<PAGE>
                            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:
    / /  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 Section 240.14a-11(c) or Section
         240.14a-12
 
    
 
   
                                   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/  $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or

     Item 22(a)(2) of Schedule 14A.
/ /  $500 per each party to the controversy pursuant to Exchange Act Rule
     14a-6(i)(3).
/ /  Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
     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>
   [LOGO]
 
                            LAM RESEARCH CORPORATION
 
                                ----------------
 

                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD OCTOBER 31, 1996
 
                            ------------------------
 
To the Stockholders:
 
    NOTICE IS HEREBY GIVEN that the 1996 Annual Meeting of Stockholders of Lam
Research Corporation (the "Company"), a Delaware corporation, will be held on
Thursday, October 31, 1996, 10:00 a.m., local time, at the principal 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 approve an amendment of the Company's 1984 Employee Stock Purchase
       Plan (the "1984 Purchase Plan") to increase the number of shares reserved
       for issuance thereunder by 350,000 shares to 1,687,500.
 
    3.  To ratify the appointment of Ernst & Young LLP as independent auditors
       of the Company for the fiscal year ending June 30, 1997.
 
    4.  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 2, 1996
are entitled to notice of and to vote at the meeting and 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, date and return the enclosed proxy as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any stockholder attending
the meeting may vote in person even if he or she has returned a proxy.
 
                                          By Order of the Board of Directors
 
                                          Richard H. Lovgren
                                          SECRETARY
 
   
Fremont, California
S
eptember 23, 1996
    
 
                             YOUR VOTE IS IMPORTANT
IN ORDER TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE REQUESTED TO
COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND
RETURN IT IN THE ENCLOSED ENVELOPE (TO WHICH NO POSTAGE NEED BE AFFIXED IF
MAILED IN THE UNITED STATES).

<PAGE>
                            LAM RESEARCH CORPORATION
 
                               ------------------
 
                                PROXY STATEMENT
                                      FOR
                         ANNUAL MEETING OF STOCKHOLDERS
                          TO BE HELD OCTOBER 31, 1996
 
                               TABLE OF CONTENTS
 

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
Information Concerning Solicitation and Voting............................     1
P
roposal No. 1--Election of Directors.....................................     2
Security Ownership of Certain Beneficial Owners and Management............     4
Director Compensation.....................................................     5
Executive Compensation and Other Information..............................     5
Certain Relationships and Related Transactions............................    12
Compensation Committee Interlocks and Insider Participation...............    12
Report of the Compensation Committee......................................    12
Comparative Stock Performance.............................................    15
P
roposal No. 2--Amendment of the 1984 Employee Stock Purchase Plan........    15
P
roposal No. 3--Ratification of Appointment of Independent Auditors.......    20

Compliance with Section 16(a) of the Securities Exchange Act..............    20
Other Matters.............................................................    20
</TABLE>


<PAGE>
 
                           LAM RESEARCH CORPORATION
 
                                ----------------
 
            PROXY STATEMENT FOR 1996 ANNUAL MEETING OF STOCKHOLDERS
 
                             ---------------------
 
                 INFORMATION CONCERNING SOLICITATION AND VOTING
 
GENERAL
 
    The enclosed proxy is solicited on behalf of Lam Research Corporation (the
"Company") for use at the Annual Meeting of Stockholders (the "Annual Meeting")
to be held Thursday, October 31, 1996 at 10:00 a.m., local time, or at 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 September 30,
1996 to all stockholders entitled to vote at the meeting. A copy of the
Company's 1996 Annual Report to Stockholders accompanies this Proxy Statement.
    
 
RECORD DATE AND PRINCIPAL SHARE OWNERSHIP
 
   
    Stockholders of record at the close of business on September 2, 1996 are
entitled to receive notice of and to vote at the Annual Meeting. At the record
date 30,298,633 shares of the Company's Common Stock were issued and
outstanding.
    
 
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. Attending the Annual Meeting
in and of itself may not constitute a revocation of a proxy.
 
VOTING AND SOLICITATION
 
    Every stockholder voting in 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 (five 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,
provided that votes cannot be cast for more than five candidates. However, no
stockholder shall be entitled to cumulate votes unless the candidate's name has
been placed in nomination prior to the voting. On all other matters, each share
has one vote.
 
    Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the Inspector of Elections (the "Inspector") with the assistance of the
Company's transfer agent. The Inspector will also determine whether or not a
quorum is present. Except with respect to the election of directors where
cumulative voting is involved and except in certain other specific
circumstances, the affirmative vote of a majority of shares present in person or
represented by proxy at a duly held meeting at which a quorum is present is
required under Delaware law for approval of proposals presented to stockholders.
In general, Delaware law also provides that a quorum consists of a majority of
the shares entitled to vote and present or represented by proxy at the meeting.
The Inspector will treat abstentions as shares that are present and
 
                                       1

<PAGE>
   
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. Any proxy which is returned using the form of proxy
enclosed and which is not marked as to a particular item will be voted for the
election of directors, for approval of the amendments of the 1984 Purchase Plan,
for ratification of the appointment of the designated independent auditors and,
as the case may be with respect to any items not marked, as the proxy holders
deem advisable, on other matters that may come before the meeting. 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"), those shares will not be considered as present 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 Beacon Hill Partners, Inc. to aid in the solicitation
of proxies from bankers, bank nominees and other institutional owners. The
Company estimates that it will pay Beacon Hill a fee not to exceed $5,000 for
its services and will reimburse Beacon Hill 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
material 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 telegram.
    
 
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
 
    Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the 1997 Annual Meeting of Stockholders must be received
by the Company no later than May 26, 1997 in order to have them included in the
proxy statement and form of proxy relating to that meeting.
 
 
                                PROPOSAL NO. 1
                             ELECTION OF DIRECTORS
 
NOMINEES
 
    A board of five directors is to be elected at the Annual Meeting. The bylaws
of the Company provide that the number of directors shall be fixed at five. The
proxies cannot be voted for a greater number of persons than the five nominees
named below. Unless otherwise instructed, the proxy holders will vote the
proxies received by them for the Company's five nominees named below, all of
whom are presently directors of the Company. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who 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. 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.
 
                                       2

<PAGE>
    The following table sets forth certain information concerning the nominees
which is based on data furnished by them.
 
   

<TABLE>
<CAPTION>
                                     DIRECTOR      PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
NOMINEES FOR DIRECTOR           AGE   SINCE                   DURING PAST FIVE YEARS
- ------------------------------  ---  --------   --------------------------------------------------
 
<S>                             <C>  <C>        <C>
Roger D. Emerick..............  57     1982     Chairman of the Board since 1984. Chief Executive
                                                Officer of the Company since July 1982. Mr.
                                                Emerick is a Director of Electroglas, Inc., Brooks
                                                Automation, Inc., Integrated Process Equipment
                                                Corp., and Semiconductor Equipment and Materials
                                                International (SEMI).
 
David G. Arscott(1,2).........  52     1980     Mr. Arscott has been a director of the Company
                                                since 1980, and was Chairman of the Board from
                                                1982-1984. He is currently and has been since 1989
                                                General Partner of Compass Management Partners.
                                                From 1978 to 1989, Mr. Arscott was a Managing
                                                General Partner of Arscott, Norton & Associates, a
                                                venture capital firm.
 
Jack R. Harris(1,2)...........  54     1982     Mr. Harris has been a director of the Company
                                                since 1982. He is currently and has been since
                                                1986 Chairman, Chief Executive Officer, President
                                                and Chief Financial Officer of Optical
                                                Specialties, Inc. Mr. Harris is a director of
                                                ILEX.
 
Grant M. Inman(1,2)...........  54     1981     Mr. Inman has been a director of the Company since
                                                1981. He is currently and has been since 1985 a
                                                General Partner of Inman & Bowman. Mr. Inman is a
                                                director of Paychex, Inc. and Insite Vision.
 
Osamu Kano(1).................  59     1987     Mr. Kano has been a director of the Company since
                                                1987 and Chairman of Lam Research Co., Ltd. in
                                                Japan since 1991. From 1987 to June 1991, Mr. Kano
                                                served as the Company's Senior Vice President of
                                                Japan Operations. He is currently and has been
                                                since 1991 President of Innoquest Corporation. Mr.
                                                Kano is a director of Optical Specialties, Inc.,
                                                Innotech Corporation, and XMR, 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.
 
BOARD MEETINGS AND COMMITTEES
 
    The Board of Directors of the Company held a total of four meetings during
the fiscal year ended June 30, 1996. The Board of Directors has an Audit
Committee and a Compensation Committee. There is no Nominating Committee or
committee performing the functions of a nominating committee. There is no
incumbent director who attended fewer than 75% of the meetings of the Board of
Directors, and no incumbent director who attended fewer than 50% of the meetings
of the committee or committees on which he served.
 
                                       3

<PAGE>
    The Audit Committee, which consists of directors Arscott, Harris, Inman and
Kano, met two times during fiscal 1996. This committee recommends engagement of
the Company's independent auditors, 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 the internal accounting procedures and controls with the
Company's financial and accounting staff.
 
    The Compensation Committee, which consists of directors Arscott, Harris and
Inman, met four times and acted by Unanimous Written Consent three times during
fiscal 1996. 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.
 

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The table below sets forth the beneficial ownership of shares of Common
Stock of the Company as of September 2, 1996 by: (i) each person or entity who,
based on the information provided to the Company by such persons or entities,
owned beneficially more than five percent of the Company's Common Stock and such
person or entity's address; (ii) each director of the Company; (iii) each named
executive officer described in the section of this proxy statement captioned
"Executive Compensation and Other Information"; and (iv) all current directors
and executive officers as a group.
 
   

<TABLE>
<CAPTION>
 
                                                  SHARES     APPROXIMATE
      NAME OF PERSON OR IDENTITY OR GROUP         OWNED(1)   PERCENT OWNED
      ------------------------------------------  ---------  -------------
      <S>                                         <C>        <C>
      Pioneering Management Corp. ..............  2,767,000      9.13
      60 State Street
      Boston, MA 02109-1975
 
      Miller Anderson & Sherrerd ...............  1,925,124      6.33
      1 Tower Bridge, 100 Front Street
      West Conshohocken, PA 19428-2889
 
      Roger D. Emerick .........................    256,839     *
 
      David G. Arscott .........................     81,408     *
 
      Jack R. Harris ...........................     30,000     *
 
      Grant M. Inman ...........................     47,633     *
 
      Osamu Kano ...............................     50,367     *
 
      Hsui-Sheng (Way) Tu ......................     50,485     *
 
      Henk J. Evenhuis .........................     87,564     *
 
      Raymond Degner ...........................     45,659     *
 
      Thomas Yep ...............................     39,779     *
 
      All current directors and executive
        officers as a group (15 persons) .......    792,725      2.62
</TABLE>

    
 
- ------------------------
 
*   Less than one percent
 
(1) Includes 241,245, 24,000, 24,000, 24,000, 24,000, 42,853, 79,837, 33,181,
    35,899 and 623,747 subject to outstanding options that are currently
    exercisable or exercisable within 60 days after September 2, 1996 in favor
    of Mr. Emerick, Mr. Arscott, Mr. Harris, Mr. Inman, Mr. Kano, Mr. Tu, Mr.
    Evenhuis, Dr. Degner, Dr. Yep, and all current directors and executive
    officers as a group, respectively.
 
                                       4

<PAGE>
                             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, up
to a maximum of four meetings (other than telephonic meetings), plus
reimbursement for reasonable travel expenses; and committee meeting fees of
$500, up to a maximum of four meetings, plus reimbursement for reasonable travel
expenses. In addition, each person who is a non-employee director is
automatically granted on the first business day of each calendar year an option
to purchase 6,000 shares of the Company's Common Stock under the Company's
Amended 1991 Incentive Stock Option Plan at a price per share equal to the fair
market value of one share of the Company's Common Stock on that date. Each
option has a term of ten years and is immediately exercisable. Options cease to
be exercisable immediately upon termination of director status. An option will
terminate to the extent it is not exercised.
 

                  EXECUTIVE COMPENSATION AND OTHER INFORMATION
 
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
 
    The following table provides certain summary information concerning
compensation paid or accrued by the Company to or on behalf of the Company's
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company (determined at the end of the last fiscal
year) for the fiscal years ended June 30, 1996, 1995 and 1994.
 
                           SUMMARY COMPENSATION TABLE
 
   

<TABLE>
<CAPTION>
                                                                                         LONG TERM COMPENSATION
                                                                                        -------------------------
                                                         ANNUAL COMPENSATION            RESTRICTED    NUMBER OF
                                                -------------------------------------     STOCK       SECURITIES     ALL OTHER
                                                  SALARY      BONUS    OTHER ANNUAL      AWARD(S)     UNDERLYING    COMPENSATION
NAME AND PRINCIPAL POSITION               YEAR    ($)(1)     ($)(1)   COMPENSATION($)      ($)        OPTIONS(#)        ($)
- ----------------------------------------  ----  ----------   -------  ---------------   ----------   ------------   ------------
<S>                                       <C>   <C>          <C>      <C>               <C>          <C>            <C>
Roger D. Emerick .......................  1996  640,758(2)   579,853     33,675(3)        99,494      60,000(6)      108,106(8)
Chairman of the Board and                 1995  577,105(2)   387,965        594(4)                    37,400          81,666(8)
  Chief Executive Officer                 1994  496,105(2)   349,068      3,354(4)                    25,000          55,478(8)
 
Hsui-Sheng (Way) Tu ....................  1996  273,926      205,683      2,033(4)        47,076      32,000(7)        3,095(9)
President                                 1995  190,772      133,745     --                           22,600           3,102(9)
                                          1994  164,251       83,815     --                           15,000               0
 
Henk J. Evenhuis .......................  1996  249,891      183,463      1,860(4)        31,515      22,000(7)        7,197(10)
Executive Vice President, Finance, and    1995  237,904      124,442        410(4)                    22,600           6,646(10)
  Chief Financial Officer                 1994  218,351      119,735     --                           15,000           4,993(10)
 
Raymond L. Degner ......................  1996  269,658      192,777      2,899(4)        33,495      22,000(7)        7,999(11)
Senior Vice President                     1995  234,214      121,018     38,956(5)                    22,600           8,131(11)
                                          1994  207,124      207,124         54(4)                    15,000           5,736(11)
 
Thomas O. Yep ..........................  1996  241,280      173,734      3,663(4)        31,193      28,000(7)        6,659(12)
Senior Vice President                     1995  225,582      107,935        753(4)                    22,600           7,062(12)
                                          1994  197,946       85,096         36(4)                    15,000           6,006(12)
</TABLE>

    
 
- ------------------------------
 
 (1) The amounts shown include amounts earned but deferred at the election of
    executive officers 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) Included in this amount is $100,000 in benefits paid by the Company on
    behalf of Mr. Emerick pursuant to a deferred compensation agreement.
 
 (3) Included in this amount is $31,198 paid by the Company to buy out a
    five-year bonus and $2,477 interest earned on deferred compensation to the
    extent that the interest rate exceeds 120% of the applicable federal
    long-term rate.
 
 (4) The amounts indicated for each named executive officer include interest
    earned on deferred compensation to the extent that the interest rate exceeds
    120% of the applicable federal long-term rate.
 
                                       5

<PAGE>
 (5) Included in this amount is $20,916 paid by the Company to buy out a
    five-year bonus and $658 interest earned on deferred compensation to the
    extent that the interest rate exceeds 120% of the applicable federal
    long-term rate.
 
   
 (6) Includes 30,000 stock options that were repriced on 1/15/96 to $33.625 per
    share.
    
 
   
 (7) Includes 11,000 stock options that were repriced on 1/15/96 to $33.625 per
    share.
    
 
   
 (8) Included in this amount is $100,000 for 1996, $75,000 for 1995 and $50,000
    for 1994, under the terms of a Deferred Compensation Agreement between the
    Company and Mr. Emerick. Mr. Emerick may defer compensation of up to
    $500,000 over ten years, and the Company will match the first $50,000 of Mr.
    Emerick's deferrals in any year at the rate of 50%. No matching contribution
    will be made for any year in which the Company was not profitable. The
    Company's 50% matching contribution, if any, is cumulative only for
    profitable years based on aggregate contributions by Mr. Emerick and
    continues annually through the tenth year of the Agreement. Also included in
    these amounts are: $4,056 for Company match of 50% for up to 6% of total
    contributions to a qualified retirement plan pursuant to 401(k) for each
    employee for 1996, $2,310 for 1995 and $2,310 for 1994; and term life
    insurance premiums in the amount of $4,050 for 1996, $4,356 for 1995 and
    $3,168 for 1994.
    
 
   
 (9) Included in these amounts are $2,375 for 1996 and $2,310 for 1995 for
    Company match of 50% for up to 6% of total contributions to a qualified
    retirement plan pursuant to 401(k) for each employee; and $720 and $792 for
    term life insurance premiums for 1996 and 1995, respectively.
    
 
   
(10) Included in these amounts are $4,828 for 1996, $4,226 for 1995 and $2,686
    for 1994 for Company match of 50% for up to 6% of total contributions to a
    qualified retirement plan pursuant to 401(k) for each employee; and $2,369,
    $2,420, and $2,307, for term life insurance premiums for 1996, 1995 and
    1994, respectively.
    
 
   
(11) Included in these amounts are $5,155 for 1996, $4,963 for 1995 and $3,108
    for 1994 for Company match of 50% for up to 6% of total contributions to a
    qualified retirement plan pursuant to 401(k) for each employee; and $2,844,
    $3,168, and $2,628, for term life insurance premiums for 1996, 1995 and
    1994, respectively.
    
 
   
(12) Included in these amounts are $2,375 for 1996, $2,310 for 1995 and $2,310
    for 1994 for Company match of 50% for up to 6% of total contributions to a
    qualified retirement plan pursuant to 401(k) for each employee; and $4,284,
    $4,752, and $3,696, for term life insurance premiums for 1996, 1995 and
    1994, respectively.
    
 
STOCK PLANS
 
    The Company's Amended 1984 Incentive Stock Option Plan (the "1984 Option
Plan") and the Amended 1991 Incentive Stock Option Plan (the "1991 Option Plan")
(the 1984 Option Plan, and the 1991 Option Plan are collectively referred to as
the "Option Plans"), permit the grant of both "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), as well as nonstatutory stock options. Only employees (including
employees of any company in which the Company owns directly or indirectly at
least 50 percent of the voting shares) may receive incentive stock options,
while employees, paid consultants and, in certain limited instances, outside
directors may receive nonstatutory options.
 
    The Company repriced stock options on January 15, 1996 to $33.625 per share.
All employees, including executives, holding options with an exercise price
higher than $33.625 were permitted to cancel such options and have new options
issued at the lower price. All repriced options are subject to a new four-year
vesting period, beginning on the date of reissue.
 
   
    A total of 7,147,781 shares of Common Stock have been reserved for issuance
under the Option Plans. As of September 2, 1996, options to purchase 3,435,040
shares had been exercised (of which 4,240 shares were subsequently repurchased),
options to purchase 2,869,245 shares were outstanding at an average exercise
price of $28.02 per share, and 819,419 shares remained available for future
grant under the Option Plans. During fiscal 1996 the Company granted options to
purchase 316,000 shares (140,000 of which were reissued pursuant to the January
15, 1996 repricing) to all current executive officers as a group (eleven
persons) at an average exercise price of $33.90 ($56.17 prior to the repricing),
options to purchase 24,000 shares to all current directors who are not executive
officers as a group (four persons) at an average exercise price of $45.00, and
options to purchase 1,655,448 shares (791,488 of which were reissued pursuant to
the January 15, 1996 repricing) to all current employees as a group (excluding
executive officers and directors) at an average exercise price of $34.72 ($53.79
prior to the repricing).
    
 
   
    In 1984 the Company adopted the 1984 Purchase Plan. The 1984 Purchase Plan
is implemented by periodic six-month offerings. As of September 2, 1996,
approximately 965,427 shares have been issued
    
 
                                       6

<PAGE>
under the 1984 Purchase Plan. The 1984 Purchase Plan is administered by the
Board of Directors of the Company or by a committee appointed by the Board.
Employees of the Company or any majority owned subsidiary, including officers,
are eligible to participate if they are customarily employed by the Company for
at least 20 hours per week and more than five months per calendar year. The 1984
Purchase Plan currently permits eligible employees to purchase Common Stock
through payroll deductions (which may not exceed ten percent of an employee's
base compensation) at 85 percent of the fair market value at the beginning or at
the end of each offering period, whichever is lower. Employees may end their
participation in an offering at any time during the offering period and
participation ends automatically on termination of employment with the Company.
 
   
    In 1995 the Company adopted a Performance-Based Restricted Stock Plan (the
"Restricted Stock Plan"). The Restricted Stock Plan was implemented on January
1, 1996. As of September 2, 1996, approximately 39,624 shares (of the 150,000
shares reserved for issuance) had been issued under the Restricted Stock Plan.
The Restricted Stock Plan is administered by the Board of Directors or by a
committee appointed by the Board. The Restricted Stock Plan is designed to
reward executives based on achievement of certain predetermined goals, which
include overall corporate results, business unit performance, and certain
qualitative factors such as organization and management development. These goals
are formula-based so that 80% of the award is made on performance against
financial objectives. Once performance has been measured against objectives, a
stock award is granted based on the fair market value of the Company's stock at
the close of the quarter. The award vests 100% at the end of five years. If an
executive leaves the Company during the five year period following the date of
award, any unvested shares are forfeited.
    
 
    See Proposal No. 2--"Amendment of the 1984 Employee Stock Purchase Plan."
 
                       OPTION GRANTS IN LAST FISCAL YEAR
 
   

<TABLE>
<CAPTION>
                                                                     INDIVIDUAL GRANTS
                              -----------------------------------------------------------------------------------------------
                                                                                                   POTENTIAL REALIZABLE VALUE
                                                                                                    AT ASSUMED ANNUAL RATES
                               NUMBER OF    % OF TOTAL                                                   OF STOCK PRICE
                              SECURITIES      OPTIONS                                                     APPRECIATION
                              UNDERLYING    GRANTED TO    EXERCISE OR BASE                             FOR OPTION TERM(2)
                                OPTIONS    EMPLOYEES IN        PRICE                               --------------------------
NAME                          GRANTED(1)    FISCAL YEAR        ($/SH)          EXPIRATION DATE          5%           10%
- ----------------------------  -----------  -------------  ----------------  ---------------------  ------------  ------------
<S>                           <C>          <C>            <C>               <C>                    <C>           <C>
Roger D. Emerick............      60,000         3.04%     $33.63 - 62.88    07/05/05 - 01/15/06   $  1,627,265  $  4,123,809
 
Hsui-Sheng (Way) Tu.........      32,000         1.62%     $33.63 - 62.88    07/05/05 - 01/31/06   $    863,119  $  2,187,312
 
Henk J. Evenhuis............      22,000         1.12%     $33.63 - 62.88    07/05/05 - 01/15/06   $    595,052  $  1,507,979
 
Raymond L. Degner...........      22,000         1.12%     $33.63 - 62.88    07/05/05 - 01/15/06   $    595,052  $  1,507,979
 
Thomas O. Yep...............      28,000         1.42%     $33.63 - 62.88    07/05/05 - 03/29/06   $    726,648  $  1,841,470
</TABLE>

    
 
- ------------------------
 
   
(1) Includes options to purchase shares which were repriced on January 15, 1996,
    replacing options priced higher than $33.625 (See Summary Compensation
    Table, footnotes 6 and 7). The repricing was offered to all option holders
    who were not outside directors.
    
 
(2) The "potential realizable value" shown represents the potential gains based
    on annual compound stock price appreciation of 5 percent and 10 percent from
    the date of grant through the full 10-year option term, net of exercise
    price, but before taxes associated with exercise. The amounts represent
    certain assumed rates of appreciation only, based on the Securities and
    Exchange Commission rules. Actual gains, if any, on stock option exercises
    are dependent on the future performance of the Common Stock, overall market
    conditions and the option holders' continued employment through the vesting
    period. The amounts reflected in this table may not necessarily be achieved
    and do not reflect the Company's estimate of future stock price growth.
 
                                       7

<PAGE>
    The following table provides certain information concerning the exercise of
options to purchase the Company's Common Stock in the fiscal year ended June 30,
1996 and the unexercised options held as of June 30, 1996 by the persons named
in the Summary Compensation Table:
 
              AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                         FISCAL YEAR END OPTION VALUES
 
   

<TABLE>
<CAPTION>
                                                                                                 VALUE OF
                                                                    NUMBER OF                   UNEXERCISED
                                                              UNEXERCISED OPTIONS AT      IN-THE-MONEY OPTIONS AT
                                 SHARES                         FISCAL YEAR END(3)          FISCAL YEAR END(2)
                               ACQUIRED ON       VALUE      --------------------------  ---------------------------
NAME                           EXERCISE(#)   REALIZED($)(1) EXERCISABLE  UNEXERCISABLE  EXERCISABLE   UNEXERCISABLE
- ----------------------------  -------------  -------------  -----------  -------------  ------------  -------------
<S>                           <C>            <C>            <C>          <C>            <C>           <C>
Roger D. Emerick............            0      $       0       236,615        58,284    $  3,781,244   $    34,225
 
Hsui-Sheng (Way) Tu.........        1,500      $  40,688        40,507        38,548    $    312,084   $    17,927
 
Henk J. Evenhuis............            0      $       0        77,396        29,204    $    956,513   $    22,362
 
Raymond L. Degner...........            0      $       0        31,303        28,078    $    118,027   $    10,026
 
Thomas O. Yep...............            0      $       0        33,802        34,297    $    153,318   $    13,713
</TABLE>

    
 
- ------------------------
 
(1) Market value of underlying securities at exercise minus the exercise price.
 
(2) Market value of underlying securities at year-end minus the exercise price.
 
   
(3) The repriced options replaced options that were cancelled and are no longer
    exercisable.
    
 
                                       8

<PAGE>
   
    The following table summarzies stock options granted to the executive
officers of the Company that have been repriced during the past ten fiscal
years.
    
 
   

<TABLE>
<CAPTION>
                                          TEN-YEAR OPTION REPRICINGS
 
<S>                             <C>        <C>          <C>          <C>          <C>          <C>
                                            NUMBER OF     MARKET
                                           SECURITIES    PRICE OF     EXERCISE                    LENGTH OF
                                           UNDERLYING    STOCK AT     PRICE AT                 ORIGINAL OPTION
                                             OPTIONS      TIME OF      TIME OF        NEW       TERM REMAINING
                                REPRICING   REPRICED     REPRICING    REPRICING    EXERCISE       AT DATE OF
             NAME                 DATE         (#)          ($)          ($)       PRICE ($)      REPRICING
- ------------------------------  ---------  -----------  -----------  -----------  -----------  ----------------
Roger D. Emerick .............     1/2/87      30,000    $    3.08    $    4.58    $    3.08   3 Years 281 Days
 Chairman of the Board and        8/23/90      30,000    $    2.04    $    3.08    $    2.04   1 Years 132 Days
 Chief Executive Officer          8/23/90     120,000    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90      22,500    $    2.04    $    2.71    $    2.04   2 Years 64 Days
                                  8/23/90      75,000    $    2.04    $    3.54    $    2.04   3 Years 43 Days
                                  8/23/90     100,005    $    2.04    $    3.46    $    2.04   4 Years 134 Days
                                  1/15/96      10,000    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96      20,000    $   33.63    $   47.50    $   33.63   9 Years 309 Days
 
Hsui-Sheng (Way) Tu ..........     1/2/87       1,500    $    3.08    $    6.63    $    3.08   4 Years 29 Days
 President                         1/2/87       1,500    $    3.08    $    4.67    $    3.08   4 Years 218 Days
                                  8/23/90         335    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90         626    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90       2,345    $    2.04    $    3.63    $    2.04   2 Years 73 Days
                                  8/23/90       7,500    $    2.04    $    3.54    $    2.04   4 Years 43 Days
                                  1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
 
Henk J. Evenhuis .............   10/26/87      60,000    $    2.71    $    5.13    $    2.71   4 Years 184 Days
 Executive Vice President         8/23/90      60,000    $    2.04    $    2.71    $    2.04   2 Years 64 Days
 Finance, and Chief Financial     8/23/90      15,000    $    2.04    $    3.54    $    2.04   3 Years 43 Days
 Officer                          1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
 
Raymond L. Degner ............     1/2/87      37,500    $    3.08    $    5.58    $    3.08   2 Years 303 Days
 Senior Vice President             1/2/87      37,500    $    3.08    $    4.83    $    3.08   3 Years  8 Days
                                   1/2/87      37,500    $    3.08    $    4.83    $    3.08   3 Years  8 Days
                                  8/23/90      37,500    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90       7,500    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90       7,500    $    2.04    $    2.71    $    2.04   2 Years 64 Days
                                  8/23/90      15,000    $    2.04    $    3.54    $    2.04   3 Years 43 Days
                                  1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
 
Thomas O. Yep ................     1/2/87      22,500    $    3.08    $    6.79    $    3.08   4 Years 363 Days
 Senior Vice President             1/2/87      22,500    $    3.08    $    6.79    $    3.08   4 Years 363 Days
                                   1/2/87      22,500    $    3.08    $    6.63    $    3.08   4 Years 29 Days
                                  8/23/90      22,500    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90       9,000    $    2.04    $    3.54    $    2.04   3 Years 43 Days
                                  8/23/90       7,500    $    2.04    $    3.54    $    2.04   4 Years 142 Days
                                  1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
 
George R. Canavan ............    1/15/96       1,050    $   33.63    $   62.88    $   33.63   9 Years 171 Days
 Vice President                   1/15/96       8,000    $   33.63    $   60.88    $   33.63   9 Years 289 Days
                                  1/15/96       5,000    $   33.63    $   47.50    $   33.63   9 Years 309 Days
</TABLE>

    
 
                                       9

<PAGE>
   

<TABLE>
<CAPTION>
                                    TEN-YEAR OPTION REPRICINGS (CONTINUED)
 
                                            NUMBER OF     MARKET
                                           SECURITIES    PRICE OF     EXERCISE                    LENGTH OF
                                           UNDERLYING    STOCK AT     PRICE AT                 ORIGINAL OPTION
                                             OPTIONS      TIME OF      TIME OF        NEW       TERM REMAINING
                                REPRICING   REPRICED     REPRICING    REPRICING    EXERCISE       AT DATE OF
             NAME                 DATE         (#)          ($)          ($)       PRICE ($)      REPRICING
- ------------------------------  ---------  -----------  -----------  -----------  -----------  ----------------
<S>                             <C>        <C>          <C>          <C>          <C>          <C>
Robert C. Fink ...............    1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
 Senior Vice President            1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
Richard H. Lovgren ...........    1/15/96      20,000    $   33.63    $   57.00    $   33.63   9 Years 136 Days
 Vice President, General          1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
 Counsel and Secretary            1/15/96       5,000    $   33.63    $   47.50    $   33.63   9 Years 309 Days
Larry N. Stewart .............    1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
 Vice President                   1/15/96       5,000    $   33.63    $   47.50    $   33.63   9 Years 309 Days
Alexander M. Voshchenkov .....    1/15/96       3,500    $   33.63    $   62.88    $   33.63   9 Years 171 Days
 Vice President and Chief         1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
 Technical Officer
Steve P. De Ornellas .........     1/2/87      15,000    $    3.08    $    5.58    $    3.08   2 Years 303 Days
 Former Vice President
Gordon D. Key ................    8/23/90       1,770    $    2.04    $    2.26    $    2.04   6 Years 304 Days
 Former Vice President            1/15/90       3,750    $    3.54    $    4.04    $    3.54   3 Years 45 Days
                                  8/23/90       7,500    $    2.04    $    3.54    $    2.04   3 Years 43 Days
                                  8/23/90      15,000    $    2.04    $    3.54    $    2.04   4 Years 142 Days
                                  8/23/90       3,750    $    2.04    $    3.54    $    2.04   2 Years 145 Days
Carl A. Kountz ...............     1/2/87      15,000    $    3.08    $    5.58    $    3.08   2 Years 303 Days
 Former President and Chief        1/2/87      30,000    $    3.08    $    4.58    $    3.08   3 Years 281 Days
 Operating Officer                8/23/90      15,000    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90      60,000    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90      30,000    $    2.04    $    3.08    $    2.04   1 Years 132 Days
                                  8/23/90      15,000    $    2.04    $    2.71    $    2.04   2 Years 64 Days
                                  8/23/90      45,000    $    2.04    $    3.54    $    2.04   3 Years 43 Days
                                  8/23/90      60,000    $    2.04    $    3.46    $    2.04   4 Years 134 Days
Joseph R. Monkowski ..........    8/23/90      75,000    $    2.04    $    3.54    $    2.04   2 Years 281 Days
 Former Executive Vice
 President and Chief Technical
 Officer
Steve Y. Muto ................     1/2/87      15,000    $    3.08    $    5.58    $    3.08   2 Years 303 Days
 Former Vice President             1/2/87      12,000    $    3.08    $    4.58    $    3.08   3 Years 281 Days
Alan D. Nolet ................    8/23/90      15,000    $    2.04    $    3.54    $    2.04   2 Years 281 Days
 Former Vice President            1/15/90      15,000    $    3.54    $    5.54    $    3.54   4 Years 197 Days
                                  8/23/90      15,000    $    2.04    $    3.54    $    2.04   4 Years 142 Days
                                  8/23/90      15,000    $    2.04    $    3.54    $    2.04   4 Years 145 Days
John F. Osborne ..............    8/23/90      75,000    $    2.04    $    4.08    $    2.04   2 Years 226 Days
 Former Senior Vice President     1/15/96       2,900    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96         600    $   33.63    $   62.88    $   33.63   9 Years 171 Days
                                  1/15/96       7,500    $   33.63    $   47.50    $   33.63   9 Years 309 Days
Bruce C. Rhine ...............    8/23/90      45,000    $    2.04    $    3.54    $    2.04   2 Years 281 Days
 Former Vice President
Colin C. Tierney .............    1/15/90      45,000    $    3.54    $    4.08    $    3.54   3 Years  81 Days
 Former Vice President and        8/23/90      45,000    $    2.04    $    3.54    $    2.04   2 Years 145 Days
 Chief Operating Officer
</TABLE>

    
 
                                       10

<PAGE>
   

<TABLE>
<CAPTION>
                                    TEN-YEAR OPTION REPRICINGS (CONTINUED)
 
                                            NUMBER OF     MARKET
                                           SECURITIES    PRICE OF     EXERCISE                    LENGTH OF
                                           UNDERLYING    STOCK AT     PRICE AT                 ORIGINAL OPTION
                                             OPTIONS      TIME OF      TIME OF        NEW       TERM REMAINING
                                REPRICING   REPRICED     REPRICING    REPRICING    EXERCISE       AT DATE OF
             NAME                 DATE         (#)          ($)          ($)       PRICE ($)      REPRICING
- ------------------------------  ---------  -----------  -----------  -----------  -----------  ----------------
<S>                             <C>        <C>          <C>          <C>          <C>          <C>
Thomas J. Voehl ..............     1/2/87      15,000    $    3.08    $    5.58    $    3.08   2 Years 303 Days
 Former Vice President             1/2/87      30,000    $    3.08    $    4.58    $    3.08   3 Years 281 Days
</TABLE>

    
 
    The following table sets forth, as to the Company's Chief Executive Officer
and each of the four other most highly compensated executive officers, all
current executive officers as a group and all employees (excluding executive
officers) as a group who participated in the 1984 Purchase Plan: (i) the number
of shares of the Company's Common Stock purchased under the 1984 Purchase Plan
during the last fiscal year; (ii) the dollar value of the benefit (see footnote
(1) to the table), and (iii) the amount of payroll deductions for future
purchases accumulated through June 30, 1996 for the current purchase period
under the Purchase Plan, which purchase period commenced March 25, 1996:
 
                        EMPLOYEE STOCK PURCHASE SUMMARY
 

<TABLE>
<CAPTION>
                                                                         NO. OF       DOLLAR      CURRENT PERIOD
                                                                         SHARES        VALUE          PAYROLL
NAME OF INDIVIDUAL OR IDENTIFY OF GROUP                                 PURCHASED     ($)(1)        DEDUCTIONS
- ---------------------------------------------------------------------  -----------  -----------  -----------------
 
<S>                                                                    <C>          <C>          <C>
Roger D. Emerick.....................................................         703        7,391                0
 
Hsui-Sheng (Way) Tu..................................................           0            0                0
 
Henk J. Evenhuis.....................................................         291        3,238            2,800
 
Raymond L. Degner....................................................         351        3,742            3,576
 
Thomas O. Yep........................................................         310        3,340            3,577
 
All current executive officers as a group (11) persons...............       3,456       33,129            9,953
 
All current employees, excluding executive officers, as a group......     153,039    1,372,916        4,507,414
</TABLE>

 
- ------------------------
 
(1) Market value on date of purchase minus the purchase price.
 
                  EMPLOYMENT CONTRACTS AND RETIREMENT BENEFITS
 
   
    In July 1996, the Company signed an employment agreement with Roger D.
Emerick, Chairman of the Board and Chief Executive Officer. The agreement, which
became effective as of July 1, 1996, provides for Mr. Emerick to serve as Chief
Executive Officer of the Company for a period of two (2) years, which period
extends 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 ceases to serve as Chief Executive Officer of the Company, Mr. Emerick
will serve as a consultant to the Company through June 30, 2002. The agreement
provides for an initial annual base salary of $621,857, which will be reviewed
at least annually. The 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. In the
event Mr. Emerick's employment is involuntarily terminated without cause, he
will be entitled to receive a lump sum payment equal to his base pay through
June 30, 1998 (if the termination occurs prior to that date), 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
    
 
                                       11

<PAGE>
   
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. For a period
of 24 months following Mr. Emerick's termination 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.
    
 
    The Board of Directors also 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.
 
 
                CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    In March 1994 the Board of Directors approved a fully secured loan in the
amount of $100,000 plus applicable interest to Alexander Voshchenkov, Vice
President and Chief Technical Officer. In November 1994, Dr. Voshchenkov
borrowed $100,000 from the Company pursuant to a promissory note bearing
interest at 6.34% per annum. As of November 1995, $100,000 plus accrued interest
was paid in full.
 
    In April 1996, Roger D. Emerick, Chairman of the Board and Chief Executive
Officer, borrowed $600,000 from the Company pursuant to a promissory note
bearing interest at 5.05% per annum. As of June 30, 1996, $600,000 plus accrued
interest remains outstanding.
 
 
         COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
    Osamu Kano, Director of the Company since 1987, was a member of the
Compensation Committee in fiscal 1993 and 1994. Mr. Kano is currently the
Chairman of Lam Research Co., Ltd. in Japan, a subsidiary of the Company, and
served as the Company's Senior Vice President of Japan Operations from 1987 to
June 1991. As of August 18, 1994, Mr. Kano became a member of the Audit
Committee and no longer serves on the Compensation Committee.
 
    Jack R. Harris, Director of the Company since 1982, is a member of the
Compensation Committee. Mr. Harris is the Chairman, Chief Executive Officer,
President and Chief Financial Officer of Optical Specialties, Inc. ("OSI"). The
Company has invested a total of $500,000 to purchase Series A Preferred Stock
and Series E Preferred Stock of OSI in two transactions. Other outside investors
also participated in the transactions. The latter of the transactions took place
on December 14, 1994.
 
                      REPORT OF THE COMPENSATION COMMITTEE
 
    The Compensation Committee (the "Committee") of the Board of Directors,
comprised of three non-employee directors, determines and administers the
Company's executive compensation policies and programs.
 
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.
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.
 
                                       12

<PAGE>
   
    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 a corporation which has increased its
revenues by more than 381% percent over the last four years, while providing
higher than average stockholder returns (see the Performance Graph on page 15).
    
 
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 salary of executive
officers in similar positions. The market is comprised of similarly sized high
technology companies within and outside the Company's industry. In addition, a
large portion of each executive officer's compensation will be annual incentives
in the form of a cash bonus, provided certain target performance objectives are
met.
 
ANNUAL INCENTIVES
 
    The more aggressive incentive bonus levels for executives are intended to
provide the appropriate elements of variability and risk. Bonus payments are
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 the bonus can be reduced or increased.
 
LONG-TERM INCENTIVES
 
    STOCK OPTIONS
 
    The Committee grants stock options to focus the 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 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 are granted to executives under the Restricted Stock
Plan, which was approved by the Company's stockholders in 1995. The award of
restricted stock is based upon the Company's performance against quarterly
targets. Because the restricted stock does not vest until five years after the
date of the award, the Restricted Stock Plan is expected to serve as a retention
tool, as well as a means of aligning executive and stockholder interests.
 
    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. Participants receive a fixed rate yield based on the average
annual interest rate of ten-year United States Treasury
 
                                       13

<PAGE>
Notes for the previous ten years. An enhanced yield of up to 115 percent 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.
 
    STOCK OPTION REPRICING
 
    In January 1996, the Compensation Committee authorized the reduction of the
exercise price under options granted to employees, including executives, which
had an exercise price higher than the current market price of the Company's
Common Stock at the time of the repricing ($33.625). The options granted to
employees were designed to provide incentive to the employees to work to achieve
long term success for the Company. The decline in the market price of the
Company's Common Stock since the date the options were granted frustrated the
purpose of the options and the Committee deemed it to be in the best interests
of the Company to allow the reissue of the options to reduce the exercise price
to the market price at the time of the reissue. All repriced options are subject
to a new four-year vesting period, beginning on the date of reissue.
 
COMPENSATION OF CHIEF EXECUTIVE OFFICER
 
   
    The Committee bases compensation of the Chief Executive Officer, Mr. Roger
D. Emerick, on the policies and procedures described above. In determining Mr.
Emerick's base salary and bonus, the Committee examined compensation levels for
other chief executive officers in high technology firms within and outside the
industry. The Committee compared this information to the relevant performance of
such firms relative to the Company's performance. Mr. Emerick's fiscal 1996
compensation arrangement, which included the grant of 60,000 stock options
(30,000 of which were reissued stock options pursuant to the January 15, 1996
repricing), reflects the Company's strong performance in the 1996 fiscal year,
in which the Company's earnings increased to $141.1 million from $89.2 million
and revenue grew to $1276.9 million from $810.6 million in the prior year. The
Committee recognizes that the Company's growth was the result of strategic
planning adopted and implemented by Mr. Emerick and his management staff over a
number of years. Mr. Emerick's current employment agreement and compensation
arrangement with the Company also reflects the Company's desire to retain and
motivate him with long-term incentives. In addition to the grant of 60,000 stock
options and participation in the Deferred Plan, Mr. Emerick received 3,318
shares of restricted stock under the Restricted Stock Plan. Mr. Emerick also has
a ten-year deferred compensation arrangement with the Company, which provides
for an increasing portion of compensation to be paid to Mr. Emerick each year in
which the Company is profitable. (See Summary Compensation Table, footnote 7.)
    
 
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 its overall
compensation objectives, virtually all executive compensation will be deductible
for federal income tax purposes.
 
                                         COMPENSATION COMMITTEE
 
                                              David G. Arscott
                                               Jack R. Harris
                                                Grant Inman
 
                                       14

<PAGE>
                         COMPARATIVE STOCK PERFORMANCE
 
    Set forth below is the graph comparing the cumulative total stockholder
return on the Company's Common Stock for the last five fiscal years. The graph
compares stockholder return on the Company's Common Stock with the cumulative
total return on the Nasdaq Stock Market Index (U.S. companies only) and the
Hambrecht & Quist ("H&Q") Semiconductor Index over the same period (assuming the
investment in Lam Research Common Stock and each index was $100 on June 30, 1991
and that dividends, if any, were reinvested). The stock price performance shown
on the graph is not necessarily indicative of future price performance.
 
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
 

<TABLE>
<CAPTION>
              LAM RESEARCH   NASDAQ STOCK MARKET -U.S.    H&Q SEMICONDUCTOR SECTOR
<S>          <C>             <C>                         <C>
30-Jun-91            100.00                      100.00                      100.00
31-Jul-91            117.39                      105.92                      102.19
31-Aug-91            131.88                      111.19                      106.14
30-Sep-91            113.04                      111.60                       92.38
31-Oct-91            155.07                      115.28                       97.65
30-Nov-91            146.38                      111.41                       92.87
31-Dec-91            144.93                      125.03                      108.12
31-Jan-92            172.46                      132.34                      126.81
29-Feb-92            159.42                      135.33                      134.08
31-Mar-92            149.28                      128.95                      118.06
30-Apr-92            127.54                      123.42                      115.49
31-May-92            133.33                      125.02                      112.83
30-Jun-92            137.68                      120.13                      113.53
31-Jul-92            142.03                      124.39                      121.68
31-Aug-92            156.52                      120.59                      119.02
30-Sep-92            192.75                      125.07                      133.79
31-Oct-92            195.65                      129.99                      142.80
30-Nov-92            242.03                      140.34                      152.75
31-Dec-92            242.03                      145.50                      169.75
31-Jan-93            286.96                      149.64                      197.24
28-Feb-93            308.70                      144.06                      210.66
31-Mar-93            349.28                      148.23                      214.31
30-Apr-93            347.83                      141.90                      192.06
31-May-93            428.99                      150.38                      221.98
30-Jun-93            459.42                      151.08                      225.90
31-Jul-93            484.06                      151.26                      227.73
31-Aug-93            546.38                      159.07                      270.45
30-Sep-93            591.27                      163.81                      284.06
31-Oct-93            460.85                      167.49                      248.49
30-Nov-93            521.71                      162.50                      247.77
31-Dec-93            565.19                      167.03                      251.56
31-Jan-94            621.71                      172.10                      272.66
28-Feb-94            626.06                      170.49                      289.65
31-Mar-94            539.10                      160.00                      284.98
30-Apr-94            526.06                      157.93                      271.89
31-May-94            499.97                      158.31                      277.66
30-Jun-94            486.93                      152.52                      267.72
31-Jul-94            491.28                      155.65                      281.04
31-Aug-94            617.36                      165.57                      302.49
30-Sep-94            699.96                      165.15                      292.58
31-Oct-94            782.57                      168.40                      316.30
30-Nov-94            734.75                      162.81                      308.88
31-Dec-94            647.79                      163.27                      308.91
31-Jan-95            652.14                      164.18                      313.99
28-Feb-95            695.62                      172.86                      352.79
31-Mar-95            778.22                      177.99                      373.04
30-Apr-95            878.22                      183.59                      425.83
31-May-95            995.60                      188.33                      460.99
30-Jun-95           1112.99                      203.59                      523.55
31-Jul-95           1186.90                      218.55                      597.24
31-Aug-95           1047.77                      222.97                      586.09
30-Sep-95           1039.08                      228.10                      591.68
31-Oct-95           1058.64                      226.79                      555.98
30-Nov-95            952.13                      232.11                      492.00
31-Dec-95            795.61                      230.87                      429.91
31-Jan-96            743.44                      232.00                      424.07
29-Feb-96            641.27                      240.85                      426.24
31-Mar-96            608.67                      241.63                      406.02
30-Apr-96            704.31                      261.68                      465.19
31-May-96            691.27                      273.72                      450.78
30-Jun-96            452.15                      261.37                      389.13
</TABLE>

 
 
                                PROPOSAL NO. 2
               AMENDMENT OF THE 1984 EMPLOYEE STOCK PURCHASE PLAN
 
    In July 1996, the Board of Directors approved an amendment to the 1984
Employee Stock Purchase Plan (the "1984 Purchase Plan") increasing the number of
shares reserved thereunder from 1,337,500 to 1,687,500. The stockholders are
being asked to approve this amendment at the Annual Meeting.
 
   
    In 1984 the Company adopted the 1984 Purchase Plan and reserved 112,500
shares for issuance under said plan. In November 1987, the Board of Directors
amended the 1984 Purchase Plan to increase the number of shares reserved
thereunder to 262,500, which amendment was approved by stockholders in February
1988. In September 1989, the Board of Directors amended the 1984 Purchase Plan
to increase the number of shares authorized thereunder to 487,500 which
amendment was approved by stockholders in November 1989. In July 1991, the Board
of Directors amended the 1984 Purchase Plan to increase the number of shares
authorized thereunder to 862,500 which amendment was approved by stockholders in
November 1991. In July 1993, the Board of Directors amended the 1984 Purchase
Plan to increase the number of shares authorized thereunder to 1,087,500, which
amendment was approved by stockholders in October 1993. In August 1994, the
Board of Directors amended the 1984 Purchase Plan to increase the number of
shares authorized thereunder to 1,187,500, which amendment was approved by the
stockholders in October 1994. In August 1995, the Board of Directors amended the
1984 Employee Stock Purchase Plan to increase the number of shares authorized
thereunder to 1,337,500, which amendment was approved by the stockholders in
October 1995.
    
 
                                       15

<PAGE>
PURPOSE
 
    The purpose of the 1984 Purchase Plan is to provide employees (including
officers) of the Company who participate in the 1984 Purchase Plan with an
opportunity to purchase Common Stock of the Company through payroll deductions.
 
ADMINISTRATION
 
    The 1984 Purchase Plan may be administered by the Board of Directors or a
committee appointed by the Board, and is currently being administered by the
Board of Directors. All questions of interpretation or application of the 1984
Purchase Plan are determined in the sole discretion of the Board of Directors or
its committee, and its decisions are final and binding upon all participants.
Members of the Board of Directors who are eligible employees are permitted to
participate in the 1984 Purchase Plan, provided that such members may not vote
on any matter affecting administration of the 1984 Purchase Plan or serve on a
committee formed to administer the 1984 Purchase Plan. No charges for operations
or other costs may be made against the payroll deductions of a participant in
the 1984 Purchase Plan. Members of the Board of Directors receive no additional
compensation for their services in connection with the administration of the
1984 Purchase Plan.
 
ELIGIBILITY
 
   
    Any regular employee (including an officer) who is employed by the Company
(or by any of its majority-owned subsidiaries) for at least 20 hours per week
and more than five months in a calendar year is eligible to participate in the
1984 Purchase Plan, provided that such employee is employed on the commencement
date of the offering period and subject to certain limitations imposed by
Section 423(b) of the Code. As of September 2, 1996, approximately 4,500
employees were eligible to participate in the 1984 Purchase Plan; 2,456
employees are participating in the offering period ending September 22, 1996.
    
 
    Notwithstanding the foregoing, no employee shall be permitted to subscribe
for shares under the plan if, immediately after the grant of the option, the
employee would own five percent or more of the voting stock or value of all
classes of stock of the Company or its majority-owned subsidiaries (including
stock which may be purchased through subscriptions under the plan or pursuant to
any other options), nor shall any employee be granted an option which would
permit his or her rights to purchase stock under all employee stock purchase
plans of the Company to accrue at a rate which exceeds $25,000 of fair market
value of such stock (determined at the fair market value of the shares at the
time the option is granted) for each calendar year in which such option is
outstanding at any time.
 
OFFERING DATES
 
    The 1984 Purchase Plan is implemented by one offering during each six-month
period of the plan. Since its adoption in 1984, there have been 20 six-month
offering periods. The twenty-first offering period will begin on September 25,
1996. The Board of Directors has the power to alter the duration of the offering
periods without stockholder approval.
 
PARTICIPATION IN THE PLAN
 
    Eligible employees become participants in the 1984 Purchase Plan by
delivering to the Company a subscription agreement authorizing payroll
deductions prior to the applicable offering date, or at such other time as may
be determined by the Board of Directors for all eligible employees with respect
to a given offering. An employee who becomes eligible to participate in the 1984
Purchase Plan after the commencement of an offering may not participate in the
plan until the commencement of the next offering.
 
                                       16

<PAGE>
PURCHASE PRICE
 
    The purchase price per share at which shares are sold under the 1984
Purchase Plan is the lower of 85 percent of the fair market value of a share of
Common Stock on the date of commencement of the offering period or 85 percent of
the fair market value of a share of Common Stock on the last day of the
six-month offering period. For so long as the Company's Common Stock is listed
on the Nasdaq National Market, the fair market value of the Common Stock on a
given date shall be based upon the mean of the bid and asked price as of such
date.
 
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
 
    The purchase price of the shares is accumulated by payroll deductions during
the offering period. The deductions may not exceed ten percent of a
participant's eligible compensation, which is defined in the 1984 Purchase Plan
to include all regular straight time salary, exclusive of any payments for
overtime, bonuses, commissions or incentive compensation. A participant may
discontinue his or her participation in the 1984 Purchase Plan or may decrease,
but not increase, the rate of payroll deductions at any time during the offering
period. Payroll deductions shall commence on the first payday following the
commencement date of the offering and shall continue at the same rate until the
end of the offering period unless sooner terminated as provided in the 1984
Purchase Plan.
 
    All payroll deductions are credited to the participant's account under the
1984 Purchase Plan and are deposited with the general funds of the Company. To
the extent that an employee's payroll deductions exceed the amount required to
purchase the shares subject to option, such excess is refunded to the employee
without interest. All payroll deductions received or held by the Company may be
used by the Company for any corporate purpose.
 
PURCHASE OF STOCK; EXERCISE OF OPTION
 
    By executing a subscription agreement to participate in the 1984 Purchase
Plan, each employee is in effect granted an option to purchase shares of Common
Stock. The maximum number of shares placed under option to a participant in an
offering shall not be allowed to accrue at a rate which exceeds $25,000 of the
fair market value of such stock (determined at the time such option is granted)
for each calendar year in which the option is outstanding. See "Payment of
Purchase Price; Payroll Deductions" for limitations on payroll deductions. If
the number of shares which would otherwise be placed under option at the
beginning of an offering period exceeds the number of shares then available
under the 1984 Purchase Plan, a pro rata allocation of the shares remaining
shall be made in as equitable a manner as is practicable. Unless an employee
withdraws from participation in the plan (See "Withdrawal") or his or her
participation is otherwise discontinued (See "Termination of Employment"), the
employee's option for the purchase of shares will be exercised automatically at
the end of the offering period for the maximum number of shares at the
applicable price.
 
WITHDRAWAL
 
    While each participant in the 1984 Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest in a given offering may be terminated in whole, but not in part, by
signing and delivering to the Company a notice of withdrawal from the 1984
Purchase Plan. Such withdrawal may be elected at any time prior to the end of
the applicable six-month offering period. Any withdrawal by the employee of
accumulated payroll deductions for a given offering automatically terminates the
employee's interest in that offering. A participant's withdrawal from an
offering does not have any effect upon such participant's eligibility to
participate in subsequent offerings under the 1984 Purchase Plan except for
officers subject to Section 16 of the Securities Exchange Act of 1934, as
amended ("Securities Exchange Act").
 
                                       17

<PAGE>
    In effect, therefore, the employee is given an option which he or she may or
may not exercise at the end of the six-month offering period. By executing the
subscription agreement to choose to participate in the 1984 Purchase Plan, the
employee does not become obligated to make the stock purchase; rather, the
subscription agreement is merely an election by the employee to have shares
placed under option to him or her. Unless the employee's participation is
discontinued or his or her payroll deductions withdrawn, however, the option for
the purchase of shares will be exercised automatically at the end of the
offering period, and the maximum number of full shares subject to option which
are purchasable with the employee's accumulated payroll deductions will be
purchased for the employee at the applicable price.
 
TERMINATION OF EMPLOYMENT
 
    Termination of a participant's continuous status as an employee for any
reason, including retirement or death, cancels his or her participation in the
1984 Purchase Plan immediately. In such event, the payroll deductions credited
to the participant's account will be returned to such participant or, in the
case of death, to the person or persons entitled thereto as specified by the
employee in the subscription agreement. Failure to remain in the continuous
employ of the Company for at least 20 hours per week during the offering period
will be deemed to be a withdrawal from the 1984 Purchase Plan.
 
CAPITAL CHANGES
 
    In the event any change is made in the capitalization of the Company, such
as stock splits or stock dividends, which results in an increase or decrease in
the number of shares of Common Stock outstanding without receipt of
consideration by the Company, appropriate adjustments will be made by the
Company in the shares subject to purchase and in the purchase price per share,
subject to any required action by the stockholders of the Company.
 
    In the event of the liquidation or dissolution of the Company, the offering
period shall terminate automatically unless otherwise provided by the Board. In
the event of the merger of the Company with another corporation or the sale of
substantially all of the assets of the Company, the 1984 Purchase Plan provides
that each outstanding option shall be assumed or an equivalent option shall be
substituted by the successor corporation. If the successor corporation does not
agree to assume the option or to substitute an equivalent option, the Board
shall provide for the optionee to have the right to exercise the option as to
all the optioned stock, including the shares as to which the option would not
otherwise be exercisable.
 
NONASSIGNABILITY
 
    No rights or accumulated payroll deductions of an employee under the 1984
Purchase Plan may be pledged, assigned or transferred for any reason, and any
such attempt may be treated by the Company as an election to withdraw from the
1984 Purchase Plan.
 
REPORTS
 
    Individual accounts will be maintained for each participant in the 1984
Purchase Plan. Each participant shall receive as promptly as practicable after
the end of the six-month offering period a report of his or her account setting
forth the total amount of payroll deductions accumulated, the per share purchase
price, the number of shares purchased and the remaining cash balance, if any.
 
AMENDMENT AND TERMINATION OF THE PLAN
 
    The Board of Directors may at any time amend or terminate the 1984 Purchase
Plan, except that such termination shall not affect options previously granted
nor may any amendment make any change in an option granted prior thereto which
adversely affects the rights of any participant. No amendment may be made to the
1984 Purchase Plan without prior approval of the stockholders of the Company if
such amendment would increase the number of shares reserved under the 1984
Purchase Plan, materially
 
                                       18

<PAGE>
modify the eligibility requirements under the 1984 Purchase Plan or materially
increase the benefits which may accrue to participants under the 1984 Purchase
Plan. In addition, to the extent necessary to comply with Rule 16b-3 under the
Securities Exchange Act, or with Section 422 of the Code, (or any other
applicable law or regulation), the Company shall obtain stockholder approval of
any amendment of the 1984 Purchase Plan in such a manner and to such a degree as
required. In any event the 1984 Purchase Plan will terminate in 2004.
 
CERTAIN UNITED STATES FEDERAL INCOME TAX INFORMATION
 
    The 1984 Purchase Plan, and the right of participants to make purchases
thereunder, is intended to qualify under the provisions of Sections 421 and 423
of the Code. Under these provisions, no income will be taxable to a participant
at the time of grant of the option or purchase of shares. Upon disposition of
the shares, the participant will generally be subject to tax. If the shares have
been held by the participant for more than two years after the first day of the
offering period and more than one year after the purchase date of the shares,
the lesser of (a) the excess of the fair market value of the shares at the time
of such disposition over the purchase price of the shares, or (b) 15% of the
fair market value of the shares on the first day of the offering period, will be
treated as ordinary income, and any further gain upon such disposition will be
treated as long-term capital gain. If the shares are disposed of before the
expiration of the holding periods described above, the excess of the fair market
value of the shares on the last day of the offering period over the purchase
price will be treated as ordinary income, and any further gain or any loss on
such disposition will be capital gain or loss. Different rules may apply with
respect to optionees subject to Section 16(b) of the Securities Exchange Act.
The Company is not entitled to a deduction for amounts taxable to a participant,
except to the extent of ordinary income reported by participants upon
disposition of shares prior to the expiration of the holding periods described
above.
 
    THE FOREGOING IS ONLY A SUMMARY OF THE UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES OF THE 1984 PURCHASE PLAN TO PARTICIPANTS AND THE COMPANY AND DOES
NOT PURPORT TO BE COMPLETE. REFERENCE SHOULD BE MADE TO THE APPLICABLE
PROVISIONS OF THE CODE. IN ADDITION, THE SUMMARY DOES NOT DISCUSS THE INCOME TAX
CONSEQUENCES OF A PARTICIPANT'S DEATH OR THE INCOME TAX LAWS OF ANY
MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE. EACH
PARTICIPANT SHOULD CONSULT HIS OR HER OWN TAX ADVISOR CONCERNING APPLICABILITY
OF THESE TAX LAWS.
 
RESTRICTION ON RESALE
 
    Certain officers and directors of the Company may be deemed to be
"affiliates" of the Company as that term is defined under the Securities Act of
1933, as amended (the "Securities Act"). Common Stock acquired under the 1984
Purchase Plan by an affiliate may only be reoffered or resold pursuant to an
effective registration statement or pursuant to Rule 144 under the Securities
Act or another exemption from the registration requirements of the Securities
Act.
 
VOTE REQUIRED
 
    Approval of the amendment increasing shares under the 1984 Purchase Plan
will require the affirmative vote of a majority of the outstanding shares of
Common Stock present or represented at the meeting.
 
 
                THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
            THE INCREASE IN THE NUMBER OF SHARES RESERVED UNDER THE
                       1984 EMPLOYEE STOCK PURCHASE PLAN.
 
                                       19

<PAGE>

                                 PROPOSAL NO. 3
              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 year. Ernst & Young LLP has been the Company's
independent auditors since fiscal year 1981.
 
    Audit services of Ernst & Young LLP during the 1996 fiscal year included the
examination of the consolidated financial statements of the Company and services
related to filings with the Securities and Exchange Commission ("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 effect that
the performance of non-audit services may have upon the independence of the
auditors is examined.
 
    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. Moreover, the representative will be available to respond to
appropriate questions from the stockholders.
 
 
   THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
 

          COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
 
    Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors and persons who own more than ten percent 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 Form 4 or 5 with the SEC.
Executive officers, directors and greater than ten percent stockholders are also
required by SEC rules to furnish the Company with copies of all Section 16(a)
forms they file. 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 during the last fiscal year, it complied with all filing
requirements applicable to its officers, directors and ten percent stockholders.
 
 
                                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
persons 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.
 
                                          THE BOARD OF DIRECTORS
 
   
Dated: September 23, 1996
    
 
                                       20

<PAGE>


           THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
                             LAM RESEARCH CORPORATION
                       1996 ANNUAL MEETING OF STOCKHOLDERS
                                OCTOBER 31, 1996

   
     The undersigned stockholder of LAM RESEARCH CORPORATION (the "Company"), 
a Delaware corporation, hereby acknowledges receipt of the Notice of Annual 
Meeting of Stockholders and Proxy Statement, each dated September 23, 1996, 
and 1996 Annual Report to Stockholders, and hereby appoints Roger D. Emerick 
and Richard H. Lovgren, or either of them, proxies 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 1996 Annual Meeting of 
Stockholders of LAM RESEARCH CORPORATION to be held on October 31, 1996 at 
10:00 a.m., local time, at the principal executive offices of the Company at 
4650 Cushing Parkway, Fremont, California 94538, and at 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 AMENDMENT OF THE
1984 EMPLOYEE STOCK PURCHASE PLAN, FOR THE RATIFICATION OF THE APPOINTMENT OF
ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND AS SAID PROXIES DEEM ADVISABLE ON
SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.


                   CONTINUED AND TO BE SIGNED ON REVERSE SIDE


<PAGE>

                              FOLD AND DETACH HERE

Please mark your votes as indicated in this example

     /X/

- -------------------------------------------------------------------------------
   THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.

- -----------------------------------          ---------------------------
          ACCOUNT NUMBER                               COMMON


1.        Election of Directors:

     FOR all nominees              WITHHOLD  (If you wish to withhold authority
     listed below                            to vote for any individual nominee,
     (except as                              strike a line through the nominee's
     indicated).                             name in the list below).
                                             Roger D. Emerick; David G. Arscott;
                                             Jack R. Harris; Grant M. Inman;
                                             Osamu Kano

          / /                      / /


2.        Proposal to approve an Amendment of the 1984 Employee Stock Purchase
Plan to increase the number of shares reserved for issuance thereunder by
350,000 shares to 1,687,500:

          FOR            AGAINST             ABSTAIN
          / /              / /                 / /


3.        Proposal to ratify the appointment of Ernst & Young LLP as the
independent auditors of the Company for fiscal 1997:

          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 holders should sign.)

Signature(s):

- ----------------------------------------------------

- ----------------------------------------------------

Dated                                   , 1996
     -----------------------------------
          (Be sure to date Proxy.)

Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.