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SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
KEITHLEY INSTRUMENTS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
KEITHLEY INSTRUMENTS, INC.
(NAME OF PERSON(S) FILING PROXY STATEMENT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount Previously Paid: __
(2) Form, Schedule or Registration Statement No.: __
(3) Filing Party: __
(4) Date Filed: __
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<TABLE>
<S> <C>
KEITHLEY LOGO KEITHLEY INSTRUMENTS, INC.
28775 Aurora Road
Solon, Ohio 44139
(440) 248-0400
Fax (440) 248-6168
</TABLE>
December 30, 1998
TO THE SHAREHOLDERS OF KEITHLEY INSTRUMENTS, INC.
This year's Annual Meeting of Shareholders of Keithley Instruments, Inc.
will be held at 12:00 Noon (EST), Saturday, February 13, 1999, at our corporate
headquarters, 28775 Aurora Road, Solon, Ohio.
In addition to acting on the matters outlined in the Proxy Statement, we
look forward to giving you a progress report on the first quarter which will end
on December 31, 1998. As in the past, there will be an informal presentation on
the Company's businesses.
We hope that you are planning to attend the Annual Meeting personally, and
we look forward to seeing you. Whether or not you expect to attend in person,
the return of the enclosed Proxy as soon as possible would be greatly
appreciated and will ensure that your shares will be represented at the Annual
Meeting. If you do attend the Annual Meeting, you may withdraw your Proxy should
you wish to vote in person.
On behalf of the Directors and management of Keithley Instruments, Inc., we
would like to thank you for your continued support and confidence in the
Company.
Sincerely yours,
/s/ Joseph P. Keithley
JOSEPH P. KEITHLEY
Chairman, President and Chief Executive Officer
<PAGE> 3
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<TABLE>
<S> <C>
KEITHLEY LOGO KEITHLEY INSTRUMENTS, INC.
28775 Aurora Road
Solon, Ohio 44139
(440)248-0400
Fax (440) 248-6168
</TABLE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Keithley
Instruments, Inc. will be held at the Company's corporate headquarters, 28775
Aurora Road, Solon, Ohio, on Saturday, February 13, 1999, at 12:00 Noon (EST),
for the following purposes:
(1) To consider such reports as may be laid before the Annual Meeting;
(2) To vote on a proposal to fix the number of Directors of the
Company at eight;
(3) To elect seven members of the Board of Directors to serve until
the next annual meeting of shareholders and until their successors shall
have been duly elected and qualified, leaving one vacancy to be filled by
the Board of Directors at its discretion;
(4) To vote on a proposal to approve the Board of Directors' selection
of PricewaterhouseCoopers LLP as independent accountants of the Company;
and
(5) To transact such other business as may properly come before the
Annual Meeting or any adjournment thereof.
Only holders of Common Shares and Class B Common Shares of record at the
close of business on Tuesday, December 15, 1998, are entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof.
By Order of the Board of Directors,
/s/ James B. Griswold
JAMES B. GRISWOLD
Secretary
December 30, 1998
PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY.
A RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
<PAGE> 4
KEITHLEY INSTRUMENTS, INC.
28775 Aurora Road
Solon, Ohio 44139
PROXY STATEMENT
--------------------------------------
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 13, 1999
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Keithley Instruments, Inc. (the "Company")
to be used at the Annual Meeting of Shareholders of the Company to be held on
February 13, 1999, and any postponements or adjournments thereof. The time,
place and purposes of the Annual Meeting are stated in the Notice of Annual
Meeting of Shareholders which accompanies this Proxy Statement.
The expense of soliciting proxies, including the cost of preparing,
assembling and mailing the proxy materials will be borne by the Company. In
addition to solicitation of proxies by mail, solicitation may be made personally
and by telephone, and the Company may pay persons holding shares for others
their expenses for sending proxy materials to their principals. No solicitation
will be made other than by Directors, officers and employees of the Company.
Any person giving a proxy pursuant to this solicitation may revoke it by
giving notice to the Company in writing or in open meeting. All validly executed
Proxies received by the Board of Directors of the Company pursuant to this
solicitation will be voted at the Annual Meeting, and the directions contained
in such Proxies will be followed in each instance. If no directions are given,
the Proxy will be voted FOR the election of the nominees listed in the Proxy and
FOR the proposals set forth in the Notice.
This Proxy Statement and the accompanying President's letter, notice and
Proxy, together with the Company's annual report to shareholders for the fiscal
year ended September 30, 1998, are first being sent to shareholders on or about
December 30, 1998.
VOTING RIGHTS
As of the close of business on December 15, 1998, there were outstanding
4,784,812 Common Shares, without par value, of the Company (the "Common Shares")
and 2,692,528 Class B Common Shares, without par value, of the Company (the
"Class B Common Shares"). The holders of the outstanding Common Shares on that
date will be entitled to one vote for each share held and the holders of the
outstanding Class B Common Shares on that date will be entitled to ten votes for
each share held.
The presence in person or by proxy of a majority of the votes entitled to
be cast by holders of the Common Shares will constitute a quorum for the
election of the two Directors to be elected separately by holders of the Common
Shares (see "Election of Directors"). The presence in person or by proxy of a
majority of the votes entitled to be cast by the holders of outstanding Common
Shares and Class B Common Shares will constitute a quorum for the election of
the remaining five Directors and for action on other matters submitted to a vote
of the shareholders. The two nominees receiving the greatest number of votes of
the Common Shares voting separately as a class and the five other nominees
receiving the greatest number of votes of the Common Shares and the Class B
Common Shares voting together without regard to class will be elected as
Directors. The affirmative vote of a majority of the Common Shares and the Class
B Common Shares outstanding and voting together without regard to class is
required for approval of each other matter to be submitted to a vote of the
shareholders. Abstaining votes and broker non-votes will not count in favor of,
or against, election of a nominee; however, such votes will have the effect of a
vote against approval of any matter required to be approved by a majority of the
Common Shares and Class B Common Shares outstanding.
The Ohio Revised Code, as it applies to the Company, provides that if
notice in writing is given by any shareholder to the President, a Vice President
or the Secretary of the Company not less than 48 hours before
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<PAGE> 5
the time fixed for holding the meeting that he or she desires the voting at such
election to be cumulative, and an announcement of the giving of such notice is
made upon the convening of the meeting by the Chairman or the Secretary or by or
on behalf of the shareholder giving such notice, then each shareholder shall
have cumulative voting rights in the election of Directors, enabling him or her
to give one nominee for Director as many votes as is equal to the number of
Directors to be elected multiplied by the number of shares in respect of which
such shareholder is voting, or to distribute his or her votes on the same
principle among two or more nominees, as he or she sees fit. Only shareholders
of record at the close of business on December 15, 1998 are entitled to notice
of and to vote at this meeting.
PRINCIPAL SHAREHOLDERS
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following persons are known to the Company to be the beneficial owners
of more than 5% of the voting securities of the Company as of December 15, 1998:
<TABLE>
<CAPTION>
COMMON SHARES CLASS B COMMON SHARES (1)
-------------------------- --------------------------
NUMBER OF NUMBER OF PERCENTAGE
SHARES SHARES OF TOTAL
BENEFICIALLY PERCENT BENEFICIALLY PERCENT VOTING
NAME OF BENEFICIAL OWNER OWNED(2) OF CLASS OWNED(2) OF CLASS POWER
------------------------ ------------ -------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C>
Joseph P. Keithley............. 173,630(3) 3.6% 2,649,586(4) 98.4% 83.8%
Kennedy Capital Management,
Inc.(5)...................... 610,370 12.8% -- -- 1.9%
First Pacific Advisors,
Inc.(6)...................... 674,000 14.1% -- -- 2.1%
Fleet Financial Group(7)....... 304,400 6.4% -- -- 1.0%
</TABLE>
- ---------------
(1) Pursuant to the Company's Amended Articles of Incorporation, all holders of
Class B Common Shares are entitled to convert any or all of their Class B
Common Shares into Common Shares at any time, on a share-for-share basis.
The Company may not issue any additional Class B Common Shares unless such
issuance is in connection with share dividends or share splits of the Class
B Common Shares.
(2) This information has been furnished by each owner. The number of shares
indicated for each owner includes those shares owned of record and
beneficially by such owner unless otherwise indicated.
(3) Includes Common Shares represented by options exercisable on or before
February 13, 1999, by Joseph P. Keithley (99,250 shares). Such shares are
deemed to be outstanding for the purpose of computing the percentage of
shares outstanding owned by Mr. Keithley and his percentage of total voting
power of the Company's capital stock, but are not deemed outstanding for the
purpose of computing the percentage of shares held by or total voting power
of any other person. Also includes 16,352 shares of restricted stock which
are subject to certain vesting requirements, 20,000 shares owned of record
by a partnership of which Joseph P. Keithley serves as the general partner
and 1,224 shares owned of record by Joseph P. Keithley's wife. Joseph P.
Keithley disclaims beneficial ownership with respect to the shares owned of
record by his wife.
(4) Includes 2,584,586 shares owned of record by two partnerships of which
Joseph P. Keithley serves as the general partner.
(5) Derived from information set forth on a Schedule 13G of Kennedy Capital
Management, Inc. dated February 10, 1998.
(6) Derived from information set forth on a Schedule 13G of First Pacific
Advisors, Inc. dated February 10, 1998.
(7) Derived from information set forth on a Schedule 13G of Fleet Financial
Group dated February 13, 1998.
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<PAGE> 6
The business address of Mr. Keithley is 28775 Aurora Road, Solon, Ohio
44139. Kennedy Capital Management, Inc's. address is 10829 Olive Boulevard, St.
Louis, Missouri 63141; First Pacific Advisors, Inc.'s address is 11400 West
Olympic Boulevard, Suite 1200, Los Angeles, California 90064; and Fleet
Financial Group's address is One Federal Street, Boston, Massachusetts 02110.
SECURITY OWNERSHIP OF MANAGEMENT
The beneficial ownership of Common Shares and Class B Common Shares by each
of the Directors, each of the executive officers named in the Summary
Compensation Table and by the executive officers and Directors of the Company as
a group on December 15, 1998, is set forth in the table below:
<TABLE>
<CAPTION>
CLASS B
COMMON SHARES COMMON SHARES(1)
-------------------------- -----------------------------
NUMBER OF NUMBER OF PERCENTAGE
SHARES SHARES OF
NAME AND ADDRESS BENEFICIALLY PERCENT BENEFICIALLY PERCENT TOTAL VOTING
OF BENEFICIAL OWNER OWNED(2)(3) OF CLASS OWNED(2) OF CLASS POWER(3)
------------------- ------------ -------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
Brian R. Bachman.......................... 15,682 * -- -- *
James T. Bartlett......................... 47,959(4) 1.0% -- -- *
Dr. Arden L. Bement, Jr................... 24,124 * -- -- *
James B. Griswold......................... 43,416(5) * -- -- *
Leon J. Hendrix, Jr....................... 27,870 * -- -- *
Joseph P. Keithley........................ 173,630(6) 3.6% 2,649,586(7) 98.4% 83.8%
Ronald M. Rebner.......................... 158,794 3.3% -- -- *
R. Elton White............................ 69,234(8) 1.4% -- -- *
David H. Patricy.......................... 23,940 * -- -- *
Mark J. Plush............................. 59,379(9) 1.2% -- -- *
Gabriel A. Rosica......................... 29,065 * -- -- *
All officers and Directors as a group (12
persons including the above)............ 724,444 14.0% 2,649,586 98.4% 84.8%
</TABLE>
- ---------------
*Less than 1%
(1) Pursuant to the Company's Amended Articles of Incorporation, all holders of
Class B Common Shares are entitled to convert any or all of their Class B
Common Shares into Common Shares at any time, on a share-for-share basis.
The Company may not issue any additional Class B Common Shares unless such
issuance is in connection with share dividends on or share splits of the
Class B Common Shares.
(2) This information has been furnished by each Director and officer. The
number of shares indicated for each such person includes those shares owned
of record and beneficially by him unless otherwise indicated.
(3) Includes Common Shares represented by options exercisable on or before
February 13, 1999 by Brian R. Bachman (10,000 shares), James T. Bartlett
(13,000 shares), Dr. Arden L. Bement, Jr. (11,200 shares), James B.
Griswold (13,000 shares), Leon J. Hendrix, Jr. (13,000 shares), Joseph P.
Keithley (99,250 shares), Ronald M. Rebner (88,342 shares), R. Elton White
(11,800 shares), David H. Patricy (19,260 shares), Mark J. Plush (38,475
shares), Gabriel A. Rosica (26,200 shares), and all officers and Directors
as a group (382,749 shares). Such shares are deemed to be outstanding for
the purpose of computing the percentage of shares outstanding owned by each
of the individuals and all officers and Directors as a group and their
percentage of total voting power of the Company's capital stock,
respectively, but are not deemed outstanding for the purpose of computing
the percentage of shares held by or total voting power of any other person.
Also includes restricted stock shares which are subject to certain vesting
requirements for Mr. Keithley (16,352 shares), Mr. Plush (11,918 shares)
and all officers as a group (40,301 shares). Includes shares owned under
the Keithley Instruments, Inc. 1996 Outside Directors Deferred Stock Plan
for the benefit of Mr. Bachman (5,682 shares), Mr. Bartlett (7,409 shares),
Dr. Bement (6,324 shares), Mr. Griswold (7,701 shares), Mr. Hendrix (6,870
shares), Mr. White (7,434 shares) and Mr. Rosica (865 shares), as to which
such persons do not have current voting rights.
3
<PAGE> 7
(4) Includes 10,500 shares owned of record by Mr. Bartlett's children and 2,050
shares owned of record by his wife. Mr. Bartlett disclaims beneficial
ownership with respect to the shares owned of record by his wife.
(5) Includes 1,125 shares owned by a trust of which Mr. Griswold acts as
co-executor.
(6) Includes 20,000 shares owned of record by a partnership for which Mr.
Keithley serves as the general partner and 1,224 shares owned of record by
his wife. Mr. Keithley disclaims beneficial ownership with respect to the
shares owned of record by his wife.
(7) Includes 2,584,586 shares owned of record by two partnerships for which Mr.
Keithley serves as the general partner.
(8) Includes 25,000 shares owned of record by a partnership for which Mr. White
serves as the general partner.
(9) Includes 2,154 shares owned of record by Mr. Plush's children and 804
shares owned of record by his wife. Mr. Plush disclaims beneficial
ownership with respect to the shares owned of record by his wife.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act"),
as amended, requires the Company's directors, executive officers and holders of
more than 10% of the Company's Common Shares to file with the Commission initial
reports of ownership and reports of changes in ownership of Common Shares and
other equity securities of the Company. The Company believes that during the
fiscal year ended September 30, 1998, its officers, Directors and holders of
more than 10% of the Company's Common Shares complied with all Section 16(a)
filing requirements.
ELECTION OF DIRECTORS
The Proxy holders named in the accompanying Proxy or their substitutes will
exercise their authority to vote at the Annual Meeting, or any postponements or
adjournments thereof, for the election as Directors of the seven nominees named
below unless the shareholder, by so indicating on the Proxy, instructs that such
authority to vote for any one or more nominees is withheld. If the seven
nominees are elected at the Annual Meeting, there will be one vacancy on the
Board of Directors. The vacancy on the Board may be filled by the Directors
pursuant to the Company's Code of Regulations without further action by the
shareholders. The reason for electing a number of Directors fewer than the
number of Directors fixed pursuant to the Company's Code of Regulations is that
it is believed desirable to have a vacancy available which could be filled by
the Directors without the time and expense involved in holding a special meeting
of shareholders, should a person who could make a valuable contribution as a
Director of the Company become available during the year. No decision has been
made to fill the vacancy, nor has any candidate been considered and approved by
the Board of Directors. Proxies cannot be voted at the annual meeting for a
greater number of persons than the seven nominees named in this Proxy Statement,
although additional nominations can be made by the shareholders at the meeting.
Each of the Directors to be elected at the meeting is to serve until the
next Annual Meeting and until his successor shall have been elected and
qualified. Pursuant to the Company's Amended Articles of Incorporation,
one-fourth (calculated to the nearest whole number) of the number of authorized
directors, which will equal two directors assuming the proposal to fix the
number of directors at eight passes, is entitled to be elected by the Common
Shares voting separately as a class. Messrs. Bartlett and Hendrix have been
nominated as the Directors to be so elected by the holders of the Common Shares
of the Company. The remaining five nominees are to be elected by the holders of
the Common Shares and the Class B Common Shares voting together.
If cumulative voting is in effect, the Proxy holders will have full
discretion and authority to vote for any one or more of the seven nominees. In
the event of cumulative voting, the Proxy holders will vote the shares
represented by each Proxy so as to maximize the number of the Company's nominees
that will be elected to the Board.
Each of the nominees has indicated his willingness to serve as a Director,
if elected. In addition, each of the nominees is presently a member of the Board
of Directors. If any nominee at the time of election is unable or unwilling to
serve or is otherwise unavailable for election (which contingency is not now
contemplated or
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foreseen), it is intended that the shares represented by the Proxy will be voted
for each substitute nominee as may be named by the Board of Directors.
NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
NAME AND AGE
OF NOMINEE BUSINESS EXPERIENCE DIRECTOR SINCE
------------ ------------------- --------------
<S> <C> <C>
Joseph P. Keithley Chairman of the Board of Directors since 1991, Chief 1986
Age 50 Executive Officer since November 1993 and President
since May 1994. Director of Brush Wellman, Inc., a
manufacturer of engineered materials supplying
worldwide markets with beryllium products, alloy
products, ceramic products, precious metal products
and engineered material systems.
Brian R. Bachman Senior Vice President and Group Executive, Semi- 1996
Age 53 conductor Equipment and Speciality Controls of
Eaton Corporation since January 1996, responsible
for hydraulics, aerospace controls, commercial
controls, Navy controls and Semiconductor Equipment
Operations. Previously Vice President, Standard
Products Business Group of Philips Semiconductor,
one of the world's largest semiconductor
manufacturers, for Philips Electronics N.V., from
1991 through 1995.
James T. Bartlett(1) Managing Director since 1986 of Primus Venture 1983
Age 61 Partners, the fund manager for Primus Capital Fund
and Primus Capital Fund II, III and IV, venture
capital limited partnerships. Director of Oglebay
Norton Company, a provider of products and services
to the steelmaking and related industries and
Lamson & Sessions Co., a provider of products for
the construction and telecommunications industries.
Dr. Arden L. Bement, Jr. Head of School of Nuclear Engineering at Purdue 1988
Age 66 University since 1998. Previously Professor of
Engineering and Director of Midwest Supercon-
ductivity Consortium at Purdue University from 1993
to 1998.
James B. Griswold(2) Partner in the law firm of Baker & Hostetler LLP 1989
Age 52 since 1982.
Leon J. Hendrix, Jr.(1) Principal, Clayton, Dubilier & Rice, Inc., a private 1990
Age 57 investment firm since 1993. Chairman and Chief
Executive Officer of Remington Arms Co., a
manufacturer and marketer of firearms and am-
munition. Director of NACCO Industries, Inc., a
holding company with subsidiaries that manufac-
ture forklift trucks, small electrical appliances,
mine and market lignite coal and operate spe-
cialty retail stores, Cambrex Corp., a manufac-
turer of specialty chemicals and commodity chemical
intermediates, and Riverwood International Corp., a
leading global provider of paperboard and
paperboard packaging systems.
</TABLE>
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<PAGE> 9
<TABLE>
<CAPTION>
NAME AND AGE
OF NOMINEE BUSINESS EXPERIENCE DIRECTOR SINCE
------------ ------------------- --------------
<S> <C> <C>
R. Elton White Private Investor. Director of Kohl's Corporation, 1994
Age 56 which owns specialty department stores, and
Flowserve Corporation, a manufacturer of fluid
handling products for process industries.
</TABLE>
- ---------------
(1) Elected by holders of Common Shares only.
(2) Baker & Hostetler LLP served as general legal counsel to the Company during
the fiscal year ended September 30, 1998 and is expected to render services
in such capacity to the Company in the future.
INFORMATION REGARDING MEETINGS AND
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has an Executive Committee, an Audit Committee, a
Compensation and Human Resources Committee and a Strategy Committee. The Board
of Directors does not have a nominating committee. The Executive Committee
possesses and may exercise all of the powers of the Board of Directors, to the
extent permitted by law, during intervals between meetings of the Board of
Directors. All actions of the Executive Committee are reported to the Board of
Directors at its first meeting following such action or actions. The Audit
Committee reviews the activities of the Company's independent accountants and
various Company policies and practices. The Compensation and Human Resources
Committee approves the grant of stock options and reviews and determines the
compensation of certain key executives. The Strategy Committee reviews the
appropriateness of current business and technical strategies and explores new
business possibilities.
Set forth below is the current membership of each of the above-described
committees with the number of meetings held during the fiscal year ended
September 30, 1998, in parentheses.
<TABLE>
<CAPTION>
EXECUTIVE AUDIT COMPENSATION AND HUMAN STRATEGY
COMMITTEE (NONE) COMMITTEE (TWO) RESOURCES COMMITTEE (THREE) COMMITTEE (FOUR)
---------------- --------------- --------------------------- ----------------
<S> <C> <C> <C>
Joseph P. Keithley James T. Bartlett R. Elton White Brian R. Bachman
(Chairman) (Chairman) (Chairman) (Chairman)
James T. Bartlett James B. Griswold Brian R. Bachman James T. Bartlett
Leon J. Hendrix, Jr. R. Elton White James B. Griswold Dr. Arden L. Bement, Jr.
Leon J. Hendrix, Jr. James B. Griswold
Leon J. Hendrix, Jr.
Joseph P. Keithley
R. Elton White
</TABLE>
The Board of Directors held five meetings during the fiscal year ended
September 30, 1998. During that fiscal year, no incumbent Director attended
fewer than 75% of the aggregate of (i) the total number of meetings of the Board
of Directors held during the period he served as a Director and (ii) the total
number of meetings held by committees of the Board on which he served, during
the periods that he served.
Directors who are not employees of the Company receive an annual fee of
$10,000 paid in five installments. Unless Chairman of a committee, such
Directors receive an additional $1,000 for each Board meeting attended and $575
for each committee meeting attended, except for Executive Committee meetings for
which no additional monies are paid. Each Committee Chairman who is not an
employee of the Company is paid $1,150 for presiding as Chairman at a committee
meeting. Directors may defer their fees under the Keithley Instruments, Inc.
1996 Outside Directors Deferred Stock Plan.
EXECUTIVE COMPENSATION AND BENEFITS
The Company's compensation and benefit programs are designed to enable the
Company to attract, retain and motivate the best possible employees to operate
and manage the Company at all levels.
In general, all U.S. based employees receive a base salary, participate in
a Company supported retirement savings plan, are provided with medical and other
welfare benefit coverages and participate in a Company
6
<PAGE> 10
funded pension plan. Employees outside of the United States are similarly
covered by comprehensive compensation and benefit programs.
EMPLOYMENT AGREEMENTS
Employment Agreement with Named Executive Officers of the Company. Pursuant
to an employment agreement which was entered into on September 26, 1988, Joseph
P. Keithley is required to be compensated at the rate of at least $120,000 per
year initially for a five-year period which ended September 26, 1993 and is
automatically renewable for one-year periods thereafter. Pursuant to an
employment agreement which was entered into on December 10, 1986, Mr. Rebner is
required to be compensated at the rate of at least $105,700 per year. Mr.
Rebner's agreement initially covered a three-year period, and is automatically
renewable for one-year periods thereafter. Effective October 1, 1998, Mr. Rebner
resigned from his Executive Officer position with the Company. Pursuant to an
employment agreement which was entered into on April 7, 1994, Mr. Plush is
required to be compensated at the rate of at least $109,800 per year. Mr.
Plush's agreement initially covered a three-year period and is automatically
renewable for one-year periods thereafter.
EMPLOYEE BENEFIT PLANS
Retirement Plans. The Company's United States pension plan provides
retirement benefits to eligible participants who terminate employment at or
after age 65, or who terminate employment before age 65 with at least five years
of service. Benefits commence after termination of employment, but generally not
before age 55. Retirement benefits are computed on the basis of pension credits
for each year of the employee's service. Generally, an employee's pension
credits will be equal to the sum of (i) 0.9% of the employee's high five-year
average annual compensation, not in excess of the employee's Social Security
"covered compensation" (as defined by Section 401(l)(5)(E) of the Internal
Revenue Code) as of September 30, 1996, plus 1.5% of such average annual
compensation in excess of "covered compensation," with such sum multiplied by
the employee's years of credited service (up to 30 years) through September 30,
1996; plus (ii) 1.2% of the employee's annual compensation for each plan year
beginning on or after October 1, 1996. The employee's annual retirement benefit,
when paid as a life annuity commencing at age 65, will equal the total of the
pension credits he has earned. If the individuals listed in the compensation
table (except for Mr. Rebner) were to continue to be employees until their
attainment of age 65 at the rate of compensation they received during fiscal
1998, their annual retirement benefits would be as follows: Joseph P. Keithley,
$80,338; Mr. Rosica, $16,776; Mr. Patricy, $66,705 and Mr. Plush, $49,340. Mr.
Rebner resigned from his Executive Officer position with the Company effective
October 1, 1998. If he elects to begin collecting his benefit at age 55, the
estimated annual retirement benefit would be $17,362. If he waits until age 65,
the estimated benefit would be $37,743 annually.
Keithley Retirement Savings Trust and Plan. Effective January 1, 1988, the
Company implemented the Keithley Instruments, Inc. Retirement Savings Trust and
Plan (the "Plan"). The Plan permits all eligible employees of the Company and
its subsidiaries who elect to participate in the Plan to make payroll deductions
for contribution by the Company or subsidiary to the Plan. Payroll deductions
cannot be less than 1% or more than 15% of a participant's total compensation
(excluding certain fringe benefits and some types of incentive compensation) for
the Plan year. The Plan qualifies under Sections 401(a), 401(k) and 501(a) of
the Internal Revenue Code of 1986.
The Plan provides for matching contributions at the Company's discretion
which will not exceed 6% of a participant's compensation during the Plan year.
All contributions under the Plan are directed to the appropriate fund by Schwab
Retirement Services, Inc., the custodian of the Plan. The investment options
available at September 30, 1998 included (i) a pooled fixed income account
invested primarily in insurance companies and other investment contracts, (ii)
ten equity mutual funds: Invesco Total Return Fund, Aim Charter Fund, Fidelity
Magellan Fund, Twentieth Century Select Investors, Twentieth Century Growth
Investors, Vanguard Index Extended Market, T. Rowe Price New Horizons Fund, UAM
FM Small Company Portfolio Fund, T. Rowe Price Science and Technology Fund and
Scudder Global Fund, and (iii) a Personal Choice Retirement Account in which a
participant may choose to invest in any stock listed on a major U.S. exchange,
over 1,500 mutual funds or other bonds and fixed-income investments. Each
participant designates
7
<PAGE> 11
the fund or funds in which his contributions, as well as the Company's matching
contributions, shall be invested. Participant's contributions are fully vested
at all times. A participant's interest in the Company's contributions is fully
vested after three years of eligible service with the Company.
1998 Annual Senior Manager Extra Compensation Plan. This plan provides
additional compensation to executive officers based on consolidated corporate
and, in some instances, divisional performance for the fiscal year ended
September 30, 1998. Individual objectives also may be established. Extra
compensation for the group of senior managers, including the executive officers
of the Company, may not exceed 100% of each senior manager's October 1, 1997,
base salary unless approved by the Company's Board of Directors. The additional
compensation is based upon earnings before taxes and return on assets before any
deduction for senior manager extra compensation.
1984 Stock Option Plan. The 1984 Stock Option Plan provides for the
issuance of "incentive stock options," within the meaning of Section 422 of the
Internal Revenue Code, and nonqualified stock options, for federal income tax
purposes, to key employees. The primary features of the plan are summarized
below.
The 1984 Stock Option Plan is administered by the Compensation and Human
Resources Committee. Incentive stock options and nonqualified stock options are
granted for terms of up to ten years. The option price of an incentive stock
option equals the fair market value of the Common Shares on the date the option
is granted. In the case of a participant owning more than 10% of the voting
power of the Company's voting securities, the term of the incentive stock option
must be no more than five years and the option price must be at least 110% of
the fair market value of the Common Shares on the date the option is granted.
The option price for Common Shares under a nonqualified stock option is
determined by the Committee on the date such option is granted. The Committee
may, at its discretion, grant stock appreciation rights that give the employee
the right to be paid in an amount equal to the excess of the market price of the
Common Shares at the date of the exercise of the option over the option price.
Payment of the stock appreciation right may be made in cash, Common Shares of
the Company, or a combination thereof. The 1984 Stock Option Plan expired by its
terms on February 11, 1994. All options outstanding at the time of termination
of this plan continue in full force and effect in accordance with and subject to
their terms.
1992 Stock Incentive Plan. The 1992 Stock Incentive Plan provides for the
issuance of "incentive stock options," within the meaning of Section 422 of the
Internal Revenue Code, nonqualified stock options, for federal income tax
purposes, and restricted stock to key employees. The primary features of the
plan are summarized below.
The 1992 Stock Incentive Plan is administered by the Compensation and Human
Resources Committee. Incentive stock options and nonqualified stock options are
granted for terms of up to ten years. The option price of an incentive stock
option is not less than 100% of the fair market value of the Common Shares on
the date the option is granted. In the case of a participant owning more than
10% of the voting power of the Company's voting securities, the term of the
incentive stock option must be no more than five years and the option price must
be at least 110% of the fair market value of the Common Shares on the date the
option is granted. The option price for Common Shares under a nonqualified stock
option is determined by the Committee on the date such option is granted. The
Committee may, at its discretion, grant stock appreciation rights that give the
employee the right to be paid in an amount equal to the excess of the market
price of the Common Shares at the date of the exercise of the option over the
option price. Payment of the stock appreciation right may be made in cash,
Common Shares of the Company, or a combination thereof. The 1992 Stock Incentive
Plan will expire by its terms on February 8, 2002. All options outstanding at
the time of termination of this plan shall continue in full force and effect in
accordance with and subject to their terms.
1992 Directors' Stock Option Plan. On February 15, 1997, the Company's
Board of Directors terminated the 1992 Directors' Stock Option Plan. Prior to
its termination, each individual who qualified as a nonemployee Director at the
close of any annual meeting of the shareholders of the Company automatically was
granted an option to purchase 600 Common Shares. The option price for each
Common Share purchasable under an option was the fair market value of a Common
Share on the date such option was granted. All options currently outstanding
shall continue in full force and effect in accordance with and subject
8
<PAGE> 12
to their terms. The 1992 Directors' Stock Option Plan has been replaced by the
1997 Directors' Stock Option Plan.
1997 Director's Stock Option Plan. The 1997 Director's Stock Option Plan
provides for the issuance of stock options to nonemployee Directors. At the
close of each annual meeting of the shareholders of the Company, nonemployee
Directors are automatically granted an option to purchase 5,000 Common Shares.
The option price for each Common Share purchasable under an option is the fair
market value of a Common Share on the date such option is granted as defined by
the plan. The Board of Directors may, in its sole discretion, grant additional
options under the plan for newly-elected nonemployee Directors. The 1997
Director's Stock Option Plan will expire by its terms on February 15, 2007. All
options outstanding at the time of termination of this plan shall continue in
full force and effect in accordance with and subject to their terms.
1993 Employee Stock Purchase Plan. The 1993 Employee Stock Purchase Plan
offers eligible employees of the Company the opportunity to acquire Common
Shares at a discount and without incurring any material acquisition costs.
Eligible employees can only participate in the Plan on a year-to-year basis,
must enroll prior to the commencement of each Plan year and must authorize
monthly payroll deductions. The purchase price of the Common Shares is 85
percent of the lower of the market price at the beginning or ending of the Plan
year, which is on a calendar basis. Generally, all employees of the Company are
eligible to participate in the Plan; however, temporary employees, employees who
are customarily employed for less than five months in any calendar year, and
employees who directly or indirectly own more than a 5% interest in the Company
are not eligible to participate.
The following table sets forth information concerning the compensation of
the Chief Executive Officer of the Company and the four other named Executive
Officers of the Company as of September 30, 1998, during the fiscal years ended
September 30, 1998, 1997 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------- AWARDS
----------------------- ALL OTHER
RESTRICTED STOCK COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) STOCK $ OPTIONS # SATION(1)($)
- --------------------------- ---- ---------- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Keithley 1998 284,500 48,500 0 63,000 2,436
Chairman of the Board, 1997 274,353 0 147,168 60,000 2,124
President and 1996 259,375 0 0 75,000 4,863
Chief Executive Officer
Gabriel A. Rosica 1998 223,932 25,000 0 21,000 2,490
Senior Vice President 1997 216,750 0 0 25,000 2,197
and General Manager, 1996 131,384 50,000 0 50,000 51,971
Semiconductor
Ronald M. Rebner (2) 1998 183,855 19,000 0 0 242,143
Vice President and 1997 176,375 0 242,154 16,000 2,008
Chief Financial Officer 1996 167,900 0 0 20,000 5,296
David H. Patricy (3) 1998 157,875 24,000 0 26,500 2,493
Vice President and 1997
General Manager, Test 1996
and Measurement
Mark J. Plush (4) 1998 127,957 13,000 0 17,000 1,919
Vice President and 1997 122,750 0 107,262 14,000 1,841
Chief Financial Officer 1996 117,804 0 0 16,000 4,811
</TABLE>
- ---------------
(1) Consists of matching contributions under the Company's Retirement Savings
Trust and Plan which is intended to qualify under Section 1.401-1(b)(3) of
the income tax regulations. See (2) for the detail for Mr. Rebner.
(2) Mr. Rebner served as the Company's Vice President and Chief Financial
Officer until his retirement effective October 1, 1998. The caption "All
Other Compensation" includes the following items accrued
9
<PAGE> 13
on the Company's books: $192,640 in salary, $6,000 for life insurance
premiums, and $43,503 for other benefits including company contributions for
retirement plans and the estimated value of Mr. Rebner's use of his company
car. These benefits are payable through October 1, 1999. Additionally, his
Restricted Stock granted in 1997 became fully vested effective August 31,
1998.
(3) Mr. Patricy was appointed Vice President and General Manager, Test and
Measurement, effective December 10, 1997. The salary information shown
includes the full 1998 fiscal year. Prior year information is not required.
(4) Mr. Plush became Vice President and Chief Financial Officer effective
October 1, 1998. Prior to that time, Mr. Plush was the company's Controller
and Assistant Secretary, and an Executive Officer.
OPTION GRANTS IN FISCAL 1998
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------- POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF STOCK
GRANTED TO EXERCISE PRICE APPRECIATION
OPTIONS EMPLOYEES OR BASE FOR OPTION TERM
GRANTED IN FISCAL PRICE EXPIRATION ----------------------
NAME (#) YEAR ($/SH) DATE 5% ($) 10% ($)
- ---------------------- ------- ---------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Keithley.... 13,000 5.1% 9.8750 12/5/07 80,734 204,597
50,000 19.7% 5.0625 9/11/08 159,189 403,416
Gabriel A. Rosica..... 21,000 8.3% 5.0625 9/11/08 66,859 169,435
Ronald M. Rebner...... -- -- -- -- -- --
David H. Patricy...... 26,500 10.4% 5.0625 9/11/08 84,370 213,811
Mark J. Plush......... 17,000 6.7% 5.0625 9/11/08 54,124 137,161
</TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1998 AND
SEPTEMBER 30, 1998 OPTION VALUES
<TABLE>
<CAPTION>
EXERCISED IN FISCAL VALUE OF UNEXERCISED
1998 NUMBER OF IN-THE-MONEY
---------------------- UNEXERCISED OPTIONS AT OPTIONS AT
SHARES SEPTEMBER 30, 1998 SEPTEMBER 30, 1998
ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Joseph P. Keithley........ -- -- 117,500 168,500 -- --
Gabriel A. Rosica......... -- -- 26,200 71,000 38 --
Ronald M. Rebner.......... -- -- 59,342 29,000 10,113 --
David H. Patricy.......... -- -- 19,260 58,000 2,241 --
Mark J. Plush............. -- -- 38,475 41,125 4,646 --
</TABLE>
COMPENSATION AND HUMAN RESOURCES COMMITTEE REPORT
The Company's Board of Directors has delegated to the Compensation and
Human Resources Committee (the "Committee") the responsibility of evaluating and
recommending for formal board approval the amounts of compensation paid to
officers. The Committee is composed entirely of outside Directors.
The guiding philosophy of the Company's executive compensation program is
to attract, motivate and retain highly qualified senior managers to direct and
grow the Company. Information is gathered to provide guidelines on pay for
comparable positions in comparable industries. The pay of the officers is
managed to assure that, in general, it falls between the median and the
seventy-fifth percentiles of market survey averages. Beyond information that is
available to the Company, the consulting firm iQuantic is used to analyze the
competitiveness of the Company's compensation program.
The program provides for a salary that is based upon individual
performance, an annual bonus that is based upon the attainment of performance
goals, and long-term incentives in the form of stock options. These programs
were described earlier on pages 7 through 9 of this Proxy Statement.
10
<PAGE> 14
The salary for each executive officer is set based upon data from the
Company's compensation consultant, iQuantic. The information used is the range
of salaries paid to individuals who hold similar positions or have similar
responsibilities within companies or divisions of companies of similar size in
the electronics industry, which include some but not all of the companies
included in the S&P Technology Sector, the Company's peer group identified in
the performance graph on page 12 ("Peer Group").
The magnitude of the annual bonus that is paid to each officer is
determined as follows. First, the targeted amount of bonus to be paid annually
is determined through the use of salary survey information based on a percentage
of annual salary. An appropriate mix of business unit and/or corporate financial
measures and individual performance measures is then determined and a payout
schedule is set based upon percentage attainment of the performance goals. The
magnitude of these performance goals is set in participation with the Board to
reflect the marketplace conditions and an expectation of continuous improvement.
The bonus payment begins at 70% attainment of financial goals and cannot exceed
the equivalent of annual salary without special Board approval.
Prior to 1995, Incentive Stock Options (ISOs) were used to provide
long-term incentives to officers and other key employees. The ISOs currently
outstanding for all officers other than Joseph P. Keithley's have an option
price equal to the market price at the time of grant, vest in four years and
expire in ten years from the date of grant. Mr. Keithley's outstanding ISOs were
issued at 110% of the market price at the time of the grant, vest in four years
and expire five years from the grant date. Joseph P. Keithley's ISOs contain
different provisions than other officers since he controls more than 10% of the
voting power of the Company. Since 1995 Non-qualified Stock Options (NSOs) are
used to provide long-term incentives to officers and other key employees. Each
year a stock option grant is made for each officer based upon competitive market
practices. Options vest in four years and expire in ten years from the date of
grant and have an option price equal to the market price at the time of grant.
Chief Executive Officer Compensation.
The Compensation and Human Resources Committee determined Mr. Keithley's
compensation for fiscal 1998 based upon a number of criteria. The major facts
that influenced the Committee's decisions were the median pay levels for CEOs in
electronics firms of similar size (which include some but not all of the
companies included in the Peer Group), the performance of the Company in sales
growth and level of profits, and the general state of the electronic test and
measurement industry.
Mr. Keithley's salary for 1998 was increased by 4%. This increase leaves
Mr. Keithley's base salary lower than the median paid to others in comparable
positions in the electronics industry.
Compensation and Human Resources Committee
R. Elton White, Chairman
Brian R. Bachman
James B. Griswold
Leon J. Hendrix, Jr.
11
<PAGE> 15
COMPANY STOCK PERFORMANCE
The following performance graph compares the five year cumulative return
from investing $100 on September 30, 1993 in each of the Company's Common
Shares, the Standard & Poor's 500 Index and the Standard & Poor's High
Technology Composite Index, with dividends assumed to be reinvested when
received.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG KEITHLEY INSTRUMENTS, INC., THE S & P 500 INDEX
AND THE S & P TECHNOLOGY SECTOR INDEX
<TABLE>
<CAPTION>
KEITHLEY S & P TECHNOLOGY
INSTRUMENTS, INC. S & P 500 SECTOR
<S> <C> <C> <C>
SEP-93 100 100 100
SEP-94 105 104 116
SEP-95 309 135 184
SEP-96 186 162 226
SEP-97 254 227 366
SEP-98 109 248 415
</TABLE>
*$100 INVESTED ON 09/30/93 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
APPROVAL OF SELECTION OF INDEPENDENT ACCOUNTANTS
Although the Code of Regulations of the Company does not require the
submission of the selection of independent accountants to the shareholders for
approval, the Board of Directors considers it desirable that its appointment of
independent accountants be approved by the shareholders. The firm of
PricewaterhouseCoopers LLP, formerly Price Waterhouse LLP, an international firm
of public accountants, has audited the annual financial statements of the
Company since 1958. At the Annual Meeting, the Board of Directors will ask the
shareholders to approve the selection of this firm as independent accountants
for the Company for the fiscal year ending September 30, 1999. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THIS PROPOSAL.
A representative of PricewaterhouseCoopers LLP is expected to be present at
the Annual Meeting, and he will have an opportunity to make a statement if he so
desires. The representative will also be available to respond to appropriate
questions from shareholders.
12
<PAGE> 16
OTHER MATTERS
Reports will be laid before the meeting, including a letter from the
Chairman of the Board, Chief Executive Officer and the President which
accompanies the financial statements of the Company, and the report of
independent accountants. The Board of Directors does not contemplate and does
not intend to present for consideration the taking of action by shareholders
with respect to any reports to be laid before the meeting or with respect to the
minutes of the Annual Meeting held on February 14, 1998, which will be read at
the meeting on February 13, 1999, unless a motion to dispense with a reading is
adopted.
The Board of Directors of the Company is not aware of any matter to come
before the meeting other than those mentioned in the accompanying Notice.
However, if other matters shall properly come before the meeting, it is the
intention of the persons named in the accompanying Proxy to vote in accordance
with their best judgment on such matters.
Any shareholder proposal intended to be presented at the Annual Meeting of
Shareholders to be held in 1999 in compliance with Rule 14a-8 promulgated under
the Exchange Act must be received by the Company's Chairman and Chief Executive
Officer at its principal executive offices not later than September 1, 1999, for
inclusion in the Board of Directors' Proxy Statement and form of Proxy relating
to that meeting. Each proposal submitted should be accompanied by the name and
address of the shareholder submitting the proposal and the number of Common
Shares and/or Class B Common Shares owned. If the proponent is not a shareholder
of record, proof of beneficial ownership should be submitted. For those
shareholder proposals which are not submitted in accordance with Rule 14a-8, the
appointed proxies may exercise their discretionary voting authority for any
proposal received after November 15, 1999, without any discussion of the
proposal in the Company's proxy statement.
Upon the receipt of a written request from any shareholder entitled to vote
at the forthcoming Annual Meeting, the Company will mail, at no charge to the
shareholder, a copy of the Company's Annual Report on Form 10-K, including the
financial statements and schedules required to be filed with the Securities and
Exchange Commission pursuant to Rule 13a-1 under the Securities Exchange Act of
1934, as amended, for the Company's most recent fiscal year. Requests from
beneficial owners of the Company's voting securities must set forth a good faith
representation that as of the record date for the Annual Meeting, the person
making the request was the beneficial owner of securities entitled to vote at
such Annual Meeting. Written requests for such report should be directed to:
Mark J. Plush
Vice President and Chief Financial Officer
Keithley Instruments, Inc.
28775 Aurora Road
Solon, Ohio 44139
You are urged to sign and return your Proxy promptly in order to make
certain your shares will be voted at the Annual Meeting. For your convenience, a
return envelope is enclosed requiring no additional postage if mailed in the
United States.
By Order of the Board of Directors,
/s/ James B. Griswold
JAMES B. GRISWOLD
Secretary
December 30, 1998
13
<PAGE> 17
KEITHLEY INSTRUMENTS, INC.
CLASS B COMMON SHARES
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R OF THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS
O TO BE HELD ON SATURDAY, FEBRUARY 13, 1999
X The undersigned hereby appoints JOSEPH P. KEITHLEY and MARK J.
Y PLUSH and each of them, as Proxy holders and attorneys, with full
power of substitution, to appear and vote all the Class B Common
Shares of Keithley Instruments, Inc. which the undersigned shall be
entitled to vote at the Annual Meeting of Shareholders of the
Company to be held February 13, 1999, and at any postponements or
adjournments thereof, and directs said proxies to vote as specified
herein on the matters set forth in the notice of the meeting, and
to transact such other business as may properly come before the
Annual Meeting or any adjournment thereof, hereby revoking any and
all proxies heretofore given.
<TABLE>
<S> <C>
ELECTION OF DIRECTORS, Nominees:
Joseph P. Keithley; Brian R. Bachman, Dr. Arden L. Bement, Jr.;
James B. Griswold; and R. Elton White
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
THE PROXIES NAMED ABOVE CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND
RETURN THIS CARD.
- --------------------------------------------------------------------------------
O FOLD AND DETACH HERE O
GRAPHIC
<PAGE> 18
KEITHLEY INSTRUMENTS, INC.
COMMON SHARES
P PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R OF THE COMPANY FOR THE ANNUAL MEETING OF SHAREHOLDERS
O TO BE HELD ON SATURDAY, FEBRUARY 13, 1999
X The undersigned hereby appoints JOSEPH P. KEITHLEY and MARK J.
Y PLUSH and each of them, as Proxy holders and attorneys, with full
power of substitution, to appear and vote all the Common Shares of
Keithley Instruments, Inc. which the undersigned shall be entitled
to vote at the Annual Meeting of Shareholders of the Company to be
held February 13, 1999, and at any postponements or adjournments
thereof, and directs said proxies to vote as specified herein on
the matters set forth in the notice of the meeting, and to transact
such other business as may properly come before the Annual Meeting
or any adjournment thereof, hereby revoking any and all proxies
heretofore given.
<TABLE>
<S> <C>
ELECTION OF DIRECTORS, Nominees:
Joseph P. Keithley; Brian R. Bachman; James T. Bartlett*;
Dr. Arden L. Bement, Jr.; James B. Griswold; Leon J.
Hendrix, Jr.*; and R. Elton White
*Elected by holders of Common Shares only.
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH
TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS.
THE PROXIES NAMED ABOVE CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND
RETURN THIS CARD.
- --------------------------------------------------------------------------------
O FOLD AND DETACH HERE O
GRAPHIC
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
X PLEASE MARK YOUR 9658
VOTES AS IN THIS
EXAMPLE.
This Proxy when properly executed will be voted in the
manner directed herein by the shareholder. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR ITEM 1, ITEM 2 AND
ITEM 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1, ITEM 2 AND ITEM 3.
FOR WITHHELD FOR AGAINST ABSTAIN
Item 1. Election of Directors / / / / Item 2. Proposal to fix the number / / / / / /
(see reverse) of Directors of the Com-
pany at eight.
To withhold authority to vote for any individual nominee(s), Item 3. Proposal to approve / / / / / /
write the name of the nominee(s) in the space provided below. the Board of Directors'
_____________________________________________________________ selection of
PricewaterhouseCoopers
LLP as independent
accountants of
the Company.
In their discretion, the proxies are authorized to vote
upon such other business as may properly come before
the meeting.
The signer hereby revokes all proxies heretofore given
by the signer to vote at said meeting or any
adjournments thereof. NOTE: Please sign name(s) exactly
as printed hereon. Joint owners should each sign.
Persons signing as executors, administrators, trustees
or in similar capacities should so indicate.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE ______________________________________________________
ENCLOSED ENVELOPE ______________________________________________________
SIGNATURE(S) DATE
</TABLE>
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
KEITHLEY LOGO
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 13, 1999
12:00 NOON
KEITHLEY INSTRUMENTS, INC.
CORPORATE HEADQUARTERS
28775 AURORA ROAD
SOLON, OHIO
CLASS B COMMON SHARES
<PAGE> 20
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
X PLEASE MARK YOUR 9625
VOTES AS IN THIS
EXAMPLE.
This Proxy when properly executed will be voted in the
manner directed herein by the shareholder. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR ITEM 1, ITEM 2 AND ITEM 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEM 1, ITEM 2 AND ITEM 3.
FOR WITHHELD FOR AGAINST ABSTAIN
Item 1. Election of Directors / / / / Item 2. Proposal to fix the number / / / / / /
(see reverse) of Directors of the Com-
pany at eight.
To withhold authority to vote for any individual nominee(s),
write the name of the nominee(s) in the space provided below.
____________________________________________________________
Item 3. Proposal to approve
the Board of
Directors'
selection of
PricewaterhouseCoopers
LLP as
independent
accountants of
the Company.
In their discretion, the proxies are authorized to vote upon such other
business as may properly
come before the meeting.
The signer hereby revokes all proxies heretofore given by the signer to vote
at said meeting or any
adjournments thereof. NOTE:
Please sign name(s) exactly
as printed hereon. Joint
owners should each sign.
Persons signing as executors,
administrators, trustees or
in similar capacities should
so indicate.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE
--------------------------------
--------------------------------
SIGNATURE(S) DATE
</TABLE>
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
KEITHLEY LOGO
ANNUAL MEETING OF SHAREHOLDERS
FEBRUARY 13, 1999
12:00 NOON
KEITHLEY INSTRUMENTS, INC.
CORPORATE HEADQUARTERS
28775 AURORA ROAD
SOLON, OHIO
COMMON SHARES
