<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
LAM RESEARCH CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LOGO
LAM RESEARCH CORPORATION
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 2, 2000
------------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the 2000 Annual Meeting of Stockholders of Lam
Research Corporation, a Delaware corporation (the "Company"), will be held on
Thursday, November 2, 2000, 11:00 a.m., local time, at the principal executive
offices of the Company at 4650 Cushing Parkway, Fremont, California 94538, for
the following purposes:
1. To elect directors to serve for the ensuing year, and until their
successors are elected;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending June 30, 2001; and
3. To transact such other business as may properly come before the meeting,
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
Only stockholders of record at the close of business on September 5, 2000
are entitled to notice of and to vote at the meeting, and for any adjournment
thereof.
All stockholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign and date the enclosed proxy and return it as promptly as possible in the
postage-prepaid and return-addressed envelope enclosed for that purpose.
However, any stockholder of record attending the meeting may vote in person,
even if he or she has returned a proxy.
By Order of the Board of Directors,
LOGO
Richard H. Lovgren
Secretary
Fremont, California
October 6, 2000
YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
MARK, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN
IT IN THE ENCLOSED RETURN-ADDRESSED ENVELOPE (TO WHICH NO POSTAGE NEED BE
AFFIXED IF MAILED IN THE UNITED STATES).
<PAGE> 3
LAM RESEARCH CORPORATION
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 2, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Information Concerning Solicitation and Voting.............. 1
Proposal No. 1 -- Election of Directors..................... 3
Security Ownership of Certain Beneficial Owners and
Management............................................. 5
Director Compensation..................................... 6
Executive Compensation and Other Information.............. 7
Certain Relationships and Related Transactions............ 10
Compensation Committee Interlocks and Insider
Participation.......................................... 11
Report of the Compensation Committee...................... 11
Comparative Stock Performance............................. 14
Proposal No. 2 -- Ratification of Appointment of Independent
Auditors.................................................. 14
Section 16(a) Beneficial Ownership Reporting Compliance..... 15
Other Matters............................................... 15
</TABLE>
i
<PAGE> 4
LAM RESEARCH CORPORATION
------------------------
PROXY STATEMENT FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of Lam Research Corporation, a
Delaware corporation (the "Company"), for use at the Annual Meeting of
Stockholders to be held Thursday, November 2, 2000 at 11:00 a.m., local time
(the "Annual Meeting"), or for any adjournment thereof, for the purposes set
forth herein and in the accompanying Notice of Annual Meeting of Stockholders.
The Annual Meeting will be held at the principal executive offices of the
Company at 4650 Cushing Parkway, Fremont, California 94538. The Company's
telephone number at that location is (510) 659-0200.
These proxy solicitation materials will be mailed on or about October 6,
2000 to all stockholders entitled to vote at the meeting. A copy of Lam Research
Corporation's 2000 Annual Report to Stockholders accompanies this Proxy
Statement.
RECORD DATE AND PRINCIPAL SHARE OWNERSHIP
Stockholders of record at the close of business on September 5, 2000 are
entitled to receive notice of and to vote at the Annual Meeting. At the record
date, 124,559,636 shares of the Company's Common Stock were outstanding. All
references to the number of shares in this proxy statement give effect to the
three-for-one split of the Company's stock that became effective March 7, 2000.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company a written
notice of revocation or a duly executed proxy bearing a later date, or by
attending the Annual Meeting and voting in person. However, attending the Annual
Meeting in and of itself does not constitute a revocation of a proxy.
VOTING AND SOLICITATION
Each stockholder voting on the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the number
of directors to be elected (seven at this meeting) multiplied by the number of
shares held by such stockholder, or distribute the stockholder's votes on the
same principle among as many candidates as the stockholder deems appropriate.
However, votes cannot be cast for more than seven candidates. No stockholder
shall be entitled to cumulate votes for a candidate unless the candidate's name
has been placed in nomination prior to the voting.
Where no vote is specified or where a vote FOR all nominees is marked, the
cumulative votes represented by a proxy will be cast, unless contrary
instructions are given, at the discretion of the proxy holders in order to elect
as many nominees as believed possible under the then-prevailing circumstances.
If a stockholder desires to cumulate his or her votes, the accompanying proxy
card should be marked to indicate clearly that the stockholder desires to
exercise the right to cumulate votes and should specify how the votes are to be
allocated among the nominees for directors. For example, a stockholder may write
next to the name of the nominee or nominees for whom the stockholder desires to
cast votes the number of votes to be cast for such nominee or nominees.
Alternatively, without exercising his or her right to vote cumulatively, a
stockholder may instruct the proxy holders not to vote for one or more nominees
by striking through the name(s) of such nominee or nominees on the proxy card.
Unless indicated to the contrary in the space provided on the proxy card, if a
stockholder withholds authority to vote for one or more nominees, all cumulative
votes of such stockholder will be distributed among the remaining nominees at
the discretion of the proxy holders.
On all other matters, each share has one vote.
1
<PAGE> 5
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector"). The Inspector will also determine
whether or not a quorum is present. The seven candidates for election as
directors at the Annual Meeting who receive the highest number of affirmative
votes will be elected. The ratification of the independent auditors for the
Company for the current year will require the affirmative vote of a majority of
the shares of the Company's Common Stock present or represented and entitled to
vote at the Annual Meeting.
In general, Delaware law also provides that a quorum consists of a majority
of the shares entitled to vote at the Annual Meeting. The Inspector will treat
abstentions as shares that are present or represented and entitled to vote for
purposes of determining the presence of a quorum, but will not treat abstentions
as votes in favor of approving any matter submitted to the stockholders for a
vote. Thus, abstentions have the same effect in this regard as negative votes.
Any proxy which is properly dated, executed and returned using the form of proxy
enclosed will be voted at the Annual Meeting in accordance with the instructions
of the stockholder. If no specific instructions are given, the shares will be
voted for the election of directors, for ratification of the appointment of the
designated independent auditors and, with respect to any other matter or matters
that may come before the meeting, as the proxy holders deem advisable in
accordance with their best judgment. If a broker indicates on the enclosed proxy
or its substitute that it does not have discretionary authority as to certain
shares to vote on a particular matter ("broker non-votes"), or with respect to
shares as to which proxy authority has been withheld with respect to any matter,
those shares will be counted in determining whether a quorum is present but will
not be considered as present or represented with respect to that matter. The
Company believes that the tabulation procedures to be followed by the Inspector
are consistent with the general statutory requirements in Delaware concerning
voting of shares and determination of a quorum.
The cost of soliciting proxies will be borne by the Company. The Company
has retained the services of ChaseMellon Shareholder Services ("ChaseMellon") to
act as agent in the solicitation of proxies from bankers, bank nominees and
other institutional owners. The Company estimates that it will pay ChaseMellon a
fee of approximately $8,500 for its services and will reimburse ChaseMellon for
certain out-of-pocket expenses. The Company may reimburse brokerage firms and
other persons representing beneficial owners of shares for their expenses in
forwarding solicitation materials to such beneficial owners. Proxies may also be
solicited by certain of the Company's directors, officers and regular employees,
without additional compensation, personally or by telephone or other
communication means.
STOCKHOLDER PROPOSALS TO BE INCLUDED IN THE COMPANY'S 2001 PROXY STATEMENT
Pursuant to Rule 14a-8(e) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), some stockholder proposals may be eligible for
inclusion in the Company's 2001 Proxy Statement. Any such proposal must be
received by the Company no later than June 8, 2001. Stockholders interested in
submitting such a proposal are advised to contact counsel familiar with the
detailed requirements of the applicable securities rules.
STOCKHOLDER PROPOSALS AND NOMINATIONS TO BE VOTED ON AT 2001 ANNUAL MEETING
In addition to the Rule 14a-8(e) proposals referred to above stockholders
of the Company may submit proposals which they believe should be voted on at the
annual meeting or nominate persons for election to the Board of Directors. In
accordance with the Company's bylaws, any such proposal or nomination for the
2001 annual meeting currently scheduled for November 8, 2001 must be submitted
in writing to the Secretary of the Company no earlier than August 10, 2001 and
no later than September 9, 2001. The submission must include certain specified
information concerning the proposal or nominee, as the case may be, and
information about the proponent and the proponent's ownership of Common Stock of
the Company. Proposals or nominations that do not meet these requirements will
not be entertained at the annual meeting. The Secretary should be contacted in
writing at the address on the first page of this Proxy Statement to make any
submission, or to obtain additional information as to the proper form and
content of submissions.
2
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES
A board of seven directors is to be elected at the Annual Meeting. The
bylaws of the Company provide that the number of directors shall be fixed at
seven. The proxies cannot be voted for a greater number of persons than the
seven nominees named below. Unless otherwise instructed, the proxy holders will
vote the proxies received by them for the Company's seven nominees named below,
each of whom is currently a director of the Company. If any nominee of the
Company should decline or be unable to serve as a director as of the time of the
Annual Meeting, the proxies will be voted for any substitute nominee whom shall
be designated by the present Board of Directors to fill the vacancy. In the
event that additional persons are nominated for election as directors, the proxy
holders intend to vote all proxies received by them in such a manner in
accordance with cumulative voting as will assure the election of as many of the
nominees listed below as possible, and in such event the specific nominees to be
voted for will be determined by the proxy holders. Discretionary authority to
cumulate the votes held by the proxy holders is solicited by this Proxy
Statement. The Company is not aware of any nominee who will be unable or will
decline to serve as a director. The term of office of each person elected as a
director will continue until the next Annual Meeting of Stockholders, or until a
successor has been elected and qualified.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" EACH OF THE SEVEN
NOMINEES FOR DIRECTOR SET FORTH BELOW.
The following table sets forth certain information concerning the nominees,
which is based on data furnished by them:
<TABLE>
<CAPTION>
NOMINEES DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
FOR DIRECTOR AGE SINCE DURING PAST FIVE YEARS
------------------------- --- -------- ----------------------------------------------------
<S> <C> <C> <C>
James W. Bagley.......... 61 1997 Mr. Bagley has been Chief Executive Officer and a
director of the Company since August 6, 1997, the
day following consummation of the merger between
OnTrak Systems, Inc., a Delaware corporation
("OnTrak"), and the Company (the "Merger"). As of
September 1, 1998, Mr. Bagley became Chairman of the
Board of Directors. He is currently a director of
Teradyne, Inc., and Micron Technology, Inc. From
June 1996 to August 1997, Mr. Bagley served as
Chairman of the Board and Chief Executive Officer of
OnTrak. Prior to joining OnTrak, Mr. Bagley was
employed by Applied Materials, Inc., most recently
as Chief Operating Officer and Vice Chairman of the
Board. Mr. Bagley began his career in the
semiconductor industry with Texas Instruments, Inc.,
where he held various positions over a 15-year
period.
Roger D. Emerick......... 61 1982 Mr. Emerick has been a director of the Company since
1982, and was Chairman of the Board of Directors
from 1984 to 1998. From July 1982 to August 1997,
Mr. Emerick was Chief Executive Officer of the
Company. Mr. Emerick currently is a director of
Electroglas, Inc. and Brooks Automation, Inc. Until
September 1999, Mr. Emerick also served as a
director of the Fremont Bank.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
NOMINEES DIRECTOR PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
FOR DIRECTOR AGE SINCE DURING PAST FIVE YEARS
------------------------- --- -------- ----------------------------------------------------
<S> <C> <C> <C>
David G. Arscott(1,2).... 56 1980 Mr. Arscott has been a director of the Company since
1980, and was Chairman of the Board of Directors
from 1982 to 1984. He is currently, and has been
since 1988, a General Partner of Compass Management
Partners, an investment management firm. From 1978
to 1988, Mr. Arscott was a Managing General Partner
of Arscott, Norton & Associates, a venture capital
firm. Mr. Arscott currently is a director of Silicon
Valley Research, Inc.
Richard J. Elkus, 65 1997 Mr. Elkus has been a director of the Company since
Jr.(1)................. August 6, 1997, the day following consummation of
the Merger. He is currently, and has been since
1996, Co-Chairman of Voyan Technology and is
currently a director of KLA-Tencor Corporation,
Virage Logic and Sopra SA. From February 1994 until
consummation of the merger between Tencor
Instruments, Inc. ("Tencor") and KLA Instruments,
Inc. in April 1997, Mr. Elkus was Vice Chairman of
the Board of Tencor. From February 1994 to September
1996, Mr. Elkus was Executive Vice President of
Tencor, and was one of the founders of Prometrix
Corporation, which was acquired by Tencor in
February 1994. Mr. Elkus was Chairman of the Board
and Chief Executive Officer of Prometrix Corporation
from 1983 until February 1994.
Jack R. Harris(1,2)...... 58 1982 Mr. Harris has been a director of the Company since
1982. From 1986 until September 1999, Mr. Harris was
Chairman, Chief Executive Officer and President of
Optical Specialties, Inc. Mr. Harris is currently
Chairman of HT, Inc., First Derivative Systems and
Innovative Robotics Solutions.
Grant M. Inman(1,2)...... 58 1981 Mr. Inman has been a director of the Company since
1981. From 1985 until 1998, Mr. Inman was a General
Partner of Inman & Bowman. Mr. Inman is currently
President of Inman Investment Management and a
director of Paychex, Inc. and Wind River Systems,
Inc. Mr. Inman is currently a Trustee of the
University of California, Berkeley, and the
University of Oregon.
Kenneth M. Thompson(1)... 62 1998 Mr. Thompson has been a director of the Company
since 1998. Prior to joining the Board, Mr. Thompson
was employed by Intel Corporation for 25 years in
various management positions, most recently as Vice
President of Technology Manufacturing Engineering.
Before joining Intel Corporation, Mr. Thompson
worked with Ampex Corporation in its core memory
group. Mr. Thompson currently serves as a director
of PRI Automation, Inc., GaSonics International
Corporation, and Baguda Wear Inc. Mr. Thompson is
President and CEO of AvantCom Network, Inc.
</TABLE>
---------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
There is no family relationship between any of the foregoing nominees, or
between any of such nominees and any of the Company's executive officers.
4
<PAGE> 8
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of five regularly
scheduled or special meetings during the fiscal year ended June 25, 2000. The
Board of Directors has an Audit Committee and a Compensation Committee.
The Audit Committee, which consisted of Messrs. Arscott, Elkus, Harris,
Inman and Thompson, all non-employee directors, held five meetings during fiscal
2000. This committee recommends to the Board for its approval and for
ratification by the stockholders the engagement of the Company's independent
auditors to serve the following fiscal year, reviews the scope of the audit,
considers comments made by the independent auditors with respect to accounting
procedures and internal controls and the consideration given thereto by the
Company's management, and reviews internal accounting procedures and controls
with the Company's financial and accounting staff.
The Compensation Committee, which consisted of Messrs. Arscott, Harris and
Inman, held one meeting during fiscal 2000. This committee recommends salaries,
incentives and other forms of compensation for directors, officers and other
employees of the Company, administers the Company's various incentive
compensation and benefit plans, and recommends policies relating to such
compensation and benefit plans. This committee also approves grants of stock
options, restricted stock, deferred stock and performance share awards to
officers and other employees of the Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth the beneficial ownership of shares of Common
Stock of the Company by: (i) each person or entity whom, based on information
obtained, the Company believes beneficially owned more than 5% of the Company's
Common Stock, and the address of each such person or entity ("5% stockholder");
(ii) each current director of the Company; (iii) each named executive officer
described below in the section of this proxy statement captioned "Executive
Compensation and Other Information"; and (iv) all current directors and current
executive officers as a group. With the exception of 5% stockholders, the
information below concerning the number of shares beneficially owned is provided
with respect to holdings as of September 5, 2000 and, with respect to the 5%
stockholders, the information below is provided with respect to holdings as of
June 30, 2000 (unless otherwise identified). The percentage is calculated using
124,559,636 as the number of shares outstanding as of September 5, 2000.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT OF
NAME OF PERSON OR IDENTITY OF GROUP OWNED CLASS
----------------------------------- ------------------- ----------
<S> <C> <C>
Fidelity Management & Research.............................. 14,853,366(1) 11.92%
82 Devonshire Street
Boston, Massachusetts 02109
Putnam Investment Management, Inc. ......................... 8,329,536(1) 6.69%
1 Post Office Square
Boston, Massachusetts 02109
MFS Investment Management................................... 7,632,155(1) 6.13%
500 Boylston St.
Boston, Massachusetts 02116
James W. Bagley............................................. 2,508,000(2) 2.01%
Roger D. Emerick............................................ 155,476(2) *
David G. Arscott............................................ 235,617(2) *
Richard J. Elkus, Jr. ...................................... 123,720(2) *
Jack R. Harris.............................................. 162,000(2) *
Grant M. Inman.............................................. 264,699(2) *
Kenneth M. Thompson......................................... 36,000(2) *
Stephen G. Newberry......................................... 560,000(2) *
Hsui-Sheng (Way) Tu......................................... 144,001(2) *
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENT OF
NAME OF PERSON OR IDENTITY OF GROUP OWNED CLASS
----------------------------------- ------------------- ----------
<S> <C> <C>
Mercedes Johnson............................................ 88,666(2) *
Richard H. Lovgren.......................................... 23,614(2) *
All current directors and current executive officers as a
group (11 persons)(3)..................................... 4,204,898(2) 3.38%
</TABLE>
---------------
* Less than one percent
(1) This information was obtained from the Nasdaq National Market, Inc., and was
identified as representing the entity's quarterly 13F filing reflecting
holdings as of June 30, 2000.
(2) Includes 2,208,000, 135,000, 144,000, 91,350, 126,000, 108,000, 36,000,
500,000, 84,585, 78,900, 16,140 and 47,106 shares subject to outstanding
options that are currently exercisable or exercisable within 60 days after
September 5, 2000 in favor of Mr. Bagley, Mr. Emerick, Mr. Arscott, Mr.
Elkus, Jr., Mr. Harris, Mr. Inman, Mr. Thompson, Mr. Newberry, Mr. Tu, Ms.
Johnson and Mr. Lovgren, and Mr. Craig Garber, respectively. Mr. Garber's
shares include 16,545 options held by his spouse.
(3) Current directors and current executive officers include: Mr. Bagley, Mr.
Emerick, Mr. Arscott, Mr. Elkus, Jr., Mr. Harris, Mr. Inman, Mr. Thompson,
Mr. Newberry, Ms. Johnson, Mr. Lovgren and Mr. Garber.
DIRECTOR COMPENSATION
Directors who are not employees of the Company receive annual retainers of
$15,000; meeting fees of $1,000 for each Board of Directors meeting attended,
plus reimbursement for reasonable travel expenses; fees of $500 for each
telephonic Board meeting attended (with aggregate fees for such Board meetings
not to exceed $8,000 per fiscal year); committee meeting fees of $500 per
meeting attended, plus reimbursement for reasonable travel expenses; and fees of
$250 for each telephonic committee meeting attended (with no aggregate fee limit
for committee meetings). In addition, each person who is a non-employee director
is automatically granted on or about December 15 of each calendar year an option
to purchase 6,000 shares of the Company's Common Stock under the Company's
Amended and Restated 1991 Incentive Stock Option Plan or Amended and Restated
1997 Stock Incentive Plan, at an exercise price per share equal to the fair
market value of one share of the Company's Common Stock on the date of grant.
Each option has a term of ten years and is immediately exercisable. The plans
provide that unexercised options may be exercisable for specified periods
following termination of director status, whether by death, disability or
retirement, determined by years of service as a director to the Company.
6
<PAGE> 10
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table provides, for the three fiscal years ended June 25,
2000, and June 30, 1999, and 1998, respectively, certain summary information
concerning compensation paid or accrued by the Company to or on behalf of the
Company's Chief Executive Officer, James W. Bagley, and each of the four other
most highly compensated executive officers of the Company (determined at the end
of the last fiscal year) (the "named executives").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
ANNUAL COMPENSATION NUMBER OF
----------------------------------------------- RESTRICTED SECURITIES
NAME AND OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(1) COMPENSATION($)(3) AWARDS($)(5) OPTIONS(#) COMPENSATION($)
--------------------------- ---- ------------ ----------- ------------------ ------------ ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
James W. Bagley............ 2000 99,507 4,758(6)
Chairman of the Board 1999 91,704 17,632(4) 1,440,000 4,738(6)
and Chief Executive 1998 100,000 1,425,000 5,343(6)
Officer
Stephen G. Newberry........ 2000 596,942 1,539 126,310(7)
President and Chief 1999 416,479 1,252 900,000 126,321(7)
Operating Officer 1998 392,892 1,200,000 924(7)
Hsui-Sheng (Way) Tu........ 2000 455,559 1,008 2,912(8)
President, Asia Pacific 1999 415,475 6,862 120,000 3,510(8)
Operations 1998 449,251 264 240,000 3,508(8)
Mercedes Johnson........... 2000 297,043 37,500(2) 99 6,315(9)
Vice President, Finance, 1999 241,295 37,500(2) 826 240,000 4,714(9)
and Chief Financial 1998 260,000 37,500(2) 23 90,000 7,067(9)
Officer
Richard H. Lovgren......... 2000 243,428 53,180 6,598(10)
Vice President, General 1999 213,792 26,910 72,000 5,272(10)
Counsel and Secretary 1998 228,422 30,000 4,074(10)
</TABLE>
---------------
(1) Includes amounts earned and bonuses paid (if any) in fiscal 2000, 1999, and
1998 but deferred at the election of executive officer under the Company's
deferred compensation plans and the Company's Employee Savings Plus Plan, a
qualified defined contribution plan under Section 401(k) of the Internal
Revenue Code of 1986 (as amended).
(2) Reflects a bonus paid on the anniversary of Ms. Johnson's employment, which
Ms. Johnson designated be used to offset the principal amount of a loan
extended by the Company to Ms. Johnson in April 1997. See "Certain
Relationships and Related Transactions," below.
(3) Includes interest earned on deferred compensation, to the extent that the
interest rate exceeded 120% of the applicable federal long-term rate.
(4) Includes $9,979 and $4,998 in Company-provided reimbursements for certain
medical and health services.
(5) No dividends are paid on restricted stock. The Company last issued
restricted stock awards in June 1996.
(6) Consists of the Company's matching contributions to the Company's 401(k)
plan in the amounts of $1,947 for 2000, $1,597 for 1999 and $1,500 for
1998; and $2,811, $3,141 and $3,843 for term life insurance premiums for
2000, 1999 and 1998, respectively.
(7) Includes for fiscal 2000 and 1999 $125,000 reflecting Mr. Newberry's
interest in signing bonus received at the outset of his employment with the
Company and held in his deferred compensation account, which interest
vested on the first anniversary of his employment with the Company. See
"Employment and Termination Agreements, Change of Control Arrangements and
Retirement Benefits," "Employment Agreement with Stephen G. Newberry",
below. Also includes $1,310, $1,321 and $924 for term life insurance
premiums for 2000, 1999 and 1998, respectively.
(8) Consists of the Company's matching contributions to the Company's 401(k)
plan in the amounts of $2,113 for 2000, $2,606 for 1999, $2,500 for 1998,
and $799, $904 and $1,008, for term life insurance premiums for 2000, 1999
and 1998, respectively.
(9) Consists of the Company's matching contributions to the Company's 401(k)
plan in the amounts of $5,260 for 2000, $3,640 for 1999 and $6,059 for
1998; and $1,055, $1,074 and $1,008, for term life insurance premiums for
2000, 1999 and 1998, respectively.
(10) Consists of the Company's matching contributions to the Company's 401(k)
plan in the amounts of $5,543 for 2000, $4,326 for 1999, and $3,066 for
1998; and $1,055, $946 and $1,008 for term life insurance premiums paid in
2000, 1999 and 1998 respectively.
In fiscal 1999, all named executives agreed to a reduction in base salaries
and certain benefits in recognition of the financial environment effecting the
semiconductor equipment industry and the Company.
No option grants were made to any of the named executives during fiscal
2000.
7
<PAGE> 11
STOCK PLANS
The following table provides certain information concerning the exercise of
options to purchase the Company's Common Stock in the fiscal year ended June 25,
2000, and the unexercised options held as of June 25, 2000 by the named
executives.
AGGREGATED OPTION EXERCISES BY NAMED EXECUTIVES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NO. OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NO. OF SHARES VALUE AT FISCAL YEAR-END AT FISCAL YEAR-END(2)
ACQUIRED ON REALIZED ---------------------------- ---------------------------
NAME EXERCISE ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------- ----------- ----------- -------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James W. Bagley......... 504,000 $20,033,148 2,208,000 2,145,000 $75,035,078 $57,342,260
Stephen G. Newberry..... 150,000 $ 3,597,813 500,000 1,450,000 $17,423,970 $39,383,835
Hsui-Sheng (Way) Tu..... 329,032 $ 9,681,108 83,960 225,469 $ 2,692,994 $ 6,876,071
Mercedes Johnson........ 195,150 $ 5,723,011 78,900 280,950 $ 2,824,786 $ 9,073,482
Richard Lovgren......... 103,500 $ 3,351,666 16,140 91,860 $ 474,786 $ 2,928,592
</TABLE>
---------------
(1) Market value of underlying securities at exercise, minus the exercise price.
(2) Market value of underlying securities at fiscal year-end, minus the exercise
price.
EMPLOYMENT AND TERMINATION AGREEMENTS,
CHANGE OF CONTROL ARRANGEMENTS AND RETIREMENT BENEFITS
EMPLOYMENT AGREEMENT WITH JAMES W. BAGLEY
On July 1, 1997, the Company signed an employment agreement with James W.
Bagley which became effective on August 6, 1997, the day following consummation
of the Merger (the "Bagley Agreement"). The term of the Bagley Agreement is five
years, unless earlier terminated by the Company or Mr. Bagley. The Bagley
Agreement provides for a base salary at the annualized rate of $100,000. Mr.
Bagley is not entitled to participate in any performance bonus plan of the
Company, unless otherwise determined by the Board of Directors. As an incentive
to joining the Company, Mr. Bagley was granted non-qualified stock options to
purchase 750,000 shares of Common Stock (the "Incentive Options"). In lieu of
additional base compensation or participation in performance bonus plans, the
Company granted Mr. Bagley non-qualified stock options to purchase 675,000
shares of Common Stock (the "Base Options"). In November 1998, Mr. Bagley was
granted options to purchase an additional 1,440,000 shares of the Company's
Common Stock. Under the Bagley Agreement, Mr. Bagley is also entitled to
participate in the Company's Executive Deferred Compensation Plan and other
benefit plans and compensation programs generally maintained for other key
executives of the Company.
In the event of a change in control of the Company or the involuntary
termination of Mr. Bagley without cause, all unvested Incentive Options will
automatically be accelerated in full so as to become fully vested. Mr. Bagley
will have two years from the date of termination in which to exercise such
options. If Mr. Bagley's employment is involuntarily terminated without cause on
or after the first anniversary of the effective date of the Bagley Agreement, he
will be entitled to receive a lump sum payment of $100,000, and an automatic
vesting of any unvested portion of the Base Options that would have vested
within the 1-year period following the date of such termination (which vested
options may be exercised within two years of termination).
The Bagley Agreement provides that for a period of 12 months following Mr.
Bagley's termination of employment with the Company (other than through
expiration of the Bagley Agreement), Mr. Bagley may not perform services
respecting certain aspects of semiconductor manufacturing equipment and/or
software for anyone other than the Company, and may not solicit any of the
Company's employees to become employed by any other business enterprise.
8
<PAGE> 12
EMPLOYMENT AGREEMENT WITH STEPHEN G. NEWBERRY
On August 5, 1997, the Company signed an employment agreement with Stephen
G. Newberry (the "Newberry Agreement"). The term of the Newberry Agreement is
five years, unless earlier terminated by the Company or Mr. Newberry. The
Newberry Agreement provides for a base salary at the annualized rate of
$450,000, which is to be reviewed at least annually by the Board of Directors
for possible increases. Mr. Newberry is not entitled to participate in any
performance bonus plan of the Company, unless otherwise determined by the Board
of Directors. As an incentive to joining the Company, Mr. Newberry was granted
non-qualified stock options to purchase 600,000 shares of Common Stock (the
"Incentive Options"). In lieu of additional base compensation or participation
in performance bonus plans, the Company granted Mr. Newberry non-qualified stock
options to purchase 300,000 shares of Common Stock (the "Base Options"). In
November 1998, Mr. Newberry was granted options to purchase an additional
900,000 shares of the Company's Common Stock.
Under the Newberry Agreement, Mr. Newberry is also entitled to participate
in the Company's Executive Deferred Compensation Plan and other benefit plans
and compensation programs generally maintained for other key executives of the
Company. Mr. Newberry also received a deferred signing bonus in the amount of
$500,000, the entire amount of which was held in a deferred compensation
account, pursuant to the Company's Executive Deferred Compensation Plan, with
Mr. Newberry's interest in the account vesting in equal installments of 25% on
each of the first four anniversaries following August 5, 1997.
In the event of a change in control of the Company or involuntary
termination without cause, all unvested Incentive Options will automatically be
accelerated in full so as to become fully vested, as will any Base Options that
would have vested within the 1-year period following the date of such
termination. Mr. Newberry will have two years from the date of termination in
which to exercise such options. If Mr. Newberry's employment is involuntarily
terminated without cause on or after the first anniversary of the effective date
of the Newberry Agreement, he will be entitled to receive a lump sum payment
equal to one times his then annual base compensation.
The Newberry Agreement provides that for a period of 12 months following
Mr. Newberry's termination of employment with the Company (other than through
expiration of the Newberry Agreement), Mr. Newberry may not solicit any of the
Company's employees to become employed by any other business enterprise.
EMPLOYMENT AGREEMENT WITH MERCEDES JOHNSON
On December 11, 1999, the Company signed an employment agreement with
Mercedes Johnson (the "Johnson Agreement"). The term of the Johnson Agreement is
three years, unless earlier terminated by the Company or Ms. Johnson. The
Johnson Agreement provides for a base salary, which is unspecified and is to be
reviewed at least annually by the Board of Directors for possible increases. Ms.
Johnson is not entitled to participate in any performance bonus plan of the
Company, unless otherwise determined by the Board of Directors. As an incentive
to joining the Company, Ms. Johnson was granted non-qualified stock options to
purchase 225,000 shares of Common Stock; and, during 1998, Ms. Johnson was
granted non-qualified stock options to purchase an additional 330,000 shares of
Common Stock (collectively, these option grants are referred to as the
"Incentive Options"). Under the Johnson Agreement, Ms. Johnson is entitled to
participate in the Company's Executive Deferred Compensation Plan and other
benefit plans and compensation programs generally maintained for other key
executives of the Company.
In the event of Ms. Johnson's involuntary termination without cause, Ms.
Johnson will be placed on a one year leave of absence beginning on the
termination date. During the leave of absence, Ms. Johnson will continue to make
herself available for special projects as are delegated to her by the Company's
Chief Executive Officer. She will receive her base compensation, any targeted
bonus, her executive benefits (except those that are available only to Lam
employees), the bonus applicable to reducing her loan from the Company (see
"Loan to Mercedes Johnson" under "Certain Relationships and Related
Transactions" below) and continued vesting of all previously granted stock
options during the leave of absence. If the involuntary termination occurs after
a change in control of the company, the Incentive Options shall automatically be
accelerated in full so as to become completely vested on the termination date.
9
<PAGE> 13
The Johnson Agreement also provides that for a period of six months
following the termination of any leave of absence arising as a result of
involuntary termination Ms. Johnson may not solicit any of the Company's
employees to become employed in any other business enterprise.
CHANGE OF CONTROL ARRANGEMENTS
In addition to the change of control provisions in the foregoing
agreements, the Company's Stock Option Plans and Employee Stock Purchase Plans
provide that, upon a merger of the Company with or into another corporation, or
the sale of substantially all of the assets of the Company, each outstanding
option or right to purchase Common Stock shall be assumed, or an equivalent
option or right substituted by the successor corporation or a parent or
subsidiary of the successor corporation. In the event that the successor
corporation does not agree to assume the option or right, or substitute an
equivalent option or right, some or all of the options granted under certain of
the Stock Option Plans shall be fully exercisable and all of the rights granted
under the Employee Stock Purchase Plans shall be fully exercisable following the
merger for a period of time from the date of notice by the Board of Directors.
Following the expiration of such periods, the options and rights will terminate.
Under certain other Stock Option Plans, the Plan Administrator may make other
adjustments or provisions to compensate option holders.
RETIREMENT MEDICAL AND DENTAL BENEFITS
The Board of Directors approved a plan in July 1996 allowing executives who
retire from the Company to continue to participate in the Company's group
medical and dental plans after retirement. Additionally, in July 1998, the Board
amended the Executive Deferred Compensation Plan to provide that any participant
55 years or older may petition the Board for an early distribution of benefits
under the Plan. Any such early distribution would not effect a participant's
ability to continue to participate and earn benefits under this Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
LOAN TO ROGER D. EMERICK
In April 1996, Roger D. Emerick, then Chairman of the Board and Chief
Executive Officer of the Company, borrowed $600,000 from the Company pursuant to
a promissory note bearing interest at 5.05% per annum. In April 1997, and again
in April 1998 and April 1999, the loan was renewed by the Company. In August
1999, Mr. Emerick repaid in full the promissory note and all accrued interest.
As of September 1, 1999, no loan principal or accrued interest remains
outstanding.
LOAN TO MERCEDES JOHNSON
In connection with her initial and continued employment, the Company made
Mercedes Johnson, Vice President, Finance and Chief Financial Officer as of May
1, 1997, a loan in the amount of $150,000. The loan bears no interest and is
payable in equal annual installments over a 4-year period. On each of the first
four anniversaries of Ms. Johnson's employment, the Company will pay Ms. Johnson
a bonus in the amount of $37,500, which amount will be used to offset the loan.
In the event Ms. Johnson terminates her employment with the Company, she will be
required to pay the outstanding balance of the loan in accordance with its
terms. As of September 5, 2000, $37,500 remains due and owing under the loan
(and subject to future offset).
EMPLOYMENT AGREEMENT WITH ROGER D. EMERICK
In July 1996, the Company signed an employment agreement with Roger D.
Emerick, then Chairman of the Board and Chief Executive Officer of the Company.
The agreement, which became effective on July 1, 1996, provided that Mr. Emerick
was to serve as Chief Executive Officer of the Company for a period of two
years, which period extended automatically (but not beyond June 30, 2002) unless
terminated by the Company or Mr. Emerick with at least 180 days' advance notice.
In the event Mr. Emerick ceased to serve as the Chief Executive Officer of the
Company, Mr. Emerick was originally to serve as a consultant to the Company
through June 30, 2002. The agreement was amended, however, on June 26, 1997, to
provide for the continued employment of Mr. Emerick following the appointment of
James W. Bagley as Chief Executive
10
<PAGE> 14
Officer of the Company and again amended to reflect Mr. Emerick's resignation as
Chairman of the Board of Directors, effective September 1, 1998, and continued
service as an employee of the Company (as amended, the "Emerick Agreement"). As
provided in the Emerick Agreement, Mr. Emerick's employment with the Company
continued until June 30, 1998, which period is automatically extended (but not
beyond June 30, 2002), unless terminated by the Company or Mr. Emerick with at
least 180 days' advance notice, during which time Mr. Emerick shall perform such
strategic, senior-level duties and responsibilities as the Company's Chief
Executive Officer may assign to him. Upon expiration of Mr. Emerick's employment
period, Mr. Emerick shall continue to serve as a consultant to the Company
through June 30, 2002 (unless such consultancy is otherwise terminated, as
provided in the Emerick Agreement).
The Emerick Agreement provided for an initial annual base salary of
$621,857 during the employment period. Effective September 1, 1998, the salary
was adjusted to an annualized rate equivalent to $33,333 per month. The Emerick
Agreement also provides for an annual performance bonus of up to 50% of base
salary based on attainment of certain performance targets established by the
Company's Board of Directors. For services as a consultant, the Company will pay
Mr. Emerick a monthly consulting fee of $33,333. Mr. Emerick also participates
in all of the incentive compensation plans and programs generally available to
the senior management of the Company, as well as any employee benefit plan
maintained by the Company for its employees. If Mr. Emerick's employment is
involuntarily terminated without cause, he will be entitled to receive his
targeted bonus amount, plus an amount equal to the consulting fee, for the
period beginning on the date of termination and ending June 30, 2002, subject to
a maximum of 48 months, as well as certain other benefits. In addition, upon
involuntary termination without cause or a change in control of the Company, the
unvested portion of Mr. Emerick's stock options and restricted stock will
automatically be accelerated in full so as to become fully vested. The Emerick
Agreement provides that for a period of 24 months following Mr. Emerick's
termination of employment with the Company, Mr. Emerick may not perform services
for any direct competitor of the Company, and may not solicit any of the
Company's employees to become employed by any other business enterprise.
In July 1998, Mr. Emerick petitioned the Board to receive an early
distribution of benefits under the Company's Executive Deferred Compensation
Plan. Beginning September 1, 1998, Mr. Emerick received a monthly distribution
of $8,000 of benefits due him under the plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No persons who were members of the Compensation Committee during fiscal
year 2000 had any relationship requiring disclosure under this section.
REPORT OF THE COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended ("Securities
Act"), or the Securities Exchange Act of 1934, as amended ("Exchange Act"), that
might incorporate all or portions of future filings, including this Proxy
Statement, the following Report of the Compensation Committee, and the
Performance Graph below, shall not be incorporated by reference into any such
filings, nor shall they be deemed to be soliciting material or deemed filed with
the Securities and Exchange Commission ("SEC") under the Securities Act or the
Exchange Act.
The Compensation Committee (the "Committee") of the Board of Directors,
composed of three non-employee directors, determines and administers the
Company's executive compensation policies and programs. This committee also
approves grants of stock options, restricted stock, deferred stock and
performance share awards to officers and other employees of the Company.
COMPENSATION POLICIES
One of the Committee's primary goals in setting compensation policies is to
maintain competitive, progressive programs to attract, retain and motivate
high-caliber executives, foster teamwork and maximize the long-term success of
the Company by appropriately rewarding such individuals for their achievements.
11
<PAGE> 15
Another goal is to provide an incentive to executives to focus efforts on
long-term strategic goals for the Company by closely aligning their financial
interests with stockholder interests. To attain these goals, the Committee has
designed the Company's executive compensation program to include base salary,
annual incentives and long-term incentives.
In formulating and administering the individual elements of the Company's
executive compensation program, the Committee emphasizes planning, implementing
and achieving long-term objectives and strives to use prudent judgment in
establishing performance objectives, evaluating performance and determining
actual incentive awards.
The Committee believes that the Company's executive compensation programs
have met these objectives. The Company has been able to attract and retain the
executive talent necessary to support the corporation and promote long-term
growth. The Company has also been able to reduce the payment of bonuses during
those periods, such as fiscal 1999, in which the Company's revenue and gross
margins were depressed.
COMPENSATION COMPONENTS
Base Salary
The Committee establishes the base salaries of executive officers, after
review of relevant data of other executives with similar responsibilities from
published industry reports and surveys of similarly situated companies.
Accordingly, the Committee strives to maintain the Company's annual executive
salaries at levels competitive with the market average base salaries of
executive officers in similar positions. The market comprises similarly sized
high-technology companies within and outside the Company's industry. In
addition, a large portion of each executive officer's compensation may be annual
incentives in the form of a cash bonus, provided certain target performance
objectives are met.
Annual Incentives
Incentive bonuses may be provided to executives as part of a competitive
compensation package. The bonus levels are intended to provide the appropriate
elements of variability and risk. Bonus payments may be tied specifically to
targeted corporate performance. The Committee will establish a base bonus
amount, determined through review of a competitive market survey for executives
at similar levels, which will be incrementally reduced if the Company does not
meet its targeted performance or increased if the Company exceeds its targeted
performance. There is no minimum or maximum percentage by which a bonus can be
reduced or increased.
Long-Term Incentives
Stock Options
The Committee grants stock options to focus an executive's attention on the
long-term performance of the Company and on maximizing stockholder value. The
grant of stock options is closely tied to individual executive performance. The
Committee grants such stock options after a review of various factors, including
the executive's potential contributions to the Company, current equity ownership
in the Company and vesting rates of existing stock options, if any. Stock
options are granted with an exercise price equal to the current fair market
value of the Company's stock and utilize vesting periods intended to encourage
retention of executive officers. Because of the direct benefit executive
officers receive through improved stock performance, the Committee believes
stock options serve to align the interests of executive officers closely with
those of other stockholders.
Restricted Stock
Restricted stock awards may be granted to executives under the 1996
Restricted Stock Plan (which was approved by the Company's stockholders in
1995). The award of restricted stock is based on the Company's performance
measured against quarterly targets. Because the restricted stock does not vest
until five years
12
<PAGE> 16
after the date of the award, the 1996 Restricted Stock Plan is expected to serve
as a retention tool, as well as a means of aligning executive and stockholder
interests. Shares were last issued under the Restricted Stock Plan in June 1996.
Deferred Compensation Plan
Another component of the Company's executive compensation program is the
Executive Deferred Compensation Plan (the "Deferred Plan"), a voluntary,
non-tax-qualified, deferred compensation plan that encourages officers to save
for retirement. Under the Deferred Plan, participants are entitled to defer
compensation until retirement, death, other termination of employment, or until
specified dates. As amended by the Board in July 1998, Deferred Plan
participants 55 years or older may petition the Board for an early distribution
of benefits, which early distribution would not affect the participant's ability
to continue to participate or earn benefits under the Deferred Plan.
Participants receive a fixed-rate yield based on the average annual interest
rate of 10-year United States Treasury Notes for the previous ten years. An
enhanced yield of up to 115% of the fixed-rate yield will be payable in the
event of death, retirement under certain circumstances, and termination of
employment after plan participation for a specified number of years. Because the
benefits of the Deferred Plan increase with each year of participation, offering
the Deferred Plan to executives encourages them to stay with the Company.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Committee bases the compensation of the Company's Chief Executive
Officer on the policies and procedures described above. In determining the Chief
Executive Officer's base salary and bonus (if any), the Committee examines
compensation levels for other chief executive officers in high-technology firms
within and outside the industry. The Committee compares this information to the
relevant performance of such firms relative to the Company's performance.
James W. Bagley
In accordance with the Bagley Agreement, Mr. Bagley, Chief Executive
Officer since August 6, 1997, received a base salary in fiscal 2000 of $100,000.
Mr. Bagley is not entitled to participate in any performance bonus plan of the
Company, unless otherwise determined by the Board of Directors. As an incentive
to joining the Company, Mr. Bagley was granted in 1997 non-qualified stock
options to purchase 1,425,000 shares of Common Stock and received an additional
grant in fiscal 1999 of options to purchase 1,440,000 shares of Common Stock.
See the discussion of Mr. Bagley's Employment Agreement in "Employment and
Termination Agreements, Change of Control Arrangements and Retirement Benefits,"
above.
EFFECT OF SECTION 162(M) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Code generally limits the corporate deduction for
compensation paid to certain executive officers to $1 million, unless the
compensation is performance-based. The Committee has carefully considered the
potential impact of this tax code provision on the Company and has concluded in
general that the best interests of the Company and the stockholders will be
served if certain of the Company's stock-based long-term incentives qualify as
performance-based compensation within the meaning of the Code. It is the
Committee's intention that, so long as it is consistent with the Company's
overall compensation objectives, virtually all executive compensation will be
deductible by the Company for federal income tax purposes.
COMPENSATION COMMITTEE
David G. Arscott
Jack R. Harris
Grant M. Inman
13
<PAGE> 17
COMPARATIVE STOCK PERFORMANCE
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock ("LRCX") for the last five fiscal years
against the cumulative total return on the Nasdaq National Market Index (U.S.
companies only) ("NASD") and the Salomon Smith Barney Semiconductor Equipment
Index ("SSB") over the same period. The graph and table assume that the
investment in the Company's Common Stock and each index was $100 on July 1,
1995, and that dividends, if any, were reinvested. This data was furnished by
Salomon Smith Barney. The Nasdaq National Market Index and the Salomon Smith
Barney Semiconductor Equipment Index are based on a calendar year. The Company's
return is based on its fiscal year. The stock price performance shown on the
graph is not necessarily indicative of future price performance.
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
SSB NASD LRCX
--- ---- ----
<S> <C> <C> <C>
1-Jul-95 100.0000 100.0000 100.0000
120.1060 107.2590 106.6420
118.4530 109.2840 94.1405
30-Sep-95 115.6740 111.7940 93.3624
110.4560 110.9930 95.1202
103.2640 113.4710 85.5482
31-Dec-95 86.1175 112.7140 71.4855
83.6383 113.5350 66.7979
81.1331 117.8480 57.6197
31-Mar-96 75.3714 117.9920 54.6899
89.8739 127.5400 63.2822
87.1972 133.2080 62.1103
30-Jun-96 70.2484 126.9510 40.6272
58.9536 115.7630 34.7677
61.6134 122.2880 36.9146
30-Sep-96 68.5633 131.4390 41.6022
65.8488 130.8600 38.0865
88.7207 137.9100 56.0540
31-Dec-96 86.6293 138.3070 43.9460
116.3820 147.8230 63.0854
110.3180 140.2320 59.5697
31-Mar-97 101.6350 130.8800 52.7352
110.2370 135.0640 45.3148
135.4020 150.0160 56.8368
30-Jun-97 142.1840 154.4880 57.9103
182.7660 170.7440 82.6185
193.3600 170.0490 88.2811
30-Sep-97 201.7570 180.5870 72.6574
144.6320 170.7230 56.4478
134.7620 171.4660 47.8507
31-Dec-97 123.6580 168.2310 45.7038
128.9040 173.4810 35.6443
155.3440 189.6740 44.1429
31-Mar-98 146.3000 196.6550 43.9460
153.1710 200.1620 48.4367
130.4850 190.5690 37.2053
30-Jun-98 117.5010 202.9820 29.8833
122.5680 200.5880 28.0270
88.8206 160.6140 17.0909
30-Sep-98 85.9747 181.4600 15.6237
120.7430 189.7680 22.5613
135.1450 208.8530 27.9286
31-Dec-98 147.8430 234.9020 27.8301
212.8150 268.4550 59.9634
183.0820 245.1150 46.1913
31-Mar-99 195.0110 263.6890 45.3148
176.0440 272.4140 49.2195
183.8830 264.6650 43.3601
30-Jun-99 245.1730 287.7630 72.9527
241.3270 282.6600 86.5232
239.6340 293.4650 88.1873
30-Sep-99 264.5470 294.1950 95.3124
299.8600 317.7920 131.9360
331.7220 357.4010 121.2910
31-Dec-99 422.0650 435.9430 174.3170
453.6890 422.1280 195.1200
609.5050 503.1540 243.9510
31-Mar-00 589.7370 489.8850 211.2310
608.6290 413.5910 215.0420
488.0040 364.3380 150.5880
30-Jun-00 567.2950 424.8870 175.7840
481.1940 403.5560 137.1110
</TABLE>
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
Unless marked to the contrary, proxies received will be voted "FOR" the
ratification of the appointment of Ernst & Young LLP as the independent auditors
for the Company for the current fiscal year. Ernst & Young LLP has been the
Company's independent auditors since fiscal year 1981.
The audit services of Ernst & Young LLP during fiscal 2000 included the
examination of the consolidated financial statements of the Company and services
related to filings with the SEC and other regulatory bodies.
The Audit Committee of the Company meets with Ernst & Young LLP on an
annual or more frequent basis. At such time, the Audit Committee reviews both
audit and non-audit services performed by Ernst & Young LLP for the preceding
year, as well as the fees charged for such services. Among other things, the
14
<PAGE> 18
Committee examines the effect that the performance of non-audit services may
have upon the independence of the auditors.
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will have an opportunity to make a statement if he or she so
desires. The representative will also be available to respond to appropriate
questions from the stockholders.
Approval of Proposal No. 2 will require the affirmative vote of a majority
of the outstanding shares of Common Stock present or represented and entitled to
vote at the Annual Meeting.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR"
THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS FOR FISCAL YEAR 2001.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers, directors and persons who own more than 10% of a registered class of
the Company's equity securities to file an initial report of ownership on Form 3
and changes in ownership on Forms 4 or 5 with the SEC. Executive officers,
directors and greater than 10% stockholders are also required by SEC rules to
furnish the Company with copies of all Section 16(a) forms they file. Specific
due dates for these reports have been established, and the Company is required
to disclose in this Proxy Statement any failure to file such reports on a timely
basis. Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that all of these requirements were satisfied during the last fiscal year.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If
any other matters properly come before the meeting, it is the intention of the
proxy holders named in the enclosed form of Proxy to vote the shares they
represent as the Board of Directors may recommend.
It is important that your stock be represented at the meeting, regardless
of the number of shares which you hold. You are, therefore, urged to execute and
return, at your earliest convenience, the accompanying proxy card in the
envelope which has been enclosed.
By Order of the Board of Directors,
LOGO
Richard H. Lovgren
Secretary
Fremont, California
Dated: October 6, 2000
15
<PAGE> 19
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF
LAM RESEARCH CORPORATION
IN CONJUNCTION WITH THE
2000 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
NOVEMBER 2, 2000
The undersigned stockholder of LAM RESEARCH CORPORATION, a Delaware
corporation (the "Company"), hereby acknowledges receipt of the Notice of
Annual Meeting of Stockholders and Proxy Statement, each dated October 6,
2000, and 2000 Annual Report to Stockholders, and hereby appoints James W.
Bagley and Richard H. Lovgren, or either of them, proxy holders and
attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 2000 Annual
Meeting of Stockholders of LAM RESEARCH CORPORATION to be held on Thursday,
November 2, 2000 at 11:00 a.m. local time, at the principal executive offices
of the Company at 4650 Cushing Parkway, Fremont, California 94538, and for any
adjournment or adjournments thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there personally
present, on the matters set forth below and, in their discretion, upon such
other matter or matters which may properly come before the meeting or any
adjournment or adjournments thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE RATIFICATION OF
THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE CURRENT
FISCAL YEAR AND, AS SAID PROXY HOLDERS DEEM ADVISABLE, ON SUCH OTHER MATTER OR
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE> 20
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
1. Election of Directors:
FOR all nominees listed WITHHOLD
below (except as
indicated)
[ ] [ ]
(IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW)
James W. Bagley; Roger D. Emerick; David G. Arscott; Richard J. Elkus, Jr.; Jack
R. Harris; Grant M. Inman; Kenneth M. Thompson
2. Proposal to ratify the appointment of Ernst & Young LLP as the independent
auditors of the Company for the fiscal year 2001:
For Against Abstain
[ ] [ ] [ ]
(This Proxy should be marked, dated and signed by the stockholder(s)
exactly as his or her name appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary capacity should so indicate.
If shares are held by joint tenants or as community property, all such
stockholders should sign.)
Signature(s):
----------------------------------------
----------------------------------------
Dated: --------------------------, 2000
(Be sure to date Proxy.)
Please mark, sign, date and return the proxy card promptly, using the enclosed
return-addressed and postage-paid envelope.
