Document:

EX-10.1

Exhibit 10.1

KEITHLEY INSTRUMENTS, INC.

2002 STOCK INCENTIVE PLAN

OPTION AGREEMENT

This option agreement (the “Agreement”) is made as of this      day of      , 20     ,
between Keithley Instruments, Inc., an Ohio corporation (the “Company”), and the key employee of
the Company indicated at the bottom of this Agreement (“Optionee”). Optionee hereby is granted
the option to purchase common shares of the Company, based on the number of shares and the
exercise price(s) indicated on the attached Notice of Grant of Stock Options attached as Exhibit A
hereto and incorporated herein by reference), subject to the vesting and other conditions set
forth in said Exhibit. Unless Exhibit A hereto clearly indicates that the Options are “incentive
stock options,” the Options shall be treated as non qualified stock options.

The rights described in this Agreement shall expire on      , 20     , subject to
early expiration pursuant to paragraph 5 or paragraph 7 hereof, where applicable (the “Expiration
Date”). This Agreement (including Exhibit A), and the options being granted hereunder (each, an
“Option”; together, the “Options”), are subject to the terms and conditions of the Keithley
Instruments, Inc. 2002 Stock Incentive Plan, as amended and then in effect (the “Plan”), except
where (and to the extent) this Agreement specifically modifies such terms and conditions. Subject
to such modifications, the Plan’s terms and conditions also are incorporated herein by this
reference. Additional terms and conditions of this Agreement are as follows:

	 	1.	 	Notice of Exercise: Optionee shall exercise all or any part of his
Options at any time after such Options first vest and become exercisable (the “Vesting
Date”) and prior to the Expiration Date. To exercise, Optionee shall provide written
notice to the Company by delivering a completed copy of the form attached hereto as
Exhibit B. Such written notice shall only be effective when received by the Company at
its principal offices; such written notice in any event shall—

	 	a.	 	State that Optionee is exercising one (1) or more Options in
accordance with this Agreement, indicate the number of Company common shares being
purchased, and specify the name(s), address(es) and social security (or other
identifying tax) number(s) of those persons or parties in whose name(s) such
common shares should be registered on the Company’s books and records;

	 	b.	 	Be signed by Optionee (or other person(s) entitled to exercise such
Options and, if being exercised by anyone other than Optionee, be accompanied by
proof satisfactory to counsel for the Company demonstrating that such person(s)
are entitled to exercise such Option(s)) and be in compliance with all relevant
laws and regulations;

	 	c.	 	Be accompanied by a written representation and warranty signed by
Optionee (or other exercising person) confirming the investment intent of such
person(s), in a form satisfactory to counsel for the Company; and

	 	d.	 	Be accompanied by payment (described in paragraph 2 hereof).

	 	2.	 	Determination and Payment of Purchase Price. Any Optionee or other
person exercising Options hereunder shall tender to the Company the stated price for
said Options based on the information provided in Exhibit A hereto, plus all applicable
federal, state and local withholding taxes and assessments (as determined by the
Company, acting in its sole discretion) (together, the “Purchase Price”). Upon
request, the Company shall provide Optionee with the information needed to determine
the Purchase Price. The Purchase Price shall be paid with cash or check, or with a
surrender of Company common shares having a fair market value on the date of exercise
equal to that portion of the Purchase Price for which payment in cash or check is not
made. The Committee may, in its sole discretion, specify other methods for exercising
Options or paying the Purchase Price, but shall only do so in writing.

	 	3.	 	Non-Transferability. Except for transfers that qualify as “Permitted
Transfers” (as defined in as provided in Section 7(d) of the Plan) or transfers that
are otherwise permitted under the terms of the Plan, Options shall not be transferable
by Optionee except as otherwise expressly permitted by the Plan. Likewise, except for
Options transferred in accordance with this paragraph (or where applicable, the terms
of the Plan), Options shall be exercisable only by Optionee for his own account (except
in the event of Optionee’s death or disability, in which event otherwise exercisable
Options held by Optionee at death or disability shall be exercisable only by or for
Optionee’s estate (in the case of death) or by Optionee’s legal representative (in the
case of disability)).

	 	4.	 	Restrictions on Exercise. Options are at all times subject to all
restrictions contained in this Agreement (and where not modified herein, in the Plan).
As a condition to any exercise of Options, the Company may require Optionee, or his
successor, to represent and warrant that he will comply with all applicable laws and
regulations or confirm certain factual matters, if requested by the Company’s legal
counsel.

	 	5.	 	Specific Option Expiration and Termination Rules. All Options not
previously exercised, or terminated as further provided in this paragraph, shall expire
no later than on the Expiration Date. Notwithstanding the preceding sentence, all
non-vested Options shall automatically terminate and expire on the date Optionee’s
employment as a Company employee ends (whether by death, disability, retirement or
otherwise). Options that are vested and exercisable on the date Optionee’s employment
as a Company employee ends shall nevertheless terminate prior to the Expiration Date on
the first to occur of the following:

	 	a)	 	Three (3) years following the date Optionee’s Company employment ends,
if such employment ends on account of Optionee’s normal, early or disability
retirement under the Keithley Instruments, Inc. Employees’ Pension Plan;

	 	b)	 	One (1) year following the date Optionee dies;

	 	c)	 	Ninety (90) days following the date Optionee’s Company employment
ends, if such employment ends involuntarily, as a result of furlough, discharge or
comparable event (other than death, as further described in (b) hereof); or

	 	d)	 	Immediately upon termination of Optionee’s Company employment, if such
employment ends by quit or discharge rather than by death or retirement (as
further described in (a) and (b) hereof, respectively).

In no event shall any of the events described in subparagraphs (a) – (d) hereof extend
any Options past their Expiration Date.

	 	6.	 	Coordination With Incentive Stock Option and Other Rules. None of the
terms, conditions or provisions found in this Agreement shall be interpreted or applied
to cause any Option granted under the Plan as an Incentive Stock Option to not qualify
under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or
cause any common share issued in connection with the exercise of an Option hereunder
not to be a fully paid and non-assessable common share of the Company.

	 	7.	 	Forfeiture; Set Off & Recoupment. Notwithstanding any other provision
of this Agreement or the Plan, Optionee’s rights hereunder with respect to the Options
evidenced hereby (whether or not then exercised or exercisable) shall immediately
terminate, and otherwise be subject to forfeiture, set off, reduction, and recoupment
for and against any claims the Company may have or asserts against Optionee. Without
limiting the generality of the preceding sentence, any of the following actions by
Optionee, taken while employed by the Company or within the three (3)-year period
commencing with the cessation of Optionee’s Company employment, shall terminate
immediately Optionee’s rights under this Agreement and under the Plan, and shall
presumptively be deemed to damage the Company in an amount at least equal to the value
of the Options evidenced hereby and thereafter be subject to set off, reduction and
recoupment by the Company:

	 	a)	 	Any direct or indirect disclosure or publication (or, during the three
(3)-year period commencing with the cessation of Optionee’s Company employment,
any use) by Optionee of any Company trade secret or confidential information;

	 	b)	 	Any material violation by Optionee of the terms of any written
agreement between Optionee and the Company;

	 	c)	 	Any action by Optionee, taken in direct or indirect competition with
the Company (including, without limitation, any solicitation or acceptance by
Optionee of any employment, agency, consultation or affiliation agreement,
arrangement or understanding, involving any competitor of the Company, or any
subsidiary or affiliate thereof, determined as of the earlier of the date of such
action or the date of the cessation of Optionee’s Company employment); or

	 	d)	 	Any attempt by Optionee to induce any Company employee or any
consultant, agent or sub-agent under contract with the Company to terminate his or
her employment or other contractual relationship with the Company; and/or

In the event of any violation by Optionee of any of subparagraphs (a), (b), (c) or (d)
hereof, all Options then held by Optionee hereunder (whether or not then vested and
exercisable) shall immediately terminate, be extinguished and forfeited, and have no
further effect. In addition, with respect to Options already exercised, Optionee shall
promptly forfeit, relinquish and surrender to the Company, in cash or in whole shares of
the Company (or any combination thereof), all gains, profits, and income Optionee has
realized from the exercise of said Options (as reported by the Company for federal tax
purposes), net of any amounts withheld by the Company in connection with said exercise
of said Options. Any failure by the Company to assert its set off, forfeiture and
recoupment rights under this paragraph with respect to specific claims against Optionee
shall not waive, or operate to waive, the Company’s right to later assert its rights
hereunder with respect to other or subsequent claims against Optionee.

	 	8.	 	Choice of Law; Consent to Jurisdiction. Optionee hereby consents and
agrees that Ohio law controls the parties’ procedural and substantive rights and
obligations under this Agreement, and also consents and agrees to the jurisdiction of
the state court of general jurisdiction sitting in Cuyahoga County, Ohio, as the
exclusive forum for resolving all claims and issues arising under, out of, or in
respect of, this Agreement.

	 	9.	 	Severability; Survival of Certain Provisions. The unenforceability of
one (1) or more of the provisions in this Agreement shall not vitiate or render void or
unenforceable the remaining provisions of this Agreement; rather, such remaining
provisions will remain fully enforceable to the extent permitted by law.
Notwithstanding any contrary provision contained in the Plan or this Agreement, the
provisions of paragraph 7 hereof shall specifically survive the termination, lapse or
expiration of the Plan and/or this Agreement.

1

	 	10.	 	Definitions. Unless otherwise defined in this Agreement, capitalized
terms will have the same meanings given them in the Plan.

KEITHLEY INSTRUMENTS, INC.

	 	 	 
	DATE OF GRANT:      

	 	By:      
	 
	 	 
	
 
	 	Title: Chairman of the Board,

President and

Chief Executive Officer

ACCEPTANCE BY OPTIONEE

The undersigned has read and understood, and hereby accepts, the terms, conditions, and
obligations and restrictions imposed hereunder, as well as the terms, conditions and limitations
of the Plan to which this Agreement is subject and subordinate.

	 	 	 
	DATE:      

	 	     

Optionee
	 
	 	 

2EX-10.2

Exhibit 10.2

KEITHLEY INSTRUMENTS, INC.

2002 STOCK INCENTIVE PLAN

PERFORMANCE AWARD AGREEMENT

This performance award agreement (the “Agreement”) is made as of this      day of
     , 20     (the “Award Date”), between Keithley Instruments, Inc., an Ohio corporation (the
“Company”), and that key employee of the Company named at the bottom of this Agreement (“Key
Employee”). Subject to the terms, conditions and limitations set forth in this Agreement
(including, without limitation, the vesting provisions of paragraph 5 hereof and the performance
standards and operative provisions set forth in paragraph 1 hereof and in Exhibits A, B and C
hereto), Key Employee hereby is granted and awarded      performance units, each unit
representing one common share of the Company (the “Initial Award”). The number of Company common
shares issued to or in respect of Key Employee (if any) shall be determined strictly in accordance
with this Agreement, based on the number of units contained in any Final Award (as defined
herein), subject to the general provisions of the Plan.

The number of units comprising the Initial Award shall be subject to adjustment, expansion or
reduction, to take into account the revenue performance of the Company as compared to its relevant
competition (while retaining acceptable rates of return) during the thirty-six (36)-month period
commencing      , 20     and ending      , 20     (the “Performance Period”), as further
provided in paragraph 1 hereof and in Exhibits A, B and C hereto. The actual number of Company
common shares issued to Key Employee (if any) will only be determined by applying the performance
criteria to the Initial Award, and determining the number of units finally awarded to such
Employee (the “Final Award”).

All rights arising under or in connection with this Agreement, except with respect to those
Company common shares actually issued to or in respect of Key Employee in respect of such
Employee’s Final Award, shall expire on      , 20     , or if earlier, such earlier date as is
specified in this Agreement (the “Expiration Date”). This Agreement (including any and all
incorporated Exhibits hereto) and any Final Award made hereunder, are subject to the terms and
conditions of the Keithley Instruments, Inc. 2002 Stock Incentive Plan, as amended and then in
effect (the “Plan”). The Plan’s terms and conditions are incorporated herein by this reference.
Additional terms and conditions of this Agreement are as follows:

	 	1.	 	Performance Standards; Determining the Final Award. The size of Key
Employee’s Final Award will depend on the Company’s performance during the Performance
Period.

(a) General Performance Standards. To determine Key Employee’s Final Award, the
number of units comprising Key Employee’s Initial Award are adjusted (ranging from a
maximum of twice the number of units comprising the Initial Award, to a minimum of no
units), based on program metrics that compare the growth in the Company’s net revenues
(if any) occurring during the Performance Period to comparable growth in net revenues
being reported by the Company’s principal competitors (as determined by the Compensation
Committee of the Company’s board of directors, or its designee (for purposes of this
Agreement only, the “Committee”)) during a period comparable to the Performance Period,
taking into account the Company’s ability to achieve targeted profitability levels.

(b) Operative Provisions Incorporated By Reference. The operative provisions of the
program, and the metrics used to gauge Key Employee’s performance and determine the
number of units awarded in such Employee’s Initial Award and Final Award, are set forth
in Exhibits A, B and C hereto, all of which are individually and collectively
incorporated herein by this reference as if expressly set forth herein.

(c) Committee Determinations. The Committee shall make all operative determinations
hereunder, acting in its sole and exclusive discretion, including those required to be
made in Exhibits A, B and/or C hereto; provided, that all performance criteria used to
gauge Key Employee’s performance during the Performance Period shall be determined and
finalized not later than the December 31st next following the commencement of
the Performance Period (the “Census Date”), excepting only those changes directly
resulting from events external to the Company, such as mergers, dissolutions and
consolidations involving the Company’s competitors.

	 	2.	 	Issuance & Transfer of Common Shares. In the event Key Employee remains
employed by the Company throughout the Performance Period and on the Vesting Date (as
hereafter defined), and is determined to be entitled to receive Company common shares
hereunder in connection with the calculation and making of such Employee’s Final Award,
such shares shall be transferred and issued to Key Employee (or such other person as
may then be entitled hereunder) on the [December 31st] next following the
Vesting Date set forth in paragraph 6 hereof. In the event said transfer date is a
weekend day or a national holiday, the transfer and issuance described in this
paragraph 2 shall occur on the business day next following said transfer date.

	 	3.	 	Tax, Withholding Matters. Any Key Employee or other person receiving
Company common shares in connection with a Final Award shall provide for the
satisfaction of all applicable federal, state and local withholding taxes and
assessments arising in respect of such issuance and transfer of shares; the amount of
such withholding taxes and assessments shall be determined by the Company, acting in
its sole discretion (the “Total Withholding”). Upon request, the Company shall provide
Key Employee with the information needed to determine the Total Withholding. The Total
Withholding shall be paid with cash or check, or with a surrender of Company common
 shares having a fair market value on the date of transfer equal to that portion of the
Total Withholding for which payment in cash or check is not made. The Committee may,
in its sole discretion, specify other methods for transferring Company common shares in
satisfaction of Final Awards, but any such specification shall only be made in writing.

	 	4.	 	Interests Are Not Transferable. Any and all Awards made hereunder shall
not be transferable or assignable, or capable of alienation or anticipation, by Key
Employee except as otherwise expressly permitted by the Plan. Likewise, except as
specifically provided in the Plan, Company common shares issued hereunder shall only be
issued to Key Employee or his personal representative (except in the event of Key
Employee’s death or disability, in which event otherwise-issuable Company common shares
owed to Key Employee at death or disability shall be issued only to or for Key
Employee’s estate (in the case of death) or to Key Employee’s legal representative (in
the case of disability).

	 	5.	 	Units Carry No Dividend or Voting Rights. Awards made hereunder are at
all times subject to all restrictions contained in this Agreement and in the Plan. Key
Employee shall not have, or accrue, any shareholder rights as a result of being
credited with units hereunder in respect of an Initial Award or a Final Award. The
right to receive dividends, and to vote or otherwise assert shareholders’ rights, shall
only arise and accrue as and when Company common shares are issued and transferred to
Key Employee in accordance with, and in satisfaction of, the Company’s obligations
under the terms of the Plan and this Agreement. Key Employee understands and
acknowledges that the Committee, acting in its sole discretion, may require Key
Employee, or his successor, to represent and warrant that he will comply with all
applicable laws and regulations or confirm certain factual matters, if requested by the
Company’s legal counsel.

	 	6.	 	Vesting, Expiration and Termination Rules. Key Employee’s right to
receive an Award hereunder (subject to determining whether Key Employee qualifies to
receive Company common shares in connection with any units awarded as part of his or
her Final Award) will fully vest at 11:59 p.m. on the last calendar day of the
Performance Period (the “Vesting Date”), subject to application of this paragraph 6 and
the provisions of paragraph 8 hereof. Nothing contained in this Agreement, or in the
Plan, shall give Key Employee any substantive right to the Company common shares
represented by the units that comprise the Initial Award; rather, Key Employee shall
only vest in, and have an enforceable right to, those units (if any) that comprise the
Final Award. Notwithstanding the preceding two sentences, in the event Key Employee’s
employment by the Company terminates (including any employment with Company
subsidiaries and affiliates whose financial results are reported on a consolidated
basis with the Company) prior to the Vesting Date, regardless of the reason(s)
therefor, the Initial Award, and all Key Employee’s rights thereunder, shall terminate
immediately and be extinguished, and thereafter shall have no value.

	 	7.	 	Coordination With Other Rules. None of the terms, conditions or
provisions in this Agreement shall be interpreted or applied to cause any common share
of the Company, issued in connection with this Agreement, not to be a fully paid and
non-assessable common share of the Company.

	 	8.	 	Forfeiture; Set Off & Recoupment. Notwithstanding any other provision
of this Agreement or the Plan, Key Employee’s rights hereunder with respect to the
Award evidenced hereby (whether or not then vested, and regardless of the number of
Company common shares represented thereby) shall immediately terminate, and otherwise
be subject to forfeiture, set off, reduction, and recoupment for and against any claims
the Company may have or asserts against Key Employee. Without limiting the generality
of the preceding sentence, any of the following actions by Key Employee, taken while
employed by the Company or within the three (3)-year period commencing with the
cessation of Key Employee’s Company employment, shall terminate immediately Key
Employee’s rights under this Agreement and under the Plan, and shall presumptively be
deemed to damage the Company in an amount at least equal to the value of the Company
common shares comprising the Final Award and thereafter be subject to set off,
reduction and recoupment by the Company:

	 	a)	 	Any direct or indirect disclosure or publication (or, during the three
(3)-year period commencing with the cessation of Key Employee’s Company
employment, any use) by Key Employee of any Company trade secret or confidential
information;

	 	b)	 	Any material violation by Key Employee of the terms of any written
agreement between Key Employee and the Company;

	 	c)	 	Any action by Key Employee, taken in direct or indirect competition
with the Company (including, without limitation, any solicitation or acceptance by
Key Employee of any employment, agency, consultation or affiliation agreement,
arrangement or understanding, involving any competitor of the Company, or any
subsidiary or affiliate thereof, determined as of the earlier of the date of such
action or the date of the cessation of Key Employee’s Company employment); or

	 	d)	 	Any attempt by Key Employee to induce any Company employee or any
consultant, agent or sub-agent under contract with the Company to terminate his or
her employment or other contractual relationship with the Company; and/or

In the event of any violation by Key Employee of any of subparagraphs (a), (b), (c) or
(d) hereof, the Award evidenced herby (whether or not then vested) shall immediately
terminate, be extinguished and forfeited, and have no further effect. In addition, with
respect to all units awarded hereunder, and with respect to any Company common shares
issued or expected to be issued in connection with a Final Award, Key Employee shall
promptly forfeit, relinquish and surrender to the Company all gains, profits, and income
Key Employee has realized from such Award, without regard to the form(s) such gains,
profits and income take(s). Any failure by the Company to assert its set off,
forfeiture and recoupment rights under this paragraph with respect to specific claims
against Key Employee shall not waive, or operate to waive, the Company’s right to later
assert its rights hereunder with respect to other or subsequent claims against Key
Employee.

	 	9.	 	Change of Control Consequences. In the event Key Employee’s rights
hereunder vest on account of a Change of Control (determined in accordance with
Section 11 of the Plan) occurring prior to the Vesting Date, the number of Company
common shares Key Employee shall be entitled to receive will be based on the Initial
Award, subject only to the remaining terms of this Agreement (which shall continue to
apply). In the event such Change in Control (or any event subsequent thereto)
satisfies the requirements imposed by Section 409A(a)(2) of the Internal Revenue Code
and related regulations (pertaining to changes in ownership or effective control), the
issuance and transfer of such shares shall occur as soon as practicable after such
Change in Control or subsequent event.

	 	10.	 	Choice of Law; Consent to Jurisdiction. Key Employee hereby consents
and agrees that Ohio law controls the parties’ procedural and substantive rights and
obligations under this Agreement, and also consents and agrees to the jurisdiction of
the state court of general jurisdiction sitting in Cuyahoga County, Ohio, as the
exclusive forum for resolving all claims and issues arising under, out of, or in
respect of, this Agreement.

	 	11.	 	Severability; Survival of Certain Provisions. The unenforceability of
one (1) or more of the provisions in this Agreement shall not vitiate or render void or
unenforceable the remaining provisions of this Agreement; rather, such remaining
provisions will remain fully enforceable to the extent permitted by law.
Notwithstanding any contrary provision contained in the Plan or this Agreement, the
provisions of paragraph 8 hereof shall specifically survive the termination, lapse or
expiration of the Plan and/or this Agreement.

	 	12.	 	Definitions. Unless otherwise defined in this Agreement, capitalized
terms will have the same meanings given them in the Plan.

KEITHLEY INSTRUMENTS, INC.

	 	 	 
	DATE OF AWARD:      

	 	By:      
	 
	 	 
	
 
	 	Title: Chairman of the Board,

President and

Chief Executive Officer

ACCEPTANCE BY KEY EMPLOYEE

The undersigned has read and understood, and hereby accepts, the terms, conditions, and
obligations and restrictions imposed hereunder, as well as the terms, conditions and limitations
of the Plan to which this Agreement is subject and subordinate.

	 	 	 
	DATE:      

	 	     

Key Employee

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