CHARTER OF THE HUMAN RESOURCES AND
COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS OF APPLIED MATERIALS, INC.
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| TABLE OF CONTENTS |
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I. PURPOSE |
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II. COMPOSITION |
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III. RESPONSIBILITIES AND DUTIES |
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IV. MEETINGS |
I. PURPOSE
The primary purpose of the Human Resources and Compensation Committee (the “Committee”) is to direct the appropriate development of the human capabilities of Applied Materials, Inc. (the “Company”). The Company’s Board of Directors (the “Board”) and the Committee recognize that developing the capabilities of the Company’s executives and employees is vital to the Company’s ability to capitalize on its opportunities and increase long-term stockholder value. Accordingly, the Committee’s most important goal is to oversee the Company’s programs that foster executive and employee development and retention, with emphasis on leadership development, management capabilities and succession plans. In furtherance of its primary goal, the Committee also determines executive compensation and oversees significant employee benefits programs, policies and plans relating to the Company’s executives and employees. As appropriate, the Committee’s activities are reported to the full Board.
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II. COMPOSITION
The Committee shall consist of no fewer than two directors. Each member of the Committee shall be (1) a “non-employee director,” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “1934 Act”), (2) an “outside director,” as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended and (3) an “independent director,” as defined in Rule 4200 of the Nasdaq Marketplace Rules. One member of the Committee shall be the Chair. Members of the Committee and its Chair shall be appointed annually and may be removed by the Board. Interlocking Committee memberships (e.g., company chief executive officers sitting on each other’s compensation committees) shall be avoided. In the event any one of the appointed Committee members ceases to be a non-employee, outside or independent director, the Board will promptly select another non-employee, outside or independent director to serve on the Committee as a replacement.
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III. RESPONSIBILITIES AND DUTIES
The Committee has responsibility for a broad range of overall strategic Company human resources programs, compensation, benefits, and equity plan issues. The Committee evaluates, oversees, administers, reviews and/or approves the Company’s primary strategies for executive and employee development and retention, with emphasis on leadership development, management capabilities and succession plans. The Committee seeks to assure that the Chief Executive Officer (“CEO”), other officers, and key management of the Company are compensated and motivated effectively in a manner consistent with competitive practices/trends, the requirements of appropriate regulatory bodies, the compensation principles and strategies of the Company, and fiduciary and corporate responsibility, including internal equity considerations.
In carrying out the purposes set forth above, the Committee shall:
- Review regularly and approve the Company’s programs for executive development and employee development for senior management positions, including performance and skills evaluation, training, wellness, management depth, and succession planning.
- Develop, review and approve the principles guiding the Company’s executive compensation philosophies.
- Review annually and approve the Company’s compensation strategy to assure that officers and such other key employees as the Committee determines to be appropriate are rewarded appropriately for their contributions to the Company’s growth and profitability, and that the executive compensation strategy supports Company objectives.
- Review and determine the principal elements of total compensation for the Company’s officers as determined under Rule 16a-1(f) of the 1934 Act (“Officers”) and such other key employees as the Committee determines to be appropriate.
- Review and approve the goals and objectives for compensating the CEO and evaluate the CEO’s performance in light of these goals before setting the CEO’s salary, bonus and other incentive and equity compensation.
- Assure that the Senior Executive Bonus Plan (the “Plan”) is administered in a manner consistent with the Company’s compensation principles and strategies and the Plan’s terms as to the following:
- Participation
- Target annual incentive awards
- Performance goals
- Actual awards paid to Plan participants
- Adopt, amend and oversee the administration of all equity-related incentive plans and senior executive bonus plans.
- Review and approve any employment, severance and/or change in control arrangements for the Company’s Officers and such other key employees as the Committee determines to be appropriate.
- Review and approve the compensation of members of the Board, as appropriate.
- Review matters relating to executive management succession and executive organization development.
- Adopt, amend and oversee the administration of the Company’s major retirement and deferred compensation programs.
- Prepare periodic reports for the Board regarding the above items.
- Review and consult with the Company’s management regarding the “Compensation Discussion and Analysis” disclosure that is prepared pursuant to Securities and Exchange Commission (“SEC”) rules, and based on such review, recommend to the Board whether such disclosure should be included in the Company’s annual report or proxy statement for each annual meeting.
- Prepare a report of the Committee to be included in the Company’s proxy statement for each annual meeting in accordance with SEC rules.
The Committee shall have the authority to invite members of the Company’s management to attend its meetings. However, the Chief Executive Officer shall not be present when his or her compensation is determined. The Committee also shall have the authority to engage its own independent advisors to assist the Committee in carrying out its responsibilities and duties and may invite such advisors to attend Committee meetings, as it deems appropriate. Written minutes of the proceedings of each meeting or consent action of the Committee shall be prepared and circulated to each member of the Committee.
The Committee shall have the authority to delegate any of its responsibilities to subcommittees, as the Committee in its sole discretion may deem appropriate.
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IV. MEETINGS
Committee meetings generally will be held in conjunction with Board meetings. Special meetings of the Committee (in person or telephonic) may be called by the Board Chair or by any Committee member.
The Committee shall meet at least annually or more frequently as appropriate. |
*July 1, 2006, Nasdaq renamed the National Market as the Nasdaq Global Market. Applied Materials (AMAT) is listed in the new top-tier market called the Nasdaq Global Select Market.
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