KLA-Tencor Corporation is a semiconductor company that primarily supplies process control and yield management products.

The original Complaint charges KLA-Tencor and its top executive officers and directors violated the federal securities laws by failing to account properly for stock options made to KLA-Tencor employees. The Complaint charges that KLA-Tencor improperly expensed stock options, thereby falsely inflating the Company's reported financial performance.

Three cases have been consolidated into one action. The consolidated Complaint alleges claims under Section 10(b) and Rule 10b-5 thereunder, Section 14(a), Section 20(a), and Section 20A of the Securities Exchange Act of 1934 as a result of KLA-Tencor's past stock option grants and related accounting and reporting, and seeks unspecified monetary damages and other relief. The Plaintiffs seek to represent a class consisting of purchasers of the Company's stock between June 30, 2001 and May 22, 2006 who allegedly suffered losses as a result of material misrepresentations in the Company's SEC filings and public statements during that period. The lead Plaintiffs, who seek to represent the class, are the Police and Fire Retirement System of the City of Detroit, the Louisiana Municipal Police Employees’ Retirement System, and the City of Philadelphia Board of Pensions and Retirement. The Defendants are KLA-Tencor and certain individuals. The Company and all other Defendants filed motions to dismiss these cases in June 2007. However, the motions to dismiss have been taken off calendar and stayed due to the agreement between the parties to settle the litigation. On June 5, 2008, the court granted preliminary approval to a settlement between the parties to resolve the Northern District Litigation. Under the terms of the settlement, the Company will be required to make a payment of $65.0 million to the settlement class. The settlement, which is subject to final court approval at a hearing scheduled for September 2008, provides for the dismissal with prejudice of the Northern District Litigation and a full release of KLA-Tencor and the other named Defendants in connection with the allegations raised in the lawsuit by the Plaintiffs and all members of the settlement class.

According to a press release dated September 26, 2008, lead Plaintiffs' Counsel in the KLA-Tencor securities litigation are set to receive more than $10 million in attorneys' fees, with a federal judge on Friday granting final approval to a $65 million settlement that lays to rest litigation over alleged options backdating. Judge Charles R. Breyer of the U.S. District Court for the Northern District of California finalized the settlement at a hearing in San Francisco, dismissing the case with prejudice after confirming that there had been no objections to the deal, which was initially announced in January.