What are the main agreements Lam Research entered into?

Lam Research entered into two main types of agreements: Indemnification Agreements with its executive officers and directors, and Reformation of Stock Option Agreements to correct 'misdated options'.

What is the purpose of the new Indemnification Agreements?

The Indemnification Agreements are designed to provide enhanced legal and financial protection to Lam Research's Section 16 executive officers and directors by indemnifying them to the fullest extent permitted by law against potential liabilities arising from their service to the company.

What are 'misdated options' and how are they being addressed?

'Misdated options' are stock options where the exercise price was set at a value less than the stock's fair market value on the correct measurement date. The company is reforming these options by adjusting the exercise price to reflect the appropriate fair market value on the correct date, without requiring any payments from the option holders.

Are there any financial implications for the company or the executives from these stock option changes?

The reformation of stock options involves adjusting the exercise price to the correct fair market value, but no payments will be made by the company or to the option holders as part of this process. The primary impact is the correction of the option terms to align with proper accounting standards.

LRCX 8-K: Leadership Changes & Material Agreements

Summary

Lam Research Corporation (LRCX) filed an 8-K on November 12, 2008, primarily disclosing the authorization and entry into new Indemnification Agreements with its Section 16 executive officers and directors. These agreements aim to provide broad indemnification to these individuals, including advancement of expenses and adherence to legal maximums, offering enhanced protection beyond existing company bylaws. This move signals a commitment to retaining key leadership by ensuring their financial and legal protection against potential liabilities arising from their roles.

Key Highlights

1Lam Research is entering into new Indemnification Agreements with its Section 16 executive officers and directors.
2These agreements offer comprehensive indemnification, extending to the fullest extent permitted by law, and include provisions for expense advancement.
3The indemnification rights are not exclusive and are in addition to other rights provided by the Company's bylaws.
4The company completed a voluntary internal review of stock options, identifying certain 'misdated options'.
5These misdated options were granted to certain current independent directors, the CEO, and Executive Chairman.
6The exercise prices of these misdated options will be reformed to reflect the fair market value on the appropriate grant date.
7No monetary payments will be made to option holders as a result of these stock option reformations.

LAM RESEARCH CORP 8-K Report, Material Agreement (Nov 13, 2008)

Summary

Key Highlights

Frequently Asked Questions