Stockholder's Investments | Stockholder's Investment Information as to the Company’s capital stock at July 31, 2015 and 2014 is as follows: July 31, 2015 July 31, 2014 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 Before any dividend may be paid on the Class B Common Stock, holders of the Class A Common Stock are entitled to receive an annual, noncumulative cash dividend of $.01665 per share. Thereafter, any further dividend in that fiscal year must be paid on each share of Class A Common Stock and Class B Common Stock on an equal basis. Other than as required by law, holders of the Class A Common Stock are not entitled to any vote on corporate matters, unless, in each of the three preceding fiscal years, the $.01665 preferential dividend described above has not been paid in full. Holders of the Class A Common Stock are entitled to one vote per share for the entire fiscal year immediately following the third consecutive fiscal year in which the preferential dividend is not paid in full. Holders of Class B Common Stock are entitled to one vote per share for the election of directors and for all other purposes. Upon liquidation, dissolution or winding up of the Company, and after distribution of any amounts due to holders of Cumulative Preferred Stock, holders of the Class A Common Stock are entitled to receive the sum of $0.835 per share before any payment or distribution to holders of the Class B Common Stock. Thereafter, holders of the Class B Common Stock are entitled to receive a payment or distribution of $0.835 per share. Thereafter, holders of the Class A Common Stock and Class B Common Stock share equally in all payments or distributions upon liquidation, dissolution or winding up of the Company. The preferences in dividends and liquidation rights of the Class A Common Stock over the Class B Common Stock will terminate at any time that the voting rights of Class A Common Stock and Class B Common Stock become equal. The following is a summary of other activity in stockholders’ investment for the fiscal years ended July 31, 2015 , 2014 , and 2013 : Unearned Restricted Stock Deferred Compensation Shares Held in Rabbi Trust, at cost Total Balances at July 31, 2012 $ (3,763 ) $ 11,610 $ (11,151 ) $ (3,304 ) Shares at July 31, 2012 517,105 517,105 Sale of shares at cost — (1,461 ) 1,419 (42 ) Purchase of shares at cost — 891 (891 ) — Forfeitures of restricted stock 838 — — 838 Amortization of restricted stock 1,788 — — 1,788 Balances at July 31, 2013 (1,137 ) 11,040 (10,623 ) (720 ) Shares at July 31, 2013 $ 469,797 $ 469,797 Sale of shares at cost $ — (1,637 ) 1,496 $ (141 ) Purchase of shares at cost — 821 (821 ) — Effect of plan amendment — (2,435 ) — (2,435 ) Amortization of restricted stock 1,137 — — 1,137 Balances at July 31, 2014 $ — $ 7,789 $ (9,948 ) $ (2,159 ) Shares at July 31, 2014 338,711 423,415 Sale of shares at cost — (2,325 ) 2,235 (90 ) Purchase of shares at cost — 220 (1,035 ) (815 ) Balances at July 31, 2015 $ — $ 5,684 $ (8,748 ) $ (3,064 ) Shares at July 31, 2015 252,261 362,025 Deferred Compensation Plans Prior to 2002, all Brady Corporation deferred compensation was invested in the Company’s Class A Nonvoting Common Stock. In 2002, the Company adopted a new deferred compensation plan for both executives and directors which allowed investing in other investment funds in addition to the Company’s Class A Nonvoting Common Stock. Under this plan, participants were allowed to transfer funds between the Company’s Class A Nonvoting Common Stock and the other investment funds. On May 1, 2006 the plan was amended with the provision that deferrals into the Company’s Class A Nonvoting Common Stock must remain in the Company’s Class A Nonvoting Common Stock and be distributed in shares of the Company’s Class A Nonvoting Common Stock. On May 21, 2014, the Director Deferred Compensation Plan was amended to allow participants to transfer funds from other investment funds into the Company’s Class A Nonvoting Common Stock. Funds are not permitted to be transferred from the Company’s Class A Nonvoting Common Stock into other investment funds until six months after the Director resigns from the Board. No such amendment was made to the Executive Deferred Compensation Plan. At July 31, 2015 , the deferred compensation balance in stockholders’ investment represents the investment at the original cost of shares held in the Company’s Class A Nonvoting Common Stock for the deferred compensation plan prior to 2002 and the investment at the cost of shares held in the Company’s Class A Nonvoting Common Stock for the plan subsequent to 2002, adjusted for the plan amendments on May 1, 2006 and May 21, 2014. The balance of shares held in the Rabbi Trust represents the investment in the Company’s Class A Nonvoting Common Stock at the original cost of all the Company’s Class A Nonvoting Common Stock held in deferred compensation plans. Incentive Stock Plans The Company has an incentive stock plan under which the Board of Directors may grant nonqualified stock options to purchase shares of Class A Nonvoting Common Stock, restricted stock units ("RSUs"), or restricted and unrestricted shares of Class A Nonvoting Common Stock to employees and non-employee directors. As of July 31, 2015 , the Company has reserved 4,178,405 shares of Class A Nonvoting Common Stock for outstanding stock options, RSUs and restricted shares and 3,152,013 shares of Class A Nonvoting Common Stock remain for future issuance of stock options, RSUs and restricted and unrestricted shares under the active plans. The Company uses treasury stock or will issue new Class A Nonvoting Common Stock to deliver shares under these plans. Total stock-based compensation expense recognized by the Company during the years ended July 31, 2015 , 2014 , and 2013 was $4,471 ( $2,772 net of taxes), $5,214 ( $3,232 net of taxes), and $1,736 ( $1,059 net of taxes), respectively. The increase in expense from fiscal 2013 to fiscal 2014 was due to the reversal of stock-based compensation expense of $7,883 in fiscal 2013, primarily related to performance awards that would not meet the financial performance conditions to vest. As of July 31, 2015 , total unrecognized compensation cost related to share-based compensation awards that are expected to vest was $17,035 pre-tax, net of estimated forfeitures, which the Company expects to recognize over a weighted-average period of 3.2 years . Stock options The options issued under the plan have an exercise price equal to the fair market value of the underlying stock at the date of grant and generally vest ratably over a three -year period, with one-third becoming exercisable one year after the grant date and one-third additional in each of the succeeding two years. Options issued under the plan, referred to herein as “service-based” options, generally expire 10 years from the date of grant. The Company has estimated the fair value of its service-based stock option awards granted during the years ended July 31, 2015 , 2014 , and 2013 using the Black-Scholes option valuation model. The weighted-average assumptions used in the Black-Scholes valuation model are reflected in the following table: Black-Scholes Option Valuation Assumptions 2015 2014 2013 Expected term (in years) 6.05 5.97 5.93 Expected volatility 34.01 % 37.32 % 38.67 % Expected dividend yield 2.48 % 2.35 % 2.21 % Risk-free interest rate 1.90 % 1.80 % 0.91 % Weighted-average market value of underlying stock at grant date $ 22.76 $ 30.98 $ 30.58 Weighted-average exercise price $ 22.76 $ 30.98 $ 30.58 Weighted-average fair value of options granted during the period $ 6.12 $ 9.17 $ 9.05 The following is a summary of stock option activity for the fiscal year ended July 31, 2015 : Option Price Options Outstanding Weighted Average Exercise Price Balance as of July 31, 2014 $ 17.23 — $40.37 4,204,260 $ 30.82 Options granted 22.66 — 27.28 628,340 22.76 Options exercised 17.23 — 27.00 (68,533 ) 23.73 Options cancelled 22.63 — 40.37 (1,263,116 ) 30.48 Balance as of July 31, 2015 $ 20.95 — $38.31 3,500,951 $ 29.64 The total fair value of options vested during the fiscal years ended July 31, 2015 , 2014 , and 2013 was $3,950 , $6,605 , and $11,086 , respectively. The total intrinsic value of options exercised during the fiscal years ended July 31, 2015 , 2014 , and 2013 was $208 , $2,452 , and $10,728 , respectively. There were 2,642,955 , 3,004,348 , and 3,311,043 options exercisable with a weighted average exercise price of $30.88 , $31.15 , and $31.46 at July 31, 2015 , 2014 , and 2013 , respectively. The cash received from the exercise of options during the fiscal years ended July 31, 2015 , 2014 , and 2013 was $1,644 , $12,113 , and $20,324 , respectively. The tax benefit on options exercised during the fiscal years ended July 31, 2015 , 2014 , and 2013 was $79 , $952 , and $1,964 , respectively. The following table summarizes information about stock options outstanding at July 31, 2015 : Options Outstanding Options Outstanding and Exercisable Range of Exercise Prices Number of Shares Outstanding at July 31, 2015 Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price Shares Exercisable at July 31, 2015 Weighted Average Remaining Contractual Life (in years) Weighted Average Exercise Price $20.95 - $26.99 711,527 7.7 $ 22.27 180,667 3.4 $ 20.95 $27.00 - $32.99 1,976,924 5.8 29.12 1,667,452 5.5 28.86 $33.00 - $38.31 812,500 2.0 37.34 794,836 1.8 37.39 Total 3,500,951 5.3 29.64 2,642,955 4.3 $ 30.88 As of July 31, 2015 , the aggregate intrinsic value (defined as the amount by which the fair value of the underlying stock exceeds the exercise price of an option) of options outstanding and the options exercisable was $913 and $464 , respectively. Restricted Shares and RSUs Restricted shares and RSUs issued under the plan have an issuance price equal to the fair market value of the underlying stock at the date of grant. In fiscal 2008 and 2013, the Company awarded restricted shares and RSUs to certain executives which vest upon meeting certain financial performance conditions over a specified vesting period. The restricted shares awarded in 2008 were amended in fiscal 2011 to allow for vesting after either a five -year period or a seven -year period based upon both performance and service conditions. These shares are referred to herein as “performance-based restricted shares.” The RSUs granted in fiscal 2013 vest over a two -year period upon meeting both performance and service conditions, referred to herein as "performance-based RSUs". In fiscal 2013 and 2014, the Company awarded restricted shares that vest solely upon meeting specified service conditions, referred to herein as "service-based restricted shares". Restricted shares awarded in fiscal 2013 vest at the end of a three -year period and have a grant-date fair value of $32.99 . The restricted shares awarded in fiscal 2014 were issued to the Interim President and Chief Executive Officer in recognition of the increased duties upon appointment. The shares vested on August 4, 2014, which was the date of the end of the individual's term as Interim President and CEO. Beginning in fiscal 2014, the Company awarded RSUs that vest solely upon meeting specified service conditions, referred to herein as “service-based RSUs.” The RSUs issued under the plan generally vest ratably over a three -year period, with one-third becoming exercisable one year after the grant date and one-third additional in each of the succeeding two years. In fiscal 2015, the Company also awarded 63,668 service-based RSUs that vest ratably at the end of years 3, 4, and 5 and 395,617 service-based RSUs that vest in increments of 10%, 20%, 30%, and 40% at the end of years 1, 2, 3, and 4, respectively. The following tables summarize the RSU and restricted share activity for the fiscal year ended July 31, 2015 : Service-Based Restricted Shares and RSUs Shares Weighted Average Grant Date Fair Value Balance as of July 31, 2014 104,857 $ 31.02 New grants 661,412 24.28 Vested (34,247 ) 30.79 Forfeited (54,568 ) 27.64 Balance as of July 31, 2015 677,454 $ 24.72 The service-based restricted shares and RSUs awarded during the fiscal years ended July 31, 2014 and 2013 had a weighted-average grant-date fair value of $30.93 and $32.99 , respectively. Performance-Based Restricted Shares and RSUs Shares Weighted Average Grant Date Fair Value Balance as of July 31, 2014 80,000 $ 32.50 New grants — — Vested — — Forfeited (80,000 ) 32.50 Balance as of July 31, 2015 — $ — The performance-based restricted shares and RSUs awarded during the fiscal year ended July 31, 2013 had a weighted-average grant-date fair value of $30.21 . No performance-based restricted shares were granted during the fiscal year ended July 31, 2014. |