Document:

exv10w45

 

Exhibit 10.45

[NAME]

Employee ID Number: [Number]

Grant Number: [Number]

APPLIED MATERIALS, INC.

PERFORMANCE SHARE AGREEMENT

     Applied Materials, Inc. (the “Company”) hereby grants you, [Name] (the “Employee”), an award
of Performance Shares (also referred to as restricted stock units) under the Company’s Employee
Stock Incentive Plan (the “Plan”). The date of this Performance Share Agreement (the “Agreement”)
is [DATE] (the “Grant Date”). Subject to the provisions of Appendix A (attached) and of the Plan,
the principal features of this award are as follows:

	 	 	 
	Number of Performance Shares:

	 	[_______]
	(also referred to as restricted stock units)
	 	 
	 
	 	 
	Vesting of Performance Shares:

	 	[VESTING SCHEDULE and/or PERFORMANCE VESTING CONDITIONS.]*

IMPORTANT:

 

* Except as otherwise provided in Appendix A, Employee will not vest in the Performance Shares
unless he or she is employed by the Company or one of its Affiliates through the applicable vesting
date.

     Your electronic or written signature below indicates your agreement and understanding
that this award is subject to all of the terms and conditions contained in Appendix A and the Plan.
For example, important additional information on vesting and forfeiture of the Performance Shares
is contained in paragraphs 3 through 5 and paragraph 7 of Appendix A. PLEASE BE SURE TO READ ALL
OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS AGREEMENT.

     By clicking the “ACCEPT” button below, you agree to the following: “This electronic contract
contains my electronic signature, which I have executed with the intent to sign this Agreement.”

	 	 	 
	 

	 	 
	EMPLOYEE
	 	 
	 
	 	 
	 	 	 
	[NAME]
	 	 
	 
	 	 
	Date:                     , 200   
	 	 

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Please be sure to retain a copy of your returned electronically signed Agreement; you may obtain a
paper copy at any time and at the Company’s expense by requesting one from Stock Programs (see
paragraph 12 below). If you prefer not to electronically sign this Agreement, you may accept this
Agreement by signing a paper copy of the Agreement and delivering it to Stock Programs.

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APPENDIX A

TERMS AND CONDITIONS OF PERFORMANCE SHARES

(Also Referred to as Restricted Stock Units)

Grant #_________

     1. Grant. The Company hereby grants to the Employee under the Plan [___] Performance
Shares (also referred to as restricted stock units), subject to all of the terms and conditions in
this Agreement and the Plan. When Shares are paid to the Employee in payment for the Performance
Shares, par value will be deemed paid by the Employee for each Performance Share by past services
rendered by the Employee, and will be subject to the appropriate tax withholdings. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in
the Plan.

     2. Company’s Obligation to Pay. Each Performance Share has a value equal to the Fair
Market Value of a Share on the date of grant. Unless and until the Performance Shares have vested
in the manner set forth in paragraphs 3 through 5, the Employee will have no right to payment of
such Performance Shares. Prior to actual payment of any vested Performance Shares, such
Performance Shares will represent an unsecured obligation. Payment of any vested Performance
Shares shall be made in whole Shares only.

     3. Vesting Schedule/Period of Restriction. Except as provided in paragraphs 4 and 5,
and subject to paragraph 7, the Performance Shares awarded by this Agreement shall vest in
accordance with the vesting provisions set forth on the first page of this Agreement. Performance
Shares shall not vest in the Employee in accordance with any of the provisions of this Agreement
unless the Employee shall have been continuously employed by the Company or by one of its
Affiliates from the Grant Date until the date the Performance Shares are otherwise scheduled to
vest occurs.

     4. Modifications to Vesting Schedule.

     (a) Vesting upon Change to Part-time Status. In the event that the Employee’s employment
with the Company or an Affiliate changes from full-time status to part-time status, and the change
to part-time status lasts more than six (6) months during any rolling twelve (12) month period, the
Performance Shares awarded by this Agreement that are scheduled to vest during the twelve (12)
months following the day the Employee first attains part-time status (as defined below) shall be
determined according to the following formula (rounded to the nearest whole share):

	 	 	 	 	 	 	 	 	 
	number of shares that

	 	X
	 	average number of hours worked per week during part-time
	 	=
	 	new number of
	would have vested

	 	 	 	status divided by the hours worked in a standard work week
	 	 	 	shares that will vest

     For purposes of this Agreement, “part-time status” means the Employee is scheduled to
work an average number of hours per week that equals seventy-five percent (75%) or less of the
total

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number of hours in a standard work week for a period greater than six (6) months, as
determined over a rolling twelve (12) month period.

     Only Performance Shares that are not yet vested may be modified pursuant to the preceding
formula. Performance Shares awarded by this Agreement that are no longer vested as a result of the
change to part-time status never will vest and instead will terminate. The preceding formula will
be reapplied if the Employee continues to be on part-time status following the conclusion of the
twelve (12) month measurement period. The number of Performance Shares awarded by this Agreement
shall be modified according to the preceding formula unless prohibited by applicable law. .

     (i) Example 1. Employee is scheduled to vest in 100 Performance Shares on July 1, 2007.
Employee has a standard work week of 40 hours. On May 1, 2006, Employee begins working 20 hours
per week, and continues to work 20 hours per week for two months. Employee still will be scheduled
to vest in 100 Performance Shares on July 1, 2007.

     (ii) Example 2. Employee is scheduled to vest in 100 Performance Shares on July 1, 2007.
Employee has a standard work week of 40 hours. On May 1, 2006, Employee begins working 20 hours
per week, and continues to work 20 hours per week for seven months. Employee now will be scheduled
to vest in 50 Performance Shares on July 1, 2007. The other 50 Performance Shares that were
scheduled to vest on July 1, 2007 will never vest and instead will terminate.

     (iii) Example 3. Employee is scheduled to vest in 100 Performance Shares on December 1, 2006.
Employee has a standard work week of 40 hours. On May 1, 2006, Employee begins working 30 hours per
week, and continues to work 30 hours per week for nine months. Employee therefore attains
part-time status on November 2, 2006. Employee now will be scheduled to vest in 75 Performance
Shares on December 1, 2006. The other 25 Performance Shares that were scheduled to vest on
December 1, 2006 will never vest and instead will terminate.

     In the event applicable law prohibits the modification under the preceding formula, the
Employee agrees that the CEO may reduce the Performance Shares awarded by this Agreement on a pro
rata basis, as reasonably determined by the CEO and to the extent permitted under applicable law,
commensurate with the Employee’s change to part-time status; provided that any such reduction in
Performance Shares shall not affect a greater number of Performance Shares than the number of
Performance Shares that would have been modified pursuant to the preceding formula.

     (b) Vesting upon Personal Leave of Absence. In the event that the Employee takes a personal
leave of absence (“PLOA”), the Performance Shares awarded by this Agreement that are scheduled to
vest shall be modified as follows:

     (i) if the duration of the Employee’s PLOA is six (6) months or less, the vesting schedule set
forth on the first page of this Agreement shall not be affected by the Employee’s PLOA.

     (ii) if the duration of the Employee’s PLOA is greater than six (6) months but not more than
twelve (12) months, the scheduled vesting of any Performance Shares awarded by this Agreement that
are not then vested shall be deferred for a period of time equal to the duration of the Employee’s
PLOA less six (6) months.

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     (iii) if the duration of the Employee’s PLOA is greater than twelve (12) months, any
Performance Shares awarded by this Agreement that are not then vested immediately will terminate.

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

     (v) Example 2. Employee is scheduled to vest in Performance Shares on January 1, 2007. On May
1, 2006, Employee begins a nine-month PLOA. Employee’s Performance Shares awarded by this Agreement
that are scheduled to vest after November 2, 2006 will be modified (this is the date on which the
Employee’s PLOA exceeds six (6) months). Employee’s Performance Shares now will be scheduled to
vest on April 1, 2007 (three (3) months after the originally scheduled date).

     (vi) Example 3. Employee is scheduled to vest in Performance Shares on January 1, 2007. On
May 1, 2006, Employee begins a 13-month PLOA. Employee’s Performance Shares will terminate on May
2, 2007.

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

     (c) Death of Employee. In the event that the Employee incurs a Termination of Service due to
his or her death, one hundred percent (100%) of the Performance Shares subject to this Performance
Share award shall vest on the date of the Employee’s death. In the event that any applicable law
limits the Company’s ability to accelerate the vesting of this award of Performance Shares, this
paragraph 4(c) shall be limited to the extent required to comply with applicable law.
Notwithstanding any contrary provision of this Agreement, if the Employee is subject to Hong Kong’s
ORSO provisions, the first sentence of this paragraph 4(c) shall not apply to this award of
Performance Shares.

     5. Committee Discretion. The Committee, in its discretion, may accelerate the vesting
of the balance, or some lesser portion of the balance, of the Performance Shares at any time,
subject to the terms of the Plan. If so accelerated, such Performance Shares will be considered as
having vested as of the date specified by the Committee. If the Committee, in its discretion,
accelerates the vesting of the balance, or some lesser portion of the balance, of the Performance
Shares, the payment of such accelerated Performance Shares nevertheless shall be made at the same
time or times as if such Performance Shares had vested in accordance with the vesting schedule set
forth on the first page of this Agreement (whether or not the Employee remains employed by the
Company or by one of its Affiliates as of such date(s)).

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     6. Payment after Vesting. Any Performance Shares that vest in accordance with
paragraphs 3 through 4 will be paid to the Employee (or in the event of the Employee’s death, to
his or her estate) as soon as practicable following the date of vesting, subject to paragraph 8.
Any Performance Shares that vest in accordance with paragraphs 5 or 11 will be paid to the Employee
(or in the event of the Employee’s death, to his or her estate) in accordance with the provisions
of such paragraphs, subject to paragraph 8. For each Performance Share that vests, the Employee
will receive one Share.

     7. Forfeiture. Notwithstanding any contrary provision of this Agreement, the balance
of the Performance Shares that have not vested pursuant to paragraphs 3 through 5 at the time of
the Employee’s Termination of Service for any or no reason will be forfeited and automatically
transferred to and reacquired by the Company at no cost to the Company.

     8. Withholding of Taxes. When Shares are issued as payment for vested Performance
Shares, the Company (or the employing Affiliate) will withhold a portion of the Shares that have an
aggregate market value sufficient to pay federal, state and local income, employment and any other
applicable taxes required to be withheld by the Company or the employing Affiliate with respect to
the Shares, unless the Company, in its sole discretion, requires the Employee to make alternate
arrangements satisfactory to the Company for such withholdings in advance of the arising of any
withholding obligations. The number of Shares withheld pursuant to the prior sentence will be
rounded up to the nearest whole Share, with no refund for any value of the Shares withheld in
excess of the tax obligation as a result of such rounding. Notwithstanding any contrary provision
of this Agreement, no Shares will be issued unless and until satisfactory arrangements (as
determined by the Company) have been made by the Employee with respect to the payment of any income
and other taxes which the Company determines must be withheld or collected with respect to such
Shares. In addition and to the maximum extent permitted by law, the Company (or the employing
Affiliate) has the right to retain without notice from salary or other amounts payable to the
Employee, cash having a sufficient value to satisfy any tax withholding obligations that the
Company determines cannot be satisfied through the withholding of otherwise deliverable Shares.
All income and other taxes related to the Performance Shares award and any Shares delivered in
payment thereof are the sole responsibility of the Employee.

     9. Rights as Stockholder. Neither the Employee nor any person claiming under or
through the Employee will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
(which may be in book entry form) will have been issued, recorded on the records of the Company or
its transfer agents or registrars, and delivered to the Employee (including through electronic
delivery to a brokerage account). Notwithstanding any contrary provisions in this Agreement, any
quarterly or other regular, periodic dividends or distributions (as determined by the Company) paid
on Shares will affect neither unvested Performance Shares nor Performance Shares that are vested
but unpaid, and no such dividends or other distributions will be paid on unvested Performance
Shares or Performance Shares that are vested but unpaid. After such issuance, recordation and
delivery, the Employee will have all the rights of a stockholder of the Company with respect to
voting such Shares and receipt of dividends and distributions on such Shares.

     10. No Effect on Employment. Subject to any employment contract with the Employee,
the terms of such employment will be determined from time to time by the Company, or the Affiliate

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

     11. Changes in Performance Shares. In the event that as a result of a stock or
extraordinary cash dividend, stock split, distribution, reclassification, recapitalization,
combination of Shares or the adjustment in capital stock of the Company or otherwise, or as a
result of a merger, consolidation, spin-off or other corporate transaction or event, the
Performance Shares will be increased, reduced or otherwise affected, and by virtue of any such
event the Employee will in his or her capacity as owner of unvested Performance Shares which have
been awarded to him or her (the “Prior Performance Shares”) be entitled to new or additional or
different shares of stock, cash or other securities or property (other than rights or warrants to
purchase securities); such new or additional or different shares, cash or securities or property
will thereupon be considered to be unvested Performance Shares and will be subject to all of the
conditions and restrictions that were applicable to the Prior Performance Shares pursuant to this
Agreement and the Plan. If the Employee receives rights or warrants with respect to any Prior
Performance Shares, such rights or warrants may be held or exercised by the Employee, provided that
until such exercise any such rights or warrants and after such exercise any shares or other
securities acquired by the exercise of such rights or warrants will be considered to be unvested
Performance Shares and will be subject to all of the conditions and restrictions which were
applicable to the Prior Performance Shares pursuant to the Plan and this Agreement. The Committee
in its absolute discretion at any time may accelerate the vesting of all or any portion of such new
or additional shares of stock, cash or securities, rights or warrants to purchase securities or
shares or other securities acquired by the exercise of such rights or warrants; provided, however,
that the payment of such new or additional awards shall be made at the same time or times as if
such awards had vested in accordance with the vesting schedule set forth on the first page of this
Agreement (whether or not the Employee remains employed by the Company or by one of its Affiliates
as of such date(s)).

     12. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement will be addressed to the Company, in care of Stock Programs, at Applied Materials,
Inc., 2881 Scott Boulevard, M/S 2023, Santa Clara, CA 95050, or at such other address as the
Company may hereafter designate in writing.

     13. Grant is Not Transferable. Except to the limited extent provided in this
Agreement, this grant of Performance Shares and the rights and privileges conferred hereby will not
be sold, pledged, assigned, hypothecated, transferred or disposed of any way (whether by operation
of law or otherwise) and will not be subject to sale under execution, attachment or similar
process, until the Employee has been issued Shares in payment of the Performance Shares. Upon any
attempt to sell, pledge, assign, hypothecate, transfer or otherwise dispose of this grant, or any
right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or
similar process, this grant and the rights and privileges conferred hereby immediately will become
null and void.

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     14. Restrictions on Sale of Securities. The Shares issued as payment for vested
Performance Shares under this Agreement will be registered under U. S. federal securities laws and
will be freely tradable upon receipt. However, an Employee’s subsequent sale of the Shares may be
subject to any market blackout-period that may be imposed by the Company and must comply with the
Company’s insider trading policies, and any other applicable securities laws.

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

     16. Additional Conditions to Issuance of Certificates for Shares. The Company shall
not be required to issue any certificate or certificates for Shares hereunder prior to fulfillment
of all the following conditions: (a) the admission of such Shares to listing on all stock
exchanges on which such class of stock is then listed; (b) the completion of any registration or
other qualification of such Shares under any U. S. state or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental regulatory body,
which the Committee shall, in its absolute discretion, deem necessary or advisable; (c) the
obtaining of any approval or other clearance from any U. S. state or federal governmental agency,
which the Committee shall, in its absolute discretion, determine to be necessary or advisable; and
(d) the lapse of such reasonable period of time following the date of vesting of the Performance
Shares as the Committee may establish from time to time for reasons of administrative convenience.

     17. Plan Governs. This Agreement is subject to all the terms and provisions of the
Plan. In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern.

     18. Committee Authority. The Committee will have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not
limited to, the determination of whether or not any Performance Shares have vested). All actions
taken and all interpretations and determinations made by the Committee in good faith will be final
and binding upon the Employee, the Company and all other interested persons. No member of the
Committee will be personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.

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

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

     21. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Employee expressly warrants that he or
she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can be made only in
an express

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written contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the Company reserves the right to revise
this Agreement as it deems necessary or advisable, in its sole discretion and without the consent
of the Employee, to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) or to otherwise avoid imposition of any additional tax or income recognition under Section
409A of the Code prior to the actual payment of Shares pursuant to this award of Performance
Shares.

     22. Amendment, Suspension or Termination of the Plan. By accepting this Performance
Shares award, the Employee expressly warrants that he or she has received a right to receive stock
under the Plan, and has received, read and understood a description of the Plan. The Employee
understands that the Plan is discretionary in nature and may be amended, suspended or terminated by
the Company at any time.

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

     24. Disclosure of Employee Information. By accepting this Performance Shares award,
the Employee consents to the collection, use and transfer of personal data as described in this
paragraph. The Employee understands that the Company and its Affiliates hold certain personal
information about him or her, including his or her name, home address and telephone number, date of
birth, social security or identity number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all awards of Performance Shares or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in his
or her favor, for the purpose of managing and administering the Plan (“Data”). The Employee further
understands that the Company and/or its Affiliates will transfer Data among themselves as necessary
for the purpose of implementation, administration and management of his or her participation in the
Plan, and that the Company and/or any of its Affiliates may each further transfer Data to any third
parties assisting the Company in the implementation, administration and management of the Plan. The
Employee understands that these recipients may be located in the European Economic Area, or
elsewhere, such as in the U.S. or Asia. The Employee authorizes the Company to receive, possess,

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

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

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

     27. Private Offer. If the Employee is a resident in Ireland, this offering is part of
a private transaction; this is not an offer to the public.

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Exhibit 10.46

AMENDMENT NO. 3 TO THE

APPLIED MATERIALS, INC.

EXECUTIVE DEFERRED COMPENSATION PLAN

     APPLIED MATERIALS, INC., having adopted the Applied Materials, Inc. Executive Deferred
Compensation Plan (the “Plan”) effective as of July 1, 1993, amended and restated the Plan in its
entirety effective as of April 1, 1995, and amended the restated Plan on two subsequent occasions,
hereby again amends the restated Plan as follows:

     1. Effective as of December 10, 1998, Section 1.6 is amended in its entirety to read as
follows:

     “1.6 “Committee” shall mean the committee appointed by the Chief Executive
Officer of the Company pursuant to Section 7.2.”

     2. Effective as of January 1, 2001, Section 1.11 is amended by adding the following sentence
at the end thereof:

“Notwithstanding the foregoing, an “Eligible Employee” shall also mean an employee of an
Employer who (a) holds office at the level of Director or above, and (b) was a participant
in the AKT, Inc. Executive Deferred Compensation Plan (the “AKT Plan”). The AKT Plan was
merged with and into this Plan effective as of January 1, 2001.”

     3. Effective as of January 1, 2002, Section 5.2 is amended by adding the following at the end
thereof:

“The Company shall reimburse the Participant for any reasonable legal fees and expenses that
the Participant incurs to enforce his or her distribution rights under the Plan following a
Change of Control. This reimbursement right shall apply only to claims made by the
Participant after the Change of Control and only for fees and expenses that the Participant
incurs after he or she has exhausted the Plan’s claims and appeal procedures described in
Section 7.4(k). Notwithstanding the foregoing, no reimbursement shall be made under this
Section 5.2 (a) unless a court of competent jurisdiction or the Company determines that the
Participant’s claim was at least partially correct, or (b) if a court of competent
jurisdiction determines that the Participant’s claim is frivolous.”

 

 

     4. Effective as of January 1, 2002, a new Section 5.9 is added immediately after Section 5.8
to read as follows:

     “5.9 Unscheduled Withdrawals. Subject to the following provisions of this
Section 5.9, at any time before a Participant’s total Account balance has been distributed,
he or she may request a withdrawal of all or a portion of the Account (an “Unscheduled
Withdrawal”). If the Committee (in its discretion) approves a Participant’s Unscheduled
Withdrawal request, the Unscheduled Withdrawal shall be paid to the Participant in a single
lump sum as soon as practicable after the request is approved.

          5.9.1 Withdrawal Request. The Participant’s request to receive an Unscheduled
Withdrawal shall be made in such manner and with such advance notice period as the Committee
(in its discretion) shall specify.

          5.9.2 Maximum Amount of Withdrawal. The maximum amount payable to a
Participant under this Section 5.9 shall be the Unscheduled Withdrawal amount requested by
the Participant (the “Requested Amount”) reduced by the Penalty Amount. For this purpose,
the “Penalty Amount” means an amount equal to the greater of (a) ten percent (10%) of the
Requested Amount, or (b) $2,500.

          5.9.3 Forfeiture. If a Participant receives an Unscheduled Withdrawal, the
Penalty Amount shall be permanently forfeited and the Employer shall have no obligation to
the Participant (or, in the event of death, his or her Beneficiary) with respect to the
forfeited amount.

          5.9.4 Withholding. The Unscheduled Withdrawal amount payable to a Participant
(and not the Penalty Amount forfeited pursuant to Section 5.9.3) shall be subject to all
applicable federal and state income taxes.

          5.9.5 Suspension. If a Participant receives an Unscheduled Withdrawal, the
Committee, in it sole discretion, may suspend the Participant’s Compensation Deferrals (if
any) for the remainder of the Plan Year. However, an election to make Compensation
Deferrals under Section 2.1 shall be irrevocable as to amounts already deferred as of the
effective date of any suspension in accordance with this Section 5.9.”

     5. Effective as of December 10, 1998, Section 7.2 is amended in its entirety to read as
follows:

     “7.2 Committee. The Plan shall be administered by the Committee. The
Committee shall have the authority to control and manage the operation and administration of
the Plan. The members of the Committee shall be appointed from time to time by, and shall
serve at the pleasure of, the Chief Executive Officer of the Company. Any member of the
Committee may resign at any time by notice in writing mailed or delivered to the Secretary
of the Company.”

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     6. Effective as of June 25, 2002, Section 10.2 is amended by deleting the last sentence
thereof and substituting the following sentence therefor:

“Notwithstanding the foregoing, a Participant may, in a manner specified by the Committee,
transfer all or any portion of his or her Account balance to the Participant’s spouse,
former spouse or dependent pursuant to a court-approved domestic relations order which
relates to the provision of child support, alimony payments or marital property rights.”

     IN WITNESS WHEREOF, Applied Materials, Inc., by its duly authorized officer, has executed this
Amendment No. 3 to the restated Plan effective as of the dates specified above.

	 	 	 	 	 
	 	APPLIED MATERIALS, INC.

 	 
	 	By:  	     /s/ Robert G. Hartley
 	 
	 	 	Title:  Vice President, 	 
	 	 	          Compensation and Benefits 	 
	 

3

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