Business Context and Reporting Period
This Form 8-K Current Report was filed by Applied Materials, Inc. on December 15, 2006. The filing addresses Item 5.02 regarding the departure of a senior officer and the associated compensatory arrangements.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the financial terms of a separation agreement.
Material Changes and Compensation Details
The report details the formal separation agreement with Nancy H. Handel, Senior Vice President, Finance and former Chief Financial Officer, effective January 5, 2007. Key financial terms include:
- Salary: Continuation of current salary through January 5, 2007.
- Consulting Fees: $10,000 per month for up to five days of service per month from January 6, 2007, through January 6, 2008.
- Separation Payments: Two payments of $687,500 each, payable on December 15, 2006, and January 5, 2007, contingent on continued service.
- Bonus Payment: A lump sum of $692,010 representing earnings under the Senior Executive Bonus Plan, payable on December 22, 2006.
- Equity Vesting: Accelerated vesting of stock options. 100% of options vesting through January 31, 2008, and 50% of options vesting between February 1, 2008, and January 31, 2009, will immediately vest. Unvested performance shares will terminate.
- Option Expiration: All outstanding options remain exercisable until the earlier of their maximum term or December 31, 2007.
Guidance, Outlook, and Risks
The filing contains no guidance, outlook, or management commentary regarding future business performance. The primary contingency noted is that the separation agreement becomes effective seven days following December 15, 2006, provided Ms. Handel does not revoke her consent.
Investor Verification Checklist
- Verify the total cash outflow associated with the separation agreement ($2,067,010 in immediate payments plus consulting fees).
- Confirm the impact of accelerated stock option vesting on the company's share count and dilution.
- Review the timeline for the transition of duties from Ms. Handel to ensure operational continuity in the finance function.
- Check for any subsequent filings regarding the appointment of a replacement CFO.