Summary
This 8-K filing from Lam Research Corporation (LRCX), dated March 2, 2009, primarily details the compensation arrangements for its named executive officers. The Compensation Committee of the Board of Directors has established performance goals and incentive programs for 2009 and a longer-term incentive program covering 2009-2010. These programs aim to align executive pay with company performance, utilizing metrics such as operating cash flow and stock price performance. Investors should note the structure of these incentive plans, which include both short-term (cash-based) and long-term (cash and equity-based) components. The short-term program for the first half of 2009 ties payouts to operating cash flow, potentially enhanced by stock price performance, with awards vesting and paid in 2010. The longer-term program (2009-2010) also incorporates operating cash flow for the first half of 2009 and extends into 2010, with payouts in 2011. Additionally, equity awards, including restricted stock units (RSUs) and stock options, were granted in February 2009, vesting two years from the grant date, with strike prices based on the closing stock price on the grant date.
Key Highlights
- 1Lam Research has established new performance goals and incentive programs for its executive officers for 2009 and the 2009-2010 period.
- 2The short-term incentive program for the first six months of 2009 is based on operating cash flow, with potential enhancement from stock price performance.
- 3Payouts for the 2008/2009 Multi-Year Incentive Program (first half of 2009) are targeted for payment in 2010, with multipliers ranging from 0 to 2.5 times target amounts.
- 4A new 2009/2010 Long-Term Incentive Program (LTIP) combines a cash component (2009/2010 MYIP) and an equity component (2009 Long-Term Equity Component).
- 5The 2009/2010 MYIP is based on company performance during 2009-2010, with cash payouts expected in 2011.
- 6Equity awards granted on February 26, 2009, include Restricted Stock Units (RSUs) and stock options, which vest two years from the grant date.
- 7The RSU grant value was determined using a stock price of $20.21 per share, which also served as the exercise price for the accompanying stock options.