Common use of Metrics and Targets Clause in Contracts

Metrics and Targets. MKS agrees to target the operational performance targets defined below. Performance targets for FY2000 are listed. Intermediate performance targets are established in the Supplier Performance Management Plan. The following defines how Applied and MKS will measure performance metrics: ------------------------------------------------------------------------------------------------------------ FY 1999 End FY 2000 End Measure Definition Calculation Target Target ------------------------------------------------------------------------------------------------------------ Quality ppm Number of quality Quantity of parts with discrepancies recorded DMR [**] [**] detected prior to occurrences provided shipping a completed by the supplier over system to an end the prior 13-week customer, expressed period, divided by the as parts per million total quantity of parts received from that supplier over the same period, multiplied by 1 million ------------------------------------------------------------------------------------------------------------ Supplier Fault DMRs Number of DMR Number of DMR [**] [**] transactions for part occurrences recorded quality discrepancies against the supplier detected in-house accumulated over the prior to system prior 13-week period installation in the field ------------------------------------------------------------------------------------------------------------ Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. ------------------------------------------------------------------------------------------------------------ FY 1999 End FY 2000 End Measure Definition Calculation Target Target ------------------------------------------------------------------------------------------------------------ Late Delivery ppm Number of parts Quantity of parts delivered later than received one day or [**] [**] the agreed upon more after the commit commit date date, accumulated for each supplier over a rolling 13-week period, divided by the total quantity of parts received over the same period, multiplied by 1 million ------------------------------------------------------------------------------------------------------------ Early Delivery ppm Number of parts Quantity of parts received three or received three or more [**] [**] more days before the days before the commit date commit date, accumulated over a rolling 13-week period, divided by the total quantity of parts received over the same period, multiplied by 1 ------------------------------------------------------------------------------------------------------------ Average Lead Time of Production Parts (Order Fulfillment Cycle Time) ------------------------------------------------------------------------------------------------------------ Source Cycle Time Average of the total The average of the (supplier reported) times, from number of days [**] [**] placement of an between order date order through receipt and receipt date for all at Applied Materials, production parts of parts supplied to recorded for the volume production supplier, based on (including Austin volume transportation time) production activity. ------------------------------------------------------------------------------------------------------------ Make Cycle Time Total cycle time to Elapsed time, as (supplier reported) source all materials determined through [**] [**] required to produce process audits and an order, based on supplier contracted parts self-assessments supplied to volume production ------------------------------------------------------------------------------------------------------------ Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Asterisks denote omissions. ------------------------------------------------------------------------------------------------------------ FY 1999 End FY 2000 End Measure Definition Calculation Target Target ------------------------------------------------------------------------------------------------------------ Cost Reduction Total production time Elapsed time, as required to fulfill an determined through [**] [**] order, including process audits and manufacturing order supplier release and build self-assessments time, based on contracted parts supplied to volume production ------------------------------------------------------------------------------------------------------------ Percentage difference Calculated for each between the average contract by the SAT, [**] [**] unit price paid for using the method materials in the prior accepted by the SMO year and price paid commodity group in the current year (see Attachment 17) ------------------------------------------------------------------------------------------------------------