BRADY CORPORATION
2001 OMNIBUS INCENTIVE STOCK PLAN
1.01
Purpose . This plan shall be known as the Brady Corporation
2001 Omnibus Incentive Stock Plan. The purpose of the Plan is to
provide an incentive for employees of Brady Corporation and its
Affiliates to improve corporate performance on a long-term basis,
and to attract and retain employees by enabling employees to
participate in the future successes of the Corporation, and by
associating the long term interests of employees with those of the
Corporation and its shareholders. It is intended that the Plan and
its operation comply with the provisions of Rule 16b-3 under
the Securities Exchange Act of 1934 (or any successor rule). The
Plan is intended to permit the grant of Nonqualified Stock Options,
Incentive Stock Options, shares of Restricted Stock and Restricted
Stock Units. The proceeds received by the Corporation from the sale
of Corporation Stock pursuant to the Plan shall be used for general
corporate purposes.
1.02 Effective
Date . The effective date of the Plan shall be October 16,
2001, subject to approval of the Plan by holders of a majority of
the outstanding voting common stock of the Corporation provided
that such approval is given within 12 months of the effective
date. Any Award granted prior to such shareholder approval shall be
expressly conditioned upon shareholder approval of the
Plan.
For Plan purposes,
except where the context clearly indicates otherwise, the following
terms shall have the meanings set forth below:
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(a)
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“ Affiliates ”
means any “subsidiary corporation” or “parent
corporation” as such terms are defined in Section 424 of
the Code.
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(b)
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“ Agreement ”
means a written agreement (including any amendment or supplement
thereto) between the Corporation and a Participant specifying the
terms and conditions of an Award.
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(c)
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“ Award ” shall
mean the grant of any form of Stock Option, Restricted Stock or
Restricted Stock Units.
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(d)
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“ Board ” shall
mean the Board of Directors of the Corporation.
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(e)
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“ Code ” shall
mean the Internal Revenue Code of 1986, as amended from time to
time.
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(f)
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“ Committee ”
shall mean the Committee described in Section 4.01.
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(g)
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“ Corporation ”
shall mean Brady Corporation, a Wisconsin corporation.
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(h)
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“ Corporation Stock
” shall mean the Corporation’s Class A Non-Voting
Common Stock, $.01 par value, and such other stock and securities
as may be substituted therefor pursuant to
Section 3.02.
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(i)
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“ Eligible Employee
” shall mean any regular salaried employee of the Corporation
or an Affiliate, including an employee who is a member of the
Board, who satisfies the requirements of
Section 5.01.
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(j)
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“ Exercise Period
” shall mean the period of time provided pursuant to
Section 6.05 within which a Stock Option may be
exercised.
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(k)
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“ Fair Market Value
” on any date shall mean, with respect to Corporation Stock,
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 recorded in
composite transactions for such date or, if such date is not a
business day or if no sales of Corporation Stock shall have been
reported with respect to such date, the next preceding business
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.
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(l)
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“ Participant ”
means an Eligible Employee who has been granted an Award under this
Plan.
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(m)
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“ Performance Goals
” means the performance goals established by the Committee
prior to the grant of any Award of Restricted Stock or Restricted
Stock Units intended to qualify as “performance-based
compensation” under Section 162(m) of the Code and which are
based on the attainment of goals relating to one or more of the
following business criteria measured on an absolute basis or in
terms of growth or reduction: net income (pre-tax or after-tax and
with adjustments as stipulated), earnings per share, return on
equity, return on assets, return on tangible book value, operating
income, earnings before depreciation, interest, taxes and
amortization (EBDITA), loss ratio, expense ratio, increase in stock
price, total shareholder return, economic value added and operating
cash flow. The Committee may establish other subjective or
objective performance goals, including individual goals, which it
deems appropriate.
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(n)
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“ Person ” means
any individual or entity, and the heirs, personal representatives,
executors, administrators, legal representatives, successors and
assigns of such Person as the context may require.
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(o)
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“ Plan ” shall
mean the Brady Corporation 2001 Omnibus Incentive Stock Plan, as
set forth herein, as it may be amended from time to
time.
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(p)
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“ Restricted Stock
” means shares of Corporation Stock granted to a Participant
under Article VII.
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(q)
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“ Restricted Stock Unit
” means an Award granted to a Participant under
Article VIII.
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(r)
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“ Stock Option ”
means an option to purchase a stated number of shares of
Corporation Stock at the price set forth in an Agreement. A Stock
Option may be either a Nonqualified Stock Option or an Incentive
Stock Option.
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III. SHARES
SUBJECT TO AWARD
3.01 Available
Shares . Subject to adjustments under Section 3.02, the
total number of shares of Corporation Stock authorized for issuance
shall not exceed five hundred thousand (500,000) shares, provided
that no individual Eligible Employee may be granted an Award or
Awards covering more than one hundred thousand (100,000) shares of
Corporation Stock in any calendar year. The shares authorized for
issuance under the Plan may consist, in whole or in part, of
authorized but unissued Corporation Stock, or of treasury stock of
the Corporation. Shares subject to and not issued under an Award
that expires, terminates, is canceled or forfeited for any reason
under the Plan shall again become available for the granting of
Awards.
3.02 Changes in
Corporation Stock . In the event of any change in the
Corporation Stock resulting from a reorganization,
recapitalization, stock split, stock dividend, merger,
consolidation, rights offering or like transaction, the Committee
shall proportionately and appropriately adjust: (a) the
aggregate number and kind of shares authorized for issuance under
the Plan; and (b) in the case of previously-granted Stock
Options, the option price and the number and kind of shares subject
to the Stock Options, without any change in the aggregate purchase
price to be paid for the Stock Options.
4.01
Administration by the Committee . The Plan shall be
administered by the Committee. The Committee shall be a committee
designated by the Board to administer the Plan and shall initially
be the Compensation Committee of the Board. The Committee shall be
constituted to permit the Plan to comply with the provisions of
Rule 16b-3 under the Securities Exchange Act of 1934 (or any
successor rule) and Section 162(m) of the Code. A majority of the
members of the Committee shall constitute a quorum. The approval of
such a quorum, expressed by a majority vote at a meeting held
either in person or by conference telephone call, or the unanimous
consent of all members in writing without a meeting, shall
constitute the action of the Committee and shall be valid and
effective for all purposes of the Plan.
4.02 Committee
Powers . Subject to Section 10.06, the Committee is
empowered to adopt, amend and rescind such rules, regulations and
procedures and take such other action as it shall deem necessary or
proper for the administration of the Plan and, in its discretion,
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modify, extend
or renew any Award theretofore granted. The Committee shall also
have authority to interpret the Plan, and the decision of the
Committee on any questions concerning the interpretation of the
Plan shall be final and conclusive. The express grant in the Plan
of any specific power to the Committee shall not be construed as
limiting any power or authority of the Committee. The Committee
shall not incur any liability for any action taken in good faith
with respect to the Plan or any Award.
Subject to the
provisions of the Plan, the Committee shall have full and final
authority to:
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(a)
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designate the Eligible Employees to
whom Awards shall be granted;
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(b)
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grant Awards in such form and amount
as the Committee shall determine;
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(c)
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impose such limitations,
restrictions and conditions upon any such Award as the Committee
shall deem appropriate, including conditions (in addition to those
contained in this Plan) on the exercisability of all or any portion
of a Stock Option or on the transferability or forfeitability of
Restricted Stock;
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(d)
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prescribe the form of Agreement with
respect to each Award;
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(e)
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waive in whole or in part any
limitations, restrictions or conditions imposed upon any such Award
as the Committee shall deem appropriate (including accelerating the
time at which any Stock Option may be exercised or the time at
which Restricted Stock may become transferable or nonforfeitable);
and
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(f)
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determine the extent to which leaves
of absence for governmental or military service, illness, temporary
disability and the like shall not be deemed interruptions of
continuous employment.
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5.01
Eligibility . Any employee of the Corporation and its
Affiliates (including officers and employees who may be members of
the Board) who, in the sole opinion of the Committee, has
contributed or can be expected to contribute to the profits, growth
and success of the Corporation shall be eligible for Awards under
the Plan. A member of the Committee or any person who is expected
to become a member within one year of any Award shall not be an
Eligible Employee if his or her status as an Eligible Employee
would prevent the Committee from being “disinterested”
under Rule 16b-3 under the Securities Exchange Act of 1934.
From among all such Eligible Employees, the Committee shall
determine from time to time those Eligible Employees to whom Awards
shall be granted. No Eligible Employee shall have any right
whatsoever to receive an Award unless so determined by the
Committee.
5.02 No
Employment Rights . The Plan shall not be construed as
conferring any rights upon any person for a continuation of
employment, nor shall it interfere with the rights of
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Corporation or
any Affiliates to terminate the employment of any person or to take
any other action affecting such person.
6.01 Stock
Options; General . Stock Options granted under the Plan shall
be in the form of Nonqualified Stock Options (“NSOs”),
Incentive Stock Options (“ISOs”) or a combination
thereof. Each Stock Option granted under the Plan shall be
evidenced by an Agreement which shall contain the terms and
conditions required by this Article VI, and such other terms
and conditions, not inconsistent herewith, as the Committee may
deem appropriate in each case. A Stock Option granted under the
Plan shall not be treated as an Incentive Stock Option unless the
Stock Option Agreement specifically designates the option as an
Incentive Stock Option.
6.02 Stock
Option Holder’s Rights as a Shareholder . The holder of a
Stock Option shall not have any rights as a shareholder with
respect to the shares covered by a Stock Option until such shares
have been delivered to him or her.
6.03 Option
Price . The price at which each share of Corporation Stock
covered by a Stock Option may be purchased shall be not less than
100% of the Fair Market Value of such stock on the date on which
the option is granted. The option price shall be subject to
adjustment as provided in Section 3.02 hereof.
6.04 Date Stock
Option Granted . For purposes of the Plan, a Stock Option shall
be considered as having been granted on the date on which the
Committee authorized the grant of the Stock Option except where the
Committee has designated a later date, in which event the later
date shall constitute the date of grant of the Stock Option;
provided, however, that notice of the grant of the Stock Option
shall be given to the Participant within a reasonable
time.
6.05 Exercise
Period . The Committee shall have the power to set the time or
times within which each Option shall be exercisable, and to
accelerate the time or times of exercise; provided, however,
that
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(a)
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no
Stock Option granted under this Plan to any Person subject to the
reporting requirements of Section 16(b) of the Securities and
Exchange Act of 1934 may be exercised until at least six months
from the later of (i) the date of grant or (ii)&nb
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