KLA May Take $400 Million in Options Charges

From the Associated Press

KLA-Tencor Corp., which makes semiconductor production equipment, said Monday that it expected to take charges of as much as $400 million when it restates past results after an investigation of its stock option practices.

KLA also said it intended to cancel all outstanding backdated stock options held by former President and Chief Executive Kenneth L. Schroeder.

Additionally, the company’s general counsel, Stuart J. Nichols, resigned effective immediately.

San Jose-based KLA said its investigation found incorrect measurement dates for certain stock option grants, mostly from July 1, 1997, to June 30, 2002.


The company made the announcement after the close of regular trading. The stock was little changed in the after-hours market. During regular trading, shares of KLA rose 73 cents to $49.54.

KLA is one of at least 88 companies under scrutiny by the Securities and Exchange Commission and the Justice Department for possible stock option backdating, the practice of setting stock options’ exercise price lower than the prevailing market price as a way to boost the payout.

The company said it would file the restatements as soon as possible.

KLA said that it also planned to re-price all outstanding backdated options held by Nichols and that it intended to name an interim general counsel in the near future.

It also will re-price options held by Chief Operating Officer John H. Kispert because he served as chief financial officer during part of the period in question.

The company said the internal investigation concluded that none of the current management was involved in the option backdating.