The Company has stock plans that provide for grants of non-qualified equity-based awards of the Company’s Common Stock to eligible employees and non-employee directors, including stock options, service-based restricted stock units (“service-based RSUs”), and market-based performance restricted stock units (“market-based PRSUs”). An option is a right to purchase Common Stock at a set price. A restricted stock unit award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company also has an employee stock purchase plan that allows eligible employees to purchase its Common Stock at a discount through payroll deductions.

The Lam Research Corporation 2015 Stock Incentive Plan (the “Plan”) was approved by the stockholders and provides for the grant of non-qualified equity-based awards to eligible employees, consultants, advisors, and non-employee directors of the Company and its subsidiaries. As of the date of stockholder approval, 192,320,680 authorized shares were available for issuance under the Plan; as of June 29, 2025, 62,666,508 shares remain available for future issuance to satisfy stock option exercises and vesting of awards.

The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Consolidated Statements of Operations:


	Year Ended
	June 29, 2025		June 30, 2024		June 25, 2023
	(in thousands)
Equity-based compensation expense	$	343,371	$	293,058	$	286,600
Income tax benefit recognized related to equity-based compensation	$	22,242	$	38,157	$	25,794
Income tax benefit realized from the exercise and vesting of options and RSUs	$	28,727	$	75,441	$	46,495

During fiscal years 2025, 2024, and 2023, the Company issued both service-based RSUs and market-based PRSUs. Service-based RSUs typically vest annually over a period of 3 years or less. Market-based PRSUs generally vest three years from the grant date if certain performance criteria are achieved and require continued employment.

For the majority of market-based PRSUs granted in the 2025 fiscal year, the number of shares that can be earned over the performance period is based on the Company’s total shareholder return (“TSR”) relative to other companies in the Philadelphia Semiconductor Index (“XSOX”), and ranges from 0% to 150% of target. Total shareholder return is a measure of stock price appreciation in the performance period, adjusted for the reinvestment of dividends. Relative TSR performance is measured using the average closing prices of each XSOX company for the 50-trading days prior to the dates the performance period begins and ends. The target number of shares is earned based on the percentile ranking of the Company’s TSR among the TSRs for the companies making up the XSOX Index. If the Company’s TSR is negative over the performance period, the payout will be capped at 100%, regardless of the percentile ranking.

For market-based PRSUs granted in the 2024 and 2023 fiscal years, the number of shares that can be earned over the performance periods is based on the Company’s Common Stock price performance compared to the market price performance of the Philadelphia Semiconductor Total Return Index (“XSOX”), and ranges from 0% to 150% of target. The stock price performance or market price performance is measured using the average closing price for the 50-trading days prior to the dates the performance period begins and ends. The target number of shares represented by the market-based PRSUs is increased by 2% of target for each 1% that Common Stock price performance exceeds the market price performance of the designated benchmark index.


	Number of Shares (in thousands)	Weighted-Average Grant Date Fair Value
Outstanding, June 30, 2024	9,228	$	65.59
Granted	4,218	76.25
Vested	(4,192)	59.63
Forfeited or canceled	(290)	66.00
Outstanding, June 29, 2025	8,964	$	74.09

Of the 8,964 thousand shares outstanding at June 29, 2025, 7,212 thousand are service-based RSUs and 1,752 thousand are market-based PRSUs. The fair value of the Company’s service-based RSUs was calculated based on the fair market value of the Company’s stock at the date of grant, discounted for dividends. The fair value of the Company’s market-based PRSUs granted during fiscal years 2025, 2024, and 2023 was calculated using a Monte Carlo simulation model at the date of the grant, resulting in a weighted average grant-date fair value per share of $85.18, $102.77, and $46.62, respectively. The total fair value of service-based RSUs and market-based RSUs that vested during fiscal years 2025, 2024, and 2023 was $249.9 million, $242.8 million, and $224.4 million, respectively.

As of June 29, 2025, the Company had $521.3 million of total unrecognized compensation expense which is expected to be recognized over a weighted-average remaining period of approximately 2.2 years.

The Company granted stock options with a 7-year maximum contractual term to a limited group of executive officers during fiscal years 2025, 2024, and 2023. Stock options typically vest over a period of three years or less. The Company had 1,285 thousand options outstanding at June 29, 2025 with a weighted-average exercise price of $57.53 per share, of which 950 thousand were exercisable with a weighted-average exercise price of $49.90 per share. As of June 29, 2025, the Company had $8.8 million of total unrecognized compensation expense related to unvested stock options granted and outstanding which is expected to be recognized over a weighted-average remaining period of 1.6 years.

The Company has an employee stock purchase plan (the “ESPP”) which allows employees to designate a portion of their base compensation to be deducted and used to purchase the Company’s Common Stock at a purchase price per share of the lower of 85% of the fair market value of the Company’s Common Stock on the first or last day of the applicable purchase period. Typically, each offering period lasts 12 months and contains one interim purchase date.