<PAGE> 1
Registration No.
-----------
As filed with the Securities and Exchange Commission on December 9, 1999
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BRADY CORPORATION
(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)
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BRADY CORPORATION RESTORATION PLAN
(Full title of the plan)
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THOMAS E. SCHERER Copy to:
Vice President, Controller and Assistant Secretary CONRAD G. GOODKIND, ESQ.
Brady Corporation Quarles & Brady LLP
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)
<TABLE>
<CAPTION>
Calculation of Registration Fee
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PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED(1) REGISTERED PER SHARE OFFERING PRICE FEE
--------------------- ------------ --------- -------------- ---
<S> <C> <C> <C> <C>
Deferred Compensation Obligations $5,000,000 100% $5,000,000 $1,320
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</TABLE>
(1) The Deferred Compensation Obligations are unsecured obligations of
Brady Corporation to pay deferred compensation in the future in
accordance with the terms of the Brady Corporation Restoration Plan for
eligible employees.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to participating employees 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 Brady Corporation ("Brady" or 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) The Registrant's Annual Report on Form 10-K for the fiscal
year ended July 31, 1999; and
(b) All other reports filed by the Registrant pursuant to Sections
13(a) or 15(d) of the 1934 Act since the end of the fiscal
year covered by the Annual Report referred to in (a) above.
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 4. DESCRIPTION OF SECURITIES.
Under the Brady Corporation Restoration Plan (the "Plan"), Brady will
provide eligible employees the opportunity to defer a specified percentage of
their compensation. The obligations of Brady for the amounts of compensation
deferred by eligible employees ("Participants") pursuant to the Plan will be
unsecured general obligations of Brady to pay the deferred compensation (plus
any net investment earnings attributable thereto) (the "Obligations") in the
future in accordance with the terms of the Plan and the Brady Corporation
Restoration Trust between Brady and PNC Bank, N.A., as trustee, dated as of
January 1, 2000 (the "Trust Agreement"). In the event of the insolvency of
Brady, the trust fund established under the Trust Agreement (the "Trust") shall
be subject to the claims of the general creditors of Brady. In such event, all
Participants and any Participant designated beneficiaries under the Plan shall
constitute unsecured general creditors of Brady with respect to amounts
otherwise payable thereunder and shall have no special or priority claim with
respect to the assets held in the Trust.
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The amount of compensation to be deferred by a Participant will be
determined in accordance with the Plan based on elections by each Participant.
Each Obligation of a Participant will be payable 30 days following
the termination of that Participant's employment with Brady, subject to certain
earlier payments that may be made in the event of a Participant's financial
hardship. In addition, if a Participant dies before receiving payment of his or
her Obligations, the balance of any remaining Obligations of the Participant
will paid to the Participant's designated beneficiary within 30 days following
the Participant's death.
The Obligations will be indexed to one or more investment options
individually chosen by each Participant from a list of investment options
selected by the Plan administrator from time to time. Each Participant's
Obligation will be adjusted to reflect the investment experience, whether
positive or negative, of the selected investment options.
A Participant's right or the right of any other person to the
Obligations cannot be assigned, alienated, sold, transferred, pledged or
encumbered, and any attempt to do so will be void. Each Participant in the Plan
has the right to designate a beneficiary to receive the balance, if any, of the
Participant's Obligation at the time of the Participant's death and shall have
the right at any time to change such designation.
Except for distributions that may be made in connection with a
Participant's financial hardship, the Obligations are not subject to redemption,
in whole or in part, prior to the payment date specified in the Plan, at the
option of Brady or through operation of a mandatory or optional sinking fund or
analogous provision. However, Brady reserves the right to amend or terminate the
Plan at any time, except that no such amendment or termination shall adversely
affect the right of any Participant (or any beneficiary) to any amounts accrued
to him or her under the Plan prior to the date of such amendment or termination.
The Obligations are not convertible into another security of Brady. PNC
Bank, N.A. has been appointed as Trustee pursuant to the Trust Agreement to take
certain action with respect to the Obligations. Within 30 days following the end
of each calendar year, Brady is required to contribute the amount needed so that
the Trust has sufficient assets to pay all amounts due to Plan Participants or
beneficiaries as of that prior year end. The Trust is irrevocable. So long as
Brady remains solvent, assets of the Trust can be used only to make payments due
under the Plan to Participants and beneficiaries. However, as described above,
in the event of Brady's insolvency, assets of the Trust would be applied for the
benefit of Brady's general creditors. Trust assets will be invested by the
Trustee in investments which are intended to mirror the investment decisions of
Participants under the Plan, but the Plan administrator may direct the Trustee
to make different investments if it so chooses.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The legality of the securities registered hereunder will be passed on
for the Registrant by Quarles & Brady LLP, the Registrant's legal counsel. Peter
J. Lettenberger, a Director, and Conrad G. Goodkind, the Secretary, of the
Registrant, are partners of Quarles & Brady LLP.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Brady Corporation is incorporated under the Wisconsin Business
Corporation Law ("WBCL").
Under Section 180.0851(1) of the WBCL, Brady is required to indemnify a
director or officer, to the extent such person is successful on the merits or
otherwise in the defense of a proceeding, for all reasonable expenses incurred
in the proceeding if such person was a party because he or she was a director or
officer
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of Brady. In all other cases, Brady is required by Section 180.0851(2)
to indemnify a director or officer against liability incurred in a proceeding to
which such person was a party because he or she was a director or officer
of Brady, unless it is determined that he or she breached or failed to perform a
duty owed to Brady and the breach or failure to perform constitutes:
- A willful failure to deal fairly with Brady or its
shareholders in connection with a matter in which the director
or officer has a material conflict of interest;
- A violation of criminal law, unless the director or officer
had reasonable cause to believe his or her conduct was lawful
or no reasonable cause to believe his or her conduct was
unlawful;
- A transaction from which the director or officer derived an
improper personal profit; or
- Willful misconduct.
Section 180.0858 of the WBCL provides that, subject to certain limitations, the
mandatory indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under Brady's Articles of Incorporation, Bylaws, any written agreement between
the director or officer and Brady or a resolution of the Board of Directors or
shareholders.
Section 180.0859 of the WBCL 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 under Sections
180.0850 to 180.0858 of the WBCL, 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.
Section 180.0828 of the WBCL 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 under Section 180.0851 referred to above.
Brady's Bylaws generally provide for mandatory indemnification of
directors and officers of the Registrant to the fullest extent permitted by law.
Officers and directors of Brady may be covered by insurance policies
purchased by Brady, 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 directors or officers.
Under Section 180.0833 of the WBCL, directors of Brady against whom
claims are asserted with respect to the declaration of improper dividends or
distributions to shareholders or certain other improper acts which they approved
are entitled to contribution from other directors who approved such actions and
from shareholders who knowingly accepted an improper dividend or distribution.
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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;
(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; and
(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
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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) Reference is made to the indemnification provisions described in
Item 6 of this Registration Statement.
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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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 December 6, 1999.
BRADY CORPORATION
By: /s/ F. M. Jaehnert
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F. M. Jaehnert
Vice President and Chief Financial Officer
(Principal Accounting Officer)
(Principal Financial Officer)
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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.*
SIGNATURE TITLE
/s/ K. M. Hudson President and Director (Principal Executive Officer)
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K. M. Hudson
/s/ P. J. Lettenberger Director
- ----------------------
P. J. Lettenberger
S-1
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/s/ R. A. Bemis Director
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R. A. Bemis
- --------------------------------- Director
F. W. Harris
/s/ R. C. Buchanan Director
- ---------------------------------
R. C. Buchanan
/s/ R. D. Peirce Director
- ---------------------------------
R. D. Peirce
/s/ G. E. Nei Director
- ---------------------------------
G. E. Nei
/s/ I. Helford Director
- ---------------------------------
I. Helford
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* Each of these signatures is affixed as of December 6, 1999.
S-2
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BRADY CORPORATION
(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 Brady Corporation Restoration Plan X
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 Brady Corporation Restoration Trust X
</TABLE>
EI-1
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EXHIBIT 4
BRADY CORPORATION RESTORATION PLAN
EFFECTIVE JANUARY 1, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I INTRODUCTION....................................................................................1
1.1 Establishment and Effective Date................................................................1
1.2 Purpose.........................................................................................1
ARTICLE II DEFINITIONS.....................................................................................2
2.1 Account.........................................................................................2
2.2 Affiliate.......................................................................................2
2.3 Beneficiary.....................................................................................2
2.4 Board...........................................................................................2
2.5 Code............................................................................................2
2.6 Committee.......................................................................................2
2.7 Compensation....................................................................................2
2.8 Elective Deferral...............................................................................2
2.9 Elective Deferral Account.......................................................................2
2.10 Eligible Employee...............................................................................2
2.11 Employee .......................................................................................2
2.12 Employer........................................................................................2
2.13 Employer Contribution...........................................................................3
2.14 Employer Contribution Account...................................................................3
2.15 Matching Contribution...........................................................................3
2.16 Matching Contribution Account...................................................................3
2.17 Participant.....................................................................................3
2.18 Plan............................................................................................3
2.19 Plan Year.......................................................................................3
2.20 Qualified 401(k) Plan ..........................................................................3
ARTICLE III PARTICIPATION...................................................................................4
3.1 Eligibility to Participate......................................................................4
3.2 Continuation of Eligibility.....................................................................4
ARTICLE IV DEFERRALS.......................................................................................5
4.1 Elective Deferrals..............................................................................5
4.2 Elective Deferral Elections.....................................................................5
4.3 Matching Contribution...........................................................................6
4.4 Employer Contribution ..........................................................................6
ARTICLE V ACCOUNTS AND CREDITS............................................................................7
5.1 Credits to Accounts.............................................................................7
5.2 No Funding......................................................................................7
5.3 Deemed Investment of Accounts...................................................................8
5.4 Reports to Participants.........................................................................8
</TABLE>
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<TABLE>
<S> <C>
ARTICLE VI VESTING.........................................................................................9
ARTICLE VII PAYMENT OF ACCOUNTS............................................................................10
7.1 Termination of Employment......................................................................10
7.2 Death..........................................................................................10
7.3 Financial Hardship.............................................................................10
7.4 Change in Law..................................................................................11
ARTICLE VIII PLAN OPERATION AND ADMINISTRATION..............................................................12
8.1 Administrator..................................................................................12
8.2 Committee......................................................................................12
8.3 Authority to Act...............................................................................12
8.4 Information from Participants..................................................................12
8.5 Committee Discretion...........................................................................12
8.6 Committee Members' Conflict of Interest........................................................13
8.7 Governing Law..................................................................................13
8.8 Expenses.......................................................................................13
8.9 Minor or Incompetent Payees....................................................................13
8.10 Withholding....................................................................................13
8.11 Indemnification................................................................................14
ARTICLE IX CLAIMS PROCEDURE...............................................................................15
9.1 Claims.........................................................................................15
9.2 Review Procedure...............................................................................15
ARTICLE X AMENDMENT AND TERMINATION......................................................................16
ARTICLE XI MISCELLANEOUS PROVISIONS.......................................................................17
11.1 Headings.......................................................................................17
11.2 Plan Not Contract of Employment................................................................17
11.3 Rights of Participants and Beneficiaries.......................................................17
11.4 Nonalienation of Benefits......................................................................17
11.5 Tax Treatment..................................................................................17
11.6 Other Plans and Agreements.....................................................................18
11.7 Number and Gender..............................................................................18
11.8 Plan Provisions Controlling....................................................................18
11.9 Severability...................................................................................18
11.10 Evidence Conclusive............................................................................18
11.11 Status of Plan Under ERISA.....................................................................19
11.12 Name and Address Changes......................................................................19
</TABLE>
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ARTICLE I
INTRODUCTION
1.1 ESTABLISHMENT AND EFFECTIVE DATE
Brady Corporation hereby establishes the Brady Corporation Restoration
Plan effective as of January 1, 2000.
1.2 PURPOSE
The Plan is intended to restore to key management employees of Brady
and its affiliates income deferral opportunities and employer
contributions they would have had under the Company's tax qualified
Brady Gold and Money Purchase Plans but for the limitations of the
Internal Revenue Code of 1986, as amended.
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ARTICLE II
DEFINITIONS
The following terms, when used in the Plan with initial capital letters, shall
have the meaning given to them in this Article.
2.1 ACCOUNT shall mean Elective Deferral Account, Matching Contribution
Account and Employer Contribution Account.
2.2 AFFILIATE shall mean each incorporated or unincorporated trade or
business in which Brady Corporation directly or indirectly owns, as
applicable, eighty percent (80%) of the voting stock or eighty percent
(80%) of the capital or profits interest.
2.3 BENEFICIARY shall mean the person designated by a Participant in
accordance with Section 7.2 to receive any amounts payable pursuant to
the Plan in the event of his death.
2.4 BOARD shall mean the Board of Directors of Brady Corporation.
2.5 CODE shall mean the Internal Revenue Code of 1986, as amended, and any
regulations issued thereunder.
2.6 COMMITTEE shall mean the Compensation Committee of the Board.
2.7 COMPENSATION shall mean the total compensation payable to a Participant
by the Employer for any period (prior to elective deferrals under this
Plan or any other plan or deferral agreement) required to be reported
as wages on the Employee's Form W-2 for income tax purposes, but
reduced by all of the following items (even if includable in gross
income): reimbursements or other expense allowances, fringe benefits
(cash and non-cash), moving expenses and welfare benefits.
2.8 ELECTIVE DEFERRAL shall mean the portion of a Participant's
Compensation that is reduced and credited to his Elective Deferral
Account pursuant to his election under Section 4.1.
2.9 ELECTIVE DEFERRAL ACCOUNT shall mean the Account maintained under the
Plan to record a Participant's interest under the Plan attributable to
his Elective Deferrals.
2.10 ELIGIBLE EMPLOYEE shall mean an Employee eligible under Sections 3.1
and 3.2.
2.11 EMPLOYEE shall mean an employee of the Employer.
2.12 EMPLOYER shall mean Brady Corporation and any Affiliate that adopts the
Plan with the approval of the Board.
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2.13 EMPLOYER CONTRIBUTION shall mean the amount credited to a Participant
pursuant to Section 4.4.
2.14 EMPLOYER CONTRIBUTION ACCOUNT shall mean the Account maintained under
the Plan to record a Participant's interest under the Plan attributable
to Employer Contributions on his behalf.
2.15 MATCHING CONTRIBUTION shall mean the amount credited to a Participant
pursuant to Section 4.3.
2.16 MATCHING CONTRIBUTION ACCOUNT shall mean the Account maintained under
the Plan to record a Participant's interest under the Plan attributable
to Matching Contributions on his behalf.
2.17 PARTICIPANT shall mean (i) an Eligible Employee under Section 3.1 or
(ii) a former Eligible Employee who has an Account under the Plan.
2.18 PLAN shall mean the Brady Corporation Restoration Plan, as set forth in
this document, as the same may be amended or restated from time to
time.
2.19 PLAN YEAR shall mean the calendar year.
2.20 QUALIFIED 401(K) PLAN shall mean the Brady Gold Plan (or any successor
plan thereto qualified under Code ss.ss. 401(a) and 401(k)).
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ARTICLE III
PARTICIPATION
3.1 ELIGIBILITY TO PARTICIPATE
An Employee shall be eligible to elect deferrals and receive
Employer contributions in accordance with the provisions of
Article IV during any Plan Year in which the Employee is
reasonably anticipated to earn compensation from the Employer
in excess of the limit described in Code Section 401(a)(17).
3.2 CONTINUATION OF ELIGIBILITY
(a) An Employee shall continue to be eligible to elect deferrals
and receive Employer contributions in accordance with the
provisions of Article IV only for so long as he continues in
employment with the Employer and satisfies the requirements of
Section 3.1.
(b) An individual who terminates employment with the Employer
shall cease to be eligible and shall again be eligible to
elect deferrals and receive Employer contributions in
accordance with the provisions of Article IV only in
accordance with Section 3.1.
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ARTICLE IV
DEFERRALS
4.1 ELECTIVE DEFERRALS
(a) An Eligible Employee may elect an Elective Deferral of up to
four percent (4%) of his Compensation for a Plan Year.
(b) An Eligible Employee's Elective Deferral election under
subsection (a) of this Section shall apply to and reduce the
portion of his Compensation earned during a Plan Year after
the date the Compensation he has earned during the Plan Year
equals the limit in Code Section 401(a)(17) for such Plan
Year.
4.2 ELECTIVE DEFERRAL ELECTIONS
(a) An Eligible Employee's Elective Deferral election under
Section 4.1 shall (i) if made within the thirty (30) day
period following the date he is first eligible to participate
or reparticipate in the Plan, be effective on the date the
election is received by the Employer, and (ii) if not made
within said thirty (30) day period, be effective on the
January 1 following the date the election is received by the
Employer, or its designee.
(b) Once effective, an Eligible Employee's election or elections
under subsection (a) of this Section shall continue in effect
(notwithstanding any change in his Compensation) until changed
or revoked by him or otherwise revoked under this Section.
(c) An Eligible Employee may change or revoke his election under
subsection (a) of this Section each January 1. Any such change
or revocation must be received by the Employer, or its
designee, before the January 1 it is to be effective.
(d) If an Eligible Employee participates in a 401(k) plan (i.e., a
qualified cash or deferred arrangement) of the Employer (or
any affiliate treated under the Code as a single employer with
the Employer for purposes of the 401(k) plan) and receives a
withdrawal of his elective contributions thereunder on account
of financial hardship prior to his attainment of age
fifty-nine and one-half (59 1/2) under the deemed distribution
rule of I.T. Reg.ss.1.401(k)-1(d)(2)(iv)(B) (or its
successor), his election under Section 4.1 shall be revoked
automatically (effective on the date such hardship withdrawal
is made or as soon as practicable thereafter). In addition,
such Eligible Employee shall not be eligible to have another
election effect for a twelve (12) month suspension period that
begins on the first day of the calendar month following the
date the hardship withdrawal is made. Such
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Eligible Employee may make another election effective for any
January 1 following the end of such suspension period, if then
still eligible to do so.
(e) An Eligible Employee's election under Section 4.1 shall be
revoked automatically upon the termination of his employment
with the Employer (and the Eligible Employee shall cease to be
an Eligible Employee).
(f) All elections and revocations made by an Eligible Employee
under this Section shall be made in accordance with procedures
prescribed by the Committee, and all elections and revocations
under this Section shall be effective with the payroll period
beginning with or next following the effective date of the
election or revocation.
4.3 MATCHING CONTRIBUTION
An Eligible Employee who elects an Elective Deferral for a Plan Year
shall be credited with a Matching Contribution for the Plan Year in an
amount equal to the amount of the Elective Deferral made on the
Eligible Employee's behalf for the Plan Year.
4.4 EMPLOYER CONTRIBUTION
An Eligible Employee shall be credited with an Employer Contribution
for a Plan Year in an amount equal to 4% of the amount by which the
Eligible Employee's Compensation exceeds the limit in Code Section
401(a)(17) for the Plan Year; provided the Eligible Employee remains in
the Employer's employ on the last day of such Plan Year.
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ARTICLE V
ACCOUNTS AND CREDITS
5.1 CREDITS TO ACCOUNTS
(a) An amount equal to the amount by which a Participant's
Compensation has been reduced pursuant to his elective
deferral election under Section 4.1 shall be credited to his
Elective Deferral Account.
(b) Matching Contributions on a Participant's behalf shall be
credited to his Matching Contribution Account.
(c) Employer Contributions on a Participant's behalf shall be
credited to his Employer Contribution Account.
(d) Said credits shall be made at times established by the
Committee but no later than as of the last day of the Plan
Year to which they relate.
(e) Each Account shall also be credited or charged with deemed
earnings and losses as if it were invested in accordance with
Section 5.3.
5.2 NO FUNDING
(a) The right of any individual to receive payment under the
provisions of this Plan shall be an unsecured claim against
the general assets of the Employer, and no provisions
contained in this Plan, nor any action taken pursuant to this
Plan, shall be construed to give any individual at any time a
security interest in any asset of the Employer, of any
affiliated company, or of the stockholders of the Employer.
The liabilities of the Employer to any individual pursuant to
this Plan shall be those of a debtor pursuant to such
contractual obligations as are created by this Plan and to the
extent any person acquires a right to receive payment from the
Employer under this Plan, such right shall be no greater than
the right of any unsecured general creditor of the Employer.
(b) The Employer may establish a grantor trust (but shall not be
required to do so) to which shall be contributed (subject to
the claims of the general creditors of the Employer) the
amounts credited to the Accounts. If a grantor trust is so
established, except as specifically provided otherwise by the
terms of the trust agreement for the trust, payment by the
trust of the amounts due to a Participant or his Beneficiary
under the Plan shall be considered a payment by the Employer
for purposes of the Plan.
7
<PAGE> 11
5.3 DEEMED INVESTMENT OF ACCOUNTS
(a) The Committee shall select one or more investment funds for
the deemed investment of Accounts. However, in no event shall
the Employer be required to make any such investment in the
investment funds, and to the extent such investments are made,
such investments shall remain an asset of the Employer subject
to the claims of its general creditors.
(b) On the date credited to the respective Account, a
Participant's Elective Deferrals, Matching Contributions and
Employer Contributions shall be deemed to be invested in one
or more of the investment funds designated by the Participant
for such deemed investment. Once made, the Participant's
investment designation shall continue in effect for all future
Elective Deferrals, Matching Contributions and Employer
Contributions until changed by the Participant. Any such
change may be elected by the Participant at the times
established by the Committee, which shall be no less
frequently than quarterly, and shall be effective only for
Elective Deferrals, Matching Contributions and Employer
Contributions credited from and after its effective date.
(c) A Participant may elect to reallocate the balance of his
Accounts deemed to be invested in the investment funds under
this Section at the times established by the Committee, which
shall be no less frequently quarterly.
(d) All elections and designations under this Section shall be
made in accordance with procedures prescribed by the
Committee. The Committee may prescribe uniform percentages for
such elections and designations.
5.4 REPORTS TO PARTICIPANTS
The Employer shall provide annual reports to each Participant showing
(a) the value of the Account as of the most recent December 31st (b)
the amount of contributions made by the Employer for the year ending on
such date and (c) the amount of any interest, earnings or investment
gain or loss credited or debited to the Participant's Account.
8
<PAGE> 12
ARTICLE VI
VESTING
A Participant shall be fully vested and nonforfeitable at all times in
all of his Accounts herein.
9
<PAGE> 13
ARTICLE VII
PAYMENT OF ACCOUNTS
7.1 TERMINATION OF EMPLOYMENT
(a) The Employer shall pay the balance of a Participant's Accounts
to him within thirty (30) days of the date his employment with
the Employer and its Affiliates terminates.
(b) Payment of a Participant's Accounts shall be made in a single
cash payment.
7.2 DEATH
(a) If a Participant dies before receiving the balance of his
Accounts, the Employer shall pay the balance of his Accounts
to his Beneficiary in a single cash payment within thirty (30)
days of the date of his death.
(b) A Participant's designation of a Beneficiary for this purpose
shall be made in a written designation filed in accordance
with procedures prescribed by the Committee, and a Participant
may change his designation of a Beneficiary at any time in
another written designation filed in accordance with such
procedures. If there is no Beneficiary designated by the
Participant or surviving at the death of the Participant, the
Participant shall be deemed to have designated as Beneficiary
with priority in the order named (i) his surviving spouse and
(ii) his estate.
7.3 FINANCIAL HARDSHIP
(a) The Employer shall pay the balance of a Participant's Accounts
to him in a single cash payment in the event of his financial
hardship, but only in an amount necessary to satisfy the
financial hardship (including reasonably anticipated taxes
resulting from such a payment) and only to the extent that
such financial hardship cannot be relieved (i) through
reimbursement or compensation by insurance or otherwise, (ii)
by liquidation of the Participant's assets to the extent such
liquidation would not result in a financial hardship or (iii)
by cessation of Elective Deferrals.
(b) For purposes of subsection (a) of this Section, financial
hardship shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or
accident of the Participant or his dependent, loss of the
Participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a
result of events outside the control of the Participant.
10
<PAGE> 14
(c) The Committee shall have the sole discretion to determine the
amount (if any) to be paid to a Participant under this
Section.
7.4 CHANGE IN LAW
Notwithstanding any of the above, the Committee may direct payment of a
Participant's Account before it otherwise would be payable under this
Article VII if, based on notification from the Internal Revenue Service
or a review by the Committee in light of Internal Revenue Service
guidance, the Committee determines that a Participant has or will
recognize income for federal income tax purposes with respect to
amounts that are or will be payable under the Plan before they are to
be paid. Further, the Committee may direct payment of a Participant's
Account before it otherwise would be payable and may terminate a
Participant's participation in the Plan if, based on notification from
the Department of Labor or a review by the Committee in light of
Department of Labor guidance, the Committee determines that an
individual's participation in the Plan jeopardizes the Plan's status as
a plan described in Section 11.11 hereof.
11
<PAGE> 15
ARTICLE VIII
PLAN OPERATION AND ADMINISTRATION
8.1 ADMINISTRATOR
The Committee shall be the plan administrator and shall be responsible
for and perform the duties imposed on a plan administrator.
8.2 COMMITTEE
The Committee shall have the power and duty to administer the Plan in
accordance with its terms, including, but not limited to, the
following:
(a) to make and enforce such rules and regulations as it may deem
necessary or desirable for the efficient administration of the
Plan;
(b) to interpret the Plan, including the right to remedy possible
ambiguities, inconsistencies or omissions;
(c) to decide all questions related to participation in, and
payment of amounts under, the Plan, including all factual
questions related thereto; and
(d) to maintain all necessary records for the administration of
the Plan.
8.3 AUTHORITY TO ACT
Brady Corporation or the Committee may authorize one or more of Brady
Corporation's employees, members, representatives or agents, as
applicable, to execute on its behalf instructions or directions to any
interested party, and any such interested party may rely thereupon and
the information contained therein.
8.4 INFORMATION FROM PARTICIPANTS
Each Participant and Beneficiary shall furnish the Committee in the
form prescribed by it and at its request, such personal data,
affidavits, authorizations to obtain information, or other information
as the Committee deems necessary or desirable for the administration of
the Plan.
8.5 COMMITTEE DISCRETION
The Committee has full and complete discretionary authority to
determine eligibility for benefits, to construe the terms of the Plan
and to decide any matter presented through the
12
<PAGE> 16
claims review procedure. Any final determination by the Committee
(including claims decisions made pursuant to Article IX) shall be
binding on all parties and afforded the maximum deference allowed by
law. If challenged in court, such determination shall not be subject to
de novo review and shall not be overturned unless proven to be
arbitrary and capricious upon the evidence considered by the Committee
at the time of such determination.
8.6 COMMITTEE MEMBERS' CONFLICT OF INTEREST
A member of the Committee who is covered hereunder may not vote or
decide upon any matter relating solely to himself or vote in any case
in which his individual right to any benefit under the Plan is
particularly involved nor may a member of the Board who is covered
hereunder vote to amend the Plan regarding the timing of distributions
or vote with respect to direct or indirect termination of the Plan.
Decisions shall be made by remaining Committee or Board members even if
there is no quorum under normal Committee or Board rules.
8.7 GOVERNING LAW
This Plan shall be construed in accordance with the laws of the State
of Wisconsin to the extent not preempted by the provisions of the
Employee Retirement Income Security Act of 1974 or other federal law.
8.8 EXPENSES
All expenses and costs incurred in connection with the administration
and operation of the Plan shall be borne by the Employer and/or the
Trust.
8.9 MINOR OR INCOMPETENT PAYEES
If a person to whom a benefit is payable is a minor or is otherwise
incompetent by reason of a physical or mental disability, the Committee
may cause the payments due to such person to be made to another person
for the first person's benefit without any responsibility to see to the
application of such payment. Such payments shall operate as a complete
discharge of the obligations to such person under the Plan.
8.10 WITHHOLDING
To the extent required by law, the Employer shall withhold any taxes
required to be withheld by the federal or any state or local government
from payments made hereunder or from other amounts paid to the
Participant by the Employer. To the extent that FICA taxes are required
to be withheld from the Participant with respect to amounts credited
under this Plan and no amounts are to be paid to the Participant
hereunder or otherwise
13
<PAGE> 17
from the Employer from which such FICA taxes may be withheld, then the
Employer shall pay such FICA taxes and the Participant's Account
hereunder shall be reduced by the amount of the FICA tax paid.
8.11 INDEMNIFICATION
Except as otherwise provided by law, neither the Board or the Committee
nor any individual member of the Board or the Committee, nor the
Employer, nor any officer, shareholder or employee of the Employer
shall be liable for any error of judgment, action or failure to act
hereunder or for any good faith exercise of discretion, excepting only
liability for gross negligence or willful misconduct. Such individuals
and entities shall be indemnified and held harmless by the Employer
against any and all claims, damages, liabilities, costs and expenses
(including attorneys' fees) arising by reason of any good faith error
of omission or commission with respect to any responsibility, duty or
action hereunder. Nothing herein contained shall preclude the Employer
from purchasing insurance to cover potential liability of one or more
persons who serve in an administrative capacity with respect to the
Plan.
14
<PAGE> 18
ARTICLE IX
CLAIMS PROCEDURE
9.1 CLAIMS
If the Participant or the Participant'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 member of the Committee designated as the claims
administrator. The claims administrator 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 claim administrator'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.
9.2 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 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.
15
<PAGE> 19
ARTICLE X
AMENDMENT AND TERMINATION
The Board may amend or terminate this Plan at any time; provided,
however, that no such amendment or termination shall deprive any Participant or
Beneficiary of any amounts accrued to him under this Plan prior to the date of
such amendment or termination. If this Plan is terminated, a Participant's
Account hereunder as of the date of Plan termination shall continue to be
credited with investment earnings under Article V and be paid at such time and
in such form as provided for under the terms of the Plan as in effect on the
date of Plan termination (subject to the Board's absolute discretion to
accelerate distributions at any time following Plan termination); provided,
however, that no additional contributions shall be credited after such
termination. Notwithstanding any other provision of the Plan to the contrary,
the Board shall always have the right to prospectively amend the investment
funds available under Section 5.3 of the Plan.
16
<PAGE> 20
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 HEADINGS
The headings of the Plan have been inserted for convenience of
reference and shall be ignored in the construction of the provisions
herein.
11.2 PLAN NOT CONTRACT OF EMPLOYMENT
The existence of the Plan shall not create or change any contract,
express or implied, between the Employer and its employees and shall
not affect the Employer's right to take any action with respect to its
employees.
11.3 RIGHTS OF PARTICIPANTS AND BENEFICIARIES
The interest and rights of a Participant and Beneficiary under the Plan
shall be those of a general unsecured creditor of the Employer, and
with respect to the creditors of the Employer, no Participant or
Beneficiary shall have any preferred claims on, or any beneficial
ownership in, the assets of the Employer, including any assets in which
the Employer may invest to aid in meeting its obligations under the
Plan.
11.4 NONALIENATION OF BENEFITS
All benefits payable hereunder are for the sole use and benefit of the
Participants and their Beneficiaries and, to the extent permitted by
law, shall be free, clear and discharged of and from, and are not to be
in any way liable for, debts, contracts or agreements, now contracted
or which may hereafter be contracted and from all claims and
liabilities now or hereafter incurred by any Participant or Beneficiary
covered by this Plan. No Participant or Beneficiary covered by this
Plan shall have the right to anticipate, surrender, encumber, alienate
or assign, whether voluntarily or involuntarily, any of the benefits to
become due hereunder unto any person or person upon any terms
whatsoever, and any attempt to do so shall be void.
11.5 TAX TREATMENT
There is no commitment or guarantee with respect to the tax treatment
to be accorded to a Participant or Beneficiary under the Plan.
17
<PAGE> 21
11.6 OTHER PLANS AND AGREEMENTS
(a) Participation in the Plan shall not affect a Participant's
rights to participate in and receive benefits under any other
plans of the Employer, nor shall it affect his rights under
any other agreement entered into with the Employer, unless
explicitly provided otherwise by such agreement.
(b) Any amount credited under or paid pursuant to the Plan shall
not be treated as wages, salary or any other type of
compensation or otherwise taken into account in the
determination of the Participant's benefits under any other
plans of the Employer, unless explicitly provided otherwise by
such plan.
11.7 NUMBER AND GENDER
The use of the singular shall be interpreted to include the plural and
the plural the singular, as the context shall require. The use of the
masculine, feminine or neuter shall be interpreted to include the
masculine, feminine or neuter, as the context shall require.
11.8 PLAN PROVISIONS CONTROLLING
In the event of any conflict between the provisions of the Plan and the
provisions of a summary or description of the Plan or the terms of any
agreement or instrument related to the Plan, the provisions of the Plan
shall be controlling.
11.9 SEVERABILITY
If any provisions of the Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining
parts of the Plan, but this Plan shall be construed and enforced as if
the illegal and invalid provisions had never been included herein.
11.10 EVIDENCE CONCLUSIVE
The Employer, the Committee and any person or persons involved in the
administration of the Plan shall be entitled to rely upon any
certification, statement, or representation made or evidence furnished
by any person with respect to any facts required to be determined under
any of the provisions of the Plan, and shall not be liable on account
of the payment of any monies or the doing of any act or failure to act
in reliance thereon. Any such certification, statement, representation,
or evidence, upon being duly made or furnished, shall be conclusively
binding upon the person furnishing it but not upon the Employer, the
Committee or any other person involved in the administration of the
Plan. Nothing herein contained shall be construed to prevent any of
such parties from
18
<PAGE> 22
contesting any such certification, statement, representation, or
evidence or to relieve any person from the duty of submitting
satisfactory proof of any fact.
11.11 STATUS OF PLAN UNDER ERISA
The Plan is intended to be an unfunded plan maintained by an Employer
primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees, as
described in Section 201(2), Section 301(a)(3), Section 401(a)(1) and
Section 4021(b)(6) of the Employee Retirement Income Security Act of
1974, as amended.
11.12 NAME AND ADDRESS CHANGES
Each Participant shall keep his name and address on file with the
Employer and shall promptly notify the Employer of any changes in his
name or address. All notices required or contemplated by this Plan
shall be deemed to have been given to a Participant if mailed with
adequate postage prepaid thereon addressed to him at his last address
on file with the Employer. If any check in payment of a benefit
hereunder (which was mailed to the last address of the payee as shown
on the Employer's records) is returned unclaimed, further payments
shall be discontinued unless evidence is furnished that the recipient
is still alive.
19
<PAGE> 1
EXHIBIT 5
December 9, 1999
Brady Corporation
6555 West Good Hope Road
P.O. Box 571
Milwaukee, Wisconsin 53201-0571
Re: Brady Corporation Restoration Plan
Ladies and Gentlemen:
We are providing this opinion in connection with the Registration
Statement of Brady Corporation (the "Company") on Form S-8 (the "Registration
Statement") to be filed under the Securities Act of 1933, as amended (the
"Act"), for the purpose of registering under the Act $5,000,000 deferred
compensation obligations (the "Obligations") which will represent unsecured
obligations of the Company to pay deferred compensation in the future in
accordance with the terms of the Brady Corporation Restoration Plan (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 Brady Corporation Restoration Trust; (v) the corporate
proceedings relating to the adoption and approval of the Plan; and (vi) such
other documents and records and such matters of law as we have deemed necessary
in order to render this opinion.
For purposes of rendering this opinion, we have examined originals or
photocopies of the documents referred to above. In conducting such examination,
we have assumed the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents submitted to us as
copies.
On the basis of the foregoing, we advise you that, in our opinion:
1. The Obligations, when issued in accordance with the
provisions of the Plan, will be valid and binding
obligations of the Company, enforceable in accordance
with their terms, except as the enforcement thereof may
be limited by or subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and the effect of
general principles of equity and public policy, whether
considered in a proceeding in equity or at law.
2. The provisions of the written documents constituting the Plan
comply with the applicable requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
One of the Company's Directors and its Secretary, Peter J. Lettenberger
and Conrad G. Goodkind, respectively, are partners of Quarles & Brady LLP, which
serves as general counsel to the Company.
<PAGE> 2
Brady Corporation
December 9, 1999
Page 2
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 LLP
<PAGE> 1
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Brady Corporation on Form S-8 of our reports dated September 23, 1999, appearing
in and incorporated by reference in the Annual Report on Form 10-K of Brady
Corporation for the year ended July 31, 1999.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
December 6, 1999
<PAGE> 1
EXHIBIT 99.1
BRADY CORPORATION
RESTORATION TRUST
THIS AGREEMENT made as of the 1st day of January, 2000, by and between
Brady Corporation ("Employer") and PNC Bank, N.A. ("Trustee");
WHEREAS, Employer is adopting the Brady Corporation Restoration Plan;
WHEREAS, Employer has incurred or expects to incur liability under the
terms of such Plan with respect to the individuals participating in such Plan;
WHEREAS, Employer wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Employer's creditors in the event of Employer's
Insolvency, as herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plan;
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
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;
WHEREAS, it is the intention of Employer to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) Employer hereby deposits with Trustee in trust the sum of $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 Employer is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
<PAGE> 2
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Employer 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 Plans and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against
Employer. Any assets held by the Trust will be subject to the claims of
Employer's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Employer, 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) Within 30 days following the end of each Plan year, Employer 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 as of the close of the Plan
year.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Employer 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), 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. With respect
to benefit payments to Plan Participants, the Employer is solely responsible for
determining the amounts of income that are reportable, the amounts and types of
payroll taxes that are to be withheld, and to remit such withholding taxes to
the appropriate government agencies. The Trustee has no duty hereunder other
than to follow the direction of the Employer.
(b) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plan shall be determined by Employer or such party as it
shall designate under the Plans, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plans.
(c) Employer may make payment of benefits directly to Plan participants
or their beneficiaries as they become due under the terms of the Plan. Employer
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,
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<PAGE> 3
Employer shall make the balance of each such payment as it falls due.
Trustee shall notify Employer where principal and earnings are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN EMPLOYER IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants and
their beneficiaries if Employer is Insolvent. Employer shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Employer is unable to
pay its debts as they become due, or (ii) Employer 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 Employer under federal and state law as set forth
below.
(1) The Board of Directors (the "Board") and the Chief
Executive Officer of Employer shall have the duty to inform Trustee in writing
of Employer's Insolvency. If a person claiming to be a creditor of Employer
alleges in writing to Trustee that Employer has become Insolvent, Trustee shall
determine whether Employer is Insolvent and, pending such determina tion,
Trustee shall discontinue payment of benefits to Plan participants or their
beneficiaries.
(2) Unless Trustee has actual knowledge of Employer's
Insolvency, or has received notice from Employer or a person claiming to be a
creditor alleging that Employer is Insolvent, Trustee shall have no duty to
inquire whether Employer is Insolvent. Trustee may in all events rely on such
evidence concerning Employer's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination concerning
Employer's solvency.
(3) If at any time Trustee has determined that Employer is
Insolvent, Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trust for the benefit of
Employer'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 Employer with respect to benefits due under the
Plans 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 Employer 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 Plans for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Employer in lieu of the payments provided
for hereunder during any such period of discontinuance.
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<PAGE> 4
SECTION 4. PAYMENTS TO EMPLOYER.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Employer shall have no right or power to direct Trustee to return
to Employer or to divert to others any of the Trust assets before all payments
of benefits have been made to Plan participants and their beneficiaries pursuant
to the terms of the Plans.
SECTION 5. INVESTMENT AUTHORITY.
(a) In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by Employer, other than a de
minimis amount held in common investment vehicles in which Trustee invests. 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.
(b) Subject to (a) above, Trustee may invest and reinvest the principal
and income of the Trust fund in any and all common stocks, preferred stocks,
bonds, notes, debentures, mort gages, 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. 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.
(c) Notwithstanding any other provision of this Trust, the Compensation
Committee of the Board of Directors of the Employer, which is responsible for
administering the Plan, may from time to time appoint one or more independent
professional investment advisors (each of which is hereinafter called an
"Investment Advisor") with respect to the total or any portion of the Trust
fund. Trustee shall not be required to be a party to any agreement appointing an
Investment Advisor except in the case where the Committee requests Trustee to
enter into an agency and/or custody agreement with an Investment Advisor which
will also be the depository and custodian of the Trust fund assets allocated to
its management; provided further that the terms and conditions of appointment,
authority, retention and removal of Investment Advisor shall be the sole
responsibility of the Committee. Investment Advisor shall have and exercise all
of the investment powers reserved to Trustee under this Trust Agreement during
the period of such appointment. Upon receipt of written notice from the
Committee of the appointment of such Investment Advisor, Trustee shall perform
such custodial and ministerial acts relating to investments as may be required
to carry out the directions of Investment Advisor and the administration of such
portion of the Trust fund for which an advisor is appointed, but shall be
relieved of all responsibility for investment or failure to invest in accordance
with this Trust Agreement for such portion of the Trust fund during the period
of such appointment, except that Trustee may invest and reinvest income and
principal cash in U.S. treasury bills, commercial paper, or other short-term
investments, including interests in any common, collective or group
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trust fund or mutual fund that is created and maintained by Trustee or any of
its affiliates from time to time for the collective short-term investment of
Trust cash reserves, pending receipt of directions as to the investment or
disposition of such cash.
(d) In connection with, or as an alternative to, the appointment of
Investment Advisors pursuant to Section 5(c) above, the Committee may direct
Trustee as to the investment of some or all of the Trust fund for the purpose of
adhering to participant investment directions which may be available under the
Plan or otherwise. Unless written notice to the contrary is provided by the
Committee to the Trustee, (1) the Committee shall direct the Trustee's
investment of Trust assets; and (2) the Trustee is directed by the Committee to
mirror the elections made by Plan Participants and their beneficiaries with
respect to the deemed investment options available with respect to their
accounts under the Plan, as communicated to the Trustee through the telephone
voice response system established for the Plan by the Trustee.
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.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Employer and Trustee. Within 60 days following the close of each calendar
quarter (and each calendar year) and within 60 days after the removal or
resignation of Trustee, Trustee shall deliver to Employer a written account of
its administration of the Trust during such quarter (or such year) or during the
period from the close of the last preceding quarter (or in the case of an annual
statement, from the close of the last year) to the date of such removal or
resignation, setting forth all investments, receipts, disbursements and other
transactions effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
The Employer may approve the account either by written notice of approval
delivered to the Trustee or by failure to object in writing to the Trustee
within 180 days from the date on which the account was delivered to the
Employer. Upon receipt of written approval of the account, or upon the
expiration of the 180-day period without written objections, the account shall
be approved, and the Trustee shall be released and discharged with respect to
the account as if the account had been settled and allowed by a decree of a
court of competent jurisdiction. Nothing herein contained, however, shall be
deemed to preclude the Trustee of its right to have its account settled by a
court of competent jurisdiction. 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.
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<PAGE> 6
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Employer shall indemnify and hold Trustee harmless from and against
any claim, loss or expense (including reasonable counsel fees) which the Trustee
may incur or pay out in connection with, or otherwise arising out of:
(i) the performance by the Trustee of its duties
hereunder, unless any such claim, loss or expense is
a result of the Trustee's own negligence, willful
misconduct, breach of fiduciary duties or violation
of applicable law; or
(ii) anything done or omitted by the Trustee in reliance
on the directions of Employer which the Employer is
required or permitted to make hereunder or in the
absence of directions which the Employer is required
to make hereunder.
(b) Trustee may consult with legal counsel, who may be counsel for
Employer or the Trustee or in the employ of Employer or the Trustee, 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 and the Employer shall pay
their reasonable expenses, fees or compensation or, if the Employer does not pay
within a reasonable time, the Trustee shall make such payments from Trust
assets.
(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 Employer on a Payment Schedule, or to the Employer 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.
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<PAGE> 7
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Employer shall pay all administrative and Trustee's fees and expenses
as shall be agreed to from time to time by Employer. 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 Employer, which
shall be effective 30 days after receipt of such notice unless Employer and
Trustee agree otherwise.
(b) Trustee may be removed by Employer 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 com pleted within 120 days after receipt of
notice of resignation, removal or transfer, unless Employer 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 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, Employer may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor 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 Employer 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 Employer. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1(b)
hereof.
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<PAGE> 8
(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 Plans. Upon termination of the Trust any assets remaining
in the Trust shall be returned to Employer.
(c) Upon written approval of participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan, Employer may terminate
this Trust prior to the time all benefit payments under the Plan have been made.
All assets in the Trust at termination shall be returned to Employer.
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.
SECTION 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be January 1, 2000.
BRADY CORPORATION
By: /s/ Thomas E. Scherer
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Title: Vice President
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PNC BANK, N.A.
By: /s/ Kimberly M. Gannis
---------------------------
Title: Vice President
------------------------
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