Document:

exv10w23

Exhibit 10.23

VOLUNTARY CANCELLATION

AGREEMENT OF

INCENTIVE STOCK OPTION AGREEMENT

ZAREBA SYSTEMS, INC.

2004 EQUITY INCENTIVE PLAN

     This Voluntary Cancellation Agreement is made effective June 30, 2008, by and between Zareba
Systems, Inc., a Minnesota corporation (the “Company”), and Jeffrey S. Mathiesen (“Participant”).

WITNESSETH,

     WHEREAS, Participant and the Company are parties to an Incentive Stock Option Agreement dated
on or about December 10, 2005 (the “Existing Agreement”); and

     WHEREAS, Participant wants the Company to agree to cancel the Existing Agreement and the
Company is willing to do so pursuant to this Agreement.

     NOW, THEREFORE in consideration of the premises and for good and other valuable consideration,
the receipt and sufficiency of which is acknowledged, the parties agree as follows:

     1. Cancellation of Existing Agreement. The Existing Agreement is canceled effective
as of the date of this Agreement without further obligation or liability to either the Company or
Participant.

     2. No Assurances. The Company has not induced Participant to enter into this
Agreement and has not indicated to Participant or assured Participant in any way that Participant’s
execution of this Agreement may, will or could result in any future issuance to Participant of a
right and option to purchase shares of common stock of the Company.

     3. Complete Agreement. This Agreement contains the entire understanding between the
parties to it and with respect to its subject matter and supersedes all prior and contemporaneous
agreements, understandings, representations, inducements or conditions, express or implied, oral or
written, except as set forth in this Agreement. This Agreement may not be modified, amended or
supplemented other than by an agreement in writing executed by the Company and the Participant.

 

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date stated
on the first page of this Agreement in a manner appropriate for each.

	 	 	 	 	 
	 	ZAREBA SYSTEMS, INC.

 	 
	 	By  	/s/ Dale A. Nordquist
 	 
	 	Its: 	             Chief Executive Officer 	 

	 	 	 	 	 
	 	/s/ Jeffrey S. Mathiesen
 	 
	 	Jeffrey S. Mathiesenexv10w24

Exhibit 10.24

VOLUNTARY CANCELLATION

AGREEMENT OF

INCENTIVE STOCK OPTION AGREEMENT

ZAREBA SYSTEMS, INC.

2004 EQUITY INCENTIVE PLAN

     This Voluntary Cancellation Agreement is made effective June 30, 2008, by and between Zareba
Systems, Inc., a Minnesota corporation (the “Company”), and Donald G. Dalland (“Participant”).

WITNESSETH,

     WHEREAS, Participant and the Company are parties to an Incentive Stock Option Agreement dated
on or about October 27, 2005 (the “Existing Agreement”); and

     WHEREAS, Participant wants the Company to agree to cancel the Existing Agreement and the
Company is willing to do so pursuant to this Agreement.

     NOW, THEREFORE in consideration of the premises and for good and other valuable consideration,
the receipt and sufficiency of which is acknowledged, the parties agree as follows:

     1. Cancellation of Existing Agreement. The Existing Agreement is canceled effective
as of the date of this Agreement without further obligation or liability to either the Company or
Participant.

     2. No Assurances. The Company has not induced Participant to enter into this
Agreement and has not indicated to Participant or assured Participant in any way that Participant’s
execution of this Agreement may, will or could result in any future issuance to Participant of a
right and option to purchase shares of common stock of the Company.

     3. Complete Agreement. This Agreement contains the entire understanding between the
parties to it and with respect to its subject matter and supersedes all prior and contemporaneous
agreements, understandings, representations, inducements or conditions, express or implied, oral or
written, except as set forth in this Agreement. This Agreement may not be modified, amended or
supplemented other than by an agreement in writing executed by the Company and the Participant.

 

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the date stated
on the first page of this Agreement in a manner appropriate for each.

	 	 	 	 	 
	 	ZAREBA SYSTEMS, INC.

 	 
	 	By  	/s/ Dale A. Nordquist
 	 
	 	Its: 	 Chief Executive Officer 	 
	 	 	 	 

	 	 	 	 	 
	 	                                                     /s/ Donald G. Dalland
 	 
	 	Donald G. Dallandexv10w6

EXHIBIT 10.6

BRADY CORPORATION

NONQUALIFIED STOCK OPTION

     Upon management’s recommendation, the Compensation Committee (the “Committee”) of the Brady
Corporation Board of Directors has awarded to                                          (“Employee”) a
non-qualified stock option (the “Option”) effective                     ,      , pursuant to the terms of
the Brady Corporation 2006 Omnibus Incentive Stock Plan (the “Plan”). The Corporation’s records
shall be the official record of the Option grant described herein and, in the event of any conflict
between this description and the Corporation’s records, the Corporation’s records shall control.

	1.	 	Number of Shares Optioned; Option Price
	 
	 	 	The Corporation grants to the Employee the right and option to purchase, on the terms and
conditions hereof, all or any part of an aggregate of                     (     ) shares of the
presently authorized Class A Common Stock of the Corporation, $.01 par value, whether
unissued or issued and reacquired by the Corporation, at the price of
$___.___ per share (the
“Option Price”).
	 
	2.	 	Conditions of Exercise of Options During Employee’s Lifetime; Vesting of Option
	 
	 	 	Except as provided in this paragraph and in paragraph 3, this Option may not be exercised
(a) unless Employee is at the date of the exercise in the employ of the Corporation or a
Subsidiary, and (b) until Employee shall have been continuously so employed for a period of
at least one year from the date hereof. Thereafter, this Option shall be exercisable for
any amount of shares up to the maximum percentage of shares covered by this Option (rounded
up to the nearest whole share), as follows (but in no event shall this Option be exercisable
for any shares after the expiration date provided in paragraph 7):

	 	 	 
	 	 	Maximum
	 	 	Percentage
	 	 	of Shares For
	Number of Completed Years After	 	Which Option is
	Date of Grant of this Option	 	Exercisable
	Less than 1
	 	Zero
	At least 1 but less than 2
	 	33-1/3%
	At least 2 but less than 3
	 	66-2/3%
	At least 3
	 	100%

	 	 	If Employee shall cease to be employed by the Corporation or a Subsidiary for any reason
other than as provided in paragraph 3 after Employee shall have been continuously so
employed for one year after the grant of this Option, Employee may, at
any time within 90 days of such termination, but in no event later than the date of
expiration of this Option, exercise this Option to the extent Employee was entitled to do so
on the date of such termination. However, if Employee was dismissed for cause, of

 

 

	 	 	which the
Committee shall be the sole judge, this Option shall forthwith expire. This Agreement does
not confer upon Employee any right of continuation of employment by the Corporation or a
Subsidiary, nor does it impair any right the Corporation or any Subsidiary may have to
terminate the Employee’s employment at any time.
	 
	3.	 	Termination of Employment
	 
	 	 	Notwithstanding the provisions of paragraph 2 hereof, if the Employee:

	 	(a)	 	is terminated by the death of the Employee, any unexercised, unexpired Stock
Options granted hereunder to the Employee shall be 100% vested and fully exercisable,
in whole or in part, at any time within one year after the date of death, by the
Employee’s personal representative or by the person to whom the Stock Options are
transferred under the Employee’s last will and testament or the applicable laws of
descent and distribution;
	 
	 	(b)	 	dies within 90 days after termination of employment by the Corporation or its
Affiliates, other than for cause, any unexercised, unexpired Stock Options granted
hereunder to the Employee and exercisable as of the date of such termination of
employment shall be exercisable, in whole or in part, at any time within one year after
the date of death, by the Employee’s personal representative or by the person to whom
the Stock Options are transferred under the Employee’s last will and testament or the
applicable laws of descent and distribution;
	 
	 	(c)	 	is terminated as a result of the disability of the Employee (a disability means
that the Employee is disabled as a result of sickness or injury, such that he or she is
unable to satisfactorily perform the material duties of Employee’s job, as determined
by the Board of Directors, on the basis of medical evidence satisfactory to it), any
unexercised, unexpired Stock Options granted hereunder to the Employee shall become
100% vested and fully exercisable, in whole or in part, at any time within one year
after the date of disability; or
	 
	 	(d)	 	is terminated as a result of the Employee’s retirement (after age 55 with ten
years of employment with the Corporation or an Affiliate or after age 65), any
unexercised, unexpired Stock Options granted hereunder to the Employee shall continue
to vest as provided in paragraph 2 hereof and any option that is or becomes vested may
be exercised in whole or in part prior to the expiration date of such option.

	4.	 	Deferral of Exercise
	 
	 	 	Although the Corporation intends to exert its best efforts so that the shares purchasable
upon the exercise of this Option will be registered under, or exempt from, the registration
requirements of, the Securities Act of 1933 (the “Act”) and any applicable state securities
law at the time or times this Option (or any portion of this Option) first becomes
exercisable, if the exercise of this Option would otherwise result in a violation by the
Corporation of any provision of the Act or of any state securities law, the Corporation

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	 	 	may
require that such exercise be deferred until the Corporation has taken appropriate action to
avoid any such violation.
	 
	5.	 	Method of Exercising Option
	 
	 	 	This Option shall be exercised by delivering to the Corporation, at the office of its
Treasurer, a written notice of the number of shares with respect to which this Option is at
the time being exercised and by paying the Corporation in full the Option Price of the shares being acquired at the time.
	 
	6.	 	Method of Payment
	 
	 	 	Payment shall be made either (i) in cash; (ii) by delivering shares of the Corporation’s
Class A Common Stock which have been beneficially owned by the Employee, the spouse of the
Employee, or both of them, for a period of at least six months prior to the time of exercise
(“Delivered Stock”); (iii) by surrendering to the Corporation shares of Class A Common Stock
otherwise receivable upon exercise of the Option (a “Net Exercise”); or (iv) any combination
of the foregoing. Payment in the form of Delivered Stock shall be in the amount of the Fair
Market Value of the stock at the date of exercise, determined in accordance with
paragraph 9.
	 
	7.	 	Expiration Date
	 
	 	 	This Option shall expire ten years after the date on which this Option was granted.
	 
	8.	 	Withholding Taxes
	 
	 	 	The Corporation may require, as a condition to the exercise of this Option, that the
Employee concurrently pay to the Corporation any taxes which the Corporation is required to
withhold by reason of such exercise. In lieu of part or all of any such payment, the
Employee may elect, subject to such rules and regulations as the Committee may adopt from
time to time, to have the Corporation withhold from the shares to be issued upon exercise
that number of shares having a Fair Market Value, determined in accordance with paragraph 9,
equal to the amount which the Corporation is required to withhold.
	 
	9.	 	Method of Valuation of Stock
	 
	 	 	The “Fair Market Value” of the Class A Common Stock of the Corporation on any date shall
mean, if the stock is then listed and traded on a registered national securities exchange,
or is quoted in the NASDAQ National Market System, the average of the high and low sales
price recorded in composite transactions for such date or, if such date is not a business
day or if no sales of shares shall have been reported with respect to such date, the next
preceding business date with respect to which sales were reported. In the absence of
reported sales or if the stock is not so listed or quoted, but is traded in the
over-the-counter market, Fair Market Value shall be the average of the closing bid and asked
prices for such shares on the relevant date.

-3-

 

	10.	 	No Rights in Shares Until Certificates Issued
	 
	 	 	Neither the Employee nor his heirs nor his personal representative shall have any of the
rights or privileges of a stockholder of the Corporation in respect of any of the shares
issuable upon the exercise of the Option herein granted, unless and until certificates
representing such shares shall have been issued or shares in book entry form shall have been
recorded in the records of the Corporation’s transfer agent.
	 
	11.	 	Option Not Transferable
	 
	 	 	No portion of the Option granted hereunder shall be transferable or assignable (or made
subject to any pledge, lien, obligation or liability of an Employee) except (a) by last will
and testament or the laws of descent and distribution (and upon a transfer or assignment
pursuant to an Employee’s last will and testament or the laws of descent and distribution,
any Option must be transferred in accordance therewith); (b) during the Employee’s lifetime,
nonqualified stock Options may be transferred by an Employee to the Employee’s spouse,
children or grandchildren or to a trust for the benefit of such spouse, children or
grandchildren, provided that the terms of any such transfer prohibit the resale of shares
acquired upon exercise of the option at a time during which the transferor would not be
permitted to sell such shares under the Corporation’s policy on trading by insiders.
	 
	12.	 	Prohibition Against Pledge, Attachment, Etc.
	 
	 	 	Except as otherwise herein provided, the Option herein granted and the rights and privileges
pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to execution, attachment
or similar process.
	 
	13.	 	Changes in Stock
	 
	 	 	In the event there are any changes in the Class A Common Stock of the Corporation through
merger, consolidation, reorganization, recapitalization, stock dividend, stock split,
combination or exchange of shares, rights offering or any other change affecting the Class A
Common Stock of the Corporation, appropriate changes will be made by the Committee in the
aggregate number of shares and the purchase price and kind of shares subject to this Option,
to prevent substantial dilution or enlargement of the rights granted to or available for
Employee.
	 
	14.	 	Dissolution or Merger
	 
	 	 	Anything contained herein to the contrary notwithstanding, upon the dissolution or
liquidation of the Corporation, or upon any merger in which the Corporation is not the
surviving corporation, at any time prior to the expiration date of the termination of this
Option, the Employee shall have the right within 60 days prior to the effective date of
such dissolution, liquidation or merger, to surrender all or any unexercised portion of this
Option to the Corporation for cash, subject to the discretion of the Committee as to the
exact timing of said surrender. Notwithstanding the foregoing, however, in the event

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	 	 	Employee has retired or died, Employee’s right to surrender all or any unexercised portion
of this Option under this paragraph shall be available only to the extent that at the time
of any such surrender, Employee would have been entitled to exercise this Option under
paragraphs 2 or 3 hereof, as the case may be. The amount of cash to be paid to Employee for
the portion of this Option so surrendered, shall be equal to the number of shares of Class A
Common Stock subject to the surrendered Option multiplied by the difference between the
Option Price per share, as described in paragraph 1 hereof, and the Fair Market Value per
share, determined in accordance with paragraph 9 hereof, as of the time of surrender.
	 
	15.	 	Notices
	 
	 	 	Any notice to be given to the Corporation under the terms of this Agreement shall be
addressed to the Corporation in care of its Chief Financial Officer, and any notice to be
given to the Employee may be addressed at the address as it appears on the Corporation’s
records, or at such other address as either party may hereafter designate in writing to the
other. Except as provided in paragraph 5 hereof, any such notice shall be deemed to have
been duly given, if and when enclosed in a properly sealed envelope addressed as aforesaid,
and deposited, postage prepaid, in the United States mail.
	 
	16.	 	Provisions of Plan Controlling
	 
	 	 	This Option is subject in all respects to the provisions of the Plan. In the event of any
conflict between any provisions of this Option and the provisions of the Plan, the
provisions of the Plan shall control, except to the extent the Plan permits the Committee to
modify the terms of an Option grant and has done so herein. Terms defined in the Plan where
used herein shall have the meanings as so defined. Employee acknowledges receipt of a copy
of the Plan.
	 
	17.	 	Wisconsin Contract
	 
	 	 	This Option has been granted in Wisconsin and shall be construed under the laws of that
state.

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BRADY CORPORATION

DIRECTOR NONQUALIFIED STOCK OPTION AGREEMENT

     Option granted on                     ,      , by Brady Corporation, a Wisconsin corporation (hereinafter
called the “Company”, to
                                         (hereinafter called the “Director”)
pursuant to the terms of the Brady Corporation 2005 Nonqualified Stock Option Plan for Non-Employee
Directors. The Corporation’s records shall be the official record of the Option grant described
herein and, in the event of any conflict between this description and Corporation’s records, the
Corporation’s records shall control.

     1. Number of Shares Optioned; Option Price. The Company grants to the Director the
right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate
of                      (                    ) shares of the presently authorized Class A Common Stock of the
Company, $.01 par value, whether unissued or issued and reacquired by the Company, at the price of
                                        ($     ) per share (the “Option Price”).

     2. Conditions of Exercise of Options During Director’s Lifetime; Vesting of Option.
Except as provided hereinafter in this paragraph and in paragraph 3, this Option may not be
exercised (a) unless Director is at the date of the exercise a Director of the Company and (b)
until Director shall have been continuously a Director for a period of at least one year from the
date hereof. Thereafter, this Option shall be exercisable for any amount of shares up to the
maximum percentage of shares covered by this Option (rounded up to the nearest whole share) as
follows (but in no event shall this Option be exercisable for any shares after the expiration date
provided in paragraph 7):

	 	 	 
	 	 	Maximum Percentage
	Number of Completed Years	 	of Shares for Which
	After Date of Grant of this Option	 	Option is Exercisable
	Less than 1
	 	Zero
	At least 1 but less than 2
	 	33-1/3%
	At least 2 but less than 3
	 	66-2/3%
	At least 3
	 	100%

     If Director shall cease to be a Director of the Company for any reason (except death or
disability, or if the Director has been a member of the Board of Directors for at least three
years) after Director shall have been continuously a Director for one year after the grant of this
Option, Director may, at any time within three months of such termination, but in no event later
than the date of expiration of this Option, exercise this Option to the extent Director was
entitled to do so on the date of such termination. This Agreement does not confer upon Director
any right to continue as a Director of the Company.

     3. Termination of Employment, Etc. A. Notwithstanding the provisions of paragraph 2
hereof, in the event of the termination of the Directorship with the Company prior to three years
from date of grant, due to death or disability, this Option shall become 100% vested and fully
exercisable.

 

 

     For purposes of this Agreement, “Disability” means that the Director is disabled as a result
of sickness or injury, such that he is unable satisfactorily to perform the Director’s duties as
determined by the Board of Directors, on the basis of medical evidence satisfactory to it.

     B. (i) If the Directorship is terminated by the death of the Director prior to three years of
service, any unexercised, unexpired Stock Options granted hereunder to the Director shall be
exercisable, in whole or in part, at any time within one year after the date of death, by the
Director’s personal representative or by the person to whom the Stock Options are transferred under
the Director’s last will and testament or the applicable laws of descent and distribution. (ii) If
the Directorship is terminated as a result of the disability of the Director prior to three years
of service, any unexercised, unexpired Stock Options granted hereunder to the Director shall be
exercisable, in whole or in part, at any time within one year after the date of disability.
(iii) If the Directorship is terminated after the Director has been a member of the Board for at
least three years, any unexercised, unexpired Stock Options granted hereunder to the Director shall
continue to vest as provided in paragraph 2 and any option that is or becomes vested may be
exercised within the term of such option.

     C. In the event of (a) the merger or consolidation of the Company with or into another
corporation or corporations in which the Company is not the surviving corporation, (b) the adoption
of any plan for the dissolution of the Company, or (c) the sale or exchange of all or substantially
all the assets of the Company for cash or for shares of stock or other securities of another
corporation, this Option shall become fully vested and exercisable immediately prior to any such
event in which the Company is not the surviving corporation.

     4. Deferral of Exercise. Although the Company intends to exert its best efforts so
that the shares purchasable upon the exercise of this Option will be registered under, or exempt
from the registration requirements of, the Federal Securities Act of 1933 (the “Act”) and any
applicable state securities law at the time or times this Option (or any portion of this Option)
first becomes exercisable, if the exercise of this Option would otherwise result in the violation
by the Company of any provision of the Act or of any state securities law, the Company may require
that such exercise be deferred until the Company has taken appropriate action to avoid any such
violation.

     5. Method of Exercising Option. This Option shall be exercised by delivering to the
Company, at the office of its Treasurer, a written notice of the number of shares with respect to
which this Option is at the time being exercised and by paying the Company in full the Option Price
of the shares being acquired at the time.

     6. Method of Payment. Payment shall be made either (i) in cash; (ii) by delivering
shares of the Company’s Class A Common Stock which have been beneficially owned by the Director,
the spouse of the Director, or both of them, for a period of at least six months prior to the time
of exercise (“Delivered Stock”); (iii) by surrendering to the Company shares of Class A Common
Stock otherwise receivable upon exercise of the Option (a “Net Exercise”); or (iv) any combination
of the foregoing. Payment in the form of Delivered Stock shall be in the amount of the Fair Market
Value of the stock at the date of exercise, determined in accordance with paragraph 9.

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     7. Expiration Date. This Option shall expire ten years after the date on which this
Option was granted.

     8. Withholding Taxes. The Company may require payment of or withhold any tax which it
believes is payable as a result of the exercise of this Option, and the Company may defer making
delivery with respect to the shares until arrangements satisfactory to the Company have been made
with regard to any such withholding obligations. In lieu of part or all of any such payment, the
Director, in satisfaction of all withholding taxes (including, without limitation, Federal income,
FICA (Social Security and Medicare) and any state and local income taxes) payable as a result of
such exercise, may elect, subject to such rules and regulations as the Company may adopt from time
to time, to have the Company withhold that number of shares (valued at Fair Market Value on the
date of exercise and rounded upward) required to settle such withholding taxes.

     9. Method of Valuation of Stock. The “Fair Market Value” of the Class A Common Stock
of the Company on any date shall mean, if the stock is then listed and traded on a registered
national securities exchange, or is quoted in the NASDAQ National Market System, the average of the
high and low sale prices recorded in composite transactions for such date or, if such date is not a
business day or if no sales of shares shall have been reported with respect to such date, the next
preceding business date with respect to which sales were reported. In the absence of reported
sales or if the stock is not so listed or quoted, but is traded in the over-the-counter market,
Fair Market Value shall be the average of the closing bid and asked prices for such shares on the
relevant date.

     10. No Rights in Shares Until Certificates Issued. Neither the Director nor his heirs
nor his personal representative shall have any of the rights or privileges of a stockholder of the
Company in respect of any of the shares issuable upon the exercise of the Option herein granted,
unless and until certificates representing such shares shall have been issued.

     11. Option Not Transferable During Director’s Lifetime. This Option shall not be
transferable by the Director other than by his will or by the laws of descent and distribution and
shall be exercisable during his lifetime only by him.

     12. Prohibition Against Pledge, Attachment, Etc. Except as otherwise herein provided,
the Option herein granted and the rights and privileges pertaining thereto shall not be
transferred, assigned, pledged or hypothecated in any way (whether by operation of law or
otherwise) and shall not be subject to execution, attachment or similar process.

     13. Changes in Stock. In the event there are any changes in the Class A Common Stock
of the Company through merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination or exchange of shares, rights offering or any other change affecting the
Class A Common Stock of the Company, appropriate changes shall be made by the Board of Directors of
the Company, in the aggregate number of shares and the purchase price and kind of shares subject to
this Option, to prevent substantial dilution or enlargement of the rights granted to or available
for Director.

-3-

 

     14. Dissolution or Merger. Anything contained herein to the contrary notwithstanding,
upon the dissolution or liquidation of the Company, or upon any merger in which the Company is not
the surviving corporation, at any time prior to the expiration date of the termination of this
Option, the Director shall have the right immediately prior to the effective date of such
dissolution, liquidation or merger, to surrender all or any unexercised portion of this Option to
the Company for cash, subject to the discretion of the Board of Directors as to the exact timing of
said surrender. Notwithstanding the foregoing, however, in the event Director has retired or died,
Director’s right to surrender all or any unexercised portion of this Option under this paragraph
shall be available only to the extent that at the time of any such surrender, Director would have
been entitled to exercise this Option under paragraphs 2 or 3 hereof, as the case may be. The
amount of cash to be paid to Director for the portion of this Option so surrendered, shall be equal
to the number of shares of Class A Common Stock subject to the surrendered Option multiplied by the
difference between the Option Price per share, as described in paragraph 1 hereof, and the Fair
Market Value per share, determined in accordance with paragraph 9 hereof, as of the time of
surrender.

     15. Notices. Any notice to be given to the Company under the terms of this Agreement
shall be addressed to the Company in care of its Vice President and Chief Financial Officer, and
any notice to be given to the Director may be addressed at the address as it appears on the
Company’s records, or at such other address as either party may hereafter designate in writing to
the other. Any such notice shall be deemed to have been duly given if and when enclosed in a
properly sealed envelope addressed as aforesaid, and deposited, postage prepaid, in the United
States mail.

     16. Provisions of Plan Controlling. This Option is subject in all respects to the
provisions of the Plan. In the event of any conflict between any provisions of this Option and the
provisions of the Plan, the provisions of the Plan shall control, except to the extent the Plan
permits the Committee to modify the terms of an Option grant and has done so herein. Terms defined
in the Plan where used herein shall have the meanings as so defined. Director acknowledges receipt
of a copy of the Plan.

     17. Wisconsin Contract. This Option has been granted in Wisconsin and shall be
construed under the laws of that state.

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BRADY CORPORATION

PERFORMANCE STOCK OPTION

               Upon management’s recommendation, the Compensation Committee (the “Committee”) of the Brady
Corporation Board of Directors has awarded to                                          (“Employee”) a
non-qualified performance stock option (the “Option”) effective                     ,      , pursuant to the
terms of the Brady Corporation 2006 Omnibus Incentive Stock Plan (the “Plan”).

	1.	 	Number of Shares Optioned; Option Price
	 
	 	 	The Corporation grants to the Employee the right and option to purchase, on the terms and
conditions hereof, all or any part of an aggregate of                      thousand (     ) shares of
the presently authorized Class A Common Stock of the Corporation, $.01 par value, whether
unissued or issued and reacquired by the Corporation, at the price of $      per share (the
“Option Price”).
	 
	2.	 	Conditions of Exercise of Options During Employee’s Lifetime; Vesting of Option
	 
	 	 	Except as provided in this paragraph and in paragraph 3, this Option may not be exercised
(a) unless Employee is, at the date of the exercise, in the employ of the Corporation or a
Subsidiary, and (b) the performance conditions provided below have been met; provided,
however, that in no event shall this Option be exercisable for any shares after the
expiration date provided in paragraph 7:

	 	 	 	 	 
	Number of 	 	Vesting	 	Condition of Vesting;
	Shares	 	Date	 	Brady Corporation Net Income
	(a)           

	 	Acceptance by the
Audit Committee of
the results of the
fiscal       audit
	 	Fiscal       net income per
share of Class A Common Stock
of at least $     .
	 
	 	 	 	 
	(b)           

	 	Acceptance by the
Audit Committee of
the results of the
fiscal       audit
	 	Fiscal       net income per
share of Class A Common Stock
of at least $     .
	 
	 	 	 	 
	(c)           

	 	Acceptance by the
Audit Committee of
the results of the
fiscal       audit
	 	Fiscal       net income per
share of Class A Common Stock
of at least $     .

 

			
	*	 	Net income per share of Class A Common Stock will be computed
by dividing the Corporation’s net income for the year by an assumed 55 million
shares of diluted outstanding Common Stock and assuming no issuance of
additional shares of Common Stock other than pursuant to the Corporation’s
Omnibus

 

 

Incentive Stock Plans. In the event of any other stock issuance, the
Compensation Committee will make an equitable adjustment of the earnings per share
amounts.

               If Employee shall cease to be employed by the Corporation or a Subsidiary for any reason other
than as provided in paragraph 3, Employee may, at any time within 90 days of such termination, but
in no event later than the date of expiration of this Option, exercise this Option to the extent
Employee was entitled to do so on the date of such termination. However, if Employee was dismissed
for cause, of which the Compensation Committee of the Board of Directors of the Corporation shall
be the sole judge, this Option shall forthwith expire. This Agreement does not confer upon
Employee any right of continuation of employment by the Corporation or a Subsidiary, nor does it
impair any right the Corporation or any Subsidiary may have to terminate the Employee’s employment
at any time.

	3.	 	Termination of Employment

          Notwithstanding the provisions of paragraph 2 hereof, other in the event of a termination for
cause, if the Employee:

	 	(a)	 	is terminated by the death of the Employee, any unexercised, unexpired Stock
Options granted hereunder to the Employee shall be 100% vested and fully exercisable,
in whole or in part, at any time within one year after the date of death, by the
Employee’s personal representative or by the person to whom the Stock Options are
transferred under the Employee’s last will and testament or the applicable laws of
descent and distribution;
	 
	 	(b)	 	dies within 90 days after termination of employment by the Corporation or its
Affiliates, other than for cause, any unexercised, unexpired Stock Options granted
hereunder to the Employee and exercisable as of the date of such termination of
employment shall be exercisable, in whole or in part, at any time within one year after
the date of death, by the Employee’s personal representative or by the person to whom
the Stock Options are transferred under the Employee’s last will and testament or the
applicable laws of descent and distribution;
	 
	 	(c)	 	is terminated as a result of the disability of the Employee (a disability means
that the Employee is disabled as a result of sickness or injury, such that he or she is
unable to satisfactorily perform the material duties of Employee’s job, as determined
by the Board of Directors, on the basis of medical evidence satisfactory to it), any
unexercised, unexpired Stock Options granted hereunder to the Employee shall become
100% vested and fully exercisable, in whole or in part, at any time within one year
after the date of disability;
	 
	 	(d)	 	is terminated as a result of the Employee’s retirement (after age 55 with ten
years of employment with the Corporation or a Subsidiary or after age 65), any
unexercised, unexpired Stock Options granted hereunder to the Employee shall continue
to vest as provided in paragraph 2 hereof and any option that is or

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	 	 	 	becomes vested may be exercised in whole or in part prior to the expiration date of
such option.

	4.	 	Deferral of Exercise
	 
	 	 	Although the Corporation intends to exert its best efforts so that the shares purchasable
upon the exercise of this Option will be registered under, or exempt from, the registration
requirements of, the Securities Act of 1933 (the “Act”) and any applicable state securities
law at the time or times this Option (or any portion of this Option) first becomes
exercisable, if the exercise of this Option would otherwise result in a violation by the
Corporation of any provision of the Act or of any state securities law, the Corporation may
require that such exercise be deferred until the Corporation has taken appropriate action to
avoid any such violation.
	 
	5.	 	Method of Exercising Option
	 
	 	 	This Option shall be exercised by delivering to the Corporation, at the office of its
Treasurer, a written notice of the number of shares with respect to which this Option is at
the time being exercised and by paying the Corporation in full the Option Price of the
shares being acquired at the time.
	 
	6.	 	Method of Payment
	 
	 	 	Payment shall be made either (i) in cash; (ii) by delivering shares of the Corporation’s
Class A Common Stock which have been beneficially owned by the Employee, the spouse of the
Employee, or both of them, for a period of at least six months prior to the time of exercise
(“Delivered Stock”); (iii) by surrendering to the Corporation shares of Class A Common Stock
otherwise receivable upon exercise of the Option (a “Net Exercise”); or (iv) any combination
of the foregoing. Payment in the form of Delivered Stock shall be in the amount of the Fair
Market Value of the stock at the date of exercise, determined in accordance with
paragraph 9.
	 
	7.	 	Expiration Date
	 
	 	 	This Option shall expire ten years after the date on which this Option was granted.
	 
	8.	 	Withholding Taxes
	 
	 	 	The Corporation may require, as a condition to the exercise of this Option, that the
Employee concurrently pay to the Corporation any taxes which the Corporation is required to
withhold by reason of such exercise. In lieu of part or all of any such payment, the
Employee may elect, subject to such rules and regulations as the Committee may adopt from
time to time, to have the Corporation withhold from the shares to be issued upon exercise
that number of shares having a Fair Market Value, determined in accordance with paragraph 9,
equal to the amount which the Corporation is required to withhold.

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	9.	 	Method of Valuation of Stock
	 
	 	 	The “Fair Market Value” of the Class A Common Stock of the Corporation on any date shall
mean, if the stock is then listed and traded on a registered national securities exchange,
or is quoted in the NASDAQ National Market System, the average of the high and low sales
price recorded in composite transactions for such date or, if such date is not a business
day or if no sales of shares shall have been reported with respect to such date, the next
preceding business date with respect to which sales were reported. In the absence of
reported sales or if the stock is not so listed or quoted, but is traded in the
over-the-counter market, Fair Market Value shall be the average of the closing bid and asked
prices for such shares on the relevant date.
	 
	10.	 	No Rights in Shares Until Certificates Issued
	 
	 	 	Neither the Employee nor his heirs nor his personal representative shall have any of the
rights or privileges of a stockholder of the Corporation in respect of any of the shares
issuable upon the exercise of the Option herein granted, unless and until certificates
representing such shares shall have been issued or shares in book entry form shall have been
recorded in the records of the Corporation’s transfer agent.
	 
	11.	 	Option Not Transferable
	 
	 	 	No portion of the Option granted hereunder shall be transferable or assignable (or made
subject to any pledge, lien, obligation or liability of an Employee) except (a) by last will
and testament or the laws of descent and distribution (and upon a transfer or assignment
pursuant to an Employee’s last will and testament or the laws of descent and distribution,
any Option must be transferred in accordance therewith); (b) during the Employee’s lifetime,
nonqualified stock Options may be transferred by an Employee to the Employee’s spouse,
children or grandchildren or to a trust for the benefit of such spouse, children or
grandchildren, provided that the terms of any such transfer prohibit the resale of shares
acquired upon exercise of the option at a time during which the transferor would not be
permitted to sell such shares under the Corporation’s policy on trading by insiders and are
subject to the provisions of paragraph 9.
	 
	12.	 	Prohibition Against Pledge, Attachment, Etc.
	 
	 	 	Except as otherwise herein provided, the Option herein granted and the rights and privileges
pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to execution, attachment
or similar process.
	 
	13.	 	Changes in Stock
	 
	 	 	In the event there are any changes in the Class A Common Stock of the Corporation through
merger, consolidation, reorganization, recapitalization, stock dividend, stock split,
combination or exchange of shares, rights offering or any other change affecting the Class A
Common Stock of the Corporation, appropriate changes will be made by the Committee in the
aggregate number of shares and the purchase price and kind of shares

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	 	 	subject to this Option, to prevent substantial dilution or enlargement of the rights granted
to or available for Employee.
	 
	14.	 	Dissolution or Merger
	 
	 	 	Anything contained herein to the contrary notwithstanding upon the dissolution or
liquidation of the Corporation, or upon any merger in which the Corporation is not the
surviving corporation, at any time prior to the expiration date of the termination of this
Option, the Employee shall have the right within sixty (60) days prior to the effective date
of such dissolution, liquidation or merger, to surrender all or any unexercised portion of
this Option to the Corporation for cash, subject to the discretion of the Committee as to
the exact timing of said surrender. Notwithstanding the foregoing, however, in the event
Employee has retired or died, Employee’s right to surrender all or any unexercised portion
of this Option under this paragraph shall be available only to the extent at the time of any
such surrender, Employee would have been entitled to exercise this Option under paragraphs 2
or 3 hereof, as the case may be. The amount of cash to be paid to Employee for the portion
of this Option so surrendered, shall be equal to the number of shares of Class A Common
Stock subject to the surrendered Option multiplied by the difference between the Option
Price per share, as described in paragraph 1 hereof, and the Fair Market Value per share,
determined in accordance with paragraph 9 hereof, as of the time of surrender.
	 
	15.	 	Notices
	 
	 	 	Any notice to be given to the Corporation under the terms of this Agreement shall be
addressed to the Corporation in care of its Chief Financial Officer, and any notice to be
given to the Employee may be addressed at the address as it appears on the Corporation’s
records, or at such other address as either party may hereafter designate in writing to the
other. Except as provided in paragraph 5 hereof, any such notice shall be deemed to have
been duly given, if and when enclosed in a properly sealed envelope addressed as aforesaid,
and deposited, postage prepaid, in the United States mail.
	 
	16.	 	Provisions of Plan and Corporate Records Controlling
	 
	 	 	This Option is subject in all respects to the provisions of the Plan. In the event of any
conflict between any provisions of this Option and the provisions of the Plan, the
provisions of the Plan shall control, except to the extent that the Plan permits the
Committee to modify the terms of an Option grant and has done so herein. Terms defined in
the Plan where used herein shall have the meanings as so defined. Employee acknowledges
receipt of a copy of the Plan. The Corporation’s records shall be the official record of
the Option grant described herein and , in the event of any conflict between this
description and the Corporation’s records, the Corporation’s records shall control.
	 
	17.	 	Wisconsin Contract
	 
	 	 	This Option has been granted in Wisconsin and shall be construed under the laws of that
state.

-5-

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