Document:

exv10w1

 

Exhibit 10.1

FIRST LEASE AMENDMENT

     THIS FIRST LEASE AMENDMENT (the “Amendment”) is executed this 11th
day of September, 2007 by and between DUGAN FINANCING LLC, a Delaware limited liability
company (“Landlord”), and VIACELL, INC., a Delaware corporation (“Tenant”).

W I T N E S S E T H :

     WHEREAS, Landlord and Tenant entered into a certain lease dated April 12, 2002 (the “Lease”),
whereby Tenant leased from Landlord certain premises consisting of approximately 12,375 square feet
of space (the “Original Premises”) in a building commonly known as Building No. 4 (the “Building”)
located in Skyport 275 Business Park (the “Park”), located at 2375 Progress Drive, Hebron, Kentucky
41048; and

     WHEREAS, Tenant desires to expand the Original Premises by approximately 8,250 square feet of
space (the “Additional Space”); and

     WHEREAS, Landlord and Tenant desire to amend certain provisions of the Lease to reflect such
expansion and other changes to the Lease;

     NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants herein
contained and each act performed hereunder by the parties, Landlord and Tenant hereby agree that
the Lease is amended as follows:

     1. Incorporation of Recitals. The above recitals are hereby incorporated into this
Amendment as if fully set forth herein.

     2. Amendment of Section 1.01. Basic Lease Provisions and Definitions.

          (a) Commencing on the Additional Space Commencement Date (as defined below), Section
1.01 of the Lease is hereby amended by incorporating Exhibit A-1, attached hereto and
incorporated herein by reference, on which the Additional Space is depicted. Collectively, the
Original Premises and the Additional Space shall hereinafter be referred to as the “Leased
Premises”. References in the Lease to the “Commencement Date” shall mean June 1, 2002 for the
Original Premises and the Additional Space Commencement Date for the Additional Space.

          (b) Commencing on the Additional Space Commencement Date, Section 1.01 of the Lease is
further amended by deleting subsections A, B, C, D, E, G, H and M and substituting the following in
lieu thereof:

	 	“A.	 	Leased Premises (as depicted on Exhibit A attached to the
Lease and Exhibit A-1 attached hereto): 2375 Progress Drive, Hebron,
Kentucky 41048; Building No. 4 (the “Building”) located in Skyport 275
Business Park, Hebron, Kentucky 41048 (the “Park”);
	 
	 	B.	 	Rentable Area: approximately 20,625 square feet;
	 
	 	C.	 	Tenant’s Proportionate Share: 28.41%;

 

 

	 	D.	 	Minimum Annual Rent:
	 
	 	 	 	Original Premises:

	 	 	 	 	 
	 
	 	September 1, 2007 - August 31, 2011	 	$91,822.56 per year
	 
	 	September 1, 2011 - May 31, 2012	 	$68,866.92 (9 months)
	 
	 	 	 	 
	 
	 	Additional Space:	 	 
	 
	 	 	 	 
	 
	 	September 1, 2007 - August 31, 2008	 	$66,825.00
	 
	 	September 1, 2008 - August 31, 2010	 	$68,887.56 per year;

	 	E.	 	Monthly Rental Installments:
	 
	 	 	 	Original Premises:

	 	 	 	 	 
	 
	 	September 1, 2007 - May 31, 2012	 	$7,651.88 per month
	 
	 	 	 	 
	 
	 	Additional Space:	 	 
	 
	 	 	 	 
	 
	 	September 1, 2007 - August 31, 2008	 	$5,568.75 per month
	 
	 	September 1, 2008 - August 31, 2010	 	$5,740.63 per month;

	 	G.	 	Lease Term:
	 
	 	 	 	Original Premises: Commencement Date through May 31, 2012

Additional Space: Additional Space Commencement Date through August 31, 2010;
	 
	 	H.	 	Commencement Date:
	 
	 	 	 	Original Premises: June 1, 2002

Additional Space: September 1, 2007 (the “Additional Space Commencement Date”);
	 
	 	M.	 	Address for payments and notices as follows:

	 	 	 	 	 
	 
	 	Landlord:	 	Dugan Financing LLC
	 
	 	 	 	c/o Duke Realty Services, LLC
	 
	 	 	 	Attn.: Vice President, Asset Management and Customer
	 
	 	 	 	           Service - Cincinnati Industrial Market
	 
	 	 	 	4555 Lake Forest Drive, Suite 400
	 
	 	 	 	Cincinnati, OH  45242
	 
	 	 	 	 
	 
	 	With a copy to:	 	Dugan Financing LLC
	 
	 	 	 	c/o Duke Realty Services, LLC
	 
	 	 	 	Attn.:  David Fronek
	 
	 	 	 	600 East 96th Street, Suite 100
	 
	 	 	 	Indianapolis, IN  46240
	 
	 	 	 	 
	 
	 	With payments to:	 	Dugan Financing LLC
	 
	 	 	 	75 Remittance Drive, Suite 1128

 

 

	 	 	 	 	 
	 
	 	 	 	Chicago, IL  60675-1128
	 
	 	 	 	 
	 
	 	Tenant:	 	ViaCell, Inc.
	 
	 	 	 	Attn:  Jim Corbett
	 
	 	 	 	245 First Street, 15th Floor
	 
	 	 	 	Cambridge, MA  02142
	 
	 	 	 	 
	 
	 	With a copy to:	 	ViaCell, Inc.
	 
	 	 	 	Attn:  General Counsel
	 
	 	 	 	245 First Street, 15th Floor
	 
	 	 	 	Cambridge, MA  02142
	 
	 	 	 	 
	 
	 	With invoices to:	 	ViaCell, Inc.
	 
	 	 	 	Attn:  Accounts Payable
	 
	 	 	 	245 First Street, 15th Floor
	 
	 	 	 	Cambridge, MA  02142;”

     3. In the event that the Tenant does not exercise its option to extend the term of the
Additional Space for the Additional Space Extension Term (as defined in Section 16.21), as
set forth in Section 16.21, commencing on September 1, 2010, Section 1.01 of the
Lease will be further amended by deleting subsections A, B and C and substituting the following in
lieu thereof:

	 	“A.	 	Leased Premises (as depicted on Exhibit A attached to the
Lease):
 2375 Progress Drive, Hebron, Kentucky 41048; Building No. 4 (the
“Building”) located in Skyport 275 Business Park, Hebron, Kentucky 41048
(the “Park”);
	 
	 	B.	 	Rentable Area: approximately 12,375 square feet;
	 
	 	C.	 	Tenant’s Proportionate Share: 17.05%;”

     4. Amendment of Section 2.02. Construction of Tenant Improvements.
Section 2.02 of the Lease is hereby amended by adding the following language to the end of
the section:

     “Notwithstanding the foregoing, with respect to the Additional Space, the
following shall apply: Tenant has personally inspected the Additional Space and
accepts the same “AS IS” without representation or warranty by Landlord of any
kind. Tenant may make tenant finish improvements and equipment installations in
the Additional Space (collectively, the “Additional Space Improvements”). The
Additional Space Improvements shall comply with the provisions of Section
7.03 of the Lease. Landlord agrees to reimburse Tenant in an amount not to
exceed Twelve Thousand Three Hundred Seventy-five Dollars ($12,375.00) (the
“Additional Space Allowance”) for the costs incurred by Tenant for the Additional
Space Improvements. Landlord shall pay the Additional Space Allowance to Tenant
within thirty (30) days after receipt of paid invoices from Tenant (all such paid
invoices shall be submitted to Landlord on or before the date which is six (6)
months immediately after the Improvement Completion Date [as defined below]) and
Landlord’s inspection of the completed work, if applicable, to the Additional
Space. All plans and specifications for the Additional Space Improvements to be made by Tenant shall be subject to
Landlord’s reasonable approval (which approval shall not be unreasonably withheld
or delayed). Landlord, or its affiliate, shall be permitted to bid on the
construction of the Additional Space Improvements. Tenant shall

 

 

consider
Landlord’s bid in good faith and in the event that another contractor’s bid is
lower than the bid submitted by Landlord or one of its affiliates, Landlord or its
affiliate shall have the right to revise its bid to match the other contractor’s
bid by providing Tenant with written notice of its desire to match the bid, which
notice shall contain a revised written bid containing the matching offer, within
five (5) business days of notification by Tenant that the other contractor’s bid
was lower than the bid of Landlord or its affiliate (“Notice”) and Landlord’s bid,
if revised to match the other contractor’s bid within the 5-day period after
receipt of Notice and given to Tenant in writing in the manner described in this
sentence, shall be accepted by Tenant. In the event that a contractor other than
Landlord or one of its affiliates performs the Additional Space Improvements,
Tenant shall pay Landlord a fee for its supervision of the project equal to five
percent (5%) of the cost of the Additional Space Improvements (the “Fee”). Tenant
shall be responsible for all costs of the Additional Space Improvements in excess
of the Additional Space Allowance. At Landlord’s option, the Fee shall either be
(i) applied against the Additional Space Allowance, or (ii) billed to Tenant after
substantial completion of the Additional Space Improvements (in which event Tenant
shall pay the Fee to Landlord within thirty (30) days following Landlord’s
delivery of an invoice to Tenant). If a contractor other than Landlord or one of
its affiliates is selected to construct the Additional Space Improvements, Tenant
and its personnel and the contractor, its subcontractors and their respective
personnel shall have the right to enter the Additional Space in order to install
the Additional Space Improvements. If and to the extent permitted by applicable
laws, rules and ordinances and after the execution of this Amendment by the
parties, Tenant shall have the right to enter the Additional Space in order to
install fixtures (such as racking) and otherwise prepare the Additional Space for
occupancy, which right shall expressly exclude making any structural
modifications. During any entry prior to the Additional Space Commencement Date
(a) Tenant shall comply with all terms and conditions of the Lease other than the
obligation to pay rent on the Additional Space, and (b) Tenant shall not interfere
with Landlord’s completion of the Additional Space Improvements. Tenant
acknowledges that Tenant shall be responsible for obtaining all applicable permits
and inspections relating to any such entry by Tenant. Tenant shall cause its
personnel and the personnel of the contractors and subcontractors to comply with
the terms and conditions of Landlord’s rules of conduct (which Landlord agrees to
furnish to Tenant upon request), and Tenant shall not begin operation of its
business in the Additional Space unless and until Tenant delivers to Landlord an
original certificate of occupancy, if applicable, for the Additional Space.
Tenant acknowledges that Tenant shall be responsible for obtaining all applicable
permits and inspections relating to Tenant’s occupancy of the Additional Space.
If Landlord or one of its affiliates is selected to construct the Additional Space
Improvements, Landlord or its affiliate shall receive reasonable and competitive
compensation for its services, but shall in no event be entitled to receive any
amounts in excess of the amount set forth in the bid accepted by Tenant unless the
variance is in compliance with the definitive agreement between the parties
related to the Additional Space Improvements, which fee(s) shall be applied
against the Additional Space Allowance. Any costs of said work performed by
Landlord or its affiliates in excess of the Additional Space Allowance shall
be borne by Tenant and reimbursed to Landlord or paid to Landlord’s designee
within thirty (30) days of receipt of an itemized statement therefor. Landlord
and Tenant shall in good faith cooperate to cause the Additional Space
Improvements to be completed at the earliest reasonably practical date. Tenant
shall be entitled to the Additional Space Allowance only if the Additional Space
Improvements are substantially complete on or before the Improvement Completion
Date and Tenant submits paid invoices to Landlord seeking

 

 

reimbursement of the
Additional Space Allowance on or before the date which is three (3) months
immediately after February 29, 2008 (the “Improvement Completion Date”). The
foregoing limitation on Tenant’s right to receive the Additional Space Allowance
shall not apply if the failure to substantially complete the Additional Space
Improvements by the Improvement Completion Date arises from the negligence or
willful misconduct of Landlord or its affiliates.”

     5. Amendment of Section 2.03. Surrender of Premises. The fourth
(4th) sentence of Section 2.03 of the Lease is hereby deleted and the following
is substituted in lieu thereof:

     “Landlord reserves the right to require Tenant to remove, at Tenant’s
expense, the clean room, the entrance and exit associated therewith, the wall
around the freezers, and all or a portion of the Additional Space Improvements
prior to the expiration or earlier termination of this Lease and other items to be
removed as indicated on Exhibit B-1.”

     6. Amendment of Section 16.14. Option to Extend. The first
(1st) sentence of Subsection A of Section 16.14 of the Lease is
hereby deleted and the following is substituted in lieu thereof:

     “A. Grant and Exercise of Option. Provided that (i) Tenant is not
in Default hereunder, and (ii) Tenant originally named herein or a Permitted
Transferee remains in possession of (a) the Original Premises since the
Commencement Date and continuing through the entire term of the Original Premises,
and (b) the Additional Space since the Additional Space Commencement Date and
continuing through the entire term of the Original Premises, Tenant shall have the
option to extend the Lease Term of the Leased Premises for two (2) additional
periods of five (5) years each (the “Extension Term(s)); provided, however,
condition (ii)(b) above shall apply only if the term of the Additional Space has
been extended, either pursuant to Section 16.21 hereof or by agreement of the
parties, for the Additional Space Extension Term.”

     7. Incorporation into Article 16. Miscellaneous. Article 16
of the Lease is hereby amended by adding the following additional sections:

     “Section 16.21. Option to Extend the Term of the Additional Space.

     (a) Grant and Exercise of Option. Provided that (i) Tenant is not in
Default hereunder, and (ii) Tenant originally named herein or its Permitted
Transferee remains in possession of the Additional Space and the Original Premises
throughout the term of the Additional Space, Tenant shall have one (1) option to
extend the term of the Additional Space through May 31, 2012 (the “Additional
Space Extension Term”). The Additional Space Extension Term
shall be upon the same terms and conditions contained in the Lease except (x)
Tenant shall not have any further option to extend the term of the Additional
Space only, (y) any improvement allowances or other concessions applicable to the
Additional Space under the Lease shall not apply to the Additional Space Extension
Term, and (z) the Minimum Annual Rent for the Additional Space shall be adjusted
as set forth below (“Additional Space Rent Adjustment”). Tenant shall exercise
such option by delivering to Landlord, no later than March 1, 2010, written notice
of Tenant’s desire to extend the term of the Additional Space. Tenant’s failure
to properly exercise such option shall be deemed a waiver of such option. If
Tenant properly exercises its option to extend the term of the Additional Space,
Landlord and Tenant shall

 

 

execute an amendment to the Lease reflecting the terms
and conditions of the Additional Space Extension Term.

     (b) Additional Space Rent Adjustment. The Minimum Annual Rent for
the Additional Space during the Additional Space Extension Term shall be as
follows:

	 	 	 	 	 
	 
	 	September 1, 2010 - August 31, 2011	 	$68,887.56
	 
	 	September 1, 2011 - May 31, 2012	 	$51,665.67 (9 months);”

     “Section 16.22. Patriot Act. Each of Landlord and Tenant,
each as to itself, hereby represents its compliance with all applicable anti-money
laundering laws, including, without limitation, the USA Patriot Act, and the laws
administered by the United States Treasury Department’s Office of Foreign Assets
Control, including, without limitation, Executive Order 13224 (“Executive Order”).
Each of Landlord and Tenant further represents (i) that it is not, and it is not
owned or controlled directly or indirectly by any person or entity, on the SDN
List published by the United States Treasury Department’s Office of Foreign Assets
Control and (ii) that it is not a person otherwise identified by government or
legal authority as a person with whom a U.S. Person is prohibited from transacting
business. As of the date hereof, a list of such designations and the text of the
Executive Order are published under the internet website address
www.ustreas.gov/offices/enforcement/ofac.”

     8. Amendment of Section 16.15. Right of First Offer. Section 16.15
of the Lease is hereby deleted in its entirety and shall be of no further force or effect.

     9. Amendment of Section 16.20. Temporary Space. Section 16.20 of the
Lease is hereby deleted in its entirety and shall be of no further force or effect.

     10. Acknowledgment of Completion of Improvements. Tenant hereby acknowledges that (i)
the improvements designated as Landlord’s obligations in Exhibit B of the Lease have been
completed in a satisfactory manner, and (ii) any and all amounts owed by Landlord to Tenant under
Exhibit B of the Lease, including but not limited to the Work Allowance, have either been
paid by Landlord or forfeited.

     11. Brokerage Commissions. The parties hereby represent and warrant that the only
real estate broker involved in the negotiation and execution of this Amendment is Duke Realty
Services, LLC, representing Landlord. Each party shall indemnify the other party from any and all
liability for the breach of this representation and warranty on its part and shall pay any
compensation to any other broker or person who may be entitled thereto. All compensation owed
to Duke Realty Services, LLC and any other broker or agent acting in a similar capacity on behalf
of the Landlord, shall be paid by the Landlord.

     12. Representations and Warranties. The undersigned person executing this Amendment
on behalf of Tenant represents and warrants to Landlord that (i) Tenant is duly organized, validly
existing and in good standing in accordance with the laws of the state under which it was
organized; (ii) all action necessary to authorize the execution of this Amendment has been taken by
Tenant; and (iii) the individual executing and delivering this Amendment on behalf of Tenant has
been authorized to do so, and such execution and delivery shall bind Tenant. Tenant, at Landlord’s
request, shall provide Landlord with evidence of such authority. The undersigned person executing
this Amendment on behalf of Landlord represents and warrants to Tenant that (i) no consent of any
other party, including but not limited to any mortgagee of the Landlord, is needed to enter into
this Amendment or, if such consent is needed, it has been obtained by Landlord; (ii) Landlord is
duly organized, validly existing and in good standing in

 

 

accordance with the laws of the state
under which it was organized; (iii) all action necessary to authorize the execution of this
Amendment has been taken by Landlord; and (iv) the individual executing and delivering this
Amendment on behalf of Landlord has been authorized to do so, and such execution and delivery shall
bind Landlord. Landlord, at Tenant’s request, shall provide Tenant with evidence of such
authority.

     13. Examination of Amendment. Submission of this instrument for examination or
signature to Tenant does not constitute a reservation or option, and it is not effective until
execution by and delivery to both Landlord and Tenant.

     14. Definitions. Except as otherwise provided herein, the capitalized terms used in
this Amendment shall have the definitions set forth in the Lease.

     15. Incorporation. This Amendment shall be incorporated into and made a part of the
Lease, and all provisions of the Lease not expressly modified or amended hereby shall remain in
full force and effect. To the extent of any inconsistency between the Lease and this Amendment,
the terms of this Amendment shall control.

(SIGNATURES CONTAINED ON FOLLOWING PAGE)

 

 

     IN WITNESS WHEREOF, the parties have caused this Amendment to be executed on the day and year
first written above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	DUGAN FINANCING LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	Dugan Realty, L.L.C., 

its sole member
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Duke Realty Limited Partnership, 

its manager
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	By:	 	Duke Realty Corporation, 

its general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	By: /s/ Jon C.
Burger
	 
	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 	 	Senior Vice President
	 

	 	 	 	 	 	 	 	 	 	Cincinnati Group
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	TENANT:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	VIACELL, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By: /s/ Marc D. Beer
	 
	 	 

	 	 	Title: President and Chief Executive Officerexv10w1

 

Exhibit 10.1

BRADY CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2008

ARTICLE I

INTRODUCTION

     For periods prior to calendar year 2005, Brady Corporation has maintained the Brady
Corporation Executive Deferred Compensation Plan by means of a series of individual deferred
compensation agreements with covered executives. Amounts deferred prior to January 1, 2005 (which
were all fully vested under Plan terms), including past and future earnings credited thereon, shall
remain subject to the terms of those individual agreements as previously in effect (the “Frozen
Agreements”) but no further amounts shall be deferred under the Frozen Agreements. All deferrals
to the Plan for periods on or after January 1, 2005 shall be governed by the terms and provisions
of this document. Except as provided in Sections 4.2(b)(x) and 6.1(a)(iii)(C) below, nothing in
this document shall apply to amounts deferred prior to 2005 and past and future earnings credited
thereon. 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 3.2 and
earnings credited on such amounts in accordance with Article IV.

     2.2 “Administrator” means the Compensation Committee of 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 the 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, and each of its affiliates which has
adopted the Plan or may adopt the Plan. Currently, the additional sponsoring affiliates are
Tricor Direct, Inc. and Brady Worldwide, Inc. The term “Corporation” as used throughout this Plan
shall include references to those affiliates of Brady Corporation which have also adopted the
Plan; provided, however, that for purposes of the power to amend or terminate the Plan or take any
other action under or with respect to the Plan, except for the payment of benefits, the term
“Corporation” shall refer only to Brady Corporation.

     2.6 “Effective Date” means January 1, 2008. This document describes how this Plan
has been administered for periods after 2004 and prior to January 1, 2008 and how it shall be
administered for periods after 2007.

     2.7 “ERISA” means the Employee Retirement Income Security Act of 1974, including any
subsequent amendments.

     2.8 “Fiscal Year” means the period beginning August 1 and ending July 31.

     2.9 “Participant” means a key management or highly compensated employee designated as
eligible to participate in the Plan for a Plan Year under Section 3.1 (such persons shall be known
as “Active Participants” for such Plan Year) and any person who previously participated in the
Plan and is entitled to benefits.

     2.10 “Performance Based Bonus” means bonus compensation, the amount of which or
entitlement to, is based on services performed over a period of at least 12 consecutive months
which is contingent on the satisfaction of pre-established organizational or individual
performance criteria, which performance criteria are not substantially certain to be met at the
time a deferral election is permitted. Performance Based Bonus compensation may include payments
based upon subjective performance criteria, but (i) any subjective performance criteria must
relate to the performance of the Participant service provider, a group of service providers that
includes the Participant service provider, or a business unit for which the Participant provides
services (which may include the entire organization) and (ii) the determination that any
subjective performance criteria have been met must not be made by the Participant or a family
member of the Participant (as defined in Code Section 267(c)(4) applied as if the family of an
individual includes the spouse of any family member). Organizational or individual performance
criteria are considered pre-established if established in writing by not later than 90 days after
the commencement of the period of service to which the criteria relate, provided that the outcome
is substantially uncertain at the time the criteria are established. A Performance Based Bonus
may include payments based on performance criteria that are not approved by the Administrator or
by the stockholders of the Corporation. A Performance Based Bonus shall not include any amount or
portion of any amount that will be paid either regardless of performance, or based upon a level of
performance that is substantially certain to be met at the time the criteria are established.
Whether a bonus is performance based shall be determined in accordance with the requirements of
IRS Reg. Section 1.409A-1 (e) which are summarized in part in this Section 2.10.

-2-

 

     2.11 “Plan” means the Brady Corporation Executive Deferred Compensation Plan, as set
forth herein, as applicable to amounts deferred after calendar year 2004, and as it may be amended
from time to time.

     2.12 “Plan Year” means the calendar year.

     2.13 “Separation from Service” shall have the meaning set forth in IRS Regulation
Section 1.409A-1 the requirements of which are summarized in part as follows:

     (a) In General. The Participant shall have a Separation from Service with the
Corporation if the Participant dies, retires, or otherwise has a termination of employment
with the Corporation. However, for purposes of this Section 2.13, the employment
relationship is treated as continuing intact while the individual is on military leave, sick
leave, or other bona fide leave of absence if the period of such leave does not exceed six
months, or if longer, so long as the individual retains a right to reemployment with the
Corporation under an applicable statute or by contract. For purposes of this paragraph (a)
of this Section 2.13, a leave of absence constitutes a bona fide leave of absence only if
there is a reasonable expectation that the Participant will return to perform services for
the Corporation. If the period of leave exceeds six months and the individual does not
retain a right to reemployment under an applicable statute or by contract, the employment
relationship is deemed to terminate on the first date immediately following such six-month
period. Notwithstanding the foregoing, where a leave of absence is due to any medically
determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than six months, where such impairment
causes the Participant to be unable to perform the duties of his or her position of
employment or any substantially similar position of employment, a 29-month period of absence
may be substituted for such six-month period.

     (b) Termination of Employment. Whether a termination of employment has
occurred is determined based on whether the facts and circumstances indicate that the
Corporation and Participant reasonably anticipated that no further services would be
performed after a certain date or that the level of bona fide services the Participant would
perform after such date (whether as an employee or as an independent contractor) would
permanently decrease to no more than 20 percent of the average level of bona fide services
performed (whether as an employee or an independent contractor) over the immediately
preceding 36-month period (or, the full period of services to the Corporation if the
Participant has been providing services to the Corporation less than 36 months). Facts and
circumstances to be considered in making this determination include, but are not limited
to, whether the Participant continues to be treated as an employee for other purposes (such
as continuation of salary and participation in employee benefit programs), whether similarly
situated service providers have been treated consistently, and whether the Participant is
permitted, and realistically available, to perform services for other service recipients in
the same line of business. The Participant is presumed to have Separated from Service where
the level of bona fide services performed decreases to a level equal to 20 percent or less
of the average level of services performed by the employee during the immediately preceding
36-month period. The Participant will be presumed not to have Separated from Service where
the level of bona fide services performed continues at a level that is 50 percent or more of
the average level of service performed by the Participant during the immediately preceding
36-month period. No presumption applies to a decrease in the level of bona fide services
performed to a level that is more than 20 percent and less than 50 percent of the average
level of bona fide services performed during the immediately preceding 36-month period. The
presumption is rebuttable by demonstrating that the Corporation and the Participant

-3-

 

reasonably anticipated that as of a certain date the level of bona fide services would
be reduced permanently to a level less than or equal to 20 percent of the average level of
bona fide services provided during the immediately preceding 36-month period or the full
period of services to the Corporation if the Participant has been providing services to the
Corporation less than 36 months (or that the level of bona fide services would not be so
reduced). For example, the Participant may demonstrate that the Corporation and the
Participant reasonably anticipated that the Participant would cease providing services, but
that, after the original cessation of services, business circumstances such as termination
of the Participant’s replacement caused the Participant to return to employment. Although
the Participant’s return to employment may cause the Participant to be presumed to have
continued in employment because the Participant is providing services at a rate equal to the
rate at which the Participant was providing services before the termination of employment,
the facts and circumstances in this case would demonstrate that at the time the Participant
originally ceased to provide services, the Corporation reasonably anticipated that the
Participant would not provide services in the future. For purposes of this paragraph (b),
for periods during which the Participant is on a paid bona fide leave of absence (as defined
in paragraph (a) of this Section 2.13) and has not otherwise terminated employment pursuant
to paragraph (a) of this Section 2.13, the Participant is treated as providing bona fide
services at a level equal to the level of services that the Participant would have been
required to perform to receive the compensation paid with respect to such leave of absence.
Periods during which the Participant is on an unpaid bona fide leave of absence (as defined
in paragraph (a) of this Section 2.13) and has not otherwise terminated employment pursuant
to paragraph (a) of this Section 2.13, are disregarded for purposes of this paragraph (b) of
this Section 2.13 (including for purposes of determining the applicable 36-month (or
shorter) period).

     (c) Asset Purchase Transactions. Where as part of a sale or other disposition
of assets by the Corporation as seller to an unrelated service recipient (buyer), a
Participant of the Corporation would otherwise experience a Separation from Service with the
Corporation, the Corporation and the buyer may retain the discretion to specify, and may
specify, whether a Participant providing services to the Corporation immediately before the
asset purchase transaction and providing services to the buyer after and in connection with
the asset purchase transaction has experienced a Separation from Service, provided that the
asset purchase transaction results from bona fide, arm’s length negotiations, all service
providers providing services to the Corporation immediately before the asset purchase
transaction and providing services to the buyer after and in connection with the asset
purchase transaction are treated consistently (regardless of position at the Corporation)
for purposes of applying the provisions of any nonqualified deferred compensation plan, and
such treatment is specified in writing no later than the closing date of the asset purchase
transaction. For purposes of this paragraph (c), references to a sale or other disposition
of assets, or an asset purchase transaction, refer only to a transfer of substantial assets,
such as a plant or division or substantially all the assets of a trade or business.

     (d) Dual Status. If a Participant provides services both as an employee of the
Corporation and as an independent contractor of the Corporation, the Participant must
separate from service both as an employee and as an independent contractor to be treated as
having Separated from Service. If a Participant ceases providing services as an independent
contractor and begins providing services as an employee, or ceases providing services as an
employee and begins providing services as an independent contractor, the Participant will
not be considered to have a Separation from Service until the Participant has ceased
providing services in both capacities. Notwithstanding the foregoing, if a Participant
provides services both as an employee of the Corporation and a member of the board of
directors of the Corporation, the services

-4-

 

provided as a director are not taken into account in determining whether the
Participant has a Separation from Service as an employee for purposes of this Plan unless
this Plan is aggregated with any plan in which the Participant participates as a director
under IRS Regulation Section 1.409A-1(c)(2)(ii).

     2.14 “Specified Employee” shall have the meaning set forth in IRS Regulation Section
1.409A-1 the requirements of which are summarized in part as follows:

     (a) In General. “Specified Employee” means a Participant who as of the date of
his Separation from Service is a “key employee” as defined in Code Section 416(i)
(disregarding Section 416(i)(5)), i.e., an employee who at any time during the 12 month
period ending on an identification date is an officer of the Corporation or one of its
affiliates having an annual compensation as defined in IRS Regulation Section 1.409A-1(i)(2)
greater than $130,000, a 5% owner of the Corporation or one of its affiliates or a 1% owner
of the Corporation or one of its affiliates having compensation of more than $150,000. The
$130,000 amount described in the preceding sentence shall be adjusted for cost of living
increases in such amounts and at such times as specified by the Internal Revenue Service.
Further, no more than 50 employees (or, if lesser, the greater of 3 or 10% of the employees)
shall be treated as officers. The foregoing definition shall be interpreted at all times in
a manner consistent with such regulations as may be adopted from time to time by the
Internal Revenue Service for purposes of applying the key employee definition of Section
416(i) to the requirements of Code Section 409A. If a person is a key employee as of an
identification date, the person is treated as a Specified Employee for the 12-month period
beginning on the first day of the fourth month following the identification date. The
“identification date” is December 31.

     (b) In the event of a public offering, merger, acquisition, spin-off, reorganization or
other corporate transaction, “Specified Employees” shall be determined as provided in IRS
Reg. Section 1.409A-(1)(i)(6).

     2.15 “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.

-5-

 

ARTICLE III

PARTICIPATION AND DEFERRALS

     3.1 Determination of Participants. Within a reasonable period of time prior to the
beginning of a Plan Year or at any time during a Plan Year, the Administrator will designate
employees who will be eligible to become Active Participants in the Plan for that Plan Year (or
the remainder of such Plan Year). An employee designated as an Active Participant for a Plan Year
shall remain an Active Participant until the employee’s Separation from Service or the
Administrator or the Board of Directors of the Corporation takes action to terminate such
employee’s participation effective on the first day of any Plan Year subsequent to the date of
such action by the Administrator or the Board.

     3.2 Deferral Elections.

     (a) Salary Payments. An Active Participant may elect to defer a specified
percentage of his salary for services performed 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 his salary
payments during the 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. An employee who is not already eligible to
participate in any other deferred compensation plan of the account balance type who becomes
an Active Participant for the first time during a Plan Year (for example, an employee
designated to be a Participant by the Administrator upon hire or promotion) may within 30
days after the effective date of participation make an election to defer a specified
percentage of salary to be paid to him for services to be performed subsequent to the
deferral election.

     (b) Bonus Payments. An Active Participant may elect to defer a portion of any
and all bonus payments made to him during a Plan Year by completing and filing such forms as
required by the Corporation. To the extent a bonus payment represents a payment of a
Performance Based Bonus, to be effective the deferral election with respect to such bonus
must be filed with the Corporation at least seven months prior to the end of the period in
which the bonus payment is earned. If a bonus payment is not a Performance Based Bonus but
is calculated on a Fiscal Year basis, then to be effective the deferral election must be
filed prior to the beginning of the Fiscal Year during which the Participant first renders
any services giving rise to the payment of the bonus. If a bonus is not a Performance Based
Bonus and is not calculated on a Fiscal Year basis, to be effective, the deferral election
must be filed prior to the beginning of the first Plan Year in which are performed any
services for which such bonus is payable. An employee who is not already eligible to
participate in any other deferred compensation plan sponsored by the Corporation of the
account balance type who becomes an Active Participant for the first time during a Plan Year
(for example, an employee designated to be a Participant by the Administrator upon hire or
promotion) may within 30 days after the effective date of participation make an election to
defer a specified percentage of any bonus payment for which the service period has already
begun and, in such event, the election shall apply to the portion of bonus compensation
equal to the total bonus compensation to be paid to the Participant with respect to that
service period multiplied by a fraction of which the numerator is the number of days
remaining in the performance period and the denominator is the total number of days in the
performance period.

-6-

 

     3.3 Continued Effect of Elections.

     (a) Salary Payments. An Active Participant’s deferral election with respect to
a Plan Year under Section 3.2(a) shall be irrevocable after the last date upon which it may
be filed pursuant to Section 3.2(a) 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 salary 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
salary payments under Section 3.2(a).

     (b) Bonus Payments. An Active Participant’s deferral election under Section
3.2(b) with respect to a bonus shall be irrevocable after the last date upon which it may be
filed pursuant to Section 3.2(b) and shall continue in effect with respect to bonuses earned
in subsequent performance periods until prospectively revoked or amended in writing. For a
revocation or amendment to be effective for any bonus payment, it must be filed by the last
date for which an effective deferral election is permitted to be filed with respect to that
bonus payment under Section 3.2(b).

     3.4 Prior Deferral Elections. Any deferral election made prior to calendar year 2005
under a Frozen Agreement shall be treated as a deferral election described in Section 3.2(a)
and/or Section 3.2(b), as the case may be, and shall continue in effect until modified as
described in Section 3.3 above unless modified earlier pursuant to Section 8.14(a) below.

     3.5 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 3.2(a) and/or (b), as the
case may be, as those provisions apply to someone who is already an Active Participant in the
Plan.

     3.6 401(k) Hardship. Any deferral elections in effect under this Article III shall
be cancelled as required due to a hardship distribution described in IRS Regulation Section
1.401(k)-1(d)(3) or any successor thereto. To resume deferrals after the required suspension
period, a Participant must make an election satisfying the provisions of Section 3.2(a) and/or
(b), 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 3.2 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.

-7-

 

     (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) 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 account.

     (iv) 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.

     (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

-8-

 

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. Notwithstanding Article I and Section
2.11 of this Plan to the contrary, the rule of this subparagraph (x) shall apply to
all amounts held for a Participant under a Frozen Agreement as well, meaning that
from and after May 1, 2006, a Participant shall not be entitled to transfer any
amount to or from the portion of his account held in the Brady Stock Fund under the
Frozen Agreement. The preceding sentence shall not apply to a Participant who has
had a Separation from Service prior to May 1, 2006.

     (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.

-9-

 

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.

     (a) After a Participant’s Separation from Service 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 one of the following forms 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 first day of October following the Participant’s Separation
from Service; or

     (ii) Installments. The value of the balance of the Account shall be
paid in annual installments on the first day of October each year with the first of
such installments to be paid on the first day of October following the Participant’s
Separation from Service. 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.

     (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

-10-

 

selected by the Executive, the final installment payment will include
100% of the then remaining July 31 Account value.

     (iii) In Cash or In Stock. Prior to May 1, 2006 all payments shall be
made in cash. 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.

     (C) Notwithstanding Article I and Section 2.11 of this Plan to the
contrary, the rule of this sub-paragraph (iv) shall apply to amounts held
for a Participant under a Frozen Agreement from and after May 1, 2006. The
preceding sentence shall not apply to a Participant who has had a Separation
from Service prior to May 1, 2006.

     (b) In the case of a Participant who is a Specified Employee, payment pursuant to
paragraph (a) above shall commence no earlier than the first day of the seventh month
following the Participant’s Separation from Service. This delay in distribution rule does
not apply if the payment is being made as a result of the Participant’s death or disability.
For this purpose, “disability” means that the Participant:

     (i) 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, or

     (ii) is, 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 continued
period of not less than 12 months, receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering the
employees of the Corporation or one of its affiliates in which the Participant is
covered.

-11-

 

     6.2 Payment Election. An individual who first becomes an Active Participant at the
beginning of a Plan Year who is provided with prior written notice of the effective date of
participation shall complete a payment election form specifying the form of payment applicable to
such Participant’s Account under the Plan. Absent an actual election by such Participant by the
effective date of participation, the Participant shall be deemed to have elected payment in the
five (5) annual installment payment form. An individual who first becomes an Active Participant
other than on the first day of a Plan Year shall complete a payment election form specifying the
form of payment applicable to such Participant’s Account no later than 30 days after the effective
date of participation. In the event such a Participant does not make an actual election within
such 30 day period, the Participant shall be deemed to have elected the five (5) annual
installment payment form; 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 payment election
form deemed elected under this Plan regardless of whether the individual elects a different
payment election form during that initial 30 day period. 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 Separation from
Service 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 Separation from
Service 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 following the initially scheduled commencement
date of payment previously in effect. For purposes of compliance with Section 409A of the
Internal Revenue Code, a series of five year installment payments, ten year installment payments
and twenty year installment payments are each 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 may substitute any of the other options for the option
originally elected 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 has the same meaning as in
Section 6.1(b). In the event that the Participant’s new payment election would not be effective
under the foregoing rules, the payment election form previously in effect shall be controlling.

     6.3 Financial Hardship. A partial or total distribution of the Participant’s Account
shall be made prior to Separation from Service 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 3.2 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 3.2 and any other nonqualified deferred compensation plan of the account
balance type sponsored by the Corporation upon a payment due to an Unforeseeable

-12-

 

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 to be made pursuant to the provisions of this Article
VI shall be delayed if the Corporation reasonably anticipates that the Corporation’s
deduction with respect to such payment would be limited or eliminated by application of Code
Section 162(m); provided, however that such payment shall be made on the earliest date on
which the Corporation anticipates that the deduction of the payment of the amount will not
be limited or eliminated by application of Code Section 162(m). In any event, such payment
shall be made no later than the last day of the calendar year in which the Participant has a
Separation from Service or, in the case of a Specified Employee, the last day of the
calendar year in which occurs the six (6) month anniversary of such Separation from Service.

     (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 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.)

     (d) 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).

-13-

 

     6.7 De Minimis Amounts. Notwithstanding any other provision this Article VI, a
Participant’s 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.

ARTICLE VII

ADMINISTRATION

     7.1 Compensation Committee as Administrator. The Plan shall be administered by the
Administrator, which shall be the Compensation Committee of 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

-14-

 

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;

     (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

-15-

 

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.

ARTICLE VIII

MISCELLANEOUS

     8.1 Amendment or Termination. The Corporation (through its Board of Directors or
authorized officers or employees and/or the Compensation Committee) 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 deferrals or 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 wages, salary or any other
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.

-16-

 

     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 Status of Plan Under ERISA. The Plan is intended to be an unfunded plan
maintained by the Corporation primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, as described in Section 201(2),
Section 301(a)(3), Section 401(a)(1) and Section 4021(b)(6) of ERISA.

     8.6 Withholding. The Corporation shall comply with all applicable tax and
governmental withholding requirements. To the extent required by law, the Corporation shall
withhold any taxes required to be withheld by the federal or any state or local government from
payments made hereunder or from any other amounts paid to a Participant by the Corporation. If
FICA taxes must be withheld in connection with amounts credited hereunder before payments are
otherwise due hereunder and if there are no other wages from which to withhold them, the
Corporation shall pay such FICA taxes generated by such payment (and taxes under Code Section 3401
triggered thereby and additional taxes under Section 3401 attributable to pyramiding of Section
3401 wages and taxes) but no more and the Participant’s Account hereunder shall be reduced by an
amount equal to the payments made by the Corporation. 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).

     8.7 No Right to Continued Employment. 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. Nor does participation in this Plan guarantee
the Participant the right to be continued in service in any particular position or at any
particular rate of compensation.

     8.8 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.

     8.9 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.

-17-

 

     8.10 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.

     8.11 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 become payable at the time of the election. Such election shall
remain in effect for future years until modified pursuant to Section 3.3(a) and/or (b), as
the case may be.

     (b) On or before December 31, 2007, a Participant may 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 as long as the effect of the election is not to accelerate the
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.
However, in order to subsequently change such special election after December 31, 2007, the
requirements of Section 6.2 hereof must be satisfied. (This election will not apply to
distribution of the Participant’s accounts holding amounts earned and vested prior to
January 1, 2005, if any, (and earnings credited thereon) since such accounts are not
governed by this document but are governed by the Frozen Plan.)

     IN WITNESS WHEREOF, the Corporation has caused its duly authorized officer to execute this
Plan document on its behalf this
17th day of September, 2007.

	 	 	 	 	 	 
	 	BRADY CORPORATION

 	 
	 	By:  	 /s/ Frank M. Jaehnert	 
	 	  	 	 
	 	 	Attest:  	 /s/ David Mathieson	 
	 

-18-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]