W. H. BRADY CO. 1997 NONQUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

EXHIBIT 10.13

W. H. BRADY CO.
1997 NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS

1. PURPOSE.

     The 1997 Stock Option Plan for Non-Employee Directors (the “Plan) is intended to attract and retain the services of experienced and knowledgeable independent directors of W. H. Brady Co. (the “Company”) for the benefit of the Company and its shareholders and to provide additional incentive for such directors to continue to work for the best interest of the Company and its shareholders.

2. SHARES SUBJECT TO THE PLAN.

     There are reserved for issuance upon the exercise of options granted under the Plan 125,000 Class A Non-Voting Common Shares $.01 par value, of the Company (the “Company Stock”). Such Company Stock may be authorized and unissued Company Stock or previously outstanding Company Stock then held in the Company’s treasury. If any option granted under the Plan shall expire or terminate for any reason without having been exercised in full, the Company 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.

3. ADMINISTRATION.

     The Plan shall be administered by the Board of Directors of the Company (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.

4. ELIGIBILITY.

     For purposes of the Plan, “Outside Director” means a member of the Board who is not an employee of the Company or a subsidiary of the Company. Each individual who is an Outside Director on the effective date of the Plan shall automatically be granted an option to purchase 2,500 shares of Company Stock on the effective date. Each individual who first becomes an Outside Director after the effective date of the Plan shall automatically be granted an option to purchase 2,500 shares of Company Stock on the first day of such individual’s first term of office as an Outside Director. On the date of each annual meeting of the shareholders of the Company subsequent to the effective date of the Plan, each Outside Director who first became an Outside Director prior to such annual meeting and who will continue to serve as an Outside Director after such annual meeting shall automatically be granted an option to purchase 1,000 shares of Company Stock.

     Only non-statutory stock options shall be granted under the Plan.

5. OPTION GRANTS.

     (a) The purchase price of the Company Stock under each option granted under the Plan shall be 100% of the Fair Market Value of the Company Stock on the date such option is granted. For purposes of the Plan “Fair Market Value” on any date shall mean, with respect to Company 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 as reported in the Wall Street Journal (Midwest Edition) for such date or, if such date is not a business day or if no sales of Company Stock shall have been reported with respect to such date, the next preceding 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.

     (b) All options shall be exercisable in accordance with the following schedule:

     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 Company.

     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 Company, specifying the number of shares to be purchased by payment in full of the purchase price therefor. The purchase price may be paid (a) in cash, (b) by check, (c) with the approval of t