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EQUITY-BASED COMPENSATION PLANS | 3 Months Ended
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Sep. 27, 2015
EQUITY-BASED COMPENSATION PLANS | NOTE 3 — EQUITY-BASED COMPENSATION PLANS The Company has stock plans that provide for grants of equity-based awards to eligible participants, including stock options, restricted stock units (“RSUs”), and market-based performance RSUs (“market-based PRSUs”) of Lam Research common stock (“Common Stock”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company’s market-based PRSUs contain both a market condition and a service condition. The Company’s options and RSU awards typically vest over a period of three years or less, although awards assumed in connection with the acquisition of Novellus Systems, Inc. (“Novellus”), have vesting terms up to four years. The Company also has an employee stock purchase plan that allows employees to purchase its Common Stock at a discount through payroll deductions. The Company recognized the following equity-based compensation expense and related income tax benefit in the Condensed Consolidated Statements of Operations:
|  | Three Months Ended |
|  | September 27, 2015 |  |  | September 28, 2014 |
|  | (in thousands) |
Equity-based compensation expense |  | $ | 35,774 |  |  | $ | 32,040 |
Income tax benefit related to equity-based compensation expense |  | $ | 6,097 |  |  | $ | 4,724 |
The estimated fair value of the Company’s stock-based awards, less expected forfeitures, is amortized over the awards’ vesting term on a straight-line basis. Stock Options and RSUs The Lam Research Corporation 2007 Stock Incentive Plan, as amended and 2011 Stock Incentive Plan, as amended (collectively the “Stock Plans”) provide for the grant of non-qualified equity-based awards to eligible employees, consultants and advisors, and non-employee directors of the Company and its subsidiaries. A summary of stock plan transactions is as follows:
|  | Options Outstanding |  |  | Restricted Stock Units Outstanding |
|  | Number of Shares |  |  | Weighted- Average Exercise Price |  |  | Number of Shares |  |  | Weighted- Average Fair Market Value at Grant |
June 28, 2015 |  |  | 835,832 |  |  | $ | 37.44 |  |  |  | 4,954,088 |  |  | $ | 60.13 |
Granted |  |  | — |  |  | $ | — |  |  |  | 73,614 |  |  | $ | 68.99 |
Exercised |  |  | (14,718 | ) |  | $ | 25.81 |  |  |  | N/A |  |  |  | N/A |
Cancelled |  |  | — |  |  | $ | — |  |  |  | (21,964 | ) |  | $ | 61.87 |
Vested restricted stock |  |  | N/A |  |  |  | N/A |  |  |  | (652,543 | ) |  | $ | 40.63 |
September 27, 2015 |  |  | 821,114 |  |  | $ | 37.66 |  |  |  | 4,353,195 |  |  | $ | 63.20 |
As of September 27, 2015, there was $2.5 million of total unrecognized compensation cost related to unvested stock options granted and outstanding; that cost is expected to be recognized over a weighted-average remaining vesting period of 1.9 years. As of September 27, 2015, there was $169.9 million of total unrecognized compensation expense related to unvested RSUs granted; that expense is expected to be recognized over a weighted-average remaining period of 1.9 years. ESPP The 1999 Employee Stock Purchase Plan, as amended and restated (the “1999 ESPP”), allows employees to designate a portion of their base compensation to be withheld through payroll deductions and used to purchase Common Stock at a purchase price per share equal to the lower of 85% of the fair market value of Common Stock on the first or last day of the applicable purchase period. Each offering period generally lasts up to 12 months and includes up to three interim purchase dates. Purchase rights under the 1999 ESPP were valued using the Black-Scholes option valuation model and the following weighted-average assumptions for the three and nine months ended September 27, 2015 and September 28, 2014:
|  | Three Months Ended |
|  | September 27, 2015 |  |  | September 28, 2014 |
Expected term (years) |  |  | 0.68 |  |  |  | 0.68 |
Expected stock price volatility |  |  | 31.56 | % |  |  | 29.07 | %
Risk-free interest rate |  |  | 0.18 | % |  |  | 0.07 | %
Dividend Yield |  |  | 0.93 | % |  |  | 0.29 | %
As of September 27, 2015, there was $14.0 million of unrecognized compensation expense related to the 1999 ESPP, which is expected to be recognized over a remaining period of approximately 11 months.

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- Definition Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 + Details
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