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.
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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%
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33-1/3
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%
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66-2/3
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%
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100
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%
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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 price therefor. The
purchase price may be
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