UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): August 9, 2010
Keithley Instruments, Inc.
(Exact name of registrant as specified in its charter)
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| Ohio
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1-9965
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34-0794417 |
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.) |
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| 28775 Aurora Road, Solon, Ohio
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44139 |
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| (Address of principal executive offices)
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(Zip Code) |
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| Registrant’s telephone number, including area code:
(440) 248-0400 |
Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
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| Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers. |
On August 9, 2010, Keithley Instruments, Inc. (the “Company”) entered into a change in control
agreement (each, a “Change in Control Agreement”) with Joseph P. Keithley, Linda C. Rae, Larry L.
Pendergrass and Daniel A. Faia, all of whom are executive officers of the Company.
Under the Change in Control Agreement, if within the two years following a Change in Control
(as defined in the Change in Control Agreement), the Company terminates the executive’s employment
without cause or the executive resigns for good reason (a “Triggering Event”), the executive will
be entitled to a lump sum payment consisting of:
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1.0 or, with respect to Mr. Keithley and Ms. Rae, 1.5 times the higher of the
executive’s annual salary at the time of the Change in Control or the Triggering Event; |
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1.0 or, with respect to Mr. Keithley and Ms. Rae, 1.5 times the higher of (1) the
executive’s current target bonus or (2) the average of the executive’s actual target
bonus received for the three fiscal years preceding the Change in Control (or the number
of fiscal years that the executive has been with the Company, if less than three); and |
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a portion of his or her then current year target bonus prorated for the number of
days in the fiscal quarter in which the Triggering Event occurred, less any amount of
such bonus that has already been paid to the executive. |
The executive will also receive continued medical, welfare and other benefit coverage until the
earlier of the date on which he or she is eligible to receive comparable benefits from another
employer or the one-year or, in the case of Mr. Keithley and Ms. Rae, the 18-month anniversary of
the Triggering Event. The Company will also provide outplacement services up to a cost of $25,000.
Equity awards held by the executives as of a Change in Control will be treated in accordance with
the provisions set forth in the applicable equity award plans and agreements, except that in the
case of performance award units, the executives will be entitled to a payout equal to the greater
of (1) the initial award amount specified in his or her agreement or (2) the award amount that
would be paid out under the agreement if the Company’s performance as of the vesting date for the
award was the Company’s actual performance as of the Change in Control date, but such payout cannot
be more than 1.5 times the initial award amount.
In the event payments to the executive result in the executive becoming liable for the payment of
excise taxes pursuant to section 4999 of the Internal Revenue Code, the payments to be made to the
executive as a result of the Change in Control will be reduced to the extent necessary to prevent
the payments from being subject to the excise tax, but only if by reason of the reduction, the
after-tax benefit of the reduced payments exceeds the after-tax benefit if such reduction were not
made.
In addition, payments to the executive are conditioned upon the executive’s execution and delivery
of a release in favor of the Company in the form specified in the Change in Control Agreement. The
Change in Control Agreement also provides that, for a period of one year from the date of
termination of the executive’s employment that results in a severance payment under the Change in
Control Agreement, the executive will not (1) solicit the employment of any employee who has been
employed by the Company at any time during the prior six months or (2) solicit customers, business,
patronage or orders for, or sell, any products and services in competition with, or for any
business, wherever located, that, as of the date of the executive’s termination of employment,
competes with, the business of the Company.
The above description is a summary of the Change in Control Agreements and should be read in
conjunction with the full text of the forms of Change in Control Agreement attached hereto as
Exhibits 10.1, 10.2 and 10.3 and incorporated by reference herein.