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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11- K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
/X/ Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 (Fee required)
For the fiscal year ended DECEMBER 31, 1994
or
/ / Transition report pursuant to Section 15(d) of the Securities Exchange
Act of 1934 (No fee required)
For the transition period from ___________ to ___________ .
Commission file number 2-69114
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
APPLIED MATERIALS, INC. EMPLOYEE SAVINGS AND RETIREMENT PLAN.
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
APPLIED MATERIALS, INC.
3050 Bowers Avenue
Santa Clara, California 95054
Page 1 of 15
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
APPLIED MATERIALS, INC.
EMPLOYEE SAVINGS AND RETIREMENT PLAN
Date: June 27, 1995 By /s/ Rosemary T. Elliott
--------------------------------------
Rosemary T. Elliott
Vice President, Global Human Resources
Chairman of the Corporate
Benefits Committee
2
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<TABLE>
<CAPTION>
Table of Contents
-----------------
Sequentially
Numbered Page
-------------
<S> <C>
Report of Independent Accountants 4
Financial Statement
Statements of Net Assets Available for Benefits -
December 31, 1994 and 1993 5
Statement of Changes in Net Assets Available for Benefits with Fund
Information - year ended December 31, 1994 6
Notes to Financial Statements 7-12
Schedule 27a - Schedule of Assets Held for Investment
Purposes - December 31, 1994 13
Schedule 27d - Schedule of Reportable Transactions - year ended
December 31, 1994 14
Consent of Independent Accountants (Exhibit) 15
</TABLE>
3
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Report of Independent Accountants
To the Administrative Committee of the Applied Materials, Inc. Employee Savings
and Retirement Plan:
In our opinion, the financial statements listed in the accompanying table of
contents present fairly, in all material respects, the net assets available for
benefits of the Applied Materials, Inc. Employee Savings and Retirement Plan at
December 31, 1994 and 1993, and the changes in net assets available for benefits
for the year ended December 31, 1994, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Administrative Committee; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
schedules 27a and 27d is presented for purposes of additional analysis and is
not a required part of the basic financial statements but is additional
information required by ERISA. The Fund Information in the statement of changes
in net assets available for benefits is presented for purposes of additional
analysis rather than to present the changes in net assets available for benefits
of each fund. Schedules 27a and 27d and the Fund Information have been subjected
to the auditing procedures applied in the audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
PRICE WATERHOUSE LLP
San Jose, California
May 22, 1995
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APPLIED MATERIALS, INC.
EMPLOYEE SAVINGS AND RETIREMENT PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31, December 31,
1994 1993
----------------- -----------------
<S> <C> <C>
ASSETS
Cash $ 1,097,209 $ 25,015
Investments, at fair value:
In shares of registered investment companies:
Fidelity Retirement Government Money Market Portfolio 7,758,813 6,507,408
Fidelity Equity Income Fund 9,860,017 7,746,077
Fidelity Intermediate Bond Fund 3,602,500 3,192,980
Fidelity Magellan Fund 18,726,547 15,231,355
Applied Materials, Inc. Common Stock 84,539,205 67,767,460
Participant notes receivable 3,769,075 2,423,428
Contributions receivable - 70,000
----------------- -----------------
129,353,366 102,963,723
LIABILITIES
Forfeited matching contributions 345,808 304,401
----------------- -----------------
Net assets available for benefits $ 129,007,558 $ 102,659,322
================= =================
</TABLE>
See accompanying notes to financial statements.
5
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APPLIED MATERIALS, INC.
EMPLOYEE SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
FUND A FUND B FUND C FUND D
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Additions to net assets
attributed to:
Investment Income:
Interest and dividends $ 283,051 $ 892,294 $ $ 236,286
-
Loan interest - - - -
Net realized and unrealized
appreciation (depreciation) in
fair value of investments - (900,751) 5,133,335 (296,795)
----------- ----------- ------------- -----------
283,051 (8,457) 5,133,335 (60,509)
Participant contributions 1,543,170 2,548,594 6,511,078 1,064,852
Company and AKTA contributions - - 7,185,243 -
----------- ----------- ------------- -----------
Total additions 1,826,221 2,540,137 18,829,656 1,004,343
Deductions from net assets attributed to:
Benefits paid to participants (297,376) (245,915) (2,011,326) (127,055)
----------- ----------- ------------- -----------
Net increase prior to interfund
transfers 1,528,845 2,294,222 16,818,330 877,288
Interfund transfers (318,846) (180,282) 955,608 (467,768)
----------- ----------- ------------- -----------
Net increase 1,209,999 2,113,940 17,773,938 409,520
Net assets available for
benefits:
Beginning of year 6,203,007 7,746,077 67,862,475 3,192,980
----------- ----------- ------------- -----------
End of year $ 7,413,006 $ 9,860,017 $ 85,636,413 $ 3,602,500
=========== =========== ============= ===========
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT
FUND E NOTES TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
Additions to net assets
attributed to:
Investment Income:
Interest and dividends $ 644,180 $ $ 2,055,811
-
Loan interest - 199,875 199,875
Net realized and unrealized
appreciation (depreciation) in
fair value of investments (974,962) - 2,960,827
------------ ----------- ------------
(330,782) 199,875 5,216,513
Participant contributions 5,643,971 - 17,311,665
Company and AKTA contributions - - 7,185,243
------------ ----------- ------------
Total additions 5,313,189 199,875 29,713,421
Deductions from net assets attributed to:
Benefits paid to participants (592,800) (90,713) (3,365,185)
------------ ----------- ------------
Net increase prior to interfund
transfers 4,720,389 109,162 26,348,236
Interfund transfers (1,225,197) 1,236,485 -
------------ ----------- ------------
Net increase 3,495,192 1,345,647 26,348,236
Net assets available for
benefits:
Beginning of year 15,231,355 2,423,428 102,659,322
------------ ----------- ------------
End of year $ 18,726,547 $ 3,769,075 $129,007,558
============ =========== ============
</TABLE>
See accompanying notes to financial statements.
6
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APPLIED MATERIALS, INC.
EMPLOYEE SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policies:
The accounts of the Applied Materials, Inc. Employee Savings and Retirement
Plan (the Plan) are maintained on an accrual basis.
The Plan's investments are stated at fair value which is the value per unit
as certified by the Plan Trustee for the Fidelity Retirement Government
Money Market Portfolio (Fund A) and at the closing market price as of
December 31 for the Fidelity Equity-Income shares (included in Fund B);
Applied Materials, Inc. Common Stock (included in Fund C); Fidelity
Intermediate Bond Fund shares (included in Fund D); and Fidelity Magellan
Fund shares (included in Fund E). Participant notes are valued at cost
which approximates fair value.
Benefits are recorded when paid.
2. The Plan - APPLIED MATERIALS, INC. EMPLOYEE SAVINGS AND RETIREMENT PLAN
The Plan is a defined contribution plan covering primarily all U.S.
employees of Applied Materials, Inc. (the Company) and beginning in 1994,
Applied Komatsu Technology America, Inc. (AKTA), working 20 or more hours
per week. The Plan provides for retirement benefits to participants and is
subject to the Employee Retirement Income Security Act of 1974 (ERISA). The
Plan is intended to qualify for favorable tax treatment granted to
qualified plans that meet the requirements of sections 401(a) and (k) of
the Internal Revenue Code. As a result, Company and AKTA matching
contributions, participant salary deferral contributions and any net
earnings or gains on those contributions generally will not be taxable to
the participant until they are distributed or withdrawn in accordance with
the terms of the Plan.
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Administrative Committee
The Plan's Administrative committee consists of certain officers and
executives of the Company. These members are appointed by the Benefits
Committee of the Company to oversee the Plan and its performance on behalf
of the participants.
Plan Administrator
Fidelity Institutional Retirement Services Company was appointed by the
Administrative Committee to maintain individual participant accounts and
records therein all participant contributions, Company and AKTA matching
contributions and investment income attributable to each participant. For
purposes of ERISA, the Company is the "plan administrator".
Termination of the Plan
The Company expects to continue the Plan indefinitely and expects to
continue to make contributions under the Plan. However, there is no
contractual commitment that the Plan will be continued and the Company's
Board of Directors may alter or terminate the Plan at any time and for any
reason subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100 percent vested in their accounts.
Expenses of the Plan
All expenses incurred in the administration of the Plan, including legal
and trustee fees, are funded by the Company, and consequently are not
reflected in the financial statements. Brokerage commissions and other
charges incurred in connection with investment transactions are paid out of
the assets of the respective fund.
3. Contributions
Below are general guidelines with respect to participant and accompanying
Company and AKTA contributions. Participants, the Company and AKTA are
subject to certain rules of the Internal Revenue Code which may further
limit the contributions allowable.
Participant Contributions
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Each participant may elect to defer from 1% to 12% of compensation (defined
as base pay plus overtime, excluding any bonuses or commissions). These
salary deferral contributions are invested at the direction of the
participant and share in the earnings and gains (or losses) of each
investment fund selected. These salary deferral accounts are always 100%
vested.
Participants may change their contribution percentage once during each
calendar quarter. A participant may suspend contributions at any time and
resume contributions on the first day of the calendar quarter after the
suspension.
The maximum annual salary deferral contribution was $9,240 for 1994 and
will also be $9,240 for 1995. This limitation applies in the aggregate for
all elective deferrals to all plans made by the participant during the
year. Accordingly, new participants who have made contributions to 401(k)
plans with their prior employer must aggregate all contributions for
purposes of the limit.
Company and AKTA Contributions
The participants in the Plan become eligible for the Company and AKTA
matching contributions immediately upon joining the Plan. The Company and
AKTA match 100% of participant contributions, up to the first 3% of
compensation contributed, and 50% on every dollar between 3% and 6% of
compensation contributed. The Company's and AKTA's contributions are made
biweekly. Company and AKTA matching contributions may be made in the form
of cash, shares of Applied Materials, Inc. Common Stock or a combination of
both. The trustee will use the cash contributions to purchase shares of
Applied Materials Common Stock on the open market (at the then prevailing
market price), directly from the Company, or from other persons in private
transactions (but in either of the latter cases only at the closing price
in the open market on the next preceding business day on which the shares
were traded). The Company and AKTA can make an additional discretionary
matching contribution in excess of the 50% match but not greater than 150%.
No additional matching contributions were made during 1994.
The participant becomes fully vested in the portion of the Company or AKTA
matching contribution allocated to his or her account if employed by the
Company or AKTA upon a) normal retirement (age 65 or older), b) permanent
disability, c) death, or d) after a
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designated time period per the applicable vesting schedule. The Plan
provides that vesting of the Company or AKTA matching contribution will be
as follows:
<TABLE>
<CAPTION>
Years of Service Vested Percentage
---------------- -----------------
<S> <C>
Less than three years 0%
Three but less than four years 20%
Four but less than five years 40%
Five but less than six years 60%
Six but less than seven years 80%
Seven or more years 100%
</TABLE>
If a participant leaves the Company or AKTA prior to retirement, the
portion of his or her matching account which is not vested will be
forfeited. Matching account forfeitures can be used to offset the Company's
or AKTA's required matching contribution, as applicable. Forfeitures
available to reduce future matching contributions at December 31, 1994 and
1993 were $345,808 and $304,401, respectively, and were temporarily
invested in Fund A.
The Plan contains a rehire provision whereby if a participant leaves the
Company or AKTA and at a later date is rehired before being separated for
five consecutive years, the forfeited portion of his or her account will be
restored as of the date of the rehire.
4. Investments
The Plan permits participants to direct and/or redirect their prospective
salary deferrals and/or their existing account balances into one of the
available investment funds or divide them among the funds. All matching
contributions are invested solely in Fund C, the Company Stock Fund. All of
the funds, except the Company Stock Fund, are managed by Fidelity
Investments.
The five investment funds available during 1994 and their investment
objectives are as follows:
Fund A: "Fidelity Retirement Government Money Market Portfolio"
(RGMMP) - the primary objective of this Fund is to maintain
safety of principal while producing reasonable interest income.
Investments are in units of the Fidelity RGMMP.
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RGMMP's assets are invested in obligations issued or guaranteed
as to principal and interest by the U.S. government, its
agencies or instrumentalities. The rate of return fluctuates
daily as short-term interest rates change.
Fund B: "Fidelity Equity Income Fund" - The investment objective of
this Fund is to focus on income from equity investments and
long-term appreciation. At least 80% of this fund's portfolio is
invested in income-producing common and preferred stocks; the
remainder tends to be invested in debt securities. The Equity
Income Fund invests in securities of varying quality, but the
fund does not expect to purchase securities of companies without
proven earnings or credit. The fund diversifies investments
among a variety of industries to help reduce risk of the overall
investment.
Fund C: "Company Stock Fund" - The sole investment objective of this
fund is to acquire and hold shares of Company Common Stock. The
fund will purchase either newly issued shares of Common Stock
from the Company or issued and outstanding shares in the open
market or in private transactions. No brokerage commissions are
charged on shares of Common Stock purchased from the Company or
in private transactions from any other person.
Fund D: "Fidelity Intermediate Bond Fund" - The primary objective of
this fund is to realize high current income and long-term
return. The fund invests in corporate debt obligations, U.S.
government obligations and in obligations of U.S. banks,
including certificates of deposit and banker's acceptances. The
average portfolio maturity ranges from three to ten years.
Fund E: "Fidelity Magellan Fund" - The investment objective of the
Fidelity Magellan Fund is to seek long-term capital
appreciation. This fund invests in common stocks, and securities
convertible into common stock, issued by companies operating in
the U.S. and/or abroad as well as foreign companies. Investments
are made in large corporations as well as smaller, less
well-known companies. The fund also diversifies investments
among a variety of industries and sectors within the market to
reduce overall risk.
Presently, Funds A, B, D and E are invested in Fidelity mutual fund and
money market shares bearing the name of the respective Funds (collectively
the "Fidelity Funds"). The
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Fidelity Funds are open-end, diversified investment companies ("mutual
funds"), the shares of which are publicly held.
None of the investment funds described above carries a guarantee of
principal or rate of return.
5. Loans to Plan Participants
Participants may borrow up to 50% of their vested account balance. The
minimum and maximum loan amounts are $1,000 and $50,000, respectively,
although as required by law, certain participants have lower maximum
permitted loan amounts. The loans are secured by the balance in the
participant's account and bear a fixed interest rate based on the prime
rate plus 1% at the time of the borrowing. Interest rates at December 31,
1994 range from 7% to 9.5%. Repayments of loans are made by payroll
deductions in equal installments over the life of the loan. Loan terms are
a minimum of one year and a maximum of five years. Loans are payable in
full upon the participant's termination of employment from the Company or
AKTA, or the occurrence of certain other events.
6. Federal Income Tax Status of the Plan
The Company amended and restated the Plan as of March 31, 1995 to reflect
current requirements of the Internal Revenue Code (IRC) and has applied for
a determination letter from the IRS that the Plan continues to constitute a
qualified plan, and that the trust continues to be tax-exempt. The Company
has made (or will make) all amendments to the Plan necessary or appropriate
to ensure that the Company will receive a favorable determination letter
covering the Plan and accordingly, expects to receive a favorable
determination letter in due course. The Company believes that the Plan is
currently being operated in compliance with the applicable requirements
of the IRC. Accordingly, no provision for federal or state income
taxes has been provided.
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APPLIED MATERIALS, INC.
EMPLOYEE SAVINGS AND RETIREMENT PLAN
SCHEDULE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
Shares or Approximate
Principal Historical Market
Amount Cost Value
---------- ----------- -----------
<S> <C> <C> <C>
Fund A:
Fidelity Retirement Government
Money Market Fund 7,758,813 $ 7,758,813 $ 7,758,813
Fund B:
Fidelity Equity Income Fund 321,173 9,732,893 9,860,017
Fund C:
Applied Materials, Inc. Common Stock 2,000,928 34,883,594 84,539,205
Fund D:
Fidelity Intermediate Bond Fund 366,480 3,826,028 3,602,500
Fund E:
Fideltiy Magellan Fund 280,338 18,830,921 18,726,547
Participant note's with interest rates
which range from 7% to 9.5%. 3,769,075
-------------
Investments total $ 128,256,157
=============
</TABLE>
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APPLIED MATERIALS, INC.
EMPLOYEE SAVINGS AND RETIREMENT PLAN
SCHEDULE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
Purchase Price and Sales Price and Historical
Current Value of Asset Current Value of Asset Cost of Net
Issuer On Transaction Date On Transaction Date Assets Sold Gain/(Loss)
- ------------------------------------ ---------------------- ---------------------- ------------- -----------
<S> <C> <C> <C> <C>
Applied Materials, Inc. Common Stock $ 16,821,996 $ 5,198,586 $ 2,134,843 $ 3,063,743
Fidelity Magellan Fund 7,804,230 3,345,324 3,301,857 43,467
Fidelity Equity Income Fund 4,478,170 1,468,156 1,376,520 91,636
Fidelity Retirement Government
Money Market Fund 3,207,359 1,961,069 1,961,069 -
</TABLE>
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EXHIBIT
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-8 (No. 33-52072) of
Applied Materials, Inc. of our report dated May 22, 1995, which appears on page
4 of this Form 11-K.
PRICE WATERHOUSE LLP
San Jose, California
June 27, 1995
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