Summary
KLA-Tencor Corporation (KLAC) announced on September 19, 2006, that its Compensation Committee approved awards of restricted stock units (RSUs) to employees, including executive officers, under its 2004 Equity Incentive Plan. A total of 2,530,689 shares were covered by these awards, with a specific note that for each share issued under these RSUs, the share reserve under the plan will be reduced by 1.8 shares. This announcement is significant as it pertains to executive compensation and potential dilution for shareholders. The awards to executive officers, including the CEO, President, and CFO, are subject to a dual vesting structure: performance-based vesting tied to the company's fiscal year 2007 operating income, and a service-based vesting over four years. This structure links executive compensation directly to company performance and continued employment, which investors often view favorably as it aligns executive interests with shareholder value.
Key Highlights
- 1KLA-Tencor Corporation approved awards of restricted stock units (RSUs) totaling 2,530,689 shares to employees, including executive officers.
- 2The RSUs are granted under the Company's 2004 Equity Incentive Plan.
- 3A key feature of the plan is that for each share issued from these RSUs, the plan's share reserve will be reduced by 1.8 shares, indicating a potential dilution factor.
- 4Executive officers Richard P. Wallace (CEO) and John H. Kispert (President) were each awarded a maximum of 62,500 RSUs.
- 5Jeffrey L. Hall (CFO) was awarded a maximum of 18,750 RSUs.
- 6Vesting for executive officers is contingent on both achieving performance goals related to fiscal year 2007 operating income and completing a four-year service period.
- 7Performance vesting ranges from 0% to 100% of the awarded units based on attainment of the fiscal year 2007 operating income goal, with service vesting occurring in two 50% installments over four years.