Document:

exv10w1

Exhibit 10.1

EXECUTION COPY

     STOCKHOLDERS AGREEMENT dated as of August 12, 2010 (this
“Agreement”), among INTERNATIONAL BUSINESS MACHINES CORPORATION, a
New York corporation (“Parent”), and each of THE INDIVIDUALS AND
OTHER PARTIES LISTED ON SCHEDULE A ATTACHED HERETO (each, a
“Stockholder” and, collectively, the “Stockholders”).

          WHEREAS Parent, Amaroo Acquisition Corp., a Delaware corporation and a wholly owned subsidiary
of Parent (“Sub”), and Unica Corporation, a Delaware corporation (the “Company”),
have contemporaneously with the execution of this Agreement entered into an Agreement and Plan of
Merger dated as of the date hereof (as the same may be amended or supplemented, the “Merger
Agreement”; capitalized terms used but not defined herein shall have the meanings set forth in
the Merger Agreement);

          WHEREAS each Stockholder is the record or beneficial owner of the number of shares of Company
Common Stock set forth opposite such Stockholder’s name on Schedule A (such shares of capital stock
of the Company, the “Original Shares”, and together with any New Shares (as defined below),
the “Subject Shares”); and

          WHEREAS as a condition to their willingness to enter into the Merger Agreement, Parent and Sub
have requested that the Stockholders enter into this Agreement.

          NOW, THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements set forth herein and in the Merger Agreement, each party hereto agrees as
follows:

          SECTION 1. Representations and Warranties of Each Stockholder. Each Stockholder
jointly and severally hereby represents and warrants to Parent as follows:

          (a) Organization; Authority; Execution and Delivery; Enforceability. If such
Stockholder is not a natural person, (i) such Stockholder is duly organized, validly existing and
in good standing under the laws of its jurisdiction of organization, (ii) the execution and
delivery of this Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated by this Agreement and the compliance by such Stockholder with the terms
of this Agreement have been duly authorized by all necessary action on the part of such
Stockholder and its governing body, members, stockholders and trustees, as applicable, and
(iii) no other proceedings on the part of such Stockholder (or such Stockholder’s governing body,
members, stockholders or trustees, as applicable) are necessary to authorize this Agreement, to
consummate the transactions contemplated by this Agreement or to comply with the terms of this
Agreement. Such Stockholder has all requisite corporate, company, partnership or other power and
authority to execute and deliver this Agreement (and each Person executing this Agreement on
behalf of such Stockholder that is not a natural person has full power, authority and capacity to
execute and deliver this Agreement on behalf of such Stockholder and to thereby bind such
Stockholder), to consummate the transactions contemplated by this Agreement and to comply with the
terms of this Agreement. This Agreement has been duly executed and delivered by such Stockholder
and, assuming due

 

 

authorization, execution and delivery by Parent, constitutes a valid and binding obligation
of such Stockholder, enforceable against such Stockholder in accordance with its terms. If such
Stockholder is married and the Subject Shares of such Stockholder constitute community property or
if spousal or other approval is required for this Agreement to be legal, valid and binding, this
Agreement has been duly authorized, executed and delivered by, and constitutes a valid and binding
agreement of, such Stockholder’s spouse, enforceable against such spouse in accordance with its
terms.

          (b) No Conflicts; Consents. The execution and delivery of this Agreement, the
consummation of the transactions contemplated by this Agreement and the compliance by such
Stockholder with the terms of this Agreement do not and will not conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time, or both) under, or
give rise to a right of, or result in termination, amendment, cancelation or acceleration of any
obligation or to loss of a material benefit under, or result in the creation of any Lien in or
upon any of the properties or assets of such Stockholder under, or give rise to any increased,
additional, accelerated or guaranteed rights or entitlements under, (i) if such Stockholder is not
a natural person, any provision of any certificate of incorporation, bylaws, or trust or other
organizational document of such Stockholder, (ii) any Contract to or by which such Stockholder is
a party or bound or to or by which any of the properties or assets of such Stockholder (including
such Stockholder’s Subject Shares) is bound or subject or (iii) subject to the governmental
filings and other matters referred to in the following sentence, any Law or Judgment, in each
case, applicable to such Stockholder or to such Stockholder’s properties or assets (including such
Stockholder’s Subject Shares) other than, in the case of clauses (ii) and (iii) of this paragraph,
conflicts, violations, breaches, defaults, rights, losses, Liens or entitlements that individually
or in the aggregate are not reasonably likely to (x) impair in any material respect the ability of
such Stockholder to perform its obligations under this Agreement or (y) prevent or materially
impede or delay the consummation of any of the transactions contemplated by this Agreement. No
consent, approval, order or authorization of, or registration, declaration or filing with, any
Governmental Entity or other Person (including with respect to natural persons, any spouse, and
with respect to trusts, any co-trustee or beneficiary) (“Consent”) is required by or with
respect to such Stockholder in connection with the execution and delivery of this Agreement by
such Stockholder, the consummation by such Stockholder of the transactions contemplated by this
Agreement or the compliance by such Stockholder with the terms of this Agreement, except for
(1) filings under the HSR Act and any other applicable competition, merger control, antitrust or
similar law or regulation, (2) filings with the SEC of such reports under the Exchange Act as may
be required in connection with this Agreement and the transactions contemplated hereby and (3)
those Consents which have already been obtained.

          (c) Ownership. Such Stockholder is the record and beneficial owner of the number of
Original Shares set forth opposite such Stockholder’s name on Schedule A, and such Stockholder’s
Original Shares constitute all of the shares of Company Common Stock held of record, beneficially
owned or for which voting power or disposition power is held by such Stockholder. Such
Stockholder has good and marketable title, free and clear of any Liens, to those Original Shares
of which such Stockholder is the record owner. Such Stockholder does not own, of record or
beneficially, (i) any shares of capital stock of the Company other than the Original Shares or
(ii) any option, warrant, call or other right to acquire or receive capital stock or other equity
or voting interests in the Company, other than those set forth opposite such

 

 

Stockholder’s name on Schedule B. Such Stockholder has the sole right to vote and Transfer
such Stockholder’s Original Shares, and none of such Stockholder’s Original Shares are subject to
any voting trust or other agreement, arrangement or restriction with respect to the voting or the
Transfer of such Stockholder’s Original Shares, except as set forth in Sections 3 and 4 of this
Agreement.

          (d) Information. None of the information relating to such Stockholder provided by or
on behalf of such Stockholder for inclusion in the Proxy Statement or any filing required to be
made with the SEC by the Company, Parent or Sub will, at the respective times such documents are
filed with the SEC and at the respective times such documents are first published, sent or given
to the Company’s stockholders, at the time of any amendment or supplement of any such document or
at the time of the Stockholders Meeting, contain any untrue statement of material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading.

          SECTION 2. Representations and Warranties of Parent. Parent hereby represents and
warrants to each Stockholder as follows: Parent has all requisite power and authority to execute
and deliver this Agreement, to consummate the transactions contemplated by this Agreement and to
comply with the terms of this Agreement. The execution and delivery of this Agreement by Parent,
the consummation by Parent of the transactions contemplated by this Agreement and the compliance by
Parent with the terms of this Agreement have been duly authorized by all necessary action on the
part of Parent and no other corporate proceedings on the part of Parent are necessary to authorize
this Agreement or to consummate the transactions contemplated by this Agreement. This Agreement
has been duly executed and delivered by Parent and, assuming due authorization (in the case of each
Stockholder that is not a natural person), execution and delivery by each Stockholder, constitutes
a valid and binding obligation of Parent, enforceable against Parent in accordance with its terms.
The execution and delivery of this Agreement do not, and the consummation of the transactions
contemplated by this Agreement and compliance by Parent with the terms of this Agreement will not,
conflict with, or result in any violation or breach of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of, or result in termination, cancelation or
acceleration of any obligation or to loss of a material benefit under, or result in the creation of
any Lien upon any of the properties or assets of Parent under, or give rise to any increased,
additional, accelerated or guaranteed rights or entitlements under, any provision of (i) the
certificate of incorporation or bylaws of Parent, (ii) any Contract to or by which Parent is a
party or bound or to or by which any of the properties or assets of Parent is subject or bound or
(iii) subject to the governmental filings and other matters referred to in the following sentence,
any Law or Judgment, in each case, applicable to Parent or its properties or assets other than, in
the case of clauses (ii) and (iii), conflicts, violations, breaches, defaults, rights, losses,
Liens or entitlements that individually or in the aggregate are not reasonably likely to (x) impair
in any material respect the ability of Parent to perform its obligations under this Agreement or
(y) prevent or materially impede or delay the consummation of any of the transactions contemplated
by this Agreement. No Consent is required by or with respect to Parent in connection with the
execution and delivery of this Agreement by Parent or the consummation by Parent of the
transactions contemplated hereby, other than as contemplated by the Merger Agreement.

 

 

          SECTION 3. Covenants of Each Stockholder. Each Stockholder jointly and severally
covenants and agrees as follows:

          (a) At any meeting of the stockholders of the Company called to vote upon the Merger
Agreement, the Merger or any of the other transactions contemplated by the Merger Agreement, or at
any postponement or adjournment thereof, or in any other circumstances upon which a vote, consent,
adoption or other approval (including by written consent solicitation) with respect to the Merger
Agreement, the Merger or any of the other transactions contemplated by the Merger Agreement is
sought, such Stockholder shall (i) appear at such meeting or otherwise cause its Subject Shares to
be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be
voted) all of such Stockholder’s Subject Shares in favor of, and shall consent to (or cause to be
consented to), the adoption of the Merger Agreement and the approval of the terms thereof and of
the Merger and each of the other transactions contemplated by the Merger Agreement.

          (b) Prior to the date that is the later of (x) the date of the meeting of the stockholders of
the Company called to vote upon the Merger Agreement and (y) six months from the date of this
Agreement, at any meeting of the stockholders of the Company or at any postponement or adjournment
thereof or in any other circumstances upon which a vote, consent, adoption or other approval
(including by written consent solicitation) is sought, such Stockholder shall vote (or cause to be
voted) all of such Stockholder’s Subject Shares against, and shall not (and shall not commit or
agree to) consent to (or cause to be consented to), any of the following: (i) any Takeover
Proposal or any Acquisition Agreement relating thereto or (ii) any amendment of the Company
Certificate or the Company Bylaws (other than pursuant to or as contemplated by the Merger
Agreement) or any other proposal, action, agreement or transaction which, in the case of this
clause (ii), could reasonably be expected to (A) result in a breach of any covenant, agreement,
obligation, representation or warranty of the Company contained in the Merger Agreement or of the
Stockholders contained in this Agreement, (B) prevent, impede, interfere or be inconsistent with,
delay, discourage or adversely affect the timely consummation of the Merger or the other
transactions contemplated by the Merger Agreement or by this Agreement, (C) dilute in any material
respect the benefits to Parent or Sub of the Merger and the other transactions contemplated by the
Merger Agreement or by this Agreement or (D) change in any manner the voting rights of the Company
Common Stock (the matters described in clauses (i) and (ii), collectively, the “Vote-Down
Matters”).

          (c) Such Stockholder shall not, and shall not commit or agree to, (i) sell, transfer, pledge,
exchange, assign, tender or otherwise dispose of (including by gift, merger or otherwise by
operation of law) (collectively, “Transfer”), or consent to or permit any Transfer of, any
Subject Shares (or any interest therein) or any rights to acquire any securities or equity
interests of the Company, or enter into any Contract, option, call or other arrangement with
respect to the Transfer (including any profit-sharing or other derivative arrangement) of any
Subject Shares (or any interest therein) or any rights to acquire any securities or equity
interests of the Company, to any Person other than pursuant to this Agreement or the Merger
Agreement, unless prior to any such Transfer the transferee of such Stockholder’s Subject Shares
is a party to this Agreement, enters into a stockholder agreement with Parent on terms
substantially identical to the terms of this Agreement or agrees to become a party to this
Agreement pursuant to a joinder agreement satisfactory to Parent, or (ii) enter into any voting
arrangement, whether

 

 

	 	 	by proxy, voting agreement or otherwise, with respect to any Subject Shares or rights to
acquire any securities or equity interests of the Company, other than this Agreement. Each
certificate or other instrument representing any Subject Shares shall bear a legend that such
Subject Shares are subject to the provisions of this Agreement, including this Section 3(c);
provided, however, that nothing contained herein shall restrict the ability of
such Stockholder to exercise any Stock Options.

          (d) (i) Such Stockholder shall not commit or agree to take any action inconsistent with or
challenging the transactions contemplated by, or the terms of, this Agreement or the Merger
Agreement. Such Stockholder hereby waives any rights of appraisal, or rights to dissent from the
Merger, that such Stockholder may have.

     (ii) Such Stockholder shall not, directly or indirectly, issue any press release with
respect to the Merger Agreement, this Agreement, the Merger or any of the other transactions
contemplated by the Merger Agreement or by this Agreement without the prior written consent
of Parent, except as may be required by applicable Law or court process.

     (iii) Such Stockholder shall use commercially reasonable efforts to consult with Parent
prior to making any public statement with respect to the Merger Agreement, this Agreement,
the Merger or any of the other transactions contemplated by the Merger Agreement or by this
Agreement.

          (e) Such Stockholder hereby agrees that, in the event (i) of any stock or extraordinary
dividend or other distribution, stock split, reverse stock split, recapitalization,
reclassification, reorganization, combination or other like change, of or affecting the Subject
Shares or (ii) that such Stockholder purchases or otherwise acquires beneficial ownership of or an
interest in, or acquires the right to vote or share in the voting of, any shares of capital stock
of the Company, in each case after the execution of this Agreement (including by conversion, the
exercise of Stock Options, the vesting of RSUs, operation of law or otherwise) (collectively, the
“New Shares”), such Stockholder shall deliver promptly to Parent written notice of its
acquisition or receipt of New Shares which notice shall state the number of New Shares so acquired
or received. Such Stockholder agrees that any New Shares acquired or received by such Stockholder
pursuant to clause (i) or (ii) of this paragraph shall be subject to the terms of this Agreement,
including all covenants, agreements, obligations, representations and warranties set forth herein,
and shall constitute Subject Shares to the same extent as if those New Shares were owned by such
Stockholder on the date of this Agreement. Such Stockholder agrees that this Agreement and the
obligations hereunder shall be binding upon any Person to which record or beneficial ownership of
such Stockholder’s Subject Shares shall pass, whether by operation of Law or otherwise, including
such Stockholder’s heirs, guardians, administrators or successors, and such Stockholder further
agrees to take all actions necessary to effectuate the foregoing.

          SECTION 4. Grant of Irrevocable Proxy; Appointment of Proxy. (a) Each Stockholder
hereby irrevocably grants to, and appoints, Parent and any other individual designated in writing
by Parent, and each of them individually, such Stockholder’s proxy and attorney-in-fact (with full
power of substitution and re-substitution), for and in the name, place

 

 

and stead of such Stockholder, to vote all of such Stockholder’s Subject Shares at any meeting
of stockholders of the Company or any adjournment or postponement thereof, or grant a consent or
approval in respect of such Stockholder’s Subject Shares, (i) in favor of the adoption of the
Merger Agreement and the approval of the terms thereof and of the Merger and each of the other
transactions contemplated by the Merger Agreement, (ii) against any Vote-Down Matter and
(iii) otherwise in accordance with Section 3 of this Agreement. The proxy granted in this
Section 4 shall expire upon the expiration of all rights of Parent and Sub under Section 3 of this
Agreement.

          (b) Each Stockholder represents that any proxies heretofore given in respect of such
Stockholder’s Subject Shares are not irrevocable, and that all such proxies are hereby revoked.

          (c) Each Stockholder hereby affirms that the irrevocable proxy set forth in this Section 4 is
given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is
given to secure the performance of the duties of such Stockholder under this Agreement. Each
Stockholder hereby further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked. Each Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Each such irrevocable
proxy is executed and intended to be irrevocable in accordance with the provisions of
Section 212(e) of the DGCL.

          SECTION 5. Further Assurances. Each Stockholder shall, from time to time, execute and
deliver, or cause to be executed and delivered, such additional or further consents, documents and
other instruments as Parent may request for the purpose of effectuating the matters covered by this
Agreement, including the grant of the proxies set forth in Section 4 of this Agreement.

          SECTION 6. Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned, in whole or in part, by operation of Law or otherwise, by
any of the parties hereto without the prior written consent of the other parties hereto, except
that Parent may in its sole discretion assign, in whole or in one or more parts, any or all of its
rights, interests or obligations under this Agreement to any direct or indirect wholly owned
Subsidiary of Parent, but no such assignment shall relieve Parent of any of its obligations under
this Agreement. Any purported assignment in violation of this Section 6 shall be void. Subject to
the preceding sentences of this Section 6, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by, the parties hereto and their respective successors and assigns.

          SECTION 7. Termination. This Agreement shall terminate upon the earlier of (i) the
Effective Time and (ii) the termination of the Merger Agreement in accordance with its terms, other
than Sections 3(b), 4(a) and 8, which shall survive and instead shall expire upon the expiration of
all rights of Parent and Sub thereunder.

          SECTION 8. General Provisions. (a) Amendments. This Agreement may not be
amended except by an instrument in writing signed by each of the parties hereto.

 

 

          (b) Notices. All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent by facsimile or sent, postage
prepaid, by registered, certified or express mail or reputable overnight courier service and shall
be deemed given when so delivered by hand or sent by facsimile, or if mailed, three days after
mailing (one business day in the case of express mail or overnight courier service), to Parent in
accordance with Section 8.02 of the Merger Agreement and to the Stockholders at their respective
addresses set forth on Schedule A (or at such other address for a party as shall be specified by
notice given in accordance with this Section 8(b)).

          (c) Interpretation. When a reference is made in this Agreement to a Section or a
Schedule, such reference shall be to a Section of, or a Schedule to, this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words
“include”, “includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”. The words “hereof”, “hereto”, “hereby”, “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement. The words “date hereof” shall
refer to the date of this Agreement. The term “or” is not exclusive. The word “extent” in the
phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such
phrase shall not mean simply “if”. The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms. Any agreement or instrument defined or
referred to herein or in any agreement or instrument that is referred to herein means such
agreement or instrument as from time to time amended, modified or supplemented. References to a
Person are also to its permitted successors and assigns.

          (d) Counterparts. This Agreement may be executed in one or more counterparts
(including by facsimile), all of which shall be considered one and the same agreement and shall
become effective when one or more such counterparts have been signed by each of the parties and
delivered to the other parties.

          (e) Entire Agreement; No Third-Party Beneficiaries. This Agreement (a) constitutes
the entire agreement, and supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter of this Agreement and (b) is not
intended to confer upon any Person other than the parties hereto and their respective successors
and assigns any rights (legal, equitable or otherwise, except the rights conferred upon those
Persons specified as proxies in Section 4) or remedies, whether as third party beneficiaries or
otherwise.

          (f) Governing Law. This Agreement shall be governed by, and construed in accordance
with, the Laws of the State of Delaware, regardless of the Laws that might otherwise govern under
applicable principles of conflicts of Laws thereof.

          (g) Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of Law or public policy, all other conditions
and terms of this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the

 

 

original intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner and to the end that the transactions contemplated hereby
are fulfilled to the extent possible.

          (h) Consent to Jurisdiction; Service of Process; Venue. Each of the parties hereto
irrevocably and unconditionally submits to the exclusive jurisdiction of the Delaware Court of
Chancery (and if the Delaware Court of Chancery shall be unavailable, any Delaware State court and
the Federal court of the United States of America sitting in the State of Delaware) for the
purposes of any suit, action or other proceeding arising out of this Agreement or the Merger or
any other transaction contemplated by this Agreement (and agrees that no such action, suit or
proceeding relating to this Agreement shall be brought by it or any of its Subsidiaries except in
such courts). Each of the parties further agrees that, to the fullest extent permitted by
applicable Law, service of any process, summons, notice or document by U.S. registered mail to
such Person’s respective address set forth above shall be effective service of process for any
action, suit or proceeding in the State of Delaware with respect to any matter to which it has
submitted to jurisdiction as set forth above in the immediately preceding sentence. Each of the
Stockholders hereby appoints the Company as its agent for service of process for any claim,
action, suit or other proceeding in Delaware with respect to any matters to which it has submitted
to jurisdiction as set forth above. Each of the parties hereto irrevocably and unconditionally
waives (and agrees not to plead or claim), any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the Merger or any of the other transactions
contemplated by this Agreement in the Delaware Court of Chancery (and if the Delaware Court of
Chancery shall be unavailable, in any Delaware State court or the Federal court of the United
States of America sitting in the State of Delaware) or that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.

          (i) Enforcement. The parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties hereto shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions of this Agreement in the Delaware Court of Chancery (and if
the Delaware Court of Chancery shall be unavailable, in any Delaware State court or the Federal
court of the United States of America sitting in the State of Delaware), this being in addition to
any other remedy to which they are entitled at Law or in equity.

          (j) Waiver of Jury Trial. Each party hereto hereby waives, to the fullest extent
permitted by applicable Law, any right it may have to a trial by jury in respect of any suit,
action or other proceeding directly or indirectly arising out of, under or in connection with this
Agreement. Each party hereto (a) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such party would not, in the event of any
action, suit or proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it and
the other parties hereto have been induced to enter into this Agreement, by, among other things,
the mutual waiver and certifications in this Section 8(j).

 

 

          (k) Fiduciary Duties. Notwithstanding anything in this Agreement to the contrary:

     (i) each Stockholder makes no agreement or understanding herein in any capacity other
than in such Stockholder’s capacity as a record holder and beneficial owner of the Subject
Shares and not in such Stockholder’s capacity as a director, officer or employee of the
Company or any of its Subsidiaries; and

     (ii) nothing herein shall be construed to limit or affect any actions or inactions by
such Stockholder or any representative of Stockholder, as applicable, serving on the Board
of Directors or any Subsidiary of the Company or as an officer or fiduciary of the Company
or any Subsidiary of the Company, acting in such person’s capacity as a director, officer,
employee or fiduciary of the Company or any Subsidiary of the Company.

[Signature page follows]

 

 

          IN WITNESS WHEREOF, Parent has caused this Agreement to be signed by its officer thereunto
duly authorized and each Stockholder has signed this Agreement, all as of the date first written
above.

	 	 	 	 	 
	 	INTERNATIONAL BUSINESS MACHINES CORPORATION,

 	 
	 	by  	/s/ Elias Mendoza
 	 
	 	 	Name:  	Elias Mendoza 	 
	 	 	Title:  	Vice President, Corporate Development 	 
	 

[Signature Page to Stockholders Agreement]

 

 

	 	 	 	 	 
	 	STOCKHOLDERS,

 	 
	 	/s/ Yuchun Lee
 	 
	 	Name:  	Yuchun Lee 	 
	 	Address: 	 170 Tracer Lane

Waltham, Massachusetts 02451  	 
	 

	 	 	 	 	 
	 	 	 
	 	             /s/ Agustina Sumito Lee
 	 
	 	Name:  	Agustina Sumito Lee 	 
	 	Address: 	 c/o Yuchun Lee

170 Tracer Lane

Waltham, Massachusetts 02451 	 
	 

	 	 	 	 	 
	 	AGUSTINA SUMITO LIVING TRUST,

 	 
	 	by  	/s/ Yuchun Lee
 	 
	 	 	Name:  	Yuchun Lee, Trustee 	 
	 	 	Address:  	 c/o Yuchun Lee

170 Tracer Lane

Waltham, Massachusetts 02451	 
	 

	 	 	 	 	 
	 	YUCHUN LEE 2010 GRAT,

 	 
	 	by  	/s/ Yuchun Lee
 	 
	 	 	Name:  	Yuchun Lee, Trustee 	 
	 	 	Address:  	 c/o Yuchun Lee

170 Tracer Lane

Waltham, Massachusetts 02451 	 
	 

[Signature Page to Stockholders Agreement]

 

 

	 	 	 	 	 
	 	LEE SUMITO IRREVOCABLE TRUST,

 	 
	 	by  	/s/ Agustina Sumito Lee
 	 
	 	 	Name:  	Agustina Sumito Lee, Trustee 	 
	 	 	Address: 	 c/o Yuchun Lee

170 Tracer Lane

Waltham, Massachusetts 02451  	 
	 

	 	 	 	 	 
	 	YUCHUN LEE LIVING TRUST,

 	 
	 	by  	/s/ Yuchun Lee
 	 
	 	 	Name:  	Yuchun Lee, Trustee 	 
	 	 	Address: 	 c/o Yuchun Lee

170 Tracer Lane

Waltham, Massachusetts 02451  
	 

	 	 	 	 	 
	 	2001 LEE CHARITABLE TRUST,

 	 
	 	by  	/s/ Yuchun Lee
 	 
	 	 	Name:  	Yuchun Lee, Trustee 	 
	 	 	Address: 	 c/o Yuchun Lee

170 Tracer Lane

Waltham, Massachusetts 02451  	 
	 

[Signature Page to Stockholders Agreement]

 

 

Schedule A

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Number of Subject	 
	Name and Address of	 	Number of Subject Shares	 	 	Shares Owned	 
	Stockholder	 	Owned of Record	 	 	Beneficially	 
	Yuchun Lee
	 	 	111,271	 	 	 	4,458,509	 
	Agustina Sumito Lee
	 	 	622	 	 	 	622	 
	Agustina Sumito Living Trust
	 	 	2,192,197	 	 	 	2,192,197	 
	Yuchun Lee 2010 GRAT
	 	 	1,000,000	 	 	 	1,000,000	 
	Lee Sumito Irrevocable Trust
	 	 	686,616	 	 	 	686,616	 
	Yuhun Lee Living Trust
	 	 	300,890	 	 	 	300,890	 
	2001 Lee Charitable Trust
	 	 	166,913	 	 	 	166,913	 

 

 

Schedule B

	 	 	 	 	 	 	 	 	 
	 	 	Number of Shares	 	 	Number of Shares	 
	Name and Address of	 	Subject to	 	 	Subject to Unvested	 
	Stockholder	 	Unexercised Options	 	 	RSUs	 
	Yuchun Lee
	 	 	479,999	 	 	 	92,500exv10w1

Exhibit 10.1

KEITHLEY INSTRUMENTS, INC.

CHANGE IN CONTROL AGREEMENT

     THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”) is by and between Keithley Instruments,
Inc., an Ohio corporation (the “Company”), and [Joseph P. Keithley/Linda C. Rae] (the “Executive”)
made this 9th day of August, 2010.

RECITALS

     A. The Executive is presently employed by the Company as a senior executive or key employee
and has made and is expected to continue to make significant contributions to the short- and
long-term success of the Company.

     B. The Company’s Board of Directors has determined that a Change in Control (as hereinafter
defined) or the prospect of a Change in Control of the Company may result in the distraction or
departure of key management personnel to the detriment of the Company.

     C. In order to encourage continuity of management and to ensure that the Company’s senior
executives and key employees are not distracted from discharging their duties because of a Change
in Control or the prospect of a Change in Control, the Company desires to provide the benefits
provided herein to encourage the Executive to remain in the employ of the Company.

     D. In consideration of the benefits provided by this Agreement, the Executive is willing to
continue in the Company’s employ as a senior executive or key employee.

     NOW THEREFORE, the Executive and the Company, intending to be legally bound, hereby agree as
follows:

ARTICLE I

DEFINITIONS

     When used in this Agreement, the following terms shall have the meanings set forth in this
Article I, unless the context clearly provides otherwise:

     1.1 A “Change in Control” will be deemed to have occurred if during the term of this
Agreement:

          (a) the Board of Directors or shareholders of the Company approve a plan or agreement
providing for a merger or consolidation which, if consummated, will result in the shareholders of
the Company, immediately prior to the transaction giving rise to the merger or consolidation,
owning less than 50% of the total combined voting power of all classes of equity securities
entitled to vote generally in the election of directors of the surviving entity immediately after
the consummation of the transaction giving rise to the merger or consolidation;

 

 

          (b) the Board of Directors or shareholders of the Company approve a plan or agreement to sell
all or substantially all of the assets of the Company or to liquidate or dissolve the Company; or

          (c) (i) any Person (other than the Company or a subsidiary of the Company or any employee
benefit plan of the Company (including any trustee of any such plan acting in its capacity as
trustee)) purchases, in one transaction or a series of transactions, any equity securities of the
Company (or securities convertible into equity securities) pursuant to a tender or exchange offer
without the prior consent of the Board of Directors, or without the prior consent of the Board of
Directors becomes the beneficial owner of securities of the Company representing (A) 50% or more of
the total number of outstanding Common Shares, without par value, and Class B Common Shares,
without par value, or (B) 80% or more of the Class B Common Shares, without par value, and (ii)
during any two-year period following an event specified in Section 1.1(c)(i), individuals who at
the beginning of such period constitute the entire Board of Directors cease to constitute a
majority of the Board of Directors, unless the election or the nomination for election of each new
director is approved by at least two-thirds of the directors then still in office who were
directors at the beginning of that period.

     1.2 A “Triggering Event” will be deemed to have occurred if, during the Protection Period (as
hereinafter defined):

          (a) the Company separates the Executive from service with the Company, other than in the case
of a Termination for Cause; or

          (b) The Executive separates from service with the Company for Good Reason.

The term “Protection Period” shall mean the period beginning on the date of the Change of Control
and ending two years after the date on which the Change in Control occurred; provided, however, if
a Change of Control occurs by reason of Section 1.1(a) or (b), and the plan or definitive agreement
providing for the applicable transaction giving rise to such Change of Control under Section 1.1(a)
or (b) terminates without the merger, consolidation, sale, liquidation or dissolution, as
applicable, having been completed, then the Protection Period shall end on the date such plan or
agreement terminates.

     1.3 The term “separates from service with the Company” shall mean the Executive’s Separation
from Service, as determined under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), and the regulations promulgated thereunder; provided, however, that such Separation
from Service with the Company is not as a result of the Executive’s death, retirement or disability
(as defined in Code Section 409A). If the Executive separates from service with the Company as a
result of death or disability (determined under the Company’s normal employment policies or
procedures) after the Company has provided written notice to the Executive of the Company’s intent
to separate the Executive from service with the Company at a future date, but in no event later
than two years after the date on which the Change in Control occurred, then notwithstanding the
prior sentence, the Executive or her estate, as applicable, will be entitled to the benefits
provided herein.

     1.4 The Executive’s separation from service with the Company will be deemed to be for “Good
Reason” if the Executive separates from service upon or within six months after one

2

 

or more of the following occurs without the consent of the Executive (which consent the
Executive shall be under no obligation to give):

          (a) a significant diminution in the Executive’s responsibilities, power or authority in
comparison with the responsibilities, power or authority the Executive had at or about the time of
the Change in Control, other than any diminution in the Executive’s responsibilities solely as a
result of the fact that the entity for which the Executive 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 Executive to duties that are inconsistent with the duties assigned
to the Executive on the date on which the Change in Control occurred, and which duties the Company
persists in assigning to the Executive for a period of fifteen days following the prompt written
objection of the Executive;

          (c) (i) a material reduction in the Executive’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 Executive 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 Executive’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 Executive any incentive or bonus
compensation to which the Executive 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
Executive 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 Executive;

          (d) the Company requires the Executive to be based at or generally work from any location more
than fifty (50) miles from the Company’s headquarters in Solon, Ohio or the Company, over the
course of any calendar month, requires the Executive 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 as provided
in Section 6.3.

     1.5 A “Termination for Cause” will be deemed to have occurred if, and only if, the Board of
Directors of the Company, or its designee, in good faith determines that the Executive’s separation
from service with the Company is because of any one or more of the following:

3

 

          (a) commission of an act or series of acts of intentional dishonesty that are materially
detrimental to the best interests of the Company;

          (b) willful and repeated failure to perform the duties associated with the Executive’s
position, which failure has not been cured within thirty (30) days after the Company gives written
notice thereof to the Executive; or

          (c) failure to cooperate with any internal investigation conducted by the Company or with any
investigation, inquiry, hearing or similar proceedings by any governmental authority having
jurisdiction over the Company or the Executive.

     1.6 “Executive’s Target Bonus” means an amount equal to the greater of (a) the Executive’s
Annual Salary multiplied by the bonus target percentage set forth on Exhibit A hereto, or
(b) the average bonus amount actually received by the Executive from the Company for the preceding
three fiscal years (or for such fewer number of full fiscal years that Executive has been employed
by the Company).

     1.7 “Executive’s Annual Salary” means the Executive’s annual base salary at the time of a
Triggering Event or at the time of the occurrence of a Change in Control, whichever is higher.

     1.8 “Executive’s Pro Rata Current Year Bonus” means an amount equal to (a) the Executive’s
Target Bonus, multiplied by (b) a fraction, the numerator of which is the number of days elapsed in
the fiscal quarter during which a Triggering Event occurs to the date of the Triggering Event, the
denominator of which is the total number of days in the fiscal quarter during which a Trigger Event
occurs.

     1.9 “Person” means an individual, corporation, partnership, limited liability company or other
entity and one or more Persons acting as group (as determined under Section 409A of the Code).

ARTICLE II

TRIGGERING EVENT PAYMENTS

     2.1 After the occurrence of a Triggering Event, the Company shall pay the amounts or shall
commence providing the benefits set forth herein, provided the release required and described in
Article III has been executed and delivered by the Executive to the Company and, as applicable,
such release has not been timely revoked.

     (a) The Company shall pay a lump sum severance benefit to the Executive (the “Severance
Payment”) which will be in addition to any other compensation or remuneration to which the
Executive is, or becomes, entitled to receive from the Company (including any earned but unpaid
bonus for any prior completed fiscal period) in an amount equal to the sum of (i) 1.5 times the
Executive’s Annual Salary, plus (ii) 1.5 times the Executive’s Target Bonus, plus (iii) the
Executive’s Pro Rata Current Year Bonus, less the amount of any bonus actually received by the
Executive for the current fiscal year. The payment of the benefit shall be made

4

 

in one lump sum cash payment on or about the ninetieth (90th) day after the Triggering Event,
subject, however, to Section 2.2.

          (b) The Company shall, at its expense, provide the Executive, and the Executive’s family, with
life, medical, hospitalization, vision, dental/health (the “Company Health and Welfare Benefits”)
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 Executive shall become employed by another employer after
a Triggering Event, the date on which the Executive shall be eligible to receive benefits from such
employer which are substantially equivalent to or greater than the benefits the Executive and the
Executive’s family received from the Company or (ii) the 18-month anniversary of the date of the
Triggering Event; provided, however, that if the Executive’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 Executive commencing the first day of the month after the Company makes the payments
described in Section 2.1(a) above equal to the actual cost to the Executive on a pre-tax basis, of
the coverage for such Executive, over a period of 18 months 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 Executive under this Section 2.1(c).

          (c) The Company shall, at its expense, provide the Executive with the reasonable services of
an outplacement firm mutually agreed upon between the Company and the Executive and suitable to the
Executive’s position until the first acceptance by the Executive of an offer of employment;
provided, however, that the cost of such outplacement shall not exceed $25,000; provided, further,
that the Company will not be required to provide such services to the Executive beyond December
31st of the first calendar year following the calendar year in which the Triggering Event occurs.

          (d) Except as provided in Section 2.1(e) below, the awards granted to the Executive under the
Company’s 1992 Stock Incentive Plan, 2002 Stock Incentive Plan, as amended, and 2009 Stock
Incentive Plan (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).

          (e) The number of common shares of the Company that the Executive shall be entitled to receive
under each award of performance award units granted to the Executive under the Plans that is
outstanding immediately prior to a 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 Executive 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.

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     2.2 All payments pursuant to this Agreement shall be made less standard required deductions
and withholdings. Notwithstanding the above, if the Executive is a “specified employee” (within the
meaning of Section 409A of the Code), benefits or payments to the Executive pursuant to this
Article II shall be made or commence, as applicable, on the date which is the earlier of (a) the
Executive’s death or (b) on the one hundred eighty-first (181st) day following the date
of the Executive’s separation from service with the Company.

     2.3 Notwithstanding anything in this Agreement to the contrary, in the event that it shall be
determined (as hereinafter provided) that any payment or distribution by the Company to or for the
benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement, or otherwise pursuant to or by reason of any other agreement, policy,
plan, program or arrangement, any stock option, restricted stock, stock appreciation right or
similar right, or the lapse or termination of any restriction on, or the vesting or exercisability
of, any of the foregoing (individually and collectively, a “Payment”), would be subject, but for
the application of this Section 2.3, to the excise tax imposed by Code Section 4999 (or any
successor provision thereto) (the “Excise Tax”) by reason of being considered “contingent on a
change in ownership or control” of the Company and as being considered an “excess parachute
payment,” both within the meaning of Code Section 280G (or any successor provision thereto), then:

          (a) if the After-Tax Payment Amount (as defined below) would be greater by reducing the amount
of the Severance Payment otherwise payable under Section 2.1 to the Executive to the minimum extent
necessary (but in no event to less than zero) so that, after such reduction, no portion of the
Payment would be subject to the Excise Tax, then the Severance Payment shall be so reduced; and

          (b) if the After-Tax Payment Amount would be greater without the reduction referred to in
Section 2.3(a), then there shall be no reduction in the Severance Payment by application of this
Section 2.3.

As used in this Agreement, the “After-Tax Payment Amount” means the difference of (x) the amount of
the Payment, less (y) the amount of the Excise Tax, if any, imposed upon the Payment.

Any reduction under Section 2.3(a) shall be made consistent with the requirements of Section 409A
of the Code, to the extent applicable.

     2.4 The Executive shall determine, in the first instance, whether any reduction in the amount
of the Severance Payment is required pursuant to Section 2.3. If the Executive determines that
such a reduction may be required, or if reasonably requested by the Company, then an accounting
firm selected by the Executive and reasonably acceptable to the Company (the “Accounting Firm”)
shall determine whether any such reduction is required pursuant to Section 2.3 and, if required,
the amount of such reduction, and Section 2.5 shall apply.

     2.5 If Section 2.3 applies pursuant to Section 2.4, the Executive shall direct the Accounting
Firm to submit its determination and detailed supporting calculations to both the Company and the
Executive within thirty (30) calendar days after the date of the Triggering Event. The Company and
the Executive shall each provide the Accounting Firm access to and

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copies of any books, records and documents in the possession of the Company or the Executive,
as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the
Accounting Firm in connection with the preparation and issuance of the determination and
calculations. Any determination by the Accounting Firm as to whether any reduction in the amount
of the Severance Payment is required, and the amount of the reduction if required, pursuant to
Sections 2.3 through 2.5 shall be binding upon the Company and the Executive. The fees and
expenses of the Accounting Firm for its services in connection with the determination and
calculations contemplated by Sections 2.3 through 2.5 shall be borne by the Company. The federal,
state and local income or other tax returns filed by the Executive and the Company shall be
prepared and filed on a basis consistent with such determination and calculations. The Company
shall pay the Severance Payment, as reduced or not reduced pursuant to the final determination of
the Accounting Firm, to the Executive no later than the time otherwise required hereunder.

ARTICLE III

RELEASE

     3.1 As a condition to the payment of the benefits by the Company to the Executive pursuant to
this Agreement, as described in Article II, the Executive shall deliver a signed release of claims
against the Company. Such release shall be delivered to the Company no later than sixty (60) days
following a Triggering Event, shall be in a form and substance as determined by the Company, and,
as applicable, shall not be timely revoked by the Executive, and will include among its terms the
operative language substantially similar to the following:

In exchange for the payments set forth in the Change in Control Agreement by and
between Keithley Instruments, Inc. (the “Company”) and me (the “CIC Agreement”), I
and my heirs, personal representatives, successors and assigns, hereby forever
release, remise and discharge the Company and each of its past, present, and future
officers, directors, shareholders, members, employees, trustees, agents,
representatives, affiliates, successors and assigns (collectively the “Company
Released Parties”) from any and all claims, claims for relief, demands, actions and
causes of action of any kind or description whatsoever, known or unknown, whether
arising out of contract, tort, statute, treaty or otherwise, in law or in equity,
which I now have, have had, or may hereafter have against any of the Company
Released Parties from the beginning of my employment with the Company to the date of
this release, arising from, connected with, or in any way growing out of, or related
to, directly or indirectly, (i) my employment by the Company, (ii) my service as an
officer or key employee, as the case may be, of the Company, (iii) any transaction
prior to the date of this release and all effects, consequences, losses and damages
relating thereto, (iv) the services provided by me to the Company, or (v) my
termination of employment with the Company under the common law or any federal or
state statute, including, but not limited to, all claims arising under the Civil
Rights Acts of 1866 and 1964, the Fair Labor Standards Act of 1938, the Equal Pay
Act of 1963, the Age Discrimination in Employment Act of 1967, the Rehabilitation
Act of 1973, the Older Workers Benefit Protection Act of 1990, the Americans with
Disabilities Act of 1990, the

7

 

Civil Rights Act of 1991, the Family and Medical Leave Act of 1993, the Consolidated
Omnibus Budget Reconciliation Act (“COBRA”), Title 4112 of the Ohio Revised Code,
and all other federal or state laws governing employers and employees; provided,
however, that nothing in this release will bar, impair or affect the obligations,
covenants and agreements of the Company (x) to pay compensation and benefits through
the date of termination, (y) to fulfill its obligations set forth in the CIC
Agreement and any stock option, restricted share or performance share agreement, or
(z) to satisfy any indemnification, expense advancement or other obligation under
applicable law, the Company’s Code of Regulations, or any indemnification agreement
to which the Company and I are a party.

     3.2 If the release described in this Article III has not been delivered by the Executive to
the Company thirty (30) days after a Triggering Event, the Company shall promptly provide the
Executive or her estate, as applicable, written notice that the release must be timely delivered in
order for the Executive to receive the benefits hereunder, which notice, however, shall in no event
modify any otherwise applicable time periods. Notwithstanding any other provision of this
Agreement, if the release described in this Article III is not timely delivered by the Executive to
the Company or, as applicable, is timely revoked by the Executive, then this Agreement shall
terminate and be of no further force or effect; provided, however, the restrictive covenants set
forth in Article IV shall remain operative and shall not terminate until the expiration of the term
set forth therein.

ARTICLE IV

NON-SOLICITATION AND CONFIDENTIAL INFORMATION

     4.1 For a period of one (1) year following the Executive’s separation from service with the
Company, if the Executive has received or is receiving benefits under this Agreement, the Executive
shall not, directly or indirectly, on her own behalf or on behalf of any person or entity (a)
solicit the employment of any employee who has been employed by the Company or its subsidiaries at
any time during the six (6) months immediately preceding such date of hiring or solicitation or (b)
solicit customers, business, patronage or orders for, or sell, any products and services in
competition with, or for any business, wherever located, that, as of the date of such separation
from service, competes with, the business of the Company.

     4.2 The Executive shall not use, disclose or make accessible to any other person, firm,
partnership, corporation or any other entity any Confidential Information (as defined below)
pertaining to the business of the Company or any entity controlling, controlled by, or under common
control with the Company (each an “Affiliate”) except when required to do so by a court of
competent jurisdiction; provided, however, that the foregoing restrictions shall not apply to the
extent that such information (a) is obtainable in the public domain, (b) becomes obtainable in the
public domain, except by reason of the breach by the Executive of the terms hereof, (c) was not
acquired by the Executive in connection with her employment or affiliation with the Company, (d)
was not acquired by the Executive from the Company or its representatives, or (e) is required to be
disclosed by rule of law or by order of a court or governmental body or agency. For purposes of
this Agreement, “Confidential Information” shall mean non-public information

8

 

concerning the Company’s financial data, statistical data, strategic business plans, product
development (or other proprietary product data), customer and supplier lists, customer and supplier
information, pricing data, information relating to governmental relations, discoveries, practices,
processes, methods, trade secrets, developments, marketing plans and other non-public, proprietary
and confidential information of the Company or its Affiliates, that, in any case, is not otherwise
generally available to the public and has not been disclosed by the Company, or its Affiliates, as
the case may be, to others not subject to confidentiality agreements. In the event the Executive’s
employment is terminated for any reason, the Executive immediately shall return to the Company all
Confidential Information in her possession.

ARTICLE V

TERM

     The term of this Agreement shall be three (3) years from the date hereof and shall be
automatically renewed for successive one-year periods unless the Company notifies the Executive in
writing that this Agreement will not be renewed at least sixty (60) days prior to the end of the
current term; provided, however, that (a) from and after a Change in Control during the term of
this Agreement, this Agreement shall remain in effect until the end of the Protection Period, (b)
this Agreement shall terminate if, before a Change in Control, the employment of the Executive with
the Company or any of its subsidiaries, as the case may be, shall terminate for any reason and (c)
if a Protection Period ends by reason of the proviso in Section 1.2, this Agreement shall not
terminate and shall remain in full force and effect until it otherwise terminates or expires in
accordance with this Article V. The termination this Agreement shall not affect the parties’
respective rights and obligations established prior to the termination date.

ARTICLE VI

MISCELLANEOUS

     6.1 No amounts otherwise due or payable under this Agreement will be subject to setoff or
counterclaim by either party hereto.

     6.2 All attorney’s reasonable fees and related expenses incurred in good faith by the
Executive in connection with or relating to the enforcement by her of her rights under this
Agreement will be paid for by the Company.

     6.3 This Agreement will be binding upon and will inure to the benefit of the Company and its
successors and assigns, including, without limitation, any corporation or other person which
acquires, directly or indirectly, by purchase, merger, consolidation or otherwise, all or
substantially all of the business or assets of the Company. Without limitation of the foregoing,
the Company will require any such successor, by agreement in form and substance satisfactory to the
Executive, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that it is required to be performed by the Company. This Agreement will be binding
upon and will inure to the benefit of the Executive, her heirs at law and her personal
representatives.

9

 

     6.4 Neither this Agreement nor any benefits payable hereunder will be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge or to execution, attachment,
levy or similar process at law, whether voluntary or involuntary.

     6.5 This Agreement will not in any way constitute an employment agreement between the Company
and the Executive and it will not oblige the Executive to continue in the employ of the Company,
nor will it oblige the Company to continue to employ the Executive, but it will merely require the
Company to pay benefits hereunder to the Executive under the agreed upon circumstances. The
Executive and the Company acknowledge and confirm that the Executive’s employment by the Company is
employment-at-will, and is subject to termination by the Executive or the Company at any time.

     6.6 The benefits herein provided will be in addition to, and are not intended to reduce,
restrict or eliminate any benefit to which the Executive may otherwise be entitled by virtue of her
termination of employment or otherwise.

     6.7 All notices and other communications required to be given hereunder shall be in writing
and will be deemed to have been delivered or made when mailed, by certified mail, return receipt
requested, if to the Executive, to the last address which the Executive shall provide to the
Company, in writing, for this purpose, but if the Executive has not then provided such an address,
then to the last address of the Executive then on file with the Company; and if to the Company,
then to the last address which the Company shall provide to the Executive, in writing, for this
purpose, but if the Company has not then provided the Executive with such an address, then to:

Secretary

Keithley Instruments, Inc.

28775 Aurora Road

Cleveland, Ohio 44139

     6.8 This Agreement will be governed by, and construed in accordance with, the laws of the
State of Ohio, except for the laws governing conflict of laws. If either party institutes a suit
or other legal proceedings, whether in law or equity, the Executive and the Company hereby
irrevocably consent to the jurisdiction of the Common Pleas Court of the State of Ohio (Cuyahoga
County) or the United States District Court for the Northern District of Ohio.

     6.9 This Agreement constitutes the entire understanding between the Company and the Executive
concerning the subject matter hereof and supersedes all prior written or oral agreements or
understandings between the parties hereto, including any prior change in control agreements or
arrangements by and between the Company and the Executive. Nothing in this Agreement is intended
to affect the Executive’s rights, including rights to indemnification, if applicable, under
applicable law, the Company’s Code of Regulations or any separate indemnification agreement. No
term or provision of this Agreement may be changed, waived, amended or terminated except by a
written instrument. The Company reserves the right, in its sole discretion, to amend this
Agreement to comply with Code Section 409A (which amendment may be retroactive to the extent
permitted by Code Section 409A and may be made by the Company without the consent of the
Executive). In particular, to the extent the Executive

10

 

becomes entitled to receive payments subject to Code Section 409A upon an event that does not
constitute a permitted distribution event under Code Section 409A(a)(2), then notwithstanding
anything to the contrary in this Agreement, the timing of payment to the Executive will be adjusted
accordingly.

     Notwithstanding anything in this Agreement to the contrary, any reimbursements or in-kind
benefits provided under this Agreement shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, where applicable, the requirements that
(a) any reimbursement is for expenses incurred during the period of time specified in this
Agreement, (b) the amount of expenses eligible for reimbursement, or in-kind benefits provided,
during any taxable year of the Executive may not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year of the Executive, (c) the reimbursement
of an eligible expense will be made no later than the last day of the Executive’s taxable year
following the year in which the expense is incurred, and (d) the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit.

     This Agreement is intended, and shall be construed and interpreted, to comply with Section
409A of the Code and if necessary, any provision shall be held null and void to the extent such
provision (or part thereof) fails to comply with Section 409A of the Code or the Treasury
Regulations thereunder. For purposes of Section 409A of the 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
Section 409A of the Code, either as separation pay or as short-term deferrals to the maximum
possible extent.

[Signature Page Follows]

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     IN WITNESS WHEREOF, and as conclusive evidence of the adoption of this Agreement, the parties
have hereunto set their hands as of the date and year first above written.

	 	 	 	 	 
	 	KEITHLEY INSTRUMENTS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	  	 	 
	 	 	  	 	 
	 	 	  	 	 
	 	[Joseph P. Keithley/Linda C. Rae]  	 

12

 

EXHIBIT A

TARGET BONUS PERCENTAGE

[80 percent (for Mr. Keithley)]

[60 percent (for Ms. Rae)]

13

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