SEC Form 4

FORM 4		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0287 Estimated average burden hours per response: 0.5
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person* HILL RICHARD (Last) (First) (Middle) 4000 NORTH FIRST STREET (Street) SAN JOSE CA 95134 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol NOVELLUS SYSTEMS INC [ NVLS ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) X Director 10% Owner X Officer (give title below) Other (specify below) CEO
	3. Date of Earliest Transaction (Month/Day/Year) 12/16/2010
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	12/17/2010		A		62,657(7)	A	$0.00	280,574(1)	D
Common Stock	12/17/2010		F		29,249	D	$32.84	251,325(1)	D
Common Stock	12/17/2010		M		957	A	$0.00	13,065	I	By Spouse(2)
Common Stock	12/17/2010		F		352	D	$32.84	12,713	I	By Spouse(2)
Common Stock								2,393	I	By 401(k)(3)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Stock Option (right to buy)	$33	12/16/2010		A		2,750		(4)	12/16/2020	Common Stock	2,750	$0.00	2,750	I	By Spouse
Restricted Stock Unit(5)	$0.00	12/16/2010		A		2,600		(4)	(4)	Common Stock	2,600	$0.00	2,600	I	By Spouse
Non Qualified Stock Option (right to buy)	$32.84	12/17/2010		A		181,900		(6)	12/17/2020	Common Stock	181,900	$0.00	181,900	D
Restricted Stock Unit(5)	$0.00	12/17/2010		A		40,620		(6)	(6)	Common Stock	40,620	$0.00	40,620	D
Restricted Stock Unit(5)	$0.00	12/17/2010		M		957		(8)	(8)	Common Stock	957	$0.00	2,868	I	By Spouse

Explanation of Responses:

1. Amount reported includes shares subject to unvested Restricted Stock Awards.

2. The indirect holdings by Mrs. Hill include 2,142 estimated shares held in the Company 401K unitized stock fund. The balance is reported as of the last business day. The remaining shares are held in common stock.

3. The indirect holdings in the 401K are held in the Company unitized stock fund. The balance is reported as of the last business day.

4. The grant vests in four annual equal installments beginning December 16, 2011.

5. Each restricted stock unit represents a contingent right to receive one share of NVLS common stock.

6. The grant vests in four annual equal installments beginning December 17, 2011.

7. Represents shares of common stock acquired upon the vesting of an award of Restricted Stock Units. As reported in the Issuer's Current Report on Form 8-K filed with the Securities and Exchange Commission on February 2, 2010, an award of Restricted Stock Units covering 125,315 shares of common stock was approved on January 28, 2010 and was to vest at such times and in such amounts as determined by the Issuer's Board of Directors (the "Board"), based on certain criteria that were to be determined by the Board during 2010. On December 17, 2010, the Board determined that 50% of the Restricted Stock Units would vest upon each of the following events: (i) the appointment by the Board or a committee of the Board of a Chief Operating Officer and (ii) the appointment by the Board or a committee of the Board of a successor to Mr. Hill as Chief Executive Officer. On December 17, 2010, the Board appointed a new Chief Operating Officer, effective January 3, 2011.

8. The grant vests in four annual equal installments beginning December 17, 2010.

	Richard Hill by Gina Corrales, Attorney-in-Fact	12/20/2010
	** Signature of Reporting Person	Date
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