Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On July 21, 2017, the Board of Directors (the Board) of Applied Materials,
Inc. (the Company) appointed Daniel J. Durn, age 50, Chief Financial Officer, effective on or about August 24, 2017, following the filing of the Companys Quarterly Report on Form 10-Q for the third quarter of fiscal 2017.
Mr. Durn will join the Company as Senior Vice President on August 7, 2017 and will succeed our current Chief Financial Officer, Robert J. Halliday. Mr. Halliday will remain with the Company to support a smooth transition and move to a
new role focused on business development.
Mr. Durn is currently Executive Vice President and Chief Financial Officer of NXP Semiconductors N.V., a
semiconductor manufacturer (NXP). Mr. Durn joined NXP in 2015, having served as Senior Vice President of Finance and Chief Financial Officer of Freescale Semiconductor, Inc., from June 2014 until its merger with NXP in December
2015. Prior to Freescale, Mr. Durn was Chief Financial Officer and Executive Vice President of Finance and Administration at GlobalFoundries, a semiconductor foundry, which he joined in December 2011.
Mr. Durns offer letter with the Company, dated July 21, 2017, provides that Mr. Durn will initially receive an annual base salary of
$600,000 and will be eligible to earn a target bonus of 110% of his base salary under the Companys Senior Executive Bonus Plan (SEBP) beginning in fiscal year 2018. Actual bonus earned, if any, will be subject to the terms of the
SEBP and based on achievement of performance goals established by the Human Resources and Compensation Committee (the HRCC) of the Board. Because Mr. Durns employment with the Company occurs after the eligibility date for a
2017 SEBP bonus award, he will earn a special bonus payment of $250,000 six months following his start date, subject to active employment as of such date. Mr. Durn will also receive a sign-on bonus payment of $500,000 (Sign-On
Bonus) after 30 days of continuous employment with the Company. In the event that Mr. Durn resigns or the Company terminates his employment for cause prior to the completion of 24 months of service, Mr. Durn will be obligated to
repay the Company for the full amount of the Sign-On Bonus, less any amounts withheld by the Company for taxes.
In addition, following completion of 30
days of continuous employment with the Company, Mr. Durn will be awarded the following equity awards: (1) new hire restricted stock units (RSUs) with a value of $2,500,000, scheduled to vest ratably over three years beginning
on February 1, 2018, and subject to acceleration of vesting in the event that the Company terminates Mr. Durn without cause before February 1, 2020; (2) long-term incentive award with a target value of $1,500,000, consisting of
performance shares (PSUs), scheduled to vest in December 2019, subject to achievement of certain performance targets established by the HRCC relating to the Companys three-year average wafer fabrication equipment (WFE)
market share and the Companys three-year average non-GAAP adjusted operating margin; and (3) long-term incentive award with a value of $1,500,000, consisting of RSUs scheduled to vest in three equal installments on each of
January 15, 2018, December 19, 2018 and December 19, 2019. In each case, the number of RSUs or PSUs granted will be determined by dividing the stated value of the award by the closing price of the Companys stock on the date
of grant. Mr. Durn will also receive relocation benefits under the Companys standard relocation policy.
The Company issued a press release on July 24, 2017 announcing the appointment of Mr. Durn, which is
attached as Exhibit 99.1 to this report.