8-KLeadership Changes

APPLIED MATERIALS INC /DE 8-K Report, Executive Changes (Jul 20, 2007)

Filed July 20, 2007For Securities:AMAT

Summary

This Form 8-K filing by Applied Materials, Inc. (AMAT) reports on the formal separation agreement and release entered into with Farhad Moghadam. Dr. Moghadam, who previously announced his intention to resign, will officially end his employment with the company on September 1, 2007. The agreement outlines terms including continued employment in his current roles until his departure, ongoing salary and benefits during this period, and continued vesting of stock options and performance shares. Key financial terms of the separation include aggregate cash severance payments of $1,600,000, to be paid in installments through December 2008, and reimbursement for up to 18 months of COBRA health insurance payments. The agreement also details specific provisions regarding the exercise periods and vesting of Dr. Moghadam's outstanding stock options and performance shares, with some options remaining exercisable for a year post-termination and others expiring sooner, subject to conditions and a supplemental agreement.

Key Highlights

  • 1Formal separation agreement and release executed with Farhad Moghadam, effective September 1, 2007.
  • 2Dr. Moghadam will continue in his current roles as Senior Vice President and General Manager of Thin Films Products Business Group and Foundation Engineering until his departure.
  • 3Aggregate cash severance of $1,600,000 will be paid in installments through December 2008.
  • 4Applied Materials will reimburse Dr. Moghadam for COBRA health insurance payments for up to 18 months post-termination.
  • 5Certain stock options (320,000 shares) will remain outstanding and exercisable for one year after termination.
  • 6Additional stock options (112,500 shares) and performance shares (12,500) may vest immediately upon execution of a supplemental agreement.
  • 7Dr. Moghadam is subject to ongoing confidentiality, non-solicitation, and non-competition obligations through December 31, 2008.

Frequently Asked Questions

This 8-K filing is to formally announce and detail the separation agreement between Applied Materials and Farhad Moghadam, outlining the terms and conditions of his departure from the company.

Dr. Moghadam is set to receive a total of $1,600,000 in cash severance, paid in three installments. Additionally, Applied Materials will cover his COBRA health insurance premiums for up to 18 months following his employment termination.

The treatment varies: 320,000 stock options will remain exercisable for one year after his termination date. Another 112,500 stock options and 12,500 performance shares may vest immediately if a supplemental agreement is signed. Other options will expire 30 days after his termination date, as per standard agreements.

Dr. Moghadam is bound by confidentiality and non-solicitation obligations. He also has a non-competition obligation that extends until December 31, 2008. Both parties have mutual non-disparagement obligations.