2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 350 Primary Compensation Elements for Fiscal 2017 The primary elements of our compensation program consist of base salary, annual incentive bonuses and annual long- term incentive awards. Other elements of compensation include a 401(k) savings plan, deferred compensation benefits and other benefits programs that are generally available to all employees. Primary elements of our fiscal 2017 compensation program were as follows: Element of Pay Philosophy Structure Base Salary (see page 29) Fixed cash compensation for expected day-to-day responsibilities Reviewed annually and adjusted when appropriate, based on scope of responsibility, performance, time in role, experience and competitive market for executive talent Annual Incentive Bonuses (see page 29) Variable compensation paid in cash NEO annual incentives determined through three-step performance measurement process: Based on performance against pre-established financial, operational, strategic and individual performance measures Financial and non-financial metrics provide a comprehensive assessment of executive performance Performance metrics evaluated annually for alignment with strategy and market trends Funding Allocation 1 Initial Performance Goal Non-GAAP Adjusted Earnings Per Share 2 Corporate Scorecard Business and Strategic Goals 3 Individual Performance Modifier Individual NEO Performance Long-Term Incentives (see page 35) Performance share units to establish rigorous long-term performance alignment Performance share units vest based on achievement of 3-year non-GAAP adjusted operating margin and 3-year wafer fabrication equipment market share goals Restricted stock units to provide link to shareholder value creation and retention value Restricted stock units vest ratably over 3 years 24 2018 Proxy Statement APPLIED MATERIALS, INC.

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