<PAGE> 1
Registration No.
----------
As filed with the Securities and Exchange Commission on October 28, 1997
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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W. H. BRADY CO.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0178960
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6555 West Good Hope Road
P.O. Box 571
Milwaukee, Wisconsin 53201-0571
(Address of Principal Executive Offices) (ZIP Code)
------------------
DEFERRED COMPENSATION ARRANGEMENT
(Full title of the plan)
------------------
THOMAS E. SCHERER Copy to:
Vice President and Assistant Secretary CONRAD G. GOODKIND, ESQ.
W. H. Brady Co. Quarles & Brady
6555 West Good Hope Road 411 East Wisconsin Avenue
P.O. Box 571 Milwaukee, Wisconsin 53202
Milwaukee, Wisconsin 53201-0571
(Name and address of agent for service)
(414) 358-6600
(Telephone number, including area code, of agent for service)
Calculation of Registration Fee
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE(2) FEE
- ------------------------------- ---------------- -------------- ----------------- ------------
<S> <C> <C> <C> <C>
Class A Nonvoting Common Stock,
par value $.01 per share and
Deferred Compensation Plan Interests 1,000,000 shares (2) $ 31,500,000 $ 9,545
============================================================================================================
</TABLE>
<PAGE> 2
(1) The Deferred Compensation Plan (the "Plan") provides for the issuance
of up to 1,000,000 shares of Class A Nonvoting Common Stock, par value
$.01 per share ("Class A Common Stock"). The Plan provides for possible
adjustment of the number, price and kind of shares in the event of certain
capital or other changes affecting the Registrant's Class A Common Stock.
This Registration Statement therefore covers, in addition to the above
stated 1,000,000 shares and corresponding deferred compensation plan
interests, an indeterminate number of shares that may become subject to
the Plan by means of any such adjustment.
(2) Pursuant to Rule 457(h), estimated solely for the purpose of computing
the registration fee, based upon $31.50 per share for 1,000,000 shares,
which is the average of the high and low sales prices of the Registrant's
Class A Common Stock on the Nasdaq/NMS on October 27, 1997, as reported in
the Midwest Edition of the Wall Street Journal.
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<PAGE> 3
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Information specified in Part I of Form S-8 (Items 1 and 2) will be sent or
given to Plan participants as specified by Rule 428(b)(1) under the Securities
Act of 1933.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by W. H. Brady Co. (the "Registrant")
(Commission File No. 0-12730) with the Securities and Exchange Commission (the
"Commission") pursuant to Section 13 of the Securities Exchange Act of 1934, as
amended, (the "1934 Act") are incorporated herein by reference:
(a) Annual Report on Form 10-K for the fiscal year ended July 31,
1996 and Amendment No. 1 thereto (on Form 10-K/A) dated October 29,
1996.
(b) Quarterly Reports on Form 10-Q for the quarterly periods
ended October 31, 1996, January 31, 1997 and April 30, 1997.
(c) That portion of the Registrant's Registration Statement on
Form 8-A that describes the Registrant's Class A Nonvoting Common
Stock in Item 1 thereof, which incorporates the description from the
description of Registrant's Capital Stock contained in the
Registrant's Registration Statement on Form S-1 (Registration
Statement No. 2-91287), effective June 25, 1984, as updated by the
description contained in Registrant's Form 10-Q for the quarter
ended October 31, 1995, and including any future amendment or report
filed for the purpose of updating such description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes hereof to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part hereof.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Chapter 180 of the Wisconsin Statutes includes provisions for
indemnification by a corporation of a director or officer against certain
liabilities and expenses incurred by him or her in any proceeding (whether
threatened, pending or completed, and whether brought by the corporation or any
other person) to which he or she was a party because of being a director or
officer. In general, under these provisions (1) a corporation is required to
indemnify a director or officer, to the extent he or she has been successful on
the merits or
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<PAGE> 4
otherwise in the defense of any such proceeding, for all reasonable expenses
incurred in the proceeding, and (2) in other cases, the corporation is required
to indemnify a director or officer against liabilities (including, among other
things, judgments, penalties, fines and reasonable expenses) incurred in any
such proceeding unless liability was incurred because he or she breached or
failed to perform a duty to the corporation and the breach or failure
constitutes any of the following: (a) a willful failure to deal fairly with the
corporation or its shareholders in connection with a matter in which he or she
has a material conflict of interest, (b) a violation of criminal law, unless he
or she had reasonable cause to believe his or her conduct was lawful or no
reasonable cause to believe his or her conduct was unlawful, (c) a transaction
from which he or she derived an improper personal profit, or (d) willful
misconduct. The provisions specify that the termination of a proceeding by
judgment, order, settlement or conviction, or upon a plea of no contest or an
equivalent plea, does not, by itself, create a presumption that indemnification
is not required. Also, the provisions permit a corporation to pay or reimburse
reasonable expenses as incurred if the director or officer affirms his or her
good faith belief that he or she has not breached or failed to perform his or
her duties to the corporation and undertakes to make repayment to the extent it
is ultimately determined that indemnification is not required. With specified
exceptions, these provisions do not preclude additional indemnification.
Chapter 180 specifically provides that it is the public policy of the State of
Wisconsin to require or permit indemnification, allowance of expenses and
insurance, to the extent required or permitted generally thereunder, for any
liability incurred in connection with a proceeding involving a federal or state
statute, rule or regulation regulating the offer, sale or purchase of
securities.
Chapter 180 of the Wisconsin Statutes also provides that, with certain
exceptions, a director is not liable to a corporation, its shareholders, or any
person asserting rights on behalf of the corporation or its shareholders, for
damages, settlements, fees, fines, penalties or other monetary liabilities
arising from a breach of, or failure to perform, any duty resulting solely from
his or her status as a director, unless the person asserting liability proves
that the breach or failure to perform constitutes any of the four exceptions to
mandatory indemnification referred to above.
The Bylaws of the Registrant provide generally for mandatory
indemnification of directors and officers of the Registrant to the fullest
extent permitted by law.
Officers and directors of the Registrant may be covered by insurance
policies purchased by the Registrant, under which they are insured (subject to
exceptions and limitations specified in the policies) against expenses and
liabilities arising out of actions, suits or proceedings to which they are
parties by reason of being or having been such directors or officers.
ITEM 8. EXHIBITS.
See Exhibit Index following the Signatures page in this Registration
Statement, which Exhibit Index is incorporated herein by reference.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
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<PAGE> 5
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of a prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with the Commission
by the Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referred to in Item 6, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milwaukee, State of Wisconsin, on October 27, 1997.
W. H. BRADY CO.
(Registrant)
By: /s/ Frank M. Jaehnert
------------------------------------------
Frank M. Jaehnert
Vice President and Chief Financial Officer
(Principal Accounting Officer)
--------------------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Katherine M. Hudson and Peter J. Lettenberger,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and any other regulatory
authority, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
--------------------
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.*
<TABLE>
<S> <C>
SIGNATURE TITLE
/s/ K.M. Hudson President and Director (Principal Executive Officer)
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K. M. Hudson
/s/ P.J. Lettenberger Director and Secretary
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P. J. Lettenberger
/s/ R.A. Bemis Director
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R. A.
</TABLE>
S-1
<PAGE> 7
Director
- --------------------------------
F. W. Harris
/s/ R.C. Buchanan Director
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R. C. Buchanan
Director
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R. D. Peirce
Director
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G. E. Nei
- ---------------
* Each of these signatures is affixed as of October 27, 1997.
S-2
<PAGE> 8
W. H. BRADY CO.
(THE "REGISTRANT")
(COMMISSION FILE NO. 0-12730)
EXHIBIT INDEX
TO
FORM S-8 REGISTRATION STATEMENT
<TABLE>
<CAPTION>
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO HEREWITH
- ------- ---------------------------------- --------------------------- --------
<S> <C> <C> <C>
4.1 Restated Articles of Incorporation of Exhibit 4.1 to Registrant's
the Registrant Registration Statement No.
333-04155 on Form S-3
4.2 Bylaws of the Registrant Registrant's Annual Report
on Form 10-K for the fiscal
year ended July 31, 1989
5 Opinion of Counsel X
23.1 Consent of Deloitte & Touche LLP X
23.2 Consent of Counsel Contained in
Opinion filed as
Exhibit 5
24 Powers of Attorney Signatures Page to
this Registration
Statement
99.1 Form of Deferred Compensation
Arrangement for Executives X
99.2 Form of Deferred Compensation X
Arrangement for Directors
</TABLE>
EI-1
<PAGE> 9
EXHIBIT INCORPORATED HEREIN FILED
NUMBER DESCRIPTION BY REFERENCE TO HEREWITH
- ------- ----------- ------------------- --------
99.3 Trust for Assets of Plan X
EI-2
<PAGE> 1
EXHIBIT (5)
OCTOBER 27, 1997
W. H. Brady Co.
6555 West Good Hope Road
P.O. Box 571
Milwaukee, Wisconsin 53201-0571
Re: W.H. Brady Co. Deferred Compensation Plan
Ladies and Gentlemen:
We are providing this opinion in connection with the Registration
Statement of W. H. Brady Co. (the "Company") on Form S-8 (the "Registration
Statement") to be filed under the Securities Act of 1933, as amended (the
"Act"), with respect to the proposed issuance by the Company of up to 1,000,000
shares of Class A Nonvoting Common Stock, par value $.01 per share (the
"Shares") , of the Company pursuant to the Company's Deferred Compensation
Arrangement (the "Plan").
We have examined: (i) the Registration Statement; (ii) the Company's
Restated Articles of Incorporation and Bylaws, as amended to date; (iii) the
Plan; (iv) the corporate proceedings relating to the adoption and approval of
the Plan and the authorization for the issuance of the Shares; and (v) such
other documents and records and such matters of law as I have deemed necessary
in order to render this opinion.
On the basis of the foregoing, we advise you that, in my opinion:
1. The Company is a corporation duly incorporated and validly
existing under the laws of the State of Wisconsin.
2. The Shares, when issued as and for the consideration
contemplated by the Plan, will be validly issued, fully paid and
nonassessable by the Company, subject to the personal liability
which may be imposed on shareholders by Section 180.0622(2)(b) of
the Wisconsin Business Corporation Law, as judicially interpreted,
for debts owing to employees for services performed, but not
exceeding six months service in any one case. Although Section
180.0622(2)(b) provides that such personal liability of shareholders
shall be "to an amount equal to the par value of shares owned by
them respectively, and to the consideration for which their shares
without par value was issued," the Wisconsin Supreme Court, by a
split decision without a written opinion, has affirmed a judgment
holding shareholders of a corporation liable under the substantially
identical predecessor statute in effect prior to January 1, 1991
(Section 180.40(6)) for unpaid employee wages to an amount equal to
the consideration for which their par value shares were issued
rather than the shares' lower stated par value. Local 257 of Hotel
and Restaurant Employees and Bartenders International Union v.
Wilson Street East Dinner Playhouse, Inc., 126 Wis. 2d 284,
<PAGE> 2
W.H. Brady Co.
October 27, 1997
Page 2
375 N.W.2d 664 (1985) (affirming the 1983 decision of the Circuit
Court for Dane County, Wisconsin, in Case No. 82-CV-0023).
One of the Registrant's directors and its Secretary, Peter Lettenberger,
is a partner of Quarles & Brady, which serves as general counsel to the
Registrant.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving consent, we do not admit that we are
"experts" within the meaning of Section 11 of the Act, or that we come within
the category of persons whose consent is required by Section 7 of the Act.
Very truly yours,
/s/ Quarles & Brady
Quarles & Brady
EI-2
<PAGE> 1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
W.H. Brady Co. on Form S-8 of our reports dated September 13, 1996, appearing
in and incorporated by reference in the Annual Report on Form 10-K of W.H.
Brady Co. for the year ended July 31, 1996.
Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
October 23, 1997
<PAGE> 1
EXECUTIVE'S DEFERRED COMPENSATION AGREEMENT
AGREEMENT, made as of the _____ day of ___________________, 19_____,
between W.H. BRADY CO., a Wisconsin corporation ("Company") and
________________________ ("Executive").
WITNESSETH:
WHEREAS, Executive is now serving or has previously served as an executive
of the Company in a position of importance and responsibility, and the Company
desires to provide such Executive with a tax deferral opportunity in the form
of Company common stock; and
WHEREAS, on December 17, 1971, the Board of Directors of the Company
adopted a resolution creating a plan permitting Executives of the Company
(amended effective as of August 1, 1975, to relate to additional employees) to
elect to defer portions of their base salary and/or portions of the amounts
payable to them under the Company's Executive Additional Compensation Plan, or
any amendment of the Plan, or any bonus plan which replaces the Plan, (the
"Plan") so as to be payable on the basis, at the times and upon the terms and
conditions of that Plan; and
WHEREAS, the terms of such deferrals are reflected in individual deferral
agreements that have been executed from time to time with the Executives of the
Company, and
WHEREAS, the parties desire to execute a new agreement to reflect recent
changes adopted by the Board of Directors,
NOW, THEREFORE, in consideration of the premises and the mutual benefits
to be derived herefrom, IT IS AGREED AS FOLLOWS:
1. DEFERRED COMPENSATION ACCOUNT
There shall be created on the books of the company an Executive's
Deferred Compensation Account (the "Account"), which shall be credited
with the amounts specified in Executive's elections under this Deferred
Compensation Agreement (the "Election").
Elections shall be in writing, made prior to the beginning of the year,
or partial year, in which the compensation would otherwise be paid, and
filed with the Corporate Controller of the Company. Such election shall
be effective with respect to pay periods occurring in the following year,
or, with respect to the Plan, for amounts which would become payable in
years beginning after the date of filing.
Elections with respect to base salary shall be in an amount of $50 or a
multiple thereof. Elections with respect to the Plan shall be in an
amount of $100 or a multiple thereof, but in no event less than $500 per
anum.
An Election shall be irrevocable with respect to the period to which it
relates and shall continue in effect each like period thereafter until
revoked or amended in writing with respect to periods beginning after the
filing with the Company of such written revocation or amendment.
1
<PAGE> 2
2. VALUATION OF ACCOUNT
Whenever amounts are withheld from the Executive's compensation, the
Executive's Account shall be credited with a number of stock units,
calculated by converting the amount withheld into a number of whole and
fractional stock units as if the amounts had been used to purchase Class
A non-voting common stock of the Company at the price determined under
paragraph 5 of this Agreement. The Account shall also be credited with
additional stock units whenever dividends are paid on the Class A
non-voting common stock of the Company, calculated by assuming that such
dividends were used to purchase additional stock units at the price
determined under paragraph 5 of this Agreement. The Account shall be
credited from time to time with additional shares of stock units equal in
number to the number of shares granted in any stock dividend or split to
which the holder of a like number of shares of Class A non-voting common
stock would be entitled. The Account shall likewise be credited with the
stock unit equivalent of all other distributions made with respect to
shares of Class A non-voting common stock; in the event of a distribution
of preferred stock, such preferred stock shall be valued at its par value
(or its voluntary liquidating price, if it does not have a par value).
The foregoing provisions are intended as a formula for computing the
number of shares of stock to be distributed as provided in paragraphs 3
and 4 hereof, and neither Executive nor his Beneficiary (hereinafter
defined) shall be deemed a shareholder by virtue of the existence of the
Account nor have any rights of any nature whatsoever as a shareholder
prior to the distribution of such shares.
3. DISTRIBUTIONS TO EXECUTIVE FOLLOWING TERMINATION OF EMPLOYMENT
(a) If the Executive's employment is terminated due to any reason,
including his retirement, disability, or death, and if no application and
approval under 3(b) has been made, the Company shall distribute to
Executive, or his Beneficiary, each year for a fixed period of ten years,
shares of the Class A non-voting common stock equal to the allocable part
of the number of stock units of his Account determined as of end of each
fiscal year. Thus, the first distribution shall be one-tenth of the
number of stock units then credited to such account, the second one-ninth
of the then number of stock units, etc. Such distributions shall be made
within 75 days following the end of the Company_s fiscal year, commencing
with the first fiscal year end after the date of termination of
employment. The number of stock units in the Account shall be reduced by
the number of shares of Class A non-voting common stock distributed in
each distribution.
(b) Upon application of the Executive (or Executive's Beneficiary if
Executive dies prior to termination of employment), the Company may in
its uncontrolled discretion and upon such terms and conditions as the
Board of Directors determines, pay Executive the amount credited to their
Account in smaller installments or in a lump sum on a discount or other
basis.
4. DISTRIBUTION TO BENEFICIARY OR ESTATE OF EXECUTIVE
(a) In the event of the Executive's death, annual distributions will be
made to the Executive_s beneficiary as follows:
(1) If the Executive dies prior to termination of employment, the
distributions will
2
<PAGE> 3
be in the same annual amounts and for the same number
of years as the distribution would have been received had the
Executive terminated employment on the date of death and lived
for the shorter of 10 years or the term permitted under 3(b);
(2) If the Executive dies after employment has terminated, the
distributions will be in the same annual amounts as were being
made or were distributable at the date of death for the
remaining period that distributions would have been made had
the Executive lived.
(b) The term "Beneficiary" as used herein includes the plural and means
any person(s), including corporate or individual beneficiary(s),
designated by Executive in a written instrument in a form acceptable to
and filed with the Company or by specific appointment in Executive's will
referring to this Agreement. Executive may designate a primary
beneficiary and a contingent beneficiary provided, however, that the
Company may reject any such instrument tendered for filing if it contains
successive beneficiaries or contingencies unacceptable to it. In the
absence of an acceptable designation or if the Beneficiary so designated
predeceases Executive, the payments shall be paid to Executive's estate.
If all Beneficiaries who survive Executive shall die before receiving the
full amounts payable hereunder, then the payments shall be paid to the
estate of the Beneficiary last to die. The Company shall not be charged
with notice of the appointment of a personal representative of Executive
until it shall have received a certified copy of the appointment.
5. ACCOUNTING AND VALUATION DETERMINATIONS
For the purpose of determining the amounts credited to the Account
pursuant to paragraph 2, the value of a stock unit shall be set equal to
the Fair Market Value of the Class A non- voting common stock. Fair
Market Value on any date shall mean, with respect to the Company_s Class
A non-voting common stock or any other stock of the Company, 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 reported in composite transactions as reported
in The Wall Street Journal (Midwest Edition) for such date or, if such
date is not a business day or if no sales of Company stock shall have
been reported with respect to such date, the next preceding 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.
6. CONVERSION FROM PRIOR AGREEMENT
(a) As of the earlier of the date of election to convert under paragraph
6(b) or August 1, 1998, deferrals under the prior deferral agreement
shall no longer be available. Any new amounts deferred shall be under
the terms of this Agreement, but such prior agreement shall remain in
effect with respect to amounts previously deferred, unless a conversion
is made under the terms of paragraph 6(b) hereof. Any remaining
unconverted balances under any prior agreement will continue to be valued
as described in such agreement until July 31, 2002, after which date any
increase in value for the following year will be based on the closing
yield rate on a 30-year U.S. Treasury Bond as of July 31 of each year.
3
<PAGE> 4
(b) If Executive elects in writing, the amount contained in the
Executive's Account under the terms of the prior agreement can be
converted into amounts deferred under the terms of this Agreement, and
distributions will thereafter be made solely under the terms of this
Agreement except that distributions to Executives to whom distributions
have commenced prior to the date hereof shall continue to be made at the
times provided in the prior Agreement. Such conversion may only be
elected on November 19, 1997. The number of stock units credited to the
Executive's Account shall be determined as of the date of such conversion
by valuing the Executive's account as of such date under the terms of the
prior agreement, and then converting such value into an equivalent number
of stock units under this Agreement by dividing such sum by the transfer
price as determined under paragraph 6(c).
(c) The transfer price for the conversion of amounts held under the
Executive's prior deferral agreement shall be the Fair Market Value of a
stock unit as determined under the provisions of Paragraph 5 for the date
of conversion. A one-time discount of 10%, as shall be determined by the
Board of Directors of the Company, may be offered to the Executive if the
Executive converts amounts at the conversion date offered by the Company.
7. GENERAL PROVISIONS
(a) This Agreement shall not be subject to termination, modification or
amendment by the Company with respect to any rights which have accrued
hereunder, the Company reserving the right, however, to terminate, modify
or amend this Agreement effective prospectively as of the first day of
any fiscal year upon not less than 15 days prior written notice to
Executive.
(b) The Company shall have the right to assign all of its right, title
and obligation in and under this Agreement upon a merger or consolidation
in which the Company is not the surviving entity or to the purchaser of
substantially its entire business or assets or the business or assets
pertaining to a major product line, provided such assignee or purchaser
assumes and agrees to perform after the effective date of such assignment
all of the terms, conditions and provisions imposed by this Agreement
upon the Company. Upon such assignment, all of the rights, as well as
all obligations, of the Company under this Agreement shall thereupon
cease and terminate.
(c) Any action to be taken by the Company under the provisions of this
Agreement shall require the affirmative vote of the majority of the Board
of Directors.
(d) Neither Executive nor Executive_s Beneficiary or estate shall have
power to transfer, assign, anticipate, mortgage or otherwise encumber any
rights or any amounts payable hereunder; nor shall any such rights or
payments be subject to seizure for the payment of any debts, judgments,
alimony, or separate maintenance, or be transferable by operation of law
in event of bankruptcy, insolvency, or otherwise.
(e) The Company will withhold any necessary shares from the distribution
to satisfy its Federal and State withholding tax obligations as a result
of the distribution or from other amounts paid to such individual by the
Company. Further, to the extent required by law, FICA taxes may be
withheld from amounts deferred hereunder, thereby reducing the amount of
the deferral to the extent not withheld from other amounts paid to the
Executive by the Company.
(f) This Agreement shall not supersede any other service, retainer, or
employment contract,
4
<PAGE> 5
whether oral or in writing, between the Company and Executive, nor affect
or impair the rights and obligations of the Company and Executive,
respectively, under any other contract, arrangement, or voluntary
pension, profit-sharing or other compensation plan of the Company, and
the benefits and payments under this Agreement shall be in addition to
any and all of Executive's benefits to which he may be entitled under any
other such contract, arrangement or voluntary plan. No amounts credited
to any participant hereunder and no amounts paid hereunder 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 non-qualified pension or profit
sharing plan of the Company, except as otherwise may be specifically
provided by such plan. Nothing contained herein shall impose any
obligation on the Company to continue the tenure or employment of
Executive.
(g) The Company shall have the right to transfer its rights and
obligations hereunder to the trustees of a grantor trust established by
the Company and shall have the right to transfer sufficient shares of
common stock to such trust to satisfy its obligations hereunder.
(h) If the scheduled payments under this Agreement would result in
disallowance of any portion of the Company's deduction therefore under
Section 162(m) of the Code, the payments shall be limited to the amount
which is deductible, with the balance to be paid as soon as deductible by
the Company. However, in such event, the Company 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.
(i) This Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company. The Committee shall have all
authority that may be appropriate for administering the Plan, including
the authority to adopt rules and regulations for implementing, amending
and carrying out the Plan, interpreting the provisions of the Plan and
determining the eligibility of employees to participate in the Plan and
an eligible employee's entitlement to benefits hereunder.
The Committee shall have full and complete discretionary authority to
determine eligibility for benefits under the Plan, to construe the terms
of the Plan and to decide any matter presented through the claims
procedure. Any final determination by the Committee shall be binding on
all parties. If challenged in court, such determination shall not be
subject to de novo review.
(j) If the Executive or the Executive's Beneficiary (hereinafter refereed
to as "claimant") believes he is being denied any benefit to which he is
entitled under this Plan for any reason, he may file a written claim with
the Committee. The Committee shall review the claim and notify the
claimant of his decision within 90 days of receipt of such claim, unless
the claimant receives written notice prior to the end of the 90 day
period stating that special circumstances require an extension of the
time for decision. The Committee's decision shall be in writing, sent by
first class mail to the claimant's last known address, and if a denial of
the claim, shall contain the specific reasons for the denial, reference
to pertinent provisions of the Plan on which the denial is based, a
description of any additional information or material necessary to
perfect the claim, and an explanation of the claims review procedure.
A claimant is entitled to request the entire Committee to review any
denial by written request to the Committee within 60 days of receipt of
the denial. Absent a request for review within the
5
<PAGE> 6
60-day period, the claim will be deemed to be conclusively denied.
The Committee shall afford the claimant or his authorized representative
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 Committee may extend the time for decision by
not more than 60 days upon written notice to the claimant). The
Committee's review decision shall contain specific reasons for the
decision and reference to the pertinent provisions of the Plan.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its Officers thereunto duly authorized and its corporate seal to be hereunto
affixed, and Executive has hereunto set his hand and seal as of the day and
year first above written.
W. H. BRADY CO.
By: (SEAL)
------------------------------ -----------------------------
Katherine M. Hudson
President Executive
Attest:
---------------------------------
Thomas E. Scherer
Assistant Secretary
6
<PAGE> 1
DIRECTOR'S DEFERRED COMPENSATION AGREEMENT
AGREEMENT, made as of the _____ day of ____________, 19____, between W.H.
BRADY CO., a Wisconsin corporation ("Company") and _________________________
("Director").
WITNESSETH:
WHEREAS, Director is now serving or has previously served as a director of
the Company, and the Company desires to provide such Director with a tax
deferral opportunity in the form of Company common stock; and
WHEREAS, the Board of Directors of the Company has adopted a plan
permitting Directors of the Company to elect to defer portions of their fees at
the times and upon the terms and conditions of that plan;
WHEREAS, the terms of such deferrals are reflected in individual deferral
agreements that have been executed from time to time with the Directors of the
Company, and
WHEREAS, the parties desire to execute a new agreement to reflect recent
changes adopted by the Board of Directors,
NOW, THEREFORE, in consideration of the premises and the mutual benefits
to be derived herefrom, IT IS AGREED AS FOLLOWS:
1. DEFERRED COMPENSATION ACCOUNT
There shall be created on the books of the Company a Director's Deferred
Compensation Account (the "Account"), which shall be credited with the
amounts specified in Director's elections under this Deferred
Compensation Agreement (the "Election").
Elections shall be in writing, made prior to the beginning of the year,
or partial year, in which the fees would otherwise be paid, and filed
with the Corporate Controller of the Company. Such election shall be
effective with respect to fees to be paid in fee periods occurring in the
following year.
Elections with respect to fees shall be in an amount of $________ or a
multiple thereof.
An Election shall be irrevocable with respect to the period to which it
relates and shall continue in effect each like period thereafter until
revoked or amended in writing with
<PAGE> 2
respect to periods beginning after the filing with the Company of such
written revocation or amendment.
2. VALUATION OF ACCOUNT
Whenever amounts are withheld from the Director's fees, the Director's
Account shall be credited with a number of stock units, calculated by
converting the amount withheld into a number of whole or fractional stock
units as if the amounts had been used to purchase Class A non-voting
common stock of the Company at the price determined under paragraph 5 of
this Agreement. The Account shall also be credited with additional stock
units whenever dividends are paid on the Class A non-voting common stock
of the Company, calculated by assuming that such dividends were used to
purchase additional stock units at the price determined under paragraph 5
of this Agreement. The Account shall be credited from time to time with
additional shares of stock units equal in number to the number of shares
granted in any stock dividend or split to which the holder of a like
number of shares of Class A non-voting common stock would be entitled.
The Account shall likewise be credited with the stock unit equivalent of
all other distributions made with respect to shares of Class A non-voting
common stock; in the event of a distribution of preferred stock, such
preferred stock shall be valued at is par value (or its voluntary
liquidating price, if it does not have a par value).
3. DISTRIBUTIONS TO DIRECTOR FOLLOWING TERMINATION OF EMPLOYMENT
(a) If the Director's service as a director is terminated due to
any reason, including his retirement, disability, or death, and if
no application and approval under 3(b) has been made, the Company
shall distribute to Director, or his Beneficiary, each year for a
fixed period of ten years, shares of the Class A non-voting common
stock equal to the allocable part of the number of stock units of
his Account determined as of end of each fiscal year. Thus, the
first distribution shall be one-tenth of the number of stock units
then credited to such account, the second one-ninth of the then
number of stock units, etc. Such distributions shall be made within
75 days following the end of the Company's fiscal year, commencing
with the first fiscal year end after the date of termination of
employment. The number of stock units in the Account shall be
reduced by the number of shares of Class A non-voting common stock
distributed in each distribution.
(b) Upon application of the Director the Company may in its
uncontrolled discretion and upon such terms and conditions as the
Board of Directors determines, pay Director the amount credited to
the Director's Account in a different number of installments (but
not to exceed ten) or in a lump sum on a discount or other basis,
provided, however, that Director shall not be thereby
2
<PAGE> 3
released from any of the terms and conditions hereof prior to the
expiration of the period which would apply if the manner of payment
had not been changed.
4. DISTRIBUTION TO BENEFICIARY OR ESTATE OF DIRECTOR
(a) In the event of the Director's death, annual distributions
will be made to the Director's beneficiary as follows:
(1) If the Director dies prior to termination of
employment, the distributions will be in the same annual
amounts and for the same number of years as the distribution
would have been received had the Director terminated
employment on the date of death and lived for the shorter of
10 years or the term permitted under 3(b) or the elected term
years thereafter;
(2) If the Director dies after employment has
terminated, the distributions will be in the same annual
amounts as were being made or were distributable at the date
of death for the remaining period that distributions would
have been made had the Director lived.
(b) The term "Beneficiary" as used herein includes the plural and
means any person(s), including corporation or individual
beneficiary(s), designated by Director in a written instrument in a
form acceptable to and filed with the Company or by a specific
appointment in Director's will referring to this Agreement.
Director may designate a primary beneficiary and a contingent
beneficiary provided, however, that the Company may reject any such
instrument tendered for filing if it contains successive
beneficiaries or contingencies unacceptable to it. In the absence
of an acceptable designation or if the Beneficiary so designated
predeceases Director, the payments shall be paid to Director's
estate. If all Beneficiaries who survive Director shall die before
receiving the full amounts payable hereunder, then the payments
shall be paid to the estate of the Beneficiary last to die. The
Company shall not be charged with notice of the appointment of a
personal representative of Director until it shall have received a
certified copy of the appointment.
5. ACCOUNTING AND VALUATION DETERMINATIONS
For the purpose of determining the amounts credited to the Account
pursuant to paragraph 2, the value of a stock unit shall be set equal to
the Fair Market Value of the Class A non-voting common stock. Fair
Market Value on any date shall mean, with respect to the Company's Class
A non-voting common stock or any other stock of the Company, 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
3
<PAGE> 4
high and low sale prices reported in composite transactions as reported
in The Wall Street Journal (Midwest Edition) for such date or, if such
date is not a business day or if no sales of Company stock shall have
been reported with respect to such date, the next preceding 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.
6. CONVERSION FROM PRIOR AGREEMENT
(a) As of the earlier of the date of election to convert under
paragraph 6(b) or August 1, 1998, deferrals under the prior deferral
agreement shall no longer be available. Any new amounts deferred
shall be under the terms of this Agreement, but such prior agreement
shall remain in effect with respect to amounts previously deferred,
unless conversion is made under the terms of paragraph 6(b) hereof.
Any remaining unconverted balances under any prior agreement will
continue to be valued as described in such agreement until July 31,
2002, after which date any increase in value for the following year
will be based on the closing yield rate on a 30-year U.S. Treasury
Bond as of the preceding July 31.
(b) If Director elects in writing, the amount contained in the
Director's Account under the terms of the prior agreement can be
converted into amounts deferred under the terms of this Agreement,
and distributions will thereafter be made solely under the terms of
this Agreement except that distributions to Directors to whom
distributions have commenced prior to the date hereof shall continue
to be made at the times provided in the prior Agreement. Such
conversion may only be elected on November 19, 1997. The number of
stock units credited to the Director's Account shall be determined
as of the date of such conversion by valuing the Director's Account
as of such date under the terms of the prior agreement, and then
converting such value into an equivalent number of stock units under
this Agreement by dividing such sum by the transfer price as
determined under paragraph 6(c).
(c) The transfer price for the conversion of amounts held under
the Director's prior deferral agreement shall be the Fair Market
Value of a stock unit as determined under the provisions of
Paragraph 5 for the date of conversion. A one-time discount of 10%,
as determined by the Board of Directors of the Company, may be
offered to the Director if the Director converts amounts at the
conversion date offered by the Company.
4
<PAGE> 5
7. GENERAL PROVISIONS
(a) This Agreement shall not be subject to termination,
modification or amendment by the Company with respect to any rights
which have accrued hereunder, the Company reserving the right,
however, to terminate, modify or amend this Agreement effective
prospectively as of the first day of any fiscal year upon not less
than 15 days prior written notice to Director.
(b) The Company shall have the right to assign all of its right,
title and obligation in and under this Agreement upon a merger or
consolidation in which the Company is not the surviving entity or to
the purchaser of substantially its entire business, provided such
assignee or purchaser assumes and agrees to perform after the
effective date of such assignment all of the terms, conditions and
provisions imposed by this Agreement upon the Company. Upon such
assignment, all of the rights, as well as all obligations, of the
Company under this Agreement shall thereupon cease and terminate.
(c) Any action to be taken by the Company under the provisions of
this Agreement shall require the affirmative vote of the majority of
the Board of Directors.
(d) Neither Director nor Director's Beneficiary or estate shall
have power to transfer, assign, anticipate, mortgage or otherwise
encumber any rights or any amounts payable hereunder; nor shall any
such rights or payments be subject to seizure for the payment of any
debts, judgments, alimony, or separate maintenance, or be
transferable by operation of law in event of bankruptcy, insolvency,
or otherwise.
(e) This Agreement shall not supersede any other service,
retainer, or employment contract, whether oral or in writing,
between the Company and Director, nor affect or impair the rights
and obligations of the Company and Director, respectively, under any
other contract, arrangement, or voluntary pension, profit-sharing or
other compensation plan of the Company, and the benefits and
payments under this Agreement shall be in addition to any and all of
Director's benefits to which he may be entitled under any other such
contract, arrangement or voluntary plan. Nothing contained herein
shall impose any obligation on the Company to continue the tenure
or employment of Director.
(f) The Company shall have the right to transfer its rights and
obligations hereunder to the trustees of a grantor trust established
by the Company and shall have the right to transfer sufficient
shares of common stock to such trust to satisfy its obligations
hereunder.
5
<PAGE> 6
(g) If the scheduled payments under this Agreement would
result in disallowance of any portion of the Company's
deduction therefore under Section 162(m) of the Code, the
payments shall be limited to the amount which is
deductible, with the balance to be paid as soon as
deductible by the Company. However, in such event, the
Company shall pay the Director on a quarterly basis an
amount of interest based on the prime rate recomputed each
quarter on the unpaid scheduled payments.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its Officers thereunto duly authorized and its corporate seal to be hereunto
affixed, and Director has hereunto set his hand and seal as of the day and year
first above written.
W.H. BRADY CO.
By: (SEAL)
- ---------------------- ------------
Katherine M. Hudson
President Director
Attest:
- ----------------------
Thomas E. Scherer
Assistant Secretary
6
<PAGE> 1
W. H. BRADY CO.
DEFERRED COMPENSATION TRUST
THIS AGREEMENT made this ____ day of __________, 199___, by and between W.
H. BRADY CO. ("Company") and ____________________________________ ("Trustee");
WHEREAS, Company has adopted the nonqualified deferred compensation
agreements or plans (the "Plan(s)") as listed in Appendix A; and
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Plan(s) with respect to the individuals participating in such
Plan(s); and
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust")
and to contribute to the Trust assets to be held therein, subject to the claims
of the creditors of the Company in the event of Insolvency, as herein defined,
of the Company until paid to Plan participants and their beneficiaries in such
manner and at such times as specified in the Plan(s); and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Plan(s) as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
and
WHEREAS, it is the intention of Company to make contributions to the Trust
to provide a source of funds to assist in the meeting of the liabilities under
the Plan(s);
NOW, THEREFORE, the parties do hereby create the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) Company hereby deposits with Trustee $100, which shall become the
principal of the Trust to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors as herein
set forth. Plan participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust.
Any rights created under the Plan(s) and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their beneficiaries
against Company. Any assets held by the Trust will be subject to the claims of
general creditors of the Company under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in Trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
(f) Upon a Change of Control, Company shall, as soon as possible, but
in no event longer than 30 days following the Change of Control, as defined
herein, make an irrevocable contribution to the Trust in an amount that is
sufficient, when added to existing Trust assets, to pay each Plan participant
or beneficiary the benefits to which Plan participants or their beneficiaries
would be entitled pursuant to the terms of the Plan(s)
<PAGE> 2
as of the date on which the Change of Control occurred. Thereafter, within 30
days following the end of each calendar year, the Company shall make an
irrevocable contribution in an amount sufficient, when added to existing Trust
assets, to pay each Plan participant or beneficiary the benefits payable
pursuant to the terms of the Plan(s) as of the close of that calendar year.
ALTERNATIVE: [(f) Within 30 days following the end of the Plan year(s) ending
after the Trust has become irrevocable pursuant to Section 1(b) hereof, Company
shall be required to irrevocably deposit additional cash or other property to
the Trust in an amount sufficient to pay each Plan participant or beneficiary
the benefits payable pursuant to the terms of the Plan(s) as of the close of
the Plan year(s).]
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment Schedule")
that indicates the amounts payable in respect of each Plan participant (and his
or her beneficiaries), that provides a formula or other instructions acceptable
to Trustee for determining the amounts so payable, the form in which such
amount is to be paid (as provided for or available under the Plan(s)), and the
time of commencement for payment of such amounts. Except as otherwise provided
herein, Trustee shall make payments to the Plan participants and their
beneficiaries in accordance with such Payment Schedule. Trustee shall make
provision for the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plan(s) and shall pay amounts withheld to
the appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan(s) shall be determined by Company or such party as it
shall designate under the Plan(s), and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan(s).
(c) Company may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan(s). Company
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, Company shall make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and earnings are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if Company or any contributing subsidiary is Insolvent. Whenever
the term "Company" is used in this Section 3, it shall also be deemed to mean
any contributing subsidiary of the Company. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in
writing to Trustee that Company has become Insolvent, Trustee shall
determine whether Company is Insolvent and, pending such determination,
Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency, or has
received notice from Company or a person claiming to be a creditor
alleging that Company is Insolvent, Trustee shall have no duty to inquire
whether Company is Insolvent. Trustee may in all events rely on such
evidence
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<PAGE> 3
concerning Company's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination
concerning Company's solvency.
(3) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trust for the benefit of
Company's general creditors. Nothing in this Trust Agreement shall in any
way diminish any rights of Plan participants or their beneficiaries to
pursue their rights as general creditors of Company with respect to
benefits due under the Plan(s) or otherwise.
(4) Trustee shall resume the payment of benefits to Plan participants
or their beneficiaries in accordance with Section 2 of this Trust Agreement
only after Trustee has determined that Company is not Insolvent (or is no
longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made
to Plan participants or their beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to return
to Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Plan participants and their beneficiaries pursuant
to the terms of the Plan(s). Any Trust assets held in separate bookkeeping
account for a participant or beneficiary under the terms of a separate Plan may
be returned to Company only after all payment of benefits under the terms of
that separate Plan have been made.
SECTION 5. INVESTMENT AUTHORITY.
(a) Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by Company. All rights associated with
assets of the Trust shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with Plan
participants. Company shall have the right at any time, and from time to time
in its sole discretion, to substitute assets of equal fair market value for an
asset held by the Trust. This right is exercisable by Company in a
nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity.
(b) Subject to (a) above, Trustee shall invest and reinvest the principal
and income of the Trust fund in any and all common stocks, preferred stocks,
bonds, notes, debentures, mortgages, equipment trust certificates, investment
trust certificates, common, collective or group trust investments or mutual
fund investments (including any such trusts or funds as may be established by
Trustee or any of its affiliates), real and personal property wherever
situated, and in such other property, investments and securities of any kind,
class or character as Trustee may deem suitable for the Trust, including one or
more life insurance policies. Trustee shall have the power, in its sole
discretion, to do all such acts, execute all such instruments, take all such
proceedings and exercise all rights and privileges with respect to any property
or asset constituting a part of the Trust fund as if Trustee were the absolute
owner thereof.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
With respect to the Trust fund and each Plan, Trustee shall keep or cause
to be maintained accurate and detailed accounts of all investments, receipts
and disbursements and other transactions hereunder, and all accounts, books and
records relating thereto shall be open to inspection and audit at all
reasonable times by any
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<PAGE> 4
person or persons designated by Company. Trustee shall file with Company
annually or more frequently if requested a written report setting forth all
investments, receipts and disbursements, and other transactions effected by
Trustee to the date covered by the report, and showing all cash and other
property held at the end of such period. In the case of any Plan which
provides for a separate bookkeeping account for the interests of each
participant therein, Trustee shall maintain such separate account records for
each participant and beneficiary as it considers necessary or desirable for
the proper administration of the Trust.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Company shall indemnify and hold Trustee harmless from and against
any claim, loss or expense (including reasonable counsel fees) arising out of
anything done or omitted by Trustee in reliance on the directions (or the
absence of any directions) of Company.
(b) Trustee may consult with legal counsel, who may be counsel for
Company or in the employ of Company, in respect to any of its rights, duties and
obligations hereunder and shall be fully protected in acting or refraining from
acting in accordance with the advice of such counsel.
(c) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(d) Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as a asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, to the insured if such
assignment is directed by Company on a Payment Schedule, or to the Company at
any time after all payment of benefits have been made to Plan participants
pursuant to the terms of the Plan(s), or to loan to any person the proceeds of
any borrowing against such policy.
(e) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could
give this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses as
shall be agreed to from time to time by Company. If not so paid, the fees and
expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective 60 days after receipt of such notice unless Company and
Trustee agree otherwise.
(b) Trustee may be removed by Company on 60 days' notice or upon shorter
notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 120 days after
receipt of notice of resignation removal or transfer, unless Company extends
the time limit.
(d) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a
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<PAGE> 5
successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
If Trustee resigns or is removed in accordance with Section 10(a) or (b)
hereof, Company may appoint any bank or trust company to replace Trustee upon
resignation or removal. The appointment shall be effective when accepted in
writing by the new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably requested by
Company or the successor Trustee to evidence the transfer.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument executed
by Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan(s) or shall make the Trust revocable after
it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan(s). Upon termination of the Trust any assets
remaining in the Trust shall be returned to Company.
(c) Upon written approval of participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan(s), Company may terminate
this Trust prior to the time all benefit payments under the Plan(s) have been
made. All assets in the Trust at termination shall be returned to Company.
SECTION 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Wisconsin and of the United States of America.
(d) If the Internal Revenue Service (the "IRS") makes a final
determination that a Plan participant or beneficiary is subject to federal
income tax with respect to the value of any amounts held in accounts under this
Trust prior to the actual distribution to such participant or beneficiary, or
the Trustee receives an opinion of counsel satisfactory to it that it is likely
that the IRS will determine that such federal income tax will be payable as
described above, then the Company shall, at the written request of a
participant or beneficiary accompanied by evidence reasonably satisfactory to
the Company, notify and direct the Trustee to make distribution of such amounts
to the participant or beneficiary as soon thereafter as practicable.
(e) For purposes of this Trust, a Change of Control shall occur if any
persons (as defined in Section 13(d)(3) of the Securities and Exchange Act of
1934) other than the menbers 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 Company.
ALTERNATIVE: [(e) Would be decided if alternative 1(f) is used.]
SECTION 14. EFFECTIVE DATE.
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The effective date of this Trust Agreement shall be the date first above
set forth.
W. H. BRADY CO.
BY: _____________________________
ATTEST: _____________________________
______________________(TRUSTEE)
BY: _____________________________
ATTEST: _____________________________
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APPENDIX A
W. H. BRADY CO.
DEFERRED COMPENSATION TRUST
The nonqualified deferred compensation Plans referred to on page 1 of the
above Trust are identified as follows:
1. Executive Deferred Compensation Agreements between W. H. Brady Co.
and the following named executives executed as of the date indicated:
Executive Date of Agreement
--------- -----------------
2. Director Deferred Compensation Agreements between W. H. Brady Co.
and the following named directors executed as of the date indicated:
Director Date of Agreement
-------- -----------------
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