BRADY CORPORATION
CHANGE OF CONTROL AGREEMENT
AGREEMENT, made as
of November 15, 2006, between Brady Corporation, a Wisconsin
corporation, (“Corporation”) and Robert
Tatterson.
WHEREAS, the
Executive is now serving as an executive of the Corporation in a
position of importance and responsibility; and
WHEREAS, the
Executive possesses intimate knowledge of the business and affairs
of the Corporation and its policies, markets and financial and
human resources, and the Executive has acquired certain
confidential information and data with respect to the Corporation;
and
WHEREAS, the
Corporation wishes to continue to receive the benefit of the
Executive’s knowledge and experience and, as an inducement
for continued service, is willing to offer the Executive certain
payments due to severance as a result of change of control as set
forth herein;
NOW, THEREFORE, in
consideration of the mutual promises and covenants set forth
herein, the Executive and Corporation agree as follows:
(a) Change
of Control. For purposes of this Agreement, a “Change of
Control” shall occur if and when any person or group of
persons (as defined in Section 13(d)(3) of the Securities and
Exchange Act of 1934) other than the members of the family of
William H. Brady, Jr. and their descendants, or trusts for their
benefit, and the W.H. Brady Foundation, Inc., collectively,
directly or indirectly controls in excess of 50% of the voting
common stock of the Corporation.
(b) Termination
Due to Change of Control. A “Termination Due to Change of
Control” shall occur if within the 24 month period
beginning with the date a Change of Control occurs (i) the
Executive’s employment with the Corporation is involuntarily
terminated (other than by reason of death, disability or Cause) or
(ii) the Executive’s employment with the Corporation is
voluntarily terminated by the Executive subsequent to (A) any
reduction in the total of the Executive’s annual base salary
(exclusive of fringe benefits) and the Executive’s target
bonus in comparison with the Executive’s annual base salary
and target bonus immediately prior to the date the Change of
Control occurs, (B) a significant diminution in the
responsibilities or authority of the Executive in comparison with
the Executive’s responsibility and authority immediately
prior to the date the Change of Control occurs or (C) the
imposition of a requirement by the Corporation that the Executive
relocate to a principal work location more than 50 miles from the
Executive’s principal work location immediately prior to the
date the Change of Control occurs.
(c) “Cause”
means (i) the Executive’s willful and continued failure
to substantially perform the Executive’s duties with the
Corporation (other than any such failure resulting from physical or
mental incapacity) after written demand for performance is given to
the Executive by the Corporation which specifically identifies the
manner in which the
1
Corporation
believes the Executive has not substantially performed and a
reasonable time to cure has transpired, (ii) the
Executive’s conviction of (or plea of nolo contendere for the
commission of) a felony, or (iii) the Executive’s
commission of an act of dishonesty or of any willful act of
misconduct which results in or could reasonably be expected to
result in significant injury (monetarily or otherwise) to the
Corporation, as determined in good faith by the Board of Directors
of the Corporation.
(d)
“Beneficiary” means any one or more primary or
secondary beneficiaries designated in writing by the Executive on a
form provided by the Corporation to receive any benefits which may
become payable under this Agreement on or after the
Executive’s death. The Executive shall have the right to
name, change or revoke the Executive’s designation of a
Beneficiary on a form provided by the Corporation. The designation
on file with the Corporation at the time of the Executive’s
death shall be controlling. Should the Executive fail to make a
valid Beneficiary designation or leave no named Beneficiary
surviving, any benefits due shall be paid to the Executive’s
spouse, if living; or if not living, then to the Executive’s
estate.
(e)
“Code” means the Internal Revenue Code of 1986, as
amended.
SECTION 2.
PAYMENTS UPON TERMINATION DUE TO CHANGE OF CONTROL.
(a) Following
Termination Due to Change of Control, the Executive shall be paid
an amount equal to two times the annual base salary paid the
Executive by the Corporation in effect immediately prior to the
date the Change of Control occurs, and two times the average bonus
payment received in the two years immediately prior to the date the
Change of Control occurs. Such amount shall be paid in
24 monthly installments beginning on the 15
th day of the month following the month in which
the Executive’s employment with the Corporation
terminates.
(b) If
the scheduled payments under paragraph (a) above would result
in disallowance of any portion of the Corporation’s deduction
therefore under Section 162(m) of the Code, the payments called for
under paragraph (a) shall be limited to the amount which is
deductible, with the balance to be paid as soon as deductible by
the Corporation. However, in such event, the Corporation shall pay
the Executive on a quarterly basis an amount of interest based on
the prime rate recomputed each quarter on the unpaid scheduled
payments.
SECTION 3. EXCISE
TAX, ATTORNEY FEES.
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