BRADY
CORPORATION
2005 NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
The 2005 Stock
Option Plan for Non-Employee Directors (the “Plan) is
intended to attract and retain the services of experienced and
knowledgeable non-employee directors of Brady Corporation (the
“Corporation”) for the benefit of the Corporation and
its shareholders and to provide additional incentive for such
directors to continue to work for the best interest of the
Corporation and its shareholders.
2. Shares
Subject to the Plan.
There are reserved
for issuance upon the exercise of options granted under the Plan
300,000 Class A Non-Voting Common Shares $.01 par value, of
the Corporation (the “Stock”). Such Stock may be
authorized and unissued Stock or previously outstanding Stock then
held in the Corporation’s treasury. If any option granted
under the Plan shall expire or terminate for any reason without
having been exercised in full, the Stock subject to the unexercised
portion thereof shall again be available for the purposes of
issuance upon the exercise of options granted under the
Plan.
The Plan shall be
administered by the Board of Directors of the Corporation (the
“Board”), which may delegate any or all of its
authority to a Committee of the Board. Subject to the express
provisions of the Plan, the Board shall have authority to interpret
the Plan, to prescribe, amend and rescind rules and regulations
relating to it, to determine the terms and provisions of the option
grants and agreements (which shall comply with and be subject to
the terms and conditions of the Plan) and to make all other
determinations necessary or advisable for the administration of the
Plan. The Board’s determination of the matters referred to in
this Paragraph 3 shall be conclusive.
For purposes of
the Plan, “Non-Employee Director” means a member of the
Board who is not an employee of the Corporation or a subsidiary of
the Corporation. After the effective date of the Plan, each
Non-Employee Director who first becomes a Director on an annual
meeting date after July 26, 2005 shall automatically be granted an
option to purchase 10,000 shares of Stock on a date that is
14 days after the annual meeting date, or if such person first
becomes a Director on a date other than the annual meeting date,
the option shall automatically be granted on a date that is
14 days after first becoming a Director. On a date that is
14 days after each subsequent annual meeting of the
shareholders of the Corporation on or subsequent to the effective
date of the Plan, each Non-Employee Director who will continue to
serve as an Non-Employee Director after such annual meeting shall
automatically be granted an option to purchase 6,000 shares of
Stock (6,600 shares of Stock for any grant on or after
December 1, 2008).
Only non-statutory
stock options shall be granted under the Plan.
(a) The
purchase price of the Stock under each option granted under the
Plan shall be 100% of the Fair Market Value of the Stock on the
date such option is granted. For purposes of the Plan “Fair
Market Value” on any date shall mean, with respect to 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 the 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 Stock on the relevant
date.
(b) All
options shall be exercisable in accordance with the following
schedule:
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Years
After
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Date of
Grant
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Percentage of Shares
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0%
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33-1/3%
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66-2/3%
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100%
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The term of each
option shall be ten years from the date of grant, or such shorter
period as is prescribed in Paragraphs 5(c) and 5(d). Except as
provided in Paragraphs 5(c) and 5(d), no option may be exercised at
any time unless the holder is then a director of the
Corporation.
Each option may be
exercised in whole or in part from time to time as specified in the
agreements provided, however, that each holder may exercise an
option in whole or in part by giving written notice of the exercise
to the Corporation, specifying the number of shares to be purchased
by payment in full of the purchase pri
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