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1
1994
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
Mark one
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended OCTOBER 30, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ______________
COMMISSION FILE NUMBER 0-6920
APPLIED MATERIALS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-1655526
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3050 BOWERS AVENUE, SANTA CLARA, CALIFORNIA 95054
Address of principal executive offices (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (408) 727-5555
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of class Name of each exchange on which registered
-------------- -----------------------------------------
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, $.01 par value NASDAQ
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
Aggregate market value of the voting stock held by non affiliates of the
registrant as of November 1, 1994: $4,138,522,014
Number of shares outstanding of the issuer's Common Stock, $.01 par value, as
of November 1, 1994: 84,119,287.
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Applied Materials 1994 Annual Report for the year ended October 30,
1994 are incorporated by reference into Parts I , II and IV of this Form 10-K.
Portions of the definitive Proxy Statement for the Company's Annual Meeting of
Stockholders to be held on March 14, 1995 are incorporated by reference into
Part III of this Form 10-K.
Index of Exhibits on pages 29 through 31.
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PART I
ITEM 1: BUSINESS
Organized in 1967, Applied Materials, Inc. ("Applied Materials" or
the "Company") develops, manufactures, markets and services semiconductor wafer
fabrication equipment and related spare parts. The Company's worldwide
customers include both companies which manufacture semiconductor devices for
use in their own products and companies which manufacture semiconductor devices
for sale to others. Applied Materials operates exclusively in the semiconductor
wafer fabrication equipment industry. The Company is also a fifty percent
stockholder in Applied Komatsu Technology, Inc., which produces thin film
transistor manufacturing systems for active-matrix liquid crystal displays.
PRODUCTS
Applied Materials' products are sophisticated systems requiring
state-of-the-art technology in wafer processing chemistry and physics,
particulate management, automation, process control and software. Many of
these technologies are complementary and can be applied across all of the
Company's products. The Company's products provide enabling technology,
productivity and yield enhancements to semiconductor manufacturers. The
Company's products are used to fabricate semiconductor devices on a substrate
of semiconductor material (usually silicon). Finished devices consist of thin
film layers which can form anywhere from one to millions of tiny electronic
components that combine to perform desired electrical functions. The
fabrication process must control film and feature quality to ensure proper
device performance while meeting yield and throughput goals. The Company
currently manufactures equipment that addresses three steps in wafer
fabrication: deposition, etch and ion implantation.
Single-wafer, multichamber architecture.
Recognizing the trend toward more stringent process requirements and
larger wafer sizes, Applied Materials developed a single-wafer, multichamber
system called the Precision 5000. The Company introduced the Precision 5000
with dielectric Chemical Vapor Deposition (CVD) processes in 1987, etch
processes in 1988 and CVD tungsten processes (WCVD) in 1989. The Precision
5000's single-wafer, multichamber architecture which features several
processing chambers, each of which is attached to a central handling system, is
designed for both serial and integrated processing. The Precision 5000's
integrated processing capability makes it possible to perform multiple process
steps without the wafer leaving a controlled environment, thus reducing the
risk of particulate contamination. The Company leveraged its expertise in
single-wafer, multichamber architecture to develop an evolutionary platform
called the Endura 5500 PVD (physical vapor deposition) in 1990 featuring a
staged, ultra-high vacuum architecture for the rapid sputtering of aluminum and
other metal films used to form the circuit interconnections on advanced
devices. In October 1991, the Company announced its second-generation
Precision 5000 system, the Precision 5000 Mark II, with numerous enhancements
to the platform, process chambers and remote support equipment. The Precision
5000 Mark II is used to manufacture advanced devices, such as 16 megabit DRAMs
(Dynamic Random Access Memories), on wafers up to 200mm (8-inch) in diameter.
In September 1992, the Company announced its latest generation single-wafer,
multichamber platform, the Centura, to target the high temperature thin films
market as well as future process applications with 0.5 micron and below
specifications. The Company has shipped more than 2,000 multichamber platforms
and more than 6,000 process chambers. For the fiscal year ended October 30,
1994, sales of the Company's single-wafer, multichamber systems accounted for
approximately 86% of systems revenue.
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Deposition.
A fundamental step in semiconductor fabrication, deposition is the
process of layering either electrically insulating (dielectric) or electrically
conductive material on the wafer. Applied Materials currently participates in
chemical vapor deposition (CVD), physical vapor deposition (PVD), and epitaxial
and polysilicon deposition.
CVD. Chemical vapor deposition deposits thin films
(insulators, conductors and semiconductors) from gaseous sources. In
1987, the Company introduced the Precision 5000 CVD which performs a
broad range of deposition processes utilizing up to four individual
chambers on a single system. In 1989, the Company entered the market
for metal CVD with a new system for blanket tungsten deposition, the
Precision 5000 WCVD. This system is based on the single-wafer,
multichamber Precision 5000 CVD system architecture and is designed to
reduce operating costs for tungsten deposition and to produce
high-quality tungsten films for interconnect applications in advanced
semiconductor devices. In 1990, the Company introduced integrated
tungsten plug fabrication capability by combining its blanket tungsten
CVD deposition and etchback capabilities onto the same system. In
1991, the Company introduced tungsten silicide capabilities and in
1993, titanium nitride (TiN) capabilities to further extend the
Precision 5000 platform offerings. The Company released its newest
generation of sub-atmospheric process technology on the Precision 5000
Mark II CVD platform in April 1994, addressing 0.35 micron
applications. In May 1994, the Company introduced a new
multi-platform chamber for blanket tungsten deposition on wafers up to
200mm (8 inch) in diameter.
PVD. Physical vapor deposition sputters metals on wafers
during semiconductor fabrication. Unlike CVD, the sources of the
deposited materials are solid sources of the films to be deposited.
Applied Materials entered the PVD market in April 1990 with the Endura
PVD system. The system utilizes a modular, single-wafer, multichamber
platform which accommodates ultra-high vacuum (UHV) processes like
PVD, and conventional high-vacuum processes like CVD and etch. In July
of 1993, the Company introduced the Endura High Productivity (HP) PVD
system, an enhanced version of the Endura PVD system. In November
1993, the Centura HP PVD was introduced in order to offer customers a
choice of platforms using the Company's PVD technology.
Epitaxial and polysilicon deposition. Epitaxial and
polysilicon deposition involve depositing a layer of high-quality,
silicon-based compounds on the surface of the silicon wafer. The
epitaxial layer forms the base of some types of integrated circuits.
In 1989, the Company introduced the Precision 7700 Epi system for
advanced silicon deposition. The 7700 system extends the capabilities
of radiantly-heated "barrel" technology and incorporates
fully-automated wafer handling as well as many features for
particulate control. In September 1992, the Company announced the
Centura Poly, a single-wafer, multichamber platform targeted at the
high-temperature thin film deposition of polysilicon on wafers up to
200mm (8 inch) in diameter. The Centura Epi system, which deposits
epitaxial silicon, was announced in March 1993. In December 1993, the
Company launched the Polycide Centura which combines chambers for
polysilicon and tungsten silicide deposition on the Centura platform.
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Etch.
Before etch processing begins, a wafer is patterned with photoresist
during photolithography. Etching then selectively removes material from areas
which are not covered by the photoresist pattern. Applied Materials entered
the etch market in 1981 with the introduction of the AME 8100 etch system,
which utilized a batch process technology for dry plasma etching. In 1985, the
Company introduced the Precision Etch 8300, which featured improved levels of
automation and particulate control. The Company continues to sell the
Precision Etch 8300 product and has shipped approximately 825 systems. Applied
Materials' first single-wafer, multichamber system for the dry etch market was
the Precision 5000 Etch, introduced in 1988. In 1990, the Company introduced a
metal etch system based on the Precision 5000 architecture which provides
single-wafer, aluminum etch capabilities. In July 1993, the Company introduced
its next generation etch system, the Omega Centura, designed for critical oxide
etch applications requiring sub-0.5 micron design rules. This announcement was
followed by the October 1993 introduction of the Precision 5000 Mark II Etch
MxP, a new model of the Precision 5000-series etch system with several
enhancements including process capability for 0.35 micron applications. In
July 1994, Applied Materials introduced the Metal Etch MxP Centura, which
combines sub-0.5 micron process technology with improved throughput.
Ion Implantation.
During ion implantation, silicon wafers are bombarded by a
high-velocity beam of electrically charged ions. These ions penetrate the
wafer at selected sites and change the electrical properties of the implanted
area. Applied Materials entered the high-current portion of the implant market
in 1985 with the Precision Implant 9000 and introduced the Precision Implant
9200 in 1988. In 1989, the Company added enhancements to the 9200 series
including a new option for automated selection of implant angles, and new
hardware/software options that enable customers to perform remote monitoring
and diagnostics. In 1991, the Company announced an enhanced version of its
high-current ion implanter and designated it the Precision Implant 9200XJ. In
November 1992, the Company introduced a new high-current ion implantation
system, the Precision Implant 9500, to address the production of high-density
semiconductor devices, such as 16 megabit and 64 megabit memory devices and
advanced microprocessors.
CUSTOMER SERVICE AND SUPPORT
The customer requirement for high yields of integrated circuits during
the manufacturing process requires that semiconductor wafer fabrication
equipment operates reliably, with maximum uptime and within very precise
tolerances. Applied Materials installs its equipment and provides warranty
service worldwide through offices located in the United States, Japan, Europe
and the Asia-Pacific region (Korea, Taiwan, China and Singapore). Applied
Materials maintains 54 service/sales offices worldwide, with 15 offices in
Japan, 9 offices in Europe, 8 offices in the Asia/Pacific region, and the
remainder in the United States. The Company offers a variety of service
contracts to customers for maintenance of installed equipment and provides a
comprehensive training program for all customers.
BACKLOG
At October 30, 1994, the Company's backlog totaled $715.2 million,
compared to $365.8 million at October 31, 1993. The Company expects to fill
the present backlog of orders during fiscal 1995.
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MANUFACTURING, RAW MATERIALS AND SUPPLIES
The Company's manufacturing activities consist primarily of assembling
various commercial and proprietary components into finished systems,
principally in the United States, with additional operations in England and
Japan. Production requires some raw materials and a wide variety of mechanical
and electrical components, which are manufactured to the Company's
specifications. Multiple commercial sources are available for most components.
The Company has consolidated the number of sources for several key purchased
items for purposes of improving its position with its suppliers, resulting in
higher levels of on-time delivery, lower inventory levels and better pricing to
the Company. There have been no significant delays in receiving components
from sole source suppliers; however, the unavailability of any of these sources
could disrupt scheduled deliveries to customers.
MARKETING AND SALES
Because of the highly technical nature of its products, the Company
markets its products worldwide through a direct sales force, with sales,
service and spare parts offices in the United States, Japan, Europe and the
Asia-Pacific region. For the fiscal year ended October 30, 1994, sales to
customers in the United States, Japan, Europe and Asia-Pacific accounted for
approximately 37%, 27%, 18% and 18%, respectively, of the Company's net sales.
For the fiscal year ended October 31, 1993, sales to customers in the United
States, Japan, Europe and Asia-Pacific accounted for approximately 38%, 25%,
20% and 17%, respectively, of the Company's net sales. The Company's business
is not considered to be seasonal in nature, but it is subject to the capital
equipment expenditure patterns of major semiconductor manufacturers which are
based on many factors including anticipated market demand for integrated
circuits, the development of new technologies and global economic conditions.
RESEARCH AND DEVELOPMENT
The market served by the Company is characterized by rapid
technological change. The Company's research and development efforts are global
in nature. Engineering organizations are located in the United States,
England, Israel and Japan, with process support and customer demonstration
laboratories in the United States, England and Japan. In 1991, the Company
announced the opening of an expanded technology center in Narita, Japan. In
1994, the Company announced plans to build and operate technology centers in
South Korea and Taiwan. The Company also operates a technology center in
Israel which is being used to develop controller configuration and software
tools for its semiconductor processing systems. Applied Materials' research
and development activities are primarily directed toward the development of new
wafer processing systems and new process applications for existing products.
Applied Materials works closely with its global customers to design its systems
to meet its customers' planned technical and production requirements.
COMPETITION
The global semiconductor equipment industry is highly competitive and
is characterized by rapid technological advancements and demanding worldwide
service requirements. Each of the Company's products competes in markets
defined by the particular wafer fabrication process it performs. There are
several companies that compete with Applied Materials in each of these markets.
Competition is based on many factors, primarily technological advancements,
productivity and cost-effectiveness, customer support, contamination control,
and overall product quality. Management believes that the Company's
competitive advantage in each of its served markets is based on the ability of
its products and services to address customer requirements as they relate to
these competitive factors.
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Applied Materials is a principal supplier in each of its served
markets. The Company faces strong competition throughout the world from other
semiconductor equipment manufacturers as well as semiconductor manufacturers
who design and produce fabrication equipment for their own internal uses and,
in some cases, for resale. Management believes that the Company is a strong
competitor with respect to its products, services and resources. However, new
products, pricing pressures, and other competitive actions from both new and
existing competitors could adversely affect the Company's market position.
JOINT VENTURE
In September 1991, the Company announced its plans to develop thin
film transistor (TFT) manufacturing systems for Active-Matrix Liquid Crystal
Displays (AMLCDs). The AMLCD market currently includes screens for laptop,
notebook and palmtop computers and instrument displays, and the Company
believes that this market in the future may include high-resolution
workstations and high definition television (HDTV). In September 1993, a joint
venture company was formed with Applied Materials, Inc. and Komatsu Ltd. of
Japan sharing a 50-50 ownership of the joint venture. The joint venture,
Applied Komatsu Technology, Inc. (AKT), is accounted for using the equity
method. The Company's management believes that systems developed by AKT have
the potential to lower the manufacturing costs of AMLCDs. The Company has
granted to AKT an exclusive license to use the Company's intellectual property
to develop, make, and sell products for the manufacture of flat panel displays,
in exchange for royalties in respect thereof. AKT anticipates accelerating its
investment in product technologies for both PVD and Etch in addition to
expanding the substrate size of its CVD product in fiscal 1995 and 1996.
PATENTS AND LICENSES
Management believes that the Company's competitive position is
primarily dependent upon skills in engineering, production, and marketing
rather than its patent position. However, protection of the Company's
technology assets by obtaining and enforcing patents is increasingly important.
Consequently, the Company has an active program to file applications in both
the United States and in other countries on inventions which the Company
considers significant. The Company has a number of patents in the United
States and other countries and additional applications are pending relating to
new developments in its equipment and processes. In addition to patents, the
Company also possesses other proprietary intellectual property, including
trademarks, know-how, trade secrets and copyrights.
The Company enters into patent and technology licensing agreements
with others when management determines that it is in the Company's interest to
do so. The Company pays reasonable royalties under existing patent license
agreements for the use, in several of its products, of certain patents which
are licensed to the Company for the life of the patents.
The Company has made its technology, including patents, available to
AKT through a license arrangement which permits AKT to use the Company's
technology to develop, manufacture and sell equipment for the flat panel
display industry.
In the normal course of business, the Company from time to time
receives and makes inquiries with regard to possible patent infringement. In
dealing with such inquiries, it may become necessary or useful in the future
for the Company to obtain and grant licenses or other rights. However, there
can be no assurance that such license rights will be available to the Company
on commercially reasonable terms. While there can be no assurance about the
outcome of such inquiries, the Company believes it is unlikely that their
resolution will have a material adverse effect on its financial position.
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ENVIRONMENTAL MATTERS
Although one of the Company's locations has been designated as a
Superfund site by the U.S. Environmental Protection Agency, neither compliance
with Federal, State and local provisions regulating discharge of materials into
the environment, nor remedial agreements or other actions relating to the
environment, has had or is expected to have a material effect on the Company's
capital expenditures, earnings or competitive position.
EMPLOYEES
At October 30, 1994, the Company employed 6,497 persons. None of
these employees was represented by a union. Management considers its relations
with its employees to be good.
The following portions of the Company's 1994 Annual Report are
incorporated herein by reference: "Management's Discussion and Analysis of
Financial Condition and Results of Operations," pages 27 through 30, and the
Consolidated Financial Statements and accompanying notes thereto, pages 31
through 45.
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ITEM 2: PROPERTIES
Certain information concerning the Company's principal properties at October
30, 1994 is set forth below:
Square
Location Type Principal use Footage Ownership
-------- ---- ------------- ------- ---------
Santa Clara, CA Office, plant & Headquarters, Marketing, 361,500 owned
warehouse Manufacturing, Research 881,600 leased
and Engineering
Austin, TX Office, plant & Manufacturing 154,000 owned
warehouse
Horsham, England Office, plant & Manufacturing, Research
warehouse and Engineering 74,200 leased
Narita, Japan Office, plant & Manufacturing, Research
warehouse and Engineering 218,400 owned*
Tel Aviv, Israel Office Research and Engineering 15,000 leased
The Company also leases office space for 54 service and sales offices
throughout the world: 15 offices are located in Japan, 22 offices are in the
United States, 9 offices are in Europe, and 8 offices are located in the
Asia-Pacific region.
The Company owns 173 acres of land in Austin, Texas. This site can
accommodate approximately 1.5 million square feet of building space to help
satisfy the Company's current and future needs. In fiscal 1993, the Company
began volume production at a 154,000 square-foot manufacturing facility. The
Company expects a second facility to be completed in the first quarter of
fiscal 1995.
Management considers the above facilities suitable and adequate to
meet the Company's requirements.
* Subject to loans totaling $50 million secured by property and equipment
having an approximate net book value of $84 million at October 30, 1994.
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ITEM 3: LEGAL PROCEEDINGS
On February 6, 1991, the Company filed a lawsuit against Advanced
Semiconductor Materials America, Inc., Epsilon Technology, Inc. (doing
business as ASM Epitaxy) and Advanced Semiconductor Materials International
N.V. (the defendants, together, hereafter referred to as "ASM") in the United
States District Court for the Northern District of California. The Company
alleges that ASM has been and is currently infringing certain of the Company's
patents which relate to epitaxial reactors by making and selling, among other
products, the ASM Epsilon I epitaxial reactor. The Company seeks an injunction
against further infringement of these patents, damages for ASM's infringement,
trebling of damages for willful infringement, and reasonable attorneys' fees
and costs. In October, 1992, the Company filed an additional suit against the
same defendants, alleging infringement of an additional patent by the same ASM
Epsilon I epitaxial reactor.
The defendants (except ASM International N.V.) have made counterclaims
against the Company for declaratory judgment of invalidity, unenforceability
and noninfringement of the patents in suit. The defendants also claim that the
Company monopolizes and is attempting to monopolize the market for epitaxial
reactor systems. The defendants seek dismissal, payment by the Company of the
defendants' costs and attorneys' fees, injunctions against the Company, damages
according to proof and trebling of damages.
Trial of the first lawsuit against ASM concluded in August 1993 and in
April 1994, the court issued its decision. The court found that ASM infringed
three of the Company's patents, one of the patents asserted against ASM was
found not infringed and one was found invalid. Subsequently, the court issued
an injunction against ASM's sale and use of Epsilon I epitaxial reactors in the
United States, but granted a stay of the injunction pending an appeal of the
court's decision. The stay order requires ASM to pay a fee, as a security for
the Company's interests, for each Epsilon I sold by ASM in the United States
after the date of the injunction. Proceedings to resolve the issues of
damages, willful infringement, and ASM's counterclaims, which have been
bifurcated for separate trial, will be stayed pending the appeal of the trial
court's infringement and validity decision. Both ASM and the Company are
appealing that decision. The second of the Company's lawsuits against ASM is
currently set for trial in February, 1995.
On January 19, 1993, ASM served a lawsuit on the Company which alleges
that the Company infringes two patents of ASM. The lawsuit was originally
filed by ASM in the United States District Court for the District of Arizona in
Phoenix, Arizona, but has been transferred by the court to the Northern
District of California in San Jose, California. One of the patents relates to
the Company's CVD product lines and the second patent to the Company's
epitaxial product line. The lawsuit seeks to enjoin the Company from
infringing the patents and seeks monetary damages of an unspecified amount and
costs. After substantial discovery, ASM filed a voluntary stay of the
proceedings with respect to one of the patents in suit. Trial of its claims on
the other patent is currently set for May 1995. The Company believes it has
meritorious defenses against ASM's claims.
On September 6, 1994, General Signal Corporation filed a lawsuit
against the Company in the United States District Court, District of Delaware.
General Signal alleges that the Company infringes five of General Signal's
United States Patents by making, using, selling or offering for sale
multichamber wafer fabrication equipment, including for example, the Precision
5000 series machines. General Signal seeks an injunction, multiple damages and
costs, including reasonable attorneys' fees and interest, and other relief as
the court may deem just and proper.
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The suit is in the early stages of discovery and no date has been set
for trial. The Company believes that it has meritorious defenses against
General Signal's claims.
The Company is a defendant in other litigation arising in the normal
course of business. The Company believes that it is unlikely that the outcome
of these lawsuits will have an adverse material effect on the Company's
financial position or results of operations.
Also see "Environmental Matters" and "Patents and Licenses" under
"Item 1: BUSINESS" above.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS IN FOURTH QUARTER
OF FISCAL 1994
None.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The following table and notes thereto identify and set forth information
about the Company's seven executive officers:
Name of Individual Capacities in which Served
------------------ --------------------------
James C. Morgan (1) Chairman of the Board of Directors and Chief Executive Officer
James W. Bagley (2) Vice Chairman of the Board of Directors and Chief Operating Officer
Dan Maydan (3) President of the Company and Co-Chairman of Applied Komatsu Technology, Inc.
Gerald F. Taylor (4) Senior Vice President and Chief Financial Officer
Tetsuo Iwasaki (5) Chairman of Applied Materials Japan, Inc. and President of Applied Komatsu
Technology, Inc.
Sasson Somekh (6) Senior Vice President
David N.K. Wang (7) Senior Vice President
(1) Mr. Morgan, age 56, has been Chief Executive Officer since 1977 and
Chairman of the Board of Directors since 1987. Mr. Morgan also served
as President of the Company from 1976 to 1987.
(2) Mr. Bagley, age 55, was appointed Vice Chairman of the Board of
Directors in December 1993. Mr. Bagley has been Chief Operating
Officer of the Company since 1987 and served as President of the
Company from 1987 to 1993. Prior to that, Mr. Bagley served as Senior
Vice President of the Company since 1981.
(3) Dr. Maydan, age 59, was appointed President of the Company in December
1993. Dr. Maydan served as Executive Vice President from 1990 to 1993.
Prior to that, Dr. Maydan had been Group Vice President since February
1989. Dr. Maydan joined Applied Materials in 1980 as a Director of
Technology.
(4) Mr. Taylor, age 54, has been Chief Financial Officer of the Company
since 1984 and Senior Vice President since 1991. Prior to that, Mr.
Taylor had been Vice President of Finance since 1984.
(5) Mr. Iwasaki, age 48, has been Chairman of Applied Materials Japan,
Inc. since 1991. Prior to that, Mr. Iwasaki had been President of
Applied Materials Japan, Inc. since 1981. Mr. Iwasaki became
President of Applied Komatsu Technology, Inc. (a 50-50 joint venture
corporation with Komatsu, Ltd.) in 1993.
(6) Dr. Somekh, age 48, was appointed Senior Vice President of the Company
in December 1993. Dr. Somekh served as Group Vice President from 1990
to 1993. Prior to that, Dr. Somekh had been a divisional Vice
President. Dr. Somekh joined Applied Materials in 1980 as a Project
Manager.
(7) Dr. Wang, age 48, was appointed Senior Vice President of the Company
in December 1993. Dr. Wang served as Group Vice President from 1990 to
1993. Prior to that, Dr. Wang had been a divisional Vice President.
Dr. Wang joined Applied Materials in 1980 as a Manager, Process
Engineering and Applications.
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PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
"Stock Price History" on page 47 of the Applied Materials' 1994 Annual
Report is incorporated herein by reference.
The Company's common stock is traded over-the-counter. As of November 1,
1994 there were approximately 1,175 record holders of the common stock.
To date, the Company has paid no cash dividends to its stockholders. The
Company has no plans to pay cash dividends in the near future.
ITEM 6: SELECTED FINANCIAL DATA
"Selected Consolidated Financial Data" on page 26 of the Applied Materials
1994 Annual Report is incorporated herein by reference.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
"Management's Discussion and Analysis" on pages 27 through 30 of
the Applied Materials 1994 Annual Report is incorporated herein by reference.
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ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements, together with the report
thereon of Price Waterhouse LLP, independent accountants, dated November 23,
1994 and appearing in pages 31 through 47 of Applied Materials 1994 Annual
Report are incorporated by reference in this Form 10-K Annual Report. With the
exception of the aforementioned information and the information incorporated by
reference in items 1, 5, 6, and 7, Applied Materials 1994 Annual Report is not
deemed to be filed as part of this report.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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PART III
Pursuant to Paragraph G(3) of the General Instructions to Form 10-K,
portions of the information required by Part III of Form 10-K are incorporated
by reference from the Company's Proxy Statement to be filed with the Commission
in connection with the 1995 Annual Meeting of Stockholders ("the Proxy
Statement").
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Information concerning directors of the Company appears in the
Company's Proxy Statement, under Item 1 "Election of Directors." This
portion of the Proxy Statement is incorporated herein by reference.
(b) For information with respect to Executive Officers, see Part I of this
Form 10-K.
ITEM 11: EXECUTIVE COMPENSATION
Information concerning executive compensation appears in the Company's
Proxy Statement, under the caption "Executive Compensation," and is
incorporated herein by reference.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning the security ownership of certain beneficial
owners and management appears in the Company's Proxy Statement, under Item 1
"Election of Directors," and is incorporated herein by reference.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions
appears in the Company's Proxy Statement, under Item 1 "Election of Directors,"
and is incorporated herein by reference.
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PART IV
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this Form 10-K:
(1) Consolidated Financial Statements. The following consolidated
financial statements of Applied Materials, Inc. and
subsidiaries, and the related notes and the report of
Price Waterhouse LLP, independent accountants, dated
November 23, 1994, included in the Applied Materials
1994 Annual Report, are incorporated herein by
reference:
Annual Report
Page Number
-------------
Consolidated Statements of Operations for the Fiscal
Years ended October 30, 1994, October 31, 1993
and October 25, 1992 31
Consolidated Balance Sheets at October 30, 1994
and October 31, 1993 32
Consolidated Statements of Cash Flows for
the Fiscal Years ended October 30, 1994,
October 31, 1993 and October 25, 1992 33
Notes to Consolidated Financial Statements 34 - 45
Report of Independent Accountants 47
Form 10-K
(2) Financial Statement Schedules Page Number
-----------
Report of Independent Accountants on Financial Statement
Schedules 21
Schedule I Marketable Securities - Other Investments 22
Schedule II Amounts Receivable from Officers
and Employees 23
Schedule V Property, Plant and Equipment 24
Schedule VI Accumulated Depreciation of Property, Plant
and Equipment 25
Schedule VIII Valuation and Qualifying Accounts 26
Schedule IX Short-term Borrowings 27
Schedule X Supplementary Income Statement Information 28
Schedules not listed above have been omitted because they are not required
or the information required to be set forth therein is included in the
Consolidated Financial Statements or Notes to Consolidated Financial
Statements.
15
16
(3) Exhibits - See Exhibit Index on page 29 of this report. The
following exhibits listed in the exhibit index are filed with this
Report.
Executive Compensation Plans and Arrangements
10.1 Not used.
10.2 The 1976 Management Stock Option Plan, as amended to October 5, 1993, previously
filed with the Company's Form 10-K for fiscal year 1993, and incorporated herein by
reference.
10.3 Applied Materials, Inc., Supplemental Income Plan, as amended, including
Participation Agreements with James C. Morgan, Walter Benzing, and Robert Graham,
previously filed with the Company's Form 10-K for fiscal year 1981, and incorporated
herein by reference.
10.4 Amendment to Supplemental Income Plan, dated July 20, 1984, previously filed with the
Company's Form 10-K for fiscal year 1984, and incorporated herein by reference.
10.5 The Applied Materials Employee Financial Assistance Plan, previously filed with the
Company's definitive Proxy Statement in connection with the Annual Meeting of
Shareholders held on March 5, 1981, and incorporated herein by reference.
10.6 The 1985 Stock Option Plan for Non-Employee Directors, previously filed with the
Company's Form 10-K for fiscal year 1985, and incorporated herein by reference.
10.7 Amendment 1 to the 1985 Stock Option Plan for Non-Employee Directors dated June 14,
1989, previously filed with the Company's Form 10-K for fiscal year 1989, and
incorporated herein by reference.
10.8 Applied Materials, Inc. Supplemental Income Plan as amended to
December 15, 1988, including participation agreement with James C. Morgan, previously
filed with the Company's Form 10-K for fiscal year 1988, and incorporated herein by
reference.
10.9 Not used.
10.11 The Applied Materials, Inc. Executive Deferred Compensation Plan dated July 1, 1993
and as amended on September 2, 1993, previously filed with
the Company's Form 10-Q for the quarter ended August 1, 1993, and incorporated herein
by reference.
16
17
10.12 Amendment dated December 9, 1992 to Applied Materials, Inc. Supplemental Income Plan
dated June 4, 1981 (as amended to December 15, 1988), previously filed with the Company's
Form 10-K for fiscal year 1993, and incorporated herein by reference.
10.13 Amendment No. 2 to Applied Materials, Inc. 1985 Stock Option Plan for Non-Employee
Directors, dated September 10, 1992, previously filed with the Company's Form 10-K for
fiscal year 1993, and incorporated herein by reference.
10.14 Amendment No. 3 to Applied Materials Inc. 1985 Stock Option Plan for Non-Employee
Directors, dated October 5, 1993, previously filed with the Company's Form 10-K for
fiscal year 1993, and incorporated herein by reference.
10.16 Amendment No. 4 to Applied Materials Inc. 1985 Stock Option Plan for Non-Employee
Directors, dated December 8, 1993, previously filed with the Company's Form 10-Q for the
quarter ended May 1, 1994, and incorporated herein by reference.
10.17 Amendment No. 2 to the Applied Materials, Inc. Executive Deferred Compensation Plan,
dated May 9, 1994, previously filed with the Company's Form 10-Q for the quarter ended
May 1, 1994, and incorporated herein by reference.
10.18 Applied Komatsu Technology, Inc. 1994 Executive Incentive Stock Purchase Plan, together
with forms of Promissory Note, 1994 Executive Incentive Stock Purchase Agreement, and
Loan and Security Agreement, previously filed with the Company's Form 10-Q for the quarter
ended July 31, 1994, and incorporated herein by reference.
Other Exhibits
3.1 Certificate of Incorporation of Applied Materials, Inc., a Delaware corporation, as
amended to March 14, 1989, March 24, 1993, and March 22, 1994.
3.2 Bylaws of Applied Materials, Inc., as amended to December 7, 1994.
17
18
4.1 Rights Agreement, dated as of June 14, 1989, between Applied Materials, Inc. and Bank
of America NT&SA, as Rights Agent, including Form of Right Certificate and the Form
of Summary of Rights to Purchase Common Stock, previously filed with the Company's
report on Form 8-K dated June 14, 1989, and incorporated herein by reference.
4.2 Note Agreement dated as of March 1, 1991 between Applied Materials, Inc. and a group
of seven insurance companies, including the form of 9.62% Senior Notes due April 1,
1999, previously filed with the Company's Form 10-Q for the quarter ended April 28,
1991, and incorporated herein by reference.
4.3 Stock Transfer Agency Agreement, effective September 24, 1991 and signed March 9,
1992, between Applied Materials, Inc. and Harris Trust and Savings Bank, as Stock
Transfer Agent, Registrar and Rights Agent, previously filed with the Company's Form
10-K for fiscal year 1993, and incorporated herein by reference.
4.4 Form of Indenture (including form of debt security) dated as of August 24, 1994
between Applied Materials, Inc. and Harris Trust Company of California, as Trustee,
previously filed with the Company's Form 8-K on August 17, 1994, and incorporated
herein by reference.
10.10 License agreement dated January 1, 1992 between the Company and
Varian Associates, Inc., previously filed with the Company's Form 10-K for fiscal
year 1992, and incorporated herein by reference.
10.15 Joint Venture Agreement between Applied Materials, Inc. and Komatsu Ltd. dated
September 14, 1993 and exhibits thereto, previously filed with the Company's Form 10-
K for fiscal year 1993, and incorporated herein by reference. (Confidential
treatment has been requested for certain portions of the agreement.)
10.19 Underwriting agreement between the Company and several underwriters in connection
with the sale of 2,300,000 shares of the Company's common stock dated March 16, 1994.
10.20 Underwriting agreement between the Company and several underwriters, dated August 24,
1994 related to the sale by the Company of $100 million aggregate amount of 8% senior
notes.
10.21 $125,000,000 Credit agreement dated as of September 8, 1994 between Applied Materials
and a group of seven banks.
18
19
13. Applied Materials 1994 Annual Report for the fiscal year ended October 30, 1994 (to
the extent expressly incorporated by reference).
21. Subsidiaries of Applied Materials, Inc.
23. Consent of Independent Accountants.
24. Power of Attorney.
(b) Report on Form 8-K was filed on August 17, 1994.
(c) Exhibits: The exhibits listed in Item (a)(3) above are submitted as a
separate section of this report.
(d) The individual financial statements of the registrant have been omitted
since the registrant is primarily an operating company and all subsidiaries
are included in the consolidated financial statements.
19
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
APPLIED MATERIALS, INC.
By /s/James C. Morgan
-------------------------
James C. Morgan
Chairman of the Board and
Chief Executive Officer
Dated: December 21, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Title Date
----- ----
/s/James C. Morgan Chairman of the Board and December 21, 1994
- - ------------------------ Chief Executive Officer
James C. Morgan
/s/Gerald F. Taylor Senior Vice President and December 21, 1994
- - ------------------------ Chief Financial Officer (Principal
Gerald F. Taylor Financial Officer)
/s/Michael K. O'Farrell Corporate Controller (Principal December 21, 1994
- - ------------------------ Accounting Officer)
Michael K. O'Farrell
Directors:
James C. Morgan Director December 21, 1994
James W. Bagley* Director
Dan Maydan* Director
Michael Armacost* Director
Herbert M. Dwight, Jr.* Director
George B. Farnsworth* Director
Philip V. Gerdine* Director
Tsuyoshi Kawanishi* Director
Paul R. Low* Director
Alfred J. Stein* Director
Hiroo Toyoda* Director
*By /s/James C. Morgan December 21, 1994
----------------------
James C. Morgan
Attorney-in-fact
A majority of the members of the Board of Directors.
20
21
Report of Independent Accountants on
Financial Statement Schedules
To the Board of Directors of Applied Materials, Inc.
Our audits of the consolidated financial statements referred to in our report
dated November 23, 1994 appearing on page 47 of the 1994 Annual Report of
Applied Materials, Inc., (which report and consolidated financial statements
are incorporated by reference in this Annual Report on Form 10-K) also included
an audit of the Financial Statement Schedules listed in Item 14(a) of this Form
10-K. In our opinion, these Financial Statement Schedules present fairly, in
all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.
/s/ Price Waterhouse LLP
- - ------------------------
Price Waterhouse LLP
San Jose, California
November 23, 1994
21
22
SCHEDULE I
MARKETABLE SECURITIES-OTHER INVESTMENTS
(In thousands)
October 30, 1994
Type of Issue(1) Amount(2)
----------------- ---------
Municipal Bonds $ 55,015
Dutch Auction Municipal Bonds 40,407
United States Treasury Bills and Agencies 39,996
Commercial Paper 36,202
Certificates of Deposit 33,021
Medium Term Bank Notes 28,961
Asset Backed Securities 17,940
Corporate Bonds and Others 10,463
--------
$262,005
========
(1) No individual issuer or group of issuers, as defined in Rule 12-02 of
Regulation S-X, exceeds 2% of total assets.
(2) Carried at cost which approximates fair market value.
22
23
SCHEDULE II
AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
(In thousands)
Balance at Balance
beginning at end
of year Additions Collections of year
---------- --------- ----------- -------
As of October 30, 1994
Ashok K. Sinha $200 $ - $ - $200(a)
Tetsuo Iwasaki - 156 - 156(b)
Dan Maydan - 186 - 186(b)
As of October 31, 1993:
Walter J. Wriggins $100 $ - $100 $ -
Ashok K. Sinha 200 - - 200(a)
As of October 25, 1992:
James W. Bagley $300 $ - $300 $ -
Peter R. Hanley 80 - 80 -
Walter J. Wriggins 100 - - 100
Ashok K. Sinha 200 - - 200(a)
(a) Interest-free promissory note of $200 due fiscal 1995, secured by a
subordinated residential deed of trust.
(b) Bearing interest at 7.16% per annum. Interest only payable annually
and principal due January 31, 2004, secured by non-voting preferred
stock of Applied Komatsu Technology, Inc., a 50% investee of Applied
Materials, Inc.
23
24
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
(In thousands)
Balance at Balance
beginning Sales & at end
of year Additions* retirements Adjustments** of year
---------- ---------- ----------- ------------- --------
As of October 30, 1994
Land $ 22,884 $ 35,696 $ -- $ 370 $ 58,950
Building and leasehold 209,584 52,846 (2,001) 6,463 266,892
improvements
Manufacturing and 93,111 36,691 (17,773) 2,851 114,880
demonstration equipment
Furniture and fixtures 74,485 39,395 (4,806) 1,877 110,951
Construction in progress 49,584 21,361 (4) (24) 70,917
-------- -------- -------- ------- --------
Total $449,648 $185,989 $(24,584) $11,537 $622,590
======== ======== ======== ======= ========
As of October 31, 1993:
Land $ 14,585 $ 7,651 $ -- $ 648 $ 22,884
Building and leasehold 161,969 37,604 (187) 10,198 209,584
improvements
Manufacturing and 68,900 26,774 (6,310) 3,747 93,111
demonstration equipment
Furniture and fixtures 52,831 21,032 (1,068) 1,690 74,485
Construction in progress 45,836 6,292 (2,067) (477) 49,584
-------- -------- -------- ------- --------
Total $344,121 $ 99,353 $ (9,632) $15,806 $449,648
======== ======== ======== ======= ========
As of October 25, 1992:
Land $ 14,020 $ -- $ -- $ 565 $ 14,585
Building and leasehold 123,202 32,910 (3,483) 9,340 161,969
improvements
Manufacturing and 63,090 15,363 (12,637) 3,084 68,900
demonstration equipment
Furniture and fixtures 44,554 12,383 (5,998) 1,892 52,831
Construction in progress 40,928 5,943 (890) (145) 45,836
-------- -------- -------- ------- --------
Total $285,794 $ 66,599 $(23,008) $14,736 $344,121
======== ======== ======== ======= ========
* Includes transfers between accounts.
**Includes foreign currency translation adjustments.
24
25
SCHEDULE VI
ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
(In thousands)
Balance at Balance
beginning Sales & at end
of year Additions retirements Adjustments** of year
--------- --------- ----------- ------------- --------
As of October 30, 1994
Building and leasehold $ 41,153 $23,710 $ (1,407) $1,368 $ 64,824
improvements
Manufacturing and demonstration 44,618 17,587 (9,326) 1,450 54,329
equipment
Furniture and fixtures 36,173 17,185 (3,559) 1,184 50,983
-------- ------- -------- ------ --------
Total $121,944 $58,482 $(14,292) $4,002 $170,136
======== ======= ======== ====== ========
As of October 31, 1993:
Building and leasehold $ 27,530 $12,570 $ (268) $1,321 $ 41,153
improvements
Manufacturing and demonstration 33,208 14,341 (4,607) 1,676 44,618
equipment
Furniture and fixtures 24,862 10,866 (826) 1,271 36,173
-------- ------- -------- ------ --------
Total $ 85,600 $37,777 $ (5,701) $4,268 $121,944
======== ======= ======== ====== ========
As of October 25, 1992:
Building and leasehold $ 20,990 $ 8,901 $ (3,386) $1,025 $ 27,530
improvements
Manufacturing and 29,915 10,748 (8,618) 1,163 33,208
demonstration equipment
Furniture and fixtures 21,658 8,093 (5,348) 459 24,862
-------- ------- -------- ------ --------
Total $ 72,563 $27,742 $(17,352) $2,647 $ 85,600
======== ======= ======== ====== ========
** Includes foreign currency translation adjustments.
25
26
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS
(In thousands)
Balance at Additions- Balance
beginning Charged Deduction- at end
of year to income Recoveries of year
---------- --------- ---------- -------
As of:
October 30, 1994 $ 487 $875 $ (273) $1,089
October 31, 1993 $1,171 $663 $(1,347) $ 487
October 25, 1992 $1,158 $387 $ (374) $1,171
26
27
SCHEDULE IX
SHORT-TERM BORROWINGS
BANK BORROWINGS
(In thousands)
1994 1993 1992
------- ------- -------
Balance at end of year $43,081 $41,645 $27,449
Weighted average interest rate
at end of year 3.0% 4.1% 5.3%
Maximum amount outstanding
during the year $62,443 $50,243 $51,192
Average amount outstanding
during the year * $47,336 $40,875 $34,975
Weighted average interest rate
during the year ** 3.4% 5.3% 6.6%
* An average amount outstanding for each week was calculated, and an
average of the averages was calculated for the year.
** Total annual interest expense related to short-term borrowings was
divided by the average amount of borrowings outstanding during the
year.
27
28
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(In thousands)
Charged to Costs and Expenses
-----------------------------
Item 1994 1993 1992
---- ---- ------- ------
Maintenance and repairs * $11,676 $8,923
* Maintenance and repairs expense was less than 1% of revenue for the year
ended October 30, 1994.
28
29
INDEX TO EXHIBITS
These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of
Regulation S-K:
Page
----
3.1 Certificate of Incorporation of Applied Materials, Inc., a Delaware corporation, as
amended to March 14, 1989, March 24, 1993, and March 22, 1994. 32
3.2 Bylaws of Applied Materials, Inc., as amended to December 7, 1994. 34
4.1 Rights Agreement, dated as of June 14, 1989, between Applied Materials, Inc. and Bank
of America NT&SA, as Rights Agent, including Form of Right Certificate and the Form
of Summary of Rights to Purchase Common Stock, previously filed with the Company's
report on Form 8-K dated June 14, 1989, and incorporated herein by reference.
4.2 Note Agreement dated as of March 1, 1991 between Applied Materials, Inc. and a group
of seven insurance companies, including the form of 9.62% Senior Notes due April 1,
1999, previously filed with the Company's Form 10-Q for the quarter ended April 28,
1991, and incorporated herein by reference.
4.3 Stock Transfer Agency Agreement, effective September 24, 1991 and signed March 9,
1992, between Applied Materials, Inc. and Harris Trust and Savings Bank, as Stock
Transfer Agent, Registrar and Rights Agent, previously filed with the Company's Form
10-K for fiscal year 1993, and incorporated herein by reference.
4.4 Form of Indenture (including form of debt security) dated as of August 24, 1994
between Applied Materials, Inc. and Harris Trust Company of California, as Trustee,
previously filed with the Company's Form 8-K on August 17, 1994, and incorporated
herein by reference.
10.1 Not used.
10.2 The 1976 Management Stock Option Plan, as amended to
October 5, 1993, previously filed with the Company's Form 10-K for fiscal year 1993,
and incorporated herein by reference.
10.3 Applied Materials, Inc., Supplemental Income Plan, as amended, including
Participation Agreements with James C. Morgan, Walter Benzing, and Robert Graham,
previously filed with the Company's Form 10-K for fiscal year 1981, and incorporated
herein by reference.
29
30
Page
----
10.4 Amendment to Supplemental Income Plan, dated July 20, 1984, previously filed with the
Company's Form 10-K for fiscal year 1984, and incorporated herein by reference.
10.5 The Applied Materials Employee Financial Assistance Plan, previously filed with the
Company's definitive Proxy Statement in connection with the Annual Meeting of
Shareholders held on March 5, 1981, and incorporated herein by reference.
10.6 The 1985 Stock Option Plan for Non-Employee Directors, previously filed with the
Company's Form 10-K for fiscal year 1985, and incorporated herein by reference.
10.7 Amendment 1 to the 1985 Stock Option Plan for Non-Employee Directors dated June 14,
1989, previously filed with the Company's Form 10-K for fiscal year 1989, and
incorporated herein by reference.
10.8 Applied Materials, Inc. Supplemental Income Plan as amended to
December 15, 1988, including participation agreement with James C. Morgan, previously
filed with the Company's Form 10-K for fiscal year 1988, and incorporated herein by
reference.
10.9 Not used.
10.10 License agreement dated January 1, 1992 between the Company and
Varian Associates, Inc., previously filed with the Company's Form 10-K for fiscal
year 1992, and incorporated herein by reference.
10.11 The Applied Materials, Inc. Executive Deferred Compensation Plan dated July 1, 1993
and as amended on September 2, 1993, previously filed with the Company's Form 10-Q
for the quarter ended August 1, 1993, and incorporated herein by reference.
10.12 Amendment dated December 9, 1992 to Applied Materials, Inc. Supplemental Income Plan
dated June 4, 1981 (as amended to December 15, 1988), previously filed with the
Company's Form 10-K for fiscal year 1993, and incorporated herein by reference.
10.13 Amendment No. 2 to Applied Materials, Inc. 1985 Stock Option Plan for Non-Employee
Directors, dated September 10, 1992, previously filed with the Company's Form 10-K
for fiscal year 1993, and incorporated herein by reference.
30
31
Page
----
10.14 Amendment No. 3 to Applied Materials Inc. 1985 Stock Option Plan for Non-Employee
Directors, dated October 5, 1993, previously filed with the Company's Form 10-K for
fiscal year 1993, and incorporated herein by reference.
10.15 Joint Venture Agreement between Applied Materials, Inc. and Komatsu Ltd. dated
September 14, 1993 and exhibits thereto, previously filed with the Company's Form 10-K
for fiscal year 1993, and incorporated herein by reference. (Confidential treatment
has been requested for certain portions of the agreement.)
10.16 Amendment No. 4 to Applied Materials Inc. 1985 Stock Option Plan for Non-Employee
Directors, dated December 8, 1993, previously filed with the Company's Form 10-Q for the
quarter ended May 1, 1994, and incorporated herein by reference.
10.17 Amendment No. 2 to the Applied Materials, Inc. Executive Deferred Compensation Plan,
dated May 9, 1994, previously filed with the Company's Form 10-Q for the quarter ended
May 1, 1994, and incorporated herein by reference.
10.18 Applied Komatsu Technology, Inc. 1994 Executive Incentive Stock Purchase Plan, together
with forms of Promissory Note, 1994 Executive Incentive Stock Purchase Agreement, Loan
and Security Agreement, previously filed with the Company's Form 10-Q for the quarter
ended July 31, 1994, and incorporated herein by reference.
10.19 Underwriting agreement between the Company and several underwriters in connection with 53
the sale of 2,300,000 shares of the Company's common stock dated March 16, 1994.
10.20 Underwriting agreement between the Company and several underwriters 69
dated August 24, 1994 related to the sale by the Company of $100 million aggregate amount
of 8% senior notes.
10.21 $125,000,000 Credit agreement dated as of September 8, 1994 between Applied Materials and 84
a group of seven banks.
13. Applied Materials 1994 Annual Report for the fiscal year ended October 30, 1994 (to the 193
extent expressly incorporated by reference).
21. Subsidiaries of Applied Materials, Inc. 215
23. Consent of Independent Accountants. 216
24. Power of Attorney. 217
31