
grant of ISOs. Independent contractors and consultants are not eligible for the
grant of ISOs. In addition, a Key Employee who owns more than 10% of the total
combined voting power of all classes of outstanding stock of the Company or any
of its Parents or Subsidiaries shall not be eligible for the grant of an ISO
unless the requirements set forth in section 422(c)(5) of the Code are
satisfied.

     ARTICLE 6.  OPTIONS
     ----------  -------

          6.1  Stock Option Agreement.  Each grant of an Option under the Plan
               ----------------------
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company. Such Option shall be subject to all applicable terms of the Plan and
may be subject to any other terms that are not inconsistent with the Plan, as
determined by the Committee. The Stock Option Agreement shall specify whether or
to what extent the Option is an ISO or an NSO. The provisions of the various
Stock Option Agreements entered into under the Plan need not be identical.

          6.2  Number of Shares.  Each Stock Option Agreement shall specify the
               ----------------
number of Shares subject to the Option subject to the adjustment of such number
in accordance with Article 10. Options granted to an Optionee in a single
calendar year shall in no event pertain to more than 100,000 Shares, subject to
adjustment in accordance with Article 10.

          6.3  Exercise Price. Each Stock Option Agreement shall specify the
               --------------
Exercise Price, which shall in no event be less than 100% of the Fair Market
Value of a Share on the date of grant (or, for a Key Employee who owns more than
10% of the total combined voting power of all classes of outstanding stock of
the Company or any of its Parents or Subsidiaries, 110% of the Fair Market Value
of a Share on the date of grant.)

          6.4  Exercisability and Term.  Each Stock Option Agreement shall
               -----------------------
specify the date when all or any installment of the Option is to become
exercisable. The Stock Option Agreement shall also specify the term of the
Option; provided that the term of an option shall in no event exceed 10 years
from the date of grant (or, for a Key Employee who owns more than 10% of the
total combined voting power of all classes of outstanding stock of the Company
or any of its Parents or Subsidiaries, five years from the date of grant).
Options may not be exercised more than one year from the date of termination if
the termination was caused by death or disability and more than 60 days from the
date of termination if the termination was for any other reason. The vesting of
any Option shall be determined by the Committee in its sole discretion,
provided, however, that no Option is exercisable less than six months after the
grant date, subject to the following exceptions: the Option shall be immediately
exercisable in the event of the Optionee terminates employment as a result of
his or her death or a disability that the Committee finds is a total and
permanent disability. Otherwise, the Stock Option Agreement may provide for (1)
accelerated exercisability in the event of the Optionee's retirement or (2) that
such Option shall become fully exercisable as to all Shares subject to such
Option in the event of a Change in Control.

          6.5  Modification of Exercise Price.  Neither the Board of Directors
               ------------------------------
nor the Committee may, without stockholder approval, make any adjustment or
amendment to the Exercise

                                      -5-
<PAGE>

Price of a ny Option previously awarded under the Plan, whether through
amendment, cancellation or replacement grants, or any other means.

     ARTICLE 7.  PAYMENT FOR OPTION
     ----------  ------------------

          7.1  General Rule.  The entire Exercise Price of Shares issued upon
               ------------
exercise of Options shall be payable in cash at the time when such Shares are
purchased, except as follows:

               (a)  In the case of an ISO granted under the Plan, payment shall
be made only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made in
any form(s) described in this Article 7.

               (b)  In the case of an NSO, the Committee may at any time accept
payment in any form(s) described in Section 7.2, 7.3, or 7.4.

          7.2  Surrender of Stock.  To the extent that this Section 7.2 is
               ------------------
applicable, payment for all or any part of the Exercise Price may be made with
Shares which have already been owned by the Optionee for more than six months.
Such Shares shall be valued at their Fair Market Value on the date when the new
Shares are purchased under the Plan.

          7.3  Exercise/Sale.  To the extent that this Section 7.3 is
               -------------
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to a securities broker approved by the
Company to sell Shares and to deliver all or part of the sales proceeds to the
Company in payment of all or part of the Exercise Price and any withholding
taxes.

          7.4  Exercise/Pledge. To the extent that this Section 7.4 is
               ---------------
applicable, payment may be made by the delivery (on a form prescribed by the
Company) of an irrevocable direction to pledge Shares to a securities broker or
lender approved by the Company, as security for a loan, and to deliver all or
part of the loan proceeds to the Company in payment of all or part of the
Exercise Price and any withholding taxes.

          7.5  Other Forms of Payment.  Payment may be made in any other form
               ----------------------
that is approved by the Committee and is consistent with applicable laws,
regulations and rules.

     ARTICLE 8.  RESTRICTED SHARES AND STOCK UNITS
     ----------  ---------------------------------

          8.1  Time, Amount and Form of Awards.  Awards under the Plan may be
               -------------------------------
granted in the form of Restricted Shares, in the form of Stock Units, or in any
combination of both. The amount of the Restricted Shares granted is limited to
10% of the Shares available for awards under Section 4.1.

          8.2  Payment for Awards.  Awards of Restricted Shares may be made for
               ------------------
no consideration.

                                      -6-
<PAGE>

          8.3  Vesting Conditions.  Each Award of Restricted Shares or Stock
               ------------------
Units shall become vested, in full or in installments, upon satisfaction of the
conditions specified in the Stock Award Agreement. A Restricted Share shall not
vest less than one year from the grant date if the vesting is based on meeting
performance targets established by the Committee, or in all other cases, less
than three years from the grant date subject, in both cases, to the following
exceptions: A Stock Award Agreement may provide for accelerated vesting in the
event of the Participant's death, disability or retirement or other events. The
Committee may determine, at the time of making an Award or thereafter, that such
Award shall become fully vested in the event that a Change in Control occurs
with respect to the Company.

          8.4  Form and Time of Settlement of Stock Units.  Settlement of
               ------------------------------------------
vested Stock Units may be made in the form of (a) cash, (b) Shares or (c) any
combination of both. The actual number of Stock Units eligible for settlement
may be smaller than the number included in the original Award, based on
predetermined performance factors. Methods of converting Stock Units into cash
may include (without limitation) a method based on the average Fair Market Value
of Shares over a series of trading days. Vested Stock Units may be settled in a
lump sum or in installments. The distribution may occur or commence when all
vesting conditions applicable to the Stock Units have been satisfied or have
lapsed, or it may be deferred to any later date. The amount of a deferred
distribution may be increased by an interest factor or by dividend equivalents.
Until an Award of Stock Units is settled, the number of such Stock Units shall
be subject to adjustment pursuant to Article 10. Any Stock Units Award that
becomes payable after the recipient's death shall be distributed to the
recipient's designated beneficiary or beneficiaries or his or her estate in
accordance with Section 14.l.

          8.5  Creditors' Rights.  A holder of Stock Units shall have no rights
               -----------------
other than those of a general creditor of the Company. Stock Units represent an
unfunded and unsecured obligation of the Company, subject to the terms and
conditions of the applicable Stock Award Agreement.

     ARTICLE 9.   VOTING AND DIVIDEND RIGHTS
     ----------   --------------------------

          9.1  Restricted Shares.  The holders of Restricted Shares awarded
               -----------------
under the Plan shall have the same voting, dividend and other rights as the
Company's other shareholders. A Stock Award Agreement, however, may require that
the holders of Restricted Shares invest any cash dividends received in
additional Restricted Shares. Such additional Restricted Shares shall be subject
to the same conditions and restrictions as the Award with respect to which the
dividends were paid. Such additional Restricted Shares shall not reduce the
number of Shares available under Article 4.

          9.2  Stock Units.  The holders of Stock Units shall have no voting
               -----------
rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan
may, at the Committee's discretion, carry with it a right to dividend
equivalents. Such right entitles the holder to be credited with an amount equal
to all cash dividends paid on one Share while the Stock Unit is outstanding.
Dividend equivalents may be converted into additional Stock Units. Settlement of
dividend equivalents may be made in the form of cash, in the form of Shares, or
in a combination of both. Prior to distribution,

                                      -7-
<PAGE>

any dividend equivalents which are not paid shall be subject to the same
conditions and restrictions as the Stock Units to which they attach.

     ARTICLE 10.  PROTECTION AGAINST DILUTION
     -----------  ---------------------------

          10.1  Adjustments.  In the event of a subdivision of the outstanding
                -----------
Shares, a declaration of a dividend payable in Shares, a declaration of a
dividend payable in a form other than Shares in an amount that has a material
effect on the price of Shares, a combination or consolidation of the outstanding
Shares (by reclassification or otherwise) into a lesser number of Shares, a
recapitalization, a spinoff or a similar occurrence, the Committee shall make
such adjustments as it, in its sole discretion, deems appropriate in one or more
of (a) the number of Options, Restricted Shares and Stock Units available for
future Awards under Article 4, (b) the number of Stock Units included in any
prior Award which has not yet been settled, (c) the number of Shares covered by
each outstanding Option or (d) the Exercise Price under each outstanding Option.
Except as provided in this Article 10, a Participant shall have no rights by
reason of any issue by the Company of stock of any class or securities
convertible into stock of any class, any subdivision or consolidation of shares
of stock of any class, the payment of any stock dividend or any other increase
or decrease in the number of shares of stock of any class.

          10.2  Reorganizations.  In the event that the Company is a party to a
                ---------------
merger or other reorganization, outstanding Options, Restricted Shares and Stock
Units shall be subject to the agreement of merger or reorganization. Such
agreement may provide, without limitation, for the assumption of outstanding
Awards by the surviving corporation or its parent, for their continuation by the
Company (if the Company is a surviving corporation), for accelerated vesting and
accelerated expiration, or for settlement in cash.

     ARTICLE 11.   LIMITATION ON RIGHTS
     -----------   --------------------

          11.1  Retention Rights.  Neither the Plan nor any Award granted under
                ----------------
the Plan shall be deemed to give any individual a right to remain an employee,
consultant or director of the Company, a Parent, a Subsidiary or an Affiliate.
The Company and its Parents and Subsidiaries reserve the right to terminate the
service of any employee, consultant or director at any time, and for any reason,
subject to applicable laws, the Company's certificate of incorporation and
bylaws and a written employment agreement (if any).

          11.2  Shareholders' Rights.  A Participant shall have no dividend
                --------------------
rights, voting rights or other rights as a shareholder with respect to any
Shares covered by his or her Award prior to the issuance of a stock certificate
for such Shares. No adjustment shall be made for cash dividends or other rights
for which the record date is prior to the date when such certificate is issued,
except as expressly provided in Articles 8, 9 and 10.

          11.3  Regulatory Requirements.  Any other provision of the Plan
                -----------------------
notwithstanding, the obligation of the Company to issue Shares under the Plan
shall be subject to all applicable laws, rules and regulations and such approval
by any regulatory body as may be required. The Company reserves the right to
restrict, in whole or in part, the delivery of Shares pursuant to any Award
prior

                                      -8-
<PAGE>

to the satisfaction of all legal requirements relating to the issuance of such
Shares, to their registration, qualification or listing or to an exemption from
registration, qualification or listing.

     ARTICLE 12.  LIMITATION ON PAYMENTS
     -----------  ----------------------

          12.1  Basic Rule.  Any provision of the Plan to the contrary
                ----------
notwithstanding, in the event that the independent auditors most recently
selected by the Board of Directors (the "Auditors") determine that any payment
or transfer by the Company to or for the benefit of a Participant, whether paid
or payable (or transferred or transferable) pursuant to the terms of this Plan
or otherwise (a "Payment"), would be nondeductible by the Company for federal
income tax purposes because of the provisions concerning "excess parachute
payments" in section 280G of the Code, then the aggregate present value of all
Payments shall be reduced (but not below zero) to the Reduced Amount; provided
that the Committee, at the time of making an Award under this Plan or at any
time thereafter, may specify in writing that such Award shall not be so reduced
and shall not be subject to this Article 12. For purposes of this Article 12,
the "Reduced Amount" shall be the amount, expressed as a present value, which
maximizes the aggregate present value of the Payments without causing any
Payment to be nondeductible by the Company because of section 280G of the Code.

          12.2  Reduction of Payments.  If the Auditors determine that any
                ---------------------
Payment would be nondeductible by the Company because of section 280G of the
Code, then the Company shall promptly give the Participant notice to that effect
and a copy of the detailed calculation thereof and of the Reduced Amount, and
the Participant may then elect, in his or her sole discretion, which and how
much of the Payments shall be eliminated or reduced (as long as after such
election the aggregate present value of the Payments equals the Reduced Amount)
and shall advise the Company in writing of his or her election within 10 days of
receipt of notice. If no such election is made by the Participant within such
10-day period, then the Company may elect which and how much of the Payments
shall be eliminated or reduced (as long as after such election the aggregate
present value of the Payments equals the Reduced Amount) and shall notify the
Participant promptly of such election. For purposes of this Article 12, present
value shall be determined in accordance with section 280G(d)(4) of the Code. All
determinations made by the Auditors under this Article 12 shall be binding upon
the Company and the Participant and shall be made within 60 days of the date
when a payment becomes payable or transferable. As promptly as practicable
following such determination and the elections hereunder, the Company shall pay
or transfer to or for the benefit of the Participant such amounts as are then
due to him or her under the Plan and shall promptly pay or transfer to or for
the benefit of the Participant in the future such amounts as become due to him
or her under the Plan.

          12.3  Overpayments and Underpayments.  As a result of uncertainty in
                ------------------------------
the application of section 280G of the Code at the time of an initial
determination by the Auditors hereunder, it is possible that Payments will have
been made by the Company which should not have been made (an "Overpayment") or
that additional Payments which will not have been made by the Company could have
been made (an "Underpayment"), consistent in each case with the calculation of
the Reduced Amount hereunder. In the event that the Auditors, based upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Participant which the

                                      -9-
<PAGE>

Auditors believe has a high probability of success, determine that an
Overpayment has been made, such Overpayment shall be treated for all purposes as
a loan to the Participant which he or she shall repay to the Company, together
with interest at the applicable federal rate provided in section 7872(f)(2) of
the Code; provided, however, that no amount shall be payable by the Participant
to the Company if and to the extent that such payment would not reduce the
amount which is subject to taxation under section 4999 of the Code. In the event
that the Auditors determine that an Underpayment has occurred, such Underpayment
shall promptly be paid or transferred by the Company to or for the benefit of
the Participant, together with interest at the applicable federal rate provided
in section 7872(f)(2) of the Code.

          12.4  Related.  For purposes of this Article 12, the term "Company"
                -------
shall include affiliated corporations to the extent determined by the Auditors
in accordance with section 280G(d)(5) of the Code.

     ARTICLE 13.   WITHHOLDING TAXES
     -----------   -----------------

          13.1  General.  To the extent required by applicable federal, state,
                -------
local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding
tax obligations that arise in connection with the Plan. The Company shall not be
required to issue any Shares or make any cash payment under the Plan until such
obligations are satisfied.

          13.2  Share Withholding.  The Committee may permit a Participant to
                -----------------
satisfy all or part of his or her withholding or income tax obligations by
having the Company withhold all or a portion of any Shares that otherwise would
be issued to him or her or by surrendering all or a portion of any Shares that
he or she previously acquired. Such Shares shall be valued at their Fair Market
Value on the date when taxes otherwise would be withheld in cash. Any payment of
taxes by assigning Shares to the Company may be subject to restrictions,
including any restrictions required by rules of the Securities and Exchange
Commission.

     ARTICLE 14.   ASSIGNMENT OR TRANSFER OF AWARDS
     -----------   --------------------------------

          14.1  General.  Except as provided in Article 14, Subsections (a) and
                -------
(b), below, and Section 14.2, an Award granted under the Plan shall not be
anticipated, assigned, attached, garnished, optioned, transferred or made
subject to any creditor's process, whether voluntarily, involuntarily or by
operation of law. An Option may be exercised during the lifetime of the Optionee
only by him or her or by his or her guardian or legal representative. Any act in
violation of this Article 14 shall be void.

                (a)  Each Participant shall designate a beneficiary or
beneficiaries to receive or exercise any outstanding Awards at the time of the
Participant's death. The designation shall be made on the form prescribed for
the purpose by the Company. In the event no beneficiary is designated by the
Participant or no designated beneficiary survives the Participant, any
outstanding Awards at the time of the Participant's death shall be transferred
by will or by the laws of descent and distribution.

                                      -10-
<PAGE>

                (b)  Rights under Awards may be assigned to an Alternate Payee
pursuant to a QDRO. The assignment of an Award to an Alternate Payee pursuant to
a QDRO shall not be treated as a new grant. The transfer of an ISO to an
Alternate Payee may, however, cause it to fail to qualify as an ISO. If an Award
is assigned to an Alternate Payee pursuant to a QDRO, the Alternate Payee
generally has the same rights as the grantee under the terms of the Plan, except
that (1) the Award shall be subject to the same vesting terms and exercise
period as if the Award were held by the grantee, (2) an Alternate Payee may not
transfer an Award and (3) and Alternate Payee is ineligible for re-load Options.
For purposes of the Subsection (b), the word "QDRO" means a court order (1) that
recognizes the right of the spouse, former spouse or child (an "Alternate
Payee") of an individual who is granted an Award to an interest in such Award
relating to marital property rights or support obligations and (2) that the
Committee determines to be a "qualified domestic relations order," as that term
is defined in section 414(p) of the Code, but for the fact that the Plan is not
a plan described in section 3(3) of the Employee Retirement Income Security Act
of 1974.

          14.2  Trusts.  Neither this Article 14 nor any other provision of the
                ------
Plan shall preclude a Participant from transferring or assigning Restricted
Shares or Stock Units to (a) the trustee of a trust that is revocable by such
Participant alone, both at the time of the transfer or assignment and at all
times thereafter prior to such Participant's death, or (b) the trustee of any
other trust to the extent approved in advance by the Committee in writing. A
transfer or assignment of Restricted Shares or Stock Units from such trustee to
any person other than such Participant shall be permitted only to the extent
approved in advance by the Committee in writing, and Restricted Shares or Stock
Units held by such trustee shall be subject to all of the conditions and
restrictions set forth in the Plan and in the applicable Stock Award Agreement,
as if such trustee were a party to such Agreement.

     ARTICLE 15.  FUTURE OF THE PLAN
     -----------  ------------------

          15.1  Term of the Plan.  The Plan, as set forth herein, shall become
                ----------------
effective on the date of its adoption by the Board of Directors; provided,
however, it is approved by the Company's shareholders within 12 months before or
after the date of adoption. In the event the Company's shareholders fail to
approve the Plan within 12 months after its adoption by the Board of Directors,
any Options granted under the Plan shall be null and void, shares received upon
the exercise of such Options shall not be counted in determining whether
shareholder approval has been obtained, and no additional Option grants shall be
made. The Plan shall terminate automatically ten (10) years after its adoption
by the Board of Directors and may be terminated on any earlier date pursuant to
Section 15.2. No ISOs shall be granted after May 31, 2005.

          15.2  Amendment or Termination.  The Board of Directors may, at any
                ------------------------
time and for any reason, amend or terminate the Plan. An amendment of the Plan
shall be subject to the approval of the Company's shareholders only to the
extent that the amendment materially increases the benefits available under the
plan, or as required by applicable laws, regulations or rules. No Awards shall
be granted under the Plan after the termination thereof. The termination of the
Plan, or any amendment thereof, shall not affect any Award previously granted
under the Plan.

                                      -11-
<PAGE>

                             AMENDMENT NO. 1 TO THE
                               ETEC SYSTEMS, INC.
                          1995 OMNIBUS INCENTIVE PLAN

     ETEC SYSTEMS, INC., having established the Etec Systems, Inc. 1995 Omnibus
Incentive Plan (the "Plan"), hereby amends the Plan, effective as of March 29,
2000 as follows:

          1.   Article 15 of the Plan is hereby amended in its entirety as
follows:

               ARTICLE 15.  TERM OF THE PLAN.  In connection with the merger
               -----------------------------
     (the "Merger") of Etec Systems, Inc. ("Etec") and Boston Acquisition Sub,
     Inc. ("Boston"), a Nevada corporation and a wholly-owned subsidiary of
     Applied Materials, Inc. ("AMAT"), Options previously granted to Optionees
     under the Plan that remain outstanding as of March 29, 2000 (the
     "Outstanding Options"), have been modified pursuant to the Agreement and
     Plan of Reorganization and Merger dated as of January 12, 2000 (the "Merger
     Agreement"), among Etec, Boston and AMAT, so as to be exercisable only into
     shares of common stock of AMAT, par value $0.01 per share (the "Stock"),
     all as set forth in the Merger Agreement and subject to its terms and
     conditions.  Effective as of March 29, 2000, except with respect to the
     Outstanding Options, the Plan is terminated.  Accordingly no Shares remain
     available for future grant under the Plan, other than pursuant to the
     Outstanding Options.

          2.   Section 2.6 of the Plan is amended in its entirety as follows:

               2.6  "Committee" shall mean the Stock Option and Compensation
                     ---------
     Committee of the Board of Directors of AMAT.

          3.   Section 2.21 of the Plan is amended in its entirety as follows:

               2.21 "Share" means one share of the common stock
                     -----
     of Applied Materials, Inc., a Delaware company.

          4.   Section 3.1 is hereby amended in its entirety to read as follows:

               3.1  Committee.  The Plan shall be administered by the Stock
                    ---------
     Option and Compensation Committee of the Board of Directors of AMAT. As
     used throughout this Plan, the "Board" and "Committee" shall mean the Stock
     Option and Compensation Committee of the Board of Directors of AMAT.

          5.   Article 4 is hereby amended in its entirety to read as follows:

               ARTICLE 4.  STOCK SUBJECT TO PLAN. AMAT has reserved such number
               ---------------------------------
     of Shares as are necessary to satisfy the Outstanding Options.

          6.   Article 5 is hereby amended in its entirety to read as follows:

               ARTICLE 5.  NO FURTHER AWARDS.  Effective March 29, 2000, except
               -----------------------------
     with respect to the Outstanding Options, the Plan is terminated.
     Accordingly, no

                                      -12-

<PAGE>

     further Options or other Awards shall be granted under the Plan. Optionees
     holding Outstanding Options may continue to exercise such Outstanding
     Options in accordance with their terms, subject to the terms and conditions
     of the Merger Agreement.

          7.   Section 13 is hereby amended by changing its title to "Execution
     and Termination" and by adding the following sentence to the end thereto to
     read as follows:

          Except with respect to the Outstanding Options, the Plan shall
     terminate effective as of March 29, 2000.

     IN WITNESS WHEREOF, Etec Systems, Inc., by the officer identified below,
who has been duly authorized by the Board of Directors of the Company, has
executed this Amendment No. 1 on the date indicated below.

                                                   ETEC SYSTEMS, INC.

                                                   By:_______________________

                                                   Title:____________________

                                                   Date:_____________________

                                     -13-

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