Document:

EX10.49_FormofLOUforLongTermAssignment

Exhibit 10.49
Date

[Name]
[Address]

FORM OF LONG TERM ASSIGNMENT
LETTER OF UNDERSTANDING

Dear [Name]:

This Letter of Understanding (“LOU”) covers the material terms and conditions of your long-term assignment in [Location of Assignment] in connection with your employment with Applied Materials, Inc. (also referred to herein as the “Company” or “Applied Materials”) or its subsidiary or affiliate employing you.  Your assignment is estimated to be effective [Date] and is expected to end on [Date].  The actual length of the assignment could vary due to business conditions.  This LOU contains confidential information related to your compensation and benefits while on assignment and should not be shared or discussed with other employees.

You will be eligible for the long term global relocation package set forth below.  Applied Materials outsources its relocation services to [Y Relocation (“Y”)].  A representative from [Y] will contact you to coordinate the details of your move once we have received the signed LOU.  [Y] will also assist with finding housing in [Location of Assignment] within the budget guidelines provided by Applied Materials.  PLEASE NOTE: ALL reimbursements related to your assignment must be submitted through [Y].  Expenses submitted through Applied Materials’ expense report systems, Concur, will be rejected.  (Please note if you currently have a corporate credit card for business expenses, be sure to contact your receiving manager prior to your departure to ensure an appropriate card will be provided for the host location.)

If you should have any questions before, during, or after your move to [Location of Assignment], please call your [Y] International Account Executive at the following numbers:

[Contact Information]

IMPORTANT:  Unless otherwise specified herein to the contrary, you must continue to be employed by the Company or one of its subsidiaries or affiliates on the date of payment or provision of any benefit or reimbursement hereunder.

The list below outlines the general terms and conditions of employment applicable only during the term of your assignment in [Location of Assignment]:

Compensation and Benefits

		
	1.
	Your base salary will be paid out of your home location.  Payments will be based upon home country payroll practices (e.g. monthly, bi-weekly, etc.).

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	2.
	You will be offered the Corporate Insurance/Benefits Package plan which currently includes expatriate benefits for certain medical, dental, prescription drug, and vision coverage through [Z].  Any Company-sponsored medical, dental, prescription drug, vision and/or EAP benefits you currently have will end once the Corporate Insurance/Benefits Package plan goes into effect.  Attached is a document that outlines the corporate insurance/benefits package benefits.

		
	3.
	The Company will provide a Cost of Living Allowance (“COLA”) based on the cost difference between certain basic goods and services in the home location and the host location.  The amount of your COLA payment is determined using data received by an external consultant.  This amount will be reviewed on a quarterly basis and revised if necessary, based on changes in salary, market conditions or family size.  Your COLA amount is currently calculated at [Home country currency] per month and will be adjusted at the start of your assignment based on current cost of living tables at that time.

		
	4.
	The Company will provide a tax equalization benefit (the “Tax Equalization Benefit”) through a partnering tax professional, in accordance with the guidelines in the Company’s Global Tax Equalization Policy, as it may be amended from time to time (the “Tax Equalization Policy”).  This Tax Equalization Benefit will include a reconciliation of your income taxes in both your home and host countries as well as reimbursement for gross-up tax calculations related to eligible expenses you incur due to the assignment that must be included in your income for tax purposes.  You will be tax equalized to your home country tax rate, and a hypothetical tax will be deducted from your pay.  Please read the enclosed Tax Equalization Policy and sign and return the acknowledgement with this letter to [Y]. You are not required to remain employed with the Company or one of its subsidiaries or affiliates to receive the Tax Equalization Benefit except to the extent, if any, required by the Tax Equalization Policy.

		
	5.
	The Company will pay you a one-time relocation allowance of [$X] at the beginning of the assignment.  This allowance will be paid through your home country payroll.

Pre-Assignment Benefits

You are encouraged to retain your residence in the home country.  If you elect to sell your primary residence, THE COMPANY WILL NOT PROVIDE ANY REIMBURSEMENT FOR ANY RELATED EXPENSES. In addition, if you do not retain your residence in the home country, your pay package may include a “housing norm” deduction based on cost of living data generated for the company by a recognized third party expert.  Further, if you incur expenses related to purchasing or renting housing in the home location after you return from assignment, you will not be reimbursed for such expenses.

If you are a renter in the home location and do not have any rental lease obligation during the assignment, your pay package will include a “housing norm” deduction based on the cost of living data generated for the company by a recognized third party expert.

		
	6.
	The Company will provide [you OR you and your spouse] with one [X-night] host country visit.  Expenses to be reimbursed for this trip include round-trip airfare, lodging, meals 

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and transportation.  Expenses will only be reimbursed to the extent they are incurred and comply with the current Company travel policy.  Expenses related to childcare for children under the age of 18 will be reimbursed with receipts through the Company’s third party assignment services provider, up to a maximum of [$X].

		
	7.
	The Company will provide you with home finding assistance for [X days] through an outside destination service provider to assist you in locating adequate housing, schools and area orientation.

		
	8.
	The Company will provide you and your spouse with language lessons, up to [X hours, and up to a maximum of $X per person].  Language lessons for children are not reimbursed, as children will typically receive language education as part of their school curriculum.

		
	9.
	The Company will assist in and will reimburse you for the cost of obtaining the documentation required for you to work and your accompanying dependents (as defined in the Company’s International Assignment Policy in effect as of the effective date of the LOU (the “IAP”)) to live in [Location of Assignment].  This includes assistance with and reimbursement for visas, residence permits, passports, etc.  The Company does not intend for permanent residency to be obtained and does not support any costs for you or your dependents as a result of permanent residency.

		
	10.
	The Company will provide reimbursement for any required medical examinations and/or immunizations for you and your accompanying dependents which are not currently covered under your home country medical plan.

		
	11.
	The Company will provide you and your accompanying spouse, if applicable, with a one-day cultural orientation class which will teach you about living and working in the Host Country.

		
	12.
	The Company does not ship or store personal automobiles.  However, it will reimburse you for a loss incurred as a result of the sale or lease cancellation on your personal automobile, up to [$X] per car, with a two car limit.  You must provide support documentation to obtain this benefit.

		
	13.
	The Company will provide one-way, economy (or business class for the assignee, if authorized) airfare for you and your approved accompanying dependents to the host location.  This travel must be booked through Corporate Travel according to the Company’s current travel guidelines.  At the same time, you must notify [Y] about this travel.

		
	14.
	The Company will pay for a one-time air and sea shipment of your personal belongings to the host location or a surface shipment (via land) depending on the geographic location of your home and host locations.  There is a limit on this reimbursement, and the total amount reimbursed will be subject to container size limit stated in the IAP.  Reimbursement will be for a shipment pick up from a single location and delivered to another single location.  Reimbursement will include normal customs and import duties, as well as insurance for replacement valuation.  If you are not able to immediately occupy your ultimate residence in the host country, the Company will also reimburse up to [X days] 

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of in-transit storage.  Please refer to the IAP for the list of items that will not be shipped and other shipment details.

[Table of authorized shipment size -- based on family size and housing type]

		
	15.
	The Company will also reimburse you for expenses associated with shipping up to two household pets, with a cap on reimbursement of [$X] total.

		
	16.
	The Company may provide temporary living arrangements for a combined maximum of [X] days between the home and host location.  Expenses related to such temporary accommodations will be paid directly by Applied Materials whenever possible.  While in temporary living, you will receive a meal per diem based upon the current Company travel policy.

On-Going Benefits
		
	17.
	In locations where the international bank account is not available and you choose to use the home country bank or local bank in the host country, the Company will reimburse the cost of two funds transfers per month.

		
	18.
	The Company will provide furnished housing for the duration of the assignment.  Your budget for housing is based on furnished housing at the host location to accommodate your family size and is determined by third party cost of living tables.  You will also receive a utility allowance based on data tables provided by an external consultant.

		
	19.
	The Company will reimburse [tuition and other pre-approved education expenses] [application fees] for your dependent children attending primary or secondary school in the host country.  The Company works closely with you and consultants to determine the most appropriate primary or secondary school options for your children.  If you and the Company are unable to agree on a schooling option and you elect to send your children to a primary or secondary school other than one approved by the Company, you will be reimbursed for an amount equal to the  tuition of the school deemed most appropriate by the Company.

Your dependent children attending primary or secondary school in a country other than the host location will receive reimbursement for two round trip visits per year.  Any dependent children attending university outside the host country on a full-time, undergraduate basis will receive reimbursement for one round trip visit from their university location to the host location per year during the term of your assignment.

		
	20.
	The Company will reimburse you for eligible integration expenses related to  assisting your spouse in assimilating into the new community, up to a maximum reimbursement of [$X] (e.g. career assistance, membership fees to local clubs/organizations, etc.).

		
	21.
	[The Company will provide you with a company-leased vehicle for the duration of the assignment.  The Corporate Travel Department will make arrangements for this vehicle.]  OR [Because X is considered a “no-drive” country, you will be provided [a transport 

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allowance to use public transportation] OR [a car and driver for your transportation needs] for the duration of the assignment.

		
	22.
	After you have completed 12 months of your assignment, the Company will pay for one round-trip flight each year for you and accompanying dependents to travel home to [Home Country], based on the Company’s current travel policy.  You must have at least six (6) months of your assignment remaining to be eligible for this reimbursement.  If you prefer, the Company will pay for a spouse who has remained in the home country to travel to your host location, so long as you have completed 12 months of your assignment and have at least six (6) months remaining.

In certain circumstances, and at the Company’s discretion, it will approve a home leave to a location other than the home work location.  In this instance, the allowance shall not exceed the cost of leave to the home location.

		
	23.
	The Company will provide assistance in the case of the following emergency situations while on assignment:

		
	a.
	death of an immediate family member (as defined in the IAP),

		
	b.
	emergency medical care,

		
	c.
	death of the assignee or accompanying dependent, and/or

		
	d.
	evacuation.

Post-Assignment Benefits

The Company will provide or reimburse the following repatriation benefits according to the guidelines in the IAP once you complete your assignment: transportation for you and your accompanying dependents to the Home Country, return shipment of personal belongings (subject to the same carton size limitations that applied to shipments to the host location), temporary living assistance, 30 days of rental car, and a repatriation allowance (collectively, the “Repatriation Benefits”).  Additional details about and requirements relating to this component of your relocation package will be discussed with you as the time for your return nears.  You are required to remain employed with the Company or one of its subsidiaries or affiliates to receive the Repatriation Benefits once you complete your assignment, except to the extent described in the “Miscellaneous” section below.

Section 409A and Section 457A

Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and official guidance issued thereunder, as each may be amended from time to time (collectively, “Section 409A”), and Section 457A of the Code, the regulations and official guidance issued thereunder, as each may be amended from time to time (collectively, “Section 457A”), govern deferred compensation, which may include reimbursement payments and other benefits, payable to a U.S. taxpayer and/or recipient who is otherwise subject to Section 409A and Section 457A, respectively (in each case, a “Recipient”).  If the Section 409A requirements are not met, the Recipient of deferred compensation can be subject to adverse tax consequences, including an additional 20% U.S. federal penalty tax and possible U.S. state penalty taxes.  Similarly, if the payments or benefits are not exempt from the Section 457A requirements, the 

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Recipient of certain deferred compensation can be subject to adverse tax consequences, including early income tax inclusion and, in certain circumstances, an additional 20% federal penalty tax.  The Company intends that all benefits and/or reimbursements provided hereunder be exempt from or otherwise comply with the requirements of Section 409A, and be exempt from the requirements of Section 457A, so that none of the benefits or reimbursements provided hereunder will be subject to the adverse tax consequences of Section 409A or Section 457A.  However, to do so, certain restrictions on the timing of benefits or reimbursements hereunder must be imposed.  Any ambiguities or ambiguous terms herein will be interpreted to provide for exemption from or compliance with Section 409A and to provide for exemption from Section 457A.  

Except with respect to any Repatriation Benefits to be provided or reimbursed hereunder due to your separation from service with the Company, as determined under Section 409A (your “Separation from Service”) as described below, and except as otherwise set forth in the Tax Equalization Policy with respect to any Tax Equalization Benefit to be provided hereunder, you must remain employed by the Company or a subsidiary or affiliate of the Company in order to receive a benefit or reimbursement hereunder, unless the Company waives such requirement.  If the Company waives such requirement, then no such benefit or reimbursement will be provided later than the sixtieth (60th) day following the date such waiver occurs.   Accordingly, such benefits and/or reimbursements are intended to comply with the “short-term deferral” exception to Section 409A such that they do not provide for any deferral of compensation and to be exempt from Section 457A.  

In the case of any Repatriation Benefits to be provided or reimbursed hereunder due to your Separation from Service as described below, (a) the applicable expense must be incurred no later than the last day of the second calendar year immediately following the calendar year in which your Separation from Service occurs (the “Deadline Date”), (b) the expense reimbursement must be paid no later than the third calendar year immediately following the calendar year in which your Separation from Service occurs, and (c) the applicable benefit must be provided no later than the Deadline Date.  Accordingly, such benefits and/or reimbursements are intended to comply with the “limited payment” and/or “reasonable moving expense” exceptions in Treasury Regulation Sections 1.409A-1(b)(9)(v)(A) and 1.409A-1(b)(9)(v)(C) – (E) such that they do not provide for any deferral of compensation.  If your taxable year is not a calendar year, all references to “calendar year” in the “Section 409A and Section 457A” section of this LOU will be deemed to mean your taxable year.  Any Tax Equalization Benefit to be provided hereunder will be subject to the restrictions on the timing of benefits or reimbursements set forth in the Tax Equalization Policy.

Further, if and to the extent Section 457A would otherwise impose taxation on your benefits or payments under this LOU, such payments and benefits will be made no later than twelve (12) months after the end of the taxable year of the “service recipient” (within the meaning of Section 457A) during which the right to the payment or benefit is first no longer subject to a “substantial risk of forfeiture” (within the meaning of Section 457A) (or such later date as permitted by Section 457A).

Each payment or benefit hereunder is intended to constitute a separate payment for purposes of U.S. Treasury Regulation Section 1.409A-2(b)(2) and for purposes of Section 457A.

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You and the Company agree to work together in good faith to make any amendments to the LOU and any related documents, and to take such reasonable actions which are necessary, appropriate or desirable, to avoid the imposition of any additional tax or income recognition prior to actual payment to you under Section 409A.  In no event, however, will the Company or any of its subsidiaries or affiliates reimburse you or any other benefit recipient for any taxes that may be imposed on you or any other recipient as a result of Section 409A or Section 457A.

Miscellaneous

Although the material financial terms of this offer will not change, the complexities of foreign employment arrangements may require us to modify certain elements of this offer. If so, we will provide you with prompt written notice of those changes. During your assignment, you agree to comply with the rules, procedures, and working practices of Applied Materials and with all relevant local rules, laws and regulations that apply to you both as an employee in and as a resident of the host country.

The Company reserves the right to revoke or terminate this assignment and return you to your current or an equivalent position at any time, and you agree to return to [Home Country] upon the termination or revocation of this assignment.  If the Company revokes or terminates this assignment, the Company will provide or reimburse the Repatriation Benefits described above in accordance with IAP guidelines if you remain employed by the Company or one of its subsidiaries or affiliates on the date of payment or reimbursement of such Repatriation Benefits.  If you incur a Separation from Service as a result of a termination by Applied Materials (or the employing Applied Materials subsidiary or affiliate) without cause (as determined by the Company) before the completion of the assignment or after the completion of the assignment but before your repatriation to [Home Country] is completed, the Company will provide only the following Repatriation Benefits in accordance with IAP guidelines: (a) transportation for you and your accompanying dependents to the Home Country, and (b) return shipment of personal belongings (subject to the same carton size limitations that applied to shipments to the host location), subject to the timing of payment or reimbursement restrictions set forth in the section entitled “Section 409A and Section 457A” above, as applicable.  If you resign from the Company, whether before or after the completion of the assignment, you will not be entitled to any Repatriation Benefits and you will be responsible for paying all remaining tuition and lease(s), including housing and automobile, for the remainder of the contractual obligation(s), unless the obligation(s) can be terminated without any penalty, and, unless Applied Materials determines otherwise in its discretion, you will be responsible for repayment to Applied Materials of a pro-rata portion of the expenses and costs that Applied Materials has pre-paid or otherwise incurred hereunder with respect to periods beyond your resignation date, such as pre-paid tuition.  

This LOU outlines the benefits being offered to you during your assignment period, which generally are provided or reimbursed according to the guidelines of the IAP.  If the terms of this offer are acceptable, please acknowledge acceptance by signing and returning one copy to my attention, and retaining the other for your files.  The terms and conditions of your assignment, including this LOU, shall be governed in accordance with the laws of your home country without regard to its conflicts of laws provisions.

If you have further questions, please contact me.

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Sincerely,

	
			
	

	 
	 

	Sending Line Manager – Signature
	 
	Date

	

	 
	 

	Accepted by:
	 
	 

	

	 
	 

	(Assignee’s Name) – Signature
	 
	Date

		
	cc:
	Global Mobility Manager

Home location HR Business Partner
Finance Controller of Business Unit 

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[Z] International Expatriate Benefits Plan Highlights

Access to high quality health care can be a particular concern for employees while they are on expatriate assignments.  Applied Materials currently offers the [Z] International Expatriate Benefits Plan (“[Z] Plan”), which will provide you and your eligible dependents with certain medical, prescription drug, vision and dental coverage in accordance with the terms of the [Z] Plan, and ONLY during the term of your assignment.  

Certain key points to understand regarding the [Z] Plan include:

		
	•
	The Plan is based on a shared responsibility (coinsurance) between you and Applied Materials.

		
	•
	The medical benefits provide for [X%] payment of reasonable and customary (R&C) charges until you have reached a personal out of pocket limitation of [$X] for individual and [$X] for family, then the medical benefits provide for 100% reimbursement of R&C charges.

		
	•
	The dental benefits are payable at either: (Class I) 100%, (Class II) 80% or (Class III) 50%, depending on the type of class/care required. The calendar year maximum for Class I, II, III combined is [$X].

		
	•
	Within the United States, [Z] offers in-network discounts. To take advantage of these discounts, you must ensure your physician is a member of the [Z] Preferred Care Network. You can find out which physicians participate in the [Z] Preferred Care Network via the member website: www. [Z].com/cieb.  This will allow you and your covered dependents to take advantage of the pre-negotiated discount arrangements.

		
	•
	If you are inbound to the United States, you must contact [Z] within 24 hours if you or a covered dependent is admitted to a hospital within the United States.

		
	•
	If your spouse and/or other covered dependents elect to remain in the home country, their benefits will also transfer to the [Z] plan.

You should thoroughly review the [Z] Member Information Kit provided to you.   If you have questions regarding your coverage benefits or other related general questions regarding the [Z] Plan, please contact [Z] directly. Contact information for [Z] International:

[Contact Information]

NOTE: Since the Goods & Services (COLA) index provides for cost differentials for normal (i.e. not extraordinary) medical and dental services, reimbursement of expenses in excess of what would have been reimbursed in the home country, will not be eligible to be claimed via an expense report.

9EX10.50_AMATIncentivePlanamended&restatedeff10.28.2013

Exhibit 10.50

APPLIED MATERIALS, INC.
APPLIED INCENTIVE PLAN
(Amended and Restated Effective October 28, 2013)

    

APPLIED MATERIALS, INC.
APPLIED INCENTIVE PLAN

(Amended and Restated Effective October 28, 2013)

		
	1.
	ESTABLISHMENT AND PURPOSE

Applied Materials, Inc. (the “Company”), having originally 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 October 28, 2013.  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 or, if Applied Materials, Inc. is not the highest level (ultimate parent) entity among it and its Affiliates, the board of directors of the ultimate parent corporation of the Company.
2.3.    “Cause” means a Participant’s (a) failure to perform (other than due to mental or physical disability or death) the duties of his or her position (as they may exist from time to time) to the reasonable satisfaction of the Company or an Affiliate after receipt of a written warning or performance improvement plan; (b) any act of dishonesty taken in connection with the Participant’s responsibilities as an employee that is intended to result in his or her personal enrichment; (c) conviction or plea of no contest to a crime that negatively reflects on the Participant’s fitness to perform his or her duties or harms the reputation or business of the Company or of an Affiliate; (d) willful or reckless misconduct that is injurious to the reputation or business of the Company or of an Affiliate; or (e) violation of a material policy of the Company or of an Affiliate.
2.4.    “CEO” means the Chief Executive Officer of the Company and, if Applied Materials, Inc. is not the highest level (ultimate parent) entity among it and its Affiliates, either the Chief Executive Officer of the Company or the Chief Executive Officer of the ultimate parent corporation of the Company may act as the “CEO” under the Plan.

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2.5.    “Committee” means the Company’s Chief Executive Officer of the Company (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.
2.6.    “Company” means Applied Materials, Inc., a Delaware corporation, and any successor thereto.
2.7.    “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.
2.8.    “Employer” means with respect to an individual Participant, the Company or Affiliate that both: (a) directly employs such Participant (as the case may be), and (b) the Committee has designated as eligible to cover its employees under the Plan.  
2.9.    “Entry Deadline” means, as to any Plan Year, the first business day in the fourth Company fiscal quarter of such Plan Year. 
2.10.    “HRCC” means the Human Resources and Compensation Committee of the Board or, if Applied Materials, Inc. is not the highest level (ultimate parent) entity among it and its Affiliates, the compensation committee of the board of directors of the ultimate parent corporation of the Company.
2.11.    “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.
2.12.    “Participant” means, as to any Plan Year, any employee of an Employer who is at a job level grade of B4, B5, B6, B7, E4, E5, E6, E7, M4, M5, M6, M7, V1 V2, V3, or V4, subject to Section 3.1 or other job grade level or other employee of an Employer selected by the Committee.  Except as provided in Section 3.1, a Participant for a given Plan Year does not include any employee that first commences employment at the Company or an Affiliate after the Entry Deadline for the applicable Plan Year.  Further, a Participant does not include any officer 

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selected by the HRCC to participate in the Applied Materials, Inc. Senior Executive Bonus Plan for that Plan Year.  Notwithstanding the foregoing, the Committee, in its sole discretion, may determine that an otherwise eligible employee or group of employees (including all or a portion of employees in an otherwise eligible job level grade) will not be a Participant in the Plan for a given Plan Year. 
2.13.    “Payable Award” means the award, if any, payable to a Participant under the Plan for a Plan Year. 
2.14.    “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.
2.15.    “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.
2.16.    “Plan” means the Applied Materials, Inc. Applied Incentive Plan as set forth in this instrument and as hereafter amended from time to time.
2.17.    “Plan Year” means the fiscal year of the Company.
2.18.    “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. 
2.19.    “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.
2.20.    “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and guidance thereunder, as they may be amended or modified from time to time.
2.21.     “Section 457A” means Section 457A of the Code and the regulations and guidance thereunder, as they may be amended or modified from time to time.
2.22.    “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

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3.1.    Participation.  All eligible Participants will be automatically enrolled in the Plan each Plan Year on the first day of such Plan Year or, if later (or again), on the first full business day the individual first meets the definition of “Participant” (as defined Section 2.12) for such Plan year (e.g., the individual moves to an eligible job level grade as provided in Section 2.12 or to an Employer (and provided the individual has an eligible job level grade)).  Unless otherwise determined by the Committee, a Participant enrolled in the Plan during a Plan Year will cease to be enrolled for the portion of such Plan Year in which he or she no longer meets the definition of “Participant”; provided, however, that he or she may remain eligible to receive a Payable Award for the portion of such Plan Year in which he or she met the definition of “Participant” in accordance with and subject to Sections 3.4 and Section 3.5, and provided he or she meets the other terms and conditions for eligiblity for a Payable Award.  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 (or a portion thereof).  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 to participate concurrently in any other incentive plan of the Company or its Affiliates, including, but not limited to, milestone plans, profit sharing plans, the Discretionary Bonus Incentive Plan, sales incentive plans, other incentive plans, etc.  Notwithstanding the foregoing, in determining whether an otherwise eligible employee shall become a Participant with respect to a Plan Year (or portion thereof), 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 Entry Deadline for 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 Entry Deadline for Plan Year, and (b) he or she otherwise meets the definition of a “Participant” in Section 2.12 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, 

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may increase, reduce, pro-rate or eliminate a Participant’s Payable Award based on whatever factors it deems relevant, including but not limited to in connection with a Participant’s termination of employment as described in Section 3.5 or an individual’s eligibility as a Participant for only a portion of the Plan Year, as described in Section 3.1 and Section 3.4.2, 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 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.    Pro-Ration of Target Payable Award; Pro-Rata Payable Awards. The Committee may, in its sole discretion, pro-rate the target Payable Award for Participants that meet the definition of “Participant” for a portion of the Plan Year, but remain eligible for consideration for a Payable Award in accordance with Section 3.1 and Section 3.5.  A pro-rata Payable Award may, in the sole discretion of the Committee, be made to a Participant who remains an employee of the Company or an Affiliate through the last day of the Plan Year for the portion of such Plan Year in which the Participant met the definition of “Participant” in accordance with and subject to Sections 3.4 and Section 3.5, and provided he or she meets the other terms and conditions for eligiblity for a Payable Award.  The amount, if any, of an actual Payable Award to any such Participant remains in sole discretion of the Committee. 
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 of the Company or an Affiliate through the last day of the Plan Year.  Notwithstanding the foregoing, the Committee, in its discretion, may determine that a Participant (or Participant’s estate) will be eligible for consideration for a Payable Award (which may be pro-rated and is subject to the Committee’s authority under Section 3.4) if, during the Plan Year, the Participant’s employment with the Company or an Affiliate is terminated on account of Retirement, Disability, death, or involuntary termination by the Company or an Affiliate for a reason other than Cause or under circumstances determined by the Committee to warrant continued eligibility for consideration for a Payable Award.  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 or similar program 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.

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4.2.    Form of Payment.  Any Payable Award under the Plan will be paid in cash, or its equivalent, in a single lump sum.
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, 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 whose employment with the Company or an Affiliate terminates during such 90-Day Service Period by reason of such Participant’s Retirement, Disability, death or involuntary termination by the Company or an Affiliate for a reason other than Cause.  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 

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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 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; Section 457A.  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.  It is also intended that all bonuses payable under this Plan be exempt from Section 457A of the Code so that none of the payments and benefits to be provided under this 

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Plan will be subject to the additional tax imposed under Section 457A, and any ambiguities herein shall be interpreted to 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 imposition of any additional tax or income recognition under Section 409A and/or Section 457A 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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EXECUTION

IN WITNESS WHEREOF, Applied Materials, Inc., by its duly authorized officer, has executed this restated Plan document effective as of October 28, 2013.

APPLIED MATERIALS, INC.

By _/s/ Greg Lawler_________________________
Greg Lawler
Corporate Vice President, Global Rewards

                        

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