NOTE 11 – LITIGATION AND OTHER LEGAL MATTERS

Litigation Related to Terminated Merger with Lam Research.

The California Class Actions. In connection with the previously announced Merger transaction, four purported KLA-Tencor stockholders filed putative class actions on behalf of all KLA-Tencor stockholders. Three actions were filed in the California Superior Court for Santa Clara County captioned, Hedgecock v. KLA-Tencor Corp., et al., Case No. 115CV287329, Karr v. KLA-Tencor Corporation, et al. , Case No. 115CV287331, (both filed on October 28, 2015) and Spoleto Corp. v. Wallace, et al., Case No. 115CV289552 (filed on December 29, 2015) (collectively, the “California Class Actions”). The California Class Actions all named KLA-Tencor, the members of the KLA-Tencor Board, Lam Research, Merger Sub 1, and Merger Sub 2 (together with Merger Sub 1 and Lam Research, the “Lam Group”) as defendants. The California Class Actions alleged that the members of the KLA-Tencor Board breached their fiduciary duties by, among other things, causing KLA-Tencor to agree to a merger transaction with the Lam Group at an unfair price and pursuant to an unfair process, and by making disclosures concerning the transaction that are materially misleading. Plaintiffs alleged that the Lam Group aided and abetted such breaches. Plaintiffs sought to enjoin or rescind KLA-Tencor’s transaction with the Lam Group, as applicable, as well as an award of damages and attorneys’ fees, in addition to other relief.

The Delaware Chancery Court Class Action. One putative class action was filed on November 10, 2015, in the Court of Chancery in the State of Delaware captioned, Rooney v. Wallace, et al. , Case No. 11700. The Rooney action was filed against the members of the KLA-Tencor Board and similar to the California Class Actions alleged that the members of the KLA-Tencor Board breached their fiduciary duties by, among other things, causing KLA-Tencor to agree to a merger transaction with Lam Research at an unfair price and pursuant to an unfair process, and by making disclosures concerning the transaction that are materially misleading. Plaintiff Rooney sought to enjoin or rescind KLA-Tencor’s transaction with Lam Research, as applicable, as well as an award of attorneys’ fees, in addition to other relief.

Agreement in Principle to Resolve Merger-Related Litigation. On or about December 29, 2015, plaintiffs in all four actions agreed to coordinate and proceed in the California Superior Court. On February 5, 2016, an agreement in principle was reached with the plaintiffs in the Rooney Action, Hedgecock Action, and Spoleto Action to settle those actions. Pursuant to the agreement in principle, as set forth in a signed memorandum of understanding, the parties agreed to resolve disputed legal claims and KLA-Tencor and Lam agreed to make certain supplemental disclosures regarding the proposed Merger, as set forth in the Form 8-K filed by KLA-Tencor on February 5, 2016. None of the defendants in these actions admitted wrongdoing of any kind, including that there were any inadequacies in any disclosure, any breach of any fiduciary duty, or aiding or abetting any of the foregoing. On February 17, 2016, the California Superior Court dismissed the Karr action pursuant to a stipulation by the parties.

In light of the termination of the Merger Agreement, the parties to the Rooney , Hedgecock , and Spoleto 行为应该dismisse同意的行动d. In response to plaintiffs’ intention to submit fee applications to the California Superior Court and the Delaware Court of Chancery, KLA-Tencor agreed to pay plaintiffs’ attorneys’ fees and expenses in the amount of $140,000 in connection with certain claims that the plaintiffs believe were mooted by KLA-Tencor’s filing of the supplemental disclosures on the Form 8-K on February 5, 2016. On January 13, 2017, the parties to the Rooney action filed a Stipulation and Proposed Order Regarding Payment of Attorneys’ Fees and Expenses, Notice to Stockholders, and the Dismissal of the Actions in the Delaware Court of Chancery and the parties to the Hedgecock and Spoleto actions filed a Joint Request for Dismissal with the California Superior Court. On January 18, 2017, the California Superior Court granted the request and dismissed the Hedgecock and Spoleto actions with prejudice. On January 23, 2017, the Delaware Chancery Court dismissed the Rooney action with prejudice as to plaintiff Rooney.

Other Legal Matters.

该公司作beplay官网ued为一个政党名为不时to lawsuits and other types of legal proceedings and claims in the normal course of its business. Actions filed against the Company include commercial, intellectual property, customer, and labor and employment related claims, including complaints of alleged wrongful termination and potential class action lawsuits regarding alleged violations of federal and state wage and hour and other laws. In general, legal proceedings and claims, regardless of their merit, and associated internal investigations (especially those relating to intellectual property or confidential information disputes) are often expensive to prosecute, defend or conduct and may divert management’s attention and other company resources. Moreover, the results of legal proceedings are difficult to predict, and the costs incurred in litigation can be substantial, regardless of outcome. The Company believes the amounts provided in its condensed consolidated financial statements are adequate in light of the probable and estimated liabilities. However, because such matters are subject to many uncertainties, the ultimate outcomes are not predictable, and there can be no assurances that the actual amounts required to satisfy alleged liabilities from the matters described above will not exceed the amounts reflected in the Company’s condensed consolidated financial statements or will not have a material adverse effect on its results of operations, financial condition or cash flows.