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, as amended, and the Lam Research Corporation 2025 Stock Incentive Plan (collectively the “Stock Plans”) were approved by the stockholders and provide for the grant of non-qualified equity-based awards to eligible employees, consultants, advisors, and non-employee directors of the Company and its subsidiaries. The 2025 Stock Incentive Plan was approved by shareholders on November 4, 2025 and authorizes up to 96.8 million shares available for issuance under the plan. Additionally, 62.8 million shares that remained available for grant under the Company’s 2015 Stock Incentive plan, as amended were added to the shares available for issuance under the 2025 Stock Incentive plan. As of June 28, 2026, 159.9 million shares remain available for future issuance under the Stock Plans 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 28, 2026		June 29, 2025		June 30, 2024
	(in thousands)
Equity-based compensation expense	$	386,381	$	343,371	$	293,058
Income tax benefit recognized related to equity-based compensation	$	23,505	$	22,242	$	38,157
Income tax benefit realized from the exercise and vesting of options and RSUs	$	90,697	$	28,727	$	75,441

During fiscal years 2026, 2025, and 2024, 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 and employment criteria are achieved.

For the market-based PRSUs granted in the 2026 and 2025 fiscal years, 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 fiscal year, 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 29, 2025	8,964	$	74.09
Granted	2,086	227.99
Vested	(4,706)	64.37
Forfeited or canceled	(414)	86.21
Outstanding, June 28, 2026	5,930	$	124.83

Of the 5,930 thousand shares outstanding at June 28, 2026, 4,714 thousand are service-based RSUs and 1,216 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 2026, 2025, and 2024 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 $283.38, $85.18, and $102.77, respectively. The total fair value of service-based RSUs and market-based RSUs that vested during fiscal years 2026, 2025, and 2024 was $293.7 million, $249.9 million, and $242.8 million, respectively.

As of June 28, 2026, the Company had $567.7 million of total unrecognized compensation expense which is expected to be recognized over a weighted-average remaining period of approximately 2.1 years.

The Company granted stock options with a 7-year maximum contractual term to a limited group of executive officers during fiscal years 2025 and 2024. No stock options were granted during fiscal year 2026. Stock options typically vest over a period of three years or less. The Company had 916 thousand options outstanding at June 28, 2026 with a weighted-average exercise price of $60.48 per share, of which 822 thousand were exercisable with a weighted-average exercise price of $56.28 per share. As of June 28, 2026, the Company had $2.6 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 nine months.

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.