Exhibit 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
     This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into on this 29th day of September, 2010 (the “Effective Date”) by and
between Keithley Instruments, Inc., an Ohio corporation (the “Company”), and
Mark J. Plush (the “Employee”).
RECITALS
     WHEREAS, the Company and the Employee are party to that certain Employment
Agreement dated April 7, 1994 (the “Original Employment Agreement”), which was
amended by the Amendment to Employment Agreement dated December 31, 2008 (the
“Amendment” and, as amended the “Amended Agreement”); and
     WHEREAS, the Company and the Employee desire to further amend the Amended
Agreement to provide for certain additional terms and to restate the Amended
Agreement to incorporate the Amendment and these additional terms;
     NOW, THEREFORE, the Amended Agreement is hereby amended and restated in its
entirety as set forth below, effective as of the date hereof:
I. Term of Agreement
     A. General
          The term of this Agreement commenced on April 7, 1994 and shall
continue through and including April 7, 2011, unless sooner terminated pursuant
to Section VI or XIV hereof. After the original term, the Agreement is renewable
automatically for successive one

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year terms unless either party gives the other party written notice of
non-renewal at least thirty (30) days before the end of the term of the
Agreement.
     B. Change of Control
In the event that Joseph P. Keithley and/or trusts or partnerships of which
Mr. Keithley is a trustee or partner cease to have more than fifty percent (50%)
of the voting power of the Company’s voting stock (“Change of Control”) during
the term of this Agreement, as set forth above, the term of this Agreement shall
be extended so that the term shall not end prior to thirty-six (36) months
following the date of the Change of Control.
II. Responsibility
          It is agreed that the Employee is hereby employed by the Company with
responsibility to perform such duties, consistent with his position, as shall be
assigned to him by the Chief Executive Officer or Board of Directors of the
Company.
III. Accountability
          It is agreed that in exercising his responsibilities, the Employee
will be accountable to the Company’s Board of Directors and its Chief Executive
Officer. The Employee agrees to: (i) devote his business time and efforts
full-time to the affairs of the Company and its affiliates, and (ii) use his
best efforts to promote the interests of the Company and its affiliates.
IV. Remuneration
     A. Base Salary
          The Employee will be employed beginning on the Effective Date and
during the term of this Agreement continuing thereafter at an annual base salary
of not less than $255,000, paid on a monthly basis. This base salary may be
increased, but not decreased, without the

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Employee’s consent, at the discretion of the Compensation Committee of the Board
of Directors of the Company.
     B. Additional Compensation
          The Employee shall be eligible to participate in incentive, stock
option, profit-sharing, annual cash bonus, deferred compensation and similar
plans maintained by the Company for the benefit of its executives.
V. Other Employee Fringe Benefits
          The Employee shall be included to the extent eligible thereunder (at
the expense of the Company, if provided at Company expense for other executives
of the Company with a comparable level of responsibility) under any and all
existing plans or arrangements (and any plans or arrangements which may be
adopted) providing benefits for its employees, including but not limited to
group life insurance, hospitalization, medical, pension, automobile, financial
services and any and all other similar or comparable benefits as may be in
effect for other executives of the Company with a comparable level of
responsibility from time to time during the term of this Agreement. Additional
or improved fringe benefits are to be calculated for and awarded to the Employee
in at least as beneficial a manner as they are calculated for and awarded to
such other executives.
          Nothing in this Agreement shall adversely affect the rights of the
Employee or his beneficiaries under the present or any future retirement,
profit-sharing, insurance, or other fringe benefit or compensation plans or
arrangements which the Company now has or may adopt for its employees, and no
rights of the Employee thereunder shall be forfeited by any action set forth in
this Agreement unless so provided in such plans or arrangements.

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VI. Termination of Employment
     A. Death
          If the Employee shall die during the term of this Agreement, the
duties of the Company and the Employee, one to the other, under this Agreement
shall terminate as of the date of the Employee’s death. Notwithstanding the
sentence immediately preceding, the death of the Employee shall not adversely
affect the rights of his beneficiaries to any benefits under the Company’s
employee benefit plans or arrangements in which he may be a participant, in
accordance with the terms thereof, including but not limited to those referred
to in Section VI(F) hereof.
     B. Disability
          If the Employee shall become disabled for purposes of the Company’s
long-term disability program during the term of this Agreement the duties of the
Company and the Employee, one to the other, under this Agreement shall terminate
as of the date the Employee is determined to be disabled. Notwithstanding the
sentence immediately preceding, the disability of the Employee shall not
adversely affect his rights to any benefits under the Company’s employee benefit
plans or arrangements in which he may be a participant, in accordance with the
provisions thereof, including but not limited to those referred to in
Section VI(F) hereof.
     C. Resignation
          i. If the Employee voluntarily leaves the employ of the Company during
the term of this Agreement for any reason, other than Good Reason (as defined
below) at the effective time of or following a Change of Control, the duties of
the Company and the Employee, one to the other, under this Agreement shall
terminate as of the date of the Employee’s termination of employment.
Notwithstanding the sentence immediately preceding, such voluntary termination
of employment by the Employee shall not adversely affect his rights to any

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benefits under the Company’s employee benefit plans or arrangements in which he
may be a participant, in accordance with the provisions thereof, including but
not limited to those referred to in Section VI(F) hereof.
          ii. If the Employee voluntarily leaves the employ of the Company for
Good Reason at the effective time of or following a Change of Control, the
Company shall provide the Employee with the benefits hereinafter specified in
accordance with the terms hereof. Notwithstanding the sentence immediately
preceding, such voluntary termination of employment by the Employee shall not
adversely affect his rights to any benefits under the Company’s employee benefit
plans or arrangements in which he may be a participant, in accordance with the
provisions thereof, including but not limited to those referred to in
Section VI(F) hereof.
          As used herein the words “Good Reason” shall be deemed to mean the
Employee’s termination of his employment from the Company upon or within six
months after one or more of the following occurs without the consent of the
Employee (which consent the Employee shall be under no obligation to give):
               (a) a significant diminution in the Employee’s responsibilities,
power or authority in comparison with the responsibilities, power or authority
the Employee had at or about the time of the Change of Control, other than any
diminution in the Employee’s responsibilities solely as a result of the fact
that the entity for which the Employee is providing services no longer has
securities that are listed or publicly traded (such as the elimination of any
responsibility for Securities and Exchange Commission reporting or investor
relations activities);
               (b) the assignment of the Employee to duties that are
inconsistent with the duties assigned to the Employee on the date on which the
Change of Control occurred, and

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which duties the Company persists in assigning to the Employee for a period of
fifteen days following the prompt written objection of the Employee;
               (c) (I) a material reduction in the Employee’s base salary or
incentive or bonus opportunity as a percentage of base salary, (II) a material
reduction in the aggregate value of equity grants under the Company’s
equity-based award plans or any substitute therefor (using the same methodology
for valuing equity grants as the Compensation and Human Resources Committee of
the Company’s Board of Directors used for the equity grants most recently
awarded to the Employee as of the date of the Change in Control), (III) a
material reduction in group health, life, disability or other insurance programs
(including any such benefits provided to the Employee’s family) or pension,
retirement or profit-sharing plan benefits (other than pursuant to a general
amendment or modification affecting all plan-covered employees), (IV) the
establishment of criteria or factors to be achieved for the payment of incentive
or bonus compensation that are substantially more difficult than the criteria or
factors established for other similar executive officers or key employees of the
Company, (V) the failure to promptly pay the Employee any incentive or bonus
compensation to which the Employee is entitled through the achievement of the
criteria or factors established for the payment of such incentive or bonus
compensation, (VI) the exclusion of the Employee from any plan, program or
arrangement in which similarly situated executives or key employees of the
Company are included, or (VII) a material breach by the Company of the terms of
this Agreement or any other material written agreement between the Company and
the Employee, except to the extent that the nature of such breach is covered in
another section of this “Good Reason” definition;
               (d) the Company requires the Employee to be based at or generally
work from any location more than fifty (50) miles from the Company’s
headquarters in Solon,

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Ohio or the Company, over the course of any calendar month, requires the
Employee to be away from the Company’s headquarters in Solon, Ohio for more than
50% of the business days during that month; or
               (e) the failure of any successor to the Company to expressly
adopt this Agreement.
     D. Termination by Company
          The Company may terminate the Employee’s employment at any time,
without cause, subject to providing the benefits hereinafter specified in
accordance with the terms hereof. The Company may terminate the Employee’s
employment at any time “For Cause”. In the event the Company shall terminate the
Employee’s employment For Cause, the duties of the Company and the Employee, one
to the other, under this Agreement shall terminate as of the date of the
Employee’s termination of employment. Notwithstanding the sentence immediately
preceding, such termination of employment of the Employee by the Company For
Cause shall not adversely affect his rights to any benefits under the Company’s
employee benefit plans or arrangements in which he may be a participant, in
accordance with the provisions thereof, including but not limited to those
referred to in Section VI(F) hereof.
          As used herein the words “For Cause” shall be deemed to mean and
include (i) the Employee’s conviction of either a felony involving moral
turpitude or any crime in connection with his employment by the Company which
causes the Company or any affiliated company a substantial detriment; or
(ii) the Employee’s refusal to submit to a medical examination if directed to do
so by the Board to determine whether the Employee is disabled under subsection
VI(B) hereof; or (iii) the Employee’s willful failure to take actions permitted
by law and necessary to implement policies of the Board which the Board has
communicated to him in writing, provided that minutes of a Board meeting
attended in its entirety by the Employee

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shall be deemed communicated to the Employee; or (iv) the Employee’s continued
failure to perform his duties as an executive officer of the Company as set
forth in the attached job description (provided that the Employee’s competence
in such performance shall be irrelevant); or (v) any condition which either
resulted from the Employee’s habitual drunkenness or addiction to narcotics, or
resulted from any intentionally self-inflicted injury; or (vi) acting in breach
or contravention of any material obligation, covenant or agreement of the
Employee contained in this Agreement, expressly including without limitation,
the non-competition and non-solicitation covenants set forth in Section X hereof
or the provisions of the “Employee Agreement” or any similar agreement regarding
confidentiality.
     E. Notice of Termination
          Any termination of the Employee’s employment by the Company or by the
Employee shall be communicated by written Notice of Termination to the other
party hereto which notice shall set forth the effective date of such termination
which shall not be earlier than the date of mailing, or delivery by other means,
of the notice.
     F. Continuation of Employee Benefits
          The death, disability or termination of employment of the Employee,
whether or not voluntary and whether or not For Cause or Good Reason shall not
result in the loss by the Employee or his beneficiaries of any benefits under
any life insurance, death benefit, pension, profit sharing, stock option,
medical, deferred compensation or other employee benefit plan or arrangement
except as provided for in such plan or arrangement.
VII. Compensation Upon Involuntary Termination Other Than For Cause
          Except as provided in Section VIII hereof, if the Employee’s
employment with the Company shall be terminated, during the term of this
Agreement, by the Company other than For Cause, then the Employee shall be
entitled to the benefits provided below:

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  i.   the Company shall pay the Employee, on a monthly basis, his full monthly
base salary determined as of the date of his termination of employment, for six
months following his termination of employment, or one month following his
termination of employment for each full year of his service with the Company,
whichever is greater, up to a maximum of eighteen (18) months;     ii.   full
participation in the annual Extra Compensation Plan if his termination of
employment is on or subsequent to June 30 of the respective fiscal year;    
iii.   full participation in any performance award if the performance measuring
period ends within six months following his termination of employment;     iv.  
the choice of exercising all vested stock options up to thirty days after his
termination of employment, provided this provision shall not extend the term of
his options beyond their terms as initially granted, and the Company agrees to
request the Compensation Committee of its Board of Directors to permit such
exercise pursuant to Section 6(g) of the Keithley Instruments, Inc. 1984 Stock
Option Plan or the comparable provision of any future plan;     v.   the
Employee shall be deemed to have vested in his stock, if any, acquired under the
Company’s restricted stock plan at a rate of 20% per year of service subsequent
to the date of sale of such stock to the Employee;     vi.   the Company shall
maintain in full force and effect, following the termination of the Employee’s
employment for six-months following such termination of employment or for one
month following his termination of employment for each full year of his service
with the Company, whichever is greater, up to a maximum of eighteen (18) months,
all employee fringe benefit plans and arrangements in which he was entitled to
participate immediately prior to the date of the Notice of Termination, provided
that if such continued coverage would jeopardize the tax qualified status of
such plan or arrangement with respect to any other employee or the Company the
Company may elect to provide the said benefit on an individual basis or provide
cash compensation equivalent to the benefit which otherwise would have been
provided so that the Employee shall suffer no financial loss whatsoever due to
such substitution;     vii.   in addition to the retirement benefits to which
the Employee is entitled under the Company’s Employees’ Pension Plan, as amended
from time to time (the “Pension Plan”), the Company shall pay a supplemental
retirement benefit hereunder, which benefit (except as provided below) shall be
determined in accordance with, and payable in the same form and at the same
times provided in, the Pension Plan. Such benefit shall equal (a) minus
(b) below where:

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  (a)   equals the benefit to which the Employee would be entitled under the
Pension Plan if:

  (I)   he were fully vested;     (II)   his “compensation”, as that word is
defined in the Pension Plan, were, at all times while he was a participant in
said Pension Plan, equal to the annual amount of such compensation for that
Company fiscal year from among the final three (3) Company fiscal years ending
prior to his termination of employment for which said compensation was the
highest;     (III)   his “1977 monthly compensation”, “1983 monthly
compensation” and any similar updated monthly compensation were calculated by
dividing his “compensation”, as defined in Section VII, (vii), (a), (II) above,
by twelve (12); and     (IV)   he was credited with his actual years of
“credited service” as determined under the Pension Plan; and

  (b)   equals the Employee’s actual benefit payable under the Pension Plan; and

  viii.   reimbursement of fees for outplacement services actually used to the
extent approved by the Chief Executive Officer in his sole discretion, but not
in excess of $10,000.

VIII.   Compensation Upon Involuntary Termination Other Than For Cause or
Voluntary Termination for Good Reason following a Change of Control

               If at the effective time of or following a Change of Control, the
Employee’s employment with the Company shall be terminated (a “Triggering
Event”) (a) by the Company other than For Cause, or (b) by the Employee for Good
Reason, then the Employee shall be entitled to the benefits provided below, and
to the extent such benefits call for a lump sum cash payment, the payment of
such benefits shall be made in one lump sum cash payment on or about the
ninetieth (90th) day after the Triggering Event, subject, however, to
Section IX:

  i.   the Company shall pay the Employee an amount equal to 1.5 times
Employee’s Annual Salary in equal monthly installments over a period of
twenty-four (24) months; “Employee’s Annual Salary” means the

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      Employee’s annual base salary at the time of a Triggering Event or at the
time of the Change of Control, whichever is higher;

  ii.   full participation in the annual Extra Compensation Plan if his
termination of employment is on or subsequent to June 30 of the respective
fiscal year;     iii.   except as provided in subsection (iv) below, the awards
granted to the Employee under the Company’s 1992 Stock Incentive Plan and 2002
Stock Incentive Plan, as amended (collectively, the “Plans” and each, a “Plan”)
shall be treated in the manner provided in the applicable Plan and award
agreements thereunder, including with respect to those awards outstanding
immediately prior to a “Change of Control” as defined in the applicable Plan,
becoming fully vested and, in the case of stock options, fully exercisable, upon
such Change of Control (as defined in the applicable Plan);     iv.   the number
of common shares of the Company that the Employee shall be entitled to receive
under the performance award units granted to the Employee under the Plans and
the fiscal years 2010 through 2012 award program that are outstanding
immediately prior to the Change of Control (as defined in the applicable Plan)
that occurs prior to the Vesting Date (as defined in the applicable Performance
Award Agreement) shall be determined based on the greater of (i) the Initial
Award set forth in the Performance Award Agreement or (ii) the number of shares
that the Employee would be entitled to receive if the Company’s actual
performance through the date of a Change of Control (as defined in the
applicable Plan) event was deemed to have occurred at the Vesting Date, but not
in excess of 1.5 times the Initial Award level;     v.   the Company shall
maintain in full force and effect, following the Triggering Event for eighteen
(18) months, all employee fringe benefit plans and arrangements other than life,
medical, hospitalization, vision, dental/health plans (which are addressed in
subsection (vi) below) in which he was entitled to participate immediately prior
to the date of the Notice of Termination, provided that if such continued
coverage would jeopardize the tax qualified status of such plan or arrangement
with respect to any other employee or the Company the Company may elect to
provide the said benefit on an individual basis or provide cash compensation
equivalent to the benefit which otherwise would have been provided so that the
Employee shall suffer no financial loss whatsoever due to such substitution;    
vi.   the Company shall, at its expense, provide for the Employee, and the
Employee’s family, to participate in the life, medical, hospitalization, vision,
and dental/health plans and programs that the Company or its successor maintains
during the Term (the “Company Health and Welfare Benefits”) on the same basis as
other full-time salaried employees of the

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      Company or its successor who participate in such benefit plans and
programs and providing for coverage in an amount not less than that provided on
the date on which the Change in Control occurred, until the earlier of (i) in
the event that the Employee shall become employed by another employer after a
Triggering Event, the date on which the Employee shall be eligible to receive
benefits from such employer which are substantially equivalent to or greater
than the benefits the Employee and the Employee’s family received from the
Company or (ii) the twenty-four (24) month anniversary of the Triggering Event
(such period, the “Benefits Continuation Period”); provided, however, that if
the Employee’s continuation in some or all of the Company Health and Welfare
Benefits is not available, then the Company shall make monthly payments to the
Employee for each month during the Benefits Continuation Period for which such
Company Health and Welfare Benefits are not available equal to the actual cost
to the Employee on a pre-tax basis, of the coverage for such Employee, with
respect to those benefits among the Company Health and Welfare Benefits not
available. To the extent permitted by law and the applicable benefit plan, the
Company’s health insurance continuation obligation otherwise available under the
COBRA rules will begin to run at the expiration of the period for which the
Company Health and Welfare Benefits are provided to the Employee under this
subsection (vi).

  vii.   In addition to the retirement benefits to which the Employee is
entitled under the Company’s Employees’ Pension Plan, as amended from time to
time (the “Pension Plan”), the Company shall pay a supplemental retirement
benefit hereunder, which benefit (except as provided below) shall be determined
in accordance with, and payable in the same form and at the same times provided
in, the Pension Plan. Such benefit shall equal (a) minus (b) below where:

  (a)   equals the benefit to which the Employee would be entitled under the
Pension Plan if:

  (I)   he were fully vested;     (II)   his “compensation”, as that word is
defined in the Pension Plan, were, at all times while he was a participant in
said Pension Plan, equal to the annual amount of such compensation for that
Company fiscal year from among the final three (3) Company fiscal years ending
prior to his termination of employment for which said compensation was the
highest;     (III)   his “1977 monthly compensation”, “1983 monthly
compensation” and any similar updated monthly compensation were calculated by
dividing his

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      “compensation”, as defined in Section VII, (vii), (a), (II) above, by
twelve (12); and

  (IV)   he was credited with his actual years of “credited service” as
determined under the Pension Plan; and

  (b)   equals the Employee’s actual benefit payable under the Pension Plan; and

  viii.   reimbursement of fees for outplacement services actually used to the
extent approved by the Chief Executive Officer in his sole discretion, but not
in excess of $10,000.

IX. Certain Payment Restrictions, To Comply With Section 409A.
          Notwithstanding the provisions of Section VII or VIII hereof, the
following restrictions shall be imposed upon certain of the payment and
reimbursement rights creating or arising thereunder to conform such payment and
reimbursement rights to the requirements imposed by Section 409A the Internal
Revenue Code of 1986, as amended (the “Code”), and related rulings and
regulations (“Code Section 409A”):

  i.   A termination of employment by the Company or the Employee shall entitle
the Employee to receive the payment(s) and rights identified in Section VII and
Section VIII hereof (as modified by the provisions of this Section IX) only if
and when such termination of employment also constitutes a “Separation from
Service” (as defined under Code Section 409A and related regulations) from the
Company and all those corporations which are part of the controlled group of
corporations of which the Company is a member (within the meaning of Code
Section 414(b) and related regulations), and all those non-corporate entities
which are under common control with the Company (within the meaning of Code
Section 414(c) and related regulations) (collectively, the “Related Companies”).
    ii.   In the event the Employee qualifies as a “Specified Employee” (as
herein defined) on the date such Employee’s Separation from Service occurs, any
payment otherwise scheduled to be paid to the Employee under Section VII or
Section VIII hereof prior to the expiration of six (6) months following the date
of such Employee’s Separation from Service from the Company and all Related
Companies (as defined in this Section IX) shall be held by the Company, and paid
to the Employee (or in the event of his intervening death, to his estate) in a
single sum on the first business day following the expiration of such six
(6) month period, except as set forth in Section (IX)(iv) below.

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      For this purpose, an employee qualifies as a “Specified Employee” if, as
of the date of his Separation from Service, he is a “key employee” of the
Company or any Related Company and the Company’s stock (or the stock of any
Related Company) is publicly traded on an established securities market. An
employee is a key employee if he or she meets the requirements of Code
Section 416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the
regulations thereunder and disregarding Section 416(i)(5)) at any time during a
given 12-month period commencing on January 1st and ending on the ensuing
December 31st. In the event the employee qualifies as a key employee during such
calendar year period, he shall qualify as a Specified Employee throughout the
12-month period commencing on the April 1st next following the close of such
calendar year period and ending on the ensuing March 31st. For this purpose, the
Employee’s compensation (used to determine whether he is a “key employee”) shall
be determined using the definition of compensation provided under Treasury
Regulation Section 1.415(c)-2(a).

  iii.   Any reimbursement for fringe benefits and arrangements or Company
Health and Welfare Benefits that needs to be made to the Employee in accordance
with subsection VII(vi), subsection VIII(v) and subsection VIII(vi) hereof,
shall be made on or before the last day of the Employee’s taxable year following
the taxable year in which such expense was incurred; any cash compensation
becoming due and payable to the Employee in accordance with subsection VII(vi),
subsection VIII(v) and subsection VIII(vi) hereof shall be made on or before the
last day of the Employee’s taxable year in which the Employee acquires the right
to receive such cash compensation. Any such reimbursement or compensation shall
be paid to the Employee (or in the event of his intervening death, to his
estate).     iv.   Payment to the Employee of the supplemental retirement
benefit described in subsection VII(vii) or subsection VIII(vii) hereof shall
take the form of a single life annuity, commencing on the later of (I) the first
day of the first calendar month next following such Employee’s Separation from
Service from the Company and all Related Companies, or (II) the first day of the
first calendar month following the Employee’s sixty-fifth (65th) birthday;
provided, that if the Employee is a Specified Employee on the date his
Separation from Service occurs (as herein defined), any monthly payments
otherwise payable to such Employee during the six (6) month period commencing on
the date of such Employee’s Separation from Service shall be withheld by the
Company and paid to the Employee (or in the event of his intervening death, to
his estate) on the on the first business day following the expiration of such
six (6) month period following the date of his Separation from Service. Any
adjustments in the timing or the form of payment, needed to conform the
Employee’s supplemental retirement benefit described in subsection VII(vii) or
subsection VIII(vii) hereof to the preceding sentence, shall employ the
actuarial factors used

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      under the Pension Plan to pay different types of annuities (determined as
of the date the Employee’s Pension Plan benefits commence).

  v.   Any Company reimbursement of the Employee’s outplacement expenses in
accordance with subsection VII(viii) or subsection VIII(viii) hereof shall be
made on or before the last day of the Employee’s taxable year following the
taxable year in which such expenses were incurred. Any such reimbursement shall
be paid to the Employee (or in the event of his intervening death, to his
estate).     vi.   For purposes of Code Section 409A Code, each payment of
compensation under the Agreement shall be treated as a separate payment of
compensation. Any amounts payable solely on account of an involuntary
termination shall be excludible from the requirements of Code Section 409A,
either as separation pay or as short-term deferrals, or both, to the maximum
possible extent. To the extent that the amount of payments set forth in
Section VII(i), after application of the foregoing, would constitute deferred
compensation subject to the requirements of Code Section 409A that, because of
the provisions of Section VIII hereof, would violate one or more provisions of
Code Section 409A, the amount of such payments shall be reduced to the maximum
amount that can be paid without causing such payments to become subject to Code
Section 409A.

          Nothing in this Agreement shall be construed as amending any
compensation or fringe benefit plan or arrangement of the Company. All rights of
the Employee under any such plan or arrangement upon his termination of
employment must be determined under the terms of such plans or arrangements at
the time of the Employee’s termination of employment.
X. Covenant Not To Compete
          The Employee agrees that during his employment with the Company, and
after his termination of employment for as long as payments hereunder are made
by the Company, the Employee shall remain in full compliance with the following
conditions:

  i.   He must not accept employment either directly or indirectly, with any
competitor of the Company.     ii.   He must not allow the use of his name by or
in any competitive business.     iii.   He must not employ for himself the
services of any other employee of the Company without the written permission of
the Company.

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  iv.   He must keep himself at all times reasonably available for consultation
by the officers and directors of the Company; provided that no such consultation
shall be required after the Employee attains age sixty-five (65). In the event
he is called upon to render any such substantial consulting services, he shall
receive additional compensation in a reasonable amount, and any travel or other
expenses which may be required in connection with such services shall be paid by
the Company.

          The Company shall make payments under this Agreement only so long as
the Employee complies with the above conditions except to the extent expressly
waived in writing by the Board of Directors. In the event that the Employee
shall be determined to be guilty of violation of any of the foregoing conditions
by agreement or by the reasonable determination of the Board of Directors and
the Employee does not correct such violation within a reasonable time, as
determined by the Board after notice to him in writing, the Company may
thereafter suspend or terminate in whole or in part any further payments under
this Agreement.
          This Agreement shall not be deemed to modify in any way any agreement
between the Company and the Employee concerning the protection of Company
secrets.
XI. Dissolution, Merger or Consolidation
          If the Company shall at any time be merged or consolidated into or
with any other corporation or corporations or if substantially all the assets of
the Company are sold or otherwise transferred to another corporation or party,
the provisions of this Agreement shall be binding upon and inure to the benefit
of the corporation surviving or resulting from such merger or consolidation or
to which such assets shall be sold or transferred, and this provision shall
apply in the event of any subsequent sale, merger, consolidation or transfer.
XII. Non-Assignability
          This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and to their successors. The Employee may not assign, pledge or
otherwise encumber any

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rights or interests hereunder without the written consent of the Company. The
Company may not assign this Agreement other than as set forth in Section XI
above.
XIII. Entire Agreement of the Parties
          This Agreement expresses the entire agreement of the parties, and all
promises, representations, understandings, arrangements and prior agreements are
merged herein and superseded hereby.
XIV. Amendments, Termination
          Except as herein provided, this Agreement cannot be terminated by
unilateral action of either party. However, this Agreement can be changed,
modified or terminated by mutual written agreement. No person, other than
pursuant to a resolution of the Board of Directors of the Company (or the
Compensation and Human Resources Committee thereof), shall have any authority on
behalf of the Company to agree to modify, change or terminate this Agreement or
anything in reference thereto, and any such modification, change or termination
must be in writing and signed by both parties.
XV. Laws Governing
          This Agreement has been entered into in the State of Ohio, and shall
be construed, interpreted and governed in accordance with the laws of the State
of Ohio.
XVI. Code Section 409A Compliance
          This Agreement is intended to comply with the provisions of Code
Section 409A and related rulings and regulations (the “Section 409A Rules”). In
the event that any provision of this Agreement fails to satisfy the Section 409A
Rules, such provision shall be modified so as to comply with the Section 409A
Rules while preserving as closely as possible the substantive rights of the
Company and the Employee hereunder. The Company, acting in its discretion, will
identify any further Agreement provisions that need to be modified to conform
this Agreement to

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the requirements imposed by the Section 409A Rules and notify the Employee of
such modifications and seek his consent thereto. However, the Company is not
acting (and will not be held to have acted) as a guarantor of the federal tax
consequences of this Agreement, and in the event that the Company determines
that it is not feasible to modify a provision of this Agreement to conform such
provision to the Section 409A Rules, such provision shall be apply as
theretofore written without regard to the Section 409A Rules.

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          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its officers thereunto duly authorized, and the Employee has
hereunto set his hand, as of the day and year first above written.

            KEITHLEY INSTRUMENTS, INC.
      By:   /s/ Joseph P. Keithley        Joseph P. Keithley        Chairman,
Board of Directors and Chief Executive Officer 

            EMPLOYEE:       /s/ Mark J. Plush      Mark J. Plush           

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