<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, 1999
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
FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
* * * * *
DECEMBER 31, 1999 AND 1998
<PAGE> 3
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
INDEX TO FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULE
PAGE
----
Report of independent accountants 1
Financial statements:
Statement of Net Assets Available for
Plan Benefits as of December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for
Plan Benefits for the year ended December 31, 1999 3
Notes to financial statements 4-9
Supplemental schedule:
Schedule of assets held for investment purposes
at December 31, 1999 Schedule I
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> 4
REPORT OF INDEPENDENT ACCOUNTANTS
June 16, 2000
To the Participants and Administrator
of the Keithley Instruments, Inc.
Retirement Savings Trust and Plan
In our opinion, the accompanying statement 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, 1999 and 1998, and the changes in net assets
available for plan benefits for the year ended December 31, 1999 in conformity
with accounting principles generally accepted in the United States. 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
auditing standards generally accepted in the United States 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 Schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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 supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audit of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
<PAGE> 5
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Investments, at fair value (cost of investments totaled
$29,016,200 and $24,770,989 for the years ended
December 31, 1999 and 1998, respectively) $37,089,148 $28,967,999
Participants' loans 215,510 267,478
----------- -----------
Total investments 37,304,658 29,235,477
----------- -----------
Receivables:
Employer contribution 327,831 85,786
Participant contributions 239,506 124,537
----------- -----------
Total receivables 567,337 210,323
Cash 213,307 2,969
----------- -----------
Net assets available for plan benefits $38,085,302 $29,448,769
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 6
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999
-----------
<S> <C>
Additions:
Investment income:
Net appreciation on investments $ 4,696,373
Dividends and capital gains 2,872,441
Other income 367,458
Interest 23,129
-----------
Total investment income 7,959,401
-----------
Contributions:
Employer 567,336
Participants 1,751,211
-----------
Total contributions 2,318,547
Total additions 10,277,948
-----------
Deductions:
Distributions to participants 1,639,114
Asset-based fees 2,301
-----------
Total deductions 1,641,415
-----------
Net increase 8,636,533
Net assets available for plan benefits at beginning of year 29,448,769
-----------
Net assets available for plan benefits at end of year $38,085,302
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE> 7
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. Schwab Retirement Services, Inc. ("Schwab") is the
trustee and acts as the 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 pre-tax
basis subject to certain limitations of the Plan. In 1999, the Company paid a
profit sharing award, which some employees decided to contribute to 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 1999 and
1998, the Company's match was $.50 and $.30 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.
<PAGE> 8
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 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 $16,804 and $13,445 were not allocated
to participants' accounts at December 31, 1999 and 1998, 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 an earlier 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, 1999 and 1998, bear interest
rates ranging from 8-11 percent per annum.
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.
<PAGE> 9
Use of estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
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.
The Plan presents in the Statement of Changes in Net Assets Available for Plan
Benefits the net appreciation in the fair value of its investments which
consists of the realized gains or losses and the unrealized appreciation or
depreciation on those investments.
Administrative expenses
Participation fees are paid by the Company. Asset-based fees are paid by the
participants.
<PAGE> 10
NOTE 3 - INVESTMENTS:
During 1999, 12 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, 1999, there were approximately 360 participants invested in this
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, 1999, there were
approximately 220 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, 1999, there were approximately 290
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, 1999, there were approximately 290 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, 1999, 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, 1999, there were
approximately 290 participants invested in this fund.
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, 1999, there were approximately 290
participants invested in this fund.
<PAGE> 11
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,
1999, there were approximately 145 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, 1999, there were approximately 130
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, 1999, there were approximately 120
participants invested in this 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, 1999, there were approximately 75 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, 1999, there were
approximately 15 participants invested in this fund.
<PAGE> 12
The following table presents the fair value of the individual investments that
represent 5 percent or more of the Plan's net assets:
December 31,
1999 1998
---------- ----------
Schwab Stable Value Fund $6,068,851 $5,329,028
Invesco Total Retuen Fund 1,876,522 2,427,358
Aim Charter Fund 5,300,431 4,108,685
Twentieth Century Select Fund 5,224,957 4,533,679
Twentieth Century Growth Fund 4,402,998 3,411,401
Fidelity Magellan Fund 5,429,758 4,195,673
T. Rowe Price Science & Technology Fund 4,464,347 1,752,302
The aggregate proceeds from transactions in the Plan's mutual fund investments
was $7,288,896 for the year ended December 31, 1999. The related cost of these
transactions was $6,968,304, resulting in a realized gain totaling $320,592 for
the year ended December 31, 1999. Realized gains and losses on investments are
included in the caption Net appreciation on investments in the Statement of
Changes in Net Assets Available for Plan Benefits.
Cost is determined using the revalued cost method. Unrealized appreciation on
Plan assets was $4,375,781 and $2,962,334 for the years ended December 31, 1999
and 1998.
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.
NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS
In September 1999, the Financial Accounting Standards Board issued Statement of
Position 99-3, "Accounting for Reporting of Certain Defined Contribution Plan
Investments and Other Disclosure Matters" ("SOP 99-3"), which changed the
presentation of the Statement of Changes in Net Assets Available for Plan
Benefits, eliminating the requirement to present earnings and expenses by
investment fund. The Plan adopted SOP 99-3 for the Plan year end December
31,1999. The December 31, 1998 financial statements have been conformed to the
SOP 99-3 presentation for comparability purposes.
<PAGE> 13
Schedule I
Page 1 of 3
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value
--- --- ----------------- --- ---------------------- --- -------------
<S> <C> <C> <C>
Cash $ 213,307
* Schwab Stable Value Fund 499,819 6,068,851
Invesco Total Return Fund 64,797 1,876,522
Aim Charter Fund 286,820 5,300,431
Twentieth Century Select Fund 99,183 5,224,957
Fidelity Magellan Fund 39,741 5,429,758
Twentieth Century Growth Fund 136,400 4,402,998
T. Rowe Price Science & Technology Fund 70,073 4,464,347
T. Rowe Price New Horizons Fund 37,979 1,045,555
Scudder Global Fund 28,299 883,494
Vanguard Index Extended Market Fund 24,103 893,486
UAM FMA Small Company Portfolio Fund 18,415 258,544
Personal Choice Retirement Account:
Cash and Equivalents 180,951
Common Stocks:
Actel Corp. 500 12,000
Albertsons, Inc. 807 26,047
Alottafun, Inc. 250 172
Applied Micro Circuits Corp. 150 19,088
At Home Corp. Class A 300 12,863
Bank One Corp 810 25,920
Banta Corp. 509 11,486
Brush Wellman, Inc. 1,000 16,813
Cadence Design Systems, Inc. 500 12,000
CHS Electronics, Inc. 1,000 1,125
Cohu, Inc. 1,600 49,600
Compaq Computer Corp. 250 6,766
Com21, Inc. 1,000 22,438
Cutter & Buck, Inc. 3,275 49,533
CVS Corp. 802 31,995
Cypress Semiconductor Corp. 150 4,856
Dell Computer Corp. 250 12,750
First Sec Corp. 750 19,148
Gliatech, Inc. 200 3,325
Home Depot, Inc. 150 10,340
IFR Systems Inc. 2,000 20,124
IOMega Corp. 500 1,688
J P M Company 200 1,575
* Keithley Instruments, Inc. 13,695 279,045
Keycorp, Inc. 50 1,106
</TABLE>
<PAGE> 14
Schedule I
Page 2 of 3
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value
--- --- ----------------- --- ---------------------- --- -------------
<S> <C> <C> <C>
Komag 100 313
Kulicke & Soffa Industries, Inc. 300 12,769
Lucent Technologies 165 12,382
Mattson Technology, Inc. 400 6,850
National Semiconductor Corp. 1,000 42,812
NCS Healthcare, Inc. Class A 4,000 9,625
Officemax, Inc. 3,000 16,313
Pairgain Technologies 500 7,094
PictureTel Corp. 525 2,264
PMC-Sierra, Inc. 100 16,031
Reliant Energy, Inc. 51 1,162
RF Micro Devices, Inc. 100 6,844
Solectron Corp. 245 23,306
Spyglass, Inc. 100 3,792
State Street Corp. 400 29,224
Steris Corp. 500 5,125
Sterling Commerce 900 30,600
Tyco International Ltd. 200 7,800
United Parcel Service Class B 100 6,900
Varco International, Inc. 200 2,038
Vishay Intertechnology, Inc. 656 20,746
Zoltek Companies, Inc. 100 863
Zoom Telephonics, Inc. 200 1,688
-------
Total Common Stocks 918,344
-------
Mutual Fund:
Firsthand Communication 185 2,710
Firsthand E-Commerce Fund 300 4,464
Firsthand Technology Innovators Fund 72 3,572
Firsthand Technology Leaders Fund 90 4,035
Firsthand Technology Value Fund 79 7,118
Invesco Technology II 189 15,287
Janus Enterprise Fund 39 3,026
Janus Global Technology Fund 92 2,831
Midas Fund 27,919 37,970
Munder Netnet Fund Class A 34 2,561
</TABLE>
<PAGE> 15
Schedule I
Page 3 of 3
KEITHLEY INSTRUMENTS, INC.
RETIREMENT SAVINGS TRUST AND PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT DECEMBER 31, 1999
<TABLE>
<CAPTION>
(a) (b) Identity of Issue (c) Number of Shares/Units (e) Current Value
--- --- ----------------- --- ---------------------- --- -------------
<S> <C> <C> <C>
Profundsultraotc Fund 254 25,108
Vanguard Capital Opportunity Fund 1,092 26,223
Vanguard Growth Index Fund 152 6,005
---------
Total Personal Choice Retirement Account 1,240,205
---------
Participant Loans, interest rates from 8 to 11% per
annum 215,510
---------
</TABLE>
(*) 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 27, 2000 /s/ Mark J. Plush
------------------------------------------
Mark J. Plush
Vice President and Chief Financial Officer
Keithley Instruments, Inc.
