FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended July 31, 1994
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the Transition Period from to
Commission File Number 0-12730
W.H. Brady Co.
(Exact name of registrant as specified in charter)
Wisconsin 39-0178960
(State of Incorporation) (IRS Employer Identification No.)
727 West Glendale Avenue
P.O. Box 571
Milwaukee, WI 53201
(Address of Principal Executive Offices and Zip Code)
(414) 332-8100
(Registrant's Telephone Number)
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Class A Nonvoting Common Stock, Par Value $.01 per share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. Yes X No
As of October 3, 1994, there were outstanding 5,477,312 shares of Class A
Nonvoting Common Stock (the "Class A Common Stock"), and 1,769,314
shares of Class B Common Stock. The Class B Common Stock, all of which
is held by affiliates of the Registrant, is the only voting stock.
DOCUMENTS INCORPORATED BY REFERENCE
W.H. Brady Co. 1994 Annual Report, Incorporated into Part II & IV
W.H. Brady Co.
Incentive Compensation Plan
Adopted August 1, 1993
1. Purpose
The purpose of this Incentive Compensation Plan (the "Plan")
is to provide incentive and reward to those employees of
W.H. Brady Co. and its subsidiaries (the "Company")
responsible for directing functions where the decisions
involved have a significant bearing on the success and
profitability of the Company and who have demonstrated
exceptional ability, industry and service. The Plan is to
motivate individuals to maximize profitability and
shareholder value through group and individual performance.
The incentive reward is to be in the form of supplemental
compensation in addition to the individual's regular base
compensation and will vary based upon the individual's
ability to affect the Company's and operating group's
profitability or objectives.
2. Participants and Eligibility Requirements
A. Levels of Participants
This Incentive Compensation Plan will encompass four
levels of management employees as designated by the
President:
Level 1 - Chief Executive Officer
Chief Operating Officer
Other Elected Officers
Department Heads
Other Key Individuals
Level 2 - General Managers
Level 3 - Operating Management Team (OMT)
Members
Level 4 - Venture Managers
Level 5 - Coated Products Division GM and OMT
B. Basis for Determining Incentive Compensation
The Plan for Level 1 will be based on a two part evaluation
system to determine the incentive compensation. In general,
an objective evaluation based on corporate financial
performance will comprise 60 percent of the incentive paid,
and the balance, 40 percent of the incentive will be based
upon the Senior Officer's or Manager's subjective evaluation
of the individual's performance against specific individual
goals and accomplishments.
The Plan for Level 2 will be based on a three part
evaluation system to determine the incentive compensation.
In general, an objective evaluation based on operating unit
financial performance will comprise 30 percent of the
incentive. An objective evaluation based on corporate
financial performance will comprise 30 percent of the
incentive. The balance, 40 percent of the incentive will be
based upon the Senior Officer's or Manager's subjective
evaluation of the individual's performance against specific
individual goals and accomplishments.
The Plan for Level 3 will be based on a three part
evaluation system to determine the incentive compensation.
In general, an objective evaluation based on operating unit
financial performance will comprise 40 percent of the
incentive. An objective evaluation based on corporate
financial performance will comprise 20 percent of the
incentive. The balance, 40 percent of the incentive will be
based upon the Senior Officer's or Manager's subjective
evaluation of the individual's performance against specific
individual goals and accomplishments.
The Plan for Level 4 will be based on a two part evaluation
system to determine the incentive compensation. An
objective evaluation based on corporate financial
performance will comprise 25 percent of the incentive. The
balance, 75 percent, will be based upon the Senior Officer's
subjective evaluation of the individual's performance
against specific individual goals and accomplishments.
The Plan for Level 5 will be based on a three part
evaluation system to determine incentive compensation. In
general, an objective evaluation based on the matrices of
IPD (1/2) and BCP (1/2) will comprise 30 percent of the
incentive. An objective evaluation based on corporate
financial performance will comprise 30 percent of the
incentive. The balance, 40 percent of the incentive will be
based upon the Senior Officer's or Manager's subjective
evaluation of the individual's performance against specific
individual goals and accomplishments.
C. Potential Incentive Payout
The maximum annual incentive compensation shall be a
percentage of the individual's Base Salary determined as
follows:
Chief Executive Officer - 100%
Chief Operating Officer - 80%
Vice Presidents - 70%
Director-Group Operations - 65%
General/Venture Managers - 60%
Department Heads - 50%
Operating Management Members - 40%
Other Key Individuals - 25%
D. Measurement of Financial Performance
Corporate financial performance will be based upon sales
growth and net income as a percentage of sales. Operating
units financial performance will be based upon sales growth
and controllable contribution margin (except when noted)
consistently measured across corporate, division, subsidiary
or unit lines. Prior to the beginning of each fiscal year,
or as soon after as possible, a matrix, similar to the
schedule attached, will be prepared for each appropriate
business unit and approved by the Compensation Committee of
the Board of Directors.
E. Determination of Subjective Performance
All of the subjective determinations will be subject to
approval by the President and the appropriate Senior
Manager, except that the President's will be determined by
the Compensation Committee of the Board of Directors.
F. Termination or Transfer of Employment
Any individual who ceases to be an employee of the Company
during a fiscal year for any reason whatsoever, whether
voluntarily or involuntarily, except by reason of death,
total disability, retirement, or entry into the armed
services, shall not be entitled to any incentive
compensation. An individual who dies become totally
disable, retires, or enters the armed services during a
fiscal year, and who, but for such event causing termination
of employment, would have satisfied the conditions for
eligibility, shall be entitled to incentive compensation
based on his or her aggregate Base Salary earned up to the
termination of employment.
Any individual who first becomes eligible for incentive
compensation during a fiscal year, or who changes his level
of management shall receive incentive compensation with
respect to that fiscal year based solely upon his aggregate
Base Salary received while in the position which qualifies
this person as a participant.
3. Beneficiary Designation
An individual may designate in writing in a form
satisfactory to the Company a beneficiary or beneficiaries
to receive incentive compensation in the event of the
individual's death, and payment by the Company in accordance
with such designation shall fully discharge the Company from
all liability for the amount so paid. The Company may
refuse to accept any designation which contains unacceptable
contingencies. If no such designation is on file with the
Company at the date, the incentive compensation shall be
payable to the individual's personal representative.
4. Definitions
As used herein, the following terms shall have the following
meanings:
A. "Base Salary" means the gross salary paid during the
fiscal year while in the position eligible for
incentive compensation on account of which incentive
compensation is payable (before any reduction for
amounts voluntarily deferred under the Four Square Plan
or additional deferred compensation plans) and does not
include the value of fringe benefits, director's fees,
sales incentives, additional compensation under this
Plan, or amounts paid in lieu of other benefits earned
as, for example, amounts paid in lieu of vacation
benefits.
B. "Net Sales" means the Gross Sales less returns and
allowances of the Company, Division, Subsidiary or Unit
for the fiscal year computed in accordance with
generally accepted accounting practices. In the event
of any dispute as to the amount of Net Sales, the
determination of the firm of certified public
accountants then serving the Company shall be final and
conclusive.
C. "Fiscal Year" means the Company's fiscal year and shall
relate to the period for which additional compensation
is to be determined, although payment may be made in a
subsequent fiscal year.
D. "Net Income" means the after tax earnings of the
Company for the fiscal year computed in accordance with
generally accepted accounting practices. In the event
of any dispute as to the amount of Net Income, the
determination of the firm of certified public
accountants then serving the Company shall be final and
conclusive.
E. "Controllable Contribution Margin" is the result of
subtracting expenses that are controlled by the
business unit from the sales that business unit
generates. Expenses that are controlled by the unit
are: material usage, direct labor, production
overhead, engineering/R&D expense, sales/advertising
expense, and administrative expense. Specifically
excluded from these expenses are: fringe benefits,
royalties, space charges, admin/management fees, other
income or expenses. In the event of any dispute as to
the amount of "Controllable Contribution Margin", the
determination of the firm of certified public
accountants then serving the Company shall be final and
conclusive.
F. "Cost" is the sum of material usage, direct labor,
production overhead and production depreciation
expenses that are controllable by a business unit.
G. "Cost Percent" is the result of dividing "Cost" by "Net
Sales" (both "Cost" and "Net Sales" are defined in this
Plan.
H. "Volume Growth" is defined as the net square yards
coated. It excludes all reruns, product returns, test
runs, scrap and any other unusable product.
5. Payment Date
Additional compensation shall be paid within 60 days after
the end of the fiscal year for which paid.
6. Amendments and Termination
The Plan may be amended or terminated by the Board of
Directors at any time provided, however, that no such action
which would adversely affect any individual shall be made
with respect to any fiscal year after the first date
thereof.
7. Effective Date
The Plan shall be effective as to the fiscal year beginning
August 1, 1993.
