Document:

exv10w70

Exhibit 10.70

APPLIED MATERIALS, INC.

APPLIED INCENTIVE PLAN

(May 10, 2010 Restatement)

 

 

APPLIED MATERIALS, INC.

APPLIED INCENTIVE PLAN

(May 10, 2010 Restatement)

1. ESTABLISHMENT AND PURPOSE

     Applied Materials, Inc. (the “Company”), having established the Applied Materials, Inc.
Applied Incentive Plan (the “Plan”) effective as of December 8, 2008, hereby amends and restates
the Plan in its entirety effective as of May 10, 2010. The Plan is intended to increase
shareholder value and the success of the Company and its affiliates by motivating Plan Participants
to perform to the best of their abilities, and to achieve and even exceed the Company’s objectives.
The Plan’s goals are to be achieved by providing Plan Participants with the potential to receive
incentive awards based on their meeting or exceeding performance goals set for the Company, their
business units, and/or the Participant.

2. DEFINITIONS

     The following terms will have the following meanings unless a different meaning is plainly
required by the context:

     2.1. “Affiliate” means any corporation or any other entity (including, but not limited
to, partnerships, joint ventures and limited liability companies) that the Committee determines to
be controlling, controlled by, or under common control with the Company.

     2.2. “Board” means the Company’s Board of Directors.

     2.3. “Committee” means the Company’s Chief Executive Officer (the “CEO”) or a
committee of one or more employees or other individuals appointed by the CEO to administer the
Plan. Notwithstanding the foregoing, in the case of a Section 16 Officer, “Committee” means the
HRCC.

     2.4. “Company” means Applied Materials, Inc., a Delaware corporation.

     2.5. “Disability” means a Participant’s disability occurring during a Plan Year for
which the Participant actually receives benefits under a Company-sponsored long-term disability
plan.

     2.6. “HRCC” means the Human Resources and Compensation Committee of the Board.

     2.7. “Intentional Misconduct” means a Participant’s deliberate engagement in any one
or more of the following: (a) fraud, misappropriation, embezzlement or any other act or acts of
similar gravity resulting or intended to result directly or indirectly in substantial personal
enrichment to the Participant at the expense of the Company; (b) a material violation of a federal,
state or local law or regulation applicable to the Company’s business that has a significant
negative effect on the Company’s financial results; or (c) a material breach of the Participant’s
fiduciary duty owed to the Company that has a significant negative effect on the

 

 

Company’s
financial results; provided, however, that a Participant’s exercise of judgment or actions (or
abstention from action), and/or decision-making will not constitute Intentional Misconduct if such
judgment, action (or abstention from action) and/or decision is, in the good faith determination of
the Board, reasonable based on the facts and circumstances known to the Participant at the time of
such judgment, action (or abstention from action) and/or decision; and such judgment, action (or
abstention from action) and/or decision is in an area or situation in which (i) discretion must be
exercised by the Participant or (ii) differing views or opinions may apply.

     2.8. “Participant” means, as to any Plan Year, an employee of the Company or its
Affiliate who (a) is in Grade 38, 39, x50 through Senior Executive, or x70 through x72, or (b) is
in Grade 37 and participated in the Plan as a Grade 37 during the immediately preceding Plan Year.
Notwithstanding the foregoing, the Committee, in its sole discretion, may determine that an
otherwise eligible employee will not be a Participant in the Plan for a given Plan Year.

     2.9. “Payable Award” means the award, if any, payable to a Participant under the Plan
for a Plan Year.

     2.10. “Payout Formula” or “Payout Formulae” means, as to any Plan Year, the
formula, or formulae or payout matrix established pursuant to Section 3.3 below to guide the
determination of any Payable Awards to be paid to Participants for that Plan Year. The formula or
matrix may differ from Participant to Participant and may differ from Plan Year to Plan Year.

     2.11. “Performance Goals” means the financial and/or operational goals applicable to a
Participant for a Plan Year. Performance Goals may differ from Participant to Participant and may
differ from Plan Year to Plan Year.

     2.12. “Plan” means the Applied Materials, Inc. Applied Incentive Plan as set forth in
this instrument and as hereafter amended from time to time.

     2.13. “Plan Year” means the fiscal year of the Company.

     2.14. “Retirement” means, with respect to any Participant, a termination of his or her
employment with the Company and all of its Affiliates after: (a) obtaining at least sixty (60)
years of age and whose age plus Years of Service with the Company is not less than seventy (70), or
(b) obtaining at least sixty-five (65) years of age.

     2.15. “Section 16 Officer” means an employee of the Company or its Affiliate who is
subject to Section 16 of the Securities Exchange Act of 1934, as amended.

     2.16. “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as
amended and the regulations and guidance thereunder, as they may be amended or modified from time
to time.

     2.17. “Senior Executive” means, as to any Plan Year, an officer of the Company with
grade level x10 and above, but excluding any officer selected by the HRCC to participate in the
Applied Materials, Inc. Senior Executive Bonus Plan for that Plan Year.

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     2.18. “Years of Service” means the number of months (or a fraction thereof) from a
Participant’s latest hire date with the Company or its Affiliate to the date in question, divided
by twelve (12). The Participant’s latest hire date will be determined after giving effect to the
non-401(k) plan principles of North American Human Resources Policy No. 2-06, Re-Employment of
Former Employees/Bridging of Service, as such policy may be amended, revised or superseded from
time to time.

3. PARTICIPATION AND DETERMINATION OF AWARDS

     3.1. Participation. All eligible Participants will be automatically enrolled in the Plan each Plan Year; provided,
however, that an individual who first becomes a Participant after the first business day in August
of a Plan Year may not be enrolled in the Plan for that Plan Year. Participation in the Plan is
mandatory for any eligible Participants. Notwithstanding the foregoing, the Committee, in its sole
discretion, may determine that an otherwise eligible employee will not be a Participant in the Plan
for a given Plan Year. Accordingly, a Participant who participates in the Plan in a given Plan
Year is not in any way guaranteed or assured of participation in the Plan in any subsequent Plan
Year. Unless otherwise determined by the Committee, a Participant in this Plan is not eligible for
any other Company incentive plan, including, but not necessarily limited to, milestone plans,
profit sharing plans, the Discretionary Bonus Incentive Plan, sales incentive plans, etc.
Notwithstanding the foregoing, in determining whether an otherwise eligible employee shall become a
Participant with respect to a Plan Year, the Committee may, in its sole discretion, provide that an
individual will be deemed to have become a Participant on the first day of the Plan Year, if, as of
the first business day in August of such Plan Year, (a) he or she was an employee of an entity or
its predecessor that, by virtue of an acquisition or similar transaction by the Company, first
became an Affiliate after the first business day in August of such Plan Year, and (b) he or she
otherwise meets the definition of a “Participant” in Section 2.8 of the Plan.

     3.2. Determination of Performance Goals. The Committee, in its sole discretion, will establish written Performance Goals for each
Participant for the Plan Year.

     3.3. Determination of Payout Formula or Formulae. The Committee, in its sole discretion, will establish a Payout Formula or Payout Formulae for
purposes of serving as a guide for determining any Payable Awards. Each Payout Formula will (a) be
in writing, (b) be based on a comparison of actual performance against the Performance Goals,
(c) suggest a target Payable Award based on the assumption that the Performance Goals are met, and
(d) set a maximum Payable Award.

     3.4. Determination of Payable Awards.

          3.4.1. In General. After the end of each Plan Year, the Committee will determine the
extent to which each Participant exceeded, achieved, or missed his or her Performance Goals for the
Plan Year. The Payable Award for each Participant, if any, will be determined by the Committee, in
its sole discretion, with reference to the applicable Payout Formula. Notwithstanding any contrary
provision of the Plan, (a) the Committee, in its sole discretion, may increase, reduce, pro-rate or
eliminate a Participant’s Payable Award based on whatever factors it deems relevant, and (b) the
Board, in its sole discretion, may require a Participant to forfeit, return or reimburse the
Company all or a portion of his or her Payable Award in

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accordance with Section 4.7 of the Plan.
The fact that a Participant achieved or exceeded his or her Performance Goals will not, in any
respect, guarantee that the Participant will receive any Payable Award or any specific amount of
Payable Award. As a result, a Participant has no right or entitlement to any Payable Award unless
and until the Committee, in its sole discretion, has determined the Payable Award with respect to
the Participant.

          3.4.2. Discretion for One-Time Early Determination. Notwithstanding any contrary
provision of the Plan, during the 2010 Plan Year and except as provided below, the Committee may,
in its sole discretion, determine that a portion of a Participant’s potential Payable Award for the
2010 Plan Year will be determined and payable prior to the end of that Plan Year (the “FY 2010
Discretionary Early Payment”). If the Committee, in its sole discretion, determines that a
Participant will receive a FY 2010 Discretionary Early Payment, such determination will be subject
to the Committee’s discretion to increase, reduce, pro-rate or eliminate the Participant’s FY 2010
Discretionary Early Payment, if any, based on the factors the Committee deems relevant; provided,
however, that no FY 2010 Discretionary Early Payment made to any Participant may exceed forty
percent (40%) of the Participant’s target Payable Award based on the assumption that all the
Performance Goals are met at 100% levels for the fiscal year. The amount of any FY 2010
Discretionary Early Payment made to any Participant shall be deducted from the FY 2010 maximum
Payable Award determined in accordance with Section 3.3 of the Plan. Notwithstanding the foregoing,
no FY 2010 Discretionary Early Payments may be determined or made with respect to (a) any
Participant who has elected to defer any portion of his or her Payable Award (if any) for the 2010
Plan Year under the Applied Materials, Inc. 2005 Executive Deferred Compensation Plan, as amended,
or (b) any Section 16 Officer.

     3.5. Eligibility for Payable Awards. Except as provided in this Section, a
Participant will be eligible for consideration for a Payable Award only if he or she remains an
employee with the Company or its Affiliates through the end of the Plan Year. Notwithstanding the
foregoing, a Participant will be eligible for consideration for a Payable Award if, during the Plan
Year, the Participant terminates employment with the Company and its Affiliates on account of
Retirement, Disability or death. The Committee, in its sole discretion, may determine whether a
Participant who has received any form of disciplinary action, including but not limited to a
written or final warning or is placed on a Performance Improvement Plan during the Plan Year is
entitled to a Payable Award for that Plan Year.

4. PAYMENT OF AWARDS

     4.1. Right to Receive Payment. Any Payable Award will be paid solely from the
Company’s general assets. Nothing in this Plan will be construed to create a trust or to establish
or evidence any Participant’s claim of any right other than as an unsecured general creditor with
respect to any payment to which he or she may be entitled.

     4.2. Form of Payment. Any Payable Award under the Plan will be paid in cash, or its
equivalent, in a single lump sum.

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     4.3. Timing of Payment. Any Payable Award under the Plan will be paid as soon as
administratively practicable after such Payable Award has been determined by the Committee, but in
no event will such payment be made later than the fifteenth (15th) day of the third
(3rd) month immediately following the end of the Plan Year to which the Payable Award
relates. However, in the case of any Participant who is on a Company-approved personal leave of
absence on the last day of the Plan Year (or with respect to any FY 2010 Discretionary Early
Payment, the date on which such payment is determined by the Committee in accordance with Section
3.4.2 of the Plan), the Payable Award, if any, will not be paid until the Participant has returned
to work for at least 90 consecutive days following his or her return from the leave of absence (the
“90-Day Service Period”), in which case, the Payable Award, if any, will be paid as soon as
administratively practicable after the completion of the 90-Day Service Period, but in no event
will such payment be made later than the fifteenth (15th) day of the third
(3rd) month immediately following the later of (a) the end of the Plan Year in which the
90-Day Service Period is completed; or (b) the end of the Participant’s taxable year in which the
90-Day Service Period is completed. Notwithstanding the foregoing, the Committee may, in its sole
discretion, determine that the 90-Day Service Period will be waived for any reason, including, but
not limited to, with respect to a Participant who terminates employment with the Company or its
Affiliates during such 90-Day Service Period by reason of such Participant’s Retirement, Disability
or death. If the 90-Day Service Period is waived with respect to any Participant, the Payable
Award, if any, will be paid as soon as administratively practicable after such waiver, but in no
event will such payment be made later than the fifteenth (15th) day of the third
(3rd) month immediately following the later of (a) the end of the Plan Year in which the
90-Day Service Period is waived; or (b) the end of the Participant’s taxable year in which the
90-Day Service Period is waived. For purposes of clarity, a Participant who both is on a
Company-approved non-personal leave of absence and whose employment status is protected by
applicable law as a result of such leave of absence will not be subject to any 90-Day Service
Period requirement.

     4.4. Taxes. Each Payable Award will be paid net of all applicable tax withholding and
deductions.

     4.5. Payment in Event of Participant’s Death. If the Committee has determined, in its
sole discretion, that a Participant will receive a Payable Award, but the Participant is deceased
at the time such award is payable, then such Payable Award will be paid to the Participant’s estate
or to the beneficiary or beneficiaries entitled thereto under the intestacy laws governing the
disposition of the Participant’s estate.

     4.6. Payment Through Affiliate. Payable Awards may be paid, in the Committee’s
discretion, through the Company or any of its Affiliates.

     4.7. Clawback in Connection with a Material Negative Financial Restatement. Pursuant
to the Company’s clawback policy, the Board, in its sole discretion, may require a Participant to
forfeit, return or reimburse the Company all or a portion of his or her Payable Award that is paid
on or after December 7, 2009, if (i) the Participant is or was a Section 16 Officer during the
applicable Plan Year, and (ii) the Participant deliberately engaged in Intentional Misconduct that
was determined by the Board, in its sole discretion, to be the primary cause of a material negative
restatement of a Company financial statement that was filed with the

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U.S. Securities and Exchange
Commission and such financial statement, as originally filed, is one of the Company’s three (3)
most recently filed annual financial statements. The portion of the Payable Award, if any, that a
Participant may be required to forfeit, return or reimburse will be determined by the Board, in its
sole discretion, but will be no more than the after-tax portion of the Payable Award that
was: (1) in excess of the Payable Award he or she would have received had the Company’s financial
results been calculated under the restated financial statements, and (2) paid within the period
beginning on the date the Committee determines the Payable Award (in accordance with Section 3.4 of
the Plan) and ending on the date that is twelve (12) months after the original filing of the
financial statement that subsequently was restated.

5. ADMINISTRATION

     5.1. Committee is the Administrator. The Plan will be administered by the Committee.

     5.2. Committee Authority. The Committee has all powers and discretion to administer
the Plan and to control its operation, including, but not limited to, the power and discretion to
(a) select Participants and make other determinations under Section 3; (b) make Plan rules and
regulations to address any situation or condition not specifically provided for by the Plan; and
(c) interpret the provisions of the Plan and any Payable Awards. Any determination, decision or
action of the Committee (or any delegate of the Committee) in connection with the construction,
interpretation, administration or application of the Plan will be final, conclusive, and binding
upon all persons, and will be given the maximum possible deference permitted by law.

     5.3. Delegation by the Committee. The Committee, in its sole discretion and on such
terms and conditions as it may provide, may delegate all or part of its authority and/or powers
under the Plan to one or more officers or other employees of the Company or its Affiliates;
provided, however, that any decision, action or determination under the Plan by any such delegate
of the Committee will be subject to review and change by the Committee, in its sole discretion.
Notwithstanding the foregoing, the Committee may not delegate its authority and/or powers under the
Plan with respect to Section 16 Officers.

6. GENERAL PROVISIONS

     6.1. Nonassignability. A Participant will have no right to assign or transfer any
interest under this Plan.

     6.2. Section 409A. It is intended that any Payable Awards under this Plan will be
exempt from the requirements of Section 409A pursuant to the “short-term deferral” exemption or, in
the alternative, will comply with the requirements of Section 409A so that none of the payments to
be provided under the Plan will be subject to the additional tax imposed under Section 409A, and
any ambiguities and ambiguous terms herein shall be interpreted to so comply or be exempt. Each
payment payable under this Plan is intended to constitute a separate payment for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations. The Company may, in good faith and without the
consent of any Participant, make any amendments to this Plan and take such reasonable actions which
it deems necessary, appropriate or desirable to avoid

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imposition of any additional tax or income
recognition under Section 409A prior to actual payment to any Participant.

     6.3. No Effect on Employment. The Plan, participation in the Plan, and administration
of the Plan do not confer any right upon any Participant for the continuation of his or her
employment with the Company or its Affiliates for any Plan Year or any other period. A
Participant’s employment with the Company or its Affiliates is fully terminable at will. The
Company and its Affiliates expressly reserve the right, which may be exercised at any time and
without regard to when during a Plan Year such exercise occurs, to terminate any Participant’s
employment with or without cause, and to treat him or her without regard to the effect that such
treatment might have upon him or her as a Participant.

     6.4. No Individual Liability. Neither the Committee, nor any member of the Committee,
nor any delegate of the Committee, nor any member of the HRCC, nor any member of the Board will be
liable for any determination, decision or action made or taken in good faith with respect to the
Plan or any Payable Award under the Plan.

     6.5. Integration. The Plan as stated in this document is the complete embodiment of
the terms and conditions of the Plan and supersedes any prior versions of the Plan and any prior or
contemporaneous agreements, promises, or representations concerning the subject matter of the Plan.

     6.6. Amendment or Termination. The Committee or the HRCC may amend or terminate the
Plan at any time and for any reason by a written amendment. No individual director, officer, or
employee, regardless of his or her position at the Company or its Affiliates, otherwise has the
power to amend or alter the terms and conditions of the Plan, whether he or she purports to do so
verbally or in writing.

     6.7. Arbitration. Any dispute arising from, or related to, this Plan will be settled
pursuant to the Applied Materials, Inc. Arbitration Policy, where such an arbitration policy is in
effect.

     6.8. Severability; Governing Law. If any provision of the Plan is found to be invalid
or unenforceable, such provision will not affect the other provisions of the Plan, and the Plan
will be construed in all respects as if such invalid provision had been omitted. The provisions of
the Plan will be governed by and construed in accordance with the laws of the State of California,
with the exception of California’s conflict of laws provisions.

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Table of Contents

	 	 	 	 	 
	 	 	Page	 
	1. ESTABLISHMENT AND PURPOSE
	 	 	1	 
	 
	 	 	 	 
	2. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	3. PARTICIPATION AND DETERMINATION OF AWARDS
	 	 	3	 
	 
	 	 	 	 
	3.1. Participation
	 	 	3	 
	3.2. Determination of Performance Goals
	 	 	3	 
	3.3. Determination of Payout Formula or Formulae
	 	 	3	 
	3.4. Determination of Payable Awards
	 	 	3	 
	3.5. Eligibility for Payable Awards
	 	 	4	 
	 
	 	 	 	 
	4. PAYMENT OF AWARDS
	 	 	4	 
	 
	 	 	 	 
	4.1. Right to Receive Payment
	 	 	4	 
	4.2. Form of Payment
	 	 	5	 
	4.3. Timing of Payment
	 	 	5	 
	4.4. Taxes
	 	 	5	 
	4.5. Payment in Event of Participant’s Death
	 	 	5	 
	4.6. Payment Through Affiliate
	 	 	5	 
	4.7. Clawback in Connection with a Material Negative Financial Restatement
	 	 	6	 
	 
	 	 	 	 
	5. ADMINISTRATION
	 	 	6	 
	 
	 	 	 	 
	5.1. Committee is the Administrator
	 	 	6	 
	5.2. Committee Authority
	 	 	6	 
	5.3. Delegation by the Committee
	 	 	6	 
	 
	 	 	 	 
	6. GENERAL PROVISIONS
	 	 	6	 
	 
	 	 	 	 
	6.1. Nonassignability
	 	 	6	 
	6.2. Section 409A
	 	 	6	 
	6.3. No Effect on Employment
	 	 	7	 
	6.4. No Individual Liability
	 	 	7	 
	6.5. Integration
	 	 	7	 
	6.6. Amendment or Termination
	 	 	7	 
	6.7. Arbitration
	 	 	7	 
	6.8. Severability; Governing Law
	 	 	7	 

-i-exv10w71

Exhibit 10.71

[EMPL_NAME]

Employee ID: [EMPLID]

Grant Number: [GRANT_ID]

APPLIED MATERIALS, INC.

PERFORMANCE SHARES AGREEMENT

NOTICE OF GRANT

     Applied Materials, Inc. (the “Company”) hereby grants you, [EMPL_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 Shares Agreement (the
“Agreement”) is [GRANT_DT] (the “Grant Date”). Subject to the provisions of the Terms and
Conditions of Performance Shares Agreement (the “Terms and Conditions”), which constitute part of
this Agreement, and of the Plan, the principal features of this Award are as follows:

	 	 	 

	Number of Performance Shares:

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

	 	Please refer to the UBS
One Source website for
the vesting schedule
related to this grant of
Performance Shares
(click on the specific
grant under the tab
labeled
“Grants/Awards/Units.”).*

 

			
	*	 	Except as otherwise provided in the Terms and Conditions of this Agreement, 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.

IMPORTANT:

     Your electronic or written signature below indicates your agreement and understanding that
this grant is subject to all of the terms and conditions contained in the Terms and Conditions to
this Agreement and the Plan. For example, important additional information on vesting and
forfeiture of this grant is contained in paragraphs 3 through 5 and paragraph 7 of the Terms and
Conditions. PLEASE BE SURE TO READ ALL OF THE TERMS AND CONDITIONS OF THIS GRANT. CLICK HERE
TO READ THE TERMS AND CONDITIONS.

     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.”

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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 of the Terms and Conditions). If you prefer not to electronically sign this
Agreement, you may accept this Agreement by signing a paper copy of the Agreement and delivering it
to Stock Programs.

     For Employees employed in China on the Grant Date: Under the State Administration of Foreign
Exchange (“SAFE”) regulations, the receipt of funds by you from the sale of Performance Shares must
be approved by SAFE. In order to comply with the SAFE regulations, the proceeds from the sale of
Performance Shares must be repatriated into China through an approved bank account set up and
monitored by the Company.

     For Employees employed in the United Kingdom (U.K.) on the Grant Date:
National Insurance Contribution (“NIC”) The grant of your Performance Shares is subject to
the execution of a joint election between the Company and you (the “Election”), being formally
approved by the H.M. Revenue & Customs (the “HMR&C”) and remaining in force thereafter under which
you agree to pay all NICs that may become due in connection with the grant or vesting of
Performance Shares. The NICs include the “primary” NIC payable by an employee as well as the
“secondary” NIC payable by the employer in the absence of any election (referred to as the
Secondary Class 1 NIC). By accepting the Performance Shares, to the extent allowable by applicable
law, you hereby consent and agree to satisfy any liability the Company and/or your employer
realizes with respect to Secondary Class 1 NIC payments required to be paid by the Company and/or
your employer in connection with the grant or vesting of the Performance Shares.

     In addition, by accepting the Performance Shares, you hereby authorize the Company or your
employer to withhold any such Secondary Class 1 NICs from the sale of a sufficient number of Shares
upon vesting of the Performance 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 you to satisfy such Secondary Class 1 NICs. The Company, in its
discretion, may require you, and you hereby agree, to make payment on demand for such contributions
by cash or check to UBS Financial Services, Inc., the Company or your employer, and such
contributions will be remitted to the HMR&C. If additional consents and/or elections are required
to accomplish the foregoing, you agree to provide them promptly upon request. If the foregoing is
not allowed under applicable law, the Company may rescind your Performance Shares. If you do not
enter an Election prior to the first vesting date or if the Election is revoked at any time by the
HMR&C, the Performance Shares shall become null and void without any liability to the Company
and/or your employer and shall lapse with immediate effect.

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TERMS AND CONDITIONS OF

PERFORMANCE SHARES AGREEMENT

     1. Grant. Applied Materials, Inc. (the “Company”) hereby grants to the Employee under
the Company’s Employee Stock Incentive Plan (the “Plan”) the number of Performance Shares (also
referred to as restricted stock units) set forth on the first page of the Notice of Grant of this
Agreement, 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 will 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, or paragraph 11, 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 will be made in whole Shares only, provided, however, that if the Company determines that it
is necessary or advisable, the Shares subject to this Performance Share award shall be sold
immediately upon settlement of the Performance Shares award, and the Employee shall receive the
proceeds from the sale, less any applicable fees and taxes or other required withholding.

     3. Vesting Schedule/Period of Restriction. Except as provided in paragraphs 4, 5 and
11, and subject to paragraph 7, the Performance Shares awarded by this Agreement will vest in
accordance with the vesting provisions set forth on the UBS One Source website (click on the
specific grant under the tab labeled “Grants/Awards/Units”). Performance Shares will not vest in
the Employee in accordance with any of the provisions of this Agreement unless the Employee will
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 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 will 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 UBS One Source website (click on the specific grant under the tab labeled
“Grants/Awards/Units”) will 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 will 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 will immediately 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 will
be modified as soon as the duration of the Employee’s PLOA exceeds six (6) months.

     (b) 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
Shares award will 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(b) will be limited to the extent required to comply with applicable law. If the
Employee is subject to Hong Kong’s ORSO provisions, this paragraph 4(b) will 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. Subject to the provisions of this
paragraph 5, 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 shall be made as soon as practicable upon or following the accelerated vesting
date, but in no event later than 60 days following the date such accelerated Performance Shares
vest.

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     Notwithstanding anything in the Plan or this Agreement to the contrary, if the vesting of the
balance, or some lesser portion of the balance, of the Performance Shares is accelerated in
connection with Employee’s Termination of Service (provided that such termination is a “separation
from service” within the meaning of Section 409A, as determined by the Company), other
than due to death, and if (a) the Employee is a “specified employee” within the meaning of Section
409A at the time of such Termination of Service and (b) the payment of such accelerated Performance
Shares will result in the imposition of additional tax under Section 409A if paid to the Employee
on or within the six (6) month period following Employee’s Termination of Service, then the payment
of such accelerated Performance Shares will not be made until the date six (6) months and one (1)
day following the date of Employee’s Termination of Service, unless the Employee dies following his
or her Termination of Service, in which case, the Performance Shares will be paid in Shares to the
Employee’s estate as soon as practicable following his or her death. It is the intent of this
Agreement to be exempt from or comply with the requirements of Section 409A so that none of the
Performance Shares provided under this Agreement or Shares issuable thereunder will be subject to
the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to be
so exempt or comply. For purposes of this Agreement, “Section 409A” means Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), and any proposed, temporary or final
Treasury Regulations and Internal Revenue Service guidance thereunder, as each may be amended from
time to time.

     6. Payment after Vesting. Any Performance Shares that vest in accordance with
paragraphs 3 or 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, but in all cases within 60 days
following the date such Performance Shares vest, 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, subject to paragraph 8.

     7. Forfeiture. Notwithstanding any contrary provision of this Agreement and except in
the event of Employee’s death (see Paragraph 4(b)), the balance of the Performance Shares that have
not vested pursuant to paragraphs 3 through 5 or paragraph 11 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. [To be included for Awards subject to
performance-based vesting: Notwithstanding anything to the contrary in the Plan or this Agreement,
the Board, in its sole discretion, may require the Employee to forfeit, return or reimburse the
Company all or a portion of the Performance Shares subject to this Award in accordance with
paragraph 16 of the Agreement.]

     8. Withholding of Taxes. When Shares are issued as payment for vested Performance
Shares or, in the discretion of the Company, such earlier time as the Tax Obligations (defined
below) are due, the Company (or the employing Affiliate) will withhold a portion of the Shares that
have an aggregate market value sufficient to pay all taxes and social insurance liability and other
requirements in connection with the Shares, including, without limitation, (a) all federal, state
and local income, employment and any other applicable taxes that are required to be withheld by the
Company or the employing Affiliate, (b) the Employee’s and, to the extent required by the Company
(or the employing Affiliate), the Company’s (or the employing Affiliate’s) fringe benefit tax

-5-

 

liability, if any, associated with the grant, vesting, or sale of the Performance Shares
awarded and the Shares issued thereunder, and (c) all other taxes or social insurance liabilities
with respect to which the Employee has agreed to bear responsibility (collectively, the “Tax
Obligations”). The number of Shares withheld pursuant to the prior sentence will be rounded up to
the nearest whole Share, with no refund provided in the U. S. for any value of the Shares withheld
in excess of the tax obligation as a result of such rounding. Notwithstanding the foregoing, the
Company, in its sole discretion, may require the Employee to make alternate arrangements
satisfactory to the Company for such withholdings or remittances in advance of the arising of any
remittance obligations to which the Employee has agreed or any withholding obligations.

     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
Obligations that the Company determines cannot be satisfied through the withholding of otherwise
deliverable Shares or that are due prior to the issuance of Shares under the Performance Shares
award. All Tax Obligations related to the Performance Shares award and any Shares delivered in
payment thereof are the sole responsibility of the Employee. Further, Employee shall be bound by
any additional withholding requirements included in the Notice of Grant of this Agreement.

     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
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 UBS One Source website (click on the specific grant under the tab labeled
“Grants/Awards/Units”) 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

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Employee, as the case may be, will 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 sole 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 accelerated new or additional awards will be made in accordance with the
provisions of paragraph 5.

     12. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement shall be addressed to the Company, in care of Stock Programs, at Applied Materials,
Inc., 2881 Scott Boulevard, M/S 2023, P. O. Box 58039, Santa Clara, CA 95050, U.S.A., or at such
other address as the Company may hereafter designate in writing.

     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 shall
not be sold, pledged, assigned, hypothecated, transferred or disposed of any way (whether by
operation of law or otherwise) and shall 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.

     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, Employee’s 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.

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     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. [To be included for Awards subject to performance-based vesting: Clawback in
Connection with a Material Negative Financial Restatement. Pursuant to the Company’s clawback
policy, the Board, in its sole discretion, may require the Employee to forfeit, return or reimburse
the Company all or a portion of his or her Performance Shares subject to this Award if (i) the
Employee is or was a Section 16 Person during the performance period applicable to the
performance-based vesting of the Performance Shares, and (ii) the Employee deliberately engaged in
“Intentional Misconduct” (as defined below) that was determined by the Board, in its sole
discretion, to be the primary cause of a material negative restatement of a Company financial
statement that was filed with the U.S. Securities and Exchange Commission and such financial
statement, as originally filed, is one of the Company’s three (3) most recently filed annual
financial statements. The portion of this Award, if any, that the Employee may be required to
forfeit, return or reimburse will be determined by the Board, in its sole discretion, but will be
no more than the “Clawback Maximum” (as defined below).

     (a) For purposes of this Agreement, “Clawback Maximum” means the portion of the Award that was
in excess of the Shares that the Employee would have received under this Award had the Company’s
financial results been calculated under the restated financial statements .

     (b) To the extent Tax Obligations on such Performance Shares were paid or due, such
forfeiture, return or reimbursement shall be limited to the after-tax portion of the Clawback
Maximum.

     For purposes of this Agreement, “Intentional Misconduct” means the Employee’s deliberate
engagement in any one or more of the following: (a) fraud, misappropriation, embezzlement or any
other act or acts of similar gravity resulting or intended to result directly or indirectly in
substantial personal enrichment to the Employee at the expense of the Company; (b) a material
violation of a federal, state or local law or regulation applicable to the Company’s business that
has a significant negative effect on the Company’s financial results; or (c) a material breach of
the Employee’s fiduciary duty owed to the Company that has a significant negative effect on the
Company’s financial results; provided, however, that the Employee’s exercise of judgment or actions
(or abstention from action), and/or decision-making will not constitute Intentional Misconduct if
such judgment, action (or abstention from action) and/or decision is, in the good faith
determination of the Board, reasonable based on the facts and circumstances known to the Employee
at the time of such judgment, action (or abstention from action) and/or decision; and such
judgment, action (or abstention from action) and/or decision is in an area or situation in which
(i) discretion must be exercised by the Employee or (ii) differing views or opinions may apply.]

     17. Additional Conditions to Issuance of Certificates for Shares. The Company will
not be required to issue any certificate or certificates (which may be in book entry form) 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

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regulatory body, which the Committee will, in its sole 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 will, in its sole 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.

     18. 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.

     19. 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.

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

     21. Agreement Severable. In the event that any provision in this Agreement 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.

     22. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Employee expressly warrants that he or
she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can be made only in
an express written contract executed by a duly authorized officer of the Company. 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 or to otherwise avoid imposition of any additional tax
or income recognition under Section 409A prior to the actual payment of Shares pursuant to this
award of Performance Shares.

     23. 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.

     24. 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

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lieu of Performance Shares; (b) all determinations with respect to any future grants,
including, but not limited to, the times when the Performance Shares will be granted, the number of
Performance Shares subject to each Performance Share award and the time or times when the
Performance Shares will vest, shall 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 shall 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 will 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.

     25. 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, 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. The Employee understands, however,
that refusing or withdrawing the Employee’s consent may affect the Employee’s ability to
participate in the Plan. For more information on the consequences of the Employee’s refusal to
consent or withdrawal of consent, the Employee understands that he or she may contact the
Employee’s local Human Resources representative.

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     26. Notice
of Governing Law. This award of Performance Shares will 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.

oOo

-11-

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