KLA-Tencor Finds Stock Option Date Errors

Staff Reporter -- Electronic News, 6/30/2006

San Jose-based capital equipment provider KLA-Tencor Corp. said today that the actual measurement dates for financial accounting purposes of certain stock option grants issued in prior years likely differs from the recorded grant dates of such awards according to special committee of the company’s board of directors.

The company said the committee has not completed its investigation and is continuing its review of these matters and has not yet determined whether any resulting compensation charges are material or whether the it will ultimately restate previously-issued financial statements.

In May, KLA announced that its board of directors had appointed a special committee of independent directors to conduct an internal investigation relating to stock options granted to members of senior management and the employees of the company. The special committee, assisted by independent legal counsel and accounting experts, is investigating the timing of such grants, as well as their related accounting treatment.

Based on the committee’s investigation to date, KLA now anticipates that it may record additional non-cash charges for stock-based compensation expense but has not yet determined the amount of such charges or the resulting tax impact of these actions. In the event that it is determined that these items are material, KLA may be required to restate its financial statements for the relevant prior fiscal periods.