Exhibit 10.1
BRADY CORPORATION
PERFORMANCE-BASED
RESTRICTED STOCK AGREEMENT
(January 8, 2008)
     Brady Corporation (the “Corporation”), a Wisconsin corporation, hereby
grants to                                          (the “Employee”) a Restricted
Stock Award (the “Award”) with respect to
                                         shares (the “Shares”) of Class A Common
Stock, $.01 par value, of the Corporation (the “Common Stock”), all in
accordance with and subject to the following terms and conditions:
     1. Plan; Defined Terms. This Award is made pursuant to the Brady
Corporation 2006 Omnibus Incentive Stock Plan (the “Plan”). In the event of any
conflict between any provisions of this Award and the provisions of the Plan,
the provisions of the Plan shall control. Terms defined in the Plan where used
herein shall have the meanings as so defined. Employee acknowledges receipt of a
copy of the Plan.
     2. Vesting Requirements. The vesting of this Award (other than pursuant to
accelerated vesting in certain circumstances as provided in Section 3 below)
shall be subject to the satisfaction of the conditions set forth in both Section
2(a) and Section 2(b) below:
          (a) Performance Vesting Requirement (Earnings per Share Improvement).
The performance vesting requirement under this Section 2(a) shall be satisfied
only if the Earnings Per Share for any one of the Corporation’s fiscal years
ending July 31, 2009, July 31, 2010, July 31, 2011 or July 31, 2012 are at least
10% greater than the Earnings Per Share for the Corporation’s fiscal year ending
July 31, 2008. For purposes of this Agreement, “Earnings per Share” shall mean
the basic earnings per share of the Corporation’s Class A Common Stock
calculated in accordance with the standards of the Public Company Accounting
Oversight Board as in effect for the fiscal year ended July 31, 2008. If the
performance vesting requirement is not satisfied for any of the four designated
fiscal years, the Award shall be immediately forfeited.
          (b) Service Vesting Requirement. In addition to the performance
vesting requirement of Section 2(a) above, the Award shall become vested only if
the Employee remains continuously employed by the Corporation (or an Affiliate)
from the date hereof until January 15, 2013. If this service vesting requirement
is not satisfied, this Award shall be immediately forfeited.
          The period of time during which the Shares covered by this Award are
forfeitable is referred to as the “Restricted Period.”

 

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     3. Accelerated Vesting.
          (a) Notwithstanding the terms and conditions of Section 2 hereof, in
the event of the termination of the Employee’s employment with the Corporation
(and any Affiliate) prior to the end of the Restricted Period due to death or
disability, the Shares shall become unrestricted and fully vested. For purposes
of this Agreement, “Disability” means that the Employee is disabled as a result
of sickness or injury, such that he is unable to satisfactorily perform the
material duties of his or her job, as determined by the Committee, on the basis
of medical evidence satisfactory to it.
          (b) In the event of the termination of the Employee’s employment with
the Corporation (and any Affiliate) prior to the end of the Restricted Period
due to a Change in Control, the Shares shall become unrestricted and fully
vested.
          For purposes of this Agreement, a “Change of Control” shall occur if
any person or group of persons (as defined in Section 13(d)(3) of the Securities
and Exchange Act of 1934) other than the members of the family of William H.
Brady, Jr. and their descendants, or trusts for their benefit, collectively,
directly or indirectly controls in excess of 50% of the voting common stock of
the Corporation.
          For purposes of this Agreement, a termination due to Change of Control
shall occur if within the 12 month period beginning with the date a Change of
Control occurs (i) the Employee’s employment with the Corporation (and any
Affiliate) is involuntarily terminated (other than by reason of death,
disability or Cause) or (ii) the Employee’s employment with the Corporation (and
any Affiliate) is voluntarily terminated by the Employee subsequent to (A) a 10%
or more diminution in the total of the Employee’s annual base salary (exclusive
of fringe benefits) and the Employee’s target bonus in comparison with the
Employee’s total of annual base salary and target bonus immediately prior to the
date the Change of Control occurs, (B) a significant diminution in the
responsibilities or authority of the Employee in comparison with the Employee’s
responsibility and authority immediately prior to the date the Change of Control
occurs or (C) the imposition of a requirement by the Corporation that the
Employee relocate to a principal work location more than 50 miles from the
Employee’s principal work location immediately prior to the date the Change of
Control occurs.
          For purposes of this Agreement, Cause means (i) the Employee’s willful
and continued failure to substantially perform the Employee’s duties with the
Corporation (other than any such failure resulting from physical or mental
incapacity) after written demand for performance is given to the Employee by the
Corporation which specifically identifies the manner in which the Corporation
believes the Employee has not substantially performed and a reasonable time to
cure has transpired, (ii) the Employee’s conviction of or plea of nolo
contendere for the commission of a felony, or (iii) the Employee’s commission of
an act of dishonesty or of any willful act of misconduct which results in or
could reasonably be expected to result in significant injury (monetarily or
otherwise) to the Corporation, as determined in good faith by the Committee.
          (c) In the event of (i) the merger or consolidation of the Corporation
with or into another corporation or corporations in which the Corporation is not
the surviving

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corporation, (ii) the adoption of any plan for the dissolution of the
Corporation, or (iii) the sale or exchange of all or substantially all the
assets of the Corporation for cash or for shares of stock or other securities of
another corporation, all restrictions imposed on any then-restricted Shares
shall terminate (such that any Shares shall become fully transferable)
immediately prior to any such event in which the Corporation is not the
surviving corporation.
          (d) If the lapsing of the restrictions would result in any excise tax
to the Employee as a result of Section 280G of the Code, the Corporation shall
pay the Employee an amount equal to such excise tax.
     4. Dividend Rights. The Employee shall have the right to receive any cash
dividends otherwise payable with respect to the Shares, as paid, and the
Employee shall have all other rights as holder of such Shares, provided,
however, the Corporation shall retain custody of all stock certificates
representing shares as to which such restriction has not lapsed.
     5. No Guarantee of Employment. Nothing contained in this Agreement shall
give the Employee the right to be retained in the employment of the Corporation
or affect the right of the Corporation to dismiss the Employee.
     6. Transfer Restrictions. This Award and the Shares (until they become
unrestricted pursuant to the terms hereof) are non-transferable and may not be
assigned, pledged or hypothecated and shall not be subject to execution,
attachment or similar process. Upon any attempt to effect any such disposition,
or upon the levy of any such process, the Award shall immediately become null
and void and the Shares shall be forfeited.
     7. Withholding Taxes. The Corporation may require payment of or withhold
any tax which it believes is payable as a result of the Shares becoming
unrestricted and fully vested, and the Corporation may defer making delivery
with respect to Shares until arrangements satisfactory to the Corporation have
been made with regard to any such withholding obligations. In lieu of part or
all of any such payment, the Employee, in satisfaction of all withholding taxes
(including, without limitation, Federal income, FICA (Social Security and
Medicare) and any state and local income taxes) payable as a result of such
vesting, may elect, subject to such rules and regulations as the Committee may
adopt from time to time, to have the Corporation withhold that number of Shares
(valued at Fair Market Value on the date of vesting and rounded upward) required
to settle such withholding taxes.
     8. Death of Employee. If any of the Shares shall vest upon the death of the
Employee, they shall be registered in the name of the estate of the Employee
unless the Corporation shall have theretofore received in writing a beneficiary
designation, in which event they shall be registered in the name of the
designated beneficiary.
     9. Adjustment of Shares. The terms and provisions of this Award (including,
without limitation, the terms and provisions relating to the number and class of
shares subject to this Award) shall be subject to appropriate adjustment in the
event of any recapitalization, merger, consolidation, disposition of property or
stock, separation, reorganization, stock dividend, issuance of rights,
combination or split-up or exchange of shares, or the like.
     10. Wisconsin Contract. This Award has been granted in Wisconsin and shall
be construed under the laws of that state.

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     IN WITNESS WHEREOF, this Restricted Stock Agreement has been duly executed
as of January 8, 2008.

            BRADY CORPORATION
      By:   /s/ Frank Jaehnert         Frank Jaehnert, President             
Attest:   /s/ Hoyt R. Stastney         Hoyt R. Stastney, Secretary             

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