EXHIBIT 10.40

                       FISCAL YEAR 2005 PERFORMANCE GOALS
                            AND BONUS FORMULAS UNDER
                        THE SENIOR EXECUTIVE BONUS PLAN

On December 7, 2004, the Human Resources and Compensation Committee (the
"Committee") of the Board of Directors of Applied Materials, Inc. ("Applied")
approved performance goals and bonus formulas for fiscal year 2005 under
Applied's Senior Executive Bonus Plan (the "Plan").

For fiscal year 2005, the Committee approved two equally-weighted performance
measures for Michael R. Splinter, President and Chief Executive Officer, and for
Nancy H. Handel, Group Vice President and Chief Financial Officer. These goals
relate to the achievement of certain levels of annual revenue and net income by
Applied. For Franz Janker, Senior Vice President, Sales and Marketing, the
Committee approved several differently-weighted measures. Specifically, Mr.
Janker's goals under the Plan for fiscal year 2005 relate to the achievement of
certain levels of: annual revenue by Applied and by certain business units
(weighted 35%); earnings per share (weighted 10%); and other management by
objectives related primarily to customer satisfaction, productivity and cost
reduction (weighted 55%). These goals are measured against actual performance,
and the result is multiplied by an additional earnings-per-share factor.

The actual bonuses payable for fiscal year 2005 (if any) will vary depending on
the extent to which actual performance meets, exceeds or falls short of the
goals approved by the Committee. In addition, the Committee retains discretion
to reduce or eliminate (but not increase) the bonus that otherwise would be
payable based on actual performance. In no event may any individual's bonus
under the Plan for fiscal year 2005 exceed $5 million. Moreover, each of the
individuals named above must remain an employee for all of fiscal year 2005 in
order to be eligible for any bonus.