2019 2018 2017 2016 2015
(In thousands, except per share amounts)
Operating data⁽¹⁾

Net sales $ 1,160,645
$ 1,173,851
$ 1,113,316
$ 1,120,625
$ 1,171,731
Gross margin 578,678
588,291
558,292
558,773
558,432
Operating expenses:
Research and development 45,168
45,253
39,624
35,799
36,734
Selling, general and administrative⁽²⁾
371,082
390,342
387,653
405,096
422,704
Restructuring charges⁽³⁾
—
—
—
—
16,821
Impairment charges⁽⁴⁾
—
—
—
—
46,867
Total operating expenses 416,250
435,595
427,277
440,895
523,126
Operating income 162,428
152,696
131,015
117,878
35,306
Other income (expense):
Investment and other income (expense) 5,046
2,487
1,121
(709 ) 845
Interest expense (2,830 ) (3,168 ) (5,504 ) (7,824 ) (11,156 )
Net other income (expense) 2,216
(681 ) (4,383 ) (8,533 ) (10,311 )
Income from continuing operations before income taxes 164,644
152,015
126,632
109,345
24,995
Income tax expense⁽⁵⁾
33,386
60,955
30,987
29,235
20,093
Income from continuing operations $ 131,258
$ 91,060
$ 95,645
$ 80,110
$ 4,902
Loss from discontinued operations, net of income taxes⁽⁶⁾
—
—
—
—
(1,915 )
Net income $ 131,258
$ 91,060
$ 95,645
$ 80,110
$ 2,987
Income from continuing operations per Common Share— (Diluted):
Class A nonvoting $ 2.46
$ 1.73
$ 1.84
$ 1.58
$ 0.10
Class B voting $ 2.45
$ 1.72
$ 1.83
$ 1.56
$ 0.08
Loss from discontinued operations per Common Share - (Diluted):
Class A nonvoting $ —
$ —
$ —
$ —
$ (0.04 )
Class B voting $ —
$ —
$ —
$ —
$ (0.04 )
Cash Dividends on:
Class A common stock $ 0.85
$ 0.83
$ 0.82
$ 0.81
$ 0.80
Class B common stock $ 0.83
$ 0.81
$ 0.80
$ 0.79
$ 0.78
Balance Sheet at July 31:
Total assets $ 1,157,308
$ 1,056,931
$ 1,050,223
$ 1,043,964
$ 1,062,897
Long-term obligations, less current maturities —
52,618
104,536
211,982
200,774
Stockholders’ equity 850,774
752,112
700,140
603,598
587,688
Cash Flow Data:
Net cash provided by operating activities $ 162,211
$ 143,042
$ 144,032
$ 138,976
$ 93,348
Net cash used in investing activities (34,463 ) (2,905 ) (15,253 ) (15,416 ) (14,365 )
Net cash used in financing activities (27,628 ) (90,680 ) (136,241 ) (99,576 ) (32,152 )
Depreciation and amortization 23,799
25,442
27,303
32,432
39,458
Capital expenditures (32,825 ) (21,777 ) (15,167 ) (17,140 ) (26,673 )


~~(1)~~	Operating data has been impacted by the reclassification of the Die-Cut businesses into discontinued operations in fiscal 2015. The Company has elected to not separately disclose the cash flows related to discontinued operations.

(4)During fiscal 2020, the Company invested $6.0 million in React Mobile, Inc., an employee safety software and hardware company based in the United States, which is accounted for as an equity method investment. Equity in losses of unconsolidated affiliate of $0.2 million in fiscal 2020 represented the Company's equity interest in React Mobile, Inc.


~~(2)~~	During fiscal 2018, the Company recognized a gain of $4.7 million on the sale of its Runelandhs Försäljnings AB business which was recorded as a reduction of selling, general and administrative expense.


~~(3)~~	Fiscal 2015 includes restructuring charges from a Company approved plan to consolidate facilities in the Americas, Europe, and Asia in order to enhance customer service, improve efficiency of operations, and reduce operating expenses executed in a prior year.


~~(4)~~	~~The Company recognized impairment charges of $46.9 million during the fiscal year ended July 31, 2015. The impairment charge primarily related to the WPS Americas and WPS APAC reporting units.~~

~~(5)~~

Fiscal 2018 was significantly impacted by the Tax Reform Act which resulted in total incremental tax expense of $21.1 million, which consisted of $1.0 million related to the recording of a deferred tax liability for future withholdings and income taxes on the distribution of foreign income, an income tax charge of $3.3 million related to the deemed repatriation of the historical income of foreign subsidiaries, and the impact of the Tax Reform Act on the revaluation of deferred tax assets and liabilities as well as the impact on the Company's fiscal 2018 income from the reduced tax rate was an additional income tax expense of $16.8 million. Fiscal 2015 was significantly impacted by the impairment charges of $46.9 million, of which $39.8 million was non-deductible for income tax purposes.


~~(6)~~	The Die-Cut business was sold in two phases. The second and final phase closed in the first quarter of fiscal 2015. The loss from discontinued operations in fiscal 2015 includes a $0.4 million net loss on the sale of the Die-Cut business, recorded during the three months ended October 31, 2014.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a global manufacturer and supplier of identification solutions and workplace safety products that identify and protect premises, products and people. The IDS segment is primarily involved in the design, manufacture, and distribution of high-performance and innovative identification and healthcare products. The WPS segment provides workplace safety and compliance products, approximately half of which are internally manufactured and half of which are externally sourced. Approximately 45% of our total sales are derived outside of the United States. Foreign sales within the IDS and WPS segments are ~~approximately~~approximately 40% and 70%, respectively.

The ability to provide customers with a ~~broad~~broad range of proprietary, customized and diverse products for use in various applications across multiple industries and geographies, along with a commitment to quality and service, have made Brady a leader in many of its markets. The long-term sales growth and profitability of our segments will depend not only on improved demand in end markets and the overall economic environment, but also on our ability to continuously improve the efficiency of our global operations, deliver a high level of customer service, develop and market innovative new products, and to advance our digital capabilities. In our IDS business, our strategy for growth includes an increased focus on certain industries and products, a focus on improving the customer buying experience, and ~~increasing investments in R&D.~~the development of technologically advanced, innovative and proprietary products. In our WPS business, our strategy for growth includes a focus on workplace safety critical industries, innovative new product offerings, compliance expertise, customization expertise, and improving our digital capabilities.

Impact of the COVID-19 Pandemic on Our Business

The impact of the COVID-19 pandemic on the global economic environment has resulted in reduced demand across the majority of our end markets. In the near-term, the COVID-19 pandemic is expected to continue to have adverse effects on our sales, overall profitability, and cash provided by operating activities. As of the date of this filing, significant uncertainty exists concerning the magnitude of the impact and duration of the COVID-19 pandemic.

Brady Corporation is deemed an essential business under the majority of local government orders. Our products support first responders, healthcare workers, food processing companies, and many other critical industries. Certain of our businesses were shutdown temporarily and many employees worked remotely during the second half of 2020, which had a negative impact on our financial results, operations, and employee productivity. However, the majority of our facilities were operating globally while implementing enhanced safety protocols designed to protect the well-being of our employees.

We have taken actions throughout our business to reduce controllable costs, including actions to reduce labor costs, eliminating non-essential travel, and reducing discretionary spend. We believe we have the financial strength to continue to invest in organic sales growth opportunities and R&D, while continuing to drive efficiencies and automation in our operations and selling, general and administrative expenses ("SG&A") functions. At July 31, 2020, we had cash of $217.6 million, an undrawn credit facility of $200 million, which can be increased up to $400 million at the Company's option and subject to certain conditions, and outstanding letters of credit of $3.1 million, for total available liquidity of approximately $615 million.

Due to the speed with which the COVID-19 pandemic has developed and the resulting uncertainty, including the depth and duration of any disruptions to customers and suppliers, its future effect on our business, results of operations, and financial condition cannot be predicted. Despite this uncertainty, we believe that our financial resources, liquidity levels and no outstanding debt, along with various contingency plans to reduce costs are sufficient to manage the impact of the COVID-19 pandemic, which may result in reduced sales, reduced net income, and reduced cash provided by operating activities. Refer to Risk Factors, included in Part I, Item 1A of this Annual Report on Form 10-K, for further discussion of the possible impact of the COVID-19 pandemic on our business.

Table o f Contents

Results of Operations

A comparison of results of operating income for the fiscal years ended July 31, 2020, 2019, ~~2018,~~ and ~~2017~~2018 is as follows:


(Dollars in thousands)	2020		% Sales		2019		% Sales		2018		% Sales
Net sales	$	1,081,299			$	1,160,645			$	1,173,851
Gross margin	528,565		48.9	%	578,678		49.9	%	588,291		50.1	%
Operating expenses:
Research and development	40,662		3.8	%	45,168		3.9	%	45,253		3.9	%
Selling, general and administrative	336,059		31.1	%	371,082		32.0	%	390,342		33.3	%
Impairment charges	13,821		1.3	%	—		—	%	—		—	%
Total operating expenses	390,542		36.1	%	416,250		35.9	%	435,595		37.1	%
Operating income	$	138,023	12.8	%	$	162,428	14.0	%	$	152,696	13.0	%

(Dollars in thousands) 2019 % Sales 2018 % Sales 2017 % Sales
Net sales $ 1,160,645

$ 1,173,851

$ 1,113,316

Gross margin 578,678
49.9 % 588,291
50.1 % 558,292
50.1 %
Operating expenses:
Research and development 45,168
3.9 % 45,253
3.9 % 39,624
3.6 %
Selling, general and administrative 371,082
32.0 % 390,342
33.3 % 387,653
34.8 %
Total operating expenses 416,250
35.9 % 435,595
37.1 % 427,277
38.4 %
Operating income $ 162,428
14.0 % $ 152,696
13.0 % $ 131,015
11.8 %

A discussion regarding our financial condition and results of operations for fiscal ~~2018~~2019 compared to fiscal ~~2017~~2018 can be found under Item 7 in our Annual Report on Form 10-K for the fiscal year ended July 31, ~~2018,~~2019, filed with the SEC on September ~~13, 2018,~~6, 2019, which is available free of charge on the SEC's website at www.sec.gov and our corporate website at ~~www.bradycorp.com.~~www.bradyid.com/corporate/investors. References in this Form 10-K to “organic sales” refer to net sales calculated in accordance with U.S. GAAP, excluding the impact of foreign currency translation and divestitures. The Company’s organic sales disclosures exclude the effects of foreign currency translation as

~~Table of Contents~~

foreign currency translation is subject to volatility that can obscure underlying business trends. Management believes that the non-GAAP financial measure of organic sales is meaningful to investors as it provides them with useful information to aid in identifying underlying sales trends in our businesses and facilitating comparisons of our sales performance with prior periods. All analytical commentary within the Results of Operations section regarding the change in sales when compared to prior periods are in reference to organic sales unless otherwise noted.

Net sales decreased ~~1.1%~~ 6.8% to $1,081.3 million in fiscal 2020, compared to $1,160.6 million in fiscal 2019, ~~compared to $1,173.9 million in fiscal 2018,~~ which consisted of an organic sales ~~growth~~decline of ~~2.8%, offset by~~5.4% and a decrease from foreign currency translation of ~~2.6% and a decrease from a divestiture of a business in the prior year of 1.3%~~1.4%. Organic sales ~~grew 4.1%~~declined 8.0% in the IDS segment and ~~declined 0.7%~~grew 2.3% in the WPS segment.

The COVID-19 pandemic had a significant impact on organic sales during the second half of 2020, with the impact varying between the IDS and WPS segments. The IDS segment realized reduced demand across all major product lines beginning in the third quarter which continued throughout the fourth quarter, while the WPS segment realized essentially flat organic sales in the third quarter, which improved to 10.8% organic sales growth in the ~~Product ID, Wire ID, Safety~~fourth quarter primarily due to increased sales of personal protective equipment and ~~Facility ID, and Healthcare ID product lines. WPS segment digital~~other pandemic-related products. In total, the rate of decline in organic sales ~~were approximately flat while sales~~decreased through the ~~catalog channel declined in the low-single digits.~~fourth quarter of fiscal 2020.

Gross margin decreased ~~1.6%~~8.7% to $528.6 million in fiscal 2020, compared to $578.7 million in fiscal ~~2019, compared to $588.3 million in fiscal 2018.~~2019. As a percentage of net sales, gross margin decreased to 48.9% in fiscal 2020, compared to 49.9% in fiscal ~~2019, compared to 50.1% in fiscal 2018.~~2019. The decrease in gross margin as a percentage of net sales was primarily due to ~~increased input costs such as freight and personnel costs which were partially mitigated~~the decline in sales volumes resulting from the economic slowdown caused by ~~selected price increases and our ongoing efforts to streamline manufacturing processes and drive operational efficiencies, including increased automation in our manufacturing facilities.~~the COVID-19 pandemic during second half of the fiscal 2020.

R&D expenses decreased ~~slightly~~to $40.7 million in fiscal 2020, compared to $45.2 million in fiscal ~~2019, compared to $45.3 million in fiscal 2018.~~2019. The decrease in R&D ~~spending~~expense in fiscal ~~2019~~2020 compared to the prior year was primarily due to ~~the timing of expenditures related~~a reduction in incentive-based compensation, and to ~~ongoing new product development projects.~~a lesser extent a reduction in project spending and headcount. The Company remains committed to investing in new product development ~~in connection with our focus on increasing new product~~to increase sales within our IDS and WPS businesses. Investments in new printers and materials continue to be the primary focus of R&D ~~expenditures.~~expenditures, along with investment in products specifically designed for the fight against COVID-19.

~~Selling, general and administrative ("~~SG~~&A")~~&A expenses include selling and administrative costs directly attributed to the IDS and WPS segments, as well as certain other corporate administrative expenses including finance, information technology, human resources, and other administrative expenses. SG&A expenses decreased ~~4.9%~~9.4% to $336.1 million in fiscal 2020 compared to $371.1 million in fiscal ~~2019 compared to $390.3 million in fiscal 2018. Additionally, SG&A expenses in fiscal 2018 include a gain of $4.7 million on the sale of Runelandhs.~~2019. SG&A expense as a percentage of net sales was 31.1% in fiscal 2020 compared to 32.0% in fiscal ~~2019 compared to 33.3% in fiscal 2018.~~2019. The decrease in both SG&A expenses and SG&A expenses as a percentage of net sales from the prior year was due to ~~the Company's~~ ongoing efficiency gains and continued efforts to reduce selling, general and administrative costs, reduced incentive-based compensation, and a decline in headcount. Increased cost associated with the ~~impact~~COVID-19 pandemic during the second half of ~~foreign currency translation.~~the fiscal year, including employee severance and other related costs, were effectively offset by reduced incentive-based compensation.

Table o f Contents

Impairment charges of $13,821 were recognized in fiscal 2020 due to a decline in sales in certain businesses primarily in the WPS segment. Refer to Note 3, "Other Intangible and Long-Lived Assets" for further information regarding impairment charges.

OPERATING INCOME TO NET INCOME


(Dollars in thousands)	2020		% Sales		2019		% Sales		2018		% Sales
Operating income	$	138,023	12.8	%	$	162,428	14.0	%	$	152,696	13.0	%
Other income (expense):
Investment and other income	5,079		0.5	%	5,046		0.4	%	2,487		0.2	%
Interest expense	(2,166)		(0.2)	%	(2,830)		(0.2)	%	(3,168)		(0.3)	%
Income before income taxes and losses of unconsolidated affiliate	140,936		13.0	%	164,644		14.2	%	152,015		13.0	%
Income tax expense	28,321		2.6	%	33,386		2.9	%	60,955		5.2	%
Income before losses of unconsolidated affiliate	112,615		10.4	%	131,258		11.3	%	91,060		7.8	%
Equity in losses of unconsolidated affiliate	(246)		—	%	—		—	%	—		—	%
Net income	$	112,369	10.4	%	$	131,258	11.3	%	$	91,060	7.8	%

(Dollars in thousands) 2019 % Sales 2018 % Sales 2017 % Sales
Operating income $ 162,428
14.0 % $ 152,696
13.0 % $ 131,015
11.8 %
Other income and (expense):
Investment and other income 5,046
0.4 % 2,487
0.2 % 1,121
0.1 %
Interest expense (2,830 ) (0.2 )% (3,168 ) (0.3 )% (5,504 ) (0.5 )%
Income before income taxes 164,644
14.2 % 152,015
13.0 % 126,632
11.4 %
Income tax expense 33,386
2.9 % 60,955
5.2 % 30,987
2.8 %
Net income $ 131,258
11.3 % $ 91,060
7.8 % $ 95,645
8.6 %

Investment and Other Income

Investment and other income was $5.1 million in fiscal 2020 compared to $5.0 million in fiscal ~~2019 compared to $2.5 million~~2019. Reduced interest income in fiscal ~~2018. The increase in investment and other income in 2019~~2020 was ~~primarily due to an increase in interest income due to the Company's increase in cash and cash equivalents during fiscal 2019 and~~effectively offset by an increase in the market value of securities held in deferred compensation ~~plans.~~plans compared to fiscal 2019.

Interest Expense

Interest expense decreased to $2.2 million in fiscal 2020 compared to $2.8 million in fiscal ~~2019 compared to $3.2 million in fiscal 2018.~~2019. The decrease in interest expense ~~in 2019 compared to 2018~~ was due to the repayment of the Company's ~~declining~~remaining principal balance under its ~~outstanding~~private placement debt ~~agreements.~~agreement during the quarter ended July 31, 2020.

Income Tax Expense

The Company's effective income tax rate was 20.1% in fiscal 2020. The effective income tax rate was below the applicable U.S. statutory tax rate of 21.0% primarily due to the favorable settlement of a domestic income tax audit and tax benefits from stock-based compensation, which were partially offset by an increase in the foreign income tax rate differential.

The Company's effective income tax rate was 20.3% in fiscal 2019. The effective income tax rate was below the applicable U.S. statutory tax rate of 21.0% primarily due to adjustments to the reserve for uncertain tax positions and R&D tax credits, partially offset by non-deductible executive compensation and the tax rate differential on foreign income.

Equity in Losses of Unconsolidated Affiliate

~~Table~~Equity in losses of ~~Contents~~

~~The Company's effective income tax rate was 40.1%~~unconsolidated affiliate of $0.2 million in fiscal 2018. The effective income tax rate was significantly impacted by the U.S. Tax Reform Act enacted in fiscal 2018, which resulted in total incremental tax expense of $21.1 million during fiscal 2018. This incremental tax expense consisted of $1.0 million related to the recording of a deferred tax liability for future withholdings and income taxes on the distribution of foreign income, an income tax charge of $3.3 million related to the deemed repatriation of the historical income of foreign subsidiaries, and the impact of the Tax Reform Act on the revaluation of deferred tax assets and liabilities as well as the impact on2020 represented the Company's ~~fiscal 2018 income from~~equity interest in React Mobile, Inc., an employee safety software and hardware company based in the ~~reduced tax rate was a net additional income tax expense of $16.8 million.~~

The Company’s effective income tax rate was 24.5% in fiscal 2017. The effective income tax rate was reduced from the applicable U.S. statutory tax rate of 35.0% due to the generation of foreign tax credits from cash repatriations that occurred during the year and geographic profit mix, partially offset by adjustments to the reserve for uncertain tax positions.United States.

Business Segment Operating Results

The Company ~~is organized and managed~~evaluates short-term segment performance based on ~~a global basis within two reportable segments: ID Solutions and Workplace Safety. The Company's internal measure of~~ segment profit and loss reported to the chief operating decision maker for purposes of allocating resources to the segments and assessing performance includes certain administrative costs, such as the cost of finance, information technology, human resources, and certain other administrative costs. However,customer sales. Impairment charges, interest expense, investment and other income, income tax expense, equity in losses of unconsolidated affiliate, and certain corporate administrative expenses are excluded when evaluating segment performance.

Table o f Contents

Following is a summary of segment information for the fiscal years ended July 31:


	2019		2018		2017			2020		2019		2018
SALES GROWTH INFORMATION							SALES GROWTH INFORMATION
ID Solutions							ID Solutions
Organic	4.1	%	3.4	%	1.6	%	Organic	(8.0)	%	4.1	%	3.4	%
Currency	(2.1	)%	2.3	%	(1.0	)%	Currency	(1.1)	%	(2.1)	%	2.3	%
Total	2.0	%	5.7	%	0.6	%	Total	(9.1)	%	2.0	%	5.7	%
Workplace Safety							Workplace Safety
Organic	(0.7	)%	0.7	%	(2.0	)%	Organic	2.3	%	(0.7)	%	0.7	%
Currency	(3.7	)%	4.6	%	(1.7	)%	Currency	(2.6)	%	(3.7)	%	4.6	%
Divestitures	(4.8	)%	(0.6	)%	—	%	Divestitures	—	%	(4.8)	%	(0.6)	%
Total	(9.2	)%	4.7	%	(3.7	)%	Total	(0.3)	%	(9.2)	%	4.7	%
Total Company							Total Company
Organic	2.8	%	2.6	%	0.5	%	Organic	(5.4)	%	2.8	%	2.6	%
Currency	(2.6	)%	3.0	%	(1.2	)%	Currency	(1.4)	%	(2.6)	%	3.0	%
Divestitures	(1.3	)%	(0.2	)%	—	%	Divestitures	—	%	(1.3)	%	(0.2)	%
Total	(1.1	)%	5.4	%	(0.7	)%	Total	(6.8)	%	(1.1)	%	5.4	%
SEGMENT PROFIT AS A PERCENT OF NET SALES							SEGMENT PROFIT AS A PERCENT OF NET SALES
ID Solutions	19.1	%	16.9	%	16.3	%	ID Solutions	19.2	%	19.1	%	16.9	%
Workplace Safety	7.7	%	9.7	%	8.2	%	Workplace Safety	7.1	%	7.7	%	9.7	%
Total	16.2	%	14.9	%	14.0	%	Total	15.9	%	16.2	%	14.9	%

Years Ended July 31,
2019 2018 2017
Total segment profit $ 187,978
$ 175,123
$ 156,126
Unallocated costs:
Administrative costs 25,550
27,093
25,111
Gain on sale of business⁽¹⁾
—
(4,666 ) —
Investment and other income (5,046 ) (2,487 ) (1,121 )
Interest expense 2,830
3,168
5,504
Income before income taxes $ 164,644
$ 152,015
$ 126,632

(1) Gain on sale of business relates to the WPS segment during the year ended July 31, 2018.

Table ofo f Contents

Income tax expense consists of the following:


	Years Ended July 31,
	2020		2019		2018
Current income tax expense:
United States	$	3,031	$	2,232	$	2,830
Other Nations	25,133		22,445		26,593
States (U.S.)	1,160		913		910
	$	29,324	$	25,590	$	30,333
Deferred income tax expense (benefit):
United States	$	1,072	$	8,451	$	30,267
Other Nations	(2,065)		(667)		(1,462)
States (U.S.)	(10)		12		1,817
	$	(1,003)	$	7,796	$	30,622
Total income tax expense	$	28,321	$	33,386	$	60,955

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted. Among the significant changes to the U.S. Internal Revenue Code, the Tax Reform Act reduced the U.S. federal corporate income tax rate from 35.0% to 21.0%, imposed a one-time tax on deemed repatriated income of foreign subsidiaries, eliminated the domestic manufacturing deduction and moved to a partial territorial system by providing a 100% dividend received deduction on certain qualified dividends from foreign subsidiaries.

The tax effects of temporary differences are as follows as of July 31, 2020 and 2019:


	July 31, 2020
	Assets		Liabilities		Total
Inventories	$	4,385	$	(58)	$	4,327
Prepaid catalog costs	0		(15)		(15)
Employee compensation and benefits	3,339		(72)		3,267
Accounts receivable	1,518		0		1,518
Fixed assets	3,663		(7,285)		(3,622)
Intangible assets	1,026		(31,488)		(30,462)
Deferred and equity-based compensation	7,851		0		7,851
Postretirement benefits	3,002		(31)		2,971
Tax credit and net operating loss carry-forwards	56,447		0		56,447
Valuation allowances	(58,809)		0		(58,809)
Other, net	11,786		(4,700)		7,086
Total	$	34,208	$	(43,649)	$	(9,441)

Table o f Contents

Revenues*
Years Ended July 31,

Long-Lived Assets**
As of July 31,
2019 2018 2017 2019 2018 2017
Geographic information:
United States $ 674,924
$ 663,935
$ 651,294
$ 365,205
$ 366,638
$ 367,418
Other 546,923
573,652
521,791
191,953
193,710
221,458
Eliminations (61,202 ) (63,736 ) (59,769 ) —
—
—
Consolidated total $ 1,160,645
$ 1,173,851
$ 1,113,316
$ 557,158
$ 560,348
$ 588,876

* Revenues are attributed based on country of origin.
** Long-lived assets consist of property, plant and equipment, other intangible assets and goodwill.


	July 31, 2019
	Assets		Liabilities		Total
Inventories	$	3,856	$	(1)	$	3,855
Prepaid catalog costs	0		(631)		(631)
Employee compensation and benefits	7,021		(89)		6,932
Accounts receivable	943		(233)		710
Fixed assets	3,125		(6,869)		(3,744)
Intangible assets	1,432		(31,415)		(29,983)
Deferred and equity-based compensation	7,352		0		7,352
Postretirement benefits	2,659		(71)		2,588
Tax credit and net operating loss carry-forwards	62,966		0		62,966
Valuation allowances	(60,073)		0		(60,073)
Other, net	7,406		(7,961)		(555)
Total	$	36,687	$	(47,270)	$	(10,583)

~~10.~~

Tax credit carry-forwards as of July 31, 2020 consist of the following:

•Foreign net operating loss carry-forwards of $96,104, of which $86,063 have no expiration date and the remainder of which expire within the next 17 years.

•State net operating loss carry-forwards of $29,109, which expire from 2025 to 2040.

•Foreign tax credit carry-forwards of $24,633, which expire from 2021 to 2029.

•State R&D credit carry-forwards of $12,714, which expire from 2021 to 2035.

Rate Reconciliation

A reconciliation of the income tax rate computed by applying the statutory U.S. federal income tax rate to income before income taxes and losses of unconsolidated affiliate to the total income tax expense is as follows:


	Years Ended July 31,
	2020		2019		2018
Tax at statutory rate	21.0	%	21.0	%	26.9	%
State income taxes, net of federal tax benefit	1.0	%	0.3	%	1.6	%
International rate differential⁽¹⁾	5.1	%	2.2	%	(1.1)	%
Rate variances arising from foreign subsidiary distributions	0.2	%	(0.4)	%	0.8	%
Foreign tax credit carryforward valuation allowance⁽²⁾	(1.4)	%	1.8	%	14.1	%
Divestiture of business⁽³⁾	0	%	0	%	(0.8)	%
Adjustments to tax accruals and reserves⁽⁴⁾	(2.0)	%	(3.6)	%	2.2	%
Non-deductible executive compensation⁽⁵⁾	0.5	%	2.3	%	0.5	%
Research and development tax credits and domestic manufacturer’s deduction	(2.0)	%	(1.6)	%	(2.0)	%
Deferred tax and other adjustments, net	(2.3)	%	(1.7)	%	(2.1)	%
Income tax rate	20.1	%	20.3	%	40.1	%

(1)Represents the foreign income tax rate differential when compared to the U.S. statutory income tax rate for the years ended July 31, 2020, 2019, and 2018.

(2)The year ended July 31, 2018, includes the establishment of a valuation allowance against foreign tax credit carryforwards as a result of the Tax Reform Act.

(3)The year ended July 31, 2018, includes the divestiture of the Company's Runelandhs business based in Sweden. Refer to Note 15, "Divestiture" for additional information.

(4)The years ended July 31, 2020 and 2019, include reductions of uncertain tax positions resulting from the closure of audits and lapses in statues of limitations, while the year ended July 31, 2018, includes increases in uncertain tax positions.

Table o f Contents

(5)The years ended July 31, 2020, 2019 and 2018, include non-deductible compensation such as salaries, bonuses, and other equity compensation of the Company's executives (as defined in Internal Revenue Service Code Section 162(m)).

Uncertain Tax Positions

The Company follows the guidance in ASC 740, "Income Taxes" regarding uncertain tax positions. The guidance requires application of a more-likely-than-not threshold to the recognition and de-recognition of income tax positions. A reconciliation of unrecognized tax benefits (excluding interest and penalties) is as follows:


Balance at July 31, 2017	$	18,362
Additions based on tax positions related to the current year	2,467
Additions for tax positions of prior years	1,586
Reductions for tax positions of prior years	(23)
Lapse of statute of limitations	(489)
Settlements with tax authorities	(1,277)
Cumulative translation adjustments and other	(196)
Balance as of July 31, 2018	$	20,430
Additions based on tax positions related to the current year	2,518
Additions for tax positions of prior years	612
Reductions for tax positions of prior years	(378)
Lapse of statute of limitations	(8,140)
Cumulative translation adjustments and other	(201)
Balance as of July 31, 2019	$	14,841
Additions based on tax positions related to the current year	2,798
Additions for tax positions of prior years	1,295
Reductions for tax positions of prior years	(5,087)
Lapse of statute of limitations	(117)

Cumulative translation adjustments and other	(108)
Balance as of July 31, 2020	$	13,622

Of the $13,622 of unrecognized tax benefits, if recognized, $10,557 would affect the Company's income tax rate. The Company has classified $8,931 and $10,218, excluding interest and penalties, of the reserve for uncertain tax positions in "Other liabilities" on the Consolidated Balance Sheets as of July 31, 2020 and 2019, respectively. The Company has classified $4,691 and $4,623, excluding interest and penalties, as a reduction of long-term deferred income tax assets on the accompanying Consolidated Balance Sheets as of July 31, 2020 and 2019, respectively.

Interest expense is recognized on the amount of potentially underpaid taxes associated with the Company's tax positions, beginning in the first period in which interest starts accruing under the respective tax law and continuing until the tax positions are settled. The Company recognized a decrease of $372, an decrease of $1,013, and an increase of $556 in interest expense during the years ended July 31, 2020, 2019, and 2018, respectively. There was a $96 decrease to the reserve for uncertain tax positions for penalties during the year ended July 31, 2020, a decrease of $2,357 during the year ended July 31, 2019, and an increase of $83 during the year end July 31, 2018. These amounts are net of reversals due to reductions for tax positions of prior years, statute of limitations, and settlements. At July 31, 2020 and 2019, the Company had $1,354 and $1,740, respectively, accrued for interest on unrecognized tax benefits. Penalties are accrued if the tax position does not meet the minimum statutory threshold to avoid the payment of a penalty. At July 31, 2020 and 2019, the Company had $658 and $663, respectively, accrued for penalties on unrecognized tax benefits. Interest expense and penalties are recorded as a component of "Income tax expense" in the Consolidated Statements of Income.

The Company estimates that it is reasonably possible that the unrecognized tax benefits may be reduced by $1,437 within 12 months as a result of the resolution of worldwide tax matters, tax audit settlements, amended tax filings, and/or the expiration of statute of limitations, all of which, if recognized, would result in an income tax benefit in the Consolidated Statements of Income.

Table o f Contents

During the year ended July 31, 2020, the Company recognized $504 of tax benefits (including interest and penalties) associated with the lapse of statutes of limitations. The Company also recognized $5,133 of tax benefits (including interest and penalties) associated with the reduction of tax positions for prior years due to the closure of certain tax audits.

The Company and its subsidiaries file income tax returns in the U.S., various states, and foreign jurisdictions. The following table summarizes the open tax years for the Company's major jurisdictions:


Jurisdiction						Open Tax Years
United States — Federal						F’18 — F’20

12. Net Income per Common Share

Basic net income per common share is computed by dividing net income (after deducting the applicable preferential Class A Common Stock dividends) by the weighted average Common Shares ~~outstanding of 52,596 for fiscal 2019, 51,677 for fiscal 2018, and 51,056 for fiscal 2017.~~outstanding. The Company utilizes the two-class method to calculate income per share.

Reconciliations of the numerator and denominator of the basic and diluted per share computations for the Company’s Class A and Class B common stock are summarized as follows:


	Years ended July 31,
	2020		2019		2018
Numerator (in thousands):
Net Income (Numerator for basic and diluted income per Class A Nonvoting Common Share)	$	112,369	$	131,258	$	91,060
Less:
Preferential dividends	(828)		(815)		(799)
Preferential dividends on dilutive stock options	(10)		(13)		(14)
Numerator for basic and diluted income per Class B Voting Common Share	$	111,531	$	130,430	$	90,247
Denominator (in thousands):
Denominator for basic income per share for both Class A and Class B	52,763		52,596		51,677
Plus: Effect of dilutive equity awards	468		727		847
Denominator for diluted income per share for both Class A and Class B	53,231		53,323		52,524
Net income per Class A Nonvoting Common Share:
Basic	$	2.13	$	2.50	$	1.76
Diluted	$	2.11	$	2.46	$	1.73
Net income per Class B Voting Common Share:
Basic	$	2.11	$	2.48	$	1.75
Diluted	$	2.10	$	2.45	$	1.72

Years ended July 31,
2019 2018 2017
Numerator (in thousands):
Income (Numerator for basic and diluted income per Class A Nonvoting Common Share) $ 131,258
$ 91,060
$ 95,645
Less:
Preferential dividends (815 ) (799 ) (788 )
Preferential dividends on dilutive stock options (13 ) (14 ) (14 )
Numerator for basic and diluted income per Class B Voting Common Share $ 130,430
$ 90,247
$ 94,843
Denominator (in thousands):
Denominator for basic income per share for both Class A and Class B 52,596
51,677
51,056
Plus: Effect of dilutive equity awards 727
847
900
Denominator for diluted income per share for both Class A and Class B 53,323
52,524
51,956
Net income per Class A Nonvoting Common Share:
Basic $ 2.50
$ 1.76
$ 1.87
Diluted $ 2.46
$ 1.73
$ 1.84
Net income per Class B Voting Common Share:
Basic $ 2.48
$ 1.75
$ 1.86
Diluted $ 2.45
$ 1.72
$ 1.83

~~Options~~Potentially dilutive securities attributable to ~~purchase 372,255, 751,200,~~outstanding stock options and ~~669,036 shares~~restricted stock units were excluded from the calculation of diluted earnings per share where the combined exercise price and average unamortized fair value were greater than the average market price of Brady's Class A Nonvoting Common Stock because the effect would have been anti-dilutive. The amount of anti-dilutive shares were 387,382, 372,255, and 751,200 for the fiscal years ended July 31, 2020, 2019, and 2018, ~~and 2017, respectively, were not included in the computation of diluted net income per share as the impact of the inclusion of the options would have been anti-dilutive.~~respectively.

~~Table of Contents~~

~~11. Commitments and Contingencies~~

The Company has entered into various non-cancellable operating lease agreements. Rental expense charged to operating expenses on a straight-line basis was $19,984, $15,938, and $17,495 for the years ended July 31, 2019, 2018, and 2017, respectively. Future minimum lease payments required under such leases in effect at July 31, 2019, were as follows:

Years ending July 31,
2020 $ 18,450
2021 16,132
2022 13,439
2023 10,065
2024 5,656
Thereafter 3,502
$ 67,244

In the normal course of business, the Company is named as a defendant in various lawsuits in which claims are asserted against the Company. In the opinion of management, the liabilities, if any, which may ultimately result from lawsuits are not expected to have a material effect on the consolidated financial statements of the Company.

~~12.~~13. Fair Value Measurements

~~The Company follows the guidance in ASC 820, "Fair Value Measurements and Disclosures" as it relates to its financial and non-financial assets and liabilities. The~~In accordance with fair value accounting guidance, ~~applies to other accounting pronouncements that require or permit fair value measurements, defines~~the Company determines fair value based ~~upon an exit~~on the exchange price ~~model, establishes a framework for measuring fair value, and expands the applicable disclosure requirements. The accounting guidance indicates, among other things,~~ that ~~a fair value measurement assumes that a transaction~~would be received to sell an asset or paid to transfer a liability ~~occurs~~ in ~~the principal~~an orderly transaction between market ~~for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.~~

participants. The ~~accounting guidance on fair value measurements establishes a fair market value hierarchy for the pricing~~ inputs used to measure fair ~~market value. The Company’s assets and liabilities measured at fair market~~ value are classified ~~in one of~~into the following ~~categories:~~hierarchy:

Level 1 — ~~Assets or liabilities for which fair value is based on unadjusted~~Unadjusted quoted prices in active markets for identical instruments that are accessible as of the ~~measurement~~reporting date.

Level 2 — ~~Assets or liabilities for which fair value is based on other~~Other significant pricing inputs that are either directly or indirectly observable.

Level 3 — ~~Assets or liabilities for which fair value is based on significant~~Significant unobservable pricing inputs, ~~to the extent little or no market data is available,~~ which result in the use of management's own assumptions.

Table ofo f Contents

The following table ~~sets forth by level within~~summarizes the ~~fair value hierarchy, the Company’s~~Company's financial assets and liabilities that were accounted for at fair value on a recurring basis at July 31, ~~2019~~2020 and July 31, ~~2018,~~2019, according to the valuation techniques the Company used to determine their fair values.


	July 31, 2020		July 31, 2019		Fair Value Hierarchy
Assets:
Trading securities	$	18,606	$	15,744	Level 1
Foreign exchange contracts	594		474		Level 2
Liabilities:
Foreign exchange contracts	$	777	$	5	Level 2

Inputs
Considered As

Level 1 Level 2 Fair Values Balance Sheet Classifications
July 31, 2018
Trading securities $ 14,383
$ —
$ 14,383
Other assets
Foreign exchange contracts —
1,077
1,077
Prepaid expenses and other current assets
Total Assets $ 14,383
$ 1,077
$ 15,460

Foreign exchange contracts $ —
$ 3
$ 3
Other current liabilities
Total Liabilities $ —
$ 3
$ 3

July 31, 2019
Trading securities $ 15,744
$ —
$ 15,744
Other assets
Foreign exchange contracts —
474
474
Prepaid expenses and other current assets
Total Assets $ 15,744
$ 474
$ 16,218

Foreign exchange contracts $ —
$ 5
$ 5
Other current liabilities
Total Liabilities $ —
$ 5
$ 5

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Trading ~~securities:~~securities: The Company’s deferred compensation investments consist of investments in mutual ~~funds.~~funds, which are included in "Other assets" on the accompanying Consolidated Balance Sheets. These investments were classified as Level 1 as the shares of these investments trade with sufficient frequency and volume to enable ~~the Company~~us to obtain pricing information on an ongoing basis.

Foreign exchange ~~contracts:~~contracts: The Company’s foreign exchange contracts were classified as Level 2 as the fair value was based on the present value of the future cash flows using external models that use observable inputs, such as interest rates, yield curves and foreign exchange rates. See Note ~~13,~~14, “Derivatives and Hedging ~~Activities”~~Activities,” for additional information.

There have been no transfers of assets or liabilities between the fair value hierarchy levels, outlined above, during the fiscal years ended July 31, ~~2019~~2020 and July 31, ~~2018.~~2019.

The Company’s financial instruments, other than those presented in the disclosures above, include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities and short-term and long-term debt. The fair values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximated carrying values because of the short-term nature of these instruments. See Note 6 for information regarding the fair value of the Company's short-term and long-term debt.

~~13.~~

14. Derivatives and Hedging Activities

The Company utilizes forward foreign exchange currency contracts to reduce the exchange rate risk of specific foreign currency denominated transactions. These contracts typically require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date, with maturities of less than 18 months, which qualify as cash flow hedges or net investment hedges under the accounting guidance for derivative instruments and hedging activities. The primary objective of the Company’s foreign currency exchange risk management program is to minimize the impact of currency movements due to transactions in other than the respective subsidiaries’ functional currency and to minimize the impact of currency movements on the Company’s net investment denominated in a currency other than the U.S. dollar. To achieve this objective, the Company hedges a portion of known exposures using forward foreign exchange contracts. ~~As of July 31, 2019 and 2018, the notional amount of outstanding forward~~

Main foreign ~~exchange contracts was $29,389 and $32,667, respectively.~~

~~The Company hedges a portion of known exposures using forward foreign exchange contracts. Main~~currency exposures are related to transactions denominated in the British Pound, Euro, Canadian dollar, Australian dollar, Mexican Peso, Chinese Yuan, Malaysian Ringgit and Singapore dollar. Generally, these risk management transactions will involve the use of foreign currency derivatives to minimize the impact of currency movements on non-functional currency transactions.

The U.S. dollar equivalent notional amounts of outstanding forward exchange contracts were as follows:

~~Table of Contents~~


	July 31, 2020		July 31, 2019
Designated as cash flow hedges	$	24,600	$	26,013
Non-designated hedges	3,107		3,376
Total foreign exchange contracts	$	27,707	$	29,389

Cash Flow Hedges

The Company has designated a portion of its forward foreign exchange contracts as cash flow hedges and recorded these contracts at fair value inon the accompanying Consolidated Balance Sheets. For these instruments, ~~the effective portion of~~ the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”) ~~and in the cash flow hedge section of the Consolidated Statements of Comprehensive Income,~~ and reclassified into income in the same period or periods during which the hedged transaction affects income. At July 31, 2020 and 2019, unrealized losses of $385 and ~~2018, unrealized~~ gains of $805 ~~and $1,017~~ have been included in OCI, respectively. These balances are expected to be reclassified from OCI to income during the next twelve months when the hedged transactions impact income. For the years ended July 31, 2019, 2018, and 2017, the Company reclassified gains of $1,048, losses of $552, and losses of $486 from OCI into cost of goods sold,AOCI, respectively.

~~As of July 31, 2019 and 2018, the notional amount of outstanding forward foreign exchange contracts designated as cash flow hedges was $26,013 and $27,150, respectively.~~

Table o f Contents

Net Investment Hedges

The Company has ~~also~~ designated certain third party-foreign currency denominated debt instruments as net investment hedges. On May 13, 2010, the Company completed the private placement of ~~€75,000~~€75.0 million aggregate principal amount of senior unsecured notes consisting of ~~€30,000~~€30.0 million aggregate principal amount of 3.71% Series 2010-A Senior Notes, which were repaid during fiscal 2017, and ~~€45,000~~€45.0 million aggregate principal amount of 4.24% Series 2010-A Senior Notes, ~~due May 13,~~which were repaid during fiscal 2020. This Euro-denominated debt obligation was designated as a net investment hedge to selectively hedge portions of the Company's net investment in European ~~foreign~~ operations. The Company’s foreign denominated debt obligations are valued under a market approach using publicized spot prices, and the net gains or losses attributable to the changes in spot prices are recorded as cumulative translation within AOCI and are included in the foreign currency translation adjustments section of the Consolidated ~~Statements~~Statement of Comprehensive Income. As of July 31, ~~2019~~2020 and ~~2018,~~2019, the cumulative balance recognized in accumulated other comprehensive income were gains of ~~$12,440~~$13,957 and ~~$9,961,~~$12,440, respectively, on the Euro-denominated debt obligations.

The ~~changes recognized in other comprehensive income during~~following table summarizes the ~~years ended July 31, 2019, 2018 and 2017, were~~amount of pre-tax gains ~~of $2,480, $612,~~ and losses ~~of $1,792, respectively, on the Euro-denominated debt obligations.~~related to derivatives designated as hedging instruments:


	July 31, 2020		July 31, 2019		July 31, 2018
(Losses) gains recognized in OCI:
Foreign exchange contracts (cash flow hedges)	$	(576)	$	837	$	966
Foreign currency denominated debt (net investment hedges)	1,517		2,480		612
Gains reclassified from OCI into cost of goods sold:
Forward exchange contracts (cash flow hedges)	614		1,048		(551)

Non-Designated Hedges

During the fiscal years ended July 31, 2020, 2019, ~~2018,~~ and ~~2017,~~2018, the Company recognized gains of $2, losses of $52, and gains of $24, ~~and losses of $2,508,~~ respectively, in “Investment and other income” in the ~~accompanying~~ Consolidated Statements of Income related to non-designated hedges.

Fair values of derivative and hedging instruments in the accompanying Consolidated Balance Sheets were as follows:


	July 31, 2020						July 31, 2019
	Prepaid expenses and other current assets		Other current liabilities		Prepaid expenses and other current assets		Other current liabilities		Current maturities on long-term obligations
Derivatives designated as hedging instruments:
Foreign exchange contracts (cash flow hedges)	$	588	$	761	$	472	$	0	$	0
Foreign currency denominated debt (net investment hedges)	0		0		0		0		50,189
Derivatives not designated as hedging instruments:
Foreign exchange contracts	6		16		2		5		0
Total derivative instruments	$	594	$	777	$	474	$	5	$	50,189

Name and Principal Position
Fiscal
Year

Salary
($)

Bonus
($)

Time-based and Performance-based RSUs
($)(1)

Option
Awards
($)(2)

Non-Equity
Incentive Plan
Compensation
($)(3)

All Other
Compensation
($)(4)

Total
($)
J.M. Nauman, President, CEO & Director 2019 $ 794,077
$ —
$ 2,039,917
$ 869,998
$ 1,290,375
$ 246,562
$ 5,240,929
2018 759,616
—
1,666,728
833,340
1,712,933
202,808
5,175,425
2017 721,538
—
1,666,702
833,338
1,259,987
143,598
4,625,163
A.J. Pearce, CFO & Treasurer 2019 $ 387,810
$ —
$ 687,810
$ 293,336
$ 327,699
$ 96,023
$ 1,792,678
2018 360,923
—
586,707
293,338
488,329
97,767
1,827,064
2017 332,308
—
586,712
293,337
417,811
74,651
1,704,819
L.T. Bolognini, Senior VP, General Counsel and Secretary 2019 $ 346,991
$ —
$ 254,066
$ 108,338
$ 338,316
$ 95,724
$ 1,143,435
2018 340,432
—
216,675
108,335
368,484
90,113
1,124,039
2017 337,062
—
216,694
108,334
282,525
77,981
1,022,596
H.R. Nelligan, Senior VP, Human Resources 2019 $ 313,815
$ —
$ 634,480
$ 100,000
$ 203,980
$ 71,199
$ 1,323,474
2018 306,729
—
200,033
100,001
138,335
84,631
829,729
2017 301,846
—
200,038
100,006
263,550
68,666
934,106
R.R. Shaller, Senior VP & President - Identification Solutions 2019 $ 371,991
$ —
$ 508,088
$ 216,675
$ 337,582
$ 114,333
$ 1,548,669
2018 355,548
—
366,718
183,341
539,722
113,141
1,558,470
2017 344,312
—
366,701
183,338
425,140
125,664
1,445,155

~~(1)~~

Represents the grant date fair value computed in accordance with accounting guidance for equity grants made or modified in the applicable year for time-based RSUs and performance-based RSUs. The grant date fair value is calculated based on the number of shares of Class A Common Stock underlying the time-based RSUs and fiscal years 2017 and 2018 performance-based RSUs (at target), times the average of the high and low stock price of Class A Common Stock on the date of grant. The grant date fair value for the fiscal year 2019 performance-based RSUs is calculated based on the number of shares of Class A Common Stock underlying the performance-based RSUs (at target), times a fair value per unit derived from a third-party valuation using a Monte Carlo simulation due to the presence of a market condition in the award. The actual value of a RSU will depend on the market value of the Class A Common Stock on the date the stock is sold. The table reflects the grant date fair value at target level of performance-based RSUs (100%).

~~(2)~~

Represents the grant date fair value computed in accordance with accounting guidance for equity grants made or modified in the applicable year for time-based stock options. 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 contained in Item 8 of this Form 10-K, for the fiscal year ended July 31, 2019. 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 Class A Common Stock over the exercise price on the date the option is exercised.


~~(3)~~	~~Represents annual cash incentive earned during the listed fiscal years, which was paid during the next fiscal year.~~

Table ofo f Contents

target), times a fair value per unit derived from a third-party valuation using a Monte Carlo simulation due to the presence of a market condition in the award. The actual value of a RSU will depend on the market value of the Class A Common Stock on the date the stock is sold. The table reflects the grant date fair value at target level of performance-based RSUs (100%).

~~(4)~~

The amounts in this column include: matching contributions to the Company’s Matched 401(k) Plan, Funded Retirement Plan and Restoration Plan, the costs of group term life insurance for each NEO, car allowance, and associated expenses, the cost of long-term care insurance, the cost of personal liability insurance, the cost of disability insurance and other perquisites. The perquisites may include relocation assistance and annual allowances for financial and tax planning. Refer to the table below.

(4)Represents the grant date fair value computed in accordance with accounting guidance for equity grants made or modified in the applicable year for time-based stock options. 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 contained in Item 8 of this Form 10-K, for the fiscal year ended July 31, 2020. 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 Class A Common Stock over the exercise price on the date the option is exercised.

(5)Represents annual cash incentive earned during the listed fiscal years, which was paid during the next fiscal year.

(6)The amounts in this column for Messrs. Nauman, Pearce, Shaller, Bolognini, Felmer, and Ms. Nelligan include: matching contributions to the Company’s Matched 401(k) Plan, Funded Retirement Plan and Restoration Plan, the cost of group term life insurance, car allowance, the cost of long-term care insurance, the cost of disability insurance and other perquisites. The amounts in this column for Mr. Deman include: contributions to the Company's French pension plan, the cost of group term life insurance, the cost of long-term care insurance, use of a company-leased vehicle and associated expenses. The perquisites may include relocation assistance, annual allowances for financial and tax planning, and the cost of personal liability insurance. Refer to the table below.


Name	Fiscal Year		Retirement Plan Contributions ($)			Company Car ($)			Group Term Life Insurance ($)			Long-term Care Insurance ($)			Long-term Disability Insurance ($)			Relocation ($)			Other ($)			Total All Other Compensation ($)
J.M. Nauman	2020		$	167,984		$	18,692		$	1,958		$	4,860		$	4,946		$	—		$	13,609		$	212,049
		2019			202,230			18,000			1,799			4,860			4,946			—			14,727			246,562
		2018			159,522			18,000			1,728			4,860			5,212			—			13,486			202,808
A.J. Pearce	2020		$	57,909		$	18,692		$	1,110		$	2,893		$	3,848		$	—		$	947		$	85,399
		2019			69,833			18,000			941			2,893			3,673			—			683			96,023
		2018			61,988			18,000			810			2,893			3,618			—			10,458			97,767
P. Deman	2020		$	33,197		$	9,375		$	22,285		$	378		$	—		$	—		$	1,275		$	66,510
H.R. Nelligan	2020		$	41,127		$	18,692		$	1,003		$	2,491		$	3,779		$	—		$	4,040		$	71,132
		2019			34,766			18,000			863			2,491			3,697			—			11,382			71,199
		2018			45,464			18,000			666			2,491			3,595			—			14,415			84,631
R.R. Shaller	2020		$	57,811		$	18,692		$	1,110		$	3,427		$	5,321		$	—		$	1,675		$	88,036
		2019			72,465			18,000			940			3,427			5,321			—			14,180			114,333
		2018			62,092			18,000			813			3,427			5,363			7,257			16,189			113,141
L.T. Bolognini	2020		$	54,864		$	13,154		$	817		$	2,959		$	4,061		$	—		$	9,915		$	85,770
		2019			54,983			18,000			897			3,946			5,325			—			12,573			95,724
		2018			49,748			18,000			747			3,946			5,343			—			12,329			90,113
T.J. Felmer	2020		$	24,776		$	8,308		$	308		$	1,557		$	1,526		$	—		$	202,505		$	238,980
		2019			86,510			18,000			768			3,737			3,690			—			12,618			125,323
		2018			31,044			18,000			847			3,737			3,387			—			12,340			69,355

Name
Fiscal
Year

Retirement
Plan
Contributions
($)

Company
Car
($)

Group
Term
Life
Insurance
($)

Long-term
Care
Insurance
($)

Long-term Disability Insurance
($)
Relocation ($)
Other
($)

Total
($)
J.M. Nauman 2019 $ 202,230
$ 18,000
$ 1,799
$ 4,860
$ 4,946
$ —
$ 14,727
$ 246,562
2018 159,522
18,000
1,728
4,860
5,212
—
13,486
202,808
2017 99,097
18,000
1,629
4,860
5,606
—
14,406
143,598
A.J. Pearce 2019 $ 69,833
$ 18,000
$ 941
$ 2,893
$ 3,673
$ —
$ 683
$ 96,023
2018 61,988
18,000
810
2,893
3,618
—
10,458
97,767
2017 36,517
18,000
783
2,893
3,775
—
12,683
74,651
L.T. Bolognini 2019 $ 54,983
$ 18,000
$ 897
$ 3,946
$ 5,325
$ —
$ 12,573
$ 95,724
2018 49,748
18,000
747
3,946
5,343
—
12,329
90,113
2017 36,646
18,000
779
3,946
5,557
—
13,053
77,981
H.R. Nelligan 2019 $ 34,766
$ 18,000
$ 863
$ 2,491
$ 3,697
$ —
$ 11,382
$ 71,199
2018 45,464
18,000
666
2,491
3,595
—
14,415
84,631
2017 31,324
18,000
699
2,491
3,760
—
12,392
68,666
R.R. Shaller 2019 $ 72,465
$ 18,000
$ 940
$ 3,427
$ 5,321
$ —
$ 14,180
$ 114,333
2018 62,092
18,000
813
3,427
5,363
7,257
16,189
113,141
2017 41,106
18,000
792
3,427
5,527
44,812
12,000
125,664

Table ofo f Contents

Grants of Plan-Based Awards for ~~2019~~2020

The following table summarizes grants of plan-based awards made during fiscal ~~2019~~2020 to the NEOs.


	Grant Date	Compensation Committee Approval Date	Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)								Estimated Future Payouts Under Equity Incentive Plan Awards (2)									All Other Stock Awards: Number of Shares of Stock or Units (#) (3)	All Other Option Awards: Number of Securities Underlying Options (#)	Exercise or Base Price of Stock or Option Awards ($) (4)	Grant Date Fair Value of Stock and Option Awards ($)
Name					Threshold ($)		Target ($)		Maximum ($)	Threshold (#)	Target (#)	Maximum (#)
J.M. Nauman			$	—	$	852,810	$	2,462,490
	8/1/2019	7/15/2019							4,824	19,294	38,588					$	75.00	$	1,447,050
	9/20/2019	7/15/2019										18,502				54.05		1,000,033
	9/20/2019	7/15/2019												92,936		54.05		1,000,001
A.J. Pearce			—		275,516		795,553
	8/1/2019	7/15/2019							1,415	5,660	11,320					75.00		424,500
	9/20/2019	7/15/2019										5,428				54.05		293,383
	9/20/2019	7/15/2019												27,262		54.05		293,342
P. Deman			—		135,577		391,477
	9/20/2019	7/15/2019										602				54.05		32,538
	9/20/2019	7/15/2019												3,122		54.05		32,501
	1/3/2020	11/20/2019										1,307	(5)			57.42		75,048
H.R. Nelligan			—		167,592		483,923
	8/1/2019	7/15/2019							483	1,930	3,860					75.00		144,750
	9/20/2019	7/15/2019										1,851				54.05		100,047
	9/20/2019	7/15/2019												9,294		54.05		100,004
R.R. Shaller			—		244,428		705,785
	8/1/2019	7/15/2019							1,045	4,181	8,362					75.00		313,575
	9/20/2019	7/15/2019										9,251	(5)			54.05		500,017
	9/20/2019	7/15/2019										4,009				54.05		216,686
	9/20/2019	7/15/2019												20,137		54.05		216,676
L.T. Bolognini			—		159,928		461,793
	8/1/2019	7/15/2019							483	1,930	3,860					75.00		156,825
	9/20/2019	7/15/2019										2,005				54.05		108,370
	9/20/2019	7/15/2019												10,069		54.05		108,344
T.J. Felmer			—		152,090		439,160
	8/1/2019	7/15/2019							724	2,895	5,790					75.00		217,125
	9/20/2019	7/15/2019										1,851				54.05		100,047
	10/15/2019	9/11/2019										1,658	(6)			36.85		28,862
	10/15/2019	9/11/2019										2,779	(6)			43.98		28,576
	10/15/2019	9/11/2019												7,098	(6)	36.85		64,568
	10/15/2019	9/11/2019												12,416	(6)	43.98		56,721

(1)At its May 2019 meeting, the Management Development and Compensation Committee approved the values of the annual cash incentive award under the Company's annual cash incentive plan. The structure of the plan is described in the Compensation Discussion and Analysis above and was set prior to the beginning of the fiscal year.

(2)This award represents performance-based restricted stock units awarded on August 1, 2019, as part of the annual fiscal 2020 equity grant. Payout opportunities will range from 0% to 200% of the target award. Target payout is set at 100% of award value, with threshold and maximum payouts set at 25% and 200% of target award value, respectively.

(3)The time-based RSU awards vest equally over three years.

(4)The exercise price or base price for awards granted on August 1, 2019, is based on a third-party valuation involving the use of a Monte Carlo simulation. The remaining awards' exercise price or base price is the average of the high and

Grant
Date

Compensation
Committee
Approval
Date

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (1)
Estimated Future Payouts Under Equity Incentive Plan Awards (2) All Other
Stock Awards:
Number of
Shares of Stock or Units
(#) (3) All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise
or Base
Price of
Stock
or
Option
Awards
($) (4)

Grant
Date Fair
Value
of
Stock and
Option
Awards
($)
Name Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#)
J.M. Nauman $ —
$ 794,077
$ 2,203,564

8/1/2018 7/13/2018 5,769
23,077
46,154
$ 50.70
$ 1,170,004
9/25/2018 7/13/2018 19,782
43.98
869,913
9/25/2018 7/13/2018 88,383
43.98
869,998
A.J. Pearce —
252,076
699,512

8/1/2018 7/13/2018 1,945
7,781
15,562
50.70
394,497
9/25/2018 7/13/2018 6,670
43.98
293,313
9/25/2018 7/13/2018 29,800
43.98
293,336
L.T. Bolognini —
208,195
577,740

8/1/2018 7/13/2018 719
2,874
5,748
50.70
145,712
9/25/2018 7/13/2018 2,464
43.98
108,354
9/25/2018 7/13/2018 11,006
43.98
108,338
H.R. Nelligan —
156,907
435,418

8/1/2018 7/13/2018 663
2,653
5,306
50.70
134,507
9/20/2018 9/20/2018 8,963
44.63
399,974
9/25/2018 7/13/2018 2,274
43.98
99,999
9/25/2018 7/13/2018 10,159
43.98
100,000
R.R. Shaller —
223,194
619,364

8/1/2018 7/13/2018 1,437
5,748
11,496
50.70
291,424
9/25/2018 7/13/2018 4,927
43.98
216,665
9/25/2018 7/13/2018 22,012
43.98
216,675


~~(1)~~	At its May 2018 meeting, the Management Development and Compensation Committee approved the values of the annual cash incentive award under the Company's annual cash incentive plan. The structure of the plan is described in the Compensation Discussion and Analysis above and was set prior to the beginning of the fiscal year.


~~(2)~~	This award represents performance-based restricted stock units awarded on August 1, 2018, as part of the annual fiscal 2019 equity grant. Payout opportunities will range from 0% to 200% of the target award. Target payout is set at 100% of award value, with threshold and maximum payouts set at 25% and 200% of target award value, respectively.


~~(3)~~	~~The time-based RSU awards vest equally over three years.~~


~~(4)~~	The exercise price or base price for awards granted August 1, 2018, is based on a third-party valuation involving the use of a Monte Carlo simulation. The remaining awards' exercise price or base price is the average of the high and low prices of the Company’s Class A Common Stock as reported by the New York Stock Exchange on the date of the grant.

Table ofo f Contents

low prices of the Company’s Class A Common Stock as reported by the New York Stock Exchange on the date of the grant.

(5)Time-based RSUs granted to Messrs. Deman and Shaller during fiscal 2020 for retention purposes vest in installments of 10%, 20%, 30%, and 40% on the first, second, third, and fourth anniversaries of the grant date.

(6)The written retirement agreement the Company entered into with Mr. Felmer on October 15, 2020 provided for the modification of vesting conditions for certain of Mr. Felmer's outstanding equity awards. Under the agreement, unvested stock options and restricted stock units granted on September 22, 2017 and September 25, 2018 would vest 100% and 50%, respectively, effective on the retirement date.

Table o f Contents

Outstanding Equity Awards at July 31, ~~2019~~2020


	Option Awards												Stock Awards
Name	Number of Securities Underlying Unexercised Options Exercisable (#)	Number of Securities Underlying Unexercised Options Unexercisable (#)		Option Exercise Price ($)		Option Expiration Date	Number of Units of Stock That Have Not Vested (#)		Market Value of Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units Or Other Rights That Have Not Vested ($)
J.M. Nauman	100,000	—		$	19.96	9/25/2025
	100,017	—		35.14		9/23/2026
	64,528	32,264	(1)	36.85		9/22/2027
	29,461	58,922	(2)	43.98		9/25/2028
	—	92,936	(3)	54.05		9/20/2029
							7,538	(4)	$	346,522
							13,188	(5)	606,252
							18,502	(6)	850,537
											25,162	(7)	$	1,156,697
											23,077	(8)	1,060,850
											19,294	(9)	886,945

A.J. Pearce	51,375	—		$	19.96	9/25/2025
	37,721	—		35.14		9/23/2026
	22,714	11,357	(1)	36.85		9/22/2027
	9,934	19,866	(2)	43.98		9/25/2028
	—	27,262	(3)	54.05		9/20/2029
							2,653	(4)	$	121,958
							4,446	(5)	204,383
							5,428	(6)	249,525
											8,857	(7)	$	407,156
											7,781	(8)	357,693
											5,660	(9)	260,190

P. Deman	1,473	—		$	35.14	9/23/2026
	1,508	1,508	(1)	36.85		9/22/2027
	1,150	2,299	(2)	43.98		9/25/2028
	—	3,122	(3)	54.05		9/20/2029
							294	(4)	$	13,515
							492	(5)	22,617
							602	(6)	27,674
							1,307	(10)	60,083

H.R. Nelligan	12,860	—		$	35.14	9/23/2026
	7,744	3,871	(1)	36.85		9/22/2027
	3,387	6,772	(2)	43.98		9/25/2028
	—	9,294	(3)	54.05		9/20/2029
							904	(4)	$	41,557
							7,170	(11)	329,605
							1,516	(5)	69,691
							1,851	(6)	85,090

Option Awards Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)

Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)

Option
Exercise
Price
($)

Option
Expiration Date

Number of
Units of Stock That Have Not Vested
(#)

Market
Value of Units of Stock That
Have Not Vested
($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested
(#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units Or Other Rights That Have Not Vested
($)
J.M. Nauman 180,839
—
$ 19.96
9/25/2025
64,297
35,720
(1) 35.14
9/23/2026
32,264
64,528
(2) 36.85
9/22/2027
—
88,383
(3) 43.98
9/25/2028
17,889
(4) $ 925,398

7,905
(5) 408,926

15,076
(6) 779,881

19,782
(7) 1,023,323

26,018
(8) $ 1,345,911
25,162
(9) 1,301,630
23,077
(10) 1,193,773

A.J. Pearce 9,000
—
$ 30.21
9/21/2022
4,523
—
31.07
9/20/2023
34,825
—
22.66
9/25/2024
51,375
—
19.96
9/25/2025
25,148
12,573
(1) 35.14
9/23/2026
11,357
22,714
(2) 36.85
9/22/2027

—
29,800
(3) 43.98
9/25/2028
2,782
(5) $ 143,913

5,307
(6) 274,531

6,670
(7) 345,039

9,159
(8) $ 473,795
8,857
(9) 458,173
7,781
(10) 402,511

L.T. Bolognini —
4,643
(1) $ 35.14
9/23/2026
4,195
8,388
(2) 36.85
9/22/2027
—
11,006
(3) 43.98
9/25/2028
1,027
(5) $ 53,127

1,960
(6) 101,391

2,464
(7) 127,463

3,383
(8) $ 175,003
3,271
(9) 169,209
2,874
(10) 148,672

Table ofo f Contents


											3,020	(7)	$	138,829
											2,653	(8)	121,958
											1,930	(9)	88,722

R.R. Shaller	23,576	—		$	35.14	9/23/2026
	14,197	7,098	(1)	36.85		9/22/2027
	7,338	14,674	(2)	43.98		9/25/2028
	—	20,137	(3)	54.05		9/20/2029
							1,658	(4)	$	76,218
							3,284	(5)	150,965
							4,009	(6)	184,294
							9,251	(12)	425,268
											5,536	(7)	$	254,490
											5,748	(8)	264,236
											4,181	(9)	192,201

L.T. Bolognini	12,583	—	(1)	$	36.85	9/22/2027
	3,669	7,337	(2)	43.98		9/25/2028
	—	10,069	(3)	54.05		9/20/2029
							1,642	(5)	$	75,483
							2,005	(6)	92,170
											3,271	(7)	$	150,368
											1,916	(8)	88,079
T.J. Felmer (13)

(1)The remaining options vest on September 22, 2020.

(2)One-half of the options vest on September 25, 2020 and the remaining options vest on September 25, 2021.

(3)One-third of the options vest on September 20, 2020, one-third of the options vest on September 20, 2021, and one-third of the options vest on September 20, 2022.

(4)This award represents time-based restricted stock units awarded on September 22, 2017, as part of the annual fiscal 2018 equity grant. The remaining units vest on September 22, 2020.

(5)This award represents time-based restricted stock units awarded on September 25, 2018, as part of the annual fiscal 2019 equity grant. One-half of the units vest on September 25, 2020, and the remaining units vest on September 25, 2021.

(6)This award represents time-based restricted stock units awarded on September 20, 2019, as part of the annual fiscal 2020 equity grant. One-third of the units vest on September 20, 2020, one-third of the units vest on September 20, 2021, and one-third of the units vest on September 20, 2022.

(7)This award represents performance-based RSUs awarded on August 1, 2017, as part of the annual fiscal 2018 equity grant. These performance-based RSUs have a three-year performance period with the number of shares issued at vesting determined by the Company's achievement of organic revenue and operating income growth goals over the three-year performance period. Payout opportunities will range from 0% to 200% of the target award. The amounts listed above are based on the target value of each award (100%).

(8)This award represents performance-based RSUs awarded on August 1, 2018, as part of the annual fiscal 2019 equity grant. These performance-based RSUs have a three-year performance period with the number of shares issued at vesting determined by the Company's TSR relative to the S&P 600 SmallCap Industrials Index. Payout opportunities will range from 0% to 200% of the target award. The amounts listed above are based on the target value of each award (100%).

(9)This award represents performance-based RSUs awarded on August 1, 2019, as part of the annual fiscal 2020 equity grant. These performance-based RSUs have a three-year performance period with the number of shares issued at vesting determined by the Company's TSR relative to the S&P 600 SmallCap Industrials Index. Payout opportunities will range from 0% to 200% of the target award. The amounts listed above are based on the target value of each award (100%).

H.R. Nelligan 8,574
4,286
(1) $ 35.14
9/23/2026
3,872
7,743
(2) 36.85
9/22/2027
—
10,159
(3) 43.98
9/25/2028
948
(5) $ 49,040

1,809
(6) 93,580

8,963
(11) 463,656

2,274
(7) 117,634

3,123
(8) $ 161,553
3,020
(9) 156,225
2,653
(10) 137,240

R.R. Shaller 15,718
7,858
(1) $ 35.14
9/23/2026
7,099
14,196
(2) 36.85
9/22/2027

—
22,012
(3) 43.98
9/25/2028
4,198
(12) $ 217,163

1,739
(5) 89,958

3,317
(6) 171,588

4,927
(7) 254,874

5,724
(8) $ 296,103
5,536
(9) 286,377
5,748
(10) 297,344


~~(1)~~	~~The remaining options vest on September 23, 2019.~~


~~(2)~~	~~One-half of the options vest on September 22, 2019 and the remaining options vest on September 22, 2020.~~


~~(3)~~	~~One-third of the options vest on September 25, 2019, one-third of the options vest on September 25, 2020, and one-third of the options vest on September 25, 2021.~~


~~(4)~~	Mr. Nauman was awarded 53,668 shares of time-based restricted stock units effective August 4, 2014, the date of his appointment as Chief Executive Officer and Director of the Company. The remaining units vested on August 4, 2019.


~~(5)~~	~~This award represents time-based restricted stock units awarded on September 23, 2016, as part of the annual fiscal 2017 equity grant. The remaining units vest on September 23, 2019.~~


~~(6)~~	This award represents time-based restricted stock units awarded on September 22, 2017, as part of the annual fiscal 2018 equity grant. One-half of the units vest on September 22, 2019, and the remaining units vest on September 22, 2020.


~~(7)~~	This award represents time-based restricted stock units awarded on September 25, 2018, as part of the annual fiscal 2019 equity grant. One-third of the units vest on September 25, 2019, one-third of the units vest on September 25, 2020, and one-third of the units vest on September 25, 2021.

~~(8)~~

This award represents performance-based RSUs awarded on August 1, 2016, as part of the annual fiscal 2017 equity grant. These performance-based RSUs have a three-year performance period with the number of shares issued at vesting determined by the Company's achievement of organic revenue and operating income growth goals over the three-year performance period. Payout opportunities will range from 0% to 200% of the target award. The amounts listed above are based on the target value of each award (100%).

~~(9)~~

This award represents performance-based RSUs awarded on August 1, 2017, as part of the annual fiscal 2018 equity grant. These performance-based RSUs have a three-year performance period with the number of shares issued at vesting determined by the Company's achievement of organic revenue and operating income growth goals over the three-year performance period. Payout opportunities will range from 0% to 200% of the target award. The amounts listed above are based on the target value of each award (100%).

~~(10)~~

This award represents performance-based RSUs awarded on August 1, 2018, as part of the annual fiscal 2019 equity grant. These performance-based RSUs have a three-year performance period with the number of shares issued at vesting determined by the Company's TSR relative to the S&P 600 SmallCap Industrials Index. Payout opportunities will range from 0% to 200% of the target award. The amounts listed above are based on the target value of each award (100%).


~~(11)~~	Effective September 20, 2018, Ms. Nelligan was awarded 8,963 shares of time-based restricted stock units for retention purposes. The restricted stock units vest in increments of 20%, 30%, and 50% upon the first, second and third anniversaries of the grant date.


~~(12)~~	~~Mr. Shaller was awarded 20,992 shares of time-based restricted stock units on June 22, 2015, the date he joined the Company as an officer. The remaining units vest on June 22, 2020.~~

Table ofo f Contents

(10)Effective January 3, 2020, Mr. Deman was awarded 1,307 shares of time-based restricted stock units for retention purposes. The restricted stock units vest in increments of 10%, 20%, 30%, and 40% upon the first, second, third and fourth anniversaries of the grant date.

(11)Effective September 20, 2018, Ms. Nelligan was awarded 8,963 shares of time-based restricted stock units for retention purposes. The restricted stock units vest in increments of 20%, 30%, and 50% upon the first, second and third anniversaries of the grant date.

(12)Effective September 20, 2019, Mr. Shaller was awarded 9,251 shares of time-based restricted stock units for retention purposes. The restricted stock units vest in increments of 10%, 20%, 30%, and 40% upon the first, second, third and fourth anniversaries of the grant date.

(13)Mr. Felmer had no outstanding option awards or stock awards outstanding as of July 31, 2020.

Option Exercises and Stock Vested for Fiscal ~~2019~~2020

The following table summarizes option exercises and the vesting of restricted stock during fiscal ~~2019~~2020 to the NEOs.


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)		Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)
J.M. Nauman	80,839	$	2,744,493	81,555	$	4,032,170
A.J. Pearce	48,348	1,445,813		22,315	1,093,444
P. Deman	4,456	66,087		849	45,581
H.R. Nelligan	—	—		9,401	469,703
R.R. Shaller	—	—		18,398	894,838
L.T. Bolognini	4,463	68,763		9,222	449,491
T.J. Felmer	240,322	6,214,208		22,179	1,159,082

Pension Benefits at July 31, 2020

Mr. Deman is a participant in the Brady Corporation Belgium Pension Plan, which is a closed insured defined benefit pension plan that provides benefits for certain employees residing in Belgium hired prior to October 31, 2005. The benefits earned under the plan are payable at normal retirement age in the form of a single lump sum.

At retirement, the lump sum is equal to the sum of 4.875% of the most recent five-year average annual base salary up to the Social Security ceiling plus 22.75% of the most recent five-year average annual base salary in excess of the Social Security ceiling, multiplied by the years of pensionable service. Years of pensionable service include all years and complete months of service from the date of hire through October 31, 2005, up to a maximum of 40 years. Normal retirement age for participants is age 65. Participants who are age 60-64 may elect to retire early and receive a 5% reduction in benefits per year of early retirement.

The following table summarizes the actuarial present value of the pension benefit accumulated by Mr. Deman under the Brady Corporation Belgium Pension Plan as of July 31, 2020.


Name	Plan Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit ($)(1)(2)		Payments During Last Fiscal Year ($)
P. Deman	Brady Corporation Belgium Pension Plan	6.25	$	52,429	$	—

(1) The accumulated benefit in this table for Mr. Deman will be paid to him in Euros. The amount shown in U.S. dollars was converted from Euro at the exchange rate as of July 31, 2020: 1 EUR= 1.1846 USD.

(2) The present value of accumulated pension benefit was calculated using the following assumptions: A calculation date of July 31, 2020, a 1.5% discount rate, retirement occurring at normal retirement age of 65, and Belgium MR-5/FR-5 Mortality Tables. The valuation method used to determine the present value of the accumulated benefit is the same as the method used for financial reporting purposes as of July 31, 2020. The value of the pension benefit Mr. Deman will ultimately receive will differ to the extent facts and circumstances vary from what this calculation assumes.

The aggregate change in the present value of Mr. Deman's accumulated pension benefit under the Brady Corporation Belgium Defined Benefit Pension Plan during fiscal 2020 was negligible and therefore was not included in the Summary Compensation Table.

Table o f Contents

Option Awards Stock Awards
Name
Number of Shares
Acquired on
Exercise (#)

Value Realized
on Exercise ($)

Number of Shares
Acquired on Vesting (#)

Value Realized
on Vesting ($)
J.M. Nauman 121,223
$ 3,062,012
45,580
$ 1,892,793
A.J. Pearce —
—
14,480
673,518
L.T. Bolognini 67,159
1,200,367
4,722
209,307
H.R. Nelligan 69,294
1,494,449
9,065
431,364
R.R. Shaller 46,238
1,145,715
11,353
519,883

Non-Qualified Deferred Compensation for Fiscal ~~2019~~2020

The following table summarizes the activity within the Executive Deferred Compensation Plan and the Brady Restoration Plan during fiscal ~~2019~~2020 for the NEOs.


Name	Executive Contribution in Fiscal 2020 ($)		Company Contributions in Fiscal 2020 ($)		Aggregate Earnings in Fiscal 2020 ($)		Aggregate Withdrawals/ Distributions ($)		Aggregate Balance at July 31, 2020 ($)
J.M. Nauman	$	847,275	$	145,384	$	128,539	$	—	$	2,718,252
A.J. Pearce	234,408		35,589		(33,169)		—		1,383,953
P. Deman	—		—		—		—		—
H.R. Nelligan	282,680		19,291		7,207		—		428,490
R.R. Shaller	17,493		34,986		(1,139)		—		224,279
L.T. Bolognini	59,453		32,720		27,337		—		337,812
T.J. Felmer	4,745		9,490		716,082		—		5,757,249

Name
Executive
Contribution in Fiscal 2019
($)

Company
Contributions in
Fiscal 2019
($)

Aggregate
Earnings in
Fiscal 2019
($)

Aggregate
Withdrawals/
Distributions
($)

Aggregate
Balance at
July 31, 2019
($)
J.M. Nauman $ 938,147
$ 180,030
$ 89,823
$ —
$ 1,597,054
A.J. Pearce 70,263
47,055
61,694
—
1,147,125
L.T. Bolognini 76,026
34,844
6,622
—
218,302
H.R. Nelligan 41,632
13,815
(2,385 ) —
119,312
R.R. Shaller 25,052
50,104
1,019
—
172,939

The executive contribution amounts included in this table are derived from the Salary and Non-Equity Incentive Plan Compensation columns of the Summary Compensation Table. The registrant contribution amounts included in this table are reported in the All Other Compensation columns of the Summary Compensation Table, and amounts reported in the aggregate balance at July 31, ~~2019,~~2020, previously were reported as compensation to the NEO in the Summary Compensation Table for previous years. See discussion of the Company's ~~nonqualified~~non-qualified deferred compensation plan in the Compensation Discussion and Analysis.

Potential Payments Upon Termination or Change in Control

As described in the Employment and Change of Control Agreements section of the Compensation Discussion and Analysis above, the Company has entered into separate severance agreements, employment agreements, and change of control agreements with certain NEOs.

The terms of severance arrangements with Messrs. Nauman and Shaller are triggered if (i) the executive’s employment with the Company is involuntarily terminated by the Company without cause or (ii) the executive’s employment with the Company is voluntarily terminated by the executive subsequent to (a) a material reduction in the total of the executive’s annual base salary and target annual cash incentive without the prior written agreement of the executive, (b) a significant diminution in the authority, duties or responsibilities of the executive without the executive’s prior written agreement, or (c) the relocation of the executive’s position to a principal work location more than 50 miles from Milwaukee, Wisconsin or from the executive’s principal place of residence, without the executive’s prior written agreement. Should Messrs. Nauman’s or Shaller’s employment be terminated under the circumstances described above, the Company would pay Mr. Nauman a severance benefit equal to two times the sum of his base salary plus target annual cash incentive and would pay Mr. Shaller a severance benefit equal to his base salary plus target annual cash incentive. The other NEOs are not covered by severance arrangements.

The terms of the non-compete clause under the employment agreement with Mr. Deman are triggered if his employment agreement is terminated and the Company chooses to enforce the terms of the 12-month non-compete clause. The Company reserves the right to waive the non-compete clause under the agreement, at which point no non-compete compensation would be owed to Mr. Deman. Should Mr. Deman's employment contract be terminated, he would receive a statutory severance payment equal to 6 months of the average monthly compensation, inclusive of base salary and bonus, paid to him during the last 12 months of his employment.

The terms of the change of control agreement are triggered if, within a 24-month period beginning with the date a change of control occurs, (i) the executive’s employment with the Company is involuntarily terminated other than by reason of death, disability or cause or (ii) the executive’s employment with the Company is voluntarily terminated by the executive subsequent to (a) any reduction in the total of the executive’s annual base salary, exclusive of fringe benefits, and the executive’s target annual cash incentive in comparison with the executive’s annual base salary and target annual cash incentive immediately prior to the date the change of control occurs, (b) a significant diminution in the responsibilities or authority of the executive in comparison with the executive’s responsibility and authority immediately prior to the date the change of control occurs, or (c) the imposition of a requirement by the Company that the executive relocate to a principal work location more than 50 miles from the executive’s principal work location immediately prior to the date the change of control occurs.

~~Table of Contents~~

Following termination due to a change in control, executives shall be paid a multiplier of their annual base salary in effect immediately prior to the date the change of control occurs, plus a multiplier of their average annual cash incentive payment

Table o f Contents

received over a three-year period prior to the date the change of control occurs. For Mr. Nauman, a multiplier of the target annual cash incentive amount in effect immediately prior to the date the change of control applies instead of the average annual cash incentive payment received over the prior three-year period. If the payments upon termination due to change of control result in any excise tax incurred by Messrs. Nauman, Pearce, ~~Bolognini,~~ Shaller, and Ms. Nelligan as a result of Section 280(g) of the Internal Revenue Code, the officer will be solely responsible for such excise tax. The Company will also reimburse a maximum of $25,000 of legal fees incurred by the executives in order to enforce the change of control agreement, in which the executive prevails.

The following information and tables set forth the amount of payments to each NEO in the event of termination of employment as a result of a change of control. See the section entitled "Retirement of Thomas J. Felmer" above in the Compensation Discussion and Analysis section for a description of the severance benefits paid to Mr. Felmer upon his retirement. No other employment agreements providing specified payments upon termination have been entered into between the Company and any of the NEOs in fiscal year ~~2019.~~2020.

Assumptions and General Principles

The following assumptions and general principles apply with respect to the tables that follow in this section.

•The amounts detailed in the tables assume that each NEO terminated employment on July 31, ~~2019.~~2020. Accordingly, the tables reflect amounts earned as of July 31, ~~2019,~~2020, and include estimates of amounts that would be paid to the NEO upon the termination or occurrence of a change in control. The actual amounts that would be paid to an NEO can only be determined at the time of termination.

•The tables below include amounts the Company is obligated to pay the NEO as a result of the severance agreement and 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 NEOs would receive benefits in addition to those set forth in the tables.

•An NEO is entitled to receive base salary earned during their term of employment regardless of the manner in which the named executive officer’s employment is terminated. As such, this amount is not disclosed in the tables.

J. Michael Nauman

The following table details the amount payable assuming that the terms of the change of control agreement were triggered on July 31, ~~2019~~,2020, and the NEO was required to legally enforce the terms of the agreement.


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Restricted Stock Unit Acceleration Gain ($) (3)		Stock Option Acceleration Gain ($) (4)		Legal Fee Reimbursement ($) (5)		Total ($)
$	1,660,360	$	1,660,360	$	5,486,152	$	411,502	$	25,000	$	9,243,374

Base Salary ($) (1) Annual Cash Incentive ($) (2)
Restricted Stock
Unit Acceleration
Gain ($) (3)

Stock Option
Acceleration
Gain ($) (4)

Legal Fee
Reimbursement
($) (5)
Total ($)
$ 1,612,000
$ 1,612,000
$ 7,786,400
$ 2,237,740
$ 25,000
$ 13,273,140
(1)Represents two times the base salary in effect at July 31, 2020.

~~(1)~~

~~Represents two times the base salary in effect at~~ ~~July 31, 2019~~.

(2)Represents two times the target annual cash incentive amount in effect at July 31, 2020.

(3)Represents the closing market price of $45.97 on 119,342 unvested time-based and performance-based RSUs that would vest due to the change in control.

(4)Represents the difference between the closing market price of $45.97 and the exercise price on 91,186 unvested, in-the-money stock options that would vest due to change in control.

(5)Represents the maximum reimbursement of legal fees allowed.


~~(2)~~	~~Represents two times the target annual cash incentive amount in effect at~~ ~~July 31, 2019~~.


~~(3)~~	~~Represents the closing market price of $51.73 on 150,520 unvested time-based and performance-based RSUs that would vest due to the change in control.~~


~~(4)~~	~~Represents the difference between the closing market price of $51.73 and the exercise price on 188,631 unvested, in-the-money stock options that would vest due to change in control.~~


~~(5)~~	~~Represents the maximum reimbursement of legal fees allowed.~~

The following table details the amount payable assuming that the severance terms of Mr. Nauman's offer letter were triggered on July 31, ~~2019,~~2020, and the NEO was required to legally enforce the severance terms of the agreement.


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Total ($)
$	1,660,360	$	1,660,360	$	3,320,720

Base Salary ($) (1) Annual Cash Incentive ($) (2) Restricted Stock
Unit Acceleration
Gain ($) (3) Total ($)
$ 1,612,000
$ 1,612,000
$ 925,398
$ 4,149,398
(1)Represents two times the base salary in effect at July 31, 2020.


~~(1)~~	~~Represents two times the base salary in effect at July 31, 2019.~~


~~(2)~~	~~Represents two times the target annual cash incentive amount in effect at July 31, 2019.~~


~~(3)~~	~~Represents the closing market price of $51.73 on 17,889 unvested time-based RSUs that would vest due to termination without cause.~~

(2)Represents two times the target annual cash incentive amount in effect at July 31, 2020.

Table ofo f Contents

Aaron J. Pearce

The following table details the amount payable assuming that the terms of the change of control agreement were triggered on July 31, ~~2019,~~2020, and the NEO was required to legally enforce the terms of the agreement.


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Restricted Stock Unit Acceleration Gain ($) (3)		Stock Option Acceleration Gain ($) (4)		Legal Fee Reimbursement ($) (5)		Total ($)
$	830,146	$	822,560	$	1,804,506	$	143,109	$	25,000	$	3,625,321

Base Salary ($) (1) Annual Cash Incentive ($) (2)
Restricted Stock
Unit Acceleration
Gain ($) (3)

Stock Option
Acceleration
Gain ($) (4)

Legal Fee
Reimbursement
($) (5)
Total ($)
$ 792,880
$ 700,169
$ 2,382,270
$ 777,520
$ 25,000
$ 4,677,839
(1)Represents two times the base salary in effect at July 31, 2020.


~~(1)~~	~~Represents two times the base salary in effect at July 31, 2019.~~


~~(2)~~	~~Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2019, 2018 and 2017.~~


~~(3)~~	~~Represents the closing market price of $51.73 on 46,052 unvested time-based and performance-based RSUs that would vest due to the change in control.~~


~~(4)~~	~~Represents the difference between the closing market price of $51.73 and the exercise price on 65,087 unvested, in-the-money stock options that would vest due to change in control.~~


~~(5)~~	~~Represents the maximum reimbursement of legal fees allowed.~~

~~Louis T. Bolognini~~(2)Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2020, 2019 and 2018.

(3)Represents the closing market price of $45.97 on 39,254 unvested time-based and performance-based RSUs that would vest due to the change in control.

(4)Represents the difference between the closing market price of $45.97 and the exercise price on 31,223 unvested, in-the-money stock options that would vest due to change in control.

(5)Represents the maximum reimbursement of legal fees allowed.

Pascal Deman


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Restricted Stock Unit Acceleration Gain ($) (3)		Stock Option Acceleration Gain ($) (4)		Legal Fee Reimbursement ($) (5)		Total ($)(6)
$	565,941	$	156,645	$	123,889	$	18,328	$	25,000	$	889,803

Base Salary ($) (1) Annual Cash Incentive ($) (2)
Restricted Stock
Unit Acceleration
Gain ($) (3)

Stock Option
Acceleration
Gain ($) (4)

Legal Fee
Reimbursement
($) (5)
Total ($)
$ 700,554
$ 515,435
$ 879,876
$ 287,137
$ 25,000
$ 2,408,002
(1)Represents two times the base salary in effect at July 31, 2020.


~~(1)~~	~~Represents two times the base salary in effect at July 31, 2019.~~


~~(2)~~	~~Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2019, 2018 and 2017.~~


~~(3)~~	~~Represents the closing market price of $51.73 on 17,009 unvested time-based and performance-based RSUs that would vest due to the change in control.~~


~~(4)~~	~~Represents the difference between the closing market price of $51.73 and the exercise price on 24,037 unvested, in-the-money stock options that would vest due to change in control.~~


~~(5)~~	~~Represents the maximum reimbursement of legal fees allowed.~~

(2)Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2020, 2019 and 2018.

(3)Represents the closing market price of $45.97 on 2,401 unvested time-based and performance-based RSUs that would vest due to the change in control.

(4)Represents the difference between the closing market price of $45.97 and the exercise price on 3,807 unvested, in-the-money stock options that would vest due to change in control.

(5)Represents the maximum reimbursement of legal fees allowed.

(6)The amounts shown in this table for Mr. Deman would be payable to him in Euros. The amounts shown in U.S. dollars were converted from Euro at the exchange rate as of July 31, 2020: 1 EUR= 1.1846 USD.

The amount payable assuming that the terms of the non-compete clause of Mr. Deman's employment agreement were triggered on July 31, 2020, and the NEO was required to legally enforce the terms of the agreement, would be $104,581. This amount would be payable to him in Euros and has been translated at the exchange rate as of July 31, 2020 noted above.

Helena R. Nelligan


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Restricted Stock Unit Acceleration Gain ($) (3)		Stock Option Acceleration Gain ($) (4)		Legal Fee Reimbursement ($) (5)		Total ($)
$	652,580	$	403,909	$	944,867	$	48,780	$	25,000	$	2,075,136

Base Salary ($) (1) Annual Cash Incentive ($) (2)
Restricted Stock
Unit Acceleration
Gain ($) (3)

Stock Option
Acceleration
Gain ($) (4)

Legal Fee
Reimbursement
($) (5)
Total ($)
$ 316,787
$ 164,188
$ 1,275,869
$ 265,053
$ 25,000
$ 2,046,897
(1)Represents two times the base salary in effect at July 31, 2020.


~~(1)~~	~~Represents the base salary in effect at July 31, 2019.~~


~~(2)~~	~~Represents the average annual cash incentive payment received in the last three fiscal years ended July 31, 2019, 2018 and 2017.~~


~~(3)~~	~~Represents the closing market price of $51.73 on 24,664 unvested time-based and performance-based RSUs that would vest due to the change in control.~~


~~(4)~~	~~Represents the difference between the closing market price of $51.73 and the exercise price on 22,188 unvested, in-the-money stock options that would vest due to change in control.~~


~~(5)~~	~~Represents the maximum reimbursement of legal fees allowed.~~

(2)Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2020, 2019 and 2018.

(3)Represents the closing market price of $45.97 on 20,554 unvested time-based and performance-based RSUs that would vest due to the change in control.

(4)Represents the difference between the closing market price of $45.97 and the exercise price on 10,643 unvested, in-the-money stock options that would vest due to change in control.

(5)Represents the maximum reimbursement of legal fees allowed.

Table ofo f Contents

Russell R. Shaller


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Restricted Stock Unit Acceleration Gain ($) (3)		Stock Option Acceleration Gain ($) (4)		Legal Fee Reimbursement ($) (5)		Total ($)
$	800,302	$	868,295	$	1,674,917	$	93,935	$	25,000	$	3,462,449

Base Salary ($) (1) Annual Cash Incentive ($) (2)
Restricted Stock
Unit Acceleration
Gain ($) (3)

Stock Option
Acceleration
Gain ($) (4)

Legal Fee
Reimbursement
($) (5)
Total ($)
$ 757,862
$ 757,778
$ 1,791,100
$ 512,194
$ 25,000
$ 3,843,934
(1)Represents two times the base salary in effect at July 31, 2020.


~~(1)~~	~~Represents two times the base salary in effect at July 31, 2019.~~


~~(2)~~	~~Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2019, 2018 and 2017.~~


~~(3)~~	~~Represents the closing market price of $51.73 on 34,624 unvested time-based and performance-based RSUs that would vest due to the change in control.~~


~~(4)~~	~~Represents the difference between the closing market price of $51.73 and the exercise price on 44,066 unvested, in-the-money stock options that would vest due to change in control.~~


~~(5)~~	~~Represents the maximum reimbursement of legal fees allowed.~~

(2)Represents two times the average annual cash incentive payment received in the last three fiscal years ended July 31, 2020, 2019 and 2018.

(3)Represents the closing market price of $45.97 on 36,435 unvested time-based and performance-based RSUs that would vest due to the change in control.

(4)Represents the difference between the closing market price of $45.97 and the exercise price on 21,772 unvested, in-the-money stock options that would vest due to change in control.

(5)Represents the maximum reimbursement of legal fees allowed.

The following table details the amount payable assuming that the severance terms of Mr. Shaller's offer letter were triggered on July 31, ~~2019,~~2020, and the NEO was required to legally enforce the severance terms of the agreement.


Base Salary ($) (1)		Annual Cash Incentive ($) (2)		Total ($)
$	400,151	$	244,428	$	644,579

Base Salary ($) (1) Annual Cash Incentive ($) (2) Total ($)
$ 378,931
$ 223,194
$ 602,125
(1)Represents one times the base salary in effect at July 31, 2020.


~~(1)~~	~~Represents one times the base salary in effect at July 31, 2019.~~


~~(2)~~	~~Represents one times the target annual cash incentive amount in effect at July 31, 2019.~~

(2)Represents one times the target annual cash incentive amount in effect at July 31, 2020.

Potential Payments Upon Termination Due to Death or Disability

In the event of termination due to death or disability, all unexercised, unexpired stock options would immediately vest and all restricted stock unit awards would immediately become unrestricted and fully vested. The following table shows the amount payable to the NEOs should this event occur on July 31, ~~2019~~.2020.


Name	Unvested Restricted Stock Units as of July 31, 2020	Restricted Stock Unit Acceleration Gain $ (1)		Unvested, In-the-Money Stock Options as of July 31, 2020	Stock Option Acceleration Gain $ (2)
J. Michael Nauman	119,342	$	5,486,152	91,186	$	411,502
A.J. Pearce	39,254	1,804,506		31,223	143,109
P. Deman	2,401	123,889		3,807	18,328
H.R. Nelligan	20,554	944,867		10,643	48,780
R.R. Shaller	36,435	1,674,917		21,772	93,935

Name
Unvested Restricted
Stock Units as of
July 31, 2019

Restricted Stock Unit Acceleration
Gain $ (1)

Unvested, In-the-Money Stock Options
as of
July 31, 2019

Stock Option
Acceleration
Gain $ (2)
J. Michael Nauman 150,520
$ 7,786,400
188,631
$ 2,237,740
A.J. Pearce 46,052
2,382,270
65,087
777,520
L.T. Bolognini 17,009
879,876
24,037
287,137
H.R. Nelligan 24,664
1,275,869
22,188
265,053
R.R. Shaller 34,624
1,791,100
44,066
512,194


~~(1)~~	~~Represents the closing market price of $51.73 on unvested awards that would vest due to death or disability.~~


~~(2)~~	~~Represents the difference between the closing market price of $51.73 and the exercise price on unvested, in-the-money stock options that would vest due to death or disability.~~

~~Potential Payments Upon Termination Without Cause~~(1)Represents the closing market price of $45.97 on unvested awards that would vest due to death or disability.

In(2)Represents the ~~event~~difference between the closing market price of ~~termination without cause, as defined in~~$45.97 and the ~~NEO's offer letter~~exercise price on unvested, in-the-money stock options that would vest due to death or in the officer's equity agreements, as applicable, certain restricted stock awards would immediately become unrestricted and fully vested. The following table shows the amount payable to the NEOs should this event occur on July 31, 2019.disability.

Name
Unvested Restricted
Stock Units as of
July 31, 2019

Restricted Stock Unit Acceleration
Gain $ (1)
J. Michael Nauman 17,889
$ 925,398
A.J. Pearce —
—
L.T. Bolognini —
—
H.R. Nelligan —
—
R.R. Shaller —
—


~~(1)~~	~~Represents the closing market price of $51.73 on unvested awards that would vest due to termination without cause.~~

~~Table of Contents~~

CEO Pay Ratio Disclosure

~~As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company~~Summarized below is ~~providing the following disclosure detailing~~ the ratio of the total compensation of Michael Nauman, our CEO, to the total compensation of our median employee.

WePay Ratio Methodology

The median employee was first determined ~~our median employee during and~~ for fiscal 2018 for purposes of determining our CEO pay ratio by identifying the employee whose compensation was at the median of our employee population (other than the CEO). The applicable SEC rules require us to identify a “median employee” at least once every three years, as long as there have been no material changes in our employee population or employee compensation arrangements that we reasonably believe would result in a significant change to our CEO pay ratio disclosure. As of July 31, 2020, the median employee used during the original fiscal 2018 analysis was no longer employed by the Company.

Table o f Contents

In the case where the median employee is no longer employed and there has not been a significant change in compensation or employee demographics another employee may be used as the median employee as long as the newly selected employee has compensation which is substantially similar to the original median employee, based on the compensation measure used to select the original median employee. Therefore, a median employee substantially similar to the median employee used in the original fiscal 2018 analysis was used for the fiscal 2020 calculation.

We elected to use an employee substantially similar to the ~~same~~ median employee from the original analysis performed during fiscal 2018, updated with the compensation earned by the employee in fiscal ~~2019,~~2020, for our ~~2019~~2020 CEO Pay Ratio, as there have not been noany material changes in our employee population or employee compensation arrangements that we believe would significantly impact the Company’s CEO pay ratio disclosure.

~~Pay Ratio Methodology~~

The Company used the following methodology and material assumptions to identify the median employee of its workforce:

•A measurement date of May 31, 2018 was used, which is within three months of the Company's fiscal year end, to identify the median employee. On this date, the Company's employee population consisted of 6,212 individuals; 1,778 in the United States and 4,434 outside of the United States.

•The Company considered annual total cash compensation earned by our employees, as compiled from our payroll records. This reflects the principal forms of compensation delivered to all of our employees and this information is readily available in each country.

•Our median employee's total compensation was calculated in the same manner as we calculated total compensation for each of the NEOs in the Summary Compensation Table and also includes contributions to health and welfare benefits.

•We annualized the compensation of employees to cover the full fiscal year ending July 31, 2018.

•We applied the “de minimis” exemption to exclude 308 employees from the following countries: Brazil (126), Malaysia (167), Philippines (4), and Turkey (11).

~~The~~Pay Ratio

For fiscal 2020, the median of the annual total compensation of all employees, except the CEO, ~~is $35,878.~~was $39,654. The annual total compensation of the CEO, ~~is $5,240.929.~~as reported in the Summary Compensation Table, was $4,511,943. Accordingly, the ratio of the annual total compensation of our CEO ~~pay ratio is 146:~~to the median of the annual total compensation of all other employees was 114:1.

Compensation of Directors

To ensure competitive compensation for the Directors, compensation is reviewed annually and surveys prepared by various consulting firms and the National Association of Corporate Directors are reviewed by the Corporate Governance Committee and the Management Development and Compensation Committee, and they confer with the Board’s independent compensation consultant, Meridian Compensation Partners, in making recommendations to the Board of Directors regarding Director compensation. Directors who are employees of the Company receive no additional compensation for service on the Board or on any committee of the Board. Compensation of Directors was reviewed during fiscal 2020, and no changes to Director compensation were made to retainers or meeting fees from fiscal 2019 levels.

In fiscal ~~2019,~~2020, the annual cash retainer paid to non-management Directors was $60,000. Each member of the Audit Committee received an annual retainer of $15,000, and an additional annual retainer of $15,000 was paid to the Chair; each member of the Management Development and Compensation Committee received an annual retainer of $12,000, and an additional annual retainer of $12,000 was paid to the Chair; and each member of the Corporate Governance, Finance and Technology Committees received an annual retainer of $10,000, and an additional annual retainer of $10,000 was paid to each committee Chair. Non-management Directors do not receive meeting fees. Non-management Directors are eligible to receive compensation of up to $1,000 per day for special assignments required by management or the Board of Directors, so long as the compensation does not impair independence and is approved as required by the Board. No such special assignment fees were paid in fiscal year ~~2019.~~2020.

In fiscal ~~2019,~~2020, the Chair of the Board was paid an annual fee of ~~$60,000, consistent with the evolving role of independent board leadership and the enhanced responsibilities of the position.~~$60,000. Mr. Goodkind served as Chair of the Board in fiscal ~~2019.~~2020.

The Board has established stock ownership requirements for Directors. The ownership requirement for each director is five times the annual Board retainer. Directors have five years to achieve their stock ownership requirements. All Directors, except Dr. Bem and Dr. Williams, who were each elected to the Board in February 2019, have achieved their stock ownership requirements.

Under the terms of the Brady Corporation 2017 Omnibus Incentive Stock Plan, 5,000,000 shares of the Company's Class A Common Stock have been authorized for issuance to Directors and employees. The Board has full and final authority to ~~designate~~

Table ofo f Contents

designate the non-management Directors to whom awards will be granted, the date on which awards will be granted and the number of shares of stock covered by each grant.

On September ~~11, 2018,~~4, 2019, the Board approved an annual stock-based compensation award of $109,000 in unrestricted shares of Class A Common Stock (having a grant date fair value of ~~$43.98~~$54.05 per share), for each non-management Director, effective September ~~25, 2018.~~20, 2019.

Directors are also eligible to defer portions of their fees into the Brady Corporation Director Deferred Compensation Plan (“Director Deferred Compensation Plan”), the value of which is measured by the fair value of the underlying investments. The assets of the Director Deferred Compensation Plan are held in a Rabbi Trust and are invested by the trustee as directed by the participant in several investment funds as permitted by the Director Deferred Compensation Plan. The investment funds available in the Director Deferred Compensation Plan include Brady Corporation Class A Nonvoting Common Stock and various mutual funds that are provided in the employee Matched 401(k) Plan. A Director may elect whether to receive his/her account balance following termination in a single lump sum payment or by means of distribution under an annual installment method. Distributions of the Company Class A Nonvoting Common Stock are made in-kind; distributions of mutual funds are in cash.

Director Compensation Table — Fiscal 2020


Name	Fees Earned or Paid in Cash ($)		Option Awards ($) (1)		Stock Awards ($) (2)		Total ($)
Patrick W. Allender	$	105,000	$	—	$	109,019	$	214,019
Gary S. Balkema	99,000		—		109,019		208,019
David S. Bem	80,400		—		109,019		189,419
Elizabeth P. Bruno	97,333		—		109,019		206,352
Nancy L. Gioia	92,000		—		109,019		201,019
Conrad G. Goodkind	156,333		—		109,019		265,352
Frank W. Harris	82,000		—		109,019		191,019
Bradley C. Richardson	110,267		—		109,019		219,286
Michelle E. Williams	80,400		—		109,019		189,419

(1)No stock options were awarded to non-management Directors in fiscal 2020. Outstanding option awards at July 31, 2020, for each individual who served as Director in fiscal 2020 include the following: Mr. Allender, 25,400; Mr. Balkema, 17,000; Ms. Bruno, 17,000; Ms. Gioia, 8,500; Mr. Goodkind, 25,400; and Mr. Harris, 17,000. 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 Company's common stock over the exercise price on the date the option is exercised.

(2)Represents the fair value of shares of Brady Corporation Class A Non-Voting Common Stock granted in fiscal 2020 as compensation for their services. The shares of unrestricted stock granted to the non-management directors were valued at the average of the high and low market price of $54.05 on September 20, 2019, for those non-management directors on the board as of that grant date.

Name
Fees Earned
or Paid in
Cash ($)
Option Awards ($) (1)
Stock
Awards ($) (2)
Total ($)
Patrick W. Allender $ 105,000
$ —
$ 109,026
$ 214,026
Gary S. Balkema 99,000
—
109,026
208,026
David S. Bem ⁽³⁾
43,125
—
109,044
152,169
Elizabeth P. Bruno 80,000
—
109,026
189,026
Nancy L. Gioia 92,000
—
109,026
201,026
Conrad G. Goodkind 162,500
—
109,026
271,526
Frank W. Harris 82,000
—
109,026
191,026
Bradley C. Richardson 112,000
—
109,026
221,026
Michelle E. Williams ⁽³⁾
43,125
—
109,044
152,169

~~(1)~~

No stock options were awarded to non-management Directors in fiscal 2019. Outstanding option awards at July 31, 2019, for each individual who served as Director in fiscal 2019 include the following: Mr. Allender, 33,800; Mr. Balkema, 35,400; Ms. Bruno, 25,400; Ms. Gioia, 8,500; Mr. Goodkind, 25,400; and Mr. Harris, 25,400. 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 Company's common stock over the exercise price on the date the option is exercised.

~~(2)~~

Represents the fair value of shares of Brady Corporation Class A Non-Voting Common Stock granted in fiscal 2019 as compensation for their services. The shares of unrestricted stock and RSUs granted to the non-management directors were valued at the average of the high and low market price of $43.98 on September 25, 2018, for those non-management directors on the board as of that grant date, and $46.58 on February 18, 2019, for those newly appointed non-management directors.


~~(3)~~	~~Dr. Bem and Dr. Williams were appointed as directors effective February 18, 2019.~~

Table ofo f Contents

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

(a)Security Ownership of Certain Beneficial Owners

The following table sets forth the current beneficial ownership of shareholders who are known by the Company to own more than five percent (5%) of any class of the Company’s voting shares on ~~August 1, 2019.~~July 31, 2020. As of that date, nearly all of the voting stock of the Company was held by two trusts controlled by direct descendants of the Company’s founder, William H. Brady, as follows:


Title of Class	Name and Address of Beneficial Owner	Amount of Beneficial Ownership	Percent of Ownership(2)
Class B Common Stock	EBL GST Non-Exempt Stock B Trust(1) c/o Elizabeth P. Bruno 2002 S. Hawick Ct. Chapel Hill, NC 27516	1,769,304	50	%

	William H. Brady III Living Trust dated November 1, 2013 (3)	1,769,304	50	%
	c/o William H. Brady III 249 Rosemont Ave. Pasadena, CA 91103

Title of Class Name and Address of Beneficial Owner
Amount of Beneficial
Ownership

Percent of
Ownership(2)
Class B Common Stock EBL GST Non-Exempt Stock B Trust(1) c/o Elizabeth P. Bruno 2002 S. Hawick Ct. Chapel Hill, NC 27516 1,769,304
50 %

William H. Brady III Living Trust dated November 1, 2013 (3) 1,769,304
50 %

c/o William H. Brady III
249 Rosemont Ave.
Pasadena, CA 91103

(1)The trustee is Elizabeth P. Bruno, who has sole voting and dispositive power and who is the remainder beneficiary. Elizabeth Bruno is the great-granddaughter of William H. Brady and currently serves on the Company’s Board of Directors.


~~(1)~~	The trustee is Elizabeth P. Bruno, who has sole voting and dispositive power and who is the remainder beneficiary. Elizabeth Bruno is the great-granddaughter of William H. Brady and currently serves on the Company’s Board of Directors.


~~(2)~~	~~An additional 20 shares are owned by a third trust with different trustees.~~


~~(3)~~	William H. Brady III is grantor of this revocable trust and shares voting and dispositive powers with respect to these shares with his co-trustee. William H. Brady III is the grandson of William H. Brady.

(2)An additional 20 shares are owned by a third trust with different trustees.

(3)William H. Brady III is grantor of this revocable trust and shares voting and dispositive powers with respect to these shares with his co-trustee. William H. Brady III is the grandson of William H. Brady.

(b)Security Ownership of Management

The following table sets forth the current beneficial ownership of each class of equity securities of the Company by each Director and NEO individually and by all Directors and Officers of the Company as a group as of ~~August 1, 2019.~~July 31, 2020. Unless otherwise noted, the address for each of the listed persons is c/o Brady Corporation, 6555 West Good Hope Road, Milwaukee, Wisconsin 53223. Except as otherwise indicated, all shares are owned directly.


Title of Class	Name of Beneficial Owner & Nature of Beneficial Ownership	Amount of Beneficial Ownership(5)(6)(7)	Percent of Ownership
Class A Common Stock	Elizabeth P. Bruno (1)	1,152,329	2.4	%
	J. Michael Nauman	547,912	1.1	%
	Aaron J. Pearce	237,568	0.5	%
	Conrad G. Goodkind	168,933	0.3	%
	Patrick W. Allender (2)	129,834	0.3	%
	Russell R. Shaller	110,090	0.2	%
	Gary S. Balkema	66,723	0.1	%
	Helena R. Nelligan	55,106	0.1	%
	Bradley C. Richardson	54,172	0.1	%
	Frank W. Harris	50,260	0.1	%
	Louis T. Bolognini (3)	29,675	0.1	%
	Nancy L. Gioia	26,614	0.1	%
	Thomas J. Felmer (4)	13,172	*
	Pascal Deman	9,420	*
	Michelle E. Williams	6,943	*
	David S. Bem	4,358	*
	All Officers and Directors as a Group (17 persons)	2,665,929	5.5	%

Class B Common Stock	Elizabeth P. Bruno (1)	1,769,304	50.0	%

Title of Class Name of Beneficial Owner & Nature of Beneficial Ownership
Amount of
Beneficial
Ownership(3)(4)(5)

Percent of
Ownership
Class A Common Stock Elizabeth P. Bruno (1) 1,212,997
2.5 %
J. Michael Nauman 520,756
1.1 %
Aaron J. Pearce 231,857
0.5 %
Conrad G. Goodkind 162,912
0.3 %
Patrick W. Allender (2) 120,745
0.2 %
Russell R. Shaller 86,807
0.2 %
Gary S. Balkema 56,519
0.1 %
Bradley C. Richardson 54,998
0.1 %
Frank W. Harris 52,569
0.1 %
Helena R. Nelligan 52,321
0.1 %
Louis T. Bolognini 46,332
0.1 %
Nancy L. Gioia 24,309
*
Michelle E. Williams 3,232
*
David S. Bem 2,341
*
All Officers and Directors as a Group (17 persons) 2,983,674
6.0 %

Class B Common Stock Elizabeth P. Bruno (1) 1,769,304
50.0 %



*			Indicates less than one-tenth of one percent.


~~(1)~~	~~Ms. Bruno’s holdings of Class A Common Stock include 806,296 shares owned by a trust for which she is a trustee and has sole dispositive and voting authorityand 34,530 shares owned by trusts in which she is a co-trustee. Ms. Bruno’s~~

Table ofo f Contents

(1)Ms. Bruno’s holdings of Class A Common Stock include 806,296 shares owned by a trust for which she is a trustee and has sole dispositive and voting authorityand 34,530 shares owned by trusts in which she is a co-trustee. Ms. Bruno’s 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)~~	~~Mr. Allender's holdings of Class A Common Stock include 20,000 shares owned by the Patrick and Deborah Allender Irrevocable Trust.~~

~~(3)~~

The amount shown for all officers and directors individually and as a group (17 persons) includes options to acquire a total of 1,044,332 shares of Class A Common Stock, which are currently exercisable or will be exercisable within 60 days of July 31, 2019, including the following: Ms. Bruno, 25,400 shares; Mr. Nauman, 374,845 shares; Mr. Pearce, 170,092 shares; Mr. Goodkind, 25,400 shares; Mr. Allender, 33,800 shares; Mr. Shaller, 45,111 shares; Mr. Balkema, 35,400 shares; Mr. Richardson, 0 shares; Mr. Harris, 25,400 shares; Ms. Nelligan, 23,991 shares; Mr. Bolognini, 16,701 shares; Ms. Gioia, 8,500 shares; Dr. Williams, 0 shares; and Dr. Bem, 0 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, 2019.

~~(4)~~

The amount shown for all officers and directors individually and as a group (17 persons) includes unvested restricted stock units to acquire 154,925 shares of Class A Common stock, which will vest within 60 days of July 31, 2019, including the following: Mr. Nauman, 81,555 units; Mr. Pearce, 22,315 units; Mr. Shaller, 7,155 units; Ms. Nelligan, 9,401 units; and Mr. Bolognini, 8,242 units. No unvested restricted stock units were held by directors which will vest within 60 days of July 31, 2019. It does not include unvested restricted stock awards or restricted stock units to acquire Class A Common Stock which have been granted at later dates and will not vest within 60 days of July 31, 2019.

~~(5)~~

The amount shown for all officers and directors individually and as a group (17 persons) includes Class A Common Stock owned in deferred compensation plans totaling 233,347 shares of Class A Common Stock, including the following: Ms. Bruno, 2,639 shares; Mr. Nauman, 0 shares; Mr. Pearce, 3,701 shares; Mr. Goodkind, 74,577 shares; Mr. Allender, 64,431 shares; Mr. Shaller, 0 shares; Mr. Balkema, 17,669 shares; Mr. Richardson, 49,828 shares; Mr. Harris, 0 shares; Ms. Nelligan, 0 shares; Mr. Bolognini, 0 shares; Ms. Gioia, 5,189 shares; Dr. Williams, 3,232 shares; and Dr. Bem, 0 shares.

(2)Mr. Allender's holdings of Class A Common Stock include 20,000 shares owned by the Patrick and Deborah Allender Irrevocable Trust.

(3)The amount shown in this table for Mr. Bolognini includes options to acquire 23,278 shares of Class A Common Stock, which are currently exercisable or will be exercisable within 60 days of July 31, 2020, and unvested restricted stock units to acquire 6,397 shares of Class A Common stock, which will vest within 60 days of July 31, 2020.

(4)The amount shown in this table for Mr. Felmer includes 13,172 shares of Class A Common Stock owned in deferred compensation plans.

(5)The amount shown for all officers and directors individually and as a group (17 persons) includes options to acquire a total of 818,531 shares of Class A Common Stock, which are currently exercisable or will be exercisable within 60 days of July 31, 2020, including the following: Ms. Bruno, 25,400 shares; Mr. Nauman, 386,710 shares; Mr. Pearce, 152,122 shares; Mr. Goodkind, 25,400 shares; Mr. Allender, 33,800 shares; Mr. Shaller, 66,259 shares; Mr. Balkema, 35,400 shares; Ms. Nelligan, 33,346 shares; Mr. Richardson, 0 shares; Mr. Harris, 25,400 shares; Ms. Gioia, 8,500 shares; Mr. Deman, 7,830 shares; Dr. Williams, 0 shares; and Dr. Bem, 0 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, 2020.

(6)The amount shown for all officers and directors individually and as a group (17 persons) includes unvested restricted stock units to acquire 106,886 shares of Class A Common stock, which will vest within 60 days of July 31, 2020, including the following: Mr. Nauman, 58,403 units; Mr. Pearce, 19,972 units; Mr. Shaller, 13,867 units; Ms. Nelligan, 9,489 units; and Mr. Deman, 741 units. No unvested restricted stock units were held by directors which will vest within 60 days of July 31, 2020. It does not include unvested restricted stock awards or restricted stock units to acquire Class A Common Stock which have been granted at later dates and will not vest within 60 days of July 31, 2020.

(7)The amount shown for all officers and directors individually and as a group (17 persons) includes Class A Common Stock owned in deferred compensation plans totaling 244,260 shares of Class A Common Stock, including the following: Ms. Bruno, 2,684 shares; Mr. Nauman, 0 shares; Mr. Pearce, 3,763 shares; Mr. Goodkind, 80,598 shares; Mr. Allender, 68,644 shares; Mr. Shaller, 0 shares; Mr. Balkema, 20,009 shares; Ms. Nelligan, 0 shares; Mr. Richardson, 54,172 shares; Mr. Harris, 0 shares; Ms. Gioia, 7,318 shares; Mr. Deman, 0 shares; Dr. Williams, 6,943 shares; and Dr. Bem, 0 shares.

(c)Changes in Control

No arrangements are known to the Company, which may, at a subsequent date, result in a change in control of the Company.

(d)Equity Compensation Plan Information


	As of July 31, 2020
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	1,554,402	$	39.82	3,348,834
Equity compensation plans not approved by security holders	None	None		None
Total	1,554,402	$	39.82	3,348,834

As of July 31, 2019
Plan Category
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)

Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)

Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
Equity compensation plans approved
by security holders
1,941,764
$ 32.81
3,682,157
Equity compensation plans not
approved by security holders
None
None
None
Total 1,941,764
$ 32.81
3,682,157

The Company’s equity compensation plan allows the granting of stock options, restricted stock, RSUs, and unrestricted stock to various officers, directors and other employees of the Company at prices equal to fair market value at the date of grant. The Company has reserved 5,000,000 shares of Class A Nonvoting Common Stock for issuance under the Brady Corporation 2017 Omnibus Incentive Stock Plan. Generally, options will not be exercisable until one year after the date of grant, and will be exercisable thereafter, to the extent of one-third per year and have a maximum term of ten years. Generally, RSUs vest one-third per year for the first three years.

Table o f Contents

Item 13.Certain Relationships, Related Transactions, and Director Independence

The Company annually solicits information from its Directors in order to ensure there are no conflicts of interest. The information gathered annually is reviewed by the Company and if any transactions are not in accordance with the rules of the New York Stock Exchange or are potentially in violation of the Company’s Corporate Governance Principles, the transactions are referred to the Corporate Governance Committee for approval, ratification, or other action. Further, potential affiliated party transactions would be reported as a part of the Company’s quarterly disclosure process. In addition, pursuant to its charter, the Company’s Audit Committee periodically reviews reports and disclosures of insider and affiliated party transaction with the Company, if any. Furthermore, the Company’s Directors are expected to be mindful of their fiduciary obligations to the Company and to report any potential conflicts to the Corporate Governance Committee for review. Based on the Company’s consideration of all relevant facts and circumstances, the Corporate Governance Committee will decide whether or not to approve such transactions

~~Table of Contents~~

and will approve only those transactions that are in the best interest of the Company. Additionally, the Company has processes in place to educate executives and employees about affiliated transactions. The Company maintains an anonymous hotline by which employees may report potential conflicts of interest such as affiliated party transactions.

In undertaking its review of potential related party transactions, the Board considered the commercial relationships of the Company, if any, with those entities that have employed the Company’s Directors. The commercial relationships, which involved the purchase and sale of products on customary terms, did not exceed the maximum amounts proscribed by the director independence rules of the NYSE. Furthermore, the compensation paid to the Company’s Directors by their employers, was not linked in any way to the commercial relationships their employers had with the Company in fiscal ~~2019.~~2020. After consideration of these factors, the Board concluded that none of the Directors whose employers had a commercial relationship with the Company had a material interest in the transactions and the commercial relationships were not material to the Company. Based on these factors, the Company has determined that it does not have material related party transactions that affect the results of operations, cash flow or financial condition. The Company has also determined that no transactions occurred in fiscal ~~2019,~~2020, or are currently proposed, that would require disclosure under Item 404 (a) of Regulation S-K.

See Item 10 above for a discussion of Director independence.

Item 14.Principal Accountant Fees and Services

The following table presents the aggregate fees incurred for professional services by Deloitte & Touche LLP and Deloitte Tax LLP during the years ended July 31, ~~2019~~2020 and ~~2018~~.2019. Other than as set forth below, no professional services were rendered or fees billed by Deloitte & Touche LLP or Deloitte Tax LLP during the years ended July 31, ~~2019~~2020 and ~~2018~~.2019.

2019 2018
(Dollars in thousands)
Audit, audit-related and tax compliance
Audit fees⁽¹⁾
$ 1,227
$ 1,235
Tax fees — compliance 466
609
Subtotal audit, audit-related and tax compliance fees 1,693
1,844
Non-audit related
Tax fees — planning and advice 286
320
Subtotal non-audit related fees 286
320
Total fees $ 1,979
$ 2,164


~~(1)~~	Audit fees consist of professional services rendered for the audit of the Company’s annual financial statements, attestation of management’s assessment of internal control, reviews of the quarterly financial statements and statutory reporting compliance.


	2020		2019
	(Dollars in thousands)
Audit, audit-related and tax compliance
Audit fees⁽¹⁾	$	1,313	$	1,227
Tax fees — compliance	472		466
Subtotal audit, audit-related and tax compliance fees	1,785		1,693
Non-audit related
Tax fees — planning and advice	373		286
Subtotal non-audit related fees	373		286
Total fees	$	2,158	$	1,979

2019 2018
Ratio of Tax Planning and Advice Fees to Audit Fees, Audit-Related Fees and Tax Compliance Fees 0.2 to 1 0.2 to 1

(1)Audit fees consist of professional services rendered for the audit of the Company’s annual financial statements, attestation of management’s assessment of internal control, reviews of the quarterly financial statements and statutory reporting compliance.


	2020	2019
Ratio of Tax Planning and Advice Fees to Audit Fees, Audit-Related Fees and Tax Compliance Fees	0.2 to 1	0.2 to 1

Pre-Approval Policy — The services performed by the Independent Registered Public Accounting Firm (“Independent Auditors”) in fiscal ~~2019~~2020 were pre-approved in accordance with the pre-approval policy and procedures adopted by the Audit Committee. The policy requires the Audit Committee to pre-approve the audit and non-audit services performed by the Independent Auditors in order to assure that the provision of such services does not impair the auditor’s independence. All services performed for the Company by the Independent Auditor must be approved in advance by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.

Table ofo f Contents

PART IV

Item 15.Exhibits and Financial Statement Schedules

Item 15 (a) — The following documents are filed as part of this report:

1) & 2) Consolidated Financial Statement Schedule -

Schedule II Valuation and Qualifying Accounts

All other schedules are omitted as they are not required, or the required information is shown in the consolidated financial statements or notes thereto.

3) Exhibits — See Exhibit Index at page 8894 of this Form 10-K.

8793

Table ofo f Contents

EXHIBIT INDEX



Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of December 28, 2012, by and among Brady Corporation, BC I Merger Sub Corporation, Precision Dynamics Corporation, and Precision Dynamics Holding LLC (29)
2.2	Share and Asset Purchase Agreement, dated as of February 24, 2014, by and among Brady Corporation and LTI Flexible Products, Inc. (d/b/a Boyd Corporation) (6)
3.1	Restated Articles of Incorporation of Brady Corporation (1)
3.2	~~By-laws~~By-Laws of Brady Corporation, as amended September 14, 2020 (23)
4.1	Description of Brady Corporation securities (3)
*10.1		~~Form of~~ Change of Control Agreement, ~~amended~~dated as of ~~December 23, 2008, entered into~~January 7, 2020, with ~~Thomas J. Felmer (12)~~Pascal Deman
*10.2			Brady Corporation BradyGold Plan, as amended (2)
*10.3			Executive Additional Compensation Plan, as amended (2)
*10.4		Executive Deferred Compensation Plan, as amended (37)
*10.5		Directors’ Deferred Compensation Plan, as amended (37)
*10.6		Forms of Nonqualified Employee Stock Option Agreement, Director Nonqualified Stock Option Agreement, and Employee Performance Stock Option Agreement under the Brady Corporation 2006 Omnibus Incentive Stock Plan (10)
*10.7		Brady Corporation 2017 Omnibus Incentive Plan (27)
*10.8		Form of Nonqualified Stock Option Agreement under the Brady Corporation 2017 Omnibus Incentive Plan for awards granted prior to Fiscal 2019 (33)
10.9	Brady Corporation Automatic Dividend Reinvestment Plan (4)
*10.10		~~Brady Corporation 2005 Nonqualified Stock Option Plan for Non-Employee Directors,~~Retirement Agreement, dated as ~~amended (3)~~of October 15, 2019, with Thomas J. Felmer
*10.11		Form of ~~Director Nonqualified~~Fiscal 2021 Performance-Based Restricted Stock ~~Option~~Unit Agreement under the Brady Corporation ~~2005 Nonqualified Stock Option~~2017 Omnibus Incentive Plan ~~for Non-Employee Directors, as amended (8)~~
*10.12		Form of Restricted Stock Unit Agreement under the Brady Corporation 2017 Omnibus Incentive Plan for awards granted prior to Fiscal 2019 (33)
*10.13		~~Restricted~~Form of Fiscal 2020 and Fiscal 2021 Nonqualified Employee Stock ~~Unit~~Option Agreement ~~dated as of October 1, 2014, with Thomas J. Felmer (11)~~under the Brady Corporation 2017 Omnibus Incentive Plan (3)
*10.14		Form of Fiscal 2019 and Fiscal 2020 Performance-Based Restricted Stock Unit Agreement under the Brady Corporation 2017 Omnibus Incentive Plan (37)
*10.15		Brady Corporation 2006 Omnibus Incentive Stock Plan, as amended (10)
*10.16		Form of Fiscal 2020 and Fiscal 2021 Restricted Stock Unit Agreement ~~dated as of November 28, 2014, with Thomas J. Felmer (20)~~under the Brady Corporation 2017 Omnibus Incentive Plan (3)
*10.17		Change of Control Agreement, dated as of August 28, 2015, with Russell R. Shaller (21)
*10.18		Change of Control Agreement, dated as of September 11, 2015, with Aaron J. Pearce (21)
*10.19		Form of Fiscal 2019 Nonqualified Employee Stock Option Agreement under the Brady Corporation 2017 Omnibus Incentive Plan (37)
*10.20		Form of Fiscal 2015 Employee Restricted Stock Unit Agreement under the Brady Corporation 2012 Omnibus Incentive Plan (21)
*10.21		Restated Brady Corporation Restoration Plan, as amended (37)

8894

Table ofo f Contents



*10.22			Change of Control Agreement, dated as of ~~February 28, 2013,~~March 3, 2014, with ~~Louis T. Bolognini (30)~~Helena R. Nelligan (13)
*10.23			Form of Performance-Based Restricted Stock Unit Agreement under the Brady Corporation 2017 Omnibus Incentive Plan for awards granted prior to Fiscal 2019 (33)
*10.24			Employment Offer Letter, dated as of June 2, 2015, with Russell Shaller (28)
*10.25			Restricted Stock Unit Agreement, dated as of July 15, 2015, with Aaron J. Pearce (34)
10.26		Note Purchase Agreement, dated May 13, 2010, by and among Brady Corporation, Brady Worldwide, Inc., Tricor Direct, Inc., and certain Purchasers (19)
*10.27			Form of Fiscal 2019 Restricted Stock Unit Agreement under the Brady Corporation 2017 Omnibus Incentive Plan (37)
*10.28			Brady Corporation 2010 Omnibus Incentive Stock Plan, as amended (22)
*10.29			Brady Corporation 2010 Nonqualified Stock Option Plan for Non-Employee Directors (17)
*10.30			Form of Employee Nonqualified Stock Option Agreement and Employee Performance Stock Option Agreement under the Brady Corporation 2010 Omnibus Incentive Stock Plan (17)
*10.31			Form of Director Nonqualified Stock Option Agreement under the Brady Corporation 2010 Nonqualified Stock Option Plan for Non-Employee Directors (17)
*10.32			Form of Fiscal 2015 Employee Retention Restricted Stock Unit Agreement under 2012 Omnibus Incentive Plan (21)
*10.33			~~Restricted Stock Agreement, dated as of October 7, 2013, with Thomas J. Felmer (36)~~
*10.34	Change of Control Agreement, dated as of March 3, 2014, with Bentley N. Curran (13)
*~~10.35~~		10.34	Restricted Stock Unit Agreement, dated as of ~~August 4, 2014,~~June 22, 2015, with ~~Thomas J. Felmer (9)~~Russell R. Shaller (21)
*~~10.36~~		10.35	~~Change~~Addendum to the 2017 General Stock Option Incentive Plan of ~~Control Agreement, dated as of March 3, 2014, with Helena R. Nelligan (13)~~Brady Corporation for Participants in France
*~~10.37~~		10.36	Addendum to the 2017 General Restricted Stock Unit Incentive Plan of Brady Corporation for Participants in France
*10.37		Form of Fiscal 2012 Performance Stock Option under the Brady Corporation 2010 Omnibus Incentive Stock Plan (26)
*10.38			Brady Corporation 2012 Omnibus Incentive Stock Plan (26)
*10.39			Form of Nonqualified Employee Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (26)
*10.40			Form of Nonqualified Employee Performance Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (26)
*10.41			Form of Director Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (26)
*10.42			Form of Fiscal 2013 Nonqualified Employee Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (31)
*10.43			Form of Fiscal 2013 Director Nonqualified Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (31)
10.44		Credit Agreement, dated as of August 1, 2019, by and among Brady Corporation and certain of its subsidiaries, the lenders listed therein and BMO Harris Bank, N.A., as administrative agent and L/C issuer (38)
*10.45			Employment Offer Letter, dated as of August 1, 2014, with J. Michael Nauman (35)
*10.46			Restricted Stock Unit Agreement, dated as of August 4, 2014, with J. Michael Nauman (35)
*10.47			Change of Control Agreement, dated as of August 4, 2014, with J. Michael Nauman (35)
*10.48			Form of Fiscal 2014 Nonqualified Employee Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (32)

~~Table of Contents~~



*10.49		Form of Fiscal 2014 Director Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (32)

Table o f Contents


*10.50			Form of Fiscal 2014 Restricted Stock Unit Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (32)
*10.51			Form of Fiscal 2016 Nonqualified Employee Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (21)
*10.52			Form of Fiscal 2016 Restricted Stock Unit Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (21)
*10.53			Form of Fiscal 2015 Nonqualified Employee Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (9)
*10.54			Form of Fiscal 2015 Director Nonqualified Stock Option Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (9)
*10.55			Form of Fiscal 2015 Restricted Stock Unit Agreement under the Brady Corporation 2012 Omnibus Incentive Stock Plan (9)
*10.56			~~Restricted Stock Unit~~Employment Agreement, dated as of ~~June 22, 2015,~~September 4, 2014, with ~~Russell R. Shaller (21)~~Pascal Deman
*10.57			~~Form of Fiscal~~Amendment to the Employment Agreement, dated January 7, 2020, ~~Nonqualified Employee Stock Option Agreement under the Brady Corporation 2017 Omnibus Incentive Plan~~with Pascal Deman
*10.5821		~~Form of Fiscal 2020 Restricted Stock Unit Agreement under the Brady Corporation 2017 Omnibus Incentive Plan~~
21	Subsidiaries of Brady Corporation
23		Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm
31.1		Rule 13a-14(a)/15d-14(a) Certification of J. Michael Nauman
31.2		Rule 13a-14(a)/15d-14(a) Certification of Aaron J. Pearce
32.1		Section 1350 Certification of J. Michael Nauman
32.2		Section 1350 Certification of Aaron J. Pearce
101		Interactive Data File
104		Cover Page Inline XBRL data (Contained in Exhibit 101)



*			Management contract or compensatory plan or arrangement

(1)Incorporated by reference to Registrant’s Registration Statement No. 333-04155 on Form S-3


~~(1)~~	~~Incorporated by reference to Registrant’s Registration Statement No. 333-04155 on Form S-3~~


~~(2)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 1989~~


~~(3)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed November 25, 2008~~


~~(4)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 1992~~


~~(5)~~	~~Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2008~~


~~(6)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 25, 2014~~


~~(7)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed January 9, 2008~~


~~(8)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed December 4, 2006~~


~~(9)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2014~~


~~(10)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2008~~


~~(11)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed October 2, 2014~~


~~(12)~~	~~Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2009~~


~~(13)~~	~~Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2014~~


~~(14)~~	~~Reserved~~


~~(15)~~	~~Reserved~~


~~(16)~~	~~Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011~~


~~(17)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2009~~


~~(18)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 23, 2010~~


~~(19)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed May 14, 2010~~


~~(20)~~	~~Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2014~~


~~(21)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2015~~

(2)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 1989

(3)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2019

(4)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 1992

(5)Reserved

(6)Incorporated by reference to Registrant’s Current Report on Form 8-K filed February 25, 2014

(7)Reserved

(8)Reserved

(9)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2014

(10)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2008

(11)Reserved

(12)Reserved

(13)Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2014

(14)Reserved

(15)Reserved

(16)Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011

(17)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2009

(18)Reserved

(19)Incorporated by reference to Registrant’s Current Report on Form 8-K filed May 14, 2010

(20)Reserved

(21)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2015

(22)Incorporated by reference to Registrant’s Current Report on Form 8-K filed September 27, 2010

(23)Incorporated by reference to Registrant’s Current Report on Form 8-K filed September 16, 2020

Table ofo f Contents

(24)Reserved


~~(22)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed September 27, 2010~~


~~(23)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed July 18, 2014~~


~~(24)~~	~~Reserved~~


~~(25)~~	~~Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2017~~


~~(26)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2011~~


~~(27)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed May 27, 2016~~


~~(28)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed June 5, 2015~~


~~(29)~~	~~Incorporated by reference to Registrant's Current Report on Form 8-K filed December 31, 2012~~


~~(30)~~	~~Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2013~~


~~(31)~~	~~Incorporated by reference to Registrant's Annual Report on Form 10-K for the fiscal year ended July 31, 2012~~


~~(32)~~	~~Incorporated by reference to Registrants Annual Report on Form 10-K for the fiscal year ended July 31, 2013~~


~~(33)~~	~~Incorporated by reference to Registrant's Current Report on Form 8-K filed July 14, 2016~~


~~(34)~~	~~Incorporated by reference to Registrant's Current Report on Form 8-K filed July 16, 2015~~


~~(35)~~	~~Incorporated by reference to Registrant's Current Report on Form 8-K filed August 4, 2014~~


~~(36)~~	~~Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2013~~


~~(37)~~	~~Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2018~~


~~(38)~~	~~Incorporated by reference to Registrant’s Current Report on Form 8-K filed August 1, 2019~~

(25)Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2017

(26)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2011

(27)Incorporated by reference to Registrant’s Current Report on Form 8-K filed May 27, 2016

(28)Incorporated by reference to Registrant’s Current Report on Form 8-K filed June 5, 2015

(29)Incorporated by reference to Registrant's Current Report on Form 8-K filed December 31, 2012

(30)Reserved

(31)Incorporated by reference to Registrant's Annual Report on Form 10-K for the fiscal year ended July 31, 2012

(32)Incorporated by reference to Registrants Annual Report on Form 10-K for the fiscal year ended July 31, 2013

(33)Incorporated by reference to Registrant's Current Report on Form 8-K filed July 14, 2016

(34)Incorporated by reference to Registrant's Current Report on Form 8-K filed July 16, 2015

(35)Incorporated by reference to Registrant's Current Report on Form 8-K filed August 4, 2014

(36)Reserved

(37)Incorporated by reference to Registrant’s Annual Report on Form 10-K for the fiscal year ended July 31, 2018

(38)Incorporated by reference to Registrant’s Current Report on Form 8-K filed August 1, 2019

Item 16.Form 10-K Summary

None.

BRADY CORPORATION AND SUBSIDIARIES

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS


	Year ended July 31,
Description	2020		2019		2018
	(Dollars in thousands)
Valuation accounts deducted in balance sheet from assets to which they apply — Accounts receivable — allowance for doubtful accounts:
Balances at beginning of period	$	5,005	$	4,471	$	4,629
Additions — Charged to expense	2,495		587		752
Deductions — Bad debts written off, net of recoveries	(343)		(53)		(910)
Balances at end of period	$	7,157	$	5,005	$	4,471
Inventory — Reserve for slow-moving inventory:
Balances at beginning of period	$	13,404	$	12,582	$	14,322
Additions — Charged to expense	5,722		3,168		2,797
Deductions — Inventory write-offs	(2,817)		(2,346)		(4,537)
Balances at end of period	$	16,309	$	13,404	$	12,582
Valuation allowances against deferred tax assets:
Balances at beginning of period	$	60,073	$	56,866	$	38,563
Additions during year	6,204		5,981		24,184
Deductions — Valuation allowances reversed/utilized	(7,468)		(2,774)		(5,881)
Balances at end of period	$	58,809	$	60,073	$	56,866

Year ended July 31,
Description 2019 2018 2017
(Dollars in thousands)
Valuation accounts deducted in balance sheet from assets to which they apply — Accounts receivable — allowance for doubtful accounts:
Balances at beginning of period $ 4,471
$ 4,629
$ 5,144
Additions — Charged to expense 587
752
732
Deductions — Bad debts written off, net of recoveries (53 ) (910 ) (1,247 )
Balances at end of period $ 5,005
$ 4,471
$ 4,629
Inventory — Reserve for slow-moving inventory:
Balances at beginning of period $ 12,582
$ 14,322
$ 15,083
Additions — Charged to expense 3,168
2,797
4,608
Deductions — Inventory write-offs (2,346 ) (4,537 ) (5,369 )
Balances at end of period $ 13,404
$ 12,582
$ 14,322
Valuation allowances against deferred tax assets:

Balances at beginning of period $ 56,866
$ 38,563
$ 37,992
Additions during year 5,981
24,184
2,004
Deductions — Valuation allowances reversed/utilized (2,774 ) (5,881 ) (1,433 )
Balances at end of period $ 60,073
$ 56,866
$ 38,563

Table ofo f Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized ~~this 6th~~this 16th day of September ~~2019.~~

2020.

BRADY CORPORATION

By:

/s/ AARON J. PEARCE

Aaron J. Pearce

Chief Financial Officer and Treasurer

(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.*



Signature		Title
/s/ J. MICHAEL NAUMAN		President and Chief Executive Officer; Director
J. Michael Nauman		(Principal Executive Officer)
/s/ ANN E. THORNTON		Chief Accounting Officer and Corporate Controller
Ann E. Thornton		(Principal Accounting Officer)
/s/ PATRICK W. ALLENDER
Patrick W. Allender		Director
/s/ GARY S. BALKEMA
Gary S. Balkema		Director
/s/ DAVID S. BEM
David S. Bem		Director
/s/ ELIZABETH P. BRUNO
Elizabeth P. Bruno		Director
/s/ NANCY L. GIOIA
Nancy L. Gioia		Director
/s/ CONRAD G. GOODKIND
Conrad G. Goodkind		Director
/s/ FRANK W. HARRIS
Frank W. Harris		Director
/s/ BRADLEY C. RICHARDSON
Bradley C. Richardson		Director
/s/ MICHELLE E. WILLIAMS
~~Michelle E. Williams~~	~~Director~~



*Michelle E. Williams						Director


*			Each of the above signatures is affixed as of September ~~6, 2019.~~16, 2020.

~~Wisconsin~~	~~39-0178960~~
Wisconsin		39-0178960
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)



Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Nonvoting Common Stock, ~~Par~~ ~~Value $.01~~par value $0.01 per share	BRC	New York Stock Exchange



PART I			Page
Item.1 Business			3
General Development of Business			3
Narrative Description of Business			34
Overview			34
Research and Development			5
Operations			56
Environment			6
Employees			6
Information Available on the Internet			6
Item 1A. Risk Factors			6
Item 1B. Unresolved Staff Comments			1011
Item 2. Properties			1011
Item 3. Legal Proceedings			1011
Item 4. Mine Safety Disclosures			1011
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			1112
Item 6. Selected Financial Data			1314
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			1415
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			2224
Item 8. Financial Statements and Supplementary Data			2325
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			5255
Item 9A. Controls and Procedures			5255
Item 9B. Other Information			5558
PART III
Item 10. Directors, Executive Officers and Corporate Governance			5558
Item 11. Executive Compensation			6063
Compensation Discussion and Analysis			6063
Management Development and Compensation Committee Interlocks and Insider Participation			7276
Management Development and Compensation Committee Report			7276
Compensation Policies and Practices			7276
Summary Compensation Table			7377
Grants of Plan-Based Awards for ~~201~~20209			7579
Outstanding Equity Awards at ~~201~~92020 Fiscal Year End			7580
Option Exercises and Stock Vested for Fiscal ~~201~~20209			7883
Non-Qualified Deferred Compensation for Fiscal ~~201~~20209			7884
Potential Payments Upon Termination or Change in Control			7884
CEO Pay Ratio Disclosure			7884
Compensation of Directors			8288
Director Compensation Table — Fiscal ~~201~~20209			8389
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			8490
Item 13. Certain Relationships, Related Transactions, and Director Independence			8592
Item 14. Principal ~~Accounting~~Accountant Fees and Services			8692
PART IV
Item 15. Exhibits and Financial Statement Schedules			8793
Item 16. Form 10-K Summary			9197
Signatures			9298


	2020		2019		2018
IDS	72.6	%	74.4	%	72.1	%
WPS	27.4	%	25.6	%	27.9	%
Total	100.0	%	100.0	%	100.0	%



	2019		2018		2017
IDS	74.4	%	72.1	%	71.9	%
WPS	25.6	%	27.9	%	28.1	%
Total	100.0	%	100.0	%	100.0	%


☑			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	2021		2020														2019
	1st Qtr		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr		1st Qtr		2nd Qtr		3rd Qtr		4th Qtr
Class A	$	0.22	$	0.2175	$	0.2175	$	0.2175	$	0.2175	$	0.2125	$	0.2125	$	0.2125	$	0.2125
Class B	0.20335		0.20085		0.2175		0.2175		0.2175		0.19585		0.2125		0.2125		0.2125


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans	Maximum Number of Shares That May Yet Be Purchased Under the Plans
May 1, 2020 - May 31, 2020	10,029	$	39.95	10,029	461,796
June 1, 2020 - June 30, 2020	—	—		—	461,796
July 1, 2020 - July 31, 2020	—	—		—	461,796
Total	10,029	$	39.95	10,029	461,796



	2014		2015		2016		2017		2018		2019
Brady Corporation	$	100.00	$	92.89	$	131.35	$	138.92	$	163.60	$	225.38
S&P 500 Index	100.00		111.21		117.3		136.12		158.22		170.86
S&P SmallCap 600 Index	100.00		111.97		118.53		139.46		171.69		160.11
Russell 2000 Index	100.00		112.03		111.96		132.62		157.46		150.50


	Payments Due by Period
Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years		Uncertain Timeframe
Operating Lease Obligations	$	50,251	$	16,684	$	24,522	$	8,090	$	955	$	—
Purchase Obligations⁽¹⁾	53,293		52,423		862		1		7		—
Tax Obligations	13,622		—		—		—		—		13,622
Total	$	117,166	$	69,107	$	25,384	$	8,091	$	962	$	13,622


~~(1)~~	(1)Purchase obligations include all open purchase orders as of ~~July 31, 2019~~.



			Page
Report of Independent Registered Public Accounting Firm			2426
Financial Statements:
Consolidated Balance Sheets — July 31, ~~2019~~2020 and ~~2018~~2019			2628
Consolidated Statements of Income — Years Ended July 31, 2020, 2019, ~~2018,~~ and ~~2017~~2018			2729
Consolidated Statements of Comprehensive Income — Years Ended July 31, 2020, 2019, ~~2018,~~ and ~~2017~~2018			2830
Consolidated Statements of Stockholders’ Equity — Years Ended July 31, 2020, 2019, ~~2018,~~ and ~~2017~~2018			2931
Consolidated Statements of Cash Flows — Years Ended July 31, 2020, 2019, ~~2018,~~ and ~~2017~~2018			3032
Notes to Consolidated Financial Statements — Years Ended July 31, 2020, 2019, ~~2018,~~ and ~~2017~~2018			3133



	Common Stock		Additional Paid-In Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive (Loss) Income			Other
	(In thousands, except per share amounts)
Balances at July 31, 2016	$	548	$	317,001		$	453,371		$	(108,714	)	$	(54,745	)	$	(3,863	)
Net income	—		—			95,645			—			—			—
Other comprehensive loss, net of tax	—		—			—			—			10,063			—
Issuance of 1,061,660 shares of Class A Common Stock under stock plan	—		(5,868		)	—			23,591			—			—
Other (Note 7)	—		1,943			—			(347		)	—			3,863
Tax shortfall from exercise of stock options and deferred compensation distributions	—		37			—			—			—			—
Stock-based compensation expense (Note 7)	—		9,495			—			—			—			—
Cash dividends on Common Stock
Class A — $0.82 per share	—		—			(39,037		)	—			—			—
Class B — $0.80 per share	—		—			(2,843		)	—			—			—
Balances at July 31, 2017	$	548	$	322,608		$	507,136		$	(85,470	)	$	(44,682	)	$	—
Net income	—		—			91,060			—			—			—
Other comprehensive income, net of tax	—		—			—			—			(11,719		)	—
Issuance of 842,305 shares of Class A Common Stock under stock plan	—		(7,171		)	—			16,234			—			—
Tax benefit and withholdings from deferred compensation distribution	—		214			—			(422		)	—			—
Stock-based compensation expense (Note 7)	—		9,980			—			—			—			—
Purchase of 40,694 shares of Class A Common Stock	—		—			—			(1,462		)	—			—
Adoption of ASU 2018-02	—		—			(1,869		)	—
Cash dividends on Common Stock
Class A — $0.83 per share	—		—			(39,998		)	—			—			—
Class B — $0.81 per share	—		—			(2,875		)	—			—			—
Balances at July 31, 2018	$	548	$	325,631		$	553,454		$	(71,120	)	$	(56,401	)	$	—
Net income	—		—			131,258			—			—			—
Other comprehensive loss, net of tax	—		—			—			—			(14,853		)	—
Issuance of 1,367,131 shares of Class A Common Stock under stock plan	—		(7,963		)	—			27,970			—			—
Tax benefit and withholdings from deferred compensation distributions	—		209			—			—			—			—
Stock-based compensation expense (Note 7)	—		12,092			—			—			—			—
Purchase of 80,088 shares of Class A Common Stock	—		—			—			(3,182		)	—			—
Adoption of ASU 2014-09, "Revenue from Contracts with Customers" (Note 8)	—		—			(2,137		)	—			—			—
Cash dividends on Common Stock
Class A — $0.85 per share	—		—			(41,784		)	—			—			—
Class B — $0.83 per share	—		—			(2,948		)	—			—			—
Balances at July 31, 2019	$	548	$	329,969		$	637,843		$	(46,332	)	$	(71,254	)	$	—


	Common Stock		Additional Paid-In Capital		Retained Earnings		Treasury Stock		Accumulated Other Comprehensive Loss
	(In thousands, except per share amounts)
Balances at July 31, 2017	$	548	$	322,608	$	507,136	$	(85,470)	$	(44,682)
Net income	—		—		91,060		—		—
Other comprehensive loss, net of tax	—		—		—		—		(11,719)
Issuance of shares of Class A Common Stock under stock plan	—		(7,171)		—		16,234		—
Tax benefit and withholdings from deferred compensation distribution	—		214		—		(422)		—
Stock-based compensation expense (Note 7)	—		9,980		—		—		—
Repurchase of shares of Class A Common Stock	—		—		—		(1,462)		—
Adoption of ASU 2018-02	—		—		(1,869)		—		—
Cash dividends on Common Stock:
Class A — $0.83 per share	—		—		(39,998)		—		—
Class B — $0.81 per share	—		—		(2,875)		—		—
Balances at July 31, 2018	$	548	$	325,631	$	553,454	$	(71,120)	$	(56,401)
Net income	—		—		131,258		—		—
Other comprehensive loss, net of tax	—		—		—		—		(14,853)
Issuance of shares of Class A Common Stock under stock plan	—		(7,963)		—		27,970		—
Tax benefit and withholdings from deferred compensation distribution	—		209		—		0		—
Stock-based compensation expense (Note 7)	—		12,092		—		—		—
Repurchase of shares of Class A Common Stock	—		—		—		(3,182)		—
Adoption of ASU 2014-09 "Revenue from Contracts with Customers" (Note 9)	—		—		(2,137)		—
Cash dividends on Common Stock:
Class A — $0.85 per share	—		—		(41,784)		—		—
Class B — $0.83 per share	—		—		(2,948)		—		—
Balances at July 31, 2019	$	548	$	329,969	$	637,843	$	(46,332)	$	(71,254)
Net income	—		—		112,369		—		—
Other comprehensive income, net of tax	—		—		—		—		4,777
Issuance of shares of Class A Common Stock under stock plan	—		(7,184)		—		3,630		—
Tax benefit and withholdings from deferred compensation distributions	—		134		—		0		—
Stock-based compensation expense (Note 7)	—		8,843		—		—		—
Repurchase of shares of Class A Common Stock	—		—		—		(64,514)		—
Cash dividends on Common Stock:
Class A — $0.87 per share	—		—		(42,736)		—		—
Class B — $0.85 per share	—		—		(3,020)		—		—
Balances at July 31, 2020	$	548	$	331,762	$	704,456	$	(107,216)	$	(66,477)


~~(a)~~ (a)Market Information	~~Market Information~~


~~(b)~~ (b)Holders	~~Holders~~


~~(c)~~	~~Dividends~~


~~(d)~~	~~Issuer Purchases of Equity Securities~~


	2020		2019
Finished products	$	85,547	$	77,532
Work-in-process	24,044		20,515
Raw materials and supplies	26,071		21,990
Total inventories	$	135,662	$	120,037


	Range of Useful Lives	2020		2019
Land		$	9,960	$	9,752
Buildings and improvements	10 to 33 Years	105,129		99,685
Machinery and equipment	3 to 10 Years	267,795		266,991
Construction in progress		8,432		7,500
Property, plant and equipment—gross		391,316		383,928
Accumulated depreciation		(276,248)		(273,880)
Property, plant and equipment—net		$	115,068	$	110,048



~~Asset Category~~		~~Range of Useful Lives~~
~~Buildings & Improvements~~		~~10 to 33 Years~~
~~Computer Systems~~		~~5 Years~~
~~Machinery & Equipment~~		~~3 to 10 Years~~


	IDS		WPS		Total
Balance as of July 31, 2018	$	385,524	$	34,291	$	419,815
Translation adjustments	(6,519)		(2,309)		(8,828)
Balance as of July 31, 2019	$	379,005	$	31,982	$	410,987
Translation adjustments	3,342		1,705		5,047
Balance as of July 31, 2020	$	382,347	$	33,687	$	416,034



	IDS			WPS			Total
Balance as of July 31, 2017	$	391,864		$	45,833		$	437,697
Translation adjustments	(6,340		)	(1,487		)	(7,827		)
Divestiture	—			(10,055		)	(10,055		)
Balance as of July 31, 2018	$	385,524		$	34,291		$	419,815
Translation adjustments	(6,519		)	(2,309		)	(8,828		)
Balance as of July 31, 2019	$	379,005		$	31,982		$	410,987


	July 31, 2020												July 31, 2019
	Weighted Average Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Weighted Average Amortization Period (Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Amortized other intangible assets:
Customer relationships and other	9	$	45,385	$	(32,670)	$	12,715	9	$	46,595	$	(29,343)	$	17,252
Unamortized other intangible assets:
Tradenames	N/A	9,619		—		9,619		N/A	18,871		—		18,871
Total		$	55,004	$	(32,670)	$	22,334		$	65,466	$	(29,343)	$	36,123


	Consolidated Statements of Income Location	2020
Operating lease cost	Cost of goods sold	$	9,197
Operating lease cost	Selling, general, and administrative expenses	8,974



	Unrealized gain (loss) on cash flow hedges			Gain on postretirement plans			Foreign currency translation adjustments			Accumulated other comprehensive loss
Ending balance, July 31, 2017	$	109		$	2,620		$	(47,411	)	$	(44,682	)
Other comprehensive income before reclassification	465			382			(14,242		)	(13,395		)
Amounts reclassified from accumulated other comprehensive loss	383			(576		)	—			(193		)
Adoption of accounting standard ASU 2018-02	(94		)	876			1,087			1,869
Ending balance, July 31, 2018	$	863		$	3,302		$	(60,566	)	$	(56,401	)
Other comprehensive income (loss) before reclassification	630			67			(14,195		)	(13,498		)
Amounts reclassified from accumulated other comprehensive loss	(786		)	(569		)	—			(1,355		)
Ending balance, July 31, 2019	$	707		$	2,800		$	(74,761	)	$	(71,254	)


Years ended July 31,	Operating Leases
2021	$	16,684
2022	14,703
2023	9,819
2024	5,677
2025	2,413
Thereafter	955
Total lease payments	$	50,251
Less: interest	(2,965)
Present value of lease liabilities	$	47,286


	July 31, 2020
Weighted average remaining lease term (in years)	3.5
Weighted average discount rate	3.5	%


	Twelve months ended
	July 31, 2020
Operating cash outflows from operating leases	$	17,123
Operating lease assets obtained in exchange for new operating lease liabilities	12,641


~~(1)~~	~~The year ended July 31, 2017, includes the generation of foreign tax credit carryforwards from cash repatriations that occurred during the fiscal year.~~


~~(2)~~	~~The year ended July 31, 2018, includes the establishment of a valuation allowance against foreign tax credit carryforwards as a result of the Tax Reform Act.~~


~~(4)~~	The years ended July 31, 2018 and 2017, include increases in uncertain tax positions, while the year ended July 31, 2019, includes reductions of uncertain tax positions resulting from the closure of audits and lapses in statutes of limitations.


~~(5)~~	The years ended July 31, 2019 and 2018, include non-deductible compensation such as salaries, bonuses, and other equity compensation of the Company's executives (as defined in Internal Revenue Service Code Section 162(m)).



Balance at July 31, 2016	$	15,294
Additions based on tax positions related to the current year	2,500
Additions for tax positions of prior years	1,124
Reductions for tax positions of prior years	(62		)
Lapse of statute of limitations	(663		)
Settlements with tax authorities	(118		)
Cumulative Translation Adjustments and other	287
Balance as of July 31, 2017	$	18,362
Additions based on tax positions related to the current year	2,467
Additions for tax positions of prior years	1,586
Reductions for tax positions of prior years	(23		)
Lapse of statute of limitations	(489		)
Settlements with tax authorities	(1,277		)
Cumulative Translation Adjustments and other	(196		)
Balance as of July 31, 2018	$	20,430
Additions based on tax positions related to the current year	2,518
Additions for tax positions of prior years	612
Reductions for tax positions of prior years	(378		)
Lapse of statute of limitations	(8,140		)
Cumulative Translation Adjustments and other	(201		)
Balance as of July 31, 2019	$	14,841



~~Jurisdiction~~		~~Open Tax Years~~
~~United States — Federal~~		~~F’16 — F’19~~



	2019		2018
Euro-denominated notes payable in 2020 at a fixed rate of 4.24%	$	50,166	$	52,618


	July 31, 2020						July 31, 2019
	Shares Authorized	Shares Issued	(thousands) Amount		Shares Authorized	Shares Issued	(thousands) Amount
Preferred Stock, $.01 par value	5,000,000				5,000,000
Cumulative Preferred Stock: 6% Cumulative	5,000				5,000
1972 Series	10,000				10,000
1979 Series	30,000				30,000
Common Stock, $.01 par value: Class A Nonvoting	100,000,000	51,261,487	$	513	100,000,000	51,261,487	$	513
Class B Voting	10,000,000	3,538,628	35		10,000,000	3,538,628	35
			$	548			$	548


	Deferred Compensation		Shares Held in Rabbi Trust, at cost		Total
Balances at July 31, 2017	$	8,124	$	(8,124)	$	0
Shares at July 31, 2017	314,082		314,082
Sale of shares at cost	$	(977)	$	977	$	0
Purchase of shares at cost	1,075		(1,075)		0
Balances at July 31, 2018	$	8,222	$	(8,222)	$	0
Shares at July 31, 2018	299,916		299,916
Sale of shares at cost	$	(928)	$	928	$	0
Purchase of shares at cost	1,212		(1,212)		0
Balances at July 31, 2019	$	8,506	$	(8,506)	$	0
Shares at July 31, 2019	285,533		285,533
Sale of shares at cost	$	(460)	$	460	$	0
Purchase of shares at cost	1,293		(1,293)		0
Balances at July 31, 2020	$	9,339	$	(9,339)	$	0
Shares at July 31, 2020	292,329		292,329