Document:

exv10w1

Exhibit 10.1

AGREEMENT AND GENERAL RELEASE

     Celanese Corporation, its Subsidiaries and its Affiliates, (“Employer” or “Company”), 1601
West LBJ Freeway, Dallas, Texas 75234 and John J. Gallagher III, his heirs, executors,
administrators, successors, and assigns (“Employee”), agree that:

	1.	 	Last Day of Employment (Separation Date). The Employee’s last day of employment with
the Company will be March 31, 2009 (the “Separation Date”).

	2.	 	Consideration. In consideration for signing this Agreement and General Release and
compliance with the promises made herein, Employer and Employee agree:

a. Voluntary Resignation. Employee agrees to voluntarily resign from the Employer
effective on the Separation Date. Effective as of the close of business on such Separation
Date, Executive will resign from all positions he holds as a corporate officer of the Company
(including without limitation any positions as an officer, employee and/or director), and from
all positions held on behalf of the Company (e.g., external board memberships, internal
committee positions).

b. Separation Pay. Pursuant to the terms of Employee’s Amended and Restated
Employment Agreement dated July 26, 2007 and executed on September 24, 2007, the Company will
pay an amount equal to his current annual base salary plus target bonus, for a total payment
of $1,215,000, less any lawful deductions. Such amount shall be paid in installments as
follows; (i) the first installment in the amount of $607,500 (representing 50% of the total
payment) will be paid immediately upon the commencement of the “payment period”, and (ii) the
remaining $607,500 will be paid in thirteen (13) substantially equal (bi-weekly) installments
that begin upon the commencement of the “payment period”. For purposes of this Section 2(b),
the “payment period” shall mean the period beginning on the earlier of (i) October 1, 2009, or
(ii) the date which is six (6) months and one day following the Separation Date, whichever is
applicable, subject to execution of this Agreement.

c. Bonus. Employee will be eligible to receive a bonus payout for 2008, and a
prorated bonus payout for 2009, under the same terms and conditions, and will be paid at the
same time as other similarly situated executives who receive a bonus payout for these
performance years. The bonus payout for 2008 will be based on a combination of Company
performance (35% weighting) plus the Acetyl Intermediates Division performance (65%
weighting). The Employee’s individual performance modifier will
be 1.0. The 2008 bonus payout
will be $360,194.00, minus lawful deductions. The 2008 bonus payout will be paid to the
Employee during the 2009 calendar year but in no event later than March 15, 2009. The
Employee will be credited with at least 3 full months of service when determining the prorated
bonus payout for 2009. The 2009 bonus payout will be paid to the Employee during the 2010
calendar year but in no event later than March 15, 2010. The prorated 2009 bonus payouts will
be based entirely on Company performance over the course of the full 2009 calendar year and
will be weighted based on the following percentages: Acetyl Intermediates Division (65%) and
Company (35%). The 2009 prorated bonus will be based on Employee individual performance
modifier of 1.0.

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d. Equity Awards. In addition to the Time Options and Performance Options that
previously vested under the Employee’s Nonqualified Stock Option Agreement dated August 31,
2005, under the terms of such agreement the Employee will, on the Separation Date vest in
58,400 unvested Time Options. In addition, as to his remaining 109,500 Performance Options,
the Company agrees that the performance targets for such Performance Options for the period
ending December 31, 2008, under the terms of the Employee’s Nonqualified Stock Option
Agreement dated August 31, 2005, have been achieved. Once vested, all Time Options and
Performance Options shall be exercisable by the Employee through March 31, 2010.

Pursuant to the terms of the Employee’s Nonqualified Stock Option Agreement dated July 25,
2007, the 12,000 stock options that vested on January 1, 2009, shall be exercisable by the
Employee through March 31, 2010. All remaining unvested stock options issued pursuant to the
Employee’s Nonqualified Stock Option Agreement dated July 25, 2007 shall be canceled on the
Separation Date with no additional consideration.

e. Deferred Compensation Plan. With respect to the Deferral Agreement dated August
31, 2005 pursuant to the Celanese Corporation Deferred Compensation Plan, the Company has
agreed that all Performance Targets were achieved for the 2008 calendar year and that the
Employee (i) vested in the Performance Account in the amount of $1,822,000 on December 31,
2008, which will be paid by the Company no later than March 13, 2009, and (ii) will vest in
the Tier II Time Account in the amount of $1,180,000 on the Separation Date, which will be
paid by the Company on or before April 15, 2009.

f. Tax Equalization Policy. The Company agrees that the Tax Equalization Policies in
effect during the Employee’s international assignment will continue to be in effect and
applicable as to any compensation, awards, benefits or other taxable income provided to the
Employee pursuant to the Agreement and General Release hereto.

However, such tax equalization payments shall be made no later than the end of the second
taxable year of the Employee beginning after the taxable year of the Employee in which
the Employee’s U.S. Federal income tax return is required to be filed (including any
extensions) for the year to which the compensation subject to the tax equalization payment
relates, or, if later, the second taxable year of the Employee beginning after the latest such
taxable year in which the Employee’s foreign tax return or payment is required to be filed or
made for the year to which the compensation subject to the tax equalization payment relates;
provided, however, that where such payments arise due to an audit, such payments shall be made
by the end of the Employee’s taxable year next following the Employee’s taxable year in which
the Employee remits the related taxes.

g. Relocation & Repatriation Costs. Employer waives any obligation for the Employee
to reimburse the Company for relocation costs paid by the Company. Employer will pay the
standard costs to repatriate the employee and his family from Shanghai, China to Dallas,
Texas, pursuant to Employee’s International Long Term Assignment Letter of Understanding dated
July 27, 2007, but in no event will such eligible relocation costs be paid on behalf of the
Employee, or be reimbursed directly to the Employee later than March 15, 2010.

Despite the foregoing, the Employer will continue to provide the current living accommodations
to the Employee in the host country until at least July 1, 2009. The Employer agrees to
provide a vehicle to Employee in accordance with the transportation provisions set forth in
the Letter of

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Understanding and the Addendum to Letter of Understanding, both dated July 27, 2007, through
at least July 1, 2009.

h. Pension and 401(k) Plan Vesting. Employee is 100% vested in the Company cash
balance pension and 401(k) plans.

i. Unused Vacation. Employee will be entitled to four (4) weeks vacation for 2009.
The Employer will pay to Employee wages, minus lawful deductions, for any unused vacation for
2009 and any approved vacation carried over from 2008 under the standard procedure for
calculating and paying any unused vacation to separated employees. The total number of
vacation days paid is 20. Payment will be made within 30 calendar days following the
Separation Date.

j. Company Benefit Plans. Healthcare & dental coverage will continue until the
Separation Date, according to Employee’s current health & dental plan elections. All other
normal company programs (e.g., life insurance, long term disability, 401(k) contributions,
etc.) will also continue through the Separation Date.

k. COBRA Reimbursement and Continued Medical Plan Coverage. As part of the
Employee’s repatriation to the U.S., the Employee intends to elect coverage for himself, (and
coverage for his currently enrolled family members), no later than 3/6/09, in one of the
Employer’s self -insured Employer’s medical and dental plan options available for active
employees, pursuant to the requirements of the Consolidated Omnibus Reconciliation Act of
1985, as amended (“COBRA”). The Employer shall reimburse the Employee for each monthly COBRA
premium paid by the Employee for a period of twelve (12) months following the date of
Employee’s separation, or through March 31, 2010, whichever is later.

From 4/1/09 through 6/30/09, and if Employee’s family maintains its primary residence in
Shanghai, China, the Employer will reimburse the Employee the cost difference between In-
Network and Out-of- Network eligible health care expenses incurred up to the annual out-of-
pocket maximum. Such reimbursement shall occur within 30 days of
Employer’s receipt of evidence of valid claims uncovered by the Out –of-Network Plans.

Following the expiration of the Employee’s COBRA coverage, the Employee may continue his
coverage (and the coverage of those eligible family members who have exhausted their COBRA
coverage) under the Employer’s medical plan for active employees until the Employee attains
age 65 provided that the Employee pays each required monthly premium no later than the
thirtieth (30) day of the calendar month for which such monthly premium is due. The required
monthly premium for this continued medical plan coverage shall be the greater of (i) the
monthly COBRA premium under the Employer’s medical plan for active employees or (ii) the
monthly retiree premium under the Employer’s medical plan for retirees, as applicable to the
type of coverage elected by the Employee for each month of the Employee’s continued medical
plan coverage. This right to continue medical plan coverage beyond the COBRA coverage period
shall terminate as of the first day of the calendar month for which the Employee fails to
timely pay the required monthly premium in full.

k. Unemployment. Employer will not contest any unemployment claims made by the
Employee.

l. Return of Company Property. Employee will surrender to Employer, no later than the
Separation Date, all company materials, including, but not limited to laptop computer, phone,
credit

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card, calling cards, etc. Employee shall be responsible for any credit card charges for
personal items or for items not properly submitted for reimbursement under applicable Employer
reimbursement policies.

m. Withholding. The payments and other benefits provided under this Agreement shall
be reduced by applicable withholding taxes and other lawful deductions.

	3.	 	No Consideration Absent Execution of this Agreement. Employee understands and agrees
that he would not receive certain of the monies and/or benefits specified in Paragraph “2”
above, unless the Employee signs this Agreement and General Release on the signature page
without having revoked this Agreement and General Release pursuant to Paragraph 15 below and
the fulfillment of the promises contained herein.

	4.	 	General Release of Claims. Employee knowingly and voluntarily releases and forever
discharges, to the full extent permitted by law, in all countries, including but not limited
to the U.S., the Peoples Republic of China (PRC), U.K. and Germany, the Employer, its parent
corporation, affiliates, subsidiaries, divisions, predecessors, successors and assigns and the
current and former employees, officers, directors and agents thereof (collectively referred to
throughout the remainder of this Agreement as “Employer”), of and from any and all claims,
known and unknown, asserted and unasserted, Employee has or may have against Employer as of
the date of execution of this Agreement and General Release, relating to his employment with
Employer including, but not limited to, any alleged violation of:

	 	•	 	Title VII of the Civil Rights Act of 1964, as amended;
	 
	 	•	 	The Civil Rights Act of 1991;
	 
	 	•	 	Sections 1981 through 1988 of Title 42 of the United States Code, as amended;
	 
	 	•	 	The Employee Retirement Income Security Act of 1974, as amended;
	 
	 	•	 	The Immigration Reform and Control Act, as amended;
	 
	 	•	 	The Americans with Disabilities Act of 1990, as amended;
	 
	 	•	 	The Age Discrimination in Employment Act of 1967, as amended;
	 
	 	•	 	The Workers Adjustment and Retraining Notification Act, as amended;
	 
	 	•	 	The Occupational Safety and Health Act, as amended;
	 
	 	•	 	The Sarbanes-Oxley Act of 2002;
	 
	 	•	 	The Texas Civil Rights Act, as amended;
	 
	 	•	 	The Texas Minimum Wage Law, as amended;
	 
	 	•	 	Equal Pay Law for Texas, as amended;
	 
	 	•	 	Any other federal, state or local civil or human rights law, or any other local,
state or federal law, regulation or ordinance; or any law, regulation or ordinance of a
foreign country, including but not limited to the PRC, Federal Republic of Germany and
the United Kingdom.
	 
	 	•	 	Any public policy, contract, tort, or common law.
	 
	 	•	 	The employment, labor and benefits laws and regulations in all countries in addition
to the U.S. including but not limited to the U.K. and Germany.
	 
	 	•	 	Any claim for costs, fees, or other expenses including attorneys’ fees incurred in
these matters;

provided, however, that such release shall not apply to (a) obligations of Employer under this
Agreement and General Release; (b) vested benefits under Employer employee benefit plans; and
(c) Employer’s indemnification obligations and obligations to cover Employee under directors’
and officers’ insurance.

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	5.	 	Affirmations. Employee affirms that he has not filed, caused to be filed, or
presently is a party to any claim, complaint, or action against Employer in any forum or form.
Provided, however, that the foregoing does not affect any right to file an administrative
charge with the Equal Employment Opportunity Commission (“EEOC”), subject to the restriction
that if any such charge is filed, Employee agrees not to violate the confidentiality
provisions of this Agreement and Employee further agrees and covenants that should he or any
other person, organization, or other entity file, charge, claim, sue or cause or permit to be
filed any charge with the EEOC, civil action, suit or legal proceeding against the Employer
involving any matter occurring at any time in the past, Employee will not seek or accept any
personal relief (including, but not limited to, monetary award, recovery, relief or
settlement) in such charge, civil action, suit or proceeding.
	 
	 	 	Employee furthermore affirms that he has no known workplace injuries or occupational diseases
and has been provided and/or has not been denied any leave requested under the Family and
Medical Leave Act.

	6.	 	Confidentiality. Except as may be required by law, Employee and Employer agree not
to disclose any information regarding the existence or substance of this Agreement and General
Release, except to his spouse, tax advisor, and an attorney with whom Employee chooses to
consult regarding his consideration of this Agreement and General Release.
	 
	 	 	Employee will continue to act in accordance with the terms and conditions set forth in Section 9
of his Amended and Restated Employment Agreement dated July 26, 2007 referring to
confidentiality.

	7.	 	Non-competition/Non-solicitation/Non-hire. Employee acknowledges and recognizes the
highly competitive nature of the business of the Employer. Employee will continue to act in
accordance with the terms and conditions set forth in Section 8 of his Amended and Restated
Employment Agreement dated July 26, 2007 referring to non-competition.

	8.	 	Governing Law and Interpretation. This Agreement and General Release shall be
governed and conformed in accordance with the laws of the State of Texas, without regard to
its conflict of laws provision. In the event the Employee or Employer breaches any provision
of this Agreement and General Release, Employee and Employer affirm that either may institute
an action to specifically enforce any term or terms of this Agreement and General Release.
Should any provision of this Agreement and General Release be declared illegal or
unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable,
excluding the general release language, such provision shall immediately become null and void,
leaving the remainder of this Agreement and General Release in full force and effect.

	9.	 	Non-admission of Wrongdoing. The parties agree that neither this Agreement and
General Release nor the furnishing of the consideration for this Release shall be deemed or
construed at anytime for any purpose as an admission by Employer of any liability or unlawful
conduct of any kind.

	10.	 	Neutral Reference. If contacted by another organization, the Employer will only
provide dates of employment and that the Employee voluntarily resigned from the Company.

	11.	 	Non-Disparagement. Except as may required by law or in a truthful response to
disparaging comments or communications by Employer, its employees or its directors, Employee
agrees not to disparage, or make disparaging remarks or send any disparaging communications
concerning, the

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	 	 	Employer, its reputation, its business, and/or its directors, officers, managers. Likewise the
Employer’s senior management agrees not to disparage, or make any disparaging remark or send any
disparaging communication concerning Employee, his reputation and/or his business.
	 
	12.	 	Future Cooperation after Separation Date. After separation, Employer may make
reasonable requests of Employee for assistance, and Employee agrees to make reasonable efforts
to assist Company including but not limited to: assisting with transition duties, assisting
with issues that arise after separation of employment and assisting with the defense or
prosecution of any lawsuit or claim. This includes but is not limited to providing deposition
testimony, attending hearings and testifying on behalf of the Company. The Company will
reimburse Employee for reasonable time and expenses in connection with any future cooperation
after the separation date. Time and expenses can include loss of pay or using vacation time
at a future employer. The Company shall reimburse the Employee within 30 days of remittance
by Employee to the Company of such time and expenses incurred, but in no event later than the
end of the Employee’s tax year following the tax year in which the Employee incurs such time
and expenses and such reimbursement obligation shall remain in effect for five years and the
amount of expenses eligible for reimbursement hereunder during Employee’s tax year will not
affect the expenses eligible for reimbursement in any other tax year.

	13.	 	Injunctive Relief. Employee agrees and acknowledges that the Employer will be
irreparably harmed by any breach, or threatened breach by him of this Agreement and that
monetary damages would be grossly inadequate. Accordingly, he agrees that in the event of a
breach, or threatened breach by him of this Agreement the Employer shall be entitled to apply
for immediate injunctive or other preliminary or equitable relief, as appropriate, in addition
to all other remedies at law or equity.

	14.	 	Review Period. Employee is hereby advised he has until April 3, 2009, or forty-five
(45) calendar days, to review this Agreement and General Release and to consult with an
attorney prior to execution of this Agreement and General Release. Employee agrees that any
modifications, material or otherwise, made to this Agreement and General Release do not
restart or affect in any manner the original forty-five (45) calendar day consideration
period.

	15.	 	Revocation Period and Effective Date. In the event that Employee elects to sign and
return to the Company a copy of this Agreement, he has a period of seven (7) days (the
“Revocation Period”) following the date of such execution to revoke this Agreement and General
Release, after which time this agreement will become effective (the “Effective Date”) if not
previously revoked. In order for the revocation to be effective, written notice must be
received by the Company no later than close of business on the seventh day after the Employee
signs this Agreement and General Release at which time the Revocation Period shall expire.

	16.	 	Amendment. This Agreement and General Release may not be modified, altered or
changed except upon express written consent of both parties wherein specific reference is made
to this Agreement and General Release.

	17.	 	Entire Agreement. This Agreement and General Release sets forth the entire agreement
between the parties hereto, and fully supersedes any prior obligation of the Employer to the
Employee. Employee acknowledges that he has not relied on any representations, promises, or
agreements of any kind made to him in connection with his decision to accept this Agreement
and General Release, except for those set forth in this Agreement and General Release.

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	18.	 	HAVING ELECTED TO EXECUTE THIS AGREEMENT AND GENERAL RELEASE, TO FULFILL THE PROMISES AND TO
RECEIVE THE SUMS AND BENEFITS IN PARAGRAPH “2” ABOVE, EMPLOYEE FREELY AND KNOWINGLY, AND AFTER
DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT AND GENERAL RELEASE INTENDING TO WAIVE, SETTLE
AND RELEASE CLAIMS RELEASED BY THIS DOCUMENT THAT HE HAS OR MIGHT HAVE AGAINST EMPLOYER.

          IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Release as of
the date set forth below.

	 	 	 	 	 	 	 	 	 
	 	 	EMPLOYEE	 	Celanese Corporation:
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ John J. Gallagher III
	 	 	 	By:
	 	/s/ Michael L. Summers
	 

	 	 
	 	 	 	 	 	 
	 

	 	John J. Gallagher III
	 	 	 	 	 	Michael L. Summers
	 
	 	 	 	 	 	 	 	 
	Date: February 26, 2009	 	 	 	Date: March 5, 2009

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Exhibit 10.1

BRADY CORPORATION

CHANGE OF CONTROL AGREEMENT

     AGREEMENT, made as of December 23, 2008, between Brady Corporation, a Wisconsin corporation,
(“Corporation”) and Frank M. Jaehnert.

     WHEREAS, the Executive is now serving as an executive of the Corporation in a position of
importance and responsibility; and

     WHEREAS, the Executive possesses intimate knowledge of the business and affairs of the
Corporation and its policies, markets and financial and human resources, and the Executive has
acquired certain confidential information and data with respect to the Corporation; and

     WHEREAS, the Corporation wishes to continue to receive the benefit of the Executive’s
knowledge and experience and, as an inducement for continued service, is willing to offer the
Executive certain payments due to severance as a result of change of control as set forth herein;

     NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the
Executive and Corporation agree as follows:

     SECTION 1. DEFINITIONS.

          (a) Change of Control. For purposes of this Agreement, a “Change of Control” shall occur if
and when any person or group of persons (as defined in Section 13(d)(3) of the Securities and
Exchange Act of 1934) other than the members of the family of William H. Brady, Jr. and their
descendants, or trusts for their benefit, and the W.H. Brady Foundation, Inc., collectively,
directly or indirectly controls in excess of 50% of the voting common stock of the Corporation.

          (b) Termination Due to Change of Control. A “Termination Due to Change of Control” shall
occur if within the 24 month period beginning with the date a Change of Control occurs (i) the
Executive’s employment with the Corporation is involuntarily terminated (other than by reason of
death, disability or Cause) or (ii) the Executive’s employment with the Corporation is voluntarily
terminated by the Executive subsequent to (A) any reduction in the total of the Executive’s annual
base salary (exclusive of fringe benefits) and the Executive’s target bonus in comparison with the
Executive’s annual base salary and target bonus immediately prior to the date the Change of Control
occurs, (B) a significant diminution in the responsibilities or authority of the Executive in
comparison with the Executive’s responsibility and authority immediately prior to the date the
Change of Control occurs or (C) the imposition of a requirement by the Corporation that the
Executive relocate to a principal work location more than 50 miles from the Executive’s principal
work location immediately prior to the date the Change of Control occurs.

          (c) “Cause” means (i) the Executive’s willful and continued failure to substantially perform
the Executive’s duties with the Corporation (other than any such failure resulting from physical or
mental incapacity) after written demand for performance is given to

 

 

the Executive by the
Corporation which specifically identifies the manner in which the Corporation believes the
Executive has not substantially performed and a reasonable time to cure has transpired, (ii) the
Executive’s conviction of (or plea of nolo contendere for the commission of) a felony, or (iii) the
Executive’s commission of an act of dishonesty or of any willful act of misconduct which results in
or could reasonably be expected to result in significant injury (monetarily or otherwise) to the
Corporation, as determined in good faith by the Board of Directors of the Corporation.

          (d) “Beneficiary” means any one or more primary or secondary beneficiaries designated in
writing by the Executive on a form provided by the Corporation to receive any benefits which may
become payable under this Agreement on or after the Executive’s death. The Executive shall have
the right to name, change or revoke the Executive’s designation of a Beneficiary on a form provided
by the Corporation. The designation on file with the Corporation at the time of the Executive’s
death shall be controlling. Should the Executive fail to make a valid Beneficiary designation or
leave no named Beneficiary surviving, any benefits due shall be paid to the Executive’s spouse, if
living; or if not living, then to the Executive’s estate.

          (e) “Code” means the Internal Revenue Code of 1986, as amended.

     SECTION 2. PAYMENTS UPON TERMINATION DUE TO CHANGE OF CONTROL.

          (a) Following Termination Due to Change of Control, the Executive shall be paid an amount
equal to three times the annual base salary paid the Executive by the Corporation in effect
immediately prior to the date the Change of Control occurs, and three times the average bonus
payment received in the three years immediately prior to the date the Change of Control occurs.
Such amount shall be paid in 36 monthly installments beginning on the 15th day of the
month following the month in which the Executive’s employment with the Corporation terminates.

          (b) If the scheduled payments under paragraph (a) above would result in disallowance of any
portion of the Corporation’s deduction therefore under Section 162(m) of the Code, the payments
called for under paragraph (a) shall be limited to the amount which is deductible, with the balance
to be paid during the first taxable year in which the Corporation reasonably anticipates that the
deduction of such payment is not barred by Section 162(m). However, in such event, the Corporation
shall pay the Executive on a quarterly basis an amount of interest based on the prime rate
recomputed each quarter on the unpaid scheduled payments.

          (c) It is intended that (A) each payment or installment of payments provided under this
Section 2 is a separate “payment” for purposes of Code Section 409A and (B) that the payments
satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A,
including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term
deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two year exception), and
1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay). Notwithstanding
anything to the contrary in this Agreement, if the Corporation determines that on the
Termination Due to Change of Control the Executive is a “specified employee” (as such term is
defined under Treasury Regulation 1.409A-1(i)(1)) of the Corporation and that any payments to be
provided to

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Executive are or may become subject to the additional tax under Code Section
409A(a)(1)(B) or any other taxes or penalties imposed under Code Section 409A (“Section 409A
Taxes”), then such payments shall be delayed until the date that is six (6) months after the
Termination Due to Change of Control. Any delayed payments shall be made in a lump sum on the
first day of the seventh month following the Termination Due to Change of Control, or such earlier
date that, as determined by the Corporation, is sufficient to avoid the imposition of any Section
409A Taxes on Executive.

     SECTION 3. EXCISE TAX, ATTORNEY FEES.

          (a) If the payments under Section 2 in combination with any other payments which the Executive
has the right to receive from the Corporation (the “Total Payments”) would result in the Executive
incurring an excise tax as a result of Section 280(G) of the Code, the Corporation will reimburse
the Executive for such Excise Tax. Such reimbursement will be paid to Executive by the end of the
taxable year following the taxable year in which the Executive remits the related taxes to the
Internal Revenue Service.

          (b) If the Executive is required to file a lawsuit to enforce the Executive’s rights under
this Agreement or the Executive’s Nonqualified Retention Stock Option Agreement dated February 24,
2003, and the Executive prevails in such lawsuit, the Corporation will reimburse the Executive for
attorney fees incurred up to a maximum of $25,000.00.

     SECTION 4. DEATH AFTER THE EXECUTIVE HAS BEGUN RECEIVING PAYMENTS.

     Should the Executive die after Termination Due to Change of Control, but before receiving all
payments due the Executive hereunder, any remaining payments due shall be made to the Executive’s
Beneficiary.

     SECTION 5. CONFIDENTIAL INFORMATION AGREEMENT.

     The Executive has obligations under the separate Confidential Information Agreement between
the Executive and the Corporation which continue beyond the Executive’s termination of employment.
The payments to be made hereunder are conditioned upon the Executive’s compliance with the terms of
the Confidential Information Agreement. The payments made hereunder shall be reduced by any
payments the Corporation makes to the Executive under Section 3 of the Confidential Information
Agreement. In the event the Executive violates the provisions of the Confidential Information
Agreement, no further payments shall be due hereunder and the Executive shall be obligated to repay
all previous payments received hereunder in the same manner as provided in Section 4 of the
Confidential Information Agreement.

     SECTION 6. MISCELLANEOUS.

          (a) Non-Assignability. This Agreement is personal to the Executive and, without the prior
written consent of the Corporation, shall not be assignable by the Executive otherwise than by will
or the laws of descent and distribution. This Agreement shall inure to the

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benefit of and be
binding upon the Corporation and its successors and assigns and shall also be enforceable by the
Executive’s legal representatives.

          (b) Successors. The Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or
assets of the Corporation expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would have been required to perform it if no
such succession had taken place. As used in this Agreement, “Corporation” shall mean both the
Corporation as defined above and any such successor that assumes and agrees to perform this
Agreement, by operation of law or otherwise.

          (c) Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Wisconsin, without reference to principles of conflict of laws, to the extent
not preempted by federal law. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.

          (d) Notices. All notices and other communications under this Agreement shall be in writing
and shall be given by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:

	 	 	 	 	 	 	 
	 

	 	 If to the Executive:
	 	Frank M. Jaehnert
	 	 
	 

	 	 	 	W68 N1068 Kensington Avenue	 	 
	 

	 	 	 	Cedarburg, Wisconsin 53012	 	 
	 
	 	 	 	 	 	 
	 

	 	 If to the Corporation:
	 	Brady Corporation	 	 
	 

	 	 	 	6555 West Good Hope Road	 	 
	 

	 	 	 	Milwaukee, Wisconsin 53223	 	 
	 

	 	 	 	Attention: Corporate Secretary	 	 

or to such other address as either party furnishes to the other in writing in accordance with this
paragraph. Notices and communications shall be effective when actually received by the addressee.

          (e) Construction. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement. If any
provision of this Agreement shall be held invalid or unenforceable in part, the remaining portion
of such provision, together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent consistent with law.

          (f) No Guarantee of Employment. Nothing contained in this Agreement shall give the Executive
the right to be retained in the employment of the Corporation or affect the right of the
Corporation to dismiss the Executive.

          (g) Amendment; Entire Agreement. This Agreement may not be amended or modified except by a
written agreement executed by the parties hereto or their respective successors and legal
representatives. This Agreement contains the entire agreement between the

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parties on the subjects
covered and replaces all prior writings, proposals, specifications or other oral or written
materials relating thereto.

          (h) Impact on Other Plans. No amounts paid to the Executive under this Agreement will be
taken into account as “wages”, “salary”, “base pay” or any other type of compensation when
determining the amount of any payment or allocation, or for any other purpose, under any other
qualified or nonqualified plan or agreement of the Corporation, except as otherwise may be
specifically provided by such plan or agreement.

          (i) Other Agreements. This Agreement supersedes any other severance arrangement or Change of
Control Agreement between the Corporation and the Executive. This Agreement does not confer any
payments or benefits other than the payments described in Sections 2 and 3 hereof.

          (j) Withholding. To the extent required by law, the Corporation shall withhold any taxes
required to be withheld with respect to this Agreement by the federal, state or local government
from payments made hereunder or from other amounts paid to the Executive by the Corporation.

          (k) Facility of Payment. If the Executive or, if applicable, the Executive’s Beneficiary, is
under legal disability, the Corporation may direct that payments be made to a relative of such
person for the benefit of such person, without the intervention of any legal guardian or
conservator, or to any legal guardian or conservator of such person. Any such distribution shall
constitute a full discharge with respect to the Corporation and the Corporation shall not be
required to see to the application of any distribution so made.

     SECTION 7. CLAIMS PROCEDURE.

          (a) Claim Review. If the Executive or the Executive’s Beneficiary (a “Claimant”) believes
that he or she has been denied all or a portion of a benefit under this Agreement, he or she may
file a written claim for benefits with the Corporation. The Corporation shall review the claim and
notify the Claimant of the Corporation’s decision within 60 days of receipt of such claim, unless
the Claimant receives written notice prior to the end of the 60 day period stating that special
circumstances require an extension of the time for decision. The Corporation’s 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 specific reasons for the denial, reference to pertinent provisions of this Agreement on
which the denial is based, a designation of any additional material necessary to perfect the claim,
and an explanation of the claim review procedure.

          (b) Appeal Procedure to the Board. A Claimant is entitled to request a review of any denial
by the full Board by written request to the Chair of the Board within 60 days of receipt of the
denial. Absent a request for review within the 60-day period, the claim will be deemed to be
conclusively denied. The Board shall afford the Claimant the opportunity to
review all pertinent documents and submit issues and comments in writing and shall render a
review decision in writing, all within 60 days
after receipt of a request for review (provided
that, in special circumstances the Board may extend the time for decision by not more than 60 days

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upon written notice to the Claimant.) The Board’s review decision shall contain specific reasons
for the decision and reference to the pertinent provisions of this Agreement.

     IN WITNESS WHEREOF, the Executive has signed this Agreement and, pursuant to the authorization
of the Board, the Corporation has caused this Agreement to be signed, all as of the date first set
forth above.

	 	 	 	 	 	 	 
	 	 	/s/ Frank M. Jaehnert	 	 
	 	 	 	 	 
	 	 	Executive – Frank M. Jaehnert	 	 
	 
	 	 	 	 	 	 
	 	 	Brady Corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Hoyt R. Stastney
 

	 	 
	 	 	Hoyt R. Stastney, Secretary	 	 

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