<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED, EFFECTIVE OCTOBER 7, 1996].
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED].
COMMISSION FILE NUMBER 1-9965
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
KEITHLEY INSTRUMENTS, INC.
28775 AURORA ROAD
SOLON, OHIO 44139
<PAGE> 2
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
INDEX TO FINANCIAL STATEMENTS
-----------------------------
AND SUPPLEMENTAL SCHEDULES
--------------------------
PAGE
----
Report of independent accountants 1
Financial statements:
Statement of Net Assets Available for Plan Benefits, with
Fund Information as of December 31, 1998 and 1997 2
Statement of Changes in Net Assets Available for Plan Benefits,
with Fund Information for the year ended December 31, 1998 3
Notes to financial statements 4-10
Supplemental schedules:
Schedule of assets held for investment purposes at
December 31, 1998 Schedule I
Schedule of reportable transactions for the year ended
December 31, 1998 Schedule II
NOTE: Certain schedules required under the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974 have been omitted as the conditions under
which they are required are not present.
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
June 11, 1999
To the Participants and Administrator
of the Keithley Instruments, Inc.
Retirement Savings Trust and Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Keithley Instruments, Inc. Retirement Savings Trust and
Plan (the "Plan") at December 31, 1998 and 1997, and the changes in net assets
available for plan benefits for the year ended December 31, 1998 in conformity
with generally accepted accounting principles. These financial statements are
the responsibility of the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of the
Schedule of Assets held for Investment Purposes and the Schedule of Reportable
Transactions are presented for purposes of additional analysis and are not a
required part of the basic financial statements but are supplemental information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. The fund
information in the statement of net assets available for plan benefits and the
statement of changes in net assets available for plan benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for plan benefits of each
fund. The supplemental schedules and fund information are the responsibility of
the Plan's management. The supplemental schedules and the fund information have
been subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
<PAGE> 4
<TABLE>
<CAPTION>
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
--------------------------------------------------------------------------
Participant Directed
------------------------------------------------------------------------------------------------------
Schwab Schwab U.S. Invesco Twentieth Twentieth
Stable Treasury Fidelity Total Aim Century Fidelity Century
MaGIC Value Money Market Puritan Return Charter Select Magellan Growth
Fund Fund Fund Fund Fund Fund Fund Fund Fund
----- ------ ------------ -------- ------- ------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment balance - $ - $5,329,028 $ - $ - $2,427,358 $4,108,685 $4,533,679 $4,195,673 $3,411,401
December 31, 1998
Receivables
Employer - 12,459 - - 10,065 9,466 7,898 15,490 7,180
Participants - 18,019 - - 14,887 14,550 12,293 17,634 11,630
Loans to participants - - - - - - - - -
--- ---------- --- --- ---------- ---------- ---------- ---------- ----------
Net assets available
for Plan benefits -
December 31, 1998 $ - $5,359,506 $ - $ - $2,452,310 $4,132,701 $4,553,870 $4,228,797 $3,430,211
=== ========== === === ========== ========== ========== ========== ==========
Participant Directed
-------------------------------------------------------------------------------
T. Rowe T. Rowe Vanguard UMA FMA Personal
Price Price Index Pioneer Small Choice
Science & New Scudder Extended Capital Company Retirement
Technology Horizons Global Market Growth A Portfolio Account Loan
Fund Fund Fund Fund Fund Fund Fund Fund Cash Total
---------- -------- ------- --------- -------- --------- ---------- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment balance -
December 31, 1998 $1,752,302 $871,741 $768,092 $655,134 $ - $315,368 $599,538 $ - $2,969 $28,970,968
Receivables
Employer 8,427 4,055 2,881 3,180 - 2,661 2,024 - - 85,786
Participants 12,434 6,790 5,257 5,028 - 5,302 713 - - 124,537
Loans to participants - - - - - - - 267,478 - 267,478
---------- -------- ------- -------- --- -------- -------- -------- ------ -----------
Net assets available
for Plan benefits -
December 31, 1998 $1,773,163 $882,586 $776,230 $663,342 $ - $323,331 $602,275 $267,478 $2,969 $29,448,769
========== ======== ======== ======== === ======== ======== ======== ====== ===========
<CAPTION>
Participant Directed
------------------------------------------------------------------------------------------------------
Schwab Schwab U.S. Invesco Twentieth Twentieth
Stable Treasury Fidelity Total Aim Century Fidelity Century
MaGIC Value Money Market Puritan Return Charter Select Magellan Growth
Fund Fund Fund Fund Fund Fund Fund Fund Fund
----- ------ ------------ -------- ------- ------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment balance - $4,701,890 $ - $577,401 $2,335,134 $ - $3,519,323 $3,464,050 $2,820,848 $2,357,923
December 31, 1997
Receivables
Employer - 3,269 682 3,335 - 3,516 2,439 3,487 2,447
Participants - 17,971 3,449 18,367 - 19,568 13,044 17,977 12,896
Loans to participants - - - - - - - - -
---------- ------- -------- ---------- --- ---------- ---------- ---------- ----------
Net assets available
for Plan benefits -
December 31, 1997 $4,701,890 $21,240 $581,532 $2,356,836 $ - $3,542,407 $3,479,533 $2,842,312 $2,373,266
========== ======= ======== ========== === ========== ========== ========== ==========
Participant Directed
-------------------------------------------------------------------------------
T. Rowe T. Rowe Vanguard UMA FMA Personal
Price Price Index Pioneer Small Choice
Science & New Scudder Extended Capital Company Retirement
Technology Horizons Global Market Growth A Portfolio Account Loan
Fund Fund Fund Fund Fund Fund Fund Fund Cash Total
---------- -------- ------- --------- -------- --------- ---------- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment balance -
December 31, 1997 $1,035,580 $869,920 $725,157 $665,302 $371,147 $ - $336,121 $ - $ - $23,779,796
Receivables
Employer 3,214 1,758 1,028 1,071 1,164 - - - - 27,410
Participants 17,700 10,050 5,614 5,633 6,900 - - - - 149,169
Loans to participants - - - - - - - 168,509 - 168,509
---------- -------- ------- -------- -------- --- -------- ------- --- -----------
Net assets available
for Plan benefits -
December 31, 1997 $1,056,494 $881,728 $731,799 $672,006 $379,211 $ - $336,121 $168,509 $ - $24,124,884
========== ======== ======== ======== ======== === ======== ======== === ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
<TABLE>
<CAPTION>
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
-------------------------------------------------------------------------------------
Participant Directed
----------------------------------------------------------------------------------------------------------
Schwab Schwab U.S. Invesco Twentieth Twentieth
Stable Treasury Fidelity Total Aim Century Fidelity Century
MaGIC Value Money Market Puritan Return Charter Select Magellan Growth
Fund Fund Fund Fund Fund Fund Fund Fund Fund
----- ------ ------------ -------- ------- ------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available
for Plan benefits -
December 31, 1997 $4,701,890 $ 21,240 $581,532 $2,356,836 $ - $3,542,407 $3,479,533 $2,842,312 $2,373,266
Contributions
Employer - 58,347 8,090 26,454 19,540 44,290 35,830 57,448 29,919
Participants - 230,486 43,244 165,206 82,102 214,516 163,622 288,736 141,811
Loan activity, net 1 (37,198) 83 (1,971) 1,300 (14,612) (14,935) (10,525) 5,353
Net appreciation
(depreciation)
in fair value of
investments 802 263,884 - 1,650 206,419 703,593 418,463 821,991 324,104
Interest - 15,774 - - - - - -
Dividends and
capital gains - - 39,824 79,462 174,480 782,158 188,080 550,239
Asset-based fees (5,244) (625) (2,861) - (4,362) (4,462) (4,246) (3,146)
Distributions and
withdrawals (484,934) (97,471) (87,535) (172,598) (253,971) (394,713) (254,244) (155,066)
Transfers between funds (4,702,693) 5,312,925 (550,627) (2,497,603) 2,236,085 (273,640) 88,374 299,245 163,731
---------- ---------- --------- ---------- --------- ---------- ---------- ---------- ----------
Net assets available
for Plan benefits -
December 31, 1998 $ - $5,359,506 $ - $ - $2,452,310 $4,132,701 $4,553,870 $4,228,797 $3,430,211
========== ========== ========= ========= ========== ========== ========== ========== ==========
<CAPTION>
Participant Directed
----------------------------------------------------------------------------------
T. Rowe T. Rowe Vanguard UMA FMA Personal
Price Price Index Pioneer Small Choice
Science & New Scudder Extended Capital Company Retirement
Technology Horizons Global Market Growth A Portfolio Account Loan
Fund Fund Fund Fund Fund Fund Fund Fund Cash Total
---------- -------- ------- --------- -------- --------- ---------- ---- ---- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net assets available
for Plan benefits -
December 31, 1997 $1,056,494 $ 881,728 $731,799 $ 672,006 $ 379,211 $ - $336,121 $168,509 $ - $24,124,884
Contributions
Employer 41,640 24,654 12,453 15,890 7,994 5,954 8,348 - - 396,851
Participants 231,106 143,534 66,806 79,669 50,100 25,836 29,422 - - 1,956,196
Loan activity, net 2,430 (4,930) 419 (1,468) (6,709) 402 169 101,141 - 18,950
Net appreciation
(depreciation)
in fair value of
investments 446,499 (12,540) (2,525) (6,451) (52,605) 36,324 15,936 - - 3,165,544
Interest - - - - - - - - - 15,774
Dividends and capital
gains 43,571 46,257 76,406 53,206 - 988 - - - 2,034,671
Asset-based fees (1,517) (1,090) (904) (792) (501) - (590) - - (30,340)
Distributions and
withdrawals (61,863) (68,464) (105,791) (41,476) (34,133) (19,330) - (2,172) - (2,233,761)
Transfers between funds 14,803 (126,563) (2,433) (107,242) (343,357) 273,157 212,869 - 2,969 -
---------- --------- --------- --------- --------- -------- -------- -------- ------ -----------
Net assets available for
Plan benefits -
December 31, 1998 $1,773,163 $ 882,586 $ 776,230 $ 663,342 $ - $323,331 $602,275 $267,478 $2,969 $29,448,769
========== ========= ========= ========= ========= ======== ======== ======== ====== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
NOTES TO FINANCIAL STATEMENTS
-----------------------------
NOTE 1 - PLAN DESCRIPTION:
- -------------------------
The following description of the Keithley Instruments, Inc. Retirement Savings
Trust and Plan (the "Plan") provides only general information. Participants
should refer to the Plan agreement for a more complete description of the Plan's
provisions.
PARTICIPATION
The Plan is a defined contribution plan, established on January 1, 1988,
covering all domestic employees of Keithley Instruments, Inc. and its
participating subsidiaries (the "Company") who have attained age twenty-one. The
Plan is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
ADMINISTRATION
The Plan is administered by the Company (the "Administrator"). The
administration of the Plan includes exercising all necessary powers as provided
by the Plan to interpret and apply the Plan provisions. The Company is vested
with the right to settle claims or debts and to defend any claims arising from
the operation of the Plan. The Company's Board of Directors appointed three
individuals to act as trustee of the Plan. Subsequent to December 31, 1998, the
Board of Directors appointed Schwab Retirement Services, Inc. (Schwab) to act as
trustee of the Plan. Schwab acts as custodian of the Plan.
CONTRIBUTIONS
Participants may elect to contribute up to 15 percent of their compensation and
have the option of contributing their profit sharing award, if any, on a before
tax basis subject to certain limitations of the Plan. It is the Company's policy
to match at least $.25 of each dollar contributed, limited to six percent of a
participant's compensation during the Plan year. Additionally, it is the
Company's policy to match up to a maximum of $.50 of each dollar contributed,
limited to six percent of a participant's compensation for the Plan year, based
upon the Company's financial performance. For 1998 and 1997, the Company's match
was $.30 and $.25 on each dollar contributed by participants up to six percent
of a participant's compensation, respectively. The Company has complete
discretion to determine its matching contribution, if any, each year.
PARTICIPANT ACCOUNTS
Each participant has two separate accounts under each fund in which
contributions have been invested on behalf of the participant. One account
represents the participant's contributions and
<PAGE> 7
earnings thereon (Participant Account) and the other account represents the
employer's contributions, made on behalf of the respective participant, and the
earnings thereon (Employer Account). Forfeitures of terminated participants'
nonvested account balances are used to reduce future employer contributions.
Net assets available for Plan benefits of $13,445 and $5,079 were not allocated
to participants' accounts at December 31, 1998 and 1997, respectively, due to
forfeitures during each Plan year.
VESTING
Participants are immediately vested in their voluntary contributions plus
earnings thereon. Vesting of the employer contributions starts after the first
year and is based on years of service. A participant is 100 percent vested after
three years of credited service.
PAYMENT OF BENEFITS
Upon termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of his or her account, or installment
payments. In the case of a severe financial hardship, the Administrator at its
sole discretion, may direct distribution of all or a portion of a participant's
account, subject to certain restrictions.
LOANS
In the case of a financial hardship as defined by the Plan, a participant may
apply to the Administrator for a loan. The Administrator in accordance with a
uniform nondiscriminatory policy, may direct the custodian to make a loan to a
participant from their before-tax contribution account, subject to certain
restrictions. Loans outstanding as of December 31, 1998 and 1997, bear interest
rates ranging from 8-11 percent per annum. All loan activity, net loans as well
as repayments, are reflected in the statement of changes in net assets available
for plan benefits as Loan activity, net.
TERMINATION PROVISIONS
The Company anticipates and believes that the Plan will continue indefinitely;
however, the Company reserves the right to terminate the Plan at any time by an
action of its Board of Directors. In the event of termination of the Plan, the
assets then remaining will be allocated and distributed to participants in
accordance with the terms and provisions of the Plan.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires Plan management to make estimates and assumptions
that affect the reported amounts of net assets available for Plan benefits and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of changes in net assets available for Plan
benefits during the reporting period. Actual results could differ from those
estimates.
<PAGE> 8
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
- ---------------------------------------------------
CONTRIBUTIONS AND BENEFIT DISTRIBUTIONS
Matching contributions from the Company are recognized during the period in
which they are earned. Distributions are recognized during the period in which
they are paid to a Plan participant.
INVESTMENT VALUATION AND INCOME RECOGNITION
All investment accounts are included in the financial statements at fair value
determined by quoted market prices as reported to the Plan by Schwab. Purchases
and sales of securities are recorded on a trade-date basis. Interest income is
recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Realized gains or losses on security transactions are recorded in an amount
equal to the difference between net proceeds received and the revalued cost at
the date of sale and are reflected in the Statement of Changes in Net Assets
Available for Plan Benefits, with Fund Information.
The Plan presents in the Statement of Changes in Net Assets Available for Plan
Benefits the net appreciation (depreciation) in the fair value of its
investments which consists of the realized gains or losses and the unrealized
appreciation (depreciation) on those investments.
ADMINISTRATIVE EXPENSES
Participation fees are paid by the Company. Asset-based fees are paid by the
participants.
NOTE 3 - INVESTMENTS:
- --------------------
During 1998, 15 funds were available to participants for investment purposes.
Schwab manages the distribution of assets among funds and provides recordkeeping
services. Following is a description of each fund:
SCHWAB STABLE VALUE FUND - This fund invests primarily in insurance company
guaranteed investment contracts and arrangements commonly known as synthetic
investment contracts, and other investments which seek to maintain principal
value, protect against market volatility, obtain consistent income return and
provide reasonable liquidity. Such transactions qualify as party in interest. At
December 31, 1998, there were approximately 375 participants invested in this
fund.
SCHWAB U.S. TREASURY MONEY MARKET FUND - This fund invests solely in United
States Treasury notes, bills and other direct obligations of the United States
Treasury, backed by the "full faith and credit" of the United States Government.
These investments have almost no risk to principal. Such transactions qualify as
party in interest. During 1998, this fund was closed and the assets were
transferred to the Schwab Stable Value Fund.
<PAGE> 9
FIDELITY PURITAN FUND - This fund invests in a diversified array of
high-yielding securities; these may be common stocks, preferred stocks and/or
bonds. Up to 35% of the fund's assets may be invested in lower-quality,
higher-yielding assets. The fund may purchase foreign securities, zero-coupon
bonds and indexed securities, and may engage in futures contracts, short sales
and swap agreements. During 1998, this fund was closed and the assets were
transferred to the Invesco Total Return Fund.
INVESCO TOTAL RETURN FUND - This fund invests in a combination of equities and
investment-grade fixed-income securities and seeks capital appreciation and
current income. The fund maintains at least 30% of its assets in equities, and
at least 30% in fixed and variable rate debt securities. The fund may invest up
to 25% of assets in foreign securities. At December 31, 1998, there were
approximately 250 participants invested in this fund.
AIM CHARTER FUND - This fund invests a substantial portion of its assets in
dividend-paying common stocks. No more than 10% of the fund's stocks may be in
securities that are not currently paying dividends. The fund may invest in
various short-term debt securities for liquidity or defensive purposes. It may
invest up to 10% of assets in American depositary receipts, and another 10% in
direct foreign securities. At December 31, 1998, there were approximately 325
participants invested in this fund.
TWENTIETH CENTURY SELECT FUND - This fund normally invests at least 80% of
assets in dividend-paying common stocks; however, these securities are chosen
primarily for their growth potential. The fund intends to remain fully invested
in stocks, regardless of the movement of stock prices generally. This fund may
also invest without limit in foreign securities, including American depositary
receipts. At December 31, 1998, there were approximately 275 participants
invested in this fund.
FIDELITY MAGELLAN FUND - This fund invests primarily in common stocks and
convertible securities. Up to 20% of its assets may be invested in debt
securities of all types and qualities. The fund invests in domestic and foreign
companies. There is no limitation on total foreign investment, but no more than
40% of the fund's assets may be invested in companies operating exclusively in
one foreign country. At December 31, 1998, there were approximately 325
participants invested in this fund.
TWENTIETH CENTURY GROWTH FUND - This fund normally invests substantially all
assets in equity securities of large, established companies that meet its
standards of earnings and revenue growth. However, it may hold up to 10% of
assets in cash. The fund may only purchase securities of companies with at least
three years of operations, and may invest in foreign securities without limit,
including American depositary receipts. At December 31, 1998, there were
approximately 275 participants invested in this fund.
<PAGE> 10
T. ROWE PRICE SCIENCE & TECHNOLOGY FUND - This fund normally invests at least
65% of assets in companies, both foreign and domestic, that seek to develop or
use scientific and technological advances. Industries include computers and
peripheral, software, electronics, pharmaceutical and medical devices,
telecommunications, biotechnology, waste management, chemicals, synthetic
materials, defense and aerospace. These holdings may include both new and
established companies. At December 31, 1998, there were approximately 250
participants invested in this fund.
T. ROWE PRICE NEW HORIZONS FUND - This fund invests primarily in common stocks
of small, rapidly growing companies. Management concentrates on companies that
may offer accelerating earnings growth because of new management, new products,
or structural changes in the economy. The fund may invest up to 10% of assets in
foreign securities, including American depositary receipts. At December 31,
1998, there were approximately 175 participants invested in this fund.
SCUDDER GLOBAL FUND - This fund invests in companies expected to benefit from
global economic trends, promising technologies or specific country
opportunities. It is expected that investments will be spread broadly around the
world, including the United States, in companies of varying sizes. The fund
generally invests in the equity securities of established companies listed on
foreign securities exchanges. At December 31, 1998, there were approximately 150
participants invested in this fund.
VANGUARD INDEX EXTENDED MARKET FUND - This fund invests in a statistically
selected sample of the stocks included in the Wilshire 4500 Index. This index
consists of more than 5,000 primarily smaller to medium-sized common stocks
traded on the NYSE, AMEX or listed on the NASDAQ. These stocks are not included
in the S&P 500 Index. At December 31, 1998, there were approximately 125
participants invested in this fund.
PIONEER CAPITAL GROWTH A FUND - This fund normally invests at least 80% of its
assets in common stocks, and may invest in securities with common-stock
characteristics, such as convertible bonds and preferred stocks. Securities
selected for investment have an underlying value, or potential value that
exceeds their current prices. Up to 25% of assets may be invested in foreign
securities. During 1998 this fund was closed and the assets were transferred to
the UAM FMA Small Company Portfolio Fund.
UAM FMA SMALL COMPANY PORTFOLIO FUND - This fund invests at least 65% of assets
in common stocks issued by U.S. companies with market capitalizations of
$50 million to $1 billion. When selecting securities, the advisor looks for
companies with low P/E ratios, strong cash flows, good credit lines, and
improving balance sheets. The fund may invest up to 10% of assets in foreign
securities. At December 31, 1998, there were approximately 100 participants
invested in this fund.
PERSONAL CHOICE RETIREMENT ACCOUNT - This fund provides for self-directed
investing whereby each participant may choose to invest in any stock listed on a
major U.S. exchange, over 1,200 mutual funds, bonds and other fixed-income
investments, and money market funds. At December 31, 1998, there were
approximately 10 participants invested in this fund.
<PAGE> 11
Included in the caption Net appreciation (depreciation) in fair value of
investments are the following realized gains and losses.
Aggregate Aggregate Realized
Fund Proceeds Cost Gain/(Loss)
- ---- -------- ---- -----------
MaGIC Fund $ 4,702,680 $ 4,701,876 $ 804
Schwab Stable Value 1,255,937 1,221,745 34,192
Schwab U.S. Treasury 1,044,064 1,044,064 -
Fidelity Puritan 2,722,727 2,698,480 24,247
Invesco Total Return 308,083 294,868 13,215
Aim Charter 655,170 615,799 39,371
Twentieth Century Select 620,151 552,199 67,952
Fidelity Magellan 509,871 485,501 24,370
Twentieth Century Growth 433,547 384,895 48,652
T. Rowe Price Science and Technology 253,749 242,076 11,673
T. Rowe Price New Horizons 273,293 292,360 (19,067)
Scudder Global 278,941 271,846 7,095
Vanguard Index Extended Market 208,318 212,848 (4,530)
Pioneer Capital Growth A 475,416 520,233 (44,817)
UAM FMA Small Company Portfolio 103,893 103,840 53
Personal Choice Retirement Account 849,115 849,115 -
------------ ------------ ----------
$ 14,694,955 $ 14,491,745 $ 203,210
============ ============ ==========
Cost is determined using the revalued cost method. The total change in
unrealized appreciation (depreciation) (excludes realized gains and losses) for
the year ended December 31, 1998 is as follows:
December 31,
Fund 1998 1997 Change
- ---- ---- ---- ------
MaGIC Fund $ - $ 2 $ (2)
Schwab Stable Value 239,438 9,746 229,692
Schwab U.S. Treasury - - -
Fidelity Puritan - 22,597 (22,597)
Invesco Total Return 193,830 626 193,204
Aim Charter 1,198,120 533,898 664,222
Twentieth Century Select 412,842 62,331 350,511
Fidelity Magellan 1,144,985 347,364 797,621
Twentieth Century Growth 494,844 219,392 275,452
T. Rowe Price Science and Technology 344,656 (90,170) 434,826
T. Rowe Price New Horizons 38,585 32,058 6,527
Scudder Global 11,047 20,667 (9,620)
Vanguard Index Extended Market 70,973 72,894 (1,921)
Pioneer Capital Growth A - 7,788 (7,788)
UAM FMA Small Company Portfolio 36,209 (62) 36,271
Personal Choice Retirement Account 108 (15,828) 15,936
----------- ----------- -----------
$ 4,185,637 $ 1,223,303 $ 2,962,334
=========== =========== ===========
<PAGE> 12
NOTE 4 - FEDERAL INCOME TAX STATUS:
- ----------------------------------
On February 13, 1996, the Internal Revenue Service advised that the Plan, as
amended, is qualified and the trust thereunder is exempt from federal income tax
pursuant to Section 401(a) of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the Plan's
administrator and the Plan's tax counsel believe that the plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
<PAGE> 13
<TABLE>
<CAPTION>
Schedule I
Page 1 of 2
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1998
-------------------------------------------------------------------------------
(a) (b) Identity of Issue (c) Number of Shares/Units (d) Cost (e) Current Value
- ------------------------- -------------------------- -------- -----------------
<S> <C> <C> <C>
Cash 2,969 2,969
* Schwab Stable Value Fund 463,132 5,089,590 5,329,028
Invesco Total Return Fund 77,403 2,233,527 2,427,358
Aim Charter Fund 275,566 2,910,565 4,108,685
Twentieth Century Select Fund 95,667 4,038,835 4,533,679
Fidelity Magellan Fund 34,727 3,050,688 4,195,673
Twentieth Century Growth Fund 125,604 2,998,558 3,411,401
T. Rowe Price Science & Technology Fund 46,517 1,407,646 1,752,302
T. Rowe Price New Horizons Fund 37,350 833,156 871,741
Scudder Global Fund 26,781 757,045 768,092
Vanguard Index Extended Market Fund 21,396 584,161 655,134
UAM FMA Small Company Portfolio Fund 20,373 279,159 315,368
Personal Choice Retirement Account:
Cash and Equivalents 159,729 159,729
Common Stocks:
Ascend Communications, Inc. 100 3,017 6,575
At Home Corp. Class A 200 4,938 14,850
Bank One Corp 810 37,780 41,360
Brush Wellman, Inc. 1,000 25,280 17,438
Charles Schwab Corp. 100 5,617 5,619
Cutter & Buck, Inc. 280 7,485 10,430
Cypress Semiconductor Corp. 150 1,335 1,247
Digital Microwave Corp. 200 2,230 1,369
EMC Corp. Massachusetts 40 2,805 3,400
Filenet Corp. 900 4,510 10,322
First Security. Corp. 750 17,842 17,531
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Schedule I
Page 2 of 2
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
Line 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1998
-------------------------------------------------------------------------------
(a) (b) Identity of Issue (c) Number of Shares/Units (d) Cost (e) Current Value
- ------------------------- -------------------------- -------- -----------------
<S> <C> <C> <C>
Home Depot, Inc. 100 3,676 6,129
IOMega Corp. 500 6,005 3,656
* Keithley Instruments, Inc. 24,618 220,393 224,638
Komag, Inc. 100 1,969 1,038
Kulicke & Soffa Industries, Inc. 100 2,036 1,775
Mattson Technology, Inc. 400 5,122 2,313
Newbridge Networks Corp. 70 1,430 2,126
PictureTel Corp. 525 6,345 3,478
Saville Systems PLC 700 8,924 13,300
Spyglass, Inc. 100 962 2,200
Transocean Offshore, Inc. 185 5,927 4,960
Vishay Intertechnology, Inc. 525 10,530 7,613
Zoltek Companies, Inc. 275 7,812 2,527
Zoom Telephonics, Inc. 200 1,734 800
----------- -----------
Total Common Stocks 395,704 406,694
----------- -----------
Mutual Fund:
Midas Fund 21,930 32,626 33,115
----------- -----------
Total Personal Choice Retirement Account 588,059 599,538
----------- -----------
Participant Loans, interest rates from 8 to 11% per annum 267,478 267,478
----------- -----------
$25,041,436 $29,238,446
=========== ===========
</TABLE>
(*) Denotes an allowable party in interest.
<PAGE> 15
<TABLE>
<CAPTION>
Schedule II
KEITHLEY INSTRUMENTS, INC.
--------------------------
RETIREMENT SAVINGS TRUST AND PLAN
---------------------------------
Line 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
----------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1998
Identity of party involved and Total Number Purchase Selling Historical cost of
description of assets of Transactions Price price assets sold Gain
- ------------------------------ --------------- --------- ------- ------------------- ----
<S> <C> <C> <C> <C> <C>
Purchases:
*Schwab Stable Value Fund 78 $6,320,075 -- -- --
Invesco Total Return Fund 24 $2,529,022 -- -- --
Twentieth Century Select Fund 63 $1,271,316 -- -- --
Sales:
*MAGIC Fund
Common collective trust 1 -- $4,702,681 $4,065,231 $637,450
*Schwab Stable Value Fund 86 -- $1,254,937 $1,230,484 $ 24,453
Fidelity Puritan Fund 78 -- $2,722,728 $2,439,086 $283,641
</TABLE>
Reportable transactions represent individual or series of transactions in excess
of 5% of Plan assets as of the beginning of the Plan year.
(*) Denotes an allowable party in interest.
<PAGE> 16
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
(Name of Plan)
Date: June 28, 1999 /s/ Mark J. Plush
----------------------------------------------
Mark J. Plush
Vice President and Chief Financial Officer
Keithley Instruments, Inc.
