EXHIBIT 10.2
BRADY CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN
AS AMENDED AND RESTATED EFFECTIVE FEBRUARY 17, 2011
ARTICLE I
INTRODUCTION
1.1 For periods prior to calendar year 2005, Brady Corporation has maintained
the Brady Corporation Directors’ Deferred Compensation Plan by means of a series
of individual deferred compensation agreements with covered directors. This
amended and restated document shall apply to those prior agreements with respect
to both investment and distribution of amounts deferred before 2005 and after
2004 and with respect to rules for making deferrals after 2004. This document is
intended to comply with the provisions of Section 409A of the Internal Revenue
Code and shall be interpreted accordingly. If any provision or term of this
document would be prohibited by or inconsistent with the requirements of
Section 409A of the Code, then such provision or term shall be deemed to be
reformed to comply with Section 409A of the Code. This Plan is amended and
restated, effective as of February 17, 2011.
ARTICLE II
DEFINITIONS
The following definitions shall be applicable throughout the Plan:
2.1 “Account” means the account credited from time to time with bookkeeping
amounts equal to the portions of a Participant’s compensation deferred pursuant
to Section 3.1 and earnings credited on such amounts in accordance with
Article IV.
2.2 “Administrator” means the Board of Directors of Brady Corporation.
2.3 “Beneficiary” means the person, persons, or entity designated by the
Participant to receive any benefits payable under the Plan on or after the
Participant’s death. Each Participant shall be permitted to name, change or
revoke the Participant’s designation of a Beneficiary in writing on a form and
in the manner prescribed by the Corporation; provided, however, that the
designation on file with the Corporation at the time of the Participant’s death
shall be controlling. Should a Participant fail to make a valid Beneficiary
designation or leave no named Beneficiary surviving, any benefits due shall be
paid to such Participant’s spouse, if living; or if not living, then any
benefits due shall be paid to such Participant’s estate. A Participant may
designate a primary beneficiary and a contingent beneficiary; provided, however,
that the Corporation may reject any such instrument tendered for filing if it
contains successive beneficiaries or contingencies unacceptable to it. If all
Beneficiaries who survive Participant shall die before receiving the full
amounts payable hereunder, then the payments shall be paid to the estate of the
Beneficiary last to die.

 

 

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2.4 “Code” means the Internal Revenue Code of 1986, including any subsequent
amendments.
2.5 “Corporation” means Brady Corporation.
2.6 “Distribution Date” means the October 1 following the Payment Event. For
distribution elections prior to the Effective Date, the Distribution Date was
the quarterly date specified by the Participant upon which distribution would be
made or commenced following the Participant’s Separation from Service or the
In-Service Payment Event Date, as the case may be. All distribution elections in
effect on the Effective Date shall remain in effect unless the Participant
consents to a Distribution Date that is the October 1 following the
Participant’s Payment Event; provided that no change in Distribution Date may
change the calendar year of the distribution. If the distribution is payable
other than in a single installment, subsequent installments shall be paid on
anniversaries of the Distribution Date.
2.7 “Effective Date” means February 17, 2011. This document describes how this
Plan has been administered for periods after 2004 and prior to February 17, 2011
and how it shall be administered for periods on and after February 17, 2011.
2.8 “In-Service Payment Event Date” means the date, if any, specified by the
Participant as the reference date following which distribution of his Account
shall begin. An In-Service Payment Event Date may be no earlier than January 1,
2007. For distribution elections following the Effective Date, a Participant may
not elect an In-Service Payment Event Date.
2.9 “Participant” means a director of Brady Corporation currently eligible to
make deferrals (an “Active Participant”) and any former director who previously
participated in the Plan and is entitled to benefits.
2.10 “Payment Event” means the date of a Participant’s Separation From Service.
For distribution elections prior to February 17, 2011, a Participant could elect
a Payment event that was the earlier of the date of a Participant’s Separation
From Service or the date the Participant specified as his In-Service Payment
Event Date.
2.11 “Plan” means the Brady Corporation Directors’ Deferred Compensation Plan,
as set forth herein and as it may be amended from time to time.
2.12 “Plan Year” means the calendar year.
2.13 “Separation from Service” means expiration or termination of the
arrangement with the Corporation pursuant to which the Participant performed
services as a director of the Corporation if such expiration or termination
constitutes a good faith and complete termination of the relationship and all
other independent contractor relationships the Participant has with the
Corporation. A good faith and complete termination of a relationship shall not
be deemed to have occurred if the Corporation anticipates a renewal of a
contractual relationship or anticipates that the Participant shall become an
employee of the Corporation. For this purpose, the Corporation is considered to
anticipate the renewal of a contractual relationship with the Participant if it
intends to contract again for the services provided under the expired
arrangement, and neither the Corporation nor the Participant has eliminated the
Participant as a possible provider of services under any such new arrangement.
Further, the Corporation is considered to intend to contract again for the
services provided under an expired arrangement if the Corporation’s doing so is
conditioned only upon incurring a need for the services, the availability of
funds or both. The foregoing requirements are deemed satisfied if no amount will
be paid to the Participant before a date at least 12 months after the day on
which the arrangement expires pursuant to which the Participant performed
services for the Corporation (or, in the case of more than one arrangement, all
such arrangements expire) and no amount payable to the Participant on that date
will be paid to the Participant if, after the expiration of the arrangement (or
arrangements) and before that date, the Participant performs services for the
Corporation as a director or other independent contractor or an employee). If a
Participant provides services both as an employee of the Corporation and as a
member of the board of directors of the Corporation, the services provided as an
employee are not taken into account in determining whether the Participant has a
Separation from Service as a director for purposes of this Plan because this
Plan is not aggregated with any plan in which the Participant participates as an
employee pursuant to IRS Regulation Section 1.409A-1(c)(2)(ii).

 

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2.14 “Unforeseeable Emergency” means a severe financial hardship to a
Participant resulting from an illness or accident of the Participant or the
Participant’s spouse or dependent (as defined in Section 152(a) of the Code),
loss of the Participant’s property due to casualty (including the need to
rebuild a home following damage to a home not otherwise covered by insurance,
for example, as a result of a natural disaster), or other similar extraordinary
and unforeseeable circumstances arising as a result of events beyond the control
of the Participant. For example, the imminent foreclosure of or eviction from
the Participant’s primary residence may constitute an Unforeseeable Emergency.
In addition, the need to pay for medical expenses, including non-refundable
deductibles, as well as for the costs of prescription drug medication, may
constitute an Unforeseeable Emergency. Finally, the need to pay for funeral
expenses of a spouse or a dependent (as defined in Code section 152(a)) may also
constitute an Unforeseeable Emergency. Except as otherwise provided above, the
purchase of a home and the payment of college tuition are not Unforeseeable
Emergencies. Whether a Participant is faced with an Unforeseeable Emergency is
to be determined based on the relevant facts and circumstances of each case.
ARTICLE III
DEFERRALS
3.1 Deferral Elections. An Active Participant may elect to defer a specified
percentage of his fees for services performed as a director of the Corporation
during a Plan Year by completing and filing such forms as required by the
Corporation prior to the first day of the Plan Year. A Participant’s deferrals
shall be taken at a uniform percentage rate from each of the payments made to
him by the Corporation during the Plan Year. Compensation deferred shall be
retained by the Corporation, credited to the Participant’s Account pursuant to
Section 4.1 and paid in accordance with the terms and conditions of the Plan. A
director who is not already eligible to participate in any other deferred
compensation plan of the account balance type sponsored by the Corporation who
becomes an Active Participant for the first time during a Plan Year (i.e., first
becomes a director) may within 30 days after the effective date of participation
make an election to defer a specified percentage of compensation to be paid to
him for services to be performed subsequent to the deferral election.
3.2 Continued Effect of Elections. An Active Participant’s deferral election
with respect to a Plan Year under Section 3.1 shall be irrevocable after the
last date upon which it may be filed pursuant to Section 3.1 and shall continue
in effect each subsequent Plan Year until prospectively revoked or amended in
writing. For a revocation or amendment to be effective with respect to payments
during a Plan Year, it must be filed by the last date for which an effective
deferral election is permitted to be filed with respect to those payments under
Section 3.1.
3.3 Prior Deferral Elections. Any deferral election made prior to calendar year
2005 under an individual agreement shall be treated as a deferral election
described in Section 3.1 and shall continue in effect until modified as
described in Section 3.2 above unless modified earlier pursuant to
Section 8.12(a) below.

 

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3.4 Unforeseeable Emergency. In the event that a Participant makes application
for a hardship distribution under Section 6.3 and the Administrator determines
that an Unforeseeable Emergency exists, all deferral elections otherwise in
effect under this Article III and any other nonqualified deferred compensation
plan of the account balance type sponsored by the Corporation shall immediately
terminate upon such determination. To resume deferrals thereafter, a Participant
must make an election satisfying the provisions of Section 3.1, as the case may
be, as those provisions apply to someone who is already an Active Participant in
the Plan.
ARTICLE IV
ACCOUNTS
4.1 Credits to Account. Bookkeeping amounts equal to the amounts deferred by a
Participant pursuant to Section 3.1 shall be credited to such Participant’s
Deferral Account as soon as practicable after the deferred compensation would
otherwise have been paid to such Participant in the absence of deferral.
4.2 Valuation of Account.
(a) The Participant’s Account shall be credited or charged with deemed earnings
or losses as if it were invested in accordance with paragraph (b) below.
(b) (i) The investment funds available hereunder for the deemed investment of
the Account shall be the Brady Stock Fund and such other funds as the
Administrator shall from time to time determine. However, in no event shall the
Corporation be required to make any such investment in the Brady Stock Fund or
any other investment fund and, to the extent such investments are made, such
investments shall remain an asset of the Corporation subject to the claims of
its general creditors.
(ii) On the date credited to the Participant’s Account, deferrals shall be
deemed to be invested in one or more of the investment funds designated by the
Participant for such deemed investment; provided that any deferrals designated
for investment in the Brady Stock Fund shall initially be credited to the
General Investment Sub-account and transferred to the Brady Stock Sub-account on
a quarterly basis. Once made, the Participant’s investment designation shall
continue in effect for all future deferrals until changed by the Participant.
Any such change may be prospectively elected by the Participant at the times
established by the Administrator, which shall be no less frequently than
quarterly, and shall be effective only for deferrals, credited from and after
its effective date. Until such time as the Administrator takes action to the
contrary, such changes may be elected at the same times as changes may be
elected with respect to the Brady Matched 401(k) Plan.
(iii) The portion of a Participant’s Account invested in the Brady Stock Fund
shall be called the Brady Stock Sub-account. The remaining portion of the
Participant’s Account shall be referred to as the General Investment
Sub-account.
(iv) A Participant’s balance in the Brady Stock Fund shall be determined as
though the Participant’s deferrals allocated to that Fund are invested in shares
of Class A non-voting common stock of Brady Corporation by purchase at the fair
market value price of such stock on the date the deferrals are credited to the
Participant’s Brady Stock Fund Sub-account.

 

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(v) The value of the Brady Stock Sub-account on any particular date will be
based upon the value of the shares of Class A non-voting common stock of Brady
Corporation which the sub-account is deemed to hold on that date. The shares of
such stock deemed to be held in such sub-account shall be credited with
dividends at the time they are credited with respect to actual shares of Class A
non-voting common stock of Brady Corporation and such dividends shall be deemed
to be used to purchase additional shares of Class A non-voting common stock of
Brady Corporation on the day following the crediting of such dividends at the
then fair market value price of such stock. The sub-account shall also be
credited from time to time with additional shares of Class A non-voting common
stock of Brady Corporation equal in number to the number of shares granted in
any stock dividend or split to which the holder of a like number of shares of
Class A non-voting common stock would be entitled. All other distributions with
respect to shares of Class A non-voting common stock of Brady Corporation shall
be similarly applied. In the event of a distribution of preferred stock, such
preferred stock shall be valued at its par value (or its voluntary liquidating
price, if it does not have a par value).
(vi) The valuation of the funds held in the General Investment Sub-account shall
be accomplished in the same manner as though the deemed investment in such funds
had actually been made and are valued at their fair market value price on
valuation dates hereunder.
(vii) A Participant’s Account shall be valued as of December 31 each year and at
such other times established by the Administrator, which shall be no less
frequently than quarterly. Until such time as the Administrator takes action to
the contrary, such valuation shall be at the same time as valuations made of
Brady matched 401(k) plan assets.
(viii) All elections and designations under this section shall be made in
accordance with procedures prescribed by the Administrator. The Administrator
may prescribe uniform percentages for such elections and designations.
(ix) A Participant may prospectively elect to reallocate his Account balance
among the investment funds at the times established by the Administrator, which
shall be no less frequently than quarterly. Until such time as the Administrator
takes action to the contrary, such changes may be elected at the same times as
changes may be elected with respect to the Brady Matched 401(k) Plan.
Notwithstanding any other provision of this Plan to the contrary, a Participant
may not make (i) any election or transaction in the Brady Stock Fund at a time
when the Participant is in possession of any material non-public information or
at a time not permitted under the Corporation’s policy on insider trading or
(ii) an opposite way election with respect to the Brady Stock Fund within six
months of a prior election regarding the Brady Stock Fund.
(x) Notwithstanding subparagraph (ix) above, from and after May 1, 2006, a
Participant may not shift any amounts from his Brady Stock Sub-account to his
General Investment Sub-account or vice-versa. The preceding sentence shall not
apply to a Participant who has had a Separation from Service prior to May 1,
2006. A Participant shall, on or after February 16, 2006 and prior to May 1,
2006, be entitled to reallocate up to 50% of the balance of the portion of his
Account attributable to pre-2004 deferrals from investments in the Brady Stock
Fund to the other investment funds available hereunder; and, thereafter, the
portion of such account attributable to pre-2004 deferrals held in the Brady
Stock Fund must remain in the Brady Stock Fund but the director may continue to
make new investment choices from among available investment funds with respect
to remaining portions of that account. The preceding sentence shall not apply to
a Participant who has a Separation from Service before reallocation under such
sentence has taken place.

 

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(c) The Corporation shall provide annual reports to each Participant showing
(a) the value of the Account as of the most recent December 31st, (b) the amount
of deferral made by the Participant for the Plan Year ending on such date and
(c) the amount of any investment gain or loss and the costs of administration
credited or debited to the Participant’s Account.
(d) Notwithstanding any other provision of this Agreement that may be
interpreted to the contrary, the deemed investments are to be used for
measurement purposes only and shall not be considered or construed in any manner
as an actual investment of the Participant’s Account balance in any such fund.
In the event that Brady Corporation or the trustee of any grantor trust which
Brady Corporation may choose to establish to finance some or all of its
obligations hereunder, in its own discretion, decides to invest funds in any or
all of the funds, the Participant shall have no rights in or to such investments
themselves. Without limiting the foregoing, the Participant’s Account balance
shall at all times be a bookkeeping entry only and shall not represent any
investment made on the Participant’s behalf by the Corporation or any trust; the
Participant shall at all times remain an unsecured creditor of the Corporation.
ARTICLE V
VESTING
5.1 Full Vesting. A Participant shall be fully vested and nonforfeitable at all
times in his or her Account hereunder.
ARTICLE VI
MANNER AND TIMING OF DISTRIBUTION
6.1 Payment of Benefits. After a Participant’s Payment Event the Participant’s
Account shall be paid to the Participant (or in the event of the Participant’s
death, to the Participant’s Beneficiary). Payment shall be made in a Single Sum
or Installments as specified in the Participant’s payment election pursuant to
Section 6.2:
(i) Single Sum. A single sum distribution of the value of the balance of the
Account on the Distribution Date following the Participant’s Payment Event. If
the Participant receives a single sum distribution before Separation from
Service with the result that additional amounts are subsequently deposited in
the Participant’s Account, a distribution shall be made on each succeeding
Distribution Date of the entire value of the then balance of the Account.

 

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(ii) Installments. The value of the balance of the Account shall be paid in
annual installments on the Distribution Date each year with the first of such
installments to be paid on the Distribution Date following the Participant’s
Payment Event. Annual installments shall be paid in one of the alternative
methods specified below over the number of years selected by the Participant in
the payment election made pursuant to Section 6.2, but not to exceed 10. The
earnings (or losses) provided for in Section 4.2 shall continue to accrue on the
balance remaining in the Account during the period of installment payments. The
alternative methods available are as follows:
(A) Fractional Method. The annual installment shall be calculated by multiplying
the most recent July 31 value of the Account by a fraction, the numerator of
which is one, and the denominator of which is the remaining number of annual
payments due the Participant. By way of example, if the Participant elects a
10 year annual installment method, the first payment shall be one-tenth (1/10)
of the Account balance. The following year, the payment shall be one-ninth (1/9)
of the Account balance. Further, regardless of the method selected by the
Participant, the final installment payment will include 100% of the then
remaining Account value.
(B) Percentage or Fixed Dollar Method. The annual installment shall be
calculated by multiplying the most recent July 31 value of the Account, in the
case of the percentage method, by the percentage selected by the Participant and
paying out the resulting amount or, in the case of the fixed dollar method, by
paying out the fixed dollar amount selected by the Participant for the number of
years selected by the Participant. However, in the event the dollar amount
selected is more than the value of the Account in any given year, the entire
value of the Account will be distributed. Further, regardless of the method
selected by the Participant, the final installment payment will include 100% of
the then remaining Account value.
(iii) In Cash or In Stock. Prior to May 1, 2006 all payments shall be made in
cash, except that amounts held in the Brady Stock Sub-account attributable to
pre-2004 deferrals shall be distributed by means of Class A non-voting common
stock of Brady Corporation. From and after May 1, 2006, payments shall be made
in cash and/or Class A non-voting common stock of Brady Corporation pursuant to
the following:
(A) If distribution is made in a single sum, the value of the portion of the
Participant’s Account which consists of the General Investment Sub-account shall
be paid in cash while the value of the portion of the Account which consists of
the Brady Stock Sub-account shall be paid by distributing the number of shares
of Class A non-voting stock of Brady Corporation which represent the number of
deemed shares held in the Brady Stock Sub-Account, except, however, that any
fractional shares shall be valued and distributed in cash.
(B) If distribution is made in installments, a portion of each installment shall
be distributed in cash and a portion in Class A non-voting shares of common
stock of Brady Corporation. The portion to be distributed in cash shall be that
portion of the total installment payment which is the same percentage as derived
by dividing the value of the Balance in the General Investment Sub-account by
the value of the total Account balance and the portion to be distributed in
stock shall be the same percentage as determined by dividing the value of the
balance of the Brady Stock Sub-account by the value of the total Account
balance. The number of shares of Class A non-voting shares of common stock of
Brady Corporation to be distributed shall be the number having the same value as
the portion of the installment to be paid in such stock, except, however, that
any fractional shares shall be distributed in cash.

 

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6.2 Payment Election. An individual who first becomes a Participant at the
beginning of a Plan Year shall, prior to his date of participation, complete a
payment election form specifying the form of payment applicable to such
Participant’s Account under the Plan. An individual who first becomes a
Participant other than on the first day of a Plan Year shall, no later than
30 days after the effective date of participation, complete a payment election
form specifying the form of payment applicable to such Participant’s Account;
provided, however, that if such Participant is already a participant in any
other nonqualified plan or plans sponsored by the Corporation of the account
balance type, the most recent payment election with respect to any one of those
plans shall be the form of payment election deemed elected under this Plan
regardless of whether the individual elects a different form of payment during
that initial 30 day period. A “payment election form” shall mean the form
established from time to time by the Administrator which a Participant
completes, signs and returns to the Administrator to make an election under the
Plan. To the extent authorized by the Administrator, such form may be provided
electronically and, in such case, need not be signed by the Participant. A
Participant may change the form of payment by completing and filing a new
payment election form with the Corporation, and the payment election form on
file with the Corporation as of the date of the Participant’s Payment Event
shall be controlling. Notwithstanding the foregoing, a payment election form
changing the Participant’s form of payment shall not be effective if the
Participant has a Payment Event within twelve months after the date on which the
election change is filed with the Corporation. Any change in payment method must
have the effect of delaying the commencement of payments to a date which is at
least five (5) years after the initially scheduled commencement date of payment
previously in effect. Any change in the Distribution Date must have the effect
of delaying the commencement of payments to a date which is at least five
(5) years after the initially scheduled Distribution Date. For purposes of
compliance with Code Section 409A, a series of installment payments is
designated as a single payment rather than a right to a series of separate
payments; therefore, a Participant who has elected (or is deemed to have
elected) any option under Section 6.1(a)(i) or (ii) may substitute any of the
other options for the option originally selected as long as the foregoing
one-year and five year rules are satisfied. A switch from the percentage method
to the fixed dollar method or vice versa and a switch from either of those
methods to the fractional method or vice versa is considered a substitution of a
new option for the original option for purposes of this rule even if the number
of yearly installments is not changed. The five year delay rule does not apply
if the revised payment method applies only upon the Participant’s death or
disability. For this purpose, “disability” means that the Participant is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months.
6.3 Financial Hardship. A partial or total distribution of the Participant’s
Account shall be made prior to a Payment Event upon the Participant’s request
and a demonstration by the Participant of severe financial hardship as a result
of an Unforeseeable Emergency. Such distribution shall be made in a single sum
as soon as administratively practicable following the Administrator’s
determination that the foregoing requirements have been met. In any case, a
distribution due to Unforeseeable Emergency may not be made to the extent that
such emergency is or may be relieved through reimbursement or compensation from
insurance or otherwise, by liquidation of the Participant’s assets, to the
extent the liquidation of such assets would not cause severe financial hardship,
or by cessation of deferrals under Section 3.1 and any other nonqualified
deferred compensation plan of the account balance type sponsored by the
Corporation. Distributions because of an Unforeseeable Emergency must be limited
to the amount reasonably necessary to satisfy the emergency need (which may
include amounts necessary to pay any Federal, state, or local income taxes or
penalties reasonably anticipated to result from the distribution).
Determinations of amounts reasonably necessary to satisfy the emergency need
must take into account any additional compensation that is available because of
cancellation of a deferral election under Section 3.1 and any other nonqualified
deferred compensation plan of the account balance type sponsored by the
Corporation upon a payment due to an Unforeseeable Emergency. The payment may be
made from any arrangement in which the Participant participates that provides
for payment upon an Unforeseeable Emergency, provided that the arrangement under
which the payment was made must be designated at the time of payment.

 

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6.4 Delayed Distribution.
(a) A payment otherwise required under this Article VI shall be delayed if the
Corporation reasonably anticipates that the making of the payment will violate a
term of a loan agreement to which the Corporation is a party, or other similar
contract to which the Corporation is a party, and such violation will cause
material harm to the Corporation; provided, however, that payments shall be made
on the earliest date on which the Corporation reasonably anticipates that the
making of the payment will not cause such violation, or such violation will not
cause material harm to the Corporation, and provided that the facts and
circumstances indicate that the Corporation entered into the loan agreement
(including such covenant) or other similar contract for legitimate reasons, and
not to avoid the restrictions on deferral elections and subsequent deferral
elections under Code Section 409A.
(b) A payment otherwise required under this Article VI shall be delayed if the
Corporation reasonably determines that the making of the payment will jeopardize
the ability of the Corporation to continue as a going concern; provided,
however, that payments shall be made on the earliest date on which the
Corporation reasonably determines that the making of the payment will not
jeopardize the ability of the Corporation to continue as a going concern.
(c) A payment otherwise required under this Article VI shall be delayed upon
such other events and conditions as the Internal Revenue Service may prescribe
in generally applicable guidance published in the Internal Revenue Bulletin.
6.5 Inclusion in Income Under Section 409A. Notwithstanding any other provision
of this Article VI, in the event this Plan fails to satisfy the requirements of
Code Section 409A and regulations thereunder with respect to any Participant,
there shall be distributed to such Participant as promptly as possible after the
Administrator becomes aware of such fact of noncompliance such portion of the
Participant’s Account balance hereunder as is included in income as a result of
the failure to comply, but no more. Any such distribution shall be taken on a
pro rata basis from the Participant’s General Investment Sub-account and Brady
Stock Sub-account in the manner described in Section 6.1(a)(iv)(B).
6.6 Domestic Relations Order. Notwithstanding any other provision of this
Article VI, payments shall be made from an account of a Participant in this Plan
to such individual or individuals (other than the Participant) and at such times
as are necessary to comply with a domestic relations order (as defined in Code
Section 414(p)(1)(B)). Any such distribution shall be taken on a pro rata basis
from the Participant’s General Investment Sub-account and Brady Stock
Sub-account in the manner described in Section 6.1(a)(iv)(B).
6.7 De Minimis Amounts. Notwithstanding any other provision of this Article VI,
a Participant’s entire Account balance under this Plan and all other
nonqualified deferred compensation plans of the account balance type shall
automatically be distributed to the Participant on or before the later of
December 31 of the calendar year in which occurs the Participant’s Separation
from Service or the 15th day of the third month following the Participant’s
Separation from Service if the total amount in such Account balance at the time
of distribution, when aggregated with all other amounts payable to the
Participant under all arrangements benefiting the Participant described in
Section 1.409A-1(c) or any successor thereto, do not exceed the amount described
in Code Section 402(g)(1)(B). The foregoing lump sum payment shall be made
automatically and any other distribution elections otherwise applicable with
respect to the individual in the absence of this provision shall not apply.

 

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ARTICLE VII
ADMINISTRATION
7.1 Administrator. The Plan shall be administered by the Administrator, which
shall be the Corporation’s Board of Directors. The Administrator shall have all
authority that may be appropriate for administering the Plan, including the
authority to adopt rules and regulations for the conduct of its affairs and for
implementing, amending and carrying out the Plan, interpreting the provisions of
the Plan and determining a Participant’s entitlement to benefits hereunder. The
Administrator shall be entitled to rely upon the Corporation’s records as to
information pertinent to calculations or determinations made pursuant to the
Plan.
The Administrator may also delegate any of its clerical or other administrative
duties to one or more officers or employees of the Corporation, who may assist
the Administrator in the performance of any of its functions hereunder. In the
event of such delegation, a reference to the Administrator shall be deemed to
refer to such officer(s) or employee(s).
7.2 Authority of Administrator. The Administrator shall have full and complete
discretionary authority to determine eligibility for benefits under the Plan, to
construe the terms of the Plan and to decide any matter presented through the
claims procedure. Any final determination by the Administrator shall be binding
on all parties and afforded the maximum deference allowed by law. If challenged
in court, such determination shall not be subject to de novo review and shall
not be overturned unless proven to be arbitrary and capricious based upon the
evidence considered by the Administrator at the time of such determination.
7.3 Administrator Actions. The Administrator may authorize one or more of its
members to execute on its behalf instructions or directions to any interested
party, and any such interested party may rely upon the information contained
therein. The members may also act at a meeting or by unanimous written consent.
A majority of the members shall constitute a quorum for the transaction of
business and shall have full power to act hereunder. All decisions shall be made
by vote of the majority present at any meeting at which a quorum is present,
except for actions in writing without a meeting, which must be unanimous.
7.4 Minor or Incompetent Payees. If a person to whom a benefit is payable is a
minor or is otherwise incompetent by reason of a physical or mental disability,
the Corporation may cause the payments due to such person to be made to another
person for the first person’s benefit without any responsibility to see to the
application of such payment. Such payments shall operate as a complete discharge
of the obligations to such person under the Plan.
7.5 No Liability. Except as otherwise provided by law, neither the
Administrator, nor any member thereof, nor any director, officer or employee of
the Corporation involved in the administration of the Plan shall be liable for
any error of judgment, action or failure to act hereunder or for any good faith
exercise of discretion, excepting only liability for gross negligence or willful
misconduct. The Corporation shall hold harmless and defend any individual in the
employment of the Corporation and any director of the Corporation against any
claim, action or liability asserted against him in connection with any action or
failure to act regarding the Plan, except as and to the extent that any such
liability may be based upon the individual’s own gross negligence or willful
misconduct. This indemnification shall not duplicate but may supplement any
coverage available under any applicable insurance.

 

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7.6 Claims Procedure.
(a) If the Participant or the Participant’s Beneficiary (hereinafter referred to
as a “Claimant”) is denied all or a portion of an expected benefit under the
Plan for any reason, he or she may file a claim with the Administrator or its
designee. The Administrator or its designee shall notify the Claimant within
60 days of allowance or denial of the claim, unless the Claimant receives
written notice prior to the end of the sixty (60) day period stating that
special circumstances require an extension of the time for decision and
specifying the expected date of decision. The notice of the such decision shall
be in writing, sent by mail to the Claimant’s last known address, and if a
denial of the claim, must contain the following information:
(i) the specific reasons for the denial;
(ii) specific reference to pertinent provisions of the Plan on which the denial
is based;
(iii) if applicable, a description of any additional information or material
necessary to perfect the claim, an explanation of why such information or
material is necessary, and an explanation of the claims review procedure; and
(iv) a description of the Plan’s claims review procedure, including a statement
of the Claimant’s right to bring a civil action under Section 502 of ERISA if
the Claimant’s claim is denied upon review.
(b) A Claimant is entitled to request a review of any denial of his claim. The
request for review must be submitted in writing to the Administrator within
60 days after receipt of the notice of the denial. The timely filing of such a
request is necessary to preserve any legal recourse which may be available to
the Claimant and, absent the submission of request for review within the 60-day
period, the claim will be deemed to be conclusively denied. Upon submission of a
written request for review, the Claimant or his representative shall be entitled
to review all pertinent documents, and to submit issues and comments in writing
for consideration by the Administrator. The Administrator shall fully and fairly
review the matter and shall consider all information submitted in the review
request, without regard to whether or not such information was submitted or
considered in the initial claim determination. The Administrator shall promptly
respond to the Claimant, in writing, of its decision within 60 days after
receipt of the review request. However, due to special circumstances, if no
response has been provided within the first 60 days, and notice of the need for
additional time has been furnished within such period, the review and response
may be made within the following 60 days. The Administrator’s decision shall
include specific reasons for the decision, including references to the
particular Plan provisions upon which the decision is based, notification that
the Claimant can receive or review copies of all documents, records and
information relevant to the claim, and information as to the Claimant’s right to
file suit under Section 502(a) of ERISA.
(c) If a determination of disability for purposes of Section 6.1(b) or 6.2
becomes necessary and if such determination is considered to be with respect to
a claim for benefits based on disability for purposes of 29 CFR
Section 2560.503-1, then the Administrator shall adopt and administer a special
procedure for considering such disability claims meeting the requirements of 29
CFR Section 2560.503-1 for disability benefit claims.

 

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7.7 Conflict of Interest. No person who is covered under the Plan may vote or
decide upon any matter relating solely to himself or vote in any case in which
his individual right to any benefit under the Plan is particularly involved.
Decisions shall be made by remaining members of the Corporation’s Board of
Directors.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendment or Termination. The Corporation (through its Board of Directors or
authorized officers or employees) reserves the right to alter or amend the Plan,
or any part thereof, in such manner as it may determine, at any time and for any
reason. Further, the Board of Directors of the Corporation reserves the right to
terminate the Plan, at any time and for any reason. Notwithstanding the
foregoing, in no event shall any amendment or termination deprive any
Participant or Beneficiary of any amounts credited to him under this Plan as of
the date of such amendment or termination; provided, however, that the
Corporation may prospectively change the manner in which earnings are credited
or discontinue the crediting of earnings and, further, the Corporation may make
any amendment it deems necessary or desirable for purposes of compliance with
the requirements of Code Section 409A and regulations thereunder.
If the Plan is amended to freeze benefit accruals, no additional contributions
shall be credited to any Participant Account hereunder. Following such a freeze
of benefit accruals, Participants’ Accounts shall be paid at such time and in
such form as provided under Article VI of the Plan. If the Corporation
terminates the Plan and if the termination is of the type described in
regulations issued by the Internal Revenue Service pursuant to Code
Section 409A, then the Corporation shall distribute the then existing Account
balances of Participants and beneficiaries in a lump sum within the time period
specified in such regulations and, following such distribution, there shall be
no further obligation to any Participant or beneficiary under this Plan.
However, if the termination is not of the type described in such regulations,
then following Plan termination Participants’ Accounts shall be paid at such
time and in such form as provided under Article VI of the plan.
8.2 Applicable Law. This Plan shall be governed by the laws of the State of
Wisconsin, except to the extent preempted by the provisions of ERISA or other
applicable federal law.
8.3 Relationship to Other Programs. Participation in the Plan shall not affect a
Participant’s rights to participate in and receive benefits under any other
plans of the Corporation, nor shall it affect the Participant’s rights under any
other agreement entered into with the Corporation, unless expressly provided
otherwise by such plan or agreement. Any amount credited under or paid pursuant
to this Plan shall not be treated as any type of compensation or otherwise taken
into account in the determination of the Participant’s benefits under any other
plans of the Corporation, unless expressly provided otherwise by such plan.
8.4 Non-Assignability by Participant. No Participant or Beneficiary shall have
any right to commute, sell, assign, pledge, convey, or otherwise transfer any
rights or claims to receive benefits hereunder, nor shall such rights or claims
be subject to garnishment, attachment, execution or levy of any kind except to
the extent otherwise required by law.
8.5 No Right to Continued Service. Neither participation in this Plan, nor the
payment of any benefit hereunder, shall be construed as giving to a Participant
any right to be retained in the service of the Corporation, or limiting in any
way the right of the Corporation to terminate the Participant’s service at any
time.

 

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8.6 Assignability by Corporation. The Corporation shall have the right to assign
all of its right, title and obligation in and under this Plan upon a merger or
consolidation in which the Corporation is not the surviving entity or to the
purchaser of substantially its entire business or assets or the business or
assets pertaining to a major product line, provided such assignee or purchaser
assumes and agrees to perform after the effective date of such assignment all of
the terms, conditions and provisions imposed by this Plan upon the Corporation.
Upon such assignment, all of the rights, as well as all obligations, of the
Corporation under this Plan shall thereupon cease and terminate.
8.7 Unsecured Claim; Grantor Trust. The right of a Participant to receive
payment hereunder shall be an unsecured claim against the general assets of the
Corporation, and no provisions contained herein, nor any action taken hereunder
shall be construed to give any individual at any time a security interest in any
asset of the Corporation, of any affiliated corporation, or of the stockholders
of the Corporation. The liabilities of the Corporation to a Participant
hereunder shall be those of a debtor pursuant to such contractual obligations as
are created hereunder and to the extent any person acquires a right to receive
payment from the Corporation hereunder, such right shall be no greater than the
right of any unsecured general creditor of the Corporation. The Corporation may
establish a grantor trust (but shall not be required to do so) to which the
Corporation may in its discretion contribute (subject to the claims of the
general creditors of the Corporation) the amounts credited to the Account. If a
grantor trust is so established, payment by the trust of the amounts due the
Participant or his Beneficiary hereunder shall be considered a payment by the
Corporation for purposes of this Plan.
8.8 Notices or Filings. Any notice or filing required or permitted to be given
to the Administrator hereunder shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address below:
Corporate Treasurer
Brady Corporation
P.O. Box 571
Milwaukee, WI 53201-0571
Such notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.
Any notice or filing required or permitted to be given to a Participant
hereunder shall be sufficient if in writing and hand-delivered, or sent by mail,
to the last known address of the Participant.
8.9 Special rules for 2005-2007. Notwithstanding the usual rules required
regarding the deferral elections and distribution elections:
(a) A Participant may on or before March 15, 2005 make a new deferral election
to apply to amounts which would otherwise be paid in calendar year 2005;
provided that such amounts have not been paid or became payable at the time of
the election. Such election shall remain in effect for future years until
modified pursuant to Section 3.2.
(b) On or before December 31, 2007, a Participant may elect an In-Service
Payment Event Date and/or make an election as to distribution of his Account
from among the choices described at Section 6.1 hereof without complying with
the rules described in Section 6.2 hereof as long as the effect of the election
is not to accelerate payments into 2006 or to defer payments which would
otherwise have been made in 2006 and not to accelerate payments into 2007 or to
defer payments which would otherwise have been made in 2007. Such election shall
become effective after the last day upon which it is permitted to be made or, if
earlier, the first day of the calendar year in which payments under the election
are scheduled to commence. In order to change any such election after
December 31, 2007, the requirements of Section 6.2 hereof must be satisfied. Any
individual who has on or before December 31, 2006 elected an In-Service Payment
Event Date of January 1, 2007 and a Distribution Date of April 1, may on or
before December 31, 2007 elect to change the Distribution Date to be applicable
in calendar year 2008 and subsequent years from April 1 to January 1.

 

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IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to
execute this Plan document on its behalf as of the 17th day of February, 2011,
to replace any prior version of this Plan previously adopted by the Corporation.

                  BRADY CORPORATION    
 
           
 
  By:    /s/ Frank M. Jaehnert    
 
   
 
   
 
  Attest:  /s/ Thomas J. Felmer    
 
     
 
   

 

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