DEF 14A of Applied Materials Inc /De, Jan 24, 2024

DEF 14A of Applied Materials Inc /De

Filed Jan 24, 2024 · FY20230001193125-24-014287

Open on EDGAR

  1. Director Nominees

    Director Nominees

  2. Director Nominees

    | Name and Occupation | Age | Director Since | Independent | Committees | | Rani Borkar Corporate Vice President, Azure Hardware Systems and Infrastructure, Microsoft Corporation | 62 | 2020 | | Compensation Strategy and Investment | | Judy Bruner Executive Vice President, Administration and Chief Financial Officer, SanDisk Corporation (retired) | 65 | 2016 | | Audit (Chair) Governance (Chair) | | Xun (Eric) Chen Executive Chairman, ParityBit Technologies, Inc. | 54 | 2015 | | Compensation Strategy and Investment | | Aart J. de Geus Executive Chair of the Board of Directors, Synopsys, Inc. | 69 | 2007 | | Strategy and Investment | | Gary E. Dickerson President and Chief Executive Officer, Applied Materials, Inc. | 66 | 2013 | | | | Thomas J. Iannotti Senior Vice President and General Manager, Enterprise Services, Hewlett-Packard Company (retired) | 67 | 2005 | | Compensation (Chair) | | Alexander A. Karsner Senior Strategist, X (parent company: Alphabet Inc.) | 56 | 2008 | | Compensation Governance | | Kevin P. March Senior Vice President, Chief Financial Officer, Texas Instruments, Incorporated (retired) | 66 | 2022 | | Audit | | Yvonne McGill Chief Financial Officer, Dell Technologies Inc. | 56 | 2019 | | Audit Governance | | Scott A. McGregor President and Chief Executive Officer, Broadcom Corporation (retired) | 67 | 2018 | | Strategy and Investment (Chair) Audit |

  3. Director Nominees

    | ii | APPLIED MATERIALS, INC. 2024 PROXY STATEMENT |

  4. Board Practices and Composition

    Board Practices and Composition Ensuring the Board is composed of directors who possess a wide variety of relevant skills, professional experience and backgrounds, bring diverse viewpoints and perspectives, and effectively represent the long-term interests of shareholders is a top priority of the Board and the Corporate Governance and Nominating Committee (the “Governance Committee”). Our Board composition reflects strong Board practices that support regular refreshment based on our board needs, evolving strategy, and proactive succession planning.

  5. Director Nominee Expertise

    Director Nominee Expertise

  6. Fiscal 2019 – Fiscal 2023 Total Shareholder Return vs. S&P 500 and Proxy Peers(1)

    | 1 | Reflects results from October 28, 2018 through October 29, 2023. Proxy peer data reflects the companies in Applied’s current compensation peer group approved by the HRCC in June 2023, as described on page 39, weighted by market capitalization. |

  7. Key Compensation Actions

    Key Compensation Actions Performance-Based Compensation Decisions. The HRCC approved an aggressive set of performance goals for the executive officers for fiscal 2023, including challenging financial and operational targets despite a difficult external landscape, including macro-economic uncertainty, a complex geopolitical environment and an anticipated down year for the wafer fabrication equipment market. During fiscal 2023, Applied delivered exceptional financial and operational results, meeting or exceeding most of its stretch objectives for the year in a continuing challenging environment, and made meaningful progress towards our long-term strategic goals that remain focused on enabling strong longer-term revenue and EPS growth. As a result, bonus payouts for the executive officers were, on average, modestly above target. No adjustments were made during the year to the performance goals or to the Company’s results used in determining incentive payouts. As part of our multi-year incentive program, for the period of fiscal 2021 through 2023, the HRCC approved challenging goals for non-GAAP adjusted operating margin and relative total shareholder return. The results for this three-year performance period significantly exceeded target performance levels, resulting in above-target vesting of performance share unit awards granted to our executive officers in fiscal 2021.

  8. Primary Compensation Elements and Executive Compensation Highlights for Fiscal 2023

    | Element of Pay | Structure | Highlights | | Base Salary (see page 40) | » Fixed cash compensation for performing expected day-to-day responsibilities » Reviewed annually and adjusted as appropriate, based on scope of responsibility, performance, time in role, experience, and competitive market for executive talent | » Reflecting (i) continued strong performance across the business, driven by our executive leadership, (ii) the continued growth in the size and complexity of the Company and (iii) continued demand for proven executive talent among technology companies, in fiscal 2023, the HRCC approved salary increases for three of our NEOs ranging from 5% to 9.5% » Reflecting the increased responsibilities of his role assumed in late fiscal 2022, the HRCC approved a salary increase of 37% for Mr. Deane for fiscal 2023 » Reflecting the HRCC’s belief that CEO compensation should be predominantly tied to long-term results, the Committee has not increased the salary for our CEO since December 2018 | | Annual Incentive Bonus (see page 40) | » Variable cash compensation » Based on performance compared to pre-established financial, operational, strategic and individual performance objectives » Includes assessment of the Company’s progress towards sustainability goals » Financial and non-financial metrics provide a comprehensive assessment of executive performance » Performance metrics evaluated annually to maintain continued alignment with strategy and market practice » NEO annual incentives determined through a three-step performance assessment process: | » No increase in target bonus as a percentage of base salary from fiscal 2022 to fiscal 2023 for any of the NEOs, with the exception of Mr. Deane, to reflect his new role » The initial performance hurdle for fiscal 2023 was $6.00 of non-GAAP adjusted EPS, requiring continued strong financial performance. Actual non-GAAP adjusted EPS for fiscal 2023 was $8.05 » Because the initial performance hurdle was met, annual bonuses for the NEOs were based on (i) the Company’s results as compared to the objective and quantifiable business and strategic goals in the corporate scorecard and (ii) an assessment of individual performance results as compared to quantitative and strategic objectives » Resulting payouts ranged from 98% to 108% of target for our NEOs • Corporate scorecard modifiers ranged from 0.893x to 0.980x (see corporate scorecard information on pages 42 and 43) • Individual performance modifiers were set at 1.1x for each of the NEOs (see individual performance factor details on page 44) | | Long-Term Incentives (see page 47) | » Significant portion delivered through performance share units (PSUs), to establish rigorous long-term performance alignment » Balance of award delivered in restricted stock units (RSUs) to provide a strong tie to shareholder value and enhance retention » PSUs vest based 50% on achievement of 3-year non-GAAP adjusted operating margin goal and 50% on 3-year TSR relative to the members of the S&P 500 Index » PSUs vest at end of 3-year performance period, based on achievement of performance goals; RSUs vest ratably over 3 years | » The target mix of long-term incentive awards consists of 75% PSUs and 25% RSUs for the CEO and 50% PSUs and 50% RSUs for the other NEOs » Non-GAAP adjusted operating margin is a key measure of our Company’s long-term success » Relative TSR incentivizes management to outperform the market in any business environment |

  9. Pay Mix

    Pay Mix In fiscal 2023, a significant portion of our executives’ compensation consisted of variable compensation and long-term incentives. As illustrated below, 96% of CEO compensation for fiscal 2023 consisted of variable compensation elements, and 90% of CEO compensation was delivered in long-term incentive awards with multi-year vesting.

  10. Pay Mix

    | 1 | Represents total direct compensation for fiscal 2023, including the grant date fair value of annual long-term incentive awards. |

  11. Summary of 2023 Total Direct Compensation

    Summary of 2023 Total Direct Compensation The following table summarizes elements of annual total direct compensation for our NEOs for fiscal 2023, consisting of (1) base salary received during the year, (2) actual annual incentive bonus payout and (3) long-term incentive awards (the grant date fair value of stock awards). This table excludes amounts not considered by the HRCC to be annual total direct compensation, such as certain other amounts required by the SEC to be reported in the “All Other Compensation” column in the Summary Compensation Table (see page 54 of this Proxy Statement).

  12. Summary of 2023 Total Direct Compensation

    | Name and Principal Position | Salary ($) | Annual Incentive Bonus ($) | Annual Long-Term Incentive Award ($) | Total ($) | | Gary E. Dickerson President and Chief Executive Officer | 1,030,000 | 1,631,520 | 23,951,048 | 26,612,568 | | Brice Hill Senior Vice President, Chief Financial Officer and Global Information Services | 708,846 | 1,019,304 | 5,530,849 | 7,258,999 | | Prabu G. Raja President, Semiconductor Products Group | 740,000 | 1,091,475 | 6,636,826 | 8,468,301 | | Omkaram Nalamasu Senior Vice President, Chief Technology Officer | 625,385 | 742,203 | 4,037,503 | 5,405,091 | | Timothy M. Deane Group Vice President, Applied Global Services | 574,947 | 733,590 | 3,097,266 | 4,405,803 |

  13. PROPOSAL 1 – Election of Directors

    PROPOSAL 1 – Election of Directors

  14. Nominees

    Nominees Applied’s Board of Directors is elected each year at the Annual Meeting of Shareholders. Applied currently has ten directors. Upon the recommendation of the Governance Committee, the Board has nominated the ten individuals listed below for election at the Annual Meeting, each of whom currently serves as a director of Applied. These nominees bring a wide variety of relevant skills, professional experience and backgrounds, as well as diverse viewpoints and perspectives to represent the long-term interests of shareholders and to fulfill the leadership and oversight responsibilities of the Board. If any nominee listed below becomes unable to stand for election at the Annual Meeting, the persons named as proxies may vote for any person designated by the Board to replace the nominee. Alternatively, the proxies may vote for the remaining nominees and leave a vacancy that the Board may fill later, or the Board may reduce the authorized number of directors. As of the date of this Proxy Statement, the Board is not aware of any nominee who is unable or will decline to serve as a director. Each director elected at the Annual Meeting will serve until Applied’s 2025 Annual Meeting of Shareholders or until they are succeeded by another qualified director who has been elected, or, if earlier, until their death, resignation, or removal.

  15. Nominees

    | | The Board recommends that you vote FOR each of the following director nominees |

  16. Nominees

    | | Rani Borkar Corporate Vice President, Azure Hardware Systems and Infrastructure, Microsoft Corporation Ms. Borkar brings extensive semiconductor industry experience to our Board in technology, strategy and innovation, and global business operations and services. Ms. Borkar has served as Corporate Vice President, Azure Hardware Systems and Infrastructure, at Microsoft Corporation, a global technology provider, since June 2019. She also served as Microsoft’s Corporate Vice President, Microsoft Cloud Capacity, Supply Chain and Provisioning, from 2017 to June 2019. From 2016 to 2017, Ms. Borkar was Vice President, OpenPOWER Development at IBM Corporation, a global technology and consulting company. Prior to IBM, Ms. Borkar worked at Intel Corporation for 27 years, most recently as Intel’s Corporate Vice President and General Manager, Product Development Group. Key skills and qualifications Industry and Technology: Ms. Borkar has gained over 30 years of experience in our industry and related technologies. This experience includes her current leadership role at Microsoft Azure and prior roles at IBM and Intel. Ms. Borkar also serves as a board member of the Global Semiconductor Alliance, a leading semiconductor and technology industry organization which strives to establish a profitable and sustainable semiconductor ecosystem. Strategy and Innovation; Executive Leadership; Growth and Emerging Technologies; Global Business: Each role in Ms. Borkar’s career has featured increased responsibility and accountability for strategic planning and oversight in a broad range of global, high-growth businesses. As the head of Azure Hardware Systems and Infrastructure, she leads organizations that architect, invent, and sustain the silicon, platforms, and systems that power Azure. She is responsible for the vision, strategy, and architecture of silicon development as well as global capacity deployment for Microsoft’s cloud data center infrastructure. Ms. Borkar’s other relevant experience includes her role as Corporate Vice President at Intel, leading Intel’s silicon product development strategy while managing a large and diverse global engineering organization. Service, Operations and Manufacturing: Under Ms. Borkar’s leadership in her current role, Microsoft’s engineers focus on developing technologies to drive end-to-end business value for Azure’s products and solutions. Her experience with and understanding of service management and service offerings for technology companies, manufacturing operations and other operational processes provide important insights to our Board. | | INDEPENDENT Age: 62 Director Since: 2020 Board Committees • Human Resources and Compensation • Strategy and Investment Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None Other Directorships and Memberships • Board member, Global Semiconductor Alliance | |

  17. Nominees

    | | Judy Bruner Executive Vice President, Administration and Chief Financial Officer, SanDisk Corporation (retired) Ms. Bruner has deep financial, accounting and strategic planning expertise, as well as global operations and leadership experience, that provides valuable insights and contributions to our Board. Ms. Bruner is the former Executive Vice President, Administration and Chief Financial Officer of SanDisk Corporation, a supplier of flash storage products, a role she held from 2004 until its acquisition by Western Digital in 2016. Previously, she was Senior Vice President and Chief Financial Officer of Palm, Inc., a provider of handheld computing and communications solutions, from 1999 until 2004. Prior to Palm, Inc., Ms. Bruner held financial management positions at 3Com Corporation, Ridge Computers and Hewlett-Packard Company. Key skills and qualifications Executive Leadership; Financial and Accounting; Strategy and Innovation; Global Business: Ms. Bruner’s career has been distinguished by roles of increasing responsibility in and oversight of financial management. These roles included serving as Chief Financial Officer at SanDisk Corporation and Palm, Inc. Ms. Bruner’s experience also included setting corporate strategy and diversifying businesses into new product areas that are less cyclical and less capital intensive, while focusing on the core business. Her prior roles in finance also included positions at 3Com, Ridge Computers and Hewlett-Packard. Industry and Technology: Ms. Bruner’s career has been centered in the technology sector, giving her particular insight into the challenges and opportunities of our sector and industry, as well as our end markets. Ms. Bruner’s extensive experience in the semiconductor industry at SanDisk provided an understanding of the capital intensity, business cycles, customers and engineering requirements of the semiconductor equipment business, which she brings to our Board. Risk Management; Cybersecurity: In Ms. Bruner’s role at SanDisk, she was responsible for the firm’s enterprise risk management and information technology, including cybersecurity. As a director, Ms. Bruner oversees enterprise risk management and cybersecurity at all the companies on which she currently serves as a board member, including at Rapid7, a security data and analytics solutions provider. She brings valuable insights from this experience to our Board to facilitate its oversight and considerations of these important topics. | | INDEPENDENT Age: 65 Director Since: 2016 Board Committees • Audit (Chair) • Corporate Governance and Nominating (Chair) Other Current Public Company Directorships • Qorvo, Inc. • Rapid7, Inc. • Seagate Technology plc Former Public Company Directorships (within last five years) • Varian Medical Systems, Inc. | |

  18. Nominees

    | | Xun (Eric) Chen Executive Chairman, ParityBit Technologies, Inc. Dr. Chen has extensive experience establishing, working for and investing in companies in the technology sector and related industries. Since August 2023, Dr. Chen has been Executive Chairman of ParityBit Technologies, Inc. (“ParityBit”), a data technology company he co-founded. From 2018 to August 2023, Dr. Chen was a Managing Partner of SB Investment Advisers (“SBIA”), an investment adviser focused on investments in the technology sector. Prior to joining SBIA, Dr. Chen was the Chief Executive Officer and Co-Founder of ParityBit. He served as CEO of ParityBit since it was founded in 2015, except from 2016 until 2017, when ParityBit was a portfolio company of Team Curis Group, a group of integrated biotechnology and data technology companies and laboratories, during which time Dr. Chen served as CEO of Team Curis Group. From 2008 to 2015, Dr. Chen served as a managing director of Silver Lake, and prior to Silver Lake, he was a senior vice president and member of the executive committee of ASML Holding N.V. Dr. Chen joined ASML following its 2007 acquisition of Brion Technologies, Inc., a company he co-founded in 2002 and served as Chief Executive Officer. Prior to Brion Technologies, Dr. Chen was a senior vice president at J.P. Morgan. Key skills and qualifications Industry and Technology; Strategy and Innovation; Growth and Emerging Technologies: Dr. Chen’s career has focused on the technology sector, and he provides his expertise on our industry, technologies and end markets in the boardroom. Dr. Chen is currently Executive Chairman of ParityBit, a technology company focused on leveraging the power of Big Data, AI technologies, and privacy computing. His other relevant experiences have included serving as a Managing Partner of SBIA, an investment adviser focused on investments in the technology sector, serving as a managing director at Silver Lake, a leading private investment firm focused on technology-enabled and related growth industries, and founding and serving as CEO of Brion Technologies, a firm working in computational lithography for integrated circuits in semiconductor manufacturing. Executive Leadership; Global Business: The Board values Dr. Chen’s perspective gained through his various leadership roles at firms with global operations. For example, Dr. Chen is currently the Executive Chairman, and prior to joining SBIA was the CEO and Co-Founder, of ParityBit. Dr. Chen grew ParityBit’s presence globally, including throughout the Asia Pacific Region. Prior to this, Dr. Chen worked at ASML Holding N.V., an industrial manufacturer for chipmakers in the semiconductor industry that is headquartered in The Netherlands and has 60 locations globally. | | INDEPENDENT Age: 54 Director Since: 2015 Board Committees • Human Resources and Compensation • Strategy and Investment Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None | |

  19. Nominees

    | | Aart J. de Geus Executive Chair of the Board of Directors, Synopsys, Inc. Dr. de Geus has extensive executive leadership experience and provides the Board his deep expertise in our industry, technology and corporate strategy. Dr. de Geus currently serves as Executive Chair of the Board of Directors of Synopsys, Inc., the leading provider of electronic design automation software, design IP and related services for semiconductor design companies. Since founding Synopsys in 1986, Dr. de Geus has held various positions at the company, including serving as Chief Executive Officer or co-Chief Executive Officer from 1994 to January 2024, Chairman of the Board from 1998 to January 2024, Senior Vice President of Engineering and Senior Vice President of Marketing. Prior to founding Synopsys, Dr. de Geus was employed by General Electric, where he was the Manager of the Advanced Computer-Aided Engineering Group. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business; Risk Management: As the leading founder of Synopsys, Dr. de Geus has grown Synopsys for over three and a half decades and has held senior roles in engineering and marketing before becoming Chief Executive Officer and subsequently Executive Chair of the Board. He has been involved in all aspects of executive leadership at Synopsys, including determining corporate strategy, overseeing enterprise risk management, closing well over a hundred strategic acquisitions and transactions, and expanding the operations globally. Synopsys now has offices and development centers in North America, Europe, Armenia, Israel, India, Japan, Vietnam, South Korea and China. Growth and Emerging Technologies; Government Policy and Sustainability: Dr. de Geus has expanded Synopsys from a start-up synthesis company to a global high-tech leader in electronic design automation. He has long been considered one of the world’s leading experts on logic synthesis and simulation, frequently keynotes major conferences, is a member of the National Academy of Engineering and the recipient of numerous awards including the IEEE Robert N. Noyce Medal, the Global Semiconductor Alliance Dr. Morris Chang Exemplary Leadership Award, and the Silicon Valley Leadership Group Lifetime Achievement Award. As a longtime CEO, Dr. de Geus has experience in government policy, such as the CHIPS Act and evolving international export controls, as well as driving sustainability initiatives in the context of regulatory requirements and stakeholder input. | | INDEPENDENT Age: 69 Director Since: 2007 Board Committees: • Strategy and Investment Other Current Public Company Directorships: • Synopsys, Inc. Former Public Company Directorships (within last five years): • None Other Directorships and Memberships • Executive Board Member and Past Chairman, Silicon Valley Leadership Group • Board Member, Global Semiconductor Alliance • Governing Council Member, Electronic System Design Alliance | |

  20. Nominees

    | | Gary E. Dickerson President and Chief Executive Officer, Applied Materials, Inc. Mr. Dickerson has been President of Applied Materials since 2012 and Chief Executive Officer and a member of the Board of Directors since 2013. Mr. Dickerson joined Applied following its acquisition in 2011 of Varian Semiconductor Equipment Associates, Inc., a supplier of semiconductor manufacturing equipment. Mr. Dickerson had served as Chief Executive Officer and a director of Varian since 2004. Prior to joining Varian in 2004, Mr. Dickerson served 18 years with KLA-Tencor Corporation, a supplier of process control and yield management solutions for the semiconductor and related industries, where he held a variety of roles, including President and Chief Operating Officer. Mr. Dickerson started his semiconductor career in manufacturing and engineering management at General Motors’ Delco Electronics Division and AT&T Technologies, Inc. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business; Risk Management: Mr. Dickerson has over three decades of experience in executive-level positions at large multi-national companies in the semiconductor and technology industries, including nearly two decades as a chief executive officer at Varian and Applied. Mr. Dickerson’s knowledge of our industry, technologies and end markets provides important insight and leadership to the oversight, planning and execution of our business strategy and operations. At Applied, this has resulted in the company being the world’s leading semiconductor and display equipment company with over $26 billion in annual revenues and operations in 150 cities in 24 countries. Growth and Emerging Technologies; Service, Sales and Operations; Government Policy and Sustainability: Throughout Mr. Dickerson’s career, he has held roles responsible for identifying and developing emerging technologies and service offerings for the semiconductor industry. This includes his first roles in manufacturing and engineering management with General Motors’ Delco Electronics Division and AT&T Technologies, 18 years at KLA-Tencor, progressing from roles in product development and general management of products, sales and services business units to his appointment as President and Chief Operating Officer, and to his leadership and contributions as Chief Executive Officer at Varian and Applied. Mr. Dickerson has government policy experience in guiding Applied through the geopolitical and regulatory environment, as well as from his service as a board of member of the U.S.-China Business Council. Mr. Dickerson’s experience in sustainability stems from his deep involvement in developing Applied’s sustainability roadmap and championing its sustainability initiatives. Mr. Dickerson draws on these experiences to provide leadership and insight in guiding our core semiconductor business, and as we develop new technologies and services to enable significant value creation for our customers and Applied. | | EXECUTIVE DIRECTOR Age: 66 Director Since: 2013 Board Committees • None Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None Other Directorships and Memberships • Board Member, U.S. – China Business Council | |

  21. Nominees

    | | Thomas J. Iannotti Senior Vice President and General Manager, Enterprise Services, Hewlett-Packard Company (retired) Mr. Iannotti serves as the Chairman of the Board of Applied. Mr. Iannotti has extensive leadership experience at global firms where he gained invaluable expertise in service management, offerings for technology companies, and operational processes. He served as Senior Vice President and General Manager, Enterprise Services, for Hewlett-Packard Company, a technology solutions provider to consumers, businesses, and institutions globally, from 2009 until his retirement in 2011. Prior to that role, Mr. Iannotti held various executive positions at Hewlett-Packard, including Senior Vice President and Managing Director, Enterprise Business Group, Americas. Mr. Iannotti also worked at Digital Equipment Corporation, a vendor of computer systems and software, and at Compaq Computer Corporation, a supplier of personal computing systems, following its acquisition of Digital Equipment Corporation. Key skills and qualifications Industry and Technology; Executive Leadership; Strategy and Innovation; Global Business: Mr. Iannotti had a distinguished three-decade career managing large, complex global businesses in the electronics and technology industries. He held numerous executive positions at Hewlett-Packard, with his final role as Senior Vice President and General Manager, Enterprise Services, responsible for driving profitable revenue growth and customer satisfaction across the globe. Mr. Iannotti also chaired the Americas Leadership Team responsible for managing cross-business group strategies and developing partnerships with key Hewlett-Packard stakeholders. His other relevant experience included working at Digital Equipment Corporation, a vendor of computer systems and software, and at Compaq Computer Corporation, a supplier of personal computing systems. Service, Operations and Manufacturing; Risk Management: While at Hewlett-Packard, Mr. Iannotti was integral in setting and executing operational and service strategies for the Enterprise Services group, which supported and provided services and products for all of the company’s offerings. Mr. Iannotti’s roles also involved oversight and management of risk, and he has served as the lead independent director of the board of directors of a large, public global services company. These experiences provide important input to our Board and are an integral part of successful planning and execution of our long-term vision, including the Board’s oversight of Applied’s enterprise risk management program. | | Chairman of the Board INDEPENDENT Age: 67 Director Since: 2005 Board Committees • Human Resources and Compensation (Chair) Other Current Public Company Directorships • Rigetti Computing, Inc. Former Public Company Directorships (within last five years) • Atento S.A. | |

  22. Nominees

    | | Alexander A. Karsner Senior Strategist, X (parent company: Alphabet Inc.) Mr. Karsner has extensive global executive leadership experience as well as deep expertise in technology innovation, private equity, public policy and regulation, corporate strategy and sustainability. He is currently a Senior Strategist at X (the Moonshot Factory), the innovation lab of Alphabet Inc., and Executive Chairman of Manifest Energy Inc., an energy technology development and investment firm he founded in 2009. Mr. Karsner is also Founder of Elemental, which innovates market-based solutions and technology for conservation and environment. Key skills and qualifications Executive Leadership; Global Business: Mr. Karsner has over 30 years of experience in executive leadership positions with numerous organizations with significant global operations, including his current role at X and public company board experience at ExxonMobil. Mr. Karsner was the Founder and Managing Director of Enercorp., a company involved in international project development, management and financing of energy infrastructure. Industry and Technology; Growth and Emerging Technologies; Strategy and Innovation: Mr. Karsner currently serves as Senior Strategist at X, which has catalyzed technologies for autonomous vehicles, drone delivery and industrial robotics. From 2016 to 2019, Mr. Karsner served as Managing Partner of Emerson Collective, an investment platform funding venture and private equity portfolios, as well as non-profit, philanthropic investments advancing education, immigration, health and the environment. As a private equity investor, venture partner and strategic advisor, Mr. Karsner’s portfolios have included some of the most innovative startups over the last 15 years, such as Nest (AI), Tesla (mobility), Recurrent (solar), Codexis (biotech), Boom (aerospace) and Carbon (3-D printing). Government Policy and Sustainability: Mr. Karsner has extensive experience in government policy and relations, and offers our Board valuable insight into the regulatory environment. From 2006 to 2008, he served as Assistant Secretary for Energy Efficiency and Renewable Energy at the U.S. Department of Energy, responsible for multi-billion dollar federal applied science R&D programs and national labs. In this role, he helped assemble significant bipartisan coalitions to implement the Energy Policy Act and enact the Energy Independence and Security Act and the America Competes Act. Mr. Karsner was a U.S. Principal representative to the United Nations Framework Convention on Climate Change and a delegate to the bilateral U.S.-China and U.S.-India Track II dialogues on Climate Change, and is a member of the Council on Foreign Relations and the Trilateral Commission. Mr. Karsner also serves on the board of Conservation International and is a member of the boards of advisors of the Energy Futures Initiative, MIT Media Lab and the Precourt Institute for Energy at Stanford University. With these experiences, Mr. Karsner brings a valuable perspective to our Board’s oversight of sustainability, government relations and public policy engagement strategies. | | INDEPENDENT Age: 56 Director Since: 2008 Board Committees • Corporate Governance and Nominating • Human Resources and Compensation Other Current Public Company Directorships • Exxon Mobil Corporation Former Public Company Directorships (within last five years) • Broadscale Acquisition Corp. Other Directorships and Memberships • Board Member of Conservation International • Advisory Board Member of: Energy Futures Initiative; Precourt Institute for Energy, Stanford University; MIT Media Lab | |

  23. Nominees

    | | Kevin P. March Senior Vice President, Chief Financial Officer of Texas Instruments, Incorporated (retired) Mr. March brings deep semiconductor industry experience, strong financial expertise, and executive leadership to our Board. Mr. March joined Texas Instruments Incorporated, a global semiconductor company, in 1984 and built a career of varying positions of increasing responsibility over his 33-year tenure at the company. He was appointed Controller in 2002 and was named Chief Financial Officer in 2003. Key skills and qualifications Industry and Technology; Strategy and Innovation; Service, Operations and Manufacturing; Global Business: Mr. March was a longtime executive of Texas Instruments, with extensive experience in the semiconductor industry. Mr. March held numerous roles in finance, operations and business management across corporate and business unit functions during his career at Texas Instruments. Mr. March’s leadership was instrumental in shaping Texas Instruments into a focused semiconductor company, including his role in the formation of the company’s global Analog Semiconductor segment, which became the world’s largest analog semiconductor business. Executive Leadership; Financial and Accounting; Risk Management: From 2003 to 2017, Mr. March served as Senior Vice President and Chief Financial Officer of Texas Instruments, where he led its finance organization and developed the company’s capital management strategy and was also responsible for executive management of the company’s global information technology services, procurement, logistics, facilities, and operations planning. In addition to being a member of the company’s management committee, Mr. March was a member of its strategic leadership team. At Texas Instruments, Mr. March led the company’s assessment and management of strategic, financial and operational risks, including facilitating the oversight of risk management processes by the company’s board of directors. Given the breadth and scope of its businesses and range of strategic, operational, financial and compliance risks, Mr. March’s experience at Texas Instruments positions him well to provide Applied with guidance across our risk landscape. | | INDEPENDENT Age: 66 Director Since: 2022 Board Committees: • Audit Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None | |

  24. Nominees

    | | Yvonne McGill Chief Financial Officer, Dell Technologies Inc. Ms. McGill has extensive executive leadership experience and provides the Board deep industry expertise, financial acumen, and strategic planning experience. She has been Chief Financial Officer of Dell Technologies Inc. (“Dell”), a leading global end-to-end technology provider, since August 2023, and previously held various leadership positions at Dell since joining the company in 1997, including corporate controller and CFO of the Infrastructure Solutions Group, CFO of Asia-Pacific, Japan and China business, and Chief Accounting Officer. Key skills and qualifications Executive Leadership; Financial and Accounting; Strategy and Innovation; Risk Management: Since joining Dell in 1997, Ms. McGill has served in various finance leadership roles, including her current role as Chief Financial Officer. At Dell, Ms. McGill oversees all aspects of the company’s finance function, including accounting, financial planning and analysis, tax, treasury and investor relations, as well as corporate development, global business operations and Dell financial services. She also partners closely with the office of Dell’s CEO to develop and execute a long-term strategy that creates value for Dell’s stakeholders. Prior to Dell, Ms. McGill worked at ManTech International Corporation and Price Waterhouse. Ms. McGill is a Certified Public Accountant (inactive). Industry and Technology; Global Business: During her over 26-year career at Dell, Ms. McGill has gained experience across the company’s comprehensive portfolio of IT hardware, software and service solutions spanning both traditional infrastructure and emerging, multi-cloud technologies. Ms. McGill’s deep knowledge and expertise in the technology sector, including with regards to our end-users and the markets in which we compete, offer valuable insights to our Board. | | INDEPENDENT Age: 56 Director Since: 2019 Board Committees: • Audit • Corporate Governance and Nominating Other Current Public Company Directorships • None Former Public Company Directorships (within last five years) • None | |

  25. Nominees

    | | Scott A. McGregor President and Chief Executive Officer, Broadcom Corporation (retired) Mr. McGregor brings to our Board executive leadership and deep experience working in the semiconductor and technology industries over many decades. Mr. McGregor served as President and Chief Executive Officer and as a member of the board of directors of Broadcom Corporation, a world leader in wireless connectivity, broadband and networking infrastructure, from 2005 until the company was acquired by Avago Technologies Limited in 2016. Mr. McGregor joined Broadcom from Philips Semiconductors (now NXP Semiconductors), where he was President and Chief Executive Officer. He previously served in a range of senior management positions at Santa Cruz Operation Inc., Digital Equipment Corporation (now part of HP), Xerox Corporation’s Palo Alto Research Center (PARC) and Microsoft, where he was the architect and development team leader for Windows 1.0. Key skills and qualifications Industry and Technology; Executive Leadership; Global Business: Mr. McGregor was CEO of Philips Semiconductors (now NXP Semiconductors), headquartered in the Netherlands, where he oversaw one of the world’s largest semiconductor suppliers. Mr. McGregor was also President and CEO of Broadcom, where he was responsible for guiding the strategic direction of the company, business development and day-to-day operations. Growth and Emerging Technologies; Strategy and Innovation: Throughout his career, Mr. McGregor held strategic roles developing new technologies and growing businesses in new directions. Mr. McGregor started his career at Xerox PARC working on user interface design for the world’s first personal computers. He then joined Microsoft and led the team that created the first version of Microsoft Windows. After pivoting to the semiconductor industry, Mr. McGregor continued to lead through technological innovation at both Broadcom and Philips, expanding each company’s footprint and offerings. At Broadcom, Mr. McGregor led revenue growth from $2.4 billion to over $8 billion during his tenure as CEO. Financial and Accounting; Cybersecurity; Risk Management: As CEO of Broadcom and Philips for approximately 15 years, Mr. McGregor had oversight responsibility for financing activities, risk management and cybersecurity at large companies within the semiconductor industry. As a result of these experiences, as well as oversight of cybersecurity as a board member at Equifax, Mr. McGregor brings invaluable insights in these areas to our Board. | | INDEPENDENT Age: 67 Director Since: 2018 Board Committees: • Audit • Strategy and Investment (Chair) Other Current Public Company Directorships • Equifax, Inc. Former Public Company Directorships (within last five years) • Luminar Technologies, Inc. | |

  26. Board Composition and Refreshment

    | » | Commitment to representing the long-term interests of Applied’s shareholders. |

  27. Board Leadership

    | » | Providing direct guidance to the CEO, including advising on executing the Company’s long-term strategy |

  28. Board Leadership

    | » | Leading, along with the members of the HRCC and the other independent directors, the annual performance review of the CEO |

  29. Shareholder Engagement

    Responsiveness to 2023 Shareholder Proposal to Lower the Threshold to Call a Special Meeting. In response to the support received at our 2023 annual meeting for the shareholder proposal requesting that we lower the ownership threshold required to call a special meeting to 10%, and at the direction of our Governance Committee, we asked our shareholders about their views on our special meeting right during our off-season outreach discussed above. The feedback we received from our shareholders on this topic was reviewed and discussed with our Governance Committee and the Board. After careful consideration of the results of the 2023 proposal and the shareholder feedback we received, as well as a review of market practices and provisions adopted by other companies with respect to the right to call a special meeting, in December 2023, the Board approved an amendment and restatement of our Bylaws to lower the ownership threshold required to call a special meeting from 20% to 10%. Adjusted Pay Equity Disclosure. During our regular engagement, we have heard from certain shareholders that additional quantitative disclosure regarding employee pay equity would be beneficial. This feedback was reviewed with and considered by the HRCC and the Governance Committee. In response to this feedback, and as part of our continued commitment to enhanced transparency and accountability, we recently published adjusted pay ratios by gender for our employees, both globally and in the U.S., as well as the adjusted pay ratio comparing compensation for minorities with non-minorities in the U.S. In each instance, the ratio is based on total compensation, consisting of base salary, cash bonus and equity awards, and in alignment with our compensation philosophy, accounts for factors such as employees’ roles, organizational levels and geographic locations. These adjusted pay ratios are disclosed on our corporate website at: https://www.appliedmaterials.com/us/en/corporate-responsibility/people.html#payequity. We will continue to publish these ratios annually in our Sustainability Report.

  30. Equity Compensation

    Equity Compensation Initial Grant. Upon initial appointment (by the Board) or election (by the shareholders) to the Board other than at an annual meeting of shareholders, a non-employee director receives a non-discretionary grant of restricted stock units with respect to a number of shares of Applied common stock with a fair market value on the date of grant equal to $240,000 (rounded down to the nearest whole share), pro-rated based on the period starting on the day of initial appointment or election and ending on the day of the next scheduled annual meeting of shareholders. Annual Grant. Each non-employee director elected at an annual meeting receives on that date a non-discretionary grant of restricted stock units with respect to a number of shares of Applied common stock with a fair market value on the date of grant equal to $240,000 (rounded down to the nearest whole share). A non-employee director who is initially appointed or elected to the Board on the day of an annual meeting of shareholders receives only an annual grant. Each of our non-employee directors who was re-elected at the 2023 Annual Meeting received a grant of 2,050 restricted stock units on that date. Vesting. Grants made to our non-employee directors vest in full on the earlier of March 1 of the year following the date of grant or the date of the next annual meeting, provided the non-employee director remains on the Board through the scheduled vesting date. Vesting of these grants is accelerated in full upon a non-employee director’s earlier termination of service on the Board due to disability or death, or upon a change of control of Applied if the director ceases to be a non-employee director (and does not become a member of the board of directors of any successor corporation or its parent). Non-employee directors may elect in advance to defer receipt of vested shares until their termination of service on the Board. Limit on Awards. Under our amended and restated Employee Stock Incentive Plan, grants of equity awards to any individual non-employee director may not exceed a fair market value totaling more than $400,000 in any fiscal year.

  31. Director Compensation for Fiscal 2023

    Director Compensation for Fiscal 2023

  32. Director Compensation for Fiscal 2023

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | All Other Compensation ($)(3) | Total ($) | | Rani Borkar | 107,500 | 237,452 | — | 344,952 | | Judy Bruner | 157,500 | 237,452 | 3,500 | 398,452 | | Xun (Eric) Chen | 107,500 | 237,452 | — | 344,952 | | Aart J. de Geus | 95,000 | 237,452 | — | 332,452 | | Thomas J. Iannotti | 267,500 | 237,452 | 4,000 | 508,952 | | Alexander A. Karsner | 107,500 | 237,452 | — | 344,952 | | Kevin P. March | 110,000 | 237,452 | 5,000 | 352,452 | | Yvonne McGill | 120,000 | 237,452 | — | 357,452 | | Scott A. McGregor | 132,500 | 237,452 | — | 369,952 | | Adrianna C. Ma(4) | 30,357 | — | 1,000 | 31,357 |

  33. Director Compensation for Fiscal 2023

    | (1) Amounts shown do not reflect compensation actually received by the directors. Instead, these amounts represent the grant date fair value of stock awards granted in fiscal 2023 (consisting of 2,050 restricted stock units granted to each director on March 9, 2023), as determined pursuant to FASB Accounting Standards Codification 718 (“ASC 718”). The assumptions used to calculate the value of stock awards are set forth in Note 12 of the Notes to Consolidated Financial Statements included in Applied’s Annual Report on Form 10-K for fiscal 2023 filed with the SEC on December 15, 2023. |

  34. Director Compensation for Fiscal 2023

    | (2) Each director other than Ms. Ma had 2,050 restricted stock units outstanding at the end of fiscal 2023. In addition, Dr. Chen had 23,769 restricted stock units that had vested in previous years and for which settlement was deferred until the date of his termination of service from the Board. |

  35. Director Compensation for Fiscal 2023

    | (3) Amounts shown represent The Applied Materials Foundation’s and/or the Company’s matching contribution of the director’s donations/contributions to eligible non-profit organizations. |

  36. Director Compensation for Fiscal 2023

    | (4) Ms. Ma’s term of office expired upon the election of directors at the 2023 annual meeting of shareholders on March 9, 2023 and so she did not receive a stock award in fiscal 2023 for her service as a director. |

  37. Directors and Executive Officers

    Directors and Executive Officers The following table shows the number of shares of our common stock beneficially owned as of December 31, 2023 by: (1) each director and director nominee, (2) each named executive officer and (3) the current directors and executive officers as a group. In general, “beneficial ownership” refers to shares that a director or executive officer had the power to vote or the power to dispose of, and shares that such individual had the right to acquire within 60 days after December 31, 2023.

  38. Directors and Executive Officers

    | | Shares Beneficially Owned | | | Name | Number(1) | Percent(2) | | Directors, not including the CEO: | | | | Rani Borkar | 4,438(3) | * | | Judy Bruner | 29,380(4) | * | | Xun (Eric) Chen | 40,043(5) | * | | Aart J. de Geus | 106,281 | * | | Thomas J. Iannotti | 56,084 | * | | Alexander A. Karsner | 11,347 | * | | Kevin P. March | 1,178(6) | * | | Yvonne McGill | 11,820 | * | | Scott A. McGregor | 19,075 | * | | Named Executive Officers: | | | | Gary E. Dickerson | 1,414,881 | * | | Brice Hill | 16,679 | * | | Prabu G. Raja | 362,440 | * | | Omkaram Nalamasu | 120,730 | * | | Timothy M. Deane | 54,920(7) | * | | Current Directors and Executive Officers, as a Group (16 persons) | 2,366,638(8) | * |

  39. Directors and Executive Officers

    | * Less than 1% |

  40. Directors and Executive Officers

    | (1) Except as subject to applicable community property laws and as specified in the footnotes below, the persons named in the table have sole voting and investment power with respect to all of their shares of common stock. |

  41. Directors and Executive Officers

    | (2) Percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of 830,476,616 shares of common stock outstanding as of December 31, 2023, plus the number of shares of common stock that such person or group had the right to acquire within 60 days after December 31, 2023. |

  42. Directors and Executive Officers

    | (3) Consists of 4,438 shares of common stock held in a family trust for which Ms. Borkar shares voting and investment power. |

  43. Directors and Executive Officers

    | (4) Consists of 29,380 shares of common stock held in a family trust for which Ms. Bruner shares voting and investment power. |

  44. Directors and Executive Officers

    | (5) Includes 23,944 restricted stock units that have vested and which, pursuant to Dr. Chen’s election to defer, will be converted to shares of Applied common stock and paid to him on the date of his termination of service from the Applied Board. |

  45. Directors and Executive Officers

    | (6) Consists of 1,178 shares of common stock held in a family trust for which Mr. March shares voting and investment power. |

  46. Directors and Executive Officers

    | (7) Includes 8,989 restricted stock units that are scheduled to vest within 60 days after December 31, 2023. |

  47. Directors and Executive Officers

    | (8) Includes (a) 14,342 restricted stock units that are scheduled to vest within 60 days after December 31, 2023 and (b) 23,944 restricted stock units that have vested and which, pursuant to Dr. Chen’s election to defer, will be converted to shares of Applied common stock and paid to Dr. Chen on the date of his termination of service from the Applied Board. |

  48. Directors and Executive Officers

    PROPOSAL 2 – Approval, on an Advisory Basis, of the Compensation of Our Named Executive Officers PROPOSAL 2 – Approval, on an Advisory Basis, of the Compensation of Our Named Executive Officers Pursuant to Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), we are asking shareholders to approve, on a non-binding, advisory basis, the compensation of our NEOs, as described in this Proxy Statement. We seek this approval each year. Our annual “say-on-pay” proposals have been supported by our shareholders each year since we began providing this vote in 2011, and received the support of 92% of votes cast in 2023. Our Board of Directors believes that our compensation policies and practices promote a performance-based culture and align our executives’ interests with those of our shareholders through a strong emphasis on at-risk compensation tied to the achievement of performance objectives and shareholder value. Our executive compensation program is also designed to attract and retain highly-talented executives who are critical to the successful implementation of Applied’s strategic plan. Performance-Based Compensation. We align compensation with our business objectives, performance and shareholder interests. See the section titled “Overview of Compensation Program Philosophy and Governance Framework” on page 38 for a discussion of the principal objectives of our executive compensation program. Significant Portion of CEO Pay Consists of Variable Compensation and Long-Term Incentives. In fiscal 2023, 96% of our CEO’s compensation comprised variable compensation elements, and 90% of his overall compensation was delivered in equity with multi-year vesting. Performance objectives include financial and market objectives relating to adjusted operating margin, relative TSR, adjusted gross margin and wafer fabrication equipment market share, as well as other strategic and operational objectives, as described on pages 42 and 43. Please see the “Compensation Discussion and Analysis” section for further discussion of our executive compensation program and the fiscal 2023 compensation of our NEOs. We are asking our shareholders to approve the compensation of our NEOs as described in this Proxy Statement by voting in favor of the following resolution: “RESOLVED, that the shareholders approve, on a non-binding, advisory basis, the compensation paid to the Company’s named executive officers as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis section, the Summary Compensation Table, other compensation tables, narrative discussion and related disclosure.” Even though this say-on-pay vote is advisory and therefore will not be binding on the Company, the HRCC and the Board value the opinions of our shareholders, and will consider the results of the vote when making future compensation decisions for our NEOs.

  49. Directors and Executive Officers

    | | The Board recommends that you vote FOR the approval, on an advisory basis, of the compensation of our named executive officers for fiscal year 2023, as disclosed in this Proxy Statement |

  50. Fiscal 2019 – Fiscal 2023 Total Shareholder Return vs. S&P 500 and Proxy Peers(1)

    | (1) Reflects results from October 28, 2018 through October 29, 2023. Proxy peer data reflects the companies in Applied’s current compensation peer group approved by the HRCC in June 2023, as described on page 39, weighted by market capitalization. |

  51. Key Compensation Actions

    Key Compensation Actions Performance-Based Compensation Decisions. The HRCC approved an aggressive set of performance goals for the executive officers for fiscal 2023, including challenging financial and operational targets despite a difficult external landscape, including macro-economic uncertainty, a complex geopolitical environment and an anticipated down year for the wafer fabrication equipment market. During fiscal 2023, Applied delivered exceptional financial and operational results, meeting or exceeding most of its stretch objectives for the year in a continuing challenging environment, and made meaningful progress towards our long-term strategic goals that remain focused on enabling strong longer-term revenue and EPS growth. As a result, bonus payouts for the executive officers were, on average, modestly above target. No adjustments were made during the year to the performance goals or to the Company’s results used in determining incentive payouts. As part of our multi-year incentive program, for the period of fiscal 2021 through 2023, the HRCC approved challenging goals for non-GAAP adjusted operating margin and relative total shareholder return. The results for this three-year performance period significantly exceeded target performance levels, resulting in above-target vesting of performance share unit awards granted to our executive officers in fiscal 2021.

  52. Primary Compensation Elements and Executive Compensation Highlights for Fiscal 2023

    | Element of Pay | Structure | Highlights | | Base Salary (see page 40) | » Fixed cash compensation for performing expected day-to-day responsibilities » Reviewed annually and adjusted as appropriate, based on scope of responsibility, performance, time in role, experience, and competitive market for executive talent | » Reflecting (i) continued strong performance across the business, driven by our executive leadership, (ii) the continued growth in the size and complexity of the Company and (iii) continued demand for proven executive talent among technology companies, in fiscal 2023, the HRCC approved salary increases for three of our NEOs ranging from 5% to 9.5% » Reflecting the increased responsibilities of his role assumed in late fiscal 2022, the HRCC approved a salary increase of 37% for Mr. Deane for fiscal 2023 » Reflecting the HRCC’s belief that CEO compensation should be predominantly tied to long-term results, the Committee has not increased the salary for our CEO since December 2018 | | Annual Incentive Bonus (see page 40) | » Variable cash compensation » Based on performance compared to pre-established financial, operational, strategic and individual performance objectives » Includes assessment of the Company’s progress towards sustainability goals » Financial and non-financial metrics provide a comprehensive assessment of executive performance » Performance metrics evaluated annually to maintain continued alignment with strategy and market practice » NEO annual incentives determined through a three-step performance assessment process: | » No increase in target bonus as a percentage of base salary from fiscal 2022 to fiscal 2023 for any of the NEOs, with the exception of Mr. Deane, to reflect his new role » The initial performance hurdle for fiscal 2023 was $6.00 of non-GAAP adjusted EPS, requiring continued strong financial performance. Actual non-GAAP adjusted EPS for fiscal 2023 was $8.05 » Because the initial performance hurdle was met, annual bonuses for the NEOs were based on (i) the Company’s results as compared to the objective and quantifiable business and strategic goals in the corporate scorecard and (ii) an assessment of individual performance results as compared to quantitative and strategic objectives » Resulting payouts ranged from 98% to 108% of target for our NEOs • Corporate scorecard modifiers ranged from 0.893x to 0.980x (see corporate scorecard information on pages 42 and 43) • Individual performance modifiers were set at 1.1x for each of the NEOs (see individual performance factor details on page 44) | | Long-Term Incentives (see page 47) | » Significant portion delivered through performance share units (PSUs), to establish rigorous long-term performance alignment » Balance of award delivered in restricted stock units (RSUs) to provide a strong tie to shareholder value and enhance retention » PSUs vest based 50% on achievement of 3-year non-GAAP adjusted operating margin goal and 50% on 3-year TSR relative to the members of the S&P 500 Index » PSUs vest at end of 3-year performance period, based on achievement of performance goals; RSUs vest ratably over 3 years | » The target mix of long-term incentive awards consists of 75% PSUs and 25% RSUs for the CEO and 50% PSUs and 50% RSUs for the other NEOs » Non-GAAP adjusted operating margin is a key measure of our Company’s long-term success » Relative TSR incentivizes management to outperform the market in any business environment |

  53. Pay Mix

    Pay Mix In fiscal 2023, a significant portion of our executives’ compensation consisted of variable compensation and long-term incentives. As illustrated below, 96% of CEO compensation for fiscal 2023 consisted of variable compensation elements, and 90% of CEO compensation was delivered in long-term incentive awards with multi-year vesting.

  54. Pay Mix

    | 1 | Represents total direct compensation for fiscal 2023, including the grant date fair value of annual long-term incentive awards. |

  55. Summary of 2023 Total Direct Compensation

    Summary of 2023 Total Direct Compensation The following table summarizes elements of annual total direct compensation for our NEOs for fiscal 2023, consisting of (1) base salary received during the year, (2) actual annual incentive bonus payout and (3) long-term incentive awards (the grant date fair value of stock awards). This table excludes amounts not considered by the HRCC to be annual total direct compensation, such as certain other amounts required by the SEC to be reported in the “All Other Compensation” column in the Summary Compensation Table (see page 54 of this Proxy Statement).

  56. Summary of 2023 Total Direct Compensation

    | Name and Principal Position | Salary ($) | Annual Incentive Bonus ($) | Annual Long-Term Incentive Award ($) | Total ($) | | Gary E. Dickerson President and Chief Executive Officer | 1,030,000 | 1,631,520 | 23,951,048 | 26,612,568 | | Brice Hill Senior Vice President, Chief Financial Officer and Global Information Services | 708,846 | 1,019,304 | 5,530,849 | 7,258,999 | | Prabu G. Raja President, Semiconductor Products Group | 740,000 | 1,091,475 | 6,636,826 | 8,468,301 | | Omkaram Nalamasu Senior Vice President, Chief Technology Officer | 625,385 | 742,203 | 4,037,503 | 5,405,091 | | Timothy M. Deane Group Vice President, Applied Global Services | 574,947 | 733,590 | 3,097,266 | 4,405,803 |

  57. Other Key Compensation Practices

    | WHAT WE DO | | WHAT WE DO NOT DO | | | | Pay for Performance – Significant majority of NEO target compensation is performance-based and tied to pre-established performance goals aligned with our short- and long-term objectives. | | No Guaranteed Bonuses – Our annual bonus plans are performance-based and do not include any guaranteed minimum payment levels. | | | Mitigation of Risk – Use of varied performance measures and of payout limits in incentive programs mitigates risk that executives will be motivated to pursue results with respect to any one performance measure to the detriment of Applied as a whole. | | No Hedging or Pledging – Our insider trading policy prohibits all directors, NEOs and other employees from engaging in hedging or other speculative trading, and prohibits directors and NEOs from pledging their shares. | | | Compensation Recovery Policy – We have a compensation recovery policy that, in certain circumstances, requires reimbursement of compensation received by our NEOs under our annual cash bonus plan and our stock incentive plan. | | No Excessive Perquisites – We do not provide material perquisites or other personal benefits to our NEOs or directors, except for security purposes or in connection with business-related relocation. | | | Stock Ownership Guidelines – All senior officers and directors are subject to stock ownership guidelines to ensure their interests are aligned with shareholders’ interests. | | No Dividends on Unvested Long-Term Incentive Awards – We do not pay dividends or dividend equivalents on unvested long-term incentive awards. | | | Double-Trigger Change-in-Control Provisions – For vesting to accelerate, long-term incentive awards for all NEOs require a “double-trigger” of both a change-in-control and subsequent termination of employment. | | No Executive Pensions – We do not offer any executive pension plans. | | | Annual Say-On-Pay Vote – We seek annual shareholder feedback on our executive compensation program. | | No Tax Gross-Ups – We do not pay tax gross-ups, except in connection with business-related relocation or expatriate assignments. |

  58. Overview of Compensation Program Philosophy and Governance Framework

    | » | To motivate these individuals to achieve short-term and long-term goals that enhance shareholder value; and |

  59. Overview of Compensation Program Philosophy and Governance Framework

    | • | Setting challenging performance goals for executive officers and other key employees; |

  60. Overview of Compensation Program Philosophy and Governance Framework

    | • | Providing a high proportion of total target compensation in the form of long-term incentive awards to motivate executive officers and other key employees to increase long-term value in alignment with shareholders’ interests. |

  61. Compensation Program Peer Group

    Compensation Program Peer Group The HRCC regularly reviews the structure and amount of compensation paid by our peer group, which consists of high-technology companies whose businesses are comparable to ours and with whom we are likely to compete for executive talent, as a reference point for evaluating our compensation program. The HRCC generally screens for companies that meet the following criteria: (1) innovative technology companies with product manufacturing, (2) companies whose revenues and market capitalization were approximately one-fourth to five times that of Applied, (3) publicly-traded companies with global operations that disclose executive compensation pursuant to SEC rules, and (4) companies that represent: (i) industry competitors, (ii) competitors for key talent, (iii) customers or suppliers, and/or (iv) comparable alternatives for shareholder investment. Data gathered on executive compensation practices across the peer group include base salary levels, bonus payouts, target and actual cash compensation, long-term incentive award values and total compensation levels. The HRCC uses this information as a reference point in informing its decision making, rather than targeting a specific percentile of the peer data for our NEOs. The executive compensation data for the peer companies is gathered from the sources described in “Role of Compensation Consultant” below. Our fiscal 2023 peer group established in March 2022 and unchanged from the fiscal 2022 peer group, and our relative size compared to the peer companies at the time of the HRCC’s establishment of the peer group, are set forth below.

  62. Compensation Program Peer Group

    | Fiscal 2023 Peer Group | | | Advanced Micro Devices, Inc. | Lam Research Corporation | | Analog Devices, Inc. | Micron Technology, Inc. | | Broadcom Inc. | Motorola Solutions, Inc. | | Cisco Systems, Inc. | NVIDIA Corporation | | Corning Incorporated | NXP Semiconductors N.V. | | Intel Corporation | QUALCOMM Incorporated | | NetApp, Inc. | Texas Instruments Incorporated | | KLA Corporation | Western Digital Corporation |

  63. Applied Materials Positioning Relative to Peers(1)

    In June 2023, the HRCC conducted a review of the peer group, using the screening criteria described above. Based on this assessment, the HRCC determined to (i) remove NetApp and replace it with International Business Machines Corporation (IBM), to bring the median size of the peer group closer to that of Applied, and (ii) otherwise leave the fiscal 2023 peer group unchanged. Each of the companies in the resulting peer group met most or all of the four screening criteria.

  64. Target Cash Compensation

    Target Cash Compensation Base salaries and bonus opportunities are designed to attract, motivate, reward and retain highly-talented executives, as well as to align pay with performance. Applied continues to focus the weighting of cash compensation more heavily toward performance-based incentives. At the beginning of each fiscal year (or at the time of an executive officer’s hire or appointment, as applicable), the HRCC determines each NEO’s target total cash compensation (salary and target bonus).

  65. Annual Incentive Bonus Opportunities

    Annual Incentive Bonus Opportunities Bonus Plan Overview. In fiscal 2023, all of our NEOs participated in the Senior Executive Bonus Plan (the “Bonus Plan”). The Bonus Plan is a shareholder-approved bonus program designed to motivate and reward achievement of Applied’s business goals, in alignment with delivering shareholder value. The annual incentive bonus for each NEO under the Bonus Plan is directly linked to Applied’s achievement of financial and market performance, operational performance and strategic objectives, in addition to individual performance. Company and individual goals are structured to incentivize management to drive strong operating performance, invest in innovation to drive future growth and create shareholder value. Our Bonus Plan is performance-based and does not include any guaranteed minimum payment levels. Determining Target Bonus Amounts. Target bonus amounts for the NEOs are expressed as a percentage of base salary. The HRCC approves the annual target bonus amount for each NEO, taking into consideration Mr. Dickerson’s recommendations regarding the annual target bonus amounts for each of the NEOs other than himself. In early fiscal 2023, Mr. Dickerson recommended that the target bonus amount as a percentage of base salary for Mr. Deane be increased to 120%, in recognition of his new role, and that the target bonus amounts for each other NEO remain unchanged from fiscal 2022. Similarly, based on a comprehensive review and with input from its independent compensation consultant, the HRCC determined not to change Mr. Dickerson’s target bonus amount from fiscal 2022. Assessing Performance and Payout. The determination of fiscal 2023 performance and annual incentive bonuses for our NEOs consisted of three key steps, as illustrated and described in more detail below. Initial Performance Hurdle. For fiscal 2023, the HRCC chose non-GAAP adjusted EPS as the initial performance hurdle measure under the Bonus Plan. EPS, an indicator of overall Company financial performance, is a measure of profits generated on a per-share basis that are available either to reinvest in the business or to distribute to shareholders, and has a strong link to share price. Adjusted EPS is a non-GAAP measure that excludes certain items from EPS determined in accordance with GAAP (see Appendix A for a reconciliation of non-GAAP adjusted EPS). Non-GAAP adjusted EPS includes the impact of share-based compensation expenses. If Applied did not achieve the initial performance hurdle (a threshold non-GAAP adjusted EPS for the fiscal year, set at $6.00 for fiscal 2023), no bonus would be payable. If this threshold is achieved, the maximum bonus that becomes payable for each NEO is the lowest of: (a) $5 million, (b) 3x the corporate bonus pool funding modifier multiplied by that NEO’s target bonus, and (c) 3x that NEO’s target bonus. The HRCC established a somewhat lower threshold for fiscal 2023 compared to fiscal 2022 to reflect the potential impact to fiscal 2023 financial results stemming from the uncertain macroeconomic and geopolitical environment at the beginning of the fiscal year. The HRCC believed that the initial hurdle was sufficiently challenging given that it represented performance far ahead of levels the Company had achieved prior to fiscal 2021 and because the bonus payouts for the NEOs are ultimately determined by the HRCC’s assessments of achievement of objectives on the balanced corporate scorecard and individual NEO performance. In fiscal 2023, Applied exceeded the initial performance hurdle under the Bonus Plan by delivering non-GAAP adjusted EPS of $8.05. Balanced Corporate Scorecard. If the initial performance hurdle is achieved, the HRCC then reviews the level of achievement of pre-defined objectives on the corporate scorecard and determines the appropriate scorecard result for the fiscal year. The scorecard is designed to measure achievement of financial and non-financial objectives that are considered by the HRCC to be key drivers of the Company’s near-term financial and operational success that will create shareholder value over the longer-term. The fiscal 2023 scorecard measured company performance in five broad categories: (1) Financial and Market Performance and Execution, (2) Products and Growth, (3) Services and Subscription, (4) Customers and Markets, and (5) People and Organization. These categories align with and support the Company’s strategy of strengthening our materials engineering capabilities to enable major technology inflections for our customers and positioning Applied for sustainable growth to support long-term value creation for our shareholders. Since fiscal 2021, the corporate scorecard has included sustainability objectives, with performance measured based on Applied’s successfully making annual progress required to meet our long-term DEI and sustainability goals.

  66. Annual Incentive Bonus Opportunities

    | Scorecard Category | Weighting for CEO | Link to Company Strategy and Performance | | Financial and Market Performance and Execution | 50% | Incentivizes achievement of financial, market share and TSR goals and focuses on delivering sustainable performance that increases shareholder value Aligns with increased efficiency in operational process and quality and safety performance | | Products and Growth | 30% | Reinforces strategy of developing new and differentiated products and positioning Applied and its products for future revenue, profitability and market share growth | | Services and Subscription | 10% | Increases focus on continued profitable growth of the services business with an increasingly large portion being converted to subscriptions | | Customers and Markets | 5% | Promotes focus on customer service by improving growth and efficiency at key accounts and applications | | People and Organization | 5% | Drives progress towards achieving long-term sustainability objectives and enhancing the diversity and inclusion of Applied’s talent |

  67. Annual Incentive Bonus Opportunities

    NEO Objectives and Weightings. Each NEO was assigned individualized weightings for scorecard objectives to reflect the relative impact and contributions of that NEO and their business or organizational unit to Applied’s overall performance with respect to a particular objective. The corporate scorecard objectives and weightings for each NEO are set forth in the table below. Goal Setting and Measurement. At the beginning of the fiscal year, the HRCC reviewed objectives and individual weightings proposed by management, and provided input on the corporate scorecard and weightings for each NEO. Performance objectives were set with a score of 1.0 indicating performance that met very high expectations and with scores over 1.0 indicating extraordinary achievement. Scorecard objectives are intended to be very challenging, to incentivize our NEOs to achieve performance levels that are higher than our externally communicated financial targets. Consequently, delivering results below the 1.0 level can still represent very meaningful progress towards our long-term strategic goals. At the end of the fiscal year, scores were calculated based on actual performance against objectives and were presented to the HRCC to review, adjust and approve. The following table shows the fiscal 2023 corporate scorecard objectives, their relative weightings for each of the NEOs, the achievements based on performance against rigorous objectives and the resulting scores, as approved by the HRCC (see Appendix A for non-GAAP reconciliations). The HRCC approved an aggressive set of scorecard targets for the executive officers for fiscal 2023, including financial targets that required continued sustained strong performance in an uncertain external environment, equally challenging operational targets, and a focus on continued progress towards positioning the company to achieve its long-term objectives. During fiscal 2023, Applied delivered exceptional financial and operational performance and made meaningful progress towards our long-term strategic goals focused on enabling strong longer-term revenue and EPS growth. However, due to an industry-wide slowdown and a challenging geopolitical and macroeconomic environment during fiscal 2023, the Company did not fully meet some of the aggressive goals set for the year. Beginning with the fiscal 2021 corporate scorecard, the HRCC added a broader sustainability objective – beyond the Company’s existing focus on diversity and inclusion – to demonstrate Applied’s commitment to driving sustainability throughout our business and to provide a discrete incentive for management to execute on our sustainability strategy. While the Company’s sustainability goals are long-term in nature, the HRCC believes that it is important to annually review, measure and assess progress towards those goals. As a result, the HRCC included sustainability objectives in the annual incentive program, rather than in long-term incentive awards. More detail on the Company’s sustainability framework and 2023 accomplishments can be found on pages xi through xiv.

  68. Annual Incentive Bonus Opportunities

    | Objectives | Weightings | | | | Achievements | | | | | | | | | | | Financial and Market Performance and Execution | 50% | 50% | 50% | 50% | | | | Grow wafer fabrication equipment market share (measured by VLSI Research) | 10% | 10% | 10% | 7% | Estimated market share for CY23 is highest in 20 years | 1.5 | | Achieve targeted Services core revenue growth | 2% | 2% | 2% | 5% | Delivered record Services core revenue, but fell short of our aggressive goal | 0.5 | | Achieve targeted talent and productivity milestones and execute on employee engagement initiatives to position Applied to place in top quartile of benchmark for FY24 employee engagement survey | 2.5% | 2.5% | 2.5% | 2.5% | Achieved targeted talent and productivity milestones and executed on employee engagement initiatives | 1.0 | | Achieve adjusted gross margin targets (gross margin reported externally) and deliver key milestones for gross margin improvement initiatives | 10% | 10% | 10% | 10% | Delivered 46.8% non-GAAP adjusted gross margin, a modest increase from fiscal 2022, but below target | 0.5 | | Achieve adjusted operating margin goal (operating margin reported externally) and days inventory outstanding targets | 10% | 10% | 10% | 10% | Achieved 29.1% non-GAAP adjusted operating margin, a modest decrease from fiscal 2022, and below target | 0.5 | | Achieve TSR ranking target relative to peers | 8% | 8% | 8% | 8% | Outperformed peers during the fiscal year | 1.5 | | Improve operational, quality and employee health and safety performance | 7.5% | 7.5% | 7.5% | 7.5% | Achieved key operational and quality metrics | 1.0 |

  69. Annual Incentive Bonus Opportunities

    | Objectives | Weightings | | | | Achievements | | | | | | | | | | | Products and Growth | 30% | 30% | 40% | 20% | | | | Deliver key milestones that demonstrate progress towards targeted fiscal 2025 performance for semiconductor businesses | 15% | 20% | 5% | 7.5% | Achieved milestones towards meeting 2025 revenue target for semiconductor businesses | 1.0 | | Achieve key milestones that demonstrate progress towards targeted fiscal 2025 performance for Integrated Materials Solution (IMS) business | 3.5% | 5% | 1.5% | 3% | Achieved milestones towards meeting 2025 targets for IMS business | 1.0 | | Deliver key milestones that demonstrate progress towards targeted fiscal 2025 performance for AI(x) application | 3.5% | 5% | 1.5% | 5% | Achieved milestones towards meeting 2025 targets for AI(x) application | 1.0 | | Deliver key milestones that demonstrate progress towards targeted fiscal 2025 performance for Display business | 5% | 0% | 7% | 2.5% | Made progress towards 2025 targets for Display business, but did not fully achieve milestones set for the year | 0.75 | | Deliver key milestones that demonstrate progress towards targeted fiscal 2025 performance for new and adjacent market growth | 3% | 0% | 25% | 2% | Developed pipeline of opportunities in new and adjacent growth areas but did not fully meet the milestones for the year | 0.75 | | Services and Subscription | 10% | 10% | 5% | 20% | | | | Achieve key milestones that demonstrate progress towards targeted fiscal 2025 performance for Service business | 7.5% | 7.5% | 3.5% | 15% | Achieved milestones towards 2025 targets for Service business | 1.0 | | Achieve targeted subscription revenue growth for Service business | 2.5% | 2.5% | 1.5% | 5% | Subscription revenue growth fell short of aggressive goals | 0.5 | | Customers and Markets | 5% | 5% | — | 5% | | | | Win prioritized target engagements at leading customers and accounts | 2.5% | 2.5% | — | 2.5% | Exceeded development and production tool of record goals, as well as application growth goals for systems and services | 1.5 | | Enhance customer trust by achieving targeted product safety, on-time delivery and installation performance | 2.5% | 2.5% | — | 2.5% | Met product safety and on-time delivery performance targets | 1.0 | | People and Organization | 5% | 5% | 5% | 5% | | | | Demonstrate targeted progress towards increasing representation of women and underrepresented minorities and launch DEI Engine | 2.5% | 2.5% | 2.5% | 2.5% | Continued progress toward achieving our longer-term objectives and successfully launched the DEI Engine | 1.0 | | Demonstrate progress towards achieving other long-term sustainability goals | 2.5% | 2.5% | 2.5% | 2.5% | Met key milestones towards Company’s 2030 sustainability goals and launched our collaborative net-zero playbook | 1.0 | | Scores are based on achievement of goals tied to objective and quantifiable metrics aligned with Company strategy | | | | | | |

  70. Annual Incentive Bonus Opportunities

    Individual Performance Factor. Each NEO’s individual performance factor (“IPF”) reflects an assessment of their individual performance and contributions. The IPF is only applied if the initial performance hurdle and at least some of the corporate scorecard objectives are achieved. The IPF modifies the initial bonus amount as determined based on achievement of corporate scorecard objectives. IPF modifiers can range from 0 to 1.5. The HRCC determined the IPF for each NEO, other than Mr. Dickerson, after taking into consideration Mr. Dickerson’s recommendation, which included his assessment of the achievement of strategic, financial, operational and organizational performance goals specific to the business or organizational unit for which the NEO was responsible, as well as the NEO’s leadership skills and current and expected contributions to the business. In determining the fiscal 2023 IPF for each NEO, the HRCC took into consideration: (i) financial performance, which exceeded threshold performance on non-GAAP adjusted EPS, (ii) results on the corporate scorecard and associated goals, (iii) the leadership team’s ability to guide Applied through continued external challenges including the continued challenging geopolitical and macroeconomic environment, and (iv) each executive’s capable leadership of their respective business unit or function, and in Mr. Dickerson’s case, of Applied overall. Based on this review, the HRCC determined that an IPF somewhat above target would be appropriate for fiscal 2023. In consideration of the individual accomplishments noted below, the HRCC assigned an IPF of 1.1 for each NEO. The following table shows the highlights of each NEO’s performance in fiscal 2023 that the HRCC considered in determining their respective IPFs.

  71. Annual Incentive Bonus Opportunities

    | NEO | Fiscal 2023 Individual Performance Highlights | | Gary E. Dickerson | » Led Applied to record performance for the year, growing revenue by 3% and non-GAAP adjusted EPS by 5% year-over-year | | | » Guided the Company in making significant and sustainable improvements in our operations and supply chain and to identify critical long-term partnerships and investments, including the EPIC center | | | » Drove the organization to make significant progress across key strategic areas that position Applied to deliver its targeted 2025 financial model | | | » Positioned Applied as one of the semiconductor industry’s leaders in sustainability, including by launching the Company’s collaborative net-zero playbook | | Brice Hill | » Delivered annual revenue of $26.5 billion and non-GAAP adjusted EPS of $8.05 and distributed over $3.16 billion to shareholders, including $2.2 billion in share repurchases and $975 million in dividends | | | » Successfully managed external investor relationships and communications | | | » Oversaw several key support functions, including Global Information Services and Global Indirect Procurement Services, driving enterprise enablement | | Prabu G. Raja | » Delivered record annual performance with Semiconductor Systems revenue of nearly $20 billion and the Company’s highest estimated market share in the last twenty years | | | » Demonstrated strong momentum in key growth areas, specifically etch, metal deposition products (MDP), dielectric deposition products (DDP) and packaging, while continuing to establish Applied as a clear leader in the DRAM market and maintaining leadership in foundry-logic | | | » Brought highly enabling technologies to market while securing and gaining share in key products and driving technology roadmap for our ICAPS business | | Omkaram Nalamasu | » Identified disruptive opportunities and developed potential future growth platforms | | | » Continued to identify external sources of investment to support and accelerate the Company’s innovation pipeline | | | » Led the Applied Ventures group in both investing for returns and incubating promising businesses in new and adjacent markets |

  72. Annual Incentive Bonus Opportunities

    | NEO | Fiscal 2023 Individual Performance Highlights | | Timothy M. Deane | » Delivered record Applied Global Services revenues of over $5.7 billion | | | » Supported the largest installed base of tools in the industry, with more than double the installed base of process chambers versus our nearest competitor | | | » Grew the number of tools under long-term subscription agreements, which now generate 63% of total parts and service revenues, with a 90% renewal rate for these subscriptions |

  73. Annual Incentive Bonus Opportunities

    Actual Bonus Payouts. The illustration below shows the results for each of the three key steps in determining the NEOs’ fiscal 2023 annual incentive bonuses under the Bonus Plan. Reflecting our record financial performance and significant individual contributions by the NEOs, bonus payouts for our NEOs were, on average, approximately 104% of target bonus amounts.

  74. Fiscal 2023 Annual Incentive Calculation

    Fiscal 2023 Annual Incentive Calculation

  75. Fiscal 2023 Annual Incentive Calculation

    | | Performance Measures | | Fiscal 2023 Achievement | | Initial Performance Hurdle | Fiscal 2023 non-GAAP adjusted EPS of $6.00 | | Achieved non-GAAP adjusted EPS of $8.05 | | Corporate Scorecard | Assessment of performance against predefined financial, operational and strategic corporate goals: » Financial and Market Performance and Execution » Products and Growth » Services and Subscription » Customers and Markets » People and Organization | | Strong performance on core objectives that – in some cases – fell short of exceptionally challenging goals set for the year Scorecard results achieved in a range from 0.893 to 0.980 based on varying weighting of objectives | | Individual Performance Modifier | NEO performance against personal objectives and individual contribution to business performance | | IPF achieved at a level of 1.1 | | | | Average NEO bonus, as multiple of target: 1.04 | |

  76. Fiscal 2023 Annual Incentive Calculation

    The following table shows for each NEO: (1) the bonus-eligible base salary, (2) the target bonus amount expressed as a percentage of base salary, (3) the target bonus expressed as a dollar amount and (4) the actual fiscal 2023 bonus amount approved by the HRCC and paid to the NEO.

  77. Fiscal 2023 Annual Incentive Calculation

    | NEO | (1) Base Salary ($) | (2) Target Bonus as a Percentage of Base Salary (%) | (3) Target Bonus ($) | (4) Actual Bonus ($) | | Gary E. Dickerson | $1,030,000 | 150% | $1,545,000 | $1,631,520 | | Brice Hill | $715,000 | 135% | $965,250 | $1,019,304 | | Prabu G. Raja | $750,000 | 135% | $1,012,500 | $1,091,475 | | Omkaram Nalamasu | $630,000 | 120% | $756,000 | $742,203 | | Timothy M. Deane | $600,000 | 120% | $720,000 | $733,590 |

  78. Fiscal 2023 Annual Incentive Calculation

    Rigor in Annual Bonus Program. Our process of establishing challenging financial and operating objectives under the annual bonus program has resulted in judicious payouts during a period of significant growth for the Company. The chart below shows the actual annual bonus awards to our CEO as a percentage of his target bonus opportunity and our non-GAAP adjusted EPS achievements over the last five fiscal years.

  79. CEO Actual Annual Bonus vs. Earnings Per Share

    CEO Actual Annual Bonus vs. Earnings Per Share Non-GAAP adjusted EPS is a performance target under the Bonus Plan. See Appendix A for non-GAAP reconciliations.

  80. Long-Term Incentives

    Long-Term Incentives Overview. Applied’s long-term incentive compensation program is intended to help (1) focus participants on achieving our business objectives, (2) attract, retain and motivate key talent, and (3) align our executives’ interests with shareholders’ interests to maximize long-term shareholder value. Timing of Awards. The HRCC grants long-term incentive awards to our NEOs under our shareholder-approved Employee Stock Incentive Plan (the “Stock Plan”). The HRCC has not granted, nor does it intend to grant, equity awards in anticipation of the release of material, nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement. Similarly, Applied has not timed, nor does it intend to time, the release of material, nonpublic information based on equity award grant dates.

  81. Fiscal 2023 Equity Awards

    Fiscal 2023 Equity Awards The HRCC believes that a meaningful portion of our NEOs’ target compensation should be in the form of long-term incentives. These awards are intended to reward performance over a multi-year period, align the interests of executives with those of shareholders, instill an ownership culture, enhance the personal stake of executive officers in the growth and success of the Company and provide an incentive for continued service at the Company. Given our shareholders’ ongoing strong support of our incentive programs, we continued our approach of making performance-based equity awards a substantial portion of the overall value of equity awards granted to our NEOs. The fiscal 2023 long-term incentive awards for NEOs consist of two forms of equity vehicles: performance share units and restricted stock units. The target vehicle mix of the awards for the fiscal 2023 grant remained unchanged from the previous year’s grants and consisted of 75% PSUs and 25% RSUs for the CEO and 50% PSUs and 50% RSUs for the other NEOs.

  82. Fiscal 2023 Equity Awards

    | CEO LTI Vehicle Mix | All Other NEO LTI Vehicle Mix | | | |

  83. Fiscal 2023 Equity Awards

    For fiscal 2023, in December 2022, the HRCC approved the target award values, which were converted to the corresponding number of PSUs and RSUs, listed in the below table for our NEOs.

  84. Fiscal 2023 Equity Awards

    | NEO | Target Value of Awards(1) ($) | Equivalent Target Number of PSUs(2) | Equivalent Number of RSUs(2) | | Gary E. Dickerson | $20,500,000 | 140,578 | 46,860 | | Brice Hill | $5,000,000 | 22,859 | 22,859 | | Prabu G. Raja | $6,000,000 | 27,430 | 27,430 | | Omkaram Nalamasu | $3,650,000 | 16,687 | 16,687 | | Timothy M. Deane | $2,800,000 | 12,801 | 12,801 |

  85. Fiscal 2023 Equity Awards

    | (1) Reflects target values of awards on the date of grant. These target values differ from the amounts shown in the “Stock Awards” column of the Summary Compensation Table, which represent grant date fair values determined pursuant to Accounting Standards Codification 718. |

  86. Fiscal 2023 Equity Awards

    | (2) Number of units calculated by dividing allocated portion of target value of awards by $109.37, the closing price of Applied stock on December 12, 2022, the grant date. |

  87. Fiscal 2023 Equity Awards

    Size of Fiscal 2023 Equity Awards. In determining the target award values, the HRCC considered each NEO’s award as a component of their total direct compensation. Target fiscal 2023 long-term equity awards were determined in light of each NEO’s scope of responsibility, performance, impact on results, expected future contributions to our business, compensation levels relative to other Applied officers, the need to attract and retain talent and business conditions. The fiscal 2023 target award values were set to provide sufficient performance-based equity incentives to align compensation with the long-term interests of our shareholders, compensate the NEOs in line with market norms for their respective roles and provide them with appropriate incentive to achieve Applied’s performance goals over a multi-year period. Performance Share Units. The PSU awards are designed to align NEO compensation – and therefore NEO decision making – with achievement of our strategic goals over the long term. The two metrics for the PSU portion of the long-term incentive program remain unchanged from the prior year’s grants. The fiscal 2023 PSUs, granted in December 2022, are eligible to vest three years from the grant date based on achievement of an average non-GAAP adjusted operating margin goal for fiscal 2023 through fiscal 2025 and based on TSR relative to the S&P 500 over the performance period of the first day of fiscal 2023 through the last day of fiscal 2025, with equal weighting given to each metric. The HRCC selected the members of the S&P 500 Index as the peer set for the relative TSR metric because enough differences exist between Applied and other companies in the technology and/or semiconductor space to make identifying a comparable industry-specific peer group impractical and because the HRCC believes the S&P 500 represents an appropriate proxy for the investment alternatives available to the Company’s shareholders. The number of PSUs that will vest, if any, will be based on the achievement of threshold, target or maximum levels for each metric, as set forth below.

  88. Fiscal 2023 Equity Awards

    | | Percentage of Shares Eligible to Vest Based on | | | Achievement Level | Relative TSR Result | Operating Margin Result | | Threshold | 0% | 50% | | Target | 100% | 100% | | Maximum | 200% | 200% |

  89. Fiscal 2023 Equity Awards

    Consistent with prior performance periods, a TSR payout factor will be determined by calculating the Company’s TSR percentile rank within the S&P 500, with threshold, target and maximum levels based on Applied’s TSR ranking at the 25th, 50th and 75th percentile, respectively, of the S&P 500. The TSR calculation uses a 60-day trailing average stock price at the beginning and end of the performance period for measurement purposes. This approach minimizes the impact of a single beginning and ending point stock price for each performance cycle. If the threshold level is not achieved for either metric, then no corresponding shares will vest. If achievement falls between threshold and target or target and maximum levels, the portion of the award that would vest will be determined based on straight-line interpolation. In setting goals for the PSUs, the HRCC considered Applied’s historical results and relative performance, and established goals that are aligned with Applied’s financial and strategic objectives and will require exceptional results to achieve the maximum level. Restricted Stock Units. The RSU awards are scheduled to vest ratably over three years, providing a link to shareholder value creation and maintaining retention value. Retirement Provisions. The fiscal 2023 PSU and RSU awards are subject to retirement provisions which, in the event of a qualifying retirement based on age and years of service, provide for the potential of a partial payout of the PSU awards based on actual performance at the conclusion of the three-year performance period and partial accelerated vesting of RSU awards. The retirement vesting provisions are designed to maintain engagement and focus, as well as to provide a retention incentive, for our executive officers when they approach potential retirement decisions.

  90. Performance and Payout for Fiscal 2021 Performance Share Unit Awards

    Performance and Payout for Fiscal 2021 Performance Share Unit Awards The PSUs granted to our NEOs in fiscal 2021 were eligible to vest after the conclusion of a three-year performance period, based on achievement of an average non-GAAP adjusted operating margin goal for fiscal 2021 through fiscal 2023 and relative TSR percentile rank within the S&P 500 for fiscal 2021 through fiscal 2023, with equal weighting given to each metric. In setting the adjusted operating margin performance requirements for the PSUs, the HRCC considered a number of factors, including the Company’s past performance, analyst expectations, then-current and expected macro-economic forces, the spectrum of potential outcomes, and competitor practices. The number of PSUs that could vest was based on the achievement of threshold, target or maximum levels of each metric, and straight-line interpolation for achievement that fell between the levels. The threshold, target and maximum levels and actual results achieved for each metric, as well as the resulting payout factors for the fiscal 2021 PSUs, are shown below.

  91. Performance and Payout for Fiscal 2021 Performance Share Unit Awards

    | | Three-Year Average | | | | | | Metric | Threshold | Target | Max | Result | Payout Factor | | Operating Margin (1) | 25.3% | 27.3% | 30.3% | 30.4% | 200% | | Relative TSR | 25th %ile | 50th %ile | 75th %ile | 92nd %ile | 200% | | Total | | | | | 200% |

  92. Performance and Payout for Fiscal 2021 Performance Share Unit Awards

    | (1) See Appendix A for a reconciliation of non-GAAP adjusted operating margin. |

  93. Performance and Payout for Fiscal 2021 Performance Share Unit Awards

    The actual number of fiscal 2021 PSUs earned for each NEO (with the exception of Messrs. Hill and Deane, who were not executive officers and did not receive PSUs in fiscal 2021) is shown below.

  94. Performance and Payout for Fiscal 2021 Performance Share Unit Awards

    | NEO | Target Number of PSUs | Number of PSUs Earned | | Gary E. Dickerson | 122,169 | 244,338 | | Prabu G. Raja | 24,826 | 49,652 | | Omkaram Nalamasu | 15,680 | 31,360 |

  95. Applied Global Services Leadership Compensation

    Applied Global Services Leadership Compensation In September 2022, Mr. Deane was appointed to lead Applied Global Services with no immediate change in his ongoing compensation but was granted a one-time RSU award with a grant date value of $1,000,000, vesting over a four-year period. In early fiscal 2023, the HRCC approved ongoing compensation for Mr. Deane commensurate with his new role, consisting of an initial annual base salary of $600,000; a target bonus opportunity of 120% of his base salary; and an annual long-term incentive award with a target value of $2,800,000, consisting of 50% RSUs and 50% PSUs, consistent with the equity mix for other non-CEO NEOs.

  96. Role of Compensation Consultant

    Role of Compensation Consultant The HRCC has the authority to engage independent advisors to assist it in carrying out its responsibilities. For fiscal 2023, the HRCC engaged Semler Brossy Consulting Group (“Semler Brossy”) as its independent executive compensation consultant. Semler Brossy, who reports directly to the HRCC and not to management, is independent from Applied, has not provided any services to Applied other than to the HRCC and receives compensation from Applied only for services provided to the HRCC. The HRCC assessed the independence of Semler Brossy pursuant to SEC rules and concluded that the work of Semler Brossy for the HRCC has not raised any conflict of interest. Semler Brossy reviews and advises on all principal aspects of the executive compensation program. Its main responsibilities are as follows:

  97. Role of Compensation Consultant

    | » | Advise on alignment of pay and performance; |

  98. Role of Compensation Consultant

    | » | Review and advise on executive total compensation, including base salaries, short- and long-term incentives, associated performance goals and retention and severance arrangements; |

  99. Role of Compensation Consultant

    | » | Advise on trends in executive compensation; |

  100. Role of Compensation Consultant

    | » | Provide recommendations regarding the composition of our peer group; |

  101. Role of Compensation Consultant

    | » | Analyze market compensation practices based on peer group proxy statements, compensation survey data and other publicly available data; and |

  102. Role of Compensation Consultant

    | » | Perform any special projects requested by the HRCC. |

  103. Role of Compensation Consultant

    The HRCC typically asks Semler Brossy to attend the HRCC’s meetings, including executive sessions at which management is not present. Semler Brossy communicates regularly with the HRCC Chair outside of committee meetings and also meets with management to gather information and review proposals.

  104. Non-Qualified Deferred Compensation Plan

    Non-Qualified Deferred Compensation Plan Our 2016 Deferred Compensation Plan (the “DCP”) allows our NEOs and other eligible employees to voluntarily defer on a pre-tax basis a portion of their eligible earnings. We do not provide matching or other employer contributions to our executive officers under this plan. Deferrals made prior to October 2015 under the DCP are credited with deemed interest and are subject to the distribution rules in place prior to the plan amendment in October 2015. Beginning in fiscal 2016, participants are permitted to notionally invest new deferrals in certain investment options available under the plan. Additionally, for new deferrals, the DCP provides distribution rules for in-service distributions or upon a qualifying separation from service, an elected future date, disability and change in control. See “Nonqualified Deferred Compensation” below for more information about the DCP.

  105. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    Summary Compensation Table for Fiscal 2023, 2022 and 2021 The following table shows compensation information for fiscal 2023, 2022 and 2021 for our NEOs.

  106. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($) | Total ($) | | Gary E. Dickerson President and Chief Executive Officer | 2023 2022 2021 | 1,030,000 1,030,000 1,049,808 | — — — | 23,951,048 17,783,334 31,710,469(6) | 1,631,520 1,358,055 2,039,400 | 241,976 228,583 465,882(5) | 26,854,544 20,399,972 35,265,559 | | Brice Hill(7) Senior Vice President, Chief Financial Officer and Global Information Services | 2023 2022 | 708,846 441,346 | — 2,000,000 | 5,530,849 8,351,018 | 1,019,304 523,723 | 324,136 58,343(8) | 7,583,135 11,374,430 | | Prabu G. Raja President, Semiconductor Products Group | 2023 2022 2021 | 740,000 679,615 648,135 | — — — | 6,636,826 5,372,622 9,400,928(6) | 1,091,475 819,791 1,195,703 | 18,073 18,682 75,070(9) | 8,486,374 6,890,710 11,319,836 | | Omkaram Nalamasu Senior Vice President, Chief Technology Officer | 2023 2022 2021 | 625,385 592,308 552,789 | — — — | 4,037,503 3,727,899 3,019,654 | 742,203 568,080 848,513 | 3,718 4,543 63,916(10) | 5,408,809 4,892,830 4,484,872 | | Timothy M. Deane(11) Group Vice President, Applied Global Services | 2023 2022 | 574,947 433,350 | — — | 3,097,266 2,807,119 | 733,590 412,458 | 17,761 16,703(12) | 4,423,564 3,669,630 |

  107. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (1) Applied’s fiscal 2023 and 2022 each contained 52 weeks, and fiscal 2021 contained 53 weeks. |

  108. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (2) Amount shown for Mr. Hill reflects a sign-on bonus, which is subject to pro-rata repayment if Mr. Hill voluntarily resigns or the Company terminates his employment for cause prior to completing 24 months of employment. |

  109. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (3) Amounts shown do not reflect compensation actually received by the executive officer. Instead, the amounts reported represent the aggregate grant date fair value of target stock awards granted in the respective fiscal years, as determined pursuant to ASC 718 (but excluding the effect of estimated forfeitures for performance-based awards). For fiscal 2023, the grant date fair value of the maximum number of stock awards that may be earned by each NEO was as follows: Mr. Dickerson: $37,839,380; Mr. Hill: $6,152,957; Dr. Raja: $7,383,333; Dr. Nalamasu: $4,491,640; and Mr. Deane: $3,445,645. See “Fiscal 2023 Equity Awards” on page 47 for more information regarding the stock awards. The assumptions used to calculate the value of awards are set forth in Note 12 of the Notes to Consolidated Financial Statements included in Applied’s Annual Report on Form 10-K for fiscal 2023 filed with the SEC on December 15, 2023. |

  110. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (4) Amounts consist of payouts earned under the Senior Executive Bonus Plan for services rendered in the respective fiscal years, except for the fiscal 2022 payout for Mr. Deane which was earned under the Applied Incentive Plan. |

  111. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (5) Amount includes (a) Applied’s matching contribution of $14,850 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Mr. Dickerson of $1,068 in term life insurance premiums, (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, (d) $187,925 for costs for equipment and monitoring and maintenance services for a residential security system, and (e) $35,633 for ancillary personal security services for Mr. Dickerson’s family. |

  112. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (6) Amounts shown for Mr. Dickerson and Dr. Raja for fiscal 2021 include the grant date fair value of the non-recurring performance-based Value Creation Awards granted to them in December of 2020. |

  113. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (7) Mr. Hill joined Applied as Senior Vice President, Chief Financial Officer in March 2022. |

  114. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (8) Amount consists of (a) Applied’s matching contribution of $13,583 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Mr. Hill of $1,068 in term life insurance premiums, (c) a payment of $150 as reimbursement for internet and technology expenses, (d) expenses totaling $47,363 for Mr. Hill’s travel from his home in Oregon to Applied’s headquarters in Santa Clara, California prior to his relocation, and (e) payments totaling $261,972 for relocation benefits to Mr. Hill to cover expenses incurred in his relocation to California. |

  115. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (9) Amount consists of (a) Applied’s matching contribution of $14,355 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Dr. Raja of $1,068 in term life insurance premiums, (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, and (d) a payment of $150 as reimbursement for internet and technology expenses. |

  116. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (10) Amount consists of (a) Applied’s payment on behalf of Dr. Nalamasu of $1,068 in term life insurance premiums, (b) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, and (c) a payment of $150 as reimbursement for internet and technology expenses. |

  117. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (11) Mr. Deane was not an NEO in fiscal 2021. |

  118. Summary Compensation Table for Fiscal 2023, 2022 and 2021

    | (12) Amount consists of (a) Applied’s matching contribution of $14,185 under the tax-qualified 401(k) Plan, (b) Applied’s payment on behalf of Mr. Deane of $926 in term life insurance premiums, (c) Applied’s matching contribution of $2,500 to an eligible non-profit organization pursuant to a program under the Applied Materials, Inc. Political Action Committee, and (d) a payment of $150 as reimbursement for internet and technology expenses. |

  119. Grants of Plan-Based Awards for Fiscal 2023

    Grants of Plan-Based Awards for Fiscal 2023 The following table shows all plan-based awards granted to the NEOs during fiscal 2023.

  120. Grants of Plan-Based Awards for Fiscal 2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($)(3) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Gary E. Dickerson | 12/12/2022 12/12/2022 — | — — 0 | — — 1,545,000 | — — 4,635,000 | 35,145 — — | 140,578 — — | 281,156 — — | — 46,860 — | 18,919,690 5,031,358 — | | Brice Hill | 12/12/2022 12/12/2022 — | — — 0 | — — 965,250 | — — 2,895,750 | 5,715 — — | 22,859 — — | 45,718 — — | — 22,859 — | 3,076,479 2,454,371 — | | Prabu G. Raja | 12/12/2022 12/12/2022 — | — — 0 | — — 1,012,500 | — — 3,037,500 | 6,858 — — | 27,430 — — | 54,860 — — | — 27,430 — | 3,691,667 2,945,159 — | | Omkaram Nalamasu | 12/12/2022 12/12/2022 — | — — 0 | — — 756,000 | — — 2,268,000 | 4,172 — — | 16,687 — — | 33,374 — — | — 16,687 — | 2,245,820 1,791,683 — | | Timothy M. Deane | 12/12/2022 12/12/2022 — | — — 0 | — — 720,000 | — — 2,160,000 | 3,200 — — | 12,801 — — | 25,602 — — | — 12,801 — | 1,722,823 1,374,443 — |

  121. Grants of Plan-Based Awards for Fiscal 2023

    | (1) Amounts shown were estimated possible payouts for fiscal 2023 under the Senior Executive Bonus Plan (additional information on the annual bonus plan can be found on page 40 under “Annual Incentive Bonus Opportunities.”). These amounts were based on the individual NEO’s fiscal 2023 base salary and target bonus as a percentage of base salary. The maximum amount shown is calculated as three times the target amount for the NEO. Actual bonuses received by the NEOs for fiscal 2023 under the Senior Executive Bonus Plan are reported in the Summary Compensation Table under the column titled “Non-Equity Incentive Plan Compensation.” |

  122. Grants of Plan-Based Awards for Fiscal 2023

    | (2) Additional information on the equity awards can be found under “Fiscal 2023 Equity Awards” on page 47. |

  123. Grants of Plan-Based Awards for Fiscal 2023

    | (3) Amounts shown do not reflect compensation actually received by the NEOs. Instead, the amounts represent the aggregate grant date fair value of the awards as determined pursuant to ASC 718 (but excluding the effect of estimated forfeitures for performance-based awards). The assumptions used to calculate the awards’ value are set forth in Note 12 of the Notes to Consolidated Financial Statements included in Applied’s Annual Report on Form 10-K for fiscal 2023 filed with the SEC on December 15, 2023. |

  124. Outstanding Equity Awards at Fiscal 2023 Year-End

    Outstanding Equity Awards at Fiscal 2023 Year-End The following table shows all outstanding equity awards held by the NEOs at the end of fiscal 2023.

  125. Outstanding Equity Awards at Fiscal 2023 Year-End

    | | Stock Awards(1) | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Gary E. Dickerson | 13,575 17,550 46,860 — — — —(3) (4) (5) | 1,782,398 2,304,315 6,152,718 — — — — | — — — 122,169 116,145 78,973 140,578(6) (7) (8) (9) | — — — 16,040,790 15,249,839 10,369,155 18,457,891 | | Brice Hill | 47,532 22,859 —(10) (11) | 6,240,952 3,001,387 — | — — 22,859(9) | — — 3,001,387 | | Prabu G. Raja | 8,276 11,150 27,430 — — — —(3) (12) (13) | 1,086,639 1,463,995 3,601,559 — — — — | — — — 24,826 33,769 16,725 27,430(14) (15) (8) (9) | — — — 3,259,654 4,433,870 2,195,993 3,601,559 | | Omkaram Nalamasu | 5,227 7,737 16,687 — — —(3) (16) (17) | 686,305 1,015,868 2,191,003 — — — | — — — 15,680 11,605 16,687(18) (8) (9) | — — — 2,058,784 1,523,737 2,191,003 | | Timothy M. Deane | 3,534 5,197 4,481 6,817 10,663 12,801 —(19) (20) (21) (22) (23) (24) | 464,014 682,366 588,355 895,072 1,400,052 1,680,771 — | — — — — — — 12,801(9) | — — — — — — 1,680,771 |

  126. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (1) Stock awards consist of restricted stock units (“RSUs”) and performance share units (“PSUs”), all of which would be converted into Applied common stock on a one-to-one basis upon vesting. All future vesting of shares is subject to the NEO’s continued employment with Applied through each applicable vesting date, except that award agreements for RSUs and PSUs granted to certain of our NEOs provide for modified vesting treatment in the case of certain events such as a qualifying retirement, death, or double-trigger termination following a change in control. See “Long-Term Incentives” on page 47 for more information regarding these awards. |

  127. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (2) Market value was determined by multiplying the number of such shares by the closing price of Applied common stock of $131.30 on October 27, 2023, the last trading day of fiscal 2023, as reported on the Nasdaq Global Select Market. |

  128. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (3) RSUs were granted on December 3, 2020. These shares vested in full on December 19, 2023. |

  129. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (4) RSUs were granted on December 2, 2021. Of these, 8,775 shares vested on December 19, 2023 and 8,775 shares are scheduled to vest on December 19, 2024. |

  130. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (5) RSUs were granted on December 12, 2022. Of these, 15,620 shares vested on December 19, 2023 and 15,620 shares are scheduled to vest on each of December 19, 2024 and December 19, 2025. |

  131. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (6) PSUs were granted on December 3, 2020. These shares vested on December 19, 2023. On December 7, 2023, an additional 122,169 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2023. |

  132. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (7) PSUs were granted on December 3, 2020. The shares are scheduled to vest on October 26, 2025, depending on the achievement of specified performance goals. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 200% of the target amount, depending on the achievement of specified performance goals. |

  133. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (8) PSUs were granted on December 2, 2021. The shares are scheduled to vest on December 19, 2024, depending on the achievement of specified performance goals. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 200% of the target amount, depending on the achievement of specified performance goals. |

  134. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (9) PSUs were granted on December 12, 2022. The shares are scheduled to vest on December 19, 2025, depending on the achievement of specified performance goals. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 200% of the target amount, depending on the achievement of specified performance goals. |

  135. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (10) RSUs were granted on March 7, 2022. Of these, 23,766 shares are scheduled to vest on each of April 1, 2024 and April 1, 2025. |

  136. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (11) RSUs were granted on December 12, 2022. Of these, 7,619 shares vested on December 19, 2023 and 7,620 shares are scheduled to vest on each of December 19, 2024 and December 19, 2025. |

  137. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (12) RSUs were granted on December 2, 2021. Of these, 5,575 shares vested on December 19, 2023 and 5,575 shares are scheduled to vest on December 19, 2024. |

  138. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (13) RSUs were granted on December 12, 2022. Of these, 9,143 shares vested on December 19, 2023, 9,143 shares are scheduled to vest on December 19, 2024 and 9,144 shares are scheduled to vest on December 19, 2025. |

  139. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (14) PSUs were granted on December 3, 2020. These shares vested on December 19, 2023. On December 7, 2023, an additional 24,826 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2023. |

  140. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (15) PSUs were granted on December 4, 2020. The shares are scheduled to vest on October 26, 2025, depending on the achievement of specified performance goals. The number of shares shown is the target amount, and the actual number of shares that may vest ranges from 0% to 200% of the target amount, depending on the achievement of specified performance goals. |

  141. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (16) RSUs were granted on December 2, 2021. Of these, 3,868 shares vested on December 19, 2023 and 3,869 shares are scheduled to vest on December 19, 2024. |

  142. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (17) RSUs were granted on December 12, 2022. Of these, 5,562 shares vested on December 19, 2023, 5,562 shares are scheduled to vest on December 19, 2024 and 5,563 shares are scheduled to vest on December 19, 2025. |

  143. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (18) PSUs were granted on December 3, 2020. These shares vested on December 19, 2023. On December 7, 2023, an additional 15,680 shares became eligible to vest due to achievement of performance goals related to the grant. These additional shares also vested on December 19, 2023. |

  144. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (19) RSUs were granted on December 6, 2019. These shares vested in full on January 1, 2024. |

  145. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (20) RSUs were granted on December 3, 2020. Of these, 2,598 shares vested on January 1, 2024 and 2,599 shares are scheduled to vest on January 1, 2025. |

  146. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (21) RSUs were granted on December 2, 2021. Of these, 1,494 shares vested on January 1, 2024, 1,493 shares are scheduled to vest on January 1, 2025 and 1,494 shares are scheduled to vest on January 1, 2026. |

  147. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (22) RSUs were granted on December 16, 2021. Of these, 1,363 shares vested on January 1, 2024, 2,045 shares are scheduled to vest on January 1, 2025 and 3,409 shares are scheduled to vest on January 1, 2026. |

  148. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (23) RSUs were granted on September 8, 2022. Of these, 2,132 shares are scheduled to vest on October 1, 2024, 3,199 shares are scheduled to vest on October 1, 2025 and 5,332 shares are scheduled to vest on October 1, 2026. |

  149. Outstanding Equity Awards at Fiscal 2023 Year-End

    | (24) RSUs were granted on December 12, 2022. Of these, 4,267 shares vested on December 19, 2023 and 4,267 shares are scheduled to vest on each of December 19, 2024 and December 19, 2025. |

  150. Option Exercises and Stock Vested for Fiscal 2023

    Option Exercises and Stock Vested for Fiscal 2023 The following table shows all stock awards that vested and the value realized upon vesting for each NEO during fiscal 2023.

  151. Option Exercises and Stock Vested for Fiscal 2023

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) | | Gary E. Dickerson | 391,671 | 40,729,867 | | Brice Hill | 23,765 | 2,919,055 | | Prabu G. Raja | 80,362 | 8,356,844 | | Omkaram Nalamasu | 58,091 | 6,040,883 | | Timothy M. Deane | 12,915 | 1,257,663 |

  152. Option Exercises and Stock Vested for Fiscal 2023

    | (1) Of the amounts shown in this column, Applied withheld the following number of shares to cover tax withholding obligations: 194,195 shares for Mr. Dickerson; 10,592 shares for Mr. Hill; 38,458 shares for Dr. Raja; 27,652 shares for Dr. Nalamasu; and 4,958 shares for Mr. Deane. |

  153. Option Exercises and Stock Vested for Fiscal 2023

    | (2) Value realized equals the fair market value of Applied common stock on the vesting date, multiplied by the number of shares that were acquired on vesting. |

  154. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation Applied’s 2016 Deferred Compensation Plan (the “DCP”) is a non-qualified deferred compensation plan that allows eligible employees, including executive officers, to voluntarily defer receipt of up to 40% of their base salaries and all or a portion of their eligible sales incentive and annual bonus payments, if any. Deferrals made prior to October 2015 are retained as separate “rollover” accounts under the DCP. These deferrals continue to be credited with deemed interest in the sum of (a) the yield-to-maturity of five-year U.S. Treasury notes, plus (b) 1.50%. Deferred amounts in the rollover accounts, plus deemed interest thereon, are generally payable on the same date selected by the participants or specified prior to October 2015 under the terms of the DCP. Beginning in fiscal 2016, deferrals under the DCP are credited with deemed investment returns, gains or losses based upon investment crediting options available under the DCP. Applied does not make any matching or other employer contributions to the DCP for our executive officers. Under the DCP, a change in control (as defined prior to October 2015), would trigger the distribution of all deferred balances in the rollover accounts. For account balances after October 2015, the DCP provides distribution rules for in-service and future date distribution options and upon a qualifying separation from service, disability and change in control, including the option to change the time and form of payment within three (3) months following a change in control, as such term is defined in the DCP. Distributions are payable from the general assets of Applied or from the assets of a grantor trust (known as a rabbi trust) established by Applied for distributions made from accounts consisting of deferrals made after October 2015 and as of December 31, 2019, and their associated earnings.

  155. Non-Qualified Deferred Compensation for Fiscal 2023

    Non-Qualified Deferred Compensation for Fiscal 2023

  156. Non-Qualified Deferred Compensation for Fiscal 2023

    | Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(2) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(3) | | Gary E. Dickerson | — | — | — | — | — | | Brice Hill | 224,001 | — | 7,202 | — | 383,326 | | Prabu G. Raja | 1,012,614 | — | 261,694 | — | 8,638,916 | | Omkaram Nalamasu | 798,074 | — | 225,686 | 226,241 | 6,354,866 | | Timothy M. Deane | 394,090 | — | 6,888 | — | 1,679,246 |

  157. Non-Qualified Deferred Compensation for Fiscal 2023

    | (1) Amounts in this column are included in the Salary and/or Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table for fiscal 2023. |

  158. Non-Qualified Deferred Compensation for Fiscal 2023

    | (2) Amounts in this column are not included in the Summary Compensation Table because there were no above-market or preferential earnings for fiscal 2023. |

  159. Non-Qualified Deferred Compensation for Fiscal 2023

    | (3) Amounts in this column represent balances as of October 29, 2023 and include compensation reported in the Summary Compensation Table for fiscal 2023 and in the Summary Compensation Tables for prior years’ proxy statements, except for (i) the earnings on contributions, which were not at above-market or preferential rates, and (ii) contributions made when the individual was not a NEO. |

  160. Potential Payments Upon Termination or Change of Control

    Potential Payments Upon Termination or Change of Control Applied does not currently have change of control agreements or arrangements with any of its NEOs. Potential Payments Upon Termination. Under Mr. Dickerson’s employment agreement described above, he would have been entitled to receive $2,832,500 (275% of his annual base salary at the end of fiscal 2023) had Applied terminated his employment without cause on October 27, 2023, the last business day of fiscal 2023. No other NEO was party to an employment agreement in effect on October 27, 2023 or entitled to receive severance payments under such an agreement. Additionally, the Value Creation Awards granted to Mr. Dickerson and Dr. Raja in fiscal 2021 provide for accelerated vesting in the event of an involuntary termination of employment without cause (as defined under the Stock Plan). In the event of such a termination, the performance period for the Value Creation Awards would be deemed to end on the date of such termination and the number of shares that would vest would be determined as of such date. The following table shows the amounts attributable to the accelerated vesting of the Value Creation Awards if Applied had terminated Mr. Dickerson’s or Dr. Raja’s employment, respectively, without cause on October 27, 2023, the last business day of fiscal 2023.

  161. Potential Payments Upon Termination or Change of Control

    | Named Executive Officer | Value of Vesting Acceleration of Value Creation Awards ($)(1) | | Gary E. Dickerson | 30,499,677 | | Prabu G. Raja | 8,867,739 |

  162. Potential Payments Upon Termination or Change of Control

    | (1) Amount based on the number of Value Creation Awards for which vesting would have been accelerated, calculated as (i) the target number of units awarded, (ii) multiplied by the 200% modifier that would have applied based on Applied’s absolute TSR achievement as of October 27, 2023 as compared to the program goals, (iii) multiplied by $131.30, the closing price of Applied common stock on October 27, 2023. |

  163. Potential Payments Upon Termination or Change of Control

    Qualified Retirement – Employee Stock Incentive Plan. PSU and RSU awards granted to certain of our NEOs are subject to retirement provisions which provide for partial accelerated vesting of RSU awards and a partial payout of PSU awards based on actual performance at the conclusion of the three-year performance period, in the event of a qualifying retirement. In order to qualify, an executive is required to have reached age 60 and have completed at least five years of service with Applied, at the time of his or her retirement. As of the end of fiscal 2023, each of Mr. Dickerson, Dr. Raja and Dr. Nalamasu would have met the conditions for a qualifying retirement under these provisions. The following table shows the amounts attributable to a partial accelerated vesting of RSU awards and partial payout of PSU awards if the NEOs had incurred a qualifying retirement on October 27, 2023, the last business day of fiscal 2023. The retirement provision does not apply to the Value Creation Awards.

  164. Potential Payments Upon Termination or Change of Control

    | Named Executive Officer | Value of Partial RSU Vesting Acceleration and Partial PSU Payout ($)(1) | | Gary E. Dickerson | 38,100,503 | | Brice Hill | — | | Prabu G. Raja | 10,989,810 | | Omkaram Nalamasu | 7,011,945 | | Timothy M. Deane | — |

  165. Potential Payments Upon Termination or Change of Control

    | (1) Amount based on the number of RSUs for which vesting would have been accelerated and target number of PSUs which would have remained eligible to vest, multiplied by $131.30, the closing price of Applied common stock on October 27, 2023. |

  166. Potential Payments Upon Termination or Change of Control

    Change of Control – Employee Stock Incentive Plan. Our Stock Plan provides that the vesting of equity awards granted under the plan to employees, including the NEOs, will be accelerated in full upon a change of control of Applied if the successor corporation (or its parent or subsidiary) does not assume or provide a substitute for the outstanding awards. Separately, equity awards will be accelerated in full if the award holder is terminated without cause or resigns employment with Applied for good reason, in each case, within 12 months following a change of control of Applied and as defined under the Stock Plan or the applicable award agreement. This double-trigger accelerated vesting does not apply if the applicable award agreement specifically states that it will not apply or if the participant’s employment is terminated due to his or her death or disability, resignation without good reason or termination for cause. The following table shows the amounts attributable to the accelerated vesting of equity awards under the Stock Plan following a change of control in which the awards are not assumed or substituted, or within 12 months following a change of control in which the NEO is terminated without cause or resigns for good reason, in each case assuming the change of control and termination or resignation occurred on October 27, 2023, the last business day of fiscal 2023.

  167. Potential Payments Upon Termination or Change of Control

    | Named Executive Officer | Value of Vesting Acceleration ($)(1) | | Gary E. Dickerson | 70,357,105 | | Brice Hill | 12,243,725 | | Prabu G. Raja | 19,643,268 | | Omkaram Nalamasu | 9,666,700 | | Timothy M. Deane | 7,391,402 |

  168. Potential Payments Upon Termination or Change of Control

    | (1) Amount based on the number of RSUs and target number of PSUs for which vesting would have been accelerated, multiplied by $131.30, the closing price of Applied common stock on October 27, 2023. |

  169. CEO Pay Ratio

    CEO Pay Ratio In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO, to the median of the annual total compensation of our employees (other than the CEO). The fiscal 2023 annual total compensation of our CEO, Mr. Dickerson, was $26,854,544, the fiscal 2023 annual total compensation of our median compensated employee (other than the CEO) was $96,883, and the ratio of these amounts was 277 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources system of record and the methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. As permitted under the SEC rules, we are using the same median employee as was identified for purposes of our fiscal 2021 CEO pay ratio, as we believe the changes in our employee population and compensation arrangements have not significantly impacted our pay ratio disclosure. For purposes of identifying our median compensated employee for fiscal 2021, we used our global employee population as of October 31, 2021, the last day of fiscal 2021, identified based on our human resources system of record. We used total direct compensation as our consistently applied compensation measure for such population. In this context, total direct compensation means the sum of the applicable annualized base salary determined as of October 31, 2021, the annual incentive earned for service in fiscal 2021, and the approved value of the annual equity awards granted during fiscal 2021, not including off-cycle grants in the case of new hires, promotions, or similar circumstances. Given the Company’s global population, we used the foreign currency exchange rates in effect at the end of fiscal 2021 for the salary and the annual incentive. We then calculated the annual fiscal 2023 total compensation for our previously-identified median compensated employee using the same methodology used for our CEO as set forth in the Summary Compensation Table of this Proxy Statement.

  170. Pay Versus Performance

    Pay Versus Performance The following disclosure sets forth information concerning the compensation for our principal executive officer (“PEO”) and the average compensation for our other NEOs (“Non-PEO NEOs”), as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” to such individuals, and certain financial performance measures, for our three most recently completed fiscal years. This disclosure has been prepared in accordance with Item 402(v) of the Exchange Act.

  171. Pay versus Performance Table

    Pay versus Performance Table

  172. Pay versus Performance Table

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Fiscal Year (a) | Summary Compensation Table Total for PEO (1) (b) | Compensation Actually Paid to PEO (1)(2)(3) (c) | Average Summary Compensation Table Total for Non-PEO NEOs (1) (d) | Average Compensation Actually Paid to Non-PEO NEOs (1)(2)(4) (e) | Total Shareholder Return (5) (f) | Peer Group Total Shareholder Return (5) (g) | GAAP Net Income (millions) (h) | Non-GAAP Adjusted EPS (6) (i) | | 2023 | $26,854,544 | $71,918,135 | $6,475,471 | $12,376,821 | $221.11 | $142.27 | $6,856 | $8.05 | | 2022 | $20,399,972 | ($22,058,266) | $5,953,570 | $1,634,909 | $149.67 | $105.92 | $6,525 | $7.70 | | 2021 | $35,265,559 | $144,856,918 | $6,675,150 | $14,982,610 | $226.06 | $148.13 | $5,888 | $6.84 |

  173. Pay versus Performance Table

    | (1) Mr. Dickerson was our PEO for each year presented. The Non-PEO NEOs were: (i) for fiscal 2023, Drs. Raja and Nalamasu and Messrs. Hill and Deane, (ii) for fiscal 2022, Drs. Raja and Nalamasu, Messrs. Hill and Deane, Robert J. Halliday, and Ali Salehpour, and (iii) for fiscal 2021, Drs. Raja and Nalamasu, Messrs. Halliday and Salehpour, and Daniel J. Durn. |

  174. Pay versus Performance Table

    | (2) The dollar amounts reported represent the amount of “compensation actually paid,” as calculated in accordance with SEC rules. The dollar amounts do not reflect the amounts of compensation actually earned, realized or received by our NEOs during the applicable fiscal year. In accordance with SEC rules, certain adjustments were made to the Summary Compensation Table total compensation to determine the amount of “compensation actually paid,” as shown in notes 3 and 4 to this table. |

  175. Pay versus Performance Table

    | (3) The following table shows the amounts deducted from and added to the Summary Compensation Table (“SCT”) total compensation to calculate “compensation actually paid” to Mr. Dickerson. |

  176. Pay versus Performance Table

    | Fiscal Year | SCT Total ($) | Subtract: Amounts Reported as Stock Awards in SCT ($) | Add: Year-End Fair Value of Equity Awards Granted in the Year and Unvested at Year End ($) | Add: Fair Value As of the Vesting Date of Equity Awards Granted and Vested in the Year ($) | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Unvested at Year End ($) | Add: Change As of the Vesting Date (From End of Prior Fiscal Year) in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Subtract: Fair Value as of Prior Year-End of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the Year ($) | Add: Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value ($) | Compensation Actually Paid ($) | | 2023 | 26,854,544 | 23,951,048 | 34,382,124 | — | 29,015,408 | 5,617,107 | — | — | 71,918,135 | | 2022 | 20,399,972 | 17,783,334 | 11,152,105 | — | (40,108,077) | 4,281,068 | — | — | (22,058,266) | | 2021 | 35,265,559 | 31,710,469 | 67,242,440 | — | 67,802,579 | 6,256,810 | — | — | 144,856,918 |

  177. Pay versus Performance Table

    | (4) The following table shows the amounts deducted from and added to the average SCT total compensation to calculate the average “compensation actually paid” to our Non-PEO NEOs. |

  178. Pay versus Performance Table

    | Fiscal Year | SCT Total ($) | Subtract: Amounts Reported as Stock Awards in SCT ($) | Add: Year-End Fair Value of Equity Awards Granted in the Year and Unvested at Year End ($) | Add: Fair Value As of the Vesting Date of Equity Awards Granted and Vested in the Year ($) | Add: Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Unvested at Year End ($) | Add: Change As of the Vesting Date (From End of Prior Fiscal Year) in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Subtract: Fair Value as of Prior Year-End of Equity Awards Granted in Prior Years that Failed to Meet Vesting Conditions in the Year ($) | Add: Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value ($) | Compensation Actually Paid ($) | | 2023 | 6,475,471 | 4,825,590 | 6,605,428 | — | 3,400,246 | 721,266 | — | — | 12,376,821 | | 2022 | 5,953,570 | 4,139,424 | 2,811,599 | — | (3,525,315) | 534,479 | — | — | 1,634,909 | | 2021 | 6,675,150 | 5,370,836 | 6,775,456 | — | 7,971,327 | 1,370,968 | 2,439,455 | — | 14,982,610 |

  179. Pay versus Performance Table

    | (5) Total Shareholder Return for the Company and the Peer Group is based on an initial fixed investment of $100 beginning with the market close on October 23, 2020, the last trading day before fiscal 2021, and is calculated in accordance with SEC rules. The Peer Group TSR set forth in this table reflects the TSR for the PHLX Semiconductor Index, which we also use in the performance graph required by Item 201(e) of Regulation S-K under the Exchange Act, and included in our Annual Report on Form 10-K for the fiscal year ended October 29, 2023. |

  180. Pay versus Performance Table

    | (6) Non-GAAP Adjusted Diluted Earnings Per Share is the financial measure that was determined to be the most important financial performance measure linking “compensation actually paid” to our NEOs to company performance for fiscal 2023 and therefore was selected as the fiscal 2023 “Company-Selected Measure” as defined in Item 402(v) of Regulation S-K under the Exchange Act. See Appendix A for a reconciliation of non-GAAP adjusted EPS. |

  181. Relationship Between “Compensation Actually Paid” and Performance Measures

    Relationship Between “Compensation Actually Paid” and Performance Measures The following graphs show the relationships over our three most recently completed fiscal years of the “compensation actually paid” for our PEO and Non-PEO NEOs, as compared to our TSR, GAAP Net Income, and non-GAAP Adjusted EPS, as well as the relationship between our TSR and the Peer Group TSR.