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Equity-Based Compensation Plans | 12 Months Ended
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Jun. 25, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity-Based Compensation Plans | Equity-Based Compensation Plans The Company has stock plans that provide for grants of equity-based awards to eligible participants, including stock options and restricted stock units, of the Company’s 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 options and RSU awards typically vest over a period of three years or less. 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 benefits in the Consolidated Statements of Operations:
| Year Ended
June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
| (in thousands)
Equity-based compensation expense | $ | 149,975 |  |  | $ | 142,348 |  |  | $ | 135,354 |
Income tax benefit recognized related to equity-based compensation | $ | 38,381 |  |  | $ | 37,814 |  |  | $ | 23,660 |
Income tax benefit realized from the exercise and vesting of options and RSUs | $ | 92,749 |  |  | $ | 67,756 |  |  | $ | 40,401 |
The estimated fair value of the Company’s equity-based awards, less expected forfeitures, is amortized over the awards’ vesting terms on a straight-line basis. Stock Options and RSUs The Lam Research Corporation 2007 Stock Incentive Plan, as amended and restated, 2011 Stock Incentive Plan, as amended and restated, and the 2015 Stock Incentive Plan (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. The 2015 Stock Incentive Plan was approved by shareholders on November 4, 2015, and authorizes up to 18,000,000 shares available for issuance under the plan. Additionally, 1,232,068 shares that remained available for grants under the Company’s 2007 Stock Incentive Plan were added to the shares available for issuance under the 2015 Stock Incentive Plan. As of June 25, 2017, there were a total of 11,893,338 shares available for future issuance under the Stock Plans. 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 29, 2014 | 1,331,886 |  |  | $ | 32.20 |  |  | 5,635,469 |  |  | $ | 45.83 |
Granted | 76,659 |  |  | $ | 80.60 |  |  | 1,804,937 |  |  | $ | 79.74 |
Exercised | (564,558 | ) |  | $ | 31.05 |  |  | N/A |  |  | N/A |
Canceled | (8,155 | ) |  | $ | 29.32 |  |  | (174,879 | ) |  | $ | 50.16 |
Vested restricted stock | N/A |  |  | N/A |  |  | (2,311,439 | ) |  | $ | 41.17 |
June 28, 2015 | 835,832 |  |  | $ | 37.44 |  |  | 4,954,088 |  |  | $ | 60.13 |
Granted | 196,167 |  |  | $ | 75.57 |  |  | 2,230,851 |  |  | $ | 71.87 |
Exercised | (123,726 | ) |  | $ | 24.92 |  |  | N/A |  |  | N/A |
Canceled | (862 | ) |  | $ | 21.43 |  |  | (110,131 | ) |  | $ | 69.17 |
Vested restricted stock | N/A |  |  | N/A |  |  | (2,739,704 | ) |  | $ | 54.04 |
June 26, 2016 | 907,411 |  |  | $ | 47.41 |  |  | 4,335,104 |  |  | $ | 69.30 |
Granted | 90,128 |  |  | $ | 119.67 |  |  | 1,660,571 |  |  | $ | 113.75 |
Exercised | (389,460 | ) |  | $ | 33.92 |  |  | N/A |  |  | N/A |
Canceled | (14,020 | ) |  | $ | 69.81 |  |  | (175,975 | ) |  | $ | 73.31 |
Vested restricted stock | N/A |  |  | N/A |  |  | (2,269,639 | ) |  | $ | 63.24 |
June 25, 2017 | 594,059 |  |  | $ | 66.69 |  |  | 3,550,061 |  |  | $ | 90.03 |
As of June 25, 2017, there were a total of 4,144,120 shares subject to options and RSUs issued and outstanding under the Company’s Stock Plans. Outstanding and exercisable options presented by price range at June 25, 2017, were as follows:
Range of Exercise Prices | Options Outstanding |  | Options Exercisable
Number of Options Outstanding |  | Weighted-Average Remaining Life (Years) |  | Weighted-Average Exercise Price |  | Number of Options Exercisable |  | Weighted-Average Exercise Price
$11.09-$23.59 | 57,020 |  |  | 3.62 |  | $ | 18.04 |  |  | 57,020 |  |  | $ | 18.04 |
$28.73-$35.68 | 52,606 |  |  | 3.63 |  | $ | 31.18 |  |  | 52,606 |  |  | $ | 31.18 |
$42.61-$51.76 | 150,539 |  |  | 3.37 |  | $ | 49.21 |  |  | 150,539 |  |  | $ | 49.21 |
$75.57-$119.67 | 333,894 |  |  | 5.75 |  | $ | 88.46 |  |  | 94,399 |  |  | $ | 77.77 |
$11.09-$119.67 | 594,059 |  |  | 4.63 |  | $ | 66.69 |  |  | 354,564 |  |  | $ | 49.13 |
Stock Options The fair value of the Company’s stock options granted during fiscal years 2017, 2016, and 2015 was estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions, including expected stock price volatility and the estimated life of each award:
| Year Ended
June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Expected volatility | 28.85 | % |  | 33.08 | % |  | 34.45 | %
Risk-free interest rate | 1.92 | % |  | 1.27 | % |  | 1.46 | %
Expected term (years) | 4.75 |  |  | 4.79 |  |  | 4.80 |
Dividend yield | 1.50 | % |  | 1.59 | % |  | 0.89 | %
The year-end intrinsic value relating to stock options for fiscal years 2017, 2016, and 2015 is presented below:
| Year Ended
June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
| (in thousands)
Intrinsic value - options outstanding | $ | 50,551 |  |  | $ | 31,643 |  |  | $ | 37,961 |
Intrinsic value - options exercisable | $ | 36,396 |  |  | $ | 29,112 |  |  | $ | 33,360 |
Intrinsic value - options exercised | $ | 29,674 |  |  | $ | 6,562 |  |  | $ | 26,806 |
As of June 25, 2017, the Company had $4.7 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 2.2 years. Restricted Stock Units During the fiscal years 2017, 2016, and 2015, the Company issued both service-based RSUs and market-based performance RSUs (“PRSUs”). The fair value of the Company’s service-based RSUs was calculated based on fair market value of the Company’s stock at the date of grant, discounted for dividends, using the following assumptions:
| Year Ended
June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Risk-free interest rate | 1.51 | % |  | 0.98 | % |  | 0.97 | %
Expected term (years) | 2.97 |  |  | 3.00 |  |  | 2.83 |
Dividend yield | 1.48 | % |  | 1.59 | % |  | 0.89 | %
Market-based PRSUs generally vest three years from the grant date if certain performance criteria are achieved and require continued employment. Based upon the terms of such awards, 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 Sector Index (“SOX”), ranging from 0% to 150% of target. The stock price performance or market price performance is measured using the 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 SOX index. The result of the vesting formula is rounded down to the nearest whole number. Total stockholder return is a measure of stock price appreciation in this performance period. As of June 25, 2017, 862,455 of the 3,550,061 RSU’s outstanding are market-based PRSUs. The fair value of the Company’s market-based PRSUs granted during fiscal years 2017, 2016, and 2015 was calculated using a Monte Carlo simulation model at the date of the grant. This model requires the input of highly subjective assumptions, including expected stock price volatility and the estimated life of each award:
| Year Ended
June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Expected volatility | 27.48 | % |  | 29.81 | % |  | 27.93 | %
Risk-free interest rate | 1.55 | % |  | 0.97 | % |  | 1.05 | %
Expected term (years) | 2.92 |  |  | 2.92 |  |  | 2.98 |
Dividend yield | 1.50 | % |  | 1.59 | % |  | 0.89 | %
As of June 25, 2017, the Company had $245.7 million of total unrecognized compensation expense related to all unvested RSUs granted which is expected to be recognized over a weighted-average remaining period of 2.2 years. ESPP The 1999 Employee Stock Purchase Plan (the “1999 ESPP”) 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 fourteen months and comprises two interim purchase dates. The Plan Administrator (the Compensation Committee of the Board) is authorized to set a limit on the number of shares a plan participant can purchase on any single plan exercise date. During fiscal years 2017, 2016, and 2015, there was no increase to the number of shares of Lam Research Common Stock reserved for issuance under the 1999 ESPP. During fiscal year 2017, a total of 825,486 shares of the Company’s Common Stock were sold to employees under the 1999 ESPP. At June 25, 2017, 5,672,571 shares were available for purchase under the 1999 ESPP. The 1999 ESPP rights were valued using a Black-Scholes option valuation model. During fiscal years 2017, 2016, and 2015, the 1999 ESPP was valued using the following weighted-average assumptions:
| Year Ended
June 25, 2017 |  | June 26, 2016 |  | June 28, 2015
Expected term (years) | 0.73 |  |  | 0.67 |  |  | 0.67 |
Expected stock price volatility | 31.74 | % |  | 35.48 | % |  | 27.60 | %
Risk-free interest rate | 0.41 | % |  | 0.29 | % |  | 0.07 | %
Dividend yield | 1.09 | % |  | 1.18 | % |  | 0.69 | %
As of June 25, 2017, the Company had $6.5 million of total unrecognized compensation cost related to the 1999 ESPP which is expected to be recognized over a remaining period of four 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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