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EXHIBIT 4.1
APPLIED MATERIALS, INC.
30TH ANNIVERSARY STOCK OPTION PLAN
APPLIED MATERIALS, INC., hereby adopts the Applied Materials, Inc. 30th
Anniversary Stock Option Plan effective as of October 1, 1997, as follows:
SECTION 1
BACKGROUND, PURPOSE AND DURATION
1.1 Background and Effective Date. The Plan is effective as of October
1, 1997. The Plan is intended to increase incentive and to encourage Share
ownership on the part of eligible non-officer regular employees as of November
14, 1997 of the Company and its Affiliates by providing a one-time grant of
nonqualified stock options to such employees in recognition of the 30th
anniversary of the Company. The Plan also is intended to further the growth and
profitability of the Company.
SECTION 2
DEFINITIONS
The following words and phrases shall 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 and joint ventures) controlling, controlled by,
or under common control with the Company.
2.2 "Board" or "Board of Directors" means the Board of Directors of the
Company.
2.3 "Code" means the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code or regulation thereunder shall
include such section or regulation, any valid regulation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.
2.4 "Company" means Applied Materials, Inc., a Delaware corporation, or
any successor thereto.
2.5 "Committee" means the committee appointed by the Board (pursuant to
Section 3.1) to administer the Plan. As of the effective date of the Plan, the
Plan shall be administered by the Stock Option and Compensation Committee of the
Board.
2.6 "Disability" means a permanent and total disability as determined by
the Committee in accordance with uniform and non-discriminatory standards
adopted by the Committee (in its discretion) from time to time.
2.7 "Eligible Employee" means an Employee who, as of November 14, 1997,
is neither (a) an Officer of the Company nor (b) classified as an intern or a
co-op.
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2.8 "Employee" means any regular full-time or part-time employee of the
Company or of any designated Affiliate as of November 14, 1997. The Committee,
in its sole discretion, shall determine which Affiliates shall be designated for
purposes of this Section 2.8.
2.9 "Exercise Price" means the price at which a Share may be purchased
by a Participant pursuant to the exercise of an Option.
2.10 "Fair Market Value" means the last quoted per share selling price
for Shares on the relevant date, or if there were no sales on such date, the
arithmetic mean of the highest and lowest quoted selling prices on the nearest
day before and the nearest day after the relevant date, as determined by the
Committee. Notwithstanding the preceding, for federal, state, and local income
tax purposes, fair market value shall be determined by the Committee (or its
delegate) in accordance with uniform and nondiscriminatory standards adopted
from time to time.
2.11 "Grant Date" means, with respect to an Option, the date that the
Option is granted.
2.12 "Incentive Stock Option" means an Option to purchase Shares which
is designated as an Incentive Stock Option and is intended to meet the
requirements of section 422 of the Code.
2.13 "Nonqualified Stock Option" means an option to purchase Shares
which is not intended to be an Incentive Stock Option.
2.14 "Officer" means any Employee of the Company who holds office at the
level of appointed Vice President or above.
2.15 "Option" means a Nonqualified Stock Option.
2.16 "Option Agreement" means the written agreement setting forth the
terms and provisions applicable to each Option granted under the Plan.
2.17 "Participant" means an Eligible Employee who has an outstanding
Option.
2.18 "Plan" means the Applied Materials, Inc. 30th Anniversary Stock
Option Plan, as set forth in this instrument and as hereafter amended from time
to time.
2.19 "Retirement" means, in the case of an Eligible Employee, a
Termination of Service by reason of the Eligible Employee's retirement at or
after age 65.
2.20 "Shares" means the shares of common stock of the Company.
2.21 "Termination of Service" means a cessation of the employee-employer
relationship between an Eligible Employee and the Company or an Affiliate for
any reason, including, but not by way of limitation, a termination by
resignation, discharge, death, Disability, Retirement, or the disaffiliation of
an Affiliate, but excluding any such termination where there is a simultaneous
reemployment by the Company or an Affiliate.
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SECTION 3
ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Committee. The
members of the Committee shall be appointed from time to time by, and shall
serve at the pleasure of, the Board of Directors.
3.2 Authority of the Committee. It shall be the duty of the Committee to
administer the Plan in accordance with the Plan's provisions. The Committee
shall have all powers and discretion necessary or appropriate to administer the
Plan and to control its operation, including, but not limited to, the power to
(a) prescribe the terms and conditions of the Options, (b) interpret the Plan
and the Options, (c) adopt such sub-plans or rules as may be necessary or
appropriate to permit participation in the Plan by Eligible Employees who are
not United States citizens or residents, (d) adopt rules for the administration,
interpretation and application of the Plan as are consistent therewith, and (e)
interpret, amend or revoke any such rules.
3.3 Delegation by the Committee. The Committee, in its sole discretion
and on such terms and conditions as it may provide, may delegate all or any part
of its authority and powers under the Plan to one or more directors or Officers
of the Company.
3.4 Decisions Binding. All determinations and decisions made by the
Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan shall be final, conclusive, and binding on all persons,
and shall be given the maximum deference permitted by law.
SECTION 4
SHARES SUBJECT TO THE PLAN
4.1 Number of Shares. Subject to adjustment as provided in Section 4.3,
the total number of Shares available for grant under the Plan shall not exceed
3,040,800. Shares granted under the Plan may be either authorized but unissued
Shares or treasury Shares.
4.2 Lapsed Options. If an Option terminates, expires, or lapses for any
reason, any Shares subject to such Option shall not again be available to be the
subject of another Option.
4.3 Adjustments in Options and Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, split-up, Share combination, or other change in the
corporate structure of the Company affecting the Shares, the Committee shall
adjust the number and class of Shares which may be delivered under the Plan, and
the number, class, and price of Shares subject to outstanding Options, in such
manner as the Committee (in its sole discretion) shall determine to be
appropriate to prevent the dilution or diminution of such Options.
Notwithstanding the preceding, the number of Shares subject to any Option always
shall be a whole number.
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SECTION 5
STOCK OPTIONS
5.1 Grant of Options. Subject to the terms and provisions of the Plan,
each Eligible Employee shall be granted an Option covering two hundred (200)
Shares. The Committee, in its sole discretion, shall determine the Grant Date
for each such Option, provided that no Options may be granted after November 15,
1997, unless the Grant Date is required to be postponed due to legal
requirements of countries other than the United States.
5.2 Option Agreement. Each Option shall be evidenced by an Option
Agreement that shall specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to the
exercise of the Option and such other terms and conditions as the Committee, in
its discretion, shall determine. The Option Agreement shall specify that the
Option is intended to be a Nonqualified Stock Option.
5.3 Exercise Price. The Exercise Price for each Option shall be not less
than one hundred percent (100%) of the Fair Market Value of a Share on the Grant
Date.
5.4 Expiration of Options.
5.4.1 Expiration Dates. Each Option shall terminate no later
than the first to occur of the following events:
(a) The date for termination of the Option set forth in the
written Option Agreement; or
(b) 5:00 p.m. (Pacific time) on November 13, 2004; or
(c) The expiration of fifteen (15) days from the date of the
Participant's Termination of Service for a reason other than the Participant's
death, Disability or Retirement;
(d) The expiration of six (6) months from the date of the
Participant's Termination of Service by reason of Disability; or
(e) The expiration of six (6) months from the date of the
Participant's Retirement.
5.4.2 Death of Participant. Notwithstanding Section 5.4.1, if
a Participant dies prior to the expiration of his or her Option, the Committee,
in its discretion, may provide that his or her Option shall be exercisable for
up to one (1) year after the date of death.
5.5 Exercisability of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall determine in its
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sole discretion.
5.6 Payment. Options shall be exercised by the Participant's delivery of
a written notice of exercise to the Secretary of the Company (or its designee),
setting forth the number of Shares with respect to which the Option is to be
exercised, accompanied by full payment for the Shares.
Upon the exercise of any Option, the Exercise Price shall be payable to
the Company in full (in United States dollars) in cash or its equivalent. The
Committee, in its sole discretion, also may permit exercise (a) by tendering
previously acquired Shares (and held for at least 6 months, if acquired pursuant
to an exercise of stock options) having an aggregate Fair Market Value at the
time of exercise equal to the total Exercise Price, or (b) by any other means
which the Committee, in its sole discretion, determines to both provide legal
consideration for the Shares, and to be consistent with the purposes of the
Plan.
As soon as practicable after receipt of a written notification of
exercise and full payment for the Shares purchased, the Company shall deliver to
the Participant (or the Participant's designated broker), Share certificates
(which may be in book entry form) representing such Shares.
5.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option as it
may deem advisable, including, but not limited to, restrictions related to
applicable federal securities laws, the requirements of any national securities
exchange or system upon which Shares are then listed or traded, or any blue sky
or state securities laws.
SECTION 6
MISCELLANEOUS
6.1 Deferrals. The Committee in its sole discretion, may permit a
Participant to defer receipt of the payment of cash or the delivery of Shares
that would otherwise be due to such Participant under an Award. Any such
deferral elections shall be subject to such rules and procedures as shall be
determined by the Committee in its sole discretion.
6.2 No Effect on Employment or Service. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or service at any time, with or without cause. For
purposes of the Plan, transfer of employment of a Participant between the
Company and any one of its Affiliates (or between Affiliates) shall not be
deemed a Termination of Service. Employment or service with the Company and its
Affiliates is on an at-will basis only.
6.3 Indemnification. The Committee and each person who is or shall have
been a member of the Board, shall be indemnified and held harmless by the
Company against and from (a) any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan or any Option Agreement, and (b) from any and all
amounts paid by him or her in settlement thereof, with the Company's approval,
or paid by him or her in satisfaction of any judgment in any such claim, action,
suit, or proceeding against him or her, provided he or she shall give the
Company
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an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company's
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.
6.4 Successors. All obligations of the Company under the Plan, with
respect to Options granted hereunder, shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business or assets of the Company.
6.5 Beneficiary Designations. If permitted by the Committee (in its sole
discretion), a Participant under the Plan may name a beneficiary or
beneficiaries to whom any vested but unpaid Option shall be paid in the event of
the Participant's death. Each such designation shall revoke all prior
designations by the Participant and shall be effective only if given in a form
and manner acceptable to the Committee. In the absence of any such designation,
any vested benefits remaining unpaid at the Participant's death shall be paid to
the Participant's estate and, subject to the terms of the Plan and of the
applicable Option Agreement, any unexercised vested Option may be exercised by
the administrator or executor of the Participant's estate.
6.6 Nontransferability of Options. No Option granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will, by the laws of descent and distribution, or to the limited
extent provided in Section 6.5. All rights with respect to an Option granted to
a Participant shall be available during his or her lifetime only to the
Participant.
6.7 No Rights as Stockholder. No Participant (nor any beneficiary) shall
have any of the rights or privileges of a stockholder of the Company with
respect to any Shares issuable pursuant to an Option, unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Participant (or beneficiary).
SECTION 7
AMENDMENT, TERMINATION, AND DURATION
7.1 Amendment, Suspension, or Termination. The Board, in its sole
discretion, may amend or terminate the Plan, or any part thereof, at any time
and for any reason. The amendment, suspension, or termination of the Plan shall
not, without the consent of the Participant, alter or impair any rights or
obligations under any Option theretofore granted to such Participant. No Option
may be granted during any period of suspension or after termination of the Plan.
7.2 Duration of the Plan. The Plan shall commence on the date specified
herein, and subject to Section 7.1 (regarding the Board's right to amend or
terminate the Plan), shall remain in effect thereafter.
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SECTION 8
TAX WITHHOLDING
8.1 Withholding Requirements. Prior to the delivery of any Shares
pursuant to an Option, the Company shall have the power and the right to deduct
or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes (including the
Participant's FICA obligation) required to be withheld with respect to such
Option (or exercise thereof).
8.2 Withholding Arrangements. The Committee, in its sole discretion and
pursuant to such procedures as he or she may specify from time to time, may
permit or require a Participant to satisfy all or part of the tax withholding
obligations in connection with an Option by delivering to the Company
already-owned Shares having a Fair Market Value equal to the amount required to
be withheld. The amount of the withholding requirement shall be deemed to
include any amount which the Committee determines, not to exceed the amount
determined by using the maximum federal, state or local marginal income tax
rates applicable to the Participant with respect to the Option on the date that
the amount of tax to be withheld is to be determined. The Fair Market Value of
the Shares to be withheld or delivered shall be determined as of the date that
the taxes are required to be withheld.
SECTION 9
LEGAL CONSTRUCTION
9.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
9.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
9.3 Requirements of Law. The granting of Options and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges, as may be required.
9.4 Governing Law. The Plan and all Option Agreements shall be construed
in accordance with and governed by the laws of the State of California (with the
exception of its conflict of laws provisions).
9.5 Captions. Captions are provided herein for convenience only, and
shall not serve as a basis for interpretation or construction of the Plan.
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EXECUTION
IN WITNESS WHEREOF, Applied Materials, Inc., by its duly
authorized Officer, has executed the Plan as of the date indicated below.
APPLIED MATERIALS, INC.
Dated: October 1, 1997 By: /s/ Michael K. O'Farrell
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Michael K. O'Farrell
Vice President and Corporate
Controller
(Principal Accounting Officer)
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