Document:

exv10w1

 

Exhibit 10.1

BRADY CORPORATION

DIRECTORS’ DEFERRED COMPENSATION PLAN

AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005

ARTICLE I

INTRODUCTION

     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 document amends and restates those prior
agreements effective as of January 1, 2005 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.

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.

     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 date specified by the Participant pursuant to
Section 6.2 upon which distribution shall be made or commenced following the Participant’s
Separation from Service or In-Service Payment Event Date, as the case may be. The Distribution
Date selected by the Participant must be on the first day of a calendar quarter and may be no later
than 12 months after the Participant’s Separation from Service or In-Service Payment Event Date,
whichever is the cause 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 “In-Service Payment Event Date” means the date, if any, specified by the
Participant pursuant to Section 6.2 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.

     2.8 “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.

     2.9 “Payment Event” means the earlier of the date of a Participant’s Separation From
Service or the date the Participant specifies as his In-Service Payment Event Date.

     2.10 “Plan” means the Brady Corporation Directors’ Deferred Compensation Plan, as set
forth herein and as it may be amended from time to time.

     2.11 “Plan Year” means the calendar year.

     2.12 “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).

     2.13 “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

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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.

     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 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

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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. 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.

     (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).

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     (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.

     (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

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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.

     (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 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 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

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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.

     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, whether an
In-Service Payment Event Date shall apply and the applicable Distribution Date. 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, whether an In-Service Payment Event Date shall
apply and the applicable Distribution Date; 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, there shall be no In-Service Payment
Event Date, and the Distribution Date shall be the same distribution date which would apply under
that other plan. 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, or change a previously elected In-Service Payment Event Date and/or applicable
Distribution Date by completing and filing a new payment election

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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 or changing a previously elected
In-Service Payment Date and/or applicable Distribution Date 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 the In-Service Payment Event Date must have the effect of
delaying the In-Service Payment Event Date to a date which is at least five (5) years after the
In-Service Payment Event Date previously in effect. 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. Any change in the
In-Service Payment Event Date must have the effect of delaying the In-Service Payment Event Date to
a date which is at least five (5) years after the In-Service Payment Event Date previously in
effect. 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. 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
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.

     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

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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 anticipates that the making of the payment will violate federal
securities laws or other applicable law; provided, however, that payments shall nevertheless
be made on the earliest date on which the Corporation reasonably anticipates that the making
of the payment will not cause such violation. (The making of a payment that would cause
inclusion in gross income or the applicability of any penalty provision or other provision
of the Code is not treated as a violation of applicable law.)

     (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 Account balance 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 $10,000. 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.

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

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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.

     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;

-10-

 

     (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.

     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,

-11-

 

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 this Plan is terminated, no additional deferrals or contributions shall be credited to any
Participant Account hereunder. Following Plan termination, Participants’ Accounts shall be paid at
such time and in such form as provided under Article VI of the Plan. Notwithstanding the preceding
sentence, either at the time of termination or on a subsequent date the Corporation may, in its
discretion, determine to distribute the then existing Account balances of Participants and
beneficiaries and, following such distribution, there shall be no further obligation to any
Participant or beneficiary under this Plan; provided, however, that the authority granted to the
Corporation under this sentence shall be implemented only to the extent permissible under Code
Section 409A and regulations and other guidance issued by the Internal Revenue Service interpreting
the provisions of that Section.

     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.

     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

-12-

 

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 2005-2006. 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, 2006, 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. Such election shall become
effective after the last day upon which it is permitted to be made. In order to change any
such election after December 31, 2006, the requirements of Section 6.2 hereof must be
satisfied.

     IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to execute this
Plan document on its behalf this 14th day of September, 2006, to be effective as of January 1,
2005.

	 	 	 	 	 	 	 
	 	 	BRADY CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Frank M. Jaehnert	 	 
	 

	 	 	 	 	 	 
	 

	 	Attest:
	 	/s/ Conrad G. Goodkind	 	 

-13-exv10w1

 

Exhibit
10.1

Bally Total Fitness Holding Corporation

Amendment to Employment Agreement

     THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”), dated as of September 14, 2006, is
by and between Bally Total Fitness Holding Corporation, a Delaware Corporation with its
headquarters at 8700 West Bryn Mawr Avenue, Chicago, Illinois 60631-3707 (hereinafter called
“Bally”), and Marc Bassewitz (hereinafter called the “Executive”).

     WHEREAS, Bally and Executive have entered into that certain Employment Agreement dated as of
January 1, 2005, which was amended on December 1, 2005 (the “Agreement”); and

     WHEREAS, Bally and Executive desire to further amend the Agreement on the terms and conditions
described herein;

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements of
the parties herein contained, the parties hereto agree as follows:

	1.	 	Capitalized terms not defined herein shall have the meanings ascribed to them in the
Agreement.

	2.	 	Subparagraph (c) of Section 4 of the Agreement is amended and restated to read in its
entirety as follows:
	 
	 	 	Long-Term Incentive. The Executive shall be eligible to participate in any plan
under which senior executives of the Company are eligible to receive equity compensation or
other long-term incentive grants (each, a “LTIP”) as may be determined by the Board or duly
authorized Committee of the Board.

	3.	 	Except as amended hereby, the Agreement shall remain in full force and effect, and as amended
the same is hereby affirmed and ratified.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the date first
written above.

	 	 	 
	 
	 	 
	Executive:

	 	/s/ Marc D. Bassewitz
	 

	 	Marc D. Bassewitz
	 
	 	 
	Date:

	 	September 14, 2006
	 
	 	 
	Attest:

	 	/s/ Marilyn Kanouse
	 
	 	 
	Date:

	 	September 14, 2006
	 
	 	 
	 
	 	 
	Company:
	 	 
	 
	 	 
	By:

	 	/s/ John W. Rogers, Jr.
	 

	 	John W. Rogers, Jr., Chairperson, Compensation Committee
	 
	 	 
	Date:

	 	September 14, 2006
	 
	 	 
	Attest:

	 	/s/ Marilyn Kanouse
	 
	 	 
	Date:

	 	September 14, 2006
	 
	 	 
	 
	 	 
	By:

	 	/s/ Harold Morgan
	 

	 	Harold Morgan, SVP, Chief Administrative Officer
	 
	 	 
	Date:

	 	September 14, 2006
	 
	 	 
	Attest:

	 	/s/ Marilyn Kanouse
	 
	 	 
	Date:

	 	September 14, 2006

-2-

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