Summary
KLA Corporation (KLAC) filed an 8-K on October 18, 2006, detailing significant executive changes and the near completion of its investigation into historical stock option practices. The company terminated its employment relationship with former CEO Kenneth L. Schroeder and intends to cancel his improperly granted stock options. General Counsel Stuart J. Nichols resigned, and his retroactively priced options will be re-priced. Founder and Chairman Kenneth Levy retired from his director and employee roles, and his options will also be re-priced. The company's Special Committee investigation is substantially complete, with an expected total additional non-cash charge for stock-based compensation not to exceed $400 million. Importantly, the Board concluded that current senior management, including the CEO, COO, and CFO appointed in early 2006, were not involved in the improper practices. The company is working to restate its financial statements and expects to file its delayed 2006 10-K soon.
Key Highlights
- 1Termination of Kenneth L. Schroeder, former CEO and Director, due to stock option practices investigation.
- 2Resignation of Stuart J. Nichols, General Counsel, effective immediately.
- 3Retirement of Kenneth Levy, Founder and Chairman, effective immediately; named Chairman Emeritus.
- 4Edward W. Barnholt appointed as Chairman of the Board.
- 5Total additional non-cash charges for stock-based compensation expected not to exceed $400 million.
- 6Current senior management (CEO, COO, CFO) cleared of involvement in improper stock option practices.
- 7Company working to restate financial statements and expects to file delayed Annual Report on Form 10-K.