Summary
KLA-Tencor Corporation (now KLA Corp.) has filed an 8-K report detailing the settlement of significant derivative litigation and separate disputes with two former executives. The core of this filing is the resolution of a long-standing shareholder derivative lawsuit concerning historical stock option granting practices. The proposed settlement, preliminarily approved by the court, involves KLA-Tencor receiving approximately $33.2 million from insurers and settling defendants. In exchange for the dismissal of the litigation, the company will pay $8 million in cash and issue $8 million worth of its common stock to plaintiffs' counsel for legal fees. Additionally, the company has reached separate settlements with former CEOs Kenneth Schroeder and Kenneth Levy. These resolutions aim to conclude protracted legal disputes, with KLA-Tencor agreeing to payments totaling $18.875 million to the former executives, alongside mutual releases of claims and limitations on indemnification obligations for Mr. Schroeder.
Key Highlights
- 1KLA-Tencor has reached a proposed settlement to resolve shareholder derivative litigation related to historical stock option granting practices.
- 2The company expects to receive approximately $33.2 million from insurers and settling defendants as part of the derivative litigation settlement.
- 3The company will pay $8 million in cash and issue $8 million in common stock to plaintiffs' counsel for attorneys' fees in the derivative litigation.
- 4Separate settlements have been agreed upon with former CEOs Kenneth Schroeder and Kenneth Levy.
- 5KLA-Tencor will pay $16.5 million to former CEO Kenneth Schroeder to resolve contract and tort claims, with limitations on ongoing indemnification.
- 6KLA-Tencor will pay $2.375 million to former CEO Kenneth Levy to resolve claims regarding stock options.
- 7The settlements are subject to court approval for the derivative litigation and become final upon the Effective Date of that settlement.