[ NAME
]
Employee ID Number: [ Number ]
Grant Number: [ Number ]
PERFORMANCE SHARE
AGREEMENT
Applied Materials,
Inc. (the “Company”) hereby grants you, [Name]
(the “Employee”), an award of Performance Shares (also
referred to as restricted stock units) under the Company’s
Employee Stock Incentive Plan (the “Plan”). The date of
this Performance Share Agreement (the “Agreement”) is
[DATE] (the “Grant Date”). Subject to the
provisions of Appendix A (attached) and of the Plan, the
principal features of this award are as follows:
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Number of
Performance Shares:
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[_______]
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(also
referred to as restricted stock units)
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Vesting of
Performance Shares :
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[ VESTING
SCHEDULE and/or PERFORMANCE VESTING CONDITIONS .]*
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* Except as otherwise provided in
Appendix A, Employee will not vest in the Performance Shares
unless he or she is employed by the Company or one of its
Affiliates through the applicable vesting date.
Your electronic or
written signature below indicates your agreement and understanding
that this award is subject to all of the terms and conditions
contained in Appendix A and the Plan. For example, important
additional information on vesting and forfeiture of the Performance
Shares is contained in paragraphs 3 through 5 and paragraph 7 of
Appendix A. PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH
CONTAINS THE SPECIFIC TERMS AND CONDITIONS OF THIS
AGREEMENT.
By clicking the
“ACCEPT” button below, you agree to the following:
“ This electronic contract contains my electronic
signature, which I have executed with the intent to sign this
Agreement .”
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Please be sure
to retain a copy of your returned electronically signed Agreement;
you may obtain a paper copy at any time and at the Company’s
expense by requesting one from Stock Programs (see paragraph 12
below). If you prefer not to electronically sign this Agreement,
you may accept this Agreement by signing a paper copy of the
Agreement and delivering it to Stock Programs.
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TERMS AND CONDITIONS OF
PERFORMANCE SHARES
(Also Referred to as Restricted Stock Units
)
1.
Grant . The Company hereby grants to the Employee under the
Plan [___] Performance Shares (also referred to as restricted stock
units), subject to all of the terms and conditions in this
Agreement and the Plan. When Shares are paid to the Employee in
payment for the Performance Shares, par value will be deemed paid
by the Employee for each Performance Share by past services
rendered by the Employee, and will be subject to the appropriate
tax withholdings. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in the
Plan.
2.
Company’s Obligation to Pay . Each Performance Share
has a value equal to the Fair Market Value of a Share on the date
of grant. Unless and until the Performance Shares have vested in
the manner set forth in paragraphs 3 through 5, the Employee will
have no right to payment of such Performance Shares. Prior to
actual payment of any vested Performance Shares, such Performance
Shares will represent an unsecured obligation. Payment of any
vested Performance Shares shall be made in whole Shares
only.
3.
Vesting Schedule/Period of Restriction . Except as provided
in paragraphs 4 and 5, and subject to paragraph 7, the Performance
Shares awarded by this Agreement shall vest in accordance with the
vesting provisions set forth on the first page of this Agreement.
Performance Shares shall not vest in the Employee in accordance
with any of the provisions of this Agreement unless the Employee
shall have been continuously employed by the Company or by one of
its Affiliates from the Grant Date until the date the Performance
Shares are otherwise scheduled to vest occurs.
4.
Modifications to Vesting Schedule .
(a)
Vesting upon Change to Part-time Status. In the event that
the Employee’s employment with the Company or an Affiliate
changes from full-time status to part-time status, and the change
to part-time status lasts more than six (6) months during any
rolling twelve (12) month period, the Performance Shares
awarded by this Agreement that are scheduled to vest during the
twelve (12) months following the day the Employee first attains
part-time status (as defined below) shall be determined according
to the following formula (rounded to the nearest whole
share):
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X
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average number
of hours worked per week during part-time
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=
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new number
of
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status divided
by the hours worked in a standard work week
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shares that
will vest
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For purposes of
this Agreement, “part-time status” means the Employee
is scheduled to work an average number of hours per week that
equals seventy-five percent (75%) or less of the total
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number of hours
in a standard work week for a period greater than six
(6) months, as determined over a rolling twelve
(12) month period.
Only Performance
Shares that are not yet vested may be modified pursuant to the
preceding formula. Performance Shares awarded by this Agreement
that are no longer vested as a result of the change to part-time
status never will vest and instead will terminate. The preceding
formula will be reapplied if the Employee continues to be on
part-time status following the conclusion of the twelve
(12) month measurement period. The number of Performance
Shares awarded by this Agreement shall be modified according to the
preceding formula unless prohibited by applicable law. .
(i) Example
1. Employee is scheduled to vest in 100 Performance Shares on
July 1, 2007. Employee has a standard work week of 40 hours.
On May 1, 2006, Employee begins working 20 hours per week, and
continues to work 20 hours per week for two months. Employee still
will be scheduled to vest in 100 Performance Shares on July 1,
2007.
(ii) Example
2. Employee is scheduled to vest in 100 Performance Shares on
July 1, 2007. Employee has a standard work week of 40 hours.
On May 1, 2006, Employee begins working 20 hours per week, and
continues to work 20 hours per week for seven months. Employee now
will be scheduled to vest in 50 Performance Shares on July 1,
2007. The other 50 Performance Shares that were scheduled to vest
on July 1, 2007 will never vest and instead will
terminate.
(iii) Example
3. Employee is scheduled to vest in 100 Performance Shares on
December 1, 2006. Employee has a standard work week of 40
hours. On May 1, 2006, Employee begins working 30 hours per
week, and continues to work 30 hours per week for nine months.
Employee therefore attains part-time status on November 2,
2006. Employee now will be scheduled to vest in 75 Performance
Shares on December 1, 2006. The other 25 Performance Shares
that were scheduled to vest on December 1, 2006 will never
vest and instead will terminate.
In the event
applicable law prohibits the modification under the preceding
formula, the Employee agrees that the CEO may reduce the
Performance Shares awarded by this Agreement on a pro rata basis,
as reasonably determined by the CEO and to the extent permitted
under applicable law, commensurate with the Employee’s change
to part-time status; provided that any such reduction in
Performance Shares shall not affect a greater number of Performance
Shares than the number of Performance Shares that would have been
modified pursuant to the preceding formula.
(b)
Vesting upon Personal Leave of Absence. In the event that
the Employee takes a personal leave of absence
(“PLOA”), the Performance Shares awarded by this
Agreement that are scheduled to vest shall be modified as
follows:
(i) if the
duration of the Employee’s PLOA is six (6) months or
less, the vesting schedule set forth on the first page of this
Agreement shall not be affected by the Employee’s
PLOA.
(ii) if the
duration of the Employee’s PLOA is greater than six
(6) months but not more than twelve (12) months, the
scheduled vesting of any Performance Shares awarded by this
Agreement that are not then vested shall be deferred for a period
of time equal to the duration of the Employee’s PLOA less six
(6) months.
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(iii) if the
duration of the Employee’s PLOA is greater than twelve
(12) months, any Performance Shares awarded by this Agreement
that are not then vested immediately will terminate.
(iv) Example
1. Employee is scheduled to vest in Performance Shares on
January 1, 2007. On May 1, 2006, Employee begins a
six-month PLOA. Employee’s Performance Shares will still be
scheduled to vest on January 1, 2007.
(v) Example
2. Employee is scheduled to vest in Performance Shares on
January 1, 2007. On May 1, 2006, Employee begins a nine-month
PLOA. Employee’s Performance Shares awarded by this Agreement
that are scheduled to vest after November 2, 2006 will be
modified (this is the date on which the Employee’s PLOA
exceeds six (6) months). Employee’s Performance Shares
now will be scheduled to vest on April 1, 2007 (three
(3) months after the originally scheduled date).
(vi) Example
3. Employee is scheduled to vest in Performance Shares on
January 1, 2007. On May 1, 2006, Employee begins a
13-month PLOA. Employee’s Performance Shares will terminate
on May 2, 2007.
In general, a
“personal leave of absence” does not include any
legally required leave of absence. The duration of the
Employee’s PLOA will be determined over a rolling twelve
(12) month measurement period. Performance Shares awarded by
this Agreement that are scheduled to vest during the first six
(6) months of the Employee’s PLOA will continue to vest
as scheduled. However, Performance Shares awarded by this Agreement
that are scheduled to vest after the first six (6) months of the
Employee’s PLOA will be deferred or terminated depending on
the length of the Employee’s PLOA. The Employee’s right
to vest in Performance Shares awarded by this Agreement shall be
modified as soon as the duration of the Employee’s PLOA
exceeds six (6) months.
(c) Death
of Employee . In the event that the Employee incurs a
Termination of Service due to his or her death, one hundred percent
(100%) of the Performance Shares subject to this Performance Share
award shall vest on the date of the Employee’s death. In the
event that any applicable law limits the Company’s ability to
accelerate the vesting of this award of Performance Shares, this
paragraph 4(c) shall be limited to the extent required to comply
with applicable law. Notwithstanding any contrary provision of this
Agreement, if the Employee is subject to Hong Kong’s ORSO
provisions, the first sentence of this paragraph 4(c) shall not
apply to this award of Performance Shares.
5.
Committee Discretion . The Committee, in its discretion, may
accelerate the vesting of the balance, or some lesser portion of
the balance, of the Performance Shares at any time, subject to the
terms of the Plan. If so accelerated, such Performance Shares will
be considered as having vested as of the date specified by the
Committee. If the Committee, in its discretion, accelerates the
vesting of the balance, or some lesser portion of the balance, of
the Performance Shares, the payment of such accelerated Performance
Shares nevertheless shall be made at the same time or times as if
such Performance Shares had vested in accordance with the vesting
schedule set forth on the first page of this Agreement (whether or
not the Employee remains employed by the Company or
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