KEITHLEY INSTRUMENTS,
INC.
1997 DIRECTORS’ STOCK
OPTION PLAN
(as Amended and
Restated)
1. Purpose . The purpose of
this 1997 Directors’ Stock Option Plan (the
“Plan”) is to enable Keithley Instruments, Inc. (the
“Company”) to attract, retain and reward directors of
the Company and strengthen the mutuality of interest between such
directors and the Company ‘ s shareholders by offering such directors
options (“Options”) to purchase shares of the
Company’s no par value Common Shares (“Common
Shares”). This Plan replaces and supersedes the Keithley
Instruments, Inc. 1992 Directors’ Stock Option Plan (the
“1992 Directors’ Option Plan”), effective as of
the date this Plan is adopted by the Board of Directors of the
Company. This Plan is amended and restated to conform to the
requirements of Section 409A of the Internal Revenue Code
Section of 1986, as amended (the “Code”) and the
regulations and guidance issued thereunder, effective
January 1, 2005.
2. Grant and Eligibility .
All directors of the Company who are not employees of the Company
(“Outside Directors”) shall be granted Options under
the Plan. From and after the Effective Date, so long as the Plan
remains in effect and has Common Shares available for grants
hereunder, each individual who qualifies as an Outside Director at
the close of any annual meeting of the shareholders of the Company
(an “Optionee”) shall automatically be granted an
Option to purchase five thousand (5,000) Common Shares. In addition
to the Options granted at the close of each annual meeting of
shareholders, the Board of Directors of the Company, in its sole
discretion, may grant additional Options under the Plan to
newly-elected Outside Directors, as of the date of their initial
election and in such amounts as the Board shall specify. In the
event Common Shares are available for grants hereunder, but the
number of such Shares is insufficient to provide an Outside
Director with an Option to purchase five thousand (5,000) Common
Shares, such Outside Director shall receive an Option to purchase
the lesser of (i) the number of Common Shares remaining
available for grant under the Plan; or (ii) the number of
Common Shares being granted to any other Outside Director
concurrently entitled to a grant of Options hereunder, so that
Options are granted to all such Outside Directors on a pro
rata basis. The maximum aggregate number of Common Shares available
for issuance under the Plan is two hundred thousand (200,000); such
Common Shares may be treasury shares or authorized but unissued
shares or a combination of the foregoing. If an Option granted
under the Plan shall expire, terminate or become forfeited for any
reason other than its exercise, the shares subject to, but not
delivered under, such Option shall be available for the grant of
other Options pursuant to the Plan.
3. Term of Option, Exercise and
Transferability . The term of each Option granted under the
Plan shall be ten years. An Optionee who has continuously served as
a director of the Company from the date of the grant of an Option
through the date of vesting may first exercise such Option after
the date of vesting for all or part of the number of Common Shares
in accordance with the Plan. For this purpose, the “date of
vesting” for any Option granted under the Plan shall be that
date which is six months and one day after the later to occur of:
(i) the effective date of the Plan; or (ii) the date such
Optionee is elected as a director; or (iii) the date such
Option is granted. An Outside Director who resigns or is removed
before the date of vesting for any Options held by such Director
shall forfeit such Options, unless otherwise approved by the Board
of Directors.
No Option shall
be transferable by the Optionee other than by will or the laws of
descent and distribution. Options shall be exercisable during the
Optionee’s lifetime only by an Optionee or by his or her
legal guardian or legal representative. Notwithstanding the first
and second sentences of this paragraph or the preceding paragraph,
if any Optionee dies while holding unexercised Options, any Option
held by such Optionee at the time of his or her death shall
thereafter be exercised, to the extent such Option was exercisable
at the time of death, by the estate of the Optionee (acting through
its fiduciary), within a period of one year from the date of such
death regardless of the term of the Option remaining at the
Optionee’s death.
4. Option Price and Payment
. The option price for each Common Share purchasable under an
Option shall be the fair market value of a Common Share on the date
such Option is granted in accordance with Section 2; for this
purpose, “fair market value” shall be the average of
the highest and lowest price for a Common Share, as quoted on the
New York Stock Exchange (or if Common Shares are not then traded on
such Exchange, on any other exchange on which Common Shares are
then traded) on the date preceding the date of grant. The option
price shall be payable (i) in cash; (ii) by check
acceptable to the Company; (iii) by delivery of shares of the
same class of stock subject to such Option; or (iv) a
combination of the above, so long as the sum of the fair market
value of any such cash, check or Common Shares equals the option
price. The Company shall have the right to require an Optionee who
is entitled to receive Common Shares pursuant to the exercise of an
Option to pay to the Company the amount of any taxes which
the
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