KEITHLEY INSTRUMENTS INC
EX-10.3
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<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>exhibit3.htm
<DESCRIPTION>EX-10.3
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<P align="left" style="font-size: 10pt"><FONT style="font-size: 13pt">Exhibit&nbsp;10.3
</FONT>

<P align="center" style="font-size: 13pt"><B>KEITHLEY INSTRUMENTS, INC.<BR>
2002 STOCK INCENTIVE PLAN</B>



<P align="center" style="font-size: 13pt"><B>RESTRICTED UNIT AWARD AGREEMENT</B>



<P align="left" style="font-size: 13pt; text-indent: 3%"><FONT style="font-size: 12pt">This restricted unit award agreement (the &#147;Agreement&#148;) is made as of this <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>day of
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>(the &#147;Award Date&#148;), between Keithley Instruments, Inc., an Ohio corporation (the
&#147;Company&#148;), and that key employee of the Company named at the bottom of this Agreement (&#147;Key
Employee&#148;). Subject to the terms, conditions and limitations set forth in this Agreement
(including, without limitation, the vesting provisions of paragraph 5 hereof), Key Employee hereby
is granted and awarded <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>restricted units, with each such unit representing the economic
value of a common share of the Company (the &#147;Award&#148;). When and whether Company common shares are
issued to or in respect of Key Employee (if any) as a result of this Award shall be determined
strictly in accordance with this Agreement, subject to the general provisions of the Plan.
</FONT>

<P align="left" style="font-size: 12pt; text-indent: 3%">All rights arising under or in connection with this Agreement shall expire on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>,
20<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, or if earlier, such earlier date as is specified in this Agreement (the &#147;Expiration Date&#148;).
This Agreement (including any and all incorporated Exhibits hereto) is subject to the terms and
conditions of the Keithley Instruments, Inc. 2002 Stock Incentive Plan, as amended and then in
effect (the &#147;Plan&#148;). The Plan&#146;s terms and conditions are incorporated herein by this reference.
Additional terms and conditions of this Agreement are as follows:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Issuance &#038; Transfer of Common Shares and Other Amounts and Rights</B></U><B>. </B>In
the event the restricted units evidenced by this Award vest as provided in paragraph 5
hereof, then as soon as practicable thereafter the Company shall transfer and issue to
Key Employee (or such other person as may then be entitled hereunder) those Company
common shares that such units represent.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Tax, Withholding Matters</B></U>. Any Key Employee or other person receiving
Company common shares in connection with the vesting of restricted units in accordance
with Paragraph&nbsp;5 hereof 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 &#147;Total Withholding&#148;).
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.</TD>
</TR>

</TABLE>


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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Interests Not Transferable</B></U>. 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&#146;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&#146;s estate (in the case of death) or to Key Employee&#146;s legal representative (in
the case of disability)).</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Units Carry No Dividend or Voting Rights</B></U>. 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 Award. The right to receive dividends,
and to vote or otherwise assert shareholders&#146; 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&#146;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&#146;s legal counsel.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Vesting, Expiration and Termination Rules</B></U>. The units awarded hereunder
will fully vest on the fourth (4<sup>th</sup>) anniversary of the Award Date, subject
to the provisions of Paragraph&nbsp;7 hereof (the &#147;Vesting Date&#148;). Notwithstanding the
preceding sentence, in the event Key Employee&#146;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, all Key Employee&#146;s rights hereunder shall
terminate immediately and be extinguished, and thereafter shall have no value.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Coordination With Other Rules</B></U>. 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.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Forfeiture; Set Off &#038; Recoupment</B></U><B>. </B>Notwithstanding any other provision
of this Agreement or the Plan, Key Employee&#146;s rights hereunder with respect to the
Award evidenced hereby (whether or not then vested, and regardless of the number of
units, or 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&#146;s Company employment, shall terminate immediately Key
Employee&#146;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 this Award and thereafter be subject to set off, reduction and
recoupment by the Company:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any direct or indirect disclosure or publication (or, during the three
(3)-year period commencing with the cessation of Key Employee&#146;s Company
employment, any use) by Key Employee of any Company trade secret or confidential
information;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any material violation by Key Employee of the terms of any written
agreement between Key Employee and the Company;</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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&#146;s Company employment); or</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

</TABLE>



<P align="left" style="margin-left:10%; font-size: 12pt">In the event of any violation by Key Employee of any of subparagraphs (a), (b), (c)&nbsp;or
(d)&nbsp;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 this 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&#146;s right to later
assert its rights hereunder with respect to other or subsequent claims against Key
Employee.


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Choice of Law; Consent to Jurisdiction</B></U>. Key Employee hereby consents
and agrees that Ohio law controls the parties&#146; 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.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">9.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Severability; Survival of Certain Provisions</B></U>. The unenforceability of
one (1)&nbsp;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.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 12pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="right">10.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><U><B>Definitions</B></U>. Unless otherwise defined in this Agreement, capitalized
terms will have the same meanings given them in the Plan.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 12pt; text-indent: 27%"><B>KEITHLEY INSTRUMENTS, INC.</B>

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="32%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DATE OF AWARD: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title: Chairman of the Board,<BR>
President and<BR>
Chief Executive Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 12pt"><U><B>ACCEPTANCE BY KEY EMPLOYEE</B></U>



<P align="left" style="font-size: 12pt; text-indent: 3%">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.

<DIV align="center">
<TABLE style="font-size: 12pt" cellspacing="0" border="0" cellpadding="0" width="95%">
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<TR valign="bottom">
    <TD width="42%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="53%">&nbsp;</TD>
</TR>

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<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">DATE: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Key Employee</TD>
</TR>
<TR valign="bottom" style="font-size: 12pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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</DIV>



<P align="center" style="font-size: 10pt; display: none">


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