Exhibit 10.01
KEITHLEY INSTRUMENTS, INC.
2002 & 2009 STOCK INCENTIVE PLANS
PERFORMANCE AWARD AGREEMENT
This performance award agreement (the "Agreement") is made as of this
day of , 2009 (the "Award Date"), between Keithley Instruments, Inc., an Ohio
corporation (the "Company"), and that key employee of the Company named at the
bottom of this Agreement ("Key Employee"). Subject to the terms, conditions and
limitations set forth in this Agreement (including, without limitation, the
vesting provisions of paragraph 6 hereof and the performance standards and
operative provisions set forth in paragraph 1 hereof and in Exhibit A hereto),
Key Employee hereby is granted and awarded performance units set forth on
Exhibit B, each unit representing one common share of the Company (the "Initial
Award"). The number of Company common shares issued to or in respect of Key
Employee (if any) shall be determined strictly in accordance with this
Agreement, based on the number of units contained in any Final Award (as defined
herein), subject to the general provisions of the Plan.
The number of units comprising the Initial Award shall be subject to
adjustment, expansion or reduction, to take into account the total shareholder
return performance of the Company as compared to its relevant competition during
the Measurement Period (as defined in Exhibit A and as further provided in
paragraph 1 hereof, the "Measurement Period"). The actual number of Company
common shares issued to Key Employee (if any) will only be determined by
applying the performance criteria to the Initial Award, and determining the
number of units finally awarded to such Employee (the "Final Award").
This Agreement (including any and all incorporated Exhibits hereto) and
any Final Award made hereunder, are subject to the terms and conditions of the
Keithley Instruments, Inc. 2002 Stock Incentive Plan, as amended, or the
Keithley Instruments, Inc. 2009 Stock Incentive Plan, in either case, then in
effect (the "Plan"). The Plan's terms and conditions are incorporated herein by
this reference. Additional terms and conditions of this Agreement are as
follows:
1. Performance Standards; Determining the Final Award. The size of
Key Employee's Final Award will depend on the Company's
performance during the Measurement Period.
(a) General Performance Standards. To determine Key
Employee's Final Award, the number of units comprising Key
Employee's Initial Award are adjusted (ranging from a maximum
of twice the number of units comprising the Initial Award, to
a minimum of no units), based on program metrics that compare
the the Company's total shareholder return performance
occurring during the Measurement Period to comparable total
shareholder return performance reported by the Company's
principal competitors (as determined by the Compensation
Committee of the Company's board of directors, or its designee
(for purposes of this Agreement only, the "Committee")) during
a period comparable in length to the Measurement Period,
taking into account the Company's achievement of specified
rates of return.
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(b) Operative Provisions Incorporated By Reference.
The operative provisions of the program, and the metrics used
to gauge Key Employee's performance and determine the number
of units awarded in such Employee's Initial Award and Final
Award, are set forth in Exhibits A and B hereto, all of which
are individually and collectively incorporated herein by this
reference as if expressly set forth herein.
(c) Committee Determinations. The Committee shall
make all operative determinations hereunder, acting in its
sole and exclusive discretion, including those required to be
made in Exhibits A and B hereto; provided, that all
performance criteria used to gauge the Company's performance
during any Measurement Period shall be determined and
finalized not later than the December 31st next following the
Vesting Date specified in Section 6, excepting only those
changes directly resulting from events external to the
Company, such as mergers, dissolutions and consolidations
involving the Company's competitors.
2. Issuance & Transfer of Common Shares. In the event Key Employee
is determined to be entitled to receive Company common shares
hereunder in connection with the calculation and making of such
Employee's Final Award and otherwise becomes qualified to receive
such shares in accordance with the provisions of paragraph 6
hereof (subject, in any event to the provisions of paragraph 8
hereof), such shares shall be transferred and issued to Key
Employee (or such other person as may then be entitled hereunder)
on or before the December 31st next following the Vesting Date
set forth in paragraph 6 hereof. In the event said transfer date
is a weekend day or a national holiday, the transfer and issuance
described in this paragraph 2 shall occur on the business day
next following said transfer date. In the event the Committee
determines that Key Employee is not entitled to a Final Award
pursuant to paragraph 1 and Exhibits A and B hereto, then all
rights arising under this Agreement shall terminate on the date
of such determination.
3. Tax, Withholding Matters. Any Key Employee or other person
receiving Company common shares in connection with a Final Award
shall provide for the satisfaction of all applicable federal,
state and local withholding taxes and assessments arising in
respect of such issuance and transfer of shares; the amount of
such withholding taxes and assessments shall be determined by the
Company, acting in its sole discretion (the "Total Withholding").
Upon request, the Company shall provide Key Employee with the
information needed to determine the Total Withholding. At the
Company's discretion, the Total Withholding shall be paid with
cash or check, or with a surrender of Company common shares
having a fair market value on the date of transfer equal to that
portion of the Total Withholding for which payment in cash or
check is not made. The Committee may, in its sole discretion,
specify other methods for transferring Company common shares in
satisfaction of Final Awards, but any such specification shall
only be made in writing.
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4. Interests Are Not Transferable. Any and all Awards made hereunder
shall not be transferable or assignable, or capable of alienation
or anticipation, by Key Employee except as otherwise expressly
permitted by the Plan. Likewise, except as specifically provided
in the Plan, Company common shares issued hereunder shall only be
issued to Key Employee or his personal representative (except in
the event of Key Employee's death or disability, in which event
otherwise-issuable Company common shares owed to Key Employee at
death or disability shall be issued only to or for Key Employee's
estate (in the case of death) or to Key Employee's legal
representative (in the case of disability).
5. Units Carry No Dividend or Voting Rights. Awards made hereunder
are at all times subject to all restrictions contained in this
Agreement and in the Plan. Key Employee shall not have, or
accrue, any shareholder rights as a result of being credited with
units hereunder in respect of an Initial Award or a Final Award.
The right to receive dividends, and to vote or otherwise assert
shareholders' rights, shall only arise and accrue as and when
Company common shares are issued and transferred to Key Employee
in accordance with, and in satisfaction of, the Company's
obligations under the terms of the Plan and this Agreement. Key
Employee understands and acknowledges that the Committee, acting
in its sole discretion, may require Key Employee, or his
successor, to represent and warrant that he will comply with all
applicable laws and regulations or confirm certain factual
matters, if requested by the Company's legal counsel.
6. Vesting, Expiration and Termination Rules. Key Employee's right
to receive an Award hereunder (subject to determining whether Key
Employee qualifies to receive Company common shares in connection
with any units awarded as part of his or her Final Award) will
fully vest at 11:59 p.m. on September 30, 2012 (the "Vesting
Date"), subject to application of this paragraph 6 and the
provisions of paragraph 8 hereof. Nothing contained in this
Agreement, or in the Plan, shall give Key Employee any
substantive right to the Company common shares represented by the
units that comprise the Initial Award; rather, Key Employee shall
only vest in, and have an enforceable right to, those units (if
any) that comprise the Final Award. Notwithstanding the preceding
two sentences, in the event Key Employee's employment by the
Company terminates (including any employment with Company
subsidiaries and affiliates whose financial results are reported
on a consolidated basis with the Company) prior to the Vesting
Date other than on account of a retirement approved by the
Committee (but otherwise without regard to the reason(s)
therefor), the Initial Award, and all Key Employee's rights
thereunder, shall terminate immediately and be extinguished, and
thereafter shall have no value. In the event Key Employee retires
prior to the Vesting Date but otherwise under conditions
satisfactory to the Company, Key Employee shall be entitled to a
pro rata portion of the Final Award that he or she would have
been entitled to on the Vesting Date if he or she had remained
employed by the Company on such date. Such pro rata portion shall
be equal to the number of days in the Measurement Period during
which such retiring Key Employee was actively employed by the
Company, expressed as a percentage of the total number of days in
the Measurement Period (rounded up to the nearest whole share),
and such share(s), if any, shall be.transferred and issued after
the Vesting Date and otherwise in accordance with Section 2
hereof.
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7. Coordination With Other Rules. None of the terms, conditions or
provisions in this Agreement shall be interpreted or applied to
cause any common share of the Company, issued in connection with
this Agreement, not to be a fully paid and non-assessable common
share of the Company.
8. Forfeiture; Set Off & Recoupment. Notwithstanding any other
provision of this Agreement or the Plan, Key Employee's rights
hereunder with respect to the Award evidenced hereby (whether or
not then vested) shall immediately terminate, and otherwise be
subject to forfeiture, set off and reduction for and against any
claims the Company may have or asserts against Key Employee for
any of the following actions by Key Employee, taken while
employed by the Company and, with respect to subparagraphs (a)
and (e), within a three (3)-year period commencing with the
cessation of Key Employee's Company employment:
a) Any direct or indirect disclosure or publication (or,
during the three (3)- year period commencing with the
cessation of Key Employee's Company employment, an
use) by Key Employee of any Company trade secret or
confidential information;
b) Any act of embezzlement, fraud or breach of fiduciary
duty during Key Employee's employment with the
Company that contributed to a restatement of the
Company's financial statements;
c) Any material violation (as determined by the Board of
Directors) by Key Employee of the terms of any
written agreement between Key Employee of the
Company;
d) Any act of embezzlement, fraud, dishonesty,
nonpayment of any obligation to the Company, breach
of fiduciary duty or deliberate disregard of Company
rules resulting in a loss, damage or injury to the
Company;
e) Any attempt by Key Employee to induce any Company
employee or consultant, agent or sub agent under
contract with the Company to terminate his or her
employment or other contractual relationship with the
Company.
In the event of any violation by Key Employee of any
subparagraph above, the Award evidenced hereby then held by
Key Employee hereunder (whether or not then vested) shall
immediately terminate, be extinguished or forfeited, and have
no further effect. In addition if there is a violation of
subparagraphs (a), (b) and/or (e) above, with respect to all
units awarded hereunder, and with respect to any Company
common shares issued or expected to be issued in connection
with the Final Award, Key Employee shall promptly forfeit,
relinquish and surrender to the Company all gains, profits,
and income Key Employee has realized from such Award if the
profit or income was realized within thirty-six (36) months of
the violations in question. Any failure by the Company to
assert its set off, forfeiture and recoupment rights under
this paragraph with respect to specific claims against Key
Employee shall not waive, or operate to waive, the Company's
right to later assert its rights hereunder with respect to
other or subsequent claims against Key Employee.
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9. Change of Control Consequences. In the event Key Employee's
rights hereunder vest on account of a Change of Control
(determined in accordance with Section 11 of the Plan) occurring
prior to the Vesting Date, the number of Company common shares
Key Employee shall be entitled to receive will be based on the
Initial Award, subject only to the remaining terms of this
Agreement (which shall continue to apply). In the event such
Change in Control (or any event subsequent thereto) satisfies the
requirements imposed by Section 409A(a)(2) of the Internal
Revenue Code and related regulations (pertaining to changes in
ownership or effective control), the issuance and transfer of
such shares shall occur as soon as practicable after such Change
in Control or subsequent event.
10. Choice of Law; Consent to Jurisdiction. Key Employee hereby
consents and agrees that Ohio law controls the parties'
procedural and substantive rights and obligations under this
Agreement, and also consents and agrees to the jurisdiction of
the state court of general jurisdiction sitting in Cuyahoga
County, Ohio, as the exclusive forum for resolving all claims and
issues arising under, out of, or in respect of, this Agreement.
11. Severability; Survival of Certain Provisions. The
unenforceability of one (1) or more of the provisions in this
Agreement shall not vitiate or render void or unenforceable the
remaining provisions of this Agreement; rather, such remaining
provisions will remain fully enforceable to the extent permitted
by law. Notwithstanding any contrary provision contained in the
Plan or this Agreement, the provisions of paragraph 8 hereof
shall specifically survive the termination, lapse or expiration
of the Plan and/or this Agreement.
12. Definitions. Unless otherwise defined in this Agreement,
capitalized terms will have the same meanings given them in the
Plan.
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KEITHLEY INSTRUMENTS, INC.
DATE OF GRANT: By:
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Joseph P. Keithley
Title: Chairman of the Board, President
and Chief Executive Officer
ACCEPTANCE BY KEY EMPLOYEE
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The undersigned has read and understood, and hereby accepts, the terms,
conditions, and obligations and restrictions imposed hereunder, as well as the
terms, conditions and limitations of the Plan to which this Agreement is subject
and subordinate.
DATE:
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Name
Performance Award Agreement
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Exhibit A to PERFORMANCE AWARD AGREEMENT
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[Intentionally left blank - to be attached as applicable for the award for that
fiscal year]
Performance Award Agreement
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Exhibit B to PERFORMANCE AWARD AGREEMENT
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Name:
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Number of Performance Shares Awarded:
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102668381
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