Document:

KLA-Tencor Corporation Outstanding Corporate Performance Plan for Fiscal 2007

 Exhibit 10.23 
 CONFIDENTIAL TREATMENT 
  
  
 Outstanding Corporate Performance Bonus Plan 
 Summary Plan Document 
 FY2007 

 CONFIDENTIAL TREATMENT 
 Outstanding Corporate Performance Bonus Plan 
 FY 2007 
 Plan Summary 
 The KLA-Tencor Outstanding Corporate Performance Bonus
Plan (OCPB) is intended to motivate executives to achieve long-term corporate objectives by providing a competitive bonus for target performance and the appropriate upside opportunity to reward outstanding performance. Eligibility for the OCPB Plan
as described within this document is generally Vice Presidents and above. Participants are reviewed and confirmed annually by the Senior Management team. 
 The OCPB Plan has two performance factors, profit from operations dollars (PFO$) and an incremental operating margin percentage. Further program details are discussed below. 
 Program Payment 
 Payment from the OCPB Plan is made once per year based on achievements from the prior fiscal year
incentive period (July 1—June 30). Bonus calculations are based on paid base salary for the eligible incentive period. A participant must be a regular active employee of the Company on the date of payout in order to receive payment. Employees
who become eligible during the Plan year will have their payouts calculated on paid salary from the effective date of eligibility. If an employee’s target incentive percentage changes during the year, the payout will be prorated based on the
period of time spent at each corresponding percentage. 
 Target Bonus 
 The following table shows the participant’s bonus target: 
  

					
	Position	  	Salary Grade	  	Target Bonus
	 Vice President &
 Sr. Executives
	  	X02 & Above	  	 Target Bonus
under
 Executive Incentive
 Bonus
Plan

	 	 	 
	 Vice
President
	  	X01	  	20%

 Performance Factors 
 The OCPB is based on achievement of increased revenue and incremental operating margin as defined below: 
 Profit From Operations
Dollars (PFO$) 
 PFO dollars without share based compensation. 
 Incremental Operating Margin Factor 
 At any particular PFO, higher incremental operating margin will result in increased payout. 
 Incentive Matrix and Payment Calculation

 The OCPB will be calculated by multiplying the target bonus percent by the appropriate value in the table below multiplied by the base salary. For
values not in the table, a linear interpolation should be applied to derive the appropriate percentage. 
  

					
	KLA-Tencor	  	1	  	September 2006

 CONFIDENTIAL TREATMENT 
 Outstanding Corporate Performance Bonus Plan 
 FY 2007 
 Incentive Matrix and Payment Calculation (Cont’d) 
  

																													
	Incremental Operating Margin	    	**	  	0%	  	36%	  	72%	  	108%	  	144%	  	181%	  	200%	  	200%	  	200%	  	200%	  	200%	  	200%	  	200%
	    	**	  	0%	  	29%	  	57%	  	86%	  	114%	  	143%	  	171%	  	200%	  	200%	  	200%	  	200%	  	200%	  	200%
	    	**	  	0%	  	21%	  	42%	  	63%	  	84%	  	105%	  	125%	  	146%	  	167%	  	188%	  	200%	  	200%	  	200%
	    	**	  	0%	  	17%	  	34%	  	51%	  	68%	  	86%	  	103%	  	120%	  	137%	  	154%	  	171%	  	188%	  	200%
	    	**	  	0%	  	13%	  	27%	  	40%	  	53%	  	67%	  	80%	  	93%	  	106%	  	120%	  	133%	  	146%	  	160%
	    	**	  	0%	  	10%	  	19%	  	29%	  	38%	  	48%	  	57%	  	67%	  	76%	  	86%	  	95%	  	105%	  	114%
	    	**	  	0%	  	6%	  	11%	  	17%	  	23%	  	29%	  	34%	  	40%	  	46%	  	51%	  	57%	  	63%	  	68%
	    	**	  	0%	  	0%	  	0%	  	0%	  	0%	  	10%	  	11%	  	13%	  	15%	  	17%	  	19%	  	21%	  	23%
	    	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**	  	**
		    	Profit from Operations

 ** The information contained in these cells of this Incentive Matrix and Payment Calculation has been omitted
pursuant to a request for confidential treatment and has been filed separately with the SEC. 
 General Provisions 
 The Company is the Plan Administrator and, accordingly, shall take any and all actions it deems appropriate to administer the Plan. The establishment of the Plan shall
not confer any legal rights upon any employee or other person for a continuation of employment, nor shall it interfere with the rights of the Company to discharge any employee and to treat him or her without regard to the effect which that treatment
might have upon him or her as a participant in the Plan. This Plan shall be construed, administered and enforced by the Company, in its sole discretion. The laws of the State of California will govern any legal dispute involving the Plan. The
Company may at any time alter, amend or terminate the Plan. 
  

					
	KLA-Tencor	  	2	  	September 2006Agreement by and between KLA-Tencor Corporation and Lawrence Gross

 Exhibit 10.24 
 Lawrence Gross, Esq. 
 Dear Larry: 
 I am pleased to
offer you the opportunity and challenge to join the KLA-Tencor team. As Executive VP-Legal (title pending board approval), you will work under my direction. The details of your employment offer are set forth in the Executive Employment Terms you and
the company signed on September 8, 2006. Some of those terms are summarized or repeated below, but if there is any conflict, the Executive Employment Terms will control. 
 SALARY: $57,692.31 bi-weekly. 
 FLSA STATUS: Exempt 
 *HIRING BONUS: You will receive $77,000 within your first 30 days following your orientation as a hiring bonus, subject to normal tax requirements. 
 FOCAL POINT REVIEW PROGRAM: Employee performance is measured and evaluated based on KLA-Tencor’s fiscal year on a prorated basis with an effective date of September 1. 
 The Immigration Law, effective November 6, 1986, requires that all employers verify each individual’s eligibility to work in the United States, including U.S.
citizens. Your employment offer is contingent upon your providing satisfactory proof of identity and authorization to work in the United States. Please bring the appropriate regional documentation on your first day of work. 
 Larry, I am convinced that you will be an extremely valuable asset to KLA-Tencor and hope you will find many opportunities to grow both professionally and personally.

 This offer is contingent upon completion of a satisfactory background and reference check, and it will expire on September 26, 2006. To indicate
acceptance of this employment offer, please sign both copies of this letter, keep one for your records, and return one in the enclosed self-addressed envelope. 
 You should be aware that your employment with KLA-Tencor is at will, except as otherwise provided in your Executive Employment Terms. Therefore, you are free to resign at any time, for any reason or for no reason. Similarly, KLA-Tencor is
free to conclude its employment relationship with you at any time, with or without cause, and with or without notice, provided that we comply with your Executive Employment Terms. 

 In order to expeditiously deal with any disputes relating to or arising out of our employment relationship, you and
KLA-Tencor agree that any such disputes including but not limited to claims of harassment, discrimination, breach of contract, and wrongful termination, shall be fully and finally resolved by binding arbitration conducted by the American Arbitration
Association in Santa Clara, California, pursuant to the Arbitration Rules set forth in California Code of Civil Procedure Section 1280, et seq., including Section 1283.05 (the ‘Rules’) and pursuant to the Federal Arbitration act.
KLA-Tencor will pay the costs as provided in the American Arbitration Association’s National Rules for the Resolution of Employment Disputes. This provision will not apply to your indemnification agreement with the company dated as of
September 11, 2006. 
 If you have any questions concerning this offer of employment, please feel free to contact me. We look forward to you joining
KLA-Tencor. 
 NOTE: This offer letter, executed as of the dates below, amends and restates the offer letter to you originally executed by you as of
September 25, 2006. This amendment and restatement is solely to delete your home address for purposes of filing this offer letter agreement as an exhibit to the Company’s Form 10-K. All other terms remain in full force and effect as of the
original date. 
 Sincerely, 
 /s/ Richard Wallace 

Richard Wallace 
 Chief Executive Officer 
 KLA-Tencor Corporation 
 Acceptance & Acknowledgment: 
 I agree to and accept employment with KLA-Tencor Corporation on the terms and conditions set forth in this letter. 
 Accepted by:         /s/Larry Gross             Date:
        January 24, 2007             Start Date:
        09/11/2006         

 AMENDED AND RESTATED EXECUTIVE EMPLOYMENT TERMS 
  

	 Company: 
	 KLA-Tencor Corporation, a Delaware corporation, 160 Rio Robles, San Jose, CA 95134 

  

	 Executive: 
	 Lawrence A. Gross 

  

	 Dates: 
	 The date on which this agreement was originally executed was September 8, 2006. This Executive Employment Terms agreement is amended and
restated as of the date hereof solely to delete the home address of Executive for purposes of filing this agreement as an exhibit to the Company’s Form 10-K. All other terms remain in full force and effect as of the original date.

  

	 Position: 
	 Executive will be a board-elected officer and will serve in an interim role as Executive Vice President-Legal, reporting to the Chief Executive
Officer. Such election will occur at the earliest convenient time for the board of directors of Company (“Board”) and is subject to Board approval. Executive’s responsibilities will be to (1) advise and assist Company and the
Board with respect to (a) the pending internal stock option investigation and related matters including governmental proceedings and shareholder actions, (b) acquisitions, restructurings and other major transactions, (c) corporate
governance including regular attendance by Executive at meetings of the Board and its committees (other than executive sessions and special committee meetings), and (d) other matters reasonably requested consistent with Executive’s skills
and experience; and (2) manage Company’s legal affairs and legal function including supervisory and fiscal authority for all in-house legal personnel and all outside counsel. Executive will devote substantially all of his business time and
energy to Company, provided that Executive may make passive investments, manage personal investments, serve on civic or charitable boards or committees, teach at educational institutions, accept speaking engagements, and continue to serve on the
board of a small private company in an unrelated business. Executive will spend three to four days per week (on average) in California or other business locations. Executive may, if appropriate and with Company’s assistance, establish a
temporary residence in California and register with the State Bar of California as Registered In-House Counsel (in which case that will be part of Executive’s official title). 

  

	 Term: 
	 Executive’s employment with Company will start as of September 11, 2006 (“start date”) and will continue until
February 28, 2007, provided that either party may terminate Executive’s employment at any time for any reason. If Company terminates Executive’s employment (other than for willful misconduct) before November 30, 2006, Company
will immediately pay to Executive the balance of his salary for the period up through November 30, 2006. If Company terminates Executive’s employment (other than for willful misconduct) after November 30, 2006 and before
February 28, 2007, Company will immediately pay to Executive the balance of his salary for the period up through February 28, 2007. 

	 Compensation: 
	 Company will pay Executive a one time signing bonus of $77,000 on the start date. 

  

	 	 Company will pay Executive salary at the rate of $125,000 per month in accordance with Company’s usual payroll schedule. Executive will not
participate in any bonus plan or any equity plan. 

  

	 Benefits: 
	 In lieu of group medical coverage, Company will reimburse Executive for the cost of his existing Cobra coverage (currently $1,275 per month),
which will be included in expense reports. Executive will be entitled to paid vacation time for previously scheduled vacations (Thanksgiving week, Christmas week and New Year’s week). 

  

	 Assistant: 
	 Company will employ a full-time legal assistant selected by Executive to provide assistance to Executive in carrying out his responsibilities for
Company and with the expectation that Executive’s legal assistant will often travel with him. 

  

	 Expenses: 
	 Company will pay or reimburse (1) airfare and all normal business expenses reasonably incurred by Executive (and his legal assistant) in the
course of carrying out his responsibilities for Company in accordance with Company’s usual reimbursement practices, including bar registration fees, membership dues and similar professional expenses (2) airfare and all other travel
expenses reasonably incurred by Executive to travel between Pennsylvania (or other family destination) and California (or other business destination), including travel expenses to visit Company before the start date, (3) airfare and all other
travel expenses reasonably incurred by Executive’s wife for one roundtrip to California per month (on average) and (4) all temporary living expenses in California reasonably incurred by Executive including hotel or housing costs,
automobile and other transportation costs, and related services such as for cleaning, maintenance and health club membership. Company will provide a corporate credit card to Executive (and his legal assistant). 

  

	 Other: 
	 Company will indemnify Executive, to the fullest extent permitted by applicable law, against all legal fees and other expenses reasonably incurred
by Executive in connection with any claim, action, investigation, proceeding or dispute in which Executive may become involved, as a party, witness or otherwise, by reason of Executive being or having been an officer or employee of or legal counsel
to Company. Company will promptly enter into a comprehensive indemnification agreement with Executive, dated as of the start date. Executive will be covered, during the term of his employment and for at least six years thereafter, by officer and
director liability insurance, paid for by Company, in the same amounts and on the same terms as for Company’s other officers and directors. Executive may retain counsel of his choice to advise him as to his 

	 	 role as office and employee of and legal counsel to Company, and/or any claim, action, investigation, proceeding or dispute involving such role
and/or this agreement, and all legal fees and other expenses reasonably incurred by Executive for such purpose will be paid or reimbursed by Company on an after-tax basis. While any such claim, action, investigation, proceeding or dispute is
pending, Company will not withhold any payment or benefit due to Executive, except for the specific portion thereof that is the subject of a bona fide, good faith dispute. 

  

	 	 This agreement together with the indemnification agreement referred to above sets forth the entire understanding between the parties with respect
to the subject matter hereof and cannot be changed except in writing signed by Executive and by Company’s Chief Executive Officer or Chief Operating Officer. This agreement is binding on Company and its successors and assigns and may be
enforced by Executive and his heirs, estate, executors, administrators, beneficiaries, and legal personal representatives. The respective rights and obligations of the parties under this agreement will survive any termination of Executive’s
employment to the extent necessary to preserve the intention of such rights and obligations. 

 Intending to be legally bound and for
valuable consideration, the parties agree to these terms. 
 KLA-Tencor Corporation 
  

															
								
	By:	 	/s/ Richard P. Wallace	 		  	January 24, 2007	 		  	Lawrence A. Gross	 		  	January 24, 2007
		 	Richard P. Wallace, CEO	 		  	Date	 		  	Lawrence A. Gross	 		  	Date

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