APPLIED MATERIALS, INC. PERFORMANCE SHARES AGREEMENT FOR NONEMPLOYEE DIRECTORS
EXHIBIT 10.61
[EMPL_NAME]
AMAT ID Number: [EMPLID]
Grant Number: [GRANT_ID]
AMAT ID Number: [EMPLID]
Grant Number: [GRANT_ID]
APPLIED MATERIALS, INC.
PERFORMANCE SHARES AGREEMENT FOR NONEMPLOYEE DIRECTORS
NOTICE OF GRANT
Applied Materials, Inc. (the “Company”) hereby grants you, [EMPL_NAME] (the “Grantee”), 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 Shares Agreement (the
“Agreement”) is [GRANT_DATE] (the “Grant Date”). Subject to the provisions of the Terms and
Conditions of Performance Shares Agreement (the “Terms and Conditions”), which constitute part of
this Agreement, and of the Plan, the principal features of this award are as follows:
Number of Performance Shares:
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[MAX_SHARES] [INITIAL AWARDS: Insert number of Shares equal to: (a) $200,000 times a fraction, the numerator of which is the actual number of days between the date of Grantee’s appointment or election as a director and the scheduled date of the next Annual Meeting, and the denominator of 365, divided by (b) the Fair Market Value of a Share on the date of grant, rounded down to the nearest whole number. ONGOING AWARDS: Insert number of Shares equal to $200,000 divided by the Fair Market Value of a Share on the date of grant, rounded down to the nearest whole number.] | |
(also referred to as restricted stock units) |
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Vesting of Performance Shares:
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[INITIAL AWARDS: Twenty-five percent (25%) of the Performance Shares subject to the Award will vest on each of the first four (4) annual anniversaries of the Grant Date.]/OR/[ONGOING AWARDS: Twenty-five percent (25%) of the Performance Shares subject to the Award will vest on March 1 of each year following the year in which the Grant Date occurs.]* | |
| * | Except as otherwise provided in the Terms and Conditions of this Agreement, Grantee will not vest in the Performance Shares unless he or she remains a Director of the Company through the applicable vesting date. |
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IMPORTANT:
Your written signature below indicates your agreement and understanding that this award is
subject to all of the terms and conditions contained in the Terms and Conditions to this Agreement
and the Plan. For example, important additional information on vesting and forfeiture of the
Performance Shares is contained in paragraphs 3, 4 and 7 of the Terms and Conditions. PLEASE BE
SURE TO READ ALL OF THE TERMS AND CONDITIONS OF THIS GRANT AGREEMENT.
GRANTEE
Date: ______, 20___ |
Please be sure to retain a copy of your 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 13 below of the
Terms and Conditions). You must 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 AGREEMENT
FOR NONEMPLOYEE DIRECTORS
FOR NONEMPLOYEE DIRECTORS
1. Grant. The Company hereby grants to the Grantee under the Company’s Employee Stock
Incentive Plan (the “Plan”) the number of Performance Shares (also referred to as restricted stock
units) set forth on the first page of the Notice of Grant of this Agreement, subject to all of the
terms and conditions in this Agreement and the Plan. When Shares are paid to the Grantee in
payment for the Performance Shares, par value will be deemed paid by the Grantee for each
Performance Share by past services rendered by the Grantee, and will be subject to the appropriate
tax withholdings. Unless otherwise defined herein, capitalized terms used herein will 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 and 4, the Grantee 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 will be
made in whole Shares only.
3. Vesting Schedule/Period of Restriction. Except as provided in paragraph 4, and
subject to paragraph 7, the Performance Shares awarded by this Agreement will vest in accordance
with the vesting provisions set forth on the first page of the Notice of Grant of this Agreement.
Performance Shares will not vest in accordance with any of the provisions of this Agreement unless
the Grantee will have continuously served as a Director of the Company from the Grant Date until
the date the Performance Shares are otherwise scheduled to vest occurs.
4. Acceleration or Continuation of Vesting.
| a. | Death of Grantee. In the event that the Grantee dies while serving as a Director but prior to the vesting of his or her Performance Shares, one hundred percent (100%) of the Performance Shares subject to this Agreement will vest on the date of the Grantee’s death. | ||
| b. | Retirement of Grantee. If Grantee has a Termination of Service due to Retirement prior to the vesting of his or her Performance Shares subject to this Agreement, such Performance Shares will continue to vest in accordance with the vesting schedule set forth on the first page of the Notice of Grant of this Agreement. | ||
| c. | Disability of Grantee. If Grantee has a Termination of Service due to Disability prior to the vesting of his or her Performance Shares subject to this Agreement, one hundred percent (100%) of such Performance Shares shall immediately become vested. |
5. Payment after Vesting. Subject to the provisions of paragraphs 8 and 20, any
Performance Shares that vest in accordance with paragraphs 3 or 4 will be paid to the Grantee (or
in the event of the Grantee’s death, to his or her estate) as soon as practicable following the
date of
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vesting, but in all cases both (a) by the fifteenth (15th) day of the third (3rd) calendar
month following the date such Performance Shares vest (provided that the Grantee will not be
permitted, directly or indirectly, to designate the year of the payment except pursuant to a
deferral election made in accordance with paragraph 6) and (b) within 90 days from the date such
Performance Shares vest. Notwithstanding the foregoing, any Performance Shares that vest in
accordance with paragraphs 3 or 4 that the Grantee elects to defer pursuant to paragraph 6 will be
paid to the Grantee in accordance with the terms of paragraph 6 below subject to the provisions of
paragraphs 8 and 20. For each Performance Share that vests, the Grantee will receive one Share,
subject to the provisions of paragraph 8.
6. Deferral. Subject to the Committee’s determination that this right of deferral or
any term thereof complies with applicable laws or regulations in effect from time to time, Grantee
may make an election to defer the issuance of the Shares issuable in accordance with the terms and
conditions set forth in a Performance Shares Deferral Election Form approved by the Committee. In
the event of the Committee’s determination otherwise, the Committee may, in its discretion, deny
Grantee this right of deferral altogether, modify the terms of the deferral and/or add such
requirements as it deems necessary or advisable to comply with applicable law and regulations. If
the Grantee elects to defer the issuance of vested Performance Shares in accordance with this
paragraph 6, payment of the deferred vested Performance Shares (and any dividends payable in
accordance with paragraph 9) will be made in accordance with the terms of the deferral election.
7. Forfeiture. Notwithstanding any contrary provision of this Agreement, the balance
of the Performance Shares that have not vested pursuant to paragraphs 3 and 4 at the time of the
Grantee’s Termination of Service for any or no reason will be forfeited and automatically
transferred to and reacquired by the Company at no cost to the Company.
8. Withholding of Taxes. If any tax withholding is required, when Shares are issued
as payment for vested Performance Shares or, in the discretion of the Company, such earlier time as
the tax withholding obligations are due, the Company (or, if the Grantee has become an employee of
an Affiliate, the employing Affiliate), will withhold a portion of the Shares that have an
aggregate market value sufficient to pay federal, state and local income, employment and any other
applicable taxes required to be withheld by the Company (or the employing Affiliate) with respect
to the Shares, unless the Company, in its sole discretion, requires the Grantee to make alternate
arrangements satisfactory to the Company for such withholdings in advance of the arising of any
withholding obligations. The number of Shares withheld pursuant to the prior sentence will be
rounded up to the nearest whole Share, with no refund provided in the U.S. for any value of the
Shares withheld in excess of the tax obligation as a result of such rounding. Notwithstanding any
contrary provision of this Agreement, no Shares will be issued unless and until satisfactory
arrangements (as determined by the Company) have been made by the Grantee with respect to the
payment of any income and other taxes which the Company determines must be withheld or collected
with respect to such Shares. In addition and to the maximum extent permitted by law, the Company
(or the employing Affiliate) has the right to retain without notice from any fees, salary or other
amounts payable to the Grantee, cash having a sufficient value to satisfy any tax withholding
obligations that the Company determines cannot be satisfied through the withholding of otherwise
deliverable Shares or that are due prior to the issuance of Shares under the Performance Share
award. All income and other taxes related to the Performance Shares award and any Shares delivered
in payment thereof are the sole responsibility of the Grantee.
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9. Dividend Equivalents for Deferred Performance Shares. If the Grantee elects to defer the
issuance of vested Performance Shares (the “Deferred Performance Shares”) in accordance with
paragraph 6, the Grantee will be entitled to receive dividends or distributions paid on the Shares
underlying vested Deferred Performance Shares in accordance with this paragraph 9. Any such
dividends or distributions automatically will be reinvested in Performance Shares (the “Dividend
Performance Shares”).
| a. | Cash Dividends. If the Company declares and pays any cash dividends or cash distributions on Shares during a calendar year, then with respect to the Deferred Performance Shares that were vested as of the date the cash dividend or distribution was paid and that remain unissued on the last Nasdaq Global Select Market trading day of that year (the “Applicable Date”), such Deferred Performance Shares will be increased on the Applicable Date by a number of Dividend Performance Shares equal to the quotient obtained by dividing the cash dividend or distribution paid on the Shares underlying such vested Deferred Performance Shares by the Fair Marked Value (as defined in the Plan) of a Share on the Applicable Date, rounded down to the nearest whole Share. Specifically, the number of Dividend Performance Shares for each cash dividend or distribution during a calendar year will be determined in accordance with the following formula, rounded down to the nearest whole Share: X = (A x B)/C, where X = the Dividend Performance Shares that will become vested Deferred Performance Shares on the Applicable Date by reason of the cash dividend or distribution paid during the year, A = the number of unissued Shares that were vested as of the cash dividend or distribution date and remain subject to the vested Deferred Performance Shares as of the Applicable Date, B = the per Share amount of the applicable cash dividend or distribution, and C = the Fair Market Value of a Share on the Applicable Date. | ||
| b. | Stock Dividends. If the Company declares and pays any stock dividends or stock distribution on Shares during a calendar year, then the number of unissued Shares, if any, that remain subject to Grantee’s vested Deferred Performance Shares automatically will be adjusted in accordance with paragraph 12. | ||
| c. | Any Dividend Performance Shares resulting from the application of this paragraph 9 will be subject to the same terms and conditions (including, without limitation, the applicable deferral election and forfeiture provisions) as the unissued Deferred Performance Shares to which they relate. |
10. Rights as Stockholder. Neither the Grantee nor any person claiming under or
through the Grantee will have any of the rights or privileges of a stockholder of the Company in
respect of any Shares deliverable hereunder unless and until certificates representing such Shares
(which may be in book entry form) will have been issued, recorded on the records of the Company or
its transfer agents or registrars, and delivered to the Grantee (including through electronic
delivery to a brokerage account). Except as provided by paragraph 9, any quarterly or other
regular, periodic dividends or distributions (as determined by the Company) paid on Shares will
affect neither unvested Performance Shares nor Performance Shares that are vested but unpaid, and
no such dividends or other distributions will be paid on unvested Performance Shares or Performance
Shares
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that are vested but unpaid. After such issuance, recordation and delivery, the Grantee will
have all the rights of a stockholder of the Company with respect to voting such Shares and receipt
of dividends and distributions on such Shares.
11. No Effect on Service. Subject to any subsequent employment or service contract
that may be entered into with the Grantee or applicable laws, the terms of the Grantee’s service to
the Company, whether as a Director or otherwise, will be determined from time to time by the
Company, or the Affiliate employing the Grantee, as the case may be, and the Company, or the
Affiliate employing the Grantee, as the case may be, will have the right, which is hereby expressly
reserved, to terminate or change the terms of the service as a Director or employment of the
Grantee at any time for any reason whatsoever, with or without good cause. The transactions
contemplated hereunder and the vesting schedule set forth on the first page of the Notice of Grant
of this Agreement do not constitute an express or implied promise of continued service as a
Director or employment for any period of time.
12. Changes in Performance Shares. In the event that as a result of a stock or
extraordinary cash dividend, stock split, distribution, reclassification, recapitalization,
combination of Shares or the adjustment in capital stock of the Company or otherwise, or as a
result of a merger, consolidation, spin-off or other corporate transaction or event, the
Performance Shares will be increased, reduced or otherwise affected, and by virtue of any such
event the Grantee will in his or her capacity as owner of unvested Performance Shares which have
been awarded to him or her (the “Prior Performance Shares”) be entitled to new or additional or
different shares of stock, cash or other securities or property (other than rights or warrants to
purchase securities); such new or additional or different shares, cash or securities or property
will thereupon be considered to be unvested Performance Shares and will be subject to all of the
conditions and restrictions that were applicable to the Prior Performance Shares pursuant to this
Agreement and the Plan. If the Grantee receives rights or warrants with respect to any Prior
Performance Shares, such rights or warrants may be held or exercised by the Grantee, provided that
until such exercise any such rights or warrants and after such exercise any shares or other
securities acquired by the exercise of such rights or warrants will be considered to be unvested
Performance Shares and will be subject to all of the conditions and restrictions which were
applicable to the Prior Performance Shares pursuant to the Plan and this Agreement.
13. Address for Notices. Any notice to be given to the Company under the terms of
this Agreement shall be addressed to the Company, in care of Stock Programs, at Applied Materials,
Inc., 0000 Xxxxx Xxxxxxxxx, M/S 2023, X.X. Xxx 00000, Xxxxx Xxxxx, XX 00000, U.S.A., or at such
other address as the Company may hereafter designate in writing.
14. Grant is Not Transferable. Except to the limited extent provided in this
Agreement, this grant of Performance Shares and the rights and privileges conferred hereby shall
not be sold, pledged, assigned, hypothecated, transferred or disposed of any way (whether by
operation of law or otherwise) and shall not be subject to sale under execution, attachment or
similar process, until the Grantee has been issued Shares in payment of the Performance Shares.
Upon any attempt to sell, pledge, assign, hypothecate, transfer or otherwise dispose of this grant,
or any right or privilege conferred hereby, or upon any attempted sale under any execution,
attachment or similar process, this grant and the rights and privileges conferred hereby
immediately will become null and void.
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15. Restrictions on Sale of Securities. The Shares issued as payment for vested
Performance Shares under this Agreement will be registered under U. S. federal securities laws and
will be freely tradable upon receipt. However, a Grantee’s sale of the Shares may be subject to
any market blackout period that may be imposed by the Company and must comply with the Company’s
xxxxxxx xxxxxxx policies, and any other applicable securities laws.
16. Binding Agreement. Subject to the limitation on the transferability of this grant
contained herein, this Agreement will be binding upon and inure to the benefit of the heirs,
legatees, legal representatives, successors and assigns of the parties hereto.
17. Additional Conditions to Issuance of Certificates for Shares. The Company shall
not be required to issue any certificate or certificates (which may be in book entry form) for
Shares hereunder prior to fulfillment of all the following conditions: (a) the admission of such
Shares to listing on all stock exchanges on which such class of stock is then listed; (b) the
completion of any registration or other qualification of such Shares under any U.S. state or
federal law or under the rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, which the Committee will, in its sole discretion, deem
necessary or advisable; (c) the obtaining of any approval or other clearance from any U. S. state
or federal governmental agency, which the Committee will, in its sole discretion, determine to be
necessary or advisable; and (d) the lapse of such reasonable period of time following the date of
vesting of the Performance Shares as the Committee may establish from time to time for reasons of
administrative convenience.
18. Plan Governs. This Agreement is subject to all the terms and provisions of the
Plan. In the event of a conflict between one or more provisions of this Agreement and one or more
provisions of the Plan, the provisions of the Plan will govern.
19. Committee Authority. The Committee will have the power to interpret the Plan and
this Agreement and to adopt such rules for the administration, interpretation and application of
the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not
limited to, the determination of whether or not any Performance Shares have vested). All actions
taken and all interpretations and determinations made by the Committee in good faith will be final
and binding upon the Grantee, the Company and all other interested persons. No member of the
Committee will be personally liable for any action, determination or interpretation made in good
faith with respect to the Plan or this Agreement.
20. Section 409A. Notwithstanding anything in the Plan or this Agreement to the
contrary, if the vesting or issuance of the balance, or some lesser portion of the balance, of the
Performance Shares is accelerated in connection with Grantee’s termination as a Director (provided
that such termination is a “separation from service” within the meaning of Section 409A, as
determined by the Company), other than due to death, and if (a) Grantee is a “specified employee”
within the meaning of Section 409A at the time of such termination as a Director and (b) the
payment of such accelerated Performance Shares will result in the imposition of additional tax
under Section 409A if paid to Grantee on or within the six (6) month period following Grantee’s
termination as a Director, then the payment of such accelerated Performance Shares will not be made
until the date six (6) months and one (1) day following the date of Grantee’s termination as a
Director, unless the Grantee dies following his or her termination as a Director, in which case,
the Performance Shares will be paid in Shares to the Grantee’s estate as soon as practicable
following
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his or her death. It is the intent of this Agreement to comply with the requirements of
Section 409A so that none of the Performance Shares provided under this Agreement or Shares
issuable thereunder will be subject to the additional tax imposed under Section 409A, and any
ambiguities herein will be interpreted to so comply. For purposes of this Agreement, “Section
409A” means Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and any proposed,
temporary or final Treasury Regulations and Internal Revenue Service guidance thereunder, as each
may be amended from time to time.
21. Captions. Captions provided herein are for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
22. Agreement Severable. In the event that any provision in this Agreement will be
held invalid or unenforceable, such provision will be severable from, and such invalidity or
unenforceability will not be construed to have any effect on, the remaining provisions of this
Agreement.
23. Modifications to the Agreement. This Agreement constitutes the entire
understanding of the parties on the subjects covered. The Grantee expressly warrants that he or
she is not accepting this Agreement in reliance on any promises, representations, or inducements
other than those contained herein. Modifications to this Agreement or the Plan can be made only in
an express written contract executed by a duly authorized officer of the Company. Notwithstanding
anything to the contrary in the Plan or this Agreement, the parties agree to work in good faith to
revise this Agreement as necessary or advisable to comply with Section 409A or to otherwise avoid
imposition of any additional tax or income recognition under Section 409A in connection to this
award of Performance Shares.
24. Amendment, Suspension or Termination of the Plan. By accepting this Performance
Shares award, the Grantee expressly warrants that he or she has received a right to receive stock
under the Plan, and has received, read and understood a description of the Plan. The Grantee
understands that the Plan is discretionary in nature and may be amended, suspended or terminated by
the Company at any time.
25. Labor Law. By accepting this Performance Shares award, the Grantee acknowledges
that: (a) the grant of these Performance Shares is a one-time benefit which does not create any
contractual or other right to receive future grants of Performance Shares, or benefits in lieu of
Performance Shares; (b) all determinations with respect to any future grants, including, but not
limited to, the times when the Performance Shares will be granted, the number of Performance Shares
subject to each Performance Share award and the time or times when the Performance Shares will
vest, will be at the sole discretion of the Company; (c) the Grantee’s participation in the Plan is
voluntary; (d) the value of these Performance Shares is an extraordinary item of compensation which
is outside the scope of any subsequent employment contract with the Grantee, if any; (e) these
Performance Shares are not part of the Grantee’s normal or expected compensation for purposes of
calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service
awards, pension or retirement benefits or similar payments; (f) the vesting of these Performance
Shares will cease upon termination of service as a Director for any reason except as may otherwise
be explicitly provided in the Plan or this Agreement; (g) the future value of the underlying Shares
is unknown and cannot be predicted with certainty; (h) these Performance Shares have been granted
to
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the Grantee in the Grantee’s status as a Nonemployee Director of the Company; (i) any claims
resulting from these Performance Shares will be enforceable, if at all, against the Company; and
(j) there will be no additional obligations for any Affiliate employing the Grantee as a result of
these Performance Shares.
26. Disclosure of Grantee Information. By accepting this Performance Shares award,
the Grantee consents to the collection, use and transfer of personal data as described in this
paragraph. The Grantee understands that the Company and its Affiliates hold certain personal
information about him or her, including his or her name, home address and telephone number, date of
birth, social security or identity number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all awards of Performance Shares or any other
entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in his
or her favor, for the purpose of managing and administering the Plan (“Data”). The Grantee further
understands that the Company and/or its Affiliates will transfer Data among themselves as necessary
for the purpose of implementation, administration and management of his or her participation in the
Plan, and that the Company and/or any of its Affiliates may each further transfer Data to any third
parties assisting the Company in the implementation, administration and management of the Plan. The
Grantee understands that these recipients may be located in the European Economic Area, or
elsewhere, such as in the U.S. or Asia. The Grantee authorizes the Company to receive, possess,
use, retain and transfer the Data in electronic or other form, for the purposes of implementing,
administering and managing his or her participation in the Plan, including any requisite transfer
to a broker or other third party with whom he or she may elect to deposit any Shares of stock
acquired from this award of Performance Shares of such Data as may be required for the
administration of the Plan and/or the subsequent holding of Shares of stock on his or her behalf.
The Grantee understands that these recipients may be located in the European Economic Area, or
elsewhere, such as in the U.S. or Asia. The Grantee understands that he or she may, at any time,
view the Data, require any necessary amendments to the Data or withdraw the consent herein in
writing by contacting the Human Resources department and/or the Stock Programs Administrator for
the Company and/or its applicable Affiliates.
27. Notice of Governing Law. This award of Performance Shares will be governed by,
and construed in accordance with, the laws of the State of California, in the U.S.A., without
regard to principles of conflict of laws.
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