þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Wisconsin
(State or other jurisdiction of incorporation or organization) |
39-0178960
(IRS Employer Identification No.) |
Title of each class | Name of each exchange on which registered | |
Class A Nonvoting Common Stock, Par
Value $.01 per share |
New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller Reporting Company o |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
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Facility Identification
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Safety and Security Products
Wire and Cable Identification
People Identification
High Performance Identification
Table of Contents
Precision Die-Cut Parts
Other Products
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it may be difficult for the Company to fulfill its obligations under its credit or other
debt agreements;
it may be more challenging or costly to obtain additional financing to fund future
growth;
the Company may be more vulnerable to future interest rate fluctuations;
the Company may be required to dedicate a substantial portion of its cash flows to
service its debt, thereby reducing the amount of cash available to fund new product
development, capital expenditures, working capital and other general corporate activities;
it may place the Company at a competitive disadvantage relative to its competitors that
have less debt; and
it may limit the Companys flexibility in planning for and reacting to changes in its
business.
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17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
2009
2008
2007
High
Low
High
Low
High
Low
$
29.41
$
21.33
$
39.04
$
32.99
$
37.73
$
32.73
$
23.08
$
14.61
$
34.00
$
28.58
$
38.37
$
30.91
$
31.07
$
16.38
$
40.03
$
29.44
$
40.52
$
35.70
$
39.68
$
25.18
$
43.78
$
34.04
$
38.68
$
33.16
2010
2009
2008
1st Qtr
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
$
0.175
$
0.17
$
0.17
$
0.17
$
0.17
$
0.15
$
0.15
$
0.15
$
0.15
0.15835
0.15335
0.17
0.17
0.17
0.13335
0.15
0.15
0.15
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Among Brady Corporation, The S&P 500 Index,
The S&P SmallCap 600 Index and The Russell 2000 Index
*
$100 invested on 7/31/04 in stock or index including reinvestment of dividends. Fiscal year ended July 31.
7/31/2004
7/31/2005
7/31/2006
7/31/2007
7/31/2008
7/31/2009
100.00
153.59
153.94
162.08
172.85
142.48
100.00
114.05
120.19
139.58
124.10
99.33
100.00
127.25
132.04
150.66
138.19
111.57
100.00
124.78
130.08
145.84
136.05
108.06
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Years Ended July 31, 2005 through 2009
2009
2008
2007
2006
2005
(In thousands, except per share amounts)
$
1,208,702
$
1,523,016
$
1,362,631
$
1,018,436
$
816,447
577,583
744,195
657,044
525,755
433,276
34,181
40,607
35,954
30,443
25,078
397,180
495,904
449,103
338,796
285,746
25,849
457,210
536,511
485,057
369,239
310,824
120,373
207,684
171,987
156,516
122,452
1,800
4,888
2,875
2,403
1,369
(24,901
)
(26,385
)
(22,934
)
(14,231
)
(8,403
)
(23,101
)
(21,497
)
(20,059
)
(11,828
)
(7,034
)
97,272
186,187
151,928
144,688
115,418
27,150
53,999
42,540
40,513
33,471
$
70,122
$
132,188
$
109,388
$
104,175
$
81,947
$
1.33
$
2.41
$
2.00
$
2.07
$
1.64
$
1.31
$
2.39
$
1.98
$
2.05
$
1.63
$
0.68
$
0.60
$
0.56
$
0.52
$
0.44
$
0.66
$
0.58
$
0.54
$
0.50
$
0.42
$
286,955
$
390,524
$
303,359
$
240,537
$
141,560
1,583,267
1,850,513
1,698,857
1,365,186
850,147
346,457
457,143
478,575
350,018
150,026
951,092
1,021,808
891,012
746,046
497,274
126,645
225,554
136,018
114,896
119,103
54,851
60,587
53,856
35,144
26,822
(24,027
)
(26,407
)
(51,940
)
(39,410
)
(21,920
)
(1)
Financial data has been impacted by the acquisitive nature of the
Company as two, seven, eleven and four acquisitions were completed in
fiscal years ended July 31, 2008, 2007, 2006 and 2005, respectively.
There were no acquisitions in fiscal 2009. See Note 2 in Item 8 for
further information on the acquisitions that were completed in each of
the years.
(2)
In fiscal 2009, in response to the global economic downturn, the
Company initiated several measures to address its cost structure,
including the reduction in its workforce and decreased discretionary
spending. In addition to the restructuring charges, $1.6 million of
income tax expense was incurred related to the anticipated repayment
of certain tax holidays due to site consolidation actions.
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Acquisitions:
Segment
Date Completed
Europe
November 2007
Americas
March 2008
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Acquisitions:
Segment
Date Completed
Europe
November 2007
Americas
March 2008
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Asia-
Total
Corporate and
Total
(Dollars in thousands)
Americas
Europe
Pacific
Regions
Eliminations
Company
$
534,440
$
367,156
$
307,106
$
1,208,702
$
$
1,208,702
667,106
496,715
359,195
1,523,016
1,523,016
609,855
416,514
336,262
1,362,631
1,362,631
(18.5
)%
(18.1
)%
(10.3
)%
(16.4
)%
(16.4)
%
(1.7
)%
(9.4
)%
(4.2
)%
(4.8
)%
(4.8)
%
0.3
%
1.4
%
0.0
%
0.6
%
(0.6)
%
(19.9
)%
(26.1
)%
(14.5
)%
(20.6
)%
(20.6)
%
0.9
%
(0.4
)%
(1.1
)%
0.0
%
0.0
%
2.0
%
10.6
%
7.6
%
6.0
%
6.0
%
6.5
%
9.1
%
0.3
%
5.8
%
5.8
%
9.4
%
19.3
%
6.8
%
11.8
%
11.8
%
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Asia-
Total
Corporate and
Total
(Dollars in thousands)
Americas
Europe
Pacific
Regions
Eliminations
Company
$
114,404
$
99,875
$
42,575
$
256,854
$ (7,952
)
$
248,903
157,523
135,426
58,234
351,183
(9,048
)
342,135
144,583
107,552
57,236
309,371
(10,485
)
298,886
Years ended:
July 31,
July 31,
July 31,
(Dollars in thousands)
2009
2008
2007
$
256,854
$
351,183
$
309,371
(7,952
)
(9,048
)
(10,485
)
(102,680
)
(134,451
)
(126,899
)
(25,849
)
1,800
4,888
2,875
(24,901
)
(26,385
)
(22,934
)
97,272
186,187
151,928
(27,150
)
(53,999
)
(42,540
)
$
70,122
$
132,188
$
109,388
(1)
In fiscal 2009, in response to the global economic downturn, the
Company initiated several measures to address its cost structure,
including the reduction in its workforce and decreased discretionary
spending. In addition to the restructuring charges, $1.6 million of
income tax expense was incurred related to the anticipated repayment
of certain tax holidays due to site consolidation actions.
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Payments Due by Period
Less than
1-3
3-5
More than
Uncertain
Contractual Obligations
Total
1 Year
Years
Years
5 Years
Timeframe
$
391,350
$
44,893
$
122,529
$
122,528
$
101,400
$
67,172
22,613
29,865
11,468
3,226
55,879
29,864
11,640
14,375
83,926
21,469
33,331
20,444
8,682
19,462
19,462
14,311
825
1,755
2,009
9,722
$
632,100
$
119,664
$
199,120
$
170,824
$
123,030
$
19,462
(1)
Purchase obligations include all open purchase orders as of July 31, 2009.
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(2)
Other obligations represent expected payments under the Companys postretirement medical,
dental, and vision
plans as disclosed in Note 3 to the consolidated financial statements, under Item 8 of this
report.
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Page
33
34
35
36
37
38
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Brady Corporation
Milwaukee, WI
Milwaukee, WI
September 28, 2009
Table of Contents
CONSOLIDATED BALANCE SHEETS
July 31, 2009 and 2008
2009
2008
(In thousands)
$
188,156
$
258,355
191,189
262,461
53,244
75,665
13,159
21,187
27,405
37,767
93,808
134,619
36,274
43,650
509,427
699,085
751,173
789,107
115,754
144,791
36,374
25,943
18,551
21,381
6,335
6,490
96,968
98,646
283,301
282,232
7,869
6,040
394,473
393,408
242,485
223,202
151,988
170,206
$
1,583,267
$
1,850,513
$
83,793
$
118,209
36,313
82,354
6,262
10,234
5,964
21,523
45,247
54,810
44,893
21,431
222,472
308,561
346,457
457,143
63,246
63,001
632,175
828,705
513
513
35
35
298,466
292,769
673,342
639,059
(69,823
)
(33,234
)
53,051
128,161
(4,492
)
(5,495
)
951,092
1,021,808
$
1,583,267
$
1,850,513
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CONSOLIDATED STATEMENTS OF INCOME
Years Ended July 31, 2009, 2008 and 2007
2009
2008
2007
(In thousands, except per share amounts)
$
1,208,702
$
1,523,016
$
1,362,631
631,119
778,821
705,587
577,583
744,195
657,044
34,181
40,607
35,954
397,180
495,904
449,103
25,849
457,210
536,511
485,057
120,373
207,684
171,987
1,800
4,888
2,875
(24,901
)
(26,385
)
(22,934
)
(23,101
)
(21,497
)
(20,059
)
97,272
186,187
151,928
27,150
53,999
42,540
$
70,122
$
132,188
$
109,388
$
1.33
$
2.45
$
2.03
$
1.33
$
2.41
$
2.00
$
0.68
$
0.60
$
0.56
$
1.32
$
2.43
$
2.01
$
1.31
$
2.39
$
1.98
$
0.66
$
0.58
$
0.54
52,559
54,168
53,907
52,866
54,873
54,741
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS INVESTMENT
Years Ended July 31, 2009, 2008 and 2007
Earnings
Accumulated
Additional
Retained
Other
Total
Common
Paid-In
in the
Treasury
Comprehensive
Comprehensive
Stock
Capital
Business
Stock
Income
Other
Income
(In thousands, except per share amounts)
$
540
$
258,922
$
460,991
$
(10,865
)
$
35,696
$
762
109,388
$
109,388
44,256
44,256
$
153,644
1
(4,037
)
10,865
108
(108
)
4,303
6,907
3,424
(28,218
)
(1,923
)
$
541
$
266,203
$
540,238
$
$
83,376
$
654
132,188
$
132,188
44,785
44,785
$
176,973
5
5,553
8,941
2
6,147
(6,149
)
(903
)
4,638
10,228
(42,175
)
(30,400
)
(2,064
)
$
548
$
292,769
$
639,059
$
(33,234
)
$
128,161
$
(5,495
)
70,122
$
70,122
(75,110
)
(75,110
)
$
(4,988
)
(1,995
)
3,678
(1,744
)
1,003
1,336
8,099
(40,267
)
(33,492
)
(2,347
)
$
548
$
298,466
$
673,342
$
(69,823
)
$
53,051
$
(4,492
)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended July 31, 2009, 2008 and 2007
2009
2008
2007
(Dollars in thousands)
$
70,122
$
132,188
$
109,388
54,851
60,587
53,856
(8,640
)
(2,759
)
70
383
1,672
13
7,731
10,228
6,907
2,469
53,389
(3,704
)
(17,021
)
34,749
16,224
(12,323
)
(2,423
)
(629
)
(13,307
)
(78,684
)
18,641
8,058
(9,673
)
(7,234
)
(6,821
)
2,371
340
7,198
126,645
225,554
136,018
(29,346
)
(159,475
)
3,514
(1,405
)
(5,798
)
(10,906
)
(10,350
)
(68,100
)
29,550
60,400
(24,027
)
(26,407
)
(51,940
)
796
880
2,166
3,514
2,078
2,263
(9,184
)
(19,044
)
(39,208
)
(237,039
)
(35,839
)
(32,464
)
(30,141
)
1,683
14,500
6,829
(87,224
)
(39,443
)
(110,870
)
18,000
259,300
(40,267
)
(42,175
)
1,336
4,638
4,303
(160,311
)
(76,944
)
129,421
(17,489
)
6,107
1,438
(70,199
)
115,509
29,838
258,355
142,846
113,008
$
188,156
$
258,355
$
142,846
$
26,047
$
26,308
$
19,842
48,766
51,834
49,233
$
21,508
$
87,398
(9,038
)
(33,248
)
16,876
105,325
$
$
29,346
$
159,475
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Years Ended July 31, 2009, 2008 and 2007
(In thousands except share and per share amounts)
Table of Contents
Asset Category
Range of Useful Lives
Buildings and improvements
10 to 33 Years
Mainframe computing equipment
5 Years
Machinery and equipment
3 to 10 Years
Asia-
Americas
Europe
Pacific
Total
$
404,074
$
163,699
$
169,677
$
737,450
3,615
13,261
16,876
2,564
(2,928
)
3,902
3,538
2,724
15,618
12,901
31,243
$
412,977
$
189,650
$
186,480
$
789,107
275
(52
)
(2,713
)
(2,490
)
(3,117
)
(23,347
)
(8,980
)
(35,444
)
$
410,135
$
166,251
$
174,787
$
751,173
Segment
Goodwill
Europe
$
13,261
Americas
3,615
$
16,876
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July 31, 2009
July 31, 2008
Weighted
Weighted
Average
Gross
Average
Gross
Amortization
Carrying
Accumulated
Net Book
Amortization
Carrying
Accumulated
Net Book
Period (Years)
Amount
Amortization
Value
Period (Years)
Amount
Amortization
Value
5
$
8,976
$
(7,165
)
$
1,811
5
$
8,603
$
(6,592
)
$
2,011
7
7,703
(5,121
)
2,582
7
8,079
(4,688
)
3,391
7
144,625
(76,912
)
67,713
7
151,704
(59,101
)
92,603
4
11,502
(9,656
)
1,846
4
12,222
(8,446
)
3,776
4
3,311
(3,296
)
15
4
3,299
(3,294
)
5
N/A
41,787
41,787
N/A
43,005
43,005
$
217,904
$
(102,150
)
$
115,754
$
226,912
$
(82,121
)
$
144,791
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2009
2008
2007
Performance-
Performance-
Performance-
Based
Service-Based
Based
Service-Based
Based
Service-Based
Black-Scholes Option Valuation Assumptions
Options
Options
Options
Options
Options
Options
N/A
5.96
6.57
6.04
6.57
6.07
N/A
36.07
%
33.68
%
32.05
%
34.66
%
33.99
%
N/A
2.03
%
1.58
%
1.62
%
1.51
%
1.46
%
N/A
1.75
%
4.66
%
3.44
%
4.90
%
4.52
%
N/A
$
21.26
$
35.35
$
38.22
$
33.32
$
38.17
N/A
$
21.26
$
35.35
$
38.22
$
33.32
$
38.17
N/A
$
6.30
$
12.83
$
11.94
$
12.57
$
13.56
July 31, 2009
July 31, 2008
$
(53
)
$
(971
)
1,942
2,493
51,162
126,639
$
53,051
$
128,161
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Table of Contents
a)
Acquisition costs will generally be expensed as incurred;
b)
Non-controlling interests in subsidiaries will be valued at fair value at the acquisition
date and classified as a separate component of equity;
c)
Liabilities related to contingent consideration will be re-measured at fair value in each
subsequent reporting period;
d)
Restructuring costs associated with a business combination will generally be expensed
after the acquisition date; and
e)
In-process research and development will be recorded at fair value as an indefinite-lived
intangible asset at the acquisition date.
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Tranposafe is headquartered near Amsterdam, the Netherlands with operations in Belgium,
Germany, and Poland. Transposafe specializes in security sealing and identification
solutions for protecting assets during transport. Transposafe was acquired in November
2007.
DAWG is headquartered in Terryville, Connecticut. DAWG is an Internet marketer of
sorbents, spill-containment products, safety-storage cabinets, first aid kits, and other
products that help keep facilities safe and clean. DAWG was acquired in March 2008.
Table of Contents
$
8,373
348
16,876
10,008
2,341
438
38,384
9,038
$
29,346
CIPI, was formerly headquartered in Burlington, Massachusetts, with operations in Hong
Kong, China and the Netherlands. CIPI is a market leader in badging accessories used to
identify and track employees and visitors in a variety of settings including businesses,
healthcare facilities, special events and government buildings. CIPI was acquired in August
2006.
Precision Converters L.P (Precision Converters) is located in Dallas, Texas and is a
supplier of die-cut products to the medical market with a specific focus on disposable,
advanced wound-care products. Precision Converters was acquired in October 2006.
Scafftag Ltd., Safetrak, Ltd. and Scafftag Pty., Ltd (collectively Scafftag) is located
in Barry, Wales, U.K., with operations in Australia and in the United States and a sales
office in the United Arab Emirates. Scafftag is an industry leader in safety identification
and facility management products in the U.K., specializing in products that help companies
meet legislative requirements for safety standards in the oil and gas, construction and
scaffolding industries. Scafftag was acquired in December 2006.
Asterisco Artes Graficas Ltda. (Asterisco) is located in Sao Paulo, Brazil and is a
leading manufacturer of industrial high-performance labels in Brazil, specializing in custom
labels printed on film materials for the electronics, automotive, pharmaceutical and other
industries. Asterisco was acquired in December 2006.
Modernotecnica SpA (Moderno) is located in Milan, Italy and is a wire-identification
manufacturer serving the Maintenance, Repair and Operations market with products used
primarily in the electrical industry. Moderno was acquired in December 2006.
Clement Communications, Inc. (Clement) is located in Concordville, Pennsylvania and is
a direct marketer of posters, newsletters, guides and handbooks that address safety,
quality, teamwork, sales employment practices, customer service and OSHA regulations.
Clement was acquired in February 2007.
SPC is headquartered in Somerset, New Jersey, with operations in Belgium and Hong Kong.
SPC is a
leading manufacturer and marketer of synthetic sorbent materials used in a variety of
industrial maintenance and environmental applications for spill clean-up, containment and
control. SPC was acquired in April 2007.
Table of Contents
$
38,148
12,158
105,325
23,897
11,232
967
996
192,723
33,248
$
159,475
Table of Contents
2009
2008
$
12,199
$
11,705
672
919
842
771
766
(96
)
(667
)
(687
)
(413
)
1,178
(679
)
$
14,311
$
12,199
2009
2008
$
825
$
511
13,486
11,688
$
14,311
$
12,199
2009
2008
$
3,425
$
4,499
481
657
$
3,906
$
5,156
Years Ended July 31,
2009
2008
2007
$
672
$
919
$
967
(70
)
(33
)
(33
)
Table of Contents
Years Ended July 31,
2009
2008
2007
842
771
797
(308
)
(295
)
(119
)
393
$
1,529
$
1,362
$
1,612
2009
2008
2007
5.5
%
6.8
%
6.3
%
6.8
%
6.3
%
6.0
%
8.0
%
8.0
%
9.0
%
5.5
%
5.5
%
5.5
%
2015
2013
2011
One-Percentage
One-Percentage
Point Increase
Point Decrease
$
73
$
(83
)
110
(119
)
$
825
840
915
978
1,031
5,823
Table of Contents
Years Ended July 31,
2009
2008
2007
$
(383
)
$
46,388
$
58,538
97,655
139,799
93,390
$
97,272
$
186,187
$
151,928
Years Ended July 31,
2009
2008
2007
$
3,486
$
13,943
$
5,439
31,223
41,794
34,835
1,081
1,021
2,336
35,790
56,758
42,610
(7,633
)
29
2,728
(1,693
)
(2,793
)
(4,151
)
686
5
1,353
(8,640
)
(2,759
)
(70
)
$
27,150
$
53,999
$
42,540
July 31, 2009
Assets
Liabilities
Total
$
7,229
$
7,229
$
(3,363
)
(3,363
)
1,682
1,682
1,924
1,924
6,903
(1,821
)
5,082
17,738
(5,184
)
12,554
1,901
(9,498
)
(7,597
)
2,134
(21,026
)
(18,892
)
1,400
1,400
18,934
18,934
7,202
7,202
45,057
45,057
(25,670
)
(25,670
)
250
(3,676
)
(3,426
)
51,208
(34,200
)
17,008
$
68,946
$
(39,384
)
$
29,562
Table of Contents
July 31, 2008
Assets
Liabilities
Total
$
7,594
$
7,594
$
(3,076
)
(3,076
)
3,546
3,546
2,197
2,197
5,467
(45
)
5,422
18,804
(3,121
)
15,683
434
(6,857
)
(6,423
)
2,656
(18,292
)
(15,636
)
1,866
1,866
17,033
17,033
7,017
7,017
26,630
26,630
(25,494
)
(25,494
)
573
(2,308
)
(1,735
)
30,715
(27,457
)
3,258
$
49,519
$
(30,578
)
$
18,941
Foreign net operating loss carry-forwards of $73,450, of which $48,402 have no
expiration date and the remainder of which expire within the next 5 years.
State net operating loss carry-forwards of $60,717, which expire from 2014 to 2029.
Foreign tax credit carry-forwards of $16,028, which expire from 2018 to 2019.
R&D credit carry-forwards of $800, which expire in 2029.
State credit carry-forwards of $1,670, which expire from 2017 to 2024.
Years Ended July 31,
2009
2008
2007
35.0
%
35.0
%
35.0
%
1.6
%
0.2
%
1.6
%
(8.6
)%
(5.9
)%
(3.3
)%
(3.4
)%
(1.3
)%
(2.7
)%
5.8
%
1.2
%
(2.0
)%
(1.5
)%
(0.2
)%
(0.5
)%
(1.0
)%
(0.1
)%
27.9
%
29.0
%
28.0
%
Table of Contents
$
13,731
3,003
580
(579
)
(1,435
)
717
$
16,017
2,526
4,056
(934
)
(944
)
60
(1,319
)
$
19,462
(1)
Includes acquisitions.
Table of Contents
Jurisdiction
Open Tax Years
F06 F09
F06 F09
F06 F09
F08 F09
Table of Contents
2009
2008
$
$
3
391,350
478,571
391,350
478,574
$
(44,893
)
$
(21,431
)
$
346,457
$
457,143
Years Ending July 31,
$
44,893
61,264
61,264
61,264
61,264
101,401
$
391,350
July 31, 2009
July 31, 2008
Shares
Shares
(thousands)
Shares
Shares
(thousands)
Authorized
Issued
Amount
Authorized
Issued
Amount
5,000,000
5,000,000
5,000
5,000
10,000
10,000
30,000
30,000
100,000,000
51,261,487
$
513
100,000,000
51,261,487
$
513
10,000,000
3,538,628
35
10,000,000
3,538,628
35
$
548
$
548
Table of Contents
Unearned
Shares Held
Restricted
Deferred
in Rabbi
Stock
Compensation
Trust, at cost
Total
$
$
17,602
$
(16,840
)
$
762
1,012,914
1,012,914
(5,242
)
5,134
(108
)
1,215
(1,215
)
$
$
13,575
$
(12,921
)
$
654
724,417
724,417
(1,121
)
1,154
33
1,189
(1,189
)
(6,892
)
(6,892
)
710
710
$
(6,182
)
$
13,643
$
(12,956
)
$
(5,495
)
690,539
690,539
(1,655
)
1,223
(432
)
1,294
(1,294
)
1,435
1,435
$
(4,747
)
$
13,282
$
(13,027
)
$
(4,492
)
671,650
671,650
Table of Contents
Weighted
Average
Options
Exercise
Option Price
Outstanding
Price
$
9.59 - $40.37
3,815,052
$
23.27
32.93 - 38.19
908,000
36.74
9.59 - 28.84
(397,682
)
17.13
16.00 - 40.37
(142,631
)
35.40
$
9.59 - $40.37
4,182,739
$
26.36
35.10 - 38.31
977,500
37.41
9.59 - 38.19
(763,708
)
19.02
14.16 - 30.37
(411,326
)
36.42
$
9.59 - $40.37
3,985,205
$
29.43
17.23 - 35.42
614,000
21.26
9.59 - 38.19
(138,934
)
15.75
20.95 - 38.31
(479,665
)
35.02
$
13.31 - $40.37
3,980,606
$
27.96
Table of Contents
Options Outstanding and
Options Outstanding
Exercisable
Weighted Average
Weighted
Shares
Weighted
Number of Shares
Remaining
Average
Exercisable
Average
Range of
Outstanding at
Contractual Life
Exercise
at July 31,
Exercise
Exercise Prices
July 31, 2009
(in years)
Price
2009
Price
291,800
2.8
$
13.58
291,800
$
13.58
1,875,469
5.8
21.26
1,285,469
21.43
1,813,337
6.4
37.20
1,254,042
36.87
3,980,606
5.8
27.96
2,831,311
27.46
Table of Contents
Corporate
and
Americas
Europe
Asia-Pacific
Total Region
Eliminations
Total Company
$
534,440
$
367,156
$
307,106
$
1,208,702
$
1,208,702
45,853
4,310
18,534
68,697
$
(68,697
)
22,022
8,467
15,957
46,446
8,405
54,851
114,404
99,875
42,575
256,854
(7,952
)
248,902
703,559
298,717
341,605
1,343,881
239,386
1,583,267
8,422
3,326
5,848
17,596
6,431
24,027
$
667,106
$
496,715
$
359,195
$
1,523,016
$
1,523,016
54,677
8,511
25,995
89,183
$
(89,183
)
24,856
11,172
15,482
51,510
9,077
60,587
157,523
135,426
58,234
351,183
(9,048
)
342,135
755,770
396,058
397,531
1,549,359
301,154
1,850,513
7,535
4,714
5,269
17,518
8,889
26,407
$
609,855
$
416,514
$
336,262
$
1,362,631
$
1,362,631
52,595
6,511
23,554
82,660
$
(82,660
)
23,643
8,363
16,913
48,919
4,937
53,856
144,583
107,552
57,236
309,371
(10,485
)
298,886
781,868
347,827
376,645
1,506,340
192,517
1,698,857
19,834
5,849
15,301
40,984
10,956
51,940
Years Ended July 31,
2009
2008
2007
$
256,854
$
351,183
$
309,371
(7,952
)
(9,048
)
(10,485
)
(102,680
)
(134,451
)
(126,899
)
(25,849
)
1,800
4,888
2,875
(24,901
)
(26,385
)
(22,934
)
97,272
186,187
151,928
(27,150
)
(53,999
)
(42,540
)
$
70,122
$
132,188
$
109,388
Revenues*
Long-Lived Assets**
Years Ended July 31,
As of Years Ended July 31,
2009
2008
2007
2009
2008
2007
$
510,703
$
622,618
$
589,013
$
519,932
$
532,273
$
537,182
199,893
192,048
184,413
123,078
131,810
121,181
566,589
794,036
671,865
375,905
440,021
403,462
(68,483
)
(85,686
)
(82,660
)
$
1,208,702
$
1,523,016
$
1,362,631
$
1,018,915
$
1,104,104
$
1,061,825
*
Revenues are attributed based on country of origin.
**
Long-lived assets consist of property, plant, and equipment, other intangible assets and goodwill.
Table of Contents
Years ended July 31,
2009
2008
2007
$
70,122
$
132,188
$
109,388
(823
)
(847
)
(836
)
(11
)
(13
)
(15
)
$
69,288
$
131,328
$
108,537
52,559
54,168
53,907
307
705
834
52,866
54,873
54,741
$
1.33
$
2.45
$
2.03
$
1.33
$
2.41
$
2.00
$
1.32
$
2.43
$
2.01
$
1.31
$
2.39
$
1.98
$
22,613
16,897
12,968
6,898
4,570
3,226
$
67,172
Table of Contents
Table of Contents
Employee
Asset
Related
Write-offs
Other
Total
$
$
$
$
21,279
2,101
2,469
25,849
(368
)
(2,101
)
(2,469
)
(1,178
)
(1,178
)
(15,288
)
(1,592
)
(16,880
)
$
4,445
$
$
877
$
5,322
Table of Contents
Asset Derivatives
Liability Derivatives
July 31, 2009
July 31, 2008
July 31, 2009
July 31, 2008
Balance Sheet
Balance Sheet
Balance Sheet
Balance Sheet
Location
Fair Value
Location
Fair Value
Location
Fair Value
Location
Fair Value
Prepaid expenses and other current assets
$
Prepaid expenses and other current assets
$
Other current liabilities
$
248
Other current liabilities
$
96
$
$
$
248
$
96
Prepaid expenses and other current assets
$
130
Prepaid expenses and other current assets
$
Other current liabilities
$
Other current liabilities
$
$
130
$
$
$
Table of Contents
Quarters
First
Second
Third
Fourth
Total
$
378,317
$
266,449
$
276,733
$
287,203
$
1,208,702
181,146
126,142
134,173
136,122
577,583
56,194
4,618
29,272
30,289
120,373
37,110
(4,150
)
17,960
19,202
70,122
0.70
(0.08
)
0.34
0.37
1.33
0.69
(0.08
)
0.34
0.37
1.33
$
380,134
$
364,124
$
381,909
$
396,849
$
1,523,016
187,667
175,023
189,576
191,929
744,195
58,338
42,444
52,582
54,320
207,684
36,370
26,690
34,353
34,775
132,188
0.67
0.49
0.64
0.65
2.45
0.66
0.48
0.63
0.64
2.41
*
Fiscal 2009 had a net before tax restructuring charge by quarter of $1,639, $19,408, $2,229, and
$2,573 for a total of $25,849.
**
Fiscal 2009 included a net after tax restructuring charge by quarter of $1,180, $13,974, $1,605,
and $3,464 (including $1,611 income tax expense) for a total of $20,224.
Table of Contents
Table of Contents
Brady Corporation
Milwaukee, WI
September 28, 2009
Table of Contents
Table of Contents
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
Name
Age
Title
51
President, CEO and Director
47
Sr. V.P., CFO
48
V.P., Treasurer, Director of Investor Relations
44
President Brady Asia-Pacific and V.P., Brady Corporation
50
President Brady Europe and V.P., Brady Corporation
53
President Brady Americas and V.P., Brady Corporation
44
V.P. and Chief Technology Officer
47
V.P. and Chief Information Officer
55
V.P. and Chief Accounting Officer
43
V.P. Human Resources
65
Director
42
Director
69
Director
68
Director
67
Director
65
Director
67
Director
46
Director
62
Director
51
Director
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Table of Contents
Consolidated
Earnings
Working
Segment
Segment
Target
Name
Net Sales
Per Share
Capital
Sales (1)
Profit
Payout
10.0
%
80.0
%
10.0
%
NA
NA
100.0
%
10.0
%
80.0
%
10.0
%
NA
NA
70.0
%
NA
20.0
%
10.0
%
10.0
%
60.0
%
70.0
%
NA
20.0
%
10.0
%
10.0
%
60.0
%
70.0
%
NA
20.0
%
10.0
%
10.0
%
60.0
%
70.0
%
(1)
Segment sales for Messrs. Sephton, Williamson, and Klotsche are based on regional sales.
Table of Contents
Table of Contents
Annual allowance for financial and tax planning
Eligibility for annual physical
Company car
Long-term care insurance
Personal liability insurance
Table of Contents
Frank M. Jaehnert
100,000 shares
Thomas J. Felmer
30,000 shares
Peter C. Sephton
30,000 shares
Matt O. Williamson
30,000 shares
Allan J. Klotsche
30,000 shares
Table of Contents
Patrick W. Allender
Robert C. Buchanan
Frank R. Jarc
Non-Equity
Restricted
Option
Incentive Plan
All Other
Fiscal
Salary
Stock Awards
Awards
Compensation
Compensation
Total
Name And Principal Position
Year
($)
($)(1)
($)(1)
($)(2)
($)(3)
($)
2009
750,000
328,300
577,097
176,519
1,846,339
2008
723,077
191,508
804,867
703,554
150,048
2,573,054
2007
638,987
860,224
430,677
153,510
2,083,398
2009
318,269
229,810
288,549
62,080
904,958
2008
293,269
134,056
402,433
98,128
60,689
988,575
2007
268,269
416,072
184,458
65,133
933,932
2009
325,710
229,810
288,549
86,787
924,070
2008
399,920
134,056
402,433
314,097
103,042
1,353,548
2007
352,970
418,232
326,886
95,539
1,193,627
2009
326,843
229,810
288,549
62,023
913,665
2008
299,615
134,056
402,433
183,410
65,794
1,085,308
2007
279,340
418,232
234,939
61,322
993,833
2009
290,000
229,810
288,549
61,320
875,256
2008
285,962
134,056
402,433
128,411
52,487
1,003,349
2007
268,269
416,072
53,914
64,873
803,128
(1)
Represents the amounts expensed in fiscal 2009 relating to grants of
performance-based stock options, time-based stock options and
restricted stock awards. The Company accounts for stock-based
compensation in accordance with SFAS No. 123(R), which requires it to
recognize compensation expense for stock options granted to employees
and directors
Table of Contents
based on the estimated fair value of the awards at the
time of grant. The assumptions used to determine the value of the
awards, including the use of the Black-Scholes method of valuation by
the Company, are discussed in Note 1 of the Notes to Consolidated
Financial Statements of the Company contained in Item 8 of this Form
10-K for the fiscal year
ended July 31, 2009.
The actual value of a restricted stock award will depend on the market
value of the Companys common stock on the date the stock is sold.
The actual value, if any, which an option holder will realize upon the
exercise of an option will depend on the excess of the market value of
the Companys common stock over the exercise price on the date the
option is exercised, which cannot be forecasted with any accuracy.
(2)
Reflects incentive plan compensation earned during the listed fiscal
years, which was paid during the next fiscal year.
(3)
The amounts in this column for Messrs. Jaehnert, Felmer, Williamson,
and Klotsche include: matching contributions to the Companys Matched
401(k) Plan, Funded Retirement Plan and Restoration Plan, the costs of
group term life insurance for each named executive officer, use of a
Company car and associated expenses, the cost of long-term care
insurance, the cost of personal liability insurance and other
perquisites. The perquisites may include an annual allowance for
financial and tax planning and the cost of an annual physical health
exam.
The amounts in this column for Mr. Sephton include: contributions for
the Brady U.K. Pension Plan, the cost of group term life insurance,
vehicle allowance and associated expenses and other perquisites as
listed above.
Retirement
Group Term
Long-term
Personal
Plan
Life
Company
Care
Liability
Fiscal
Contributions
Insurance
Car
Insurance
Insurance
Other
Total
Name
Year
($)
($)
($)
($)
($)
($)
($)
2009
116,284
3,042
27,698
1,621
2,654
25,220
176,519
2008
93,254
3,042
26,129
1,683
1,520
24,420
150,048
2007
104,230
4,259
26,935
1,683
843
15,560
153,510
2009
32,528
890
26,401
1,621
640
62,080
2008
37,434
572
20,380
1,683
620
60,689
2007
41,585
872
20,993
1,683
65,133
2009
52,114
1,749
32,924
86,787
2008
63,987
2,308
36,747
103,042
2007
56,475
2,349
36,715
95,539
2009
40,038
919
18,309
1,621
1,136
62,023
2008
42,241
590
21,280
1,683
65,794
2007
36,396
733
22,510
1,683
61,322
2009
33,525
816
20,033
946
6,000
61,320
2008
26,798
761
24,519
409
52,487
2007
41,163
563
22,166
982
64,873
(4)
The amounts in this table for Mr. Sephton, who works and lives in the
United Kingdom, were paid to him in British Pounds. The amounts shown
in U.S. dollars in the table above were converted from British Pounds
at the average exchange rate for fiscal 2009: $1 = £0.6294, fiscal
2008: $1 = £0.5001, fiscal 2007: $1 = £0.5135.
Table of Contents
All
All Other
Other
Option
Stock
Awards;
Awards;
Number
Exercise
Number
of
or Base
Grant
of
Securities
Price of
Date Fair
Compen-
Estimated Future Payouts Under
Shares
Under-
Stock or
Value of
sation
Non-Equity Incentive Plan Awards
of Stocks
lying
Option
Stock and
Committee
(1)
or Units
Options
Awards
Option
Grant
Approval
Threshold
Maximum
(#)(2)
(#)(3)
($/Share)
Awards
Name
Date
Date
($)
Target ($)
($)
(#)
(#)
(4)
($)
8/1/2008
7/22/2008
750,000
1,947,115
12/4/2008
11/20/2008
50,000
20.9500
321,945
8/2/2004
3/4/2009
60,000
67,421
8/1/2008
7/22/2008
227,788
826,923
12/4/2008
11/20/2008
25,000
20.9500
160,973
8/2/2004
3/4/2009
20,000
22,474
8/1/2008
7/22/2008
227,997
814,275
12/4/2008
11/20/2008
25,000
20.9500
160,973
8/2/2004
3/4/2009
30,000
33,710
8/1/2008
7/22/2008
228,790
849,308
12/4/2008
11/20/2008
25,000
20.9500
160,973
8/2/2004
3/4/2009
30,000
33,710
8/1/2008
7/22/2008
203,000
752,885
12/4/2008
11/20/2008
25,000
20.9500
160,973
8/2/2004
3/4/2009
30,000
33,710
(1)
The awards were made under the Companys annual cash incentive
plan. The structure of the plan is described in Compensation
Discussion and Analysis above. Award levels are set prior to the
beginning of the fiscal year and payouts can range from 0% to
250% of the target. The impact of the extended global economic
downturn significantly impacted the income and revenue
performance of the Company. As a result, no bonuses under the
cash incentive plan were awarded to any of the named executive
officers.
(2)
Effective March 4, 2009, the Compensation Committee of the Board
of Directors of the Company approved an amendment to the granting
agreement under which the Company issued performance-based stock
options on August 2, 2004. Pursuant to the amendment, the
exercise period for the performance-based stock options was
extended to ten years from five years. Also, the amendment
provided that during the extension period, executives may
exercise the performance-based stock options following a
termination only if the termination is as a result of the
executives death or disability or qualifies as a retirement.
The modification value is the FAS 123R incremental fair value as
of the modification date.
(3)
The options granted become exercisable as follows: one-third of
the shares on December 4, 2009, one-third of the shares on
December 4, 2010 and one-third of the shares on December 4, 2011.
These options have a term of ten years and were calculated using
FAS 123R grant date fair value.
(4)
The exercise price is the average of the high and low sale prices
of the Companys Class A Common Stock as reported by the New York
Stock Exchange on the date of the grant. The closing prices of
the Companys Class A Common Stock as reported by the New York
Stock Exchange on the dates of the grants was $20.81 per share on
December 4, 2008.
Table of Contents
Option Awards (1)
Stock Awards
Equity
Equity Incentive
Incentive Plan
Plan Awards;
Equity Incentive
Number of
Number of
Awards:
Number of
Plan Awards:
Securities
Securities
Number of
Unearned
Market or Payout
Underlying
Underlying
Securities
Shares, Units or
Value of Unearned
Unexercised
Unexercised
Underlying
Option
Other Rights
Shares, Units or
Options
Options
Unexercised
Exercise
That Have Not
Other Rights That
Exercisable
Unexercisable
Unearned
Price
Option
Vested
Have Not Vested
Name
(#)
(#)
Options (#)
($)
Expiration Date
(#)
($)
60,000
33.8900
8/1/2010
20,000
14.1575
10/24/2010
26,000
16.0000
10/16/2011
30,000
16.3875
11/14/2012
200,000
13.3100
2/24/2013
72,000
17.3250
11/20/2013
60,000
22.6325
8/2/2014
60,000
28.8425
11/18/2014
50,000
37.8300
11/30/2015
33,334
16,666
(2)
38.1900
11/30/2016
16,667
33,333
(3)
38.3100
12/4/2017
50,000
(5)
20.9500
12/4/2018
50,000
(4)
1,470,500
30,000
33.8900
8/1/2010
8,000
14.1575
10/24/2010
8,000
16.0000
10/16/2011
10,000
16.3875
11/14/2012
10,000
17.3250
11/20/2013
20,000
22.6325
8/2/2014
30,000
28.8425
11/18/2014
25,000
37.8300
11/30/2015
16,667
8,333
(2)
38.1900
11/30/2016
8,334
16,666
(3)
38.3100
12/4/2017
25,000
(5)
20.9500
12/4/2018
35,000
(4)
1,029,350
30,000
33.8900
8/1/2010
14,000
17.3250
11/20/2013
30,000
22.6325
8/2/2014
30,000
28.8425
11/18/2014
25,000
37.8300
11/30/2015
16,667
8,333
(2)
38.1900
11/30/2016
8,334
16,666
(3)
38.3100
12/4/2017
25,000
(5)
20.9500
12/4/2018
35,000
(4)
1,029,350
30,000
33.8900
8/1/2010
5,500
16.0000
10/16/2011
10,000
16.3875
11/14/2012
14,000
17.3250
11/20/2013
30,000
22.6325
8/2/2014
30,000
28.8425
11/18/2014
25,000
37.8300
11/30/2015
16,667
8,333
(2)
38.1900
11/30/2016
8,334
16,666
(3)
38.3100
12/4/2017
25,000
(5)
20.9500
12/4/2018
35,000
(4)
1,029,350
Table of Contents
Option Awards (1)
Stock Awards
Equity
Equity Incentive
Incentive Plan
Plan Awards;
Equity Incentive
Number of
Number of
Awards:
Number of
Plan Awards:
Securities
Securities
Number of
Unearned
Market or Payout
Underlying
Underlying
Securities
Shares, Units or
Value of Unearned
Unexercised
Unexercised
Underlying
Option
Other Rights
Shares, Units or
Options
Options
Unexercised
Exercise
That Have Not
Other Rights That
Exercisable
Unexercisable
Unearned
Price
Option
Vested
Have Not Vested
Name
(#)
(#)
Options (#)
($)
Expiration Date
(#)
($)
5,400
14.16
10/24/2010
30,000
33.8900
8/1/2010
5,400
16.0000
10/16/2011
10,000
16.3875
11/14/2012
10,000
17.3250
11/20/2013
30,000
22.6325
8/2/2014
30,000
28.8425
11/18/2014
25,000
37.8300
11/30/2015
16,667
8,333
(2)
38.1900
11/30/2016
8,334
16,666
(3)
38.3100
12/4/2017
25,000
(5)
20.9500
12/4/2018
35,000
(4)
1,029,350
(1)
Adjusted for a two-for-one stock split in the form of a 100% stock
dividend, effective December 31, 2004.
(2)
All vest on November 30, 2009.
(3)
One-third of the options vested on December 4, 2008, one-third of
the options vest on December 4, 2009 and one-third of the options
vest on December 4, 2010.
(4)
All vest on January 8, 2013, subject to meeting performance criteria.
(5)
One-third of the options vested on December 4, 2009, one-third of
the options vest on December 4, 2010 and one-third of the options
vest on December 4, 2011.
Option Awards
Number of Shares
Acquired on
Value Realized
Name
Exercise (#)
on Exercise ($)
22,200
306,063
18,000
226,425
None
None
None
None
34,734
616,156
Executive
Registrant
Aggregate
Aggregate
Aggregate
Contributions in
Contributions in
Earnings in
Withdrawals/
Balance at
Last Fiscal Year
Last Fiscal Year
Last Fiscal Year
Distributions
Last Fiscal Year
Name
($)
($)
($)
($)
End ($)
554,586
97,284
(517,541
)
3,030,405
122,909
13,758
(177,097
)
717,582
56,373
21,041
(112,313
)
575,622
8,636
15,073
(70,083
)
326,767
Table of Contents
The amounts shown in the tables assume that each named executive officer terminated
employment on July 31, 2009. Accordingly, the tables reflect amounts earned as of July 31,
2009 and include estimates of amounts that would be paid to the named executive officer upon
the occurrence of a change in control. The actual amounts that would be paid to a named
executive officer can only be determined at the time of termination.
The tables below include amounts the Company is obligated to pay the named executive
officer as a result of the executed change in control agreement. The tables do not include
benefits that are paid generally to all salaried employees or a broad group of salaried
employees. Therefore, the named executive officers would receive benefits in addition to
those set forth in the tables.
A named executive officer is entitled to receive base salary earned during his term of
employment regardless of the manner in which the named executive officers employment is
terminated. As such, this amount is not shown in the tables.
Table of Contents
Restricted Stock
Legal Fee
Award
Stock Option
Excise Tax
Reimbursement
Bonus ($)
Acceleration Gain
Acceleration
Reimbursement
($)
Base Salary ($)(1)
(2)
$ (3)
Gain $ (4)
($)
(5)
Total ($)
1,996,539
1,470,500
423,000
949,997
25,000
7,115,036
(1)
Represents three times the base salary in effect at July 31, 2009.
(2)
Represents three times the average bonus payment received in the last three fiscal years ended July 31.
(3)
Represents the closing market price of $29.41 on 50,000 unvested awards that would vest due to the
change in control.
(4)
Represents the difference between the closing market price of $29.41 and the exercise price on 50,000
unvested stock options in-the-money that would vest due to the change in control.
(5)
Represents the maximum reimbursement of legal fees allowed.
Restricted Stock
Legal Fee
Award
Stock Option
Excise Tax
Reimbursement
Acceleration Gain
Acceleration
Reimbursement
($)
Base Salary ($)(1)
Bonus ($) (2)
$ (3)
Gain $ (4)
($)
(5)
Total ($)
374,606
1,029,350
211,500
377,563
25,000
2,668,019
(1)
Represents two times the base salary in effect at July 31, 2009.
(2)
Represents two times the average bonus payment received in the last three fiscal years ended July 31.
(3)
Represents the closing market price of $29.41 on 35,000 unvested awards that would vest due to the
change in control.
(4)
Represents the difference between the closing market price of $29.41 and the exercise price on
25,000 unvested stock options in-the-money that would vest due to the change in control.
(5)
Represents the maximum reimbursement of legal fees allowed.
Restricted Stock
Legal Fee
Award
Stock Option
Excise Tax
Reimbursement
Acceleration Gain
Acceleration
Reimbursement
($)
Base Salary ($)(1)
Bonus ($) (2)
$ (3)
Gain $ (4)
($)
(5)
Total ($)
585,023
1,029,350
211,500
387,721
25,000
2,923,499
(1)
Represents two times the base salary in effect at July 31, 2009. As Mr. Sephton works and lives in
the United Kingdom, his base salary is paid to him in British Pounds. The amount shown in U.S.
dollars was converted from British Pounds at the July month-end exchange rate: $1 = £0.5986.
(2)
Represents two times the average bonus payment received in the last three fiscal years ended July 31.
(3)
Represents the closing market price of $29.41 on 35,000 unvested awards that would vest due to the
change in control.
(4)
Represents the difference between the closing market price of $29.41 and the exercise price on
25,000 unvested stock options in-the-money that would vest due to the change in control.
(5)
Represents the maximum reimbursement of legal fees allowed.
Table of Contents
Restricted Stock
Stock Option
Legal Fee
Base Salary ($)
Award Acceleration
Acceleration Gain $
Excise Tax
Reimbursement ($)
(1)
Bonus ($) (2)
Gain $ (3)
(4)
Reimbursement ($)
(5)
Total ($)
458,581
1,029,350
211,500
407,326
25,000
2,801,537
(1)
Represents two times the base salary in effect at July 31, 2009.
(2)
Represents two times the average bonus payment received in the last three fiscal years ended July 31.
(3)
Represents the closing market price of $29.41 on 35,000 unvested awards that would vest due to the
change in control.
(4)
Represents the difference between the closing market price of $29.41 and the exercise price on
25,000 unvested stock options in-the-money that would vest due to the change in control.
(5)
Represents the maximum reimbursement of legal fees allowed.
Restricted Stock
Stock Option
Legal Fee
Base Salary ($)
Award Acceleration
Acceleration Gain $
Excise Tax
Reimbursement ($)
(1)
Bonus ($) (2)
Gain $ (3)
(4)
Reimbursement ($)
(5)
Total ($)
277,848
1,029,350
211,500
391,443
25,000
2,515,141
(1)
Represents two times the base salary in effect at July 31, 2009.
(2)
Represents two times the average bonus payment received in the last three fiscal years ended July 31.
(3)
Represents the closing market price of $29.41 on 35,000 unvested awards that would vest due to the
change in control.
(4)
Represents the difference between the closing market price of $29.41 and the exercise price on
25,000 unvested stock options in-the-money that would vest due to the change in control.
(5)
Represents the maximum reimbursement of legal fees allowed.
Unvested Shares
Unvested Stock
of Restricted
Options
Stock
Restricted Stock
In-the
Stock Option
as of
Award Acceleration
Money as of
Acceleration
Name
July 31, 2009
Gain $ (1)
July 31, 2009
Gain $ (2)
50,000
1,470,500
50,000
423,000
35,000
1,029,350
25,000
211,500
35,000
1,029,350
25,000
211,500
35,000
1,029,350
25,000
211,500
35,000
1,029,350
25,000
211,500
(1)
Represents the closing market price of $29.41 on unvested shares that
would vest due to the change in control.
(2)
Represents the difference between the closing market price of $29.41
and the exercise price on unvested stock options in-the-money that
would vest due to death or disability.
Table of Contents
Fees Earned
or Paid in
Option
Name
Cash ($)
Awards ($) (1)
Total ($)
65,000
38,822
103,822
79,500
38,822
118,322
69,000
38,822
107,822
63,500
38,822
102,322
68,000
38,822
106,822
76,500
38,822
115,322
74,500
114,548
189,048
76,000
84,159
160,159
82,500
84,159
166,659
81,000
56,860
137,860
Table of Contents
(1)
Represents the amounts expensed in fiscal 2009 relating to grants of
stock options. The Company accounts for stock-based compensation in
accordance with SFAS No. 123(R), which requires it to recognize
compensation expense for stock options granted to employees and
directors based on the estimated fair value of the awards at the time
of grant. The assumptions used to determine the value of the awards,
including the use of the Black-Scholes method of valuation by the
Company, are discussed in Note 1 of the Notes to Consolidated
Financial Statements of the Company contained in Item 8 of this Form
10-K for the fiscal year ended July 31, 2009. The grant date fair
value of options granted in fiscal 2009 for each director was $38,820
for Ms. Pungello, Mr. Buchanan, Mr. Bemis, Mr. Harris, Mr. Nei, Mr.
Jarc, Mr. Galbato, Mr. Allender, Mr. Goodkind, and for Mr. Richardson.
The actual value, if any, which an option holder will realize upon the
exercise of an option will depend on the excess of the market value of
the Companys common stock over the exercise price on the date the
option is exercised, which cannot be forecasted with any accuracy.
(1)
Outstanding option awards at July 31, 2009 for each individual serving
as a director on that date include the following: Ms. Pungello, 36,000
shares; Mr. Buchanan, 24,000 shares; Mr. Bemis, 45,000 shares; Mr.
Harris, 45,000 shares; Mr. Nei, 39,000 shares; Mr. Jarc, 48,000
shares; Mr. Galbato, 22,000 shares; Mr. Allender, 22,000 shares; Mr.
Richardson, 16,000 shares; and Mr. Goodkind, 22,000 shares.
Table of Contents
Amount of
Beneficial
Percent of
Title of Class
Name and Address of Beneficial Owner
Ownership
Ownership(2)
Brady Corporation Class B Common Stock Trust(1)
1,769,304
50
%
c/o Elizabeth P. Pungello
2002 S. Hawick Ct.
Chapel Hill, NC 27516
William H. Brady III Revocable Trust of 2003(3)
1,769,304
50
%
c/o William H. Brady III
249 Rosemont Ave.
Pasadena, CA 91103
(1)
The trustee is Elizabeth P. Pungello, who has sole voting and dispositive
power and who is the remainder beneficiary. Elizabeth Pungello is the
great-granddaughter of William H. Brady and currently serves on the
Companys Board of Directors.
(2)
An additional 20 shares are owned by a third trust with different trustees.
(3)
William H. Brady III is special trustee of this trust and has sole voting
and dispositive powers with respect to these shares. William H. Brady III
is the grandson of William H. Brady.
Amount of
Beneficial
Percent of
Title of Class
Name of Beneficial Owner & Nature of Beneficial Ownership
Ownership(6)
Ownership
Elizabeth P. Pungello(1)
1,348,387
2.6
%
Frank M. Jaehnert(2)
753,844
1.4
Allan J. Klotsche
188,803
0.4
Thomas J. Felmer
197,670
0.4
Matthew O. Williamson
191,582
0.4
Peter C. Sephton
189,401
0.4
Richard A. Bemis
99,652
0.2
Robert C. Buchanan(3)
85,031
0.2
Frank W. Harris
72,578
0.1
Gary E. Nei(4)
63,545
0.1
Conrad G. Goodkind
62,226
0.1
Frank R. Jarc
49,188
0.1
Chan W. Galbato
8,667
*
Patrick W. Allender
13,745
*
Bradley C. Richardson
4,531
*
All Officers and Directors as a Group (20 persons)(5)
3,497,019
6.7
%
Elizabeth P. Pungello(1)
1,769,304
50.0
%
*
Indicates less than one-tenth of one percent.
Table of Contents
(1)
Ms. Pungellos holdings of Class A Common Stock include 445,506 shares held jointly with her
spouse and 876,826 shares owned by trusts for which she is a trustee and has either sole or
joint dispositive and voting authority. Ms. Pungellos holdings of Class B Common Stock include
1,769,304 shares owned by a trust over which she has sole dispositive and voting authority.
(2)
Of the amount reported, Mr. Jaehnerts spouse owns 5,446 shares of Class A Common Stock directly.
(3)
Of the amount reported, Mr. Buchanan owns 14,534 shares as co-trustee of three separate trusts.
(4)
Of the amount reported, Mr. Nei owns 14,085 shares of Class A Common Stock directly (with
respect to which he shares voting and investment power with his spouse).
(5)
The amount shown for all officers and directors individually and as a group (20 persons)
includes options to acquire a total of 1,673,310 shares of Class A Common Stock, which are
currently exercisable or will be exercisable within 60 days of July 31, 2009, including the
following: Ms. Pungello, 24,000 shares; Mr. Jaehnert, 644,668 shares; Mr. Klotsche, 179,135
shares; Mr. Felmer, 174,335 shares; Mr. Williamson, 177,835 shares; Mr. Sephton, 154,001 shares;
Mr. Bemis, 33,000 shares; Mr. Buchanan, 12,000 shares; Mr. Harris, 33,000 shares; Mr. Nei,
27,000 shares; Mr. Goodkind, 8,667 shares; Mr. Jarc, 36,000 shares; Ms. Bolens, 31,000 shares;
Mr. Tatterson, 25,001 shares; Ms. Johnson, 47,000 shares; Mr. Curran, 46,000; Mr. Galbato, 8,667
shares; Mr. Allender, 8,667 shares; Mr. Richardson, 3,334 shares. It does not include other
options for Class A Common Stock which have been granted at later dates and are not exercisable
within 60 days of July 31, 2009.
(6)
The amount shown for all officers and directors individually and as a group (20 persons)
includes Class A Common Stock owned in deferred compensation plans totaling 274,934 shares of
Class A Common Stock, including the following: Ms. Pungello, 2,055 shares; Mr. Jaehnert, 79,858
shares; Mr. Klotsche, 7,316 shares; Mr. Felmer, 10,087 shares; Mr. Williamson, 13,747 shares;
Mr. Sephton, 0 shares; Mr. Bemis, 48,652 shares; Mr. Buchanan, 56,798 shares; Mr. Harris, 80
shares; Mr. Nei, 22,460 shares; Mr. Goodkind, 6,022 shares; Mr. Jarc, 13,188 shares; Ms. Bolens,
2,752 shares; Mr. Tatterson, 0 shares; Ms. Johnson, 5,540; Mr. Curran, 99 shares; Mr. Galbato, 0
shares; Mr. Allender, 5,078 shares; Mr. Richardson, 1,197 shares.
Number of securities
remaining available for
Number of securities
future issuance under
to be issued upon
Weighted-average
equity compensation
exercise of
exercise price of
plans (excluding
outstanding options,
outstanding options,
securities reflected in
warrants and rights
warrants and rights
column (a))
Plan Category
(a)
(b)
(c)
3,980,606
$
27.96
660,330
None
None
None
3,980,606
$
27.96
660,330
Table of Contents
2009
2008
(Dollars in thousands)
$
1,379
$
1,663
56
842
863
2,221
2,582
892
1,233
340
399
1,232
1,632
$
3,453
$
4,214
(1)
Audit fees consist of professional services rendered for the audit of the Companys
annual financial statements, attestation of managements assessment of internal control,
reviews of the quarterly financial statements and statutory reporting compliance.
(2)
Audit-related fees include fees related to due diligence and employee benefit plan audits.
(3)
All other fees relate to expatriate activities.
2009
2008
.6 to 1
.6 to 1
Table of Contents
91
Table of Contents
92
93
Exhibit
Number
Description
3.1
3.2
*10.1
*10.2
*10.3
*10.4
*10.5
*10.6
*10.7
*10.8
10.9
*10.10
*10.11
*10.12
*10.13
10.14
*10.15
*10.16
10.17
*10.18
*10.19
*10.20
*10.21
*10.22
*10.23
10.24
10.25
10.26
*10.27
*10.28
Table of Contents
Exhibit
Number
Description
*10.29
*10.30
*10.31
21
23
31.1
31.2
32.1
32.2
*
Management contract or compensatory plan or arrangement
(1)
Incorporated by reference to Registrants Registration Statement No. 333-04155 on Form S-3
(2)
Incorporated by reference to Registrants Current Report on Form 8-K filed September 15, 2006
(3)
Incorporated by reference to Registrants Current Report on Form 8-K filed November 25, 2008
(4)
Incorporated by reference to Registrants Annual Report on Form 10-K for the fiscal year ended
July 31, 1992
(5)
Incorporated by reference to Registrants Quarterly Report on Form 10-Q for the fiscal quarter
ended January 31, 2008
(6)
Incorporated by reference to Registrants Current Report on Form 8-K filed March 19, 2008
(7)
Incorporated by reference to Registrants Current Report on Form 8-K filed January 9, 2008
(8)
Incorporated by reference to Registrants Current Report on Form 8-K filed December 4, 2006
(9)
Incorporated by reference to Registrants Current Report on Form 8-K filed February 17, 2006
(10)
Incorporated by reference to Registrants Quarterly Report on Form 10-Q for the fiscal quarter
ended April 30, 2003
(11)
Incorporated by reference to Registrants 8-K/A filed August 3, 2004
(12)
Incorporated by reference to Registrants Quarterly Report on Form 10-Q for the fiscal quarter
ended January 31, 2009
(13)
Incorporated by reference to Registrants Annual Report on Form 10-K for the fiscal year ended
July 31, 2005
(14)
Incorporated by reference to Registrants Annual Report on Form 10-K for the fiscal year ended
July 31, 2006
(15)
Incorporated by reference to Registrants Current Report on Form 8-K filed November 20, 2006
(16)
Incorporated by reference to Registrants Current Report on Form 8-K filed September 17, 2007
(17)
Incorporated by reference to Registrants Annual Report on Form 10-K for the fiscal year ended
July 31, 2008
Table of Contents
Year ended July 31, | ||||||||||||
Description | 2009 | 2008 | 2007 | |||||||||
(Dollars in thousands) | ||||||||||||
Valuation accounts deducted in balance sheet from assets to which they apply
|
||||||||||||
Accounts receivable allowance for losses:
|
||||||||||||
Balances at beginning of period
|
$ | 10,059 | $ | 9,109 | $ | 6,390 | ||||||
Additions Charged to expense
|
1,278 | 2,480 | 3,287 | |||||||||
Due to acquired businesses
|
| 34 | 660 | |||||||||
Deductions Bad debts written off, net of recoveries
|
(3,406 | ) | (1,564 | ) | (1,228 | ) | ||||||
|
||||||||||||
Balances at end of period
|
$ | 7,931 | $ | 10,059 | $ | 9,109 | ||||||
|
||||||||||||
Inventory reserve for slow-moving inventory:
|
||||||||||||
Balances at beginning of period
|
$ | 22,148 | $ | 18,073 | $ | 13,555 | ||||||
Net charged to expense
|
140 | 3,822 | 2,542 | |||||||||
Due to acquired businesses
|
| 253 | 1,976 | |||||||||
|
||||||||||||
Balances at end of period
|
$ | 22,288 | $ | 22,148 | $ | 18,073 | ||||||
|
94
95
Brady Corporation
By:
/s/
Thomas J. Felmer
Thomas J. Felmer
Senior Vice President & Chief Financial Officer
(Principal Financial Officer)
President and Director
(Principal Executive Officer)
September 28, 2009
V.P. and Chief Accounting Officer
(Principal Accounting Officer)
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
Director
September 28, 2009
I. | INTRODUCTION |
II. | PLAN DEFINITIONS |
(a) | Affiliates means any subsidiary corporation or parent corporation as such terms are defined in Section 424 of the Code. | ||
(b) | 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. | ||
(c) | Award shall mean the grant of any form of Stock Option, Restricted Stock or Restricted Stock Units. | ||
(d) | Board shall mean the Board of Directors of the Corporation. |
(e) | Code shall mean the Internal Revenue Code of 1986, as amended from time to time. | ||
(f) | Committee shall mean the Committee described in Section 4.01. | ||
(g) | Corporation shall mean Brady Corporation, a Wisconsin corporation. | ||
(h) | Corporation Stock shall mean the Corporations 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. | ||
(i) | 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. | ||
(j) | Exercise Period shall mean the period of time provided pursuant to Section 6.05 within which a Stock Option may be exercised. | ||
(k) | 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. | ||
(l) | Participant means an Eligible Employee who has been granted an Award under this Plan. | ||
(m) | Performance Goals means the performance goals established by the Committee prior to the grant of any Award of Stock Options, Restricted Stock or Restricted Stock Units intended to qualify as performance-based compensation under Section 162(m) of the Code. Performance Goals may be established at the Company or business unit level and may be based upon 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: revenue, expenses, 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) | 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. | ||
(o) | Plan shall mean the Brady Corporation 2010 Omnibus Incentive Stock Plan, as set forth herein, as it may be amended from time to time. | ||
(p) | Restricted Stock means shares of Corporation Stock granted to a Participant under Article VII. | ||
(q) | Restricted Stock Unit means an Award granted to a Participant under Article VIII. | ||
(r) | 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. |
III. | SHARES SUBJECT TO AWARD |
IV. | ADMINISTRATION |
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(a) | designate the Eligible Employees to whom Awards shall be granted; | ||
(b) | grant Awards in such form and amount as the Committee shall determine; | ||
(c) | 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) (i) on the exercisability of all or any portion of a Stock Option, (ii) on the transferability or forfeitability of Restricted Stock or (iii) requiring an Eligible Employee to retain all or a portion of the Corporation Stock for a period of time following the exercise of a Stock Option, the vesting of Restricted Stock or the payment of Restricted Stock Units; | ||
(d) | prescribe the form of Agreement with respect to each Award; | ||
(e) | 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); | ||
(f) | make adjustments in the terms and conditions of a Performance Goal in recognition of unusual or nonrecurring events affecting the Company or the financial statements of the Company or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, provided that no such adjustment shall be authorized to the extent that such adjustment would be inconsistent with the Plans or any Performance Award meeting the requirements of Section 162(m) of the Code; and | ||
(g) | 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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V. | PARTICIPATION |
VI. | STOCK OPTIONS |
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Years After | ||||
Date of Grant | Percentage of Shares | |||
Less than 1
|
0 | % | ||
1 but less than 2
|
33-1/3 | % | ||
2 but less than 3
|
66-2/3 | % | ||
3 or more
|
100 | % |
(a) | The aggregate Fair Market Value of Corporation Stock (determined as of the date the stock option is granted) with respect to which ISOs are exercisable for the first time during a calendar year may not exceed $100,000. To the extent that the value of the stock subject to options exceeds that amount, the excess shall be considered to be NSOs, with the determination to be made in the order the options are granted. | ||
(b) | Employees who own, directly or indirectly, within the meaning of Code Section 425(d), more than 10% of the voting power of all classes of stock of the Corporation or any parent or subsidiary corporation shall not be eligible to receive an ISO hereunder unless the purchase price per share |
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under such option is at least 110% of the Fair Market Value of the stock subject to the option and such option by its terms is not exercisable after the expiration of five (5) years from the date such option is granted | |||
(c) | To obtain favorable ISO tax treatment, the option must be exercised while the Participant is an employee, or within three months after the Participants termination as an employee; provided that, in the case of termination on account of disability (as defined in Section 22(e)(3) of the Code), the exercise period may be extended to one year; and further provided that the employment requirement is waived in the case of the participants death. |
VII. | RESTRICTED STOCK |
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(a) | Until the applicable restrictions lapse, the Participant shall not be permitted to sell, assign, transfer, exchange, pledge, hypothecate or otherwise dispose of or encumber shares of Restricted Stock. | ||
(b) | Unless and until a forfeiture of the Restricted Stock, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a shareholder of the Corporation, including the right to vote the shares (if applicable) and the right to receive any cash dividends. Unless otherwise determined by the Committee, cash dividends shall be automatically paid in cash and dividends payable in Corporation Stock shall be paid in the form of additional Restricted Stock. | ||
(c) | Except to the extent otherwise provided in the applicable Restricted Stock Agreement and (d) below, all shares still subject to restriction shall be forfeited by the Participant upon termination of a Participants employment for any reason. | ||
(d) | In the event of hardship or other special circumstances of a Participant whose employment is involuntarily terminated (other than for cause), the Committee may waive in whole or in part any or all remaining restrictions with respect to such Participants shares of Restricted Stock. | ||
(e) | If and when the applicable restrictions lapse, unlegended certificates for such shares shall be delivered to the Participant. | ||
(f) | Each Award shall be confirmed by, and be subject to the terms of, a Restricted Stock Agreement. |
VIII. | RESTRICTED STOCK UNITS |
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IX. | WITHHOLDING TAXES |
X. | GENERAL |
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(a) | if the Participants employment is terminated by the death of the Participant, any unexercised, unexpired Stock Options granted hereunder to the Participant shall be 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of death, by the Participants personal representative or by the person to whom the Stock Options are transferred under the Participants last will and testament or the applicable laws of descent and distribution; | ||
(b) | if the Participant dies within 90 days after termination of employment by the Corporation or its Affiliates, other than for cause, any unexercised, unexpired Stock Options granted hereunder to the Participant and exercisable as of the date of such termination of employment shall be exercisable, in whole or in part, at any time within one year after the date of death, by the Participants personal representative or by the person to whom the Stock Options are transferred under the Participants last will and testament or the applicable laws of descent and distribution; | ||
(c) | if the Participants employment is terminated as a result of the disability of the Participant (a disability means that the Participant is disabled as a result of sickness or injury, such that he or she is unable to satisfactorily perform the material duties of his or her job, as determined by the Board of Directors, on the basis of medical evidence satisfactory to it), any unexercised, unexpired Stock Options granted hereunder to the Participant shall become 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of disability; | ||
(d) | if the Participants employment is terminated as a result of the Participants retirement (after age 55 with ten years of employment with the Corporation or an Affiliate or after age 65), any unexercised, unexpired Stock Options granted hereunder to the Participant shall continue to vest as provided in Section 6.05 hereof and any Stock Option that is or becomes vested may be exercised in whole or in part prior to the expiration date of such Stock Option; and | ||
(e) | if the Participants employment is terminated by the Company or an Affiliate for any reason other than the Participants death, disability or retirement of the Participant or for cause, any unexercised, unexpired Stock Options granted hereunder and exercisable as of the date of such termination of employment shall be exercisable in whole or in part at any time within 90 days after such date of termination. |
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-12-
Years After | ||||
Date of Grant | Percentage of Shares | |||
Less than 1
|
0 | % | ||
1 but less than 2
|
33-1/3 | % | ||
2 but less than 3
|
66-2/3 | % | ||
3 or more
|
100 | % |
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1. | Number of Shares Optioned; Option Price | |
The Corporation grants to the Employee the right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate of ____________(___) shares of the presently authorized Class A Common Stock of the Corporation, $.01 par value, whether unissued or issued and reacquired by the Corporation, at the price of $___.___ per share (the Option Price). | ||
2. | Conditions of Exercise of Options During Employees Lifetime; Vesting of Option | |
Except as provided in this paragraph and in paragraph 3, this Option may not be exercised (a) unless Employee is at the date of the exercise in the employ of the Corporation or a Subsidiary, and (b) until Employee shall have been continuously so employed for a period of at least one year from the date hereof. Thereafter, this Option shall be exercisable for any amount of shares up to the maximum percentage of shares covered by this Option (rounded up to the nearest whole share), as follows (but in no event shall this Option be exercisable for any shares after the expiration date provided in paragraph 7): |
Maximum | ||||
Percentage | ||||
of Shares For | ||||
Number of Completed Years After | Which Option is | |||
Date of Grant of this Option | Exercisable | |||
Less than 1
|
Zero | |||
At least 1 but less than 2
|
33-1/3 | % | ||
At least 2 but less than 3
|
66-2/3 | % | ||
At least 3
|
100 | % |
If Employee shall cease to be employed by the Corporation or a Subsidiary for any reason other than as provided in paragraph 3 after Employee shall have been continuously so employed for one year after the grant of this Option, Employee may, at any time within 90 days of such termination, but in no event later than the date of expiration of this Option, exercise this Option to the extent Employee was entitled to do so on the date of such termination. However, if Employee was dismissed for cause, of |
which the Committee shall be the sole judge, this Option shall forthwith expire. This Agreement does not confer upon Employee any right of continuation of employment by the Corporation or a Subsidiary, nor does it impair any right the Corporation or any Subsidiary may have to terminate the Employees employment at any time. |
3. | Termination of Employment | |
Notwithstanding the provisions of paragraph 2 hereof, if the Employee: |
(a) | is terminated by the death of the Employee, any unexercised, unexpired Stock Options granted hereunder to the Employee shall be 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of death, by the Employees personal representative or by the person to whom the Stock Options are transferred under the Employees last will and testament or the applicable laws of descent and distribution; | ||
(b) | dies within 90 days after termination of employment by the Corporation or its Affiliates, other than for cause, any unexercised, unexpired Stock Options granted hereunder to the Employee and exercisable as of the date of such termination of employment shall be exercisable, in whole or in part, at any time within one year after the date of death, by the Employees personal representative or by the person to whom the Stock Options are transferred under the Employees last will and testament or the applicable laws of descent and distribution; | ||
(c) | is terminated as a result of the disability of the Employee (a disability means that the Employee is disabled as a result of sickness or injury, such that he or she is unable to satisfactorily perform the material duties of Employees job, as determined by the Board of Directors, on the basis of medical evidence satisfactory to it), any unexercised, unexpired Stock Options granted hereunder to the Employee shall become 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of disability; or | ||
(d) | is terminated as a result of the Employees retirement (after age 55 with ten years of employment with the Corporation or an Affiliate or after age 65), any unexercised, unexpired Stock Options granted hereunder to the Employee shall continue to vest as provided in paragraph 2 hereof and any option that is or becomes vested may be exercised in whole or in part prior to the expiration date of such option. |
4. | Deferral of Exercise | |
Although the Corporation intends to exert its best efforts so that the shares purchasable upon the exercise of this Option will be registered under, or exempt from, the registration requirements of, the Securities Act of 1933 (the Act) and any applicable state securities law at the time or times this Option (or any portion of this Option) first becomes exercisable, if the exercise of this Option would otherwise result in a violation by the Corporation of any provision of the Act or of any state securities law, the Corporation |
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may require that such exercise be deferred until the Corporation has taken appropriate action to avoid any such violation. | ||
5. | Method of Exercising Option | |
This Option shall be exercised by delivering to the Corporation, at the office of its Treasurer, a written notice of the number of shares with respect to which this Option is at the time being exercised and by paying the Corporation in full the Option Price of the shares being acquired at the time. | ||
6. | Method of Payment | |
Payment shall be made either (i) in cash; (ii) by delivering shares of the Corporations Class A Common Stock which have been beneficially owned by the Employee, the spouse of the Employee, or both of them, for a period of at least six months prior to the time of exercise (Delivered Stock); (iii) by surrendering to the Corporation shares of Class A Common Stock otherwise receivable upon exercise of the Option (a Net Exercise); or (iv) any combination of the foregoing. Payment in the form of Delivered Stock shall be in the amount of the Fair Market Value of the stock at the date of exercise, determined in accordance with paragraph 9. | ||
7. | Expiration Date | |
This Option shall expire ten years after the date on which this Option was granted. | ||
8. | Withholding Taxes | |
The Corporation may require, as a condition to the exercise of this Option, that the Employee concurrently pay to the Corporation any taxes which the Corporation is required to withhold by reason of such exercise. In lieu of part or all of any such payment, the Employee may elect, subject to such rules and regulations as the Committee may adopt from time to time, to have the Corporation withhold from the shares to be issued upon exercise that number of shares having a Fair Market Value, determined in accordance with paragraph 9, equal to the amount which the Corporation is required to withhold. | ||
9. | Method of Valuation of Stock | |
The Fair Market Value of the Class A Common Stock of the Corporation on any date shall mean, 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 sales price recorded in composite transactions for such date or, if such date is not a business day or if no sales of shares 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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10. | No Rights in Shares Until Certificates Issued | |
Neither the Employee nor his heirs nor his personal representative shall have any of the rights or privileges of a stockholder of the Corporation in respect of any of the shares issuable upon the exercise of the Option herein granted, unless and until certificates representing such shares shall have been issued or shares in book entry form shall have been recorded in the records of the Corporations transfer agent. | ||
11. | Option Not Transferable | |
No portion of the Option granted hereunder shall be transferable or assignable (or made subject to any pledge, lien, obligation or liability of an Employee) except (a) by last will and testament or the laws of descent and distribution (and upon a transfer or assignment pursuant to an Employees last will and testament or the laws of descent and distribution, any Option must be transferred in accordance therewith); (b) during the Employees lifetime, nonqualified stock Options may be transferred by an Employee to the Employees spouse, children or grandchildren or to a trust for the benefit of such spouse, children or grandchildren, provided that the terms of any such transfer prohibit the resale of shares acquired upon exercise of the option at a time during which the transferor would not be permitted to sell such shares under the Corporations policy on trading by insiders. | ||
12. | Prohibition Against Pledge, Attachment, Etc. | |
Except as otherwise herein provided, the Option herein granted and the rights and privileges pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. | ||
13. | Changes in Stock | |
In the event there are any changes in the Class A Common Stock of the Corporation through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, rights offering or any other change affecting the Class A Common Stock of the Corporation, appropriate changes will be made by the Committee in the aggregate number of shares and the purchase price and kind of shares subject to this Option, to prevent substantial dilution or enlargement of the rights granted to or available for Employee. | ||
14. | Dissolution or Merger | |
Anything contained herein to the contrary notwithstanding, upon the dissolution or liquidation of the Corporation, or upon any merger in which the Corporation is not the surviving corporation, at any time prior to the expiration date of the termination of this Option, the Employee shall have the right within 60 days prior to the effective date of such dissolution, liquidation or merger, to surrender all or any unexercised portion of this Option to the Corporation for cash, subject to the discretion of the Committee as to the exact timing of said surrender. Notwithstanding the foregoing, however, in the event |
-4-
Employee has retired or died, Employees right to surrender all or any unexercised portion of this Option under this paragraph shall be available only to the extent that at the time of any such surrender, Employee would have been entitled to exercise this Option under paragraphs 2 or 3 hereof, as the case may be. The amount of cash to be paid to Employee for the portion of this Option so surrendered, shall be equal to the number of shares of Class A Common Stock subject to the surrendered Option multiplied by the difference between the Option Price per share, as described in paragraph 1 hereof, and the Fair Market Value per share, determined in accordance with paragraph 9 hereof, as of the time of surrender. | ||
15. | Notices | |
Any notice to be given to the Corporation under the terms of this Agreement shall be addressed to the Corporation in care of its Chief Financial Officer, and any notice to be given to the Employee may be addressed at the address as it appears on the Corporations records, or at such other address as either party may hereafter designate in writing to the other. Except as provided in paragraph 5 hereof, any such notice shall be deemed to have been duly given, if and when enclosed in a properly sealed envelope addressed as aforesaid, and deposited, postage prepaid, in the United States mail. | ||
16. | Provisions of Plan Controlling | |
This Option is subject in all respects to the provisions of the Plan. In the event of any conflict between any provisions of this Option and the provisions of the Plan, the provisions of the Plan shall control, except to the extent the Plan permits the Committee to modify the terms of an Option grant and has done so herein. Terms defined in the Plan where used herein shall have the meanings as so defined. Employee acknowledges receipt of a copy of the Plan. | ||
17. | Wisconsin Contract | |
This Option has been granted in Wisconsin and shall be construed under the laws of that state. |
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1. | Number of Shares Optioned; Option Price | |
The Corporation grants to the Employee the right and option to purchase, on the terms and conditions hereof, all or any part of an aggregate of _________ thousand (______) shares of the presently authorized Class A Common Stock of the Corporation, $.01 par value, whether unissued or issued and reacquired by the Corporation, at the price of $______ per share (the Option Price). The Option shall consist of two components. The Part A Option Shares shall represent two-thirds of the total shares covered by this Option, or ______ shares. Vesting of the Part A Option Shares shall be based upon the Companys annual year-over-year growth in earnings per share (EPS) for fiscal 2010, 2011 and 2012 as compared to the baseline reported EPS for 2009. The Part B Option Shares shall represent one-third of the total shares covered by this Option, or ______ shares. Vesting of the Part B Option Shares shall be based upon the percentile rank of the Corporations earnings per share growth compared to other companies in the S&P 600 Index using 2008 as the baseline. | ||
2. | Conditions of Exercise of Options During Employees Lifetime; Vesting of Option | |
Except as provided in this paragraph and in paragraph 3, this Option may not be exercised (a) unless Employee is, at the date of the exercise, in the employ of the Corporation or a Subsidiary, and (b) the performance conditions provided below have been met; provided, however, that in no event shall this Option be exercisable for any shares after the expiration date provided in paragraph 7. | ||
Part A Option Shares | ||
Vesting of the Part A Option Shares shall be determined in accordance with the
following schedule, with the vesting date for each plan year being the date the
Audit Committee accepts the results of the fiscal year audit. Earnings per share
will be computed by dividing the Corporations net income for the year by an
assumed 53 million shares of diluted outstanding Common Stock and assuming no
issuance of additional shares of Common Stock other than pursuant to the
Corporations Omnibus Incentive Stock Plans. In the event of any other stock
issuance, the Compensation Committee will make an equitable adjustment of the
earnings per share amounts.
|
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Vesting of shares for performance between the Annual EPS Growth percentages listed above will not be interpolated. | ||
Part B Option Shares | ||
Vesting of the Part B Option Shares shall be determined in accordance with the following schedule, and by comparing the Corporations EPS Growth for Fiscal 2010, 2011, and 2012 over fiscal 2008 with other corporations in the S&P 600 Index using reported EPS for the baseline year of 2008. The vesting date for the Part B Option Shares shall be the date the Audit Committee accepts the results of the 2012 fiscal year audit. |
EPS Growth Relative to | Plan Year 3 | |
S&P 600 | FY 2012 | |
75
th
percentile
|
100% of Part B Option Shares | |
67 th percentile | 50% of Part B Option Shares | |
60 th percentile | 20% of Part B Option Shares |
Vesting of shares for performance between the percentages listed above will not be interpolated. | ||
EPS Growth for the Corporation means (a) the Corporations earnings per share for the fiscal year ending July 31, 2012, divided by (b) the earnings per share of the Company for the fiscal year ending July 31, 2008 ($__________). Earnings per share will be computed by dividing the Corporations net income for the year by an assumed 53 million shares of diluted outstanding Common Stock and assuming no issuance of additional shares of |
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Common Stock other than pursuant to the Corporations Omnibus Incentive Stock Plans. In the event of any other stock issuance, the Compensation Committee will make an equitable adjustment of the earnings per share amounts. | ||
The EPS Growth for the companies in the S&P 600 Index shall be calculated using the same method described above and shall include each company which is described by either of the following criteria: (a) the company is included in such index as of July 31, 2008 and July 31, 2012; or (b) the company is included in such index on July 31, 2012 and is a successor to a company that was included in such index on July 31, 2008. If earnings per share information is not available for any such company as of July 31, 2008 or July 31, 2012, the EPS Growth for such company shall be calculated using the twelve-month period immediately preceding the relevant July 31 for which such information is available. | ||
If Employee shall cease to be employed by the Corporation or a Subsidiary for any reason other than as provided in paragraph 3, Employee may, at any time within 90 days of such termination, but in no event later than the date of expiration of this Option, exercise this Option to the extent Employee was entitled to do so on the date of such termination. However, if Employee was dismissed for cause, of which the Compensation Committee of the Board of Directors of the Corporation shall be the sole judge, this Option shall forthwith expire. This Agreement does not confer upon Employee any right of continuation of employment by the Corporation or a Subsidiary, nor does it impair any right the Corporation or any Subsidiary may have to terminate the Employees employment at any time. | ||
3. |
Termination of Employment
Notwithstanding the provisions of paragraph 2 hereof, other than in the event of a termination for cause, if the Employee: |
(a) | is terminated by the death of the Employee, any unexercised, unexpired Stock Options granted hereunder to the Employee shall be 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of death, by the Employees personal representative or by the person to whom the Stock Options are transferred under the Employees last will and testament or the applicable laws of descent and distribution; | ||
(b) | dies within 90 days after termination of employment by the Corporation or its Affiliates, other than for cause, any unexercised, unexpired Stock Options granted hereunder to the Employee and exercisable as of the date of such termination of employment shall be exercisable, in whole or in part, at any time within one year after the date of death, by the Employees personal representative or by the person to whom the Stock Options are transferred under the Employees last will and testament or the applicable laws of descent and distribution; | ||
(c) | is terminated as a result of the disability of the Employee (a disability means that the Employee is disabled as a result of sickness or injury, such that he or she is |
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unable to satisfactorily perform the material duties of Employees job, as determined by the Board of Directors, on the basis of medical evidence satisfactory to it), any unexercised, unexpired Stock Options granted hereunder to the Employee shall become 100% vested and fully exercisable, in whole or in part, at any time within one year after the date of disability; | |||
(d) | is terminated as a result of the Employees retirement (after age 55 with ten years of employment with the Corporation or a Subsidiary or after age 65), any unexercised, unexpired Stock Options granted hereunder to the Employee shall continue to vest as provided in paragraph 2 hereof and any option that is or becomes vested may be exercised in whole or in part prior to the expiration date of such option. |
4. | Deferral of Exercise | |
Although the Corporation intends to exert its best efforts so that the shares purchasable upon the exercise of this Option will be registered under, or exempt from, the registration requirements of, the Securities Act of 1933 (the Act) and any applicable state securities law at the time or times this Option (or any portion of this Option) first becomes exercisable, if the exercise of this Option would otherwise result in a violation by the Corporation of any provision of the Act or of any state securities law, the Corporation may require that such exercise be deferred until the Corporation has taken appropriate action to avoid any such violation. | ||
5. | Method of Exercising Option | |
This Option shall be exercised by delivering to the Corporation, at the office of its Treasurer, a written notice of the number of shares with respect to which this Option is at the time being exercised and by paying the Corporation in full the Option Price of the shares being acquired at the time. | ||
6. | Method of Payment | |
Payment shall be made either (i) in cash; (ii) by delivering shares of the Corporations Class A Common Stock which have been beneficially owned by the Employee, the spouse of the Employee, or both of them, for a period of at least six months prior to the time of exercise (Delivered Stock); (iii) by surrendering to the Corporation shares of Class A Common Stock otherwise receivable upon exercise of the Option (a Net Exercise); or (iv) any combination of the foregoing. Payment in the form of Delivered Stock shall be in the amount of the Fair Market Value of the stock at the date of exercise, determined in accordance with paragraph 9. | ||
7. | Expiration Date | |
This Option shall expire ten years after the date on which this Option was granted. |
-9-
8. | Withholding Taxes | |
The Corporation may require, as a condition to the exercise of this Option, that the Employee concurrently pay to the Corporation any taxes which the Corporation is required to withhold by reason of such exercise. In lieu of part or all of any such payment, the Employee may elect, subject to such rules and regulations as the Committee may adopt from time to time, to have the Corporation withhold from the shares to be issued upon exercise that number of shares having a Fair Market Value, determined in accordance with paragraph 9, equal to the amount which the Corporation is required to withhold. | ||
9. | Method of Valuation of Stock | |
The Fair Market Value of the Class A Common Stock of the Corporation on any date shall mean, 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 sales price recorded in composite transactions for such date or, if such date is not a business day or if no sales of shares 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. | ||
10. | No Rights in Shares Until Certificates Issued | |
Neither the Employee nor his heirs nor his personal representative shall have any of the rights or privileges of a stockholder of the Corporation in respect of any of the shares issuable upon the exercise of the Option herein granted, unless and until certificates representing such shares shall have been issued or shares in book entry form shall have been recorded in the records of the Corporations transfer agent. | ||
11. | Option Not Transferable | |
No portion of the Option granted hereunder shall be transferable or assignable (or made subject to any pledge, lien, obligation or liability of an Employee) except (a) by last will and testament or the laws of descent and distribution (and upon a transfer or assignment pursuant to an Employees last will and testament or the laws of descent and distribution, any Option must be transferred in accordance therewith); (b) during the Employees lifetime, nonqualified stock Options may be transferred by an Employee to the Employees spouse, children or grandchildren or to a trust for the benefit of such spouse, children or grandchildren, provided that the terms of any such transfer prohibit the resale of shares acquired upon exercise of the option at a time during which the transferor would not be permitted to sell such shares under the Corporations policy on trading by insiders and are subject to the provisions of paragraph 9. |
-10-
12. | Prohibition Against Pledge, Attachment, Etc. | |
Except as otherwise herein provided, the Option herein granted and the rights and privileges pertaining thereto shall not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. | ||
13. | Changes in Stock | |
In the event there are any changes in the Class A Common Stock of the Corporation through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination or exchange of shares, rights offering or any other change affecting the Class A Common Stock of the Corporation, appropriate changes will be made by the Compensation Committee in the aggregate number of shares and the purchase price and kind of shares subject to this Option, to prevent substantial dilution or enlargement of the rights granted to or available for Employee. | ||
14. | Dissolution or Merger | |
Anything contained herein to the contrary notwithstanding upon the dissolution or liquidation of the Corporation, or upon any merger in which the Corporation is not the surviving corporation, at any time prior to the expiration date of the termination of this Option, the Employee shall have the right within sixty (60) days prior to the effective date of such dissolution, liquidation or merger, to surrender all or any unexercised portion of this Option to the Corporation for cash, subject to the discretion of the Compensation Committee as to the exact timing of said surrender. Notwithstanding the foregoing, however, in the event Employee has retired or died, Employees right to surrender all or any unexercised portion of this Option under this paragraph shall be available only to the extent at the time of any such surrender, Employee would have been entitled to exercise this Option under paragraphs 2 or 3 hereof, as the case may be. The amount of cash to be paid to Employee for the portion of this Option so surrendered, shall be equal to the number of shares of Class A Common Stock subject to the surrendered Option multiplied by the difference between the Option Price per share, as described in paragraph 1 hereof, and the Fair Market Value per share, determined in accordance with paragraph 9 hereof, as of the time of surrender. | ||
15. | Notices | |
Any notice to be given to the Corporation under the terms of this Agreement shall be addressed to the Corporation in care of its Chief Financial Officer, and any notice to be given to the Employee may be addressed at the address as it appears on the Corporations records, or at such other address as either party may hereafter designate in writing to the other. Except as provided in paragraph 5 hereof, any such notice shall be deemed to have been duly given, if and when enclosed in a properly sealed envelope addressed as aforesaid, and deposited, postage prepaid, in the United States mail. |
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16. | Provisions of Plan and Corporate Records Controlling | |
This Option is subject in all respects to the provisions of the Plan. In the event of any conflict between any provisions of this Option and the provisions of the Plan, the provisions of the Plan shall control, except to the extent that the Plan permits the Committee to modify the terms of an Option grant and has done so herein. Terms defined in the Plan where used herein shall have the meanings as so defined. Employee acknowledges receipt of a copy of the Plan. The Corporations records shall be the official record of the Option grant described herein and , in the event of any conflict between this description and the Corporations records, the Corporations records shall control. | ||
17. | Wisconsin Contract | |
This Option has been granted in Wisconsin and shall be construed under the laws of that state. |
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Maximum Percentage | ||||
Number of Completed Years | of Shares for Which | |||
After Date of Grant of this Option | Option is Exercisable | |||
Less than 1
|
Zero | |||
At least 1 but less than 2
|
33-1/3 | % | ||
At least 2 but less than 3
|
66-2/3 | % | ||
At least 3
|
100 | % |
-2-
-3-
-4-
Percentage | ||||||
of Voting | ||||||
State (Country) | Securities | |||||
Name of Company | Of Incorporation | Owned | ||||
Brady Corporation
|
Wisconsin | Parent | ||||
Tricor Direct Inc.
|
Delaware | 100 | % | |||
Doing Business As:
|
||||||
Seton
|
||||||
Seton Name Plate Company
|
||||||
D&G Sign and Label
|
||||||
Seton Identification Products
|
||||||
Emedco
|
||||||
Champion America
|
||||||
DAWG, Inc.
|
||||||
Worldmark of Wisconsin Inc.
|
Delaware | 100 | % | |||
Brady Investment Co.
|
Nevada | 100 | % | |||
Stopware, Inc.
|
California | 100 | % | |||
Permar Sytems, Inc.
|
New York | 100 | % | |||
Doing Business As Electromark
|
||||||
AIO Acquisition Inc.
|
Delaware | 100 | % | |||
Doing Business As:
|
||||||
All-In-One Products
|
||||||
Personnel Concepts Limited
|
||||||
Personnel Concepts Ltd.
|
||||||
PC Limited
|
||||||
USA Printing & Mailing
|
||||||
Dual Core LLC
|
Wisconsin | 100 | % | |||
Doing Business As:
|
||||||
Identicard Systems Worldwide
|
||||||
Brady People ID
|
||||||
JAM Plastics
|
||||||
PromoVision Palomino
|
||||||
Temtec
|
||||||
Brady Mexico Holding LLC
|
Delaware | 100 | % | |||
Brady Precision Converting, LLC
|
Wisconsin | 100 | % | |||
Doing Business As Brady Medical
|
||||||
Clement Communications, Inc.
|
Pennsylvania | 100 | % | |||
Visual Wear LLC
|
Massachusetts | 100 | % | |||
Doing Business As 1888LANYARD.com
|
||||||
Brady International Co.
|
Wisconsin | 100 | % | |||
Brady Worldwide, Inc.
|
Wisconsin | 100 | % | |||
Also Doing Business As:
|
||||||
Brandon International
|
||||||
Varitronic Systems
|
||||||
Teklynx International
|
||||||
Sorbent Products Company
|
||||||
TISCOR
|
||||||
Brady Australia Holdings Pty. Ltd.
|
Australia | 100 | % | |||
Brady Australia Pty. Ltd.
|
Australia | 100 | % | |||
Seton Australia Pty. Ltd.
|
Australia | 100 | % | |||
Accidental Health & Safety Pty. Ltd.
|
Australia | 100 | % | |||
Trafalgar First Aid Pty. Ltd.
|
Australia | 100 | % | |||
Carroll Australasia Pty. Ltd.
|
Australia | 100 | % | |||
Scafftag Australia Pty. Ltd.
|
Australia | 100 | % |
Percentage
of Voting
State (Country)
Securities
Name of Company
Of Incorporation
Owned
Australia
100
%
Belgium
100
%
Belgium
100
%
Brazil
100
%
Brazil
100
%
Canada
100
%
Canada
100
%
Cayman Islands
100
%
China
100
%
China
100
%
China
100
%
China
100
%
China
100
%
China
100
%
China
100
%
China
100
%
China
100
%
China
100
%
Denmark
100
%
France
100
%
France
100
%
France
100
%
Germany
100
%
Germany
100
%
Hong Kong
100
%
Hong Kong
100
%
Hong Kong
100
%
India
100
%
Ireland
100
%
Italy
100
%
Japan
100
%
Luxembourg
100
%
Malaysia
100
%
Mexico
100
%
Mexico
100
%
Netherlands
100
%
Netherlands
100
%
Netherlands
100
%
Netherlands
100
%
Norway
100
%
Philippines
100
%
Percentage
of Voting
State (Country)
Securities
Name of Company
Of Incorporation
Owned
Poland
100
%
Singapore
100
%
Singapore
100
%
Singapore
100
%
Singapore
100
%
Singapore
100
%
Slovakia
100
%
South Korea
100
%
Spain
100
%
Sweden
100
%
Sweden
100
%
Sweden
100
%
Sweden
100
%
Sweden
100
%
Thailand
100
%
Thailand
100
%
Thailand
100
%
Turkey
100
%
United Arab Emirates
100
%
United Kingdom
100
%
United Kingdom
100
%
United Kingdom
100
%
United Kingdom
100
%
United Kingdom
100
%
United Kingdom
100
%
United Kingdom
100
%
/s/ FRANK M. JAEHNERT | ||||
(Frank M. Jaehnert) | ||||
President and Chief Executive Officer |
/s/ THOMAS J. FELMER | ||||
(Thomas J. Felmer) | ||||
Senior Vice President and Chief Financial Officer |
/s/ FRANK M. JAEHNERT | ||||
(Frank M. Jaehnert) | ||||
President and Chief Executive Officer |
/s/ THOMAS J. FELMER | ||||
(Thomas J. Felmer) | ||||
Senior Vice President and Chief Financial Officer |