<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SNAP-ON INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
CHAIRMAN'S LETTER
NOTICE OF 1997 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
<PAGE>
CHAIRMAN'S LETTER
March 14, 1997
Dear Snap-on Shareholder:
Allow me to take this opportunity to invite you to our Annual Meeting of
Shareholders on FRIDAY, APRIL 25, 1997. We will be reviewing results from
another record-setting year for Snap-on, as well as discussing how we are
positioning your investment in Snap-on for the future.
The location of the meeting is detailed in the Notice of Annual Meeting of
Shareholders. As was the case in 1996, the meeting will be held at the Racine
Marriott. Directions are shown on page 12 of this Proxy Statement.
Whether or not you plan to attend the meeting, you are encouraged to read the
enclosed 1996 Annual Report and proxy materials. Please return your proxy cards
early.
We hope to see you at the meeting and look forward to renewing old acquaintances
and meeting those of you attending for the first time.
Cordially,
[SIG]
Robert A. Cornog
CHAIRMAN OF THE BOARD OF DIRECTORS,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SNAP-ON INCORPORATED
<PAGE>
SNAP-ON INCORPORATED
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Snap-on Incorporated will be held at the
Racine Marriott, 7111 Washington Avenue, Racine, Wisconsin, on Friday, April 25,
1997 at 10:00 a.m.
MEETING PURPOSES:
1. TO ELECT THREE DIRECTORS TO SERVE UNTIL THE 2000 ANNUAL MEETING, ONE DIRECTOR
TO SERVE UNTIL THE 1999 ANNUAL MEETING, AND ONE DIRECTOR TO SERVE UNTIL THE 1998
ANNUAL MEETING.
2. TO APPROVE AN AMENDMENT TO THE CORPORATION'S RESTATED CERTIFICATE OF
INCORPORATION TO INCREASE THE TOTAL NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
FROM 125,000,000 TO 250,000,000.
3. TO CONSIDER AND TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF. The only business the Board of Directors
intends to present is set forth herein, and the Board knows of no other matters
that will be brought before the Annual Meeting by any person or group; however,
if any other matters shall properly come before the Annual Meeting, it is the
intention of the persons named in the enclosed proxy to vote in accordance with
their judgment on such matters.
The Board of Directors has fixed the close of business on February 25, 1997 as
the record date for the determination of shareholders entitled to receive notice
of, and vote at, the Annual Meeting.
The Annual Report for the fiscal year ended December 28, 1996 is enclosed.
IMPORTANT: To ensure your representation at the Annual Meeting, you should
complete and sign the enclosed proxy card and return it in the enclosed
envelope. All shareholders, even those planning to attend the Annual Meeting,
are encouraged to return their proxy cards well in advance of the meeting so
that the vote count will not be delayed. Shareholders may revoke their proxies
and vote their shares in person at the Annual Meeting.
By Order of the Board of Directors.
Susan F. Marrinan
VICE PRESIDENT,
SECRETARY AND
GENERAL COUNSEL
March 14, 1997
<PAGE>
PROXY STATEMENT
INTRODUCTION
This Proxy Statement is supplied in connection with the proxy solicitation by
the Board of Directors of Snap-on Incorporated for use at the Annual Meeting of
Shareholders to be held on April 25, 1997, or any adjournment thereof. Messrs.
Brinckman, Mead and Schnabel, listed as proxies on the enclosed proxy card, are
Directors of the Corporation. This Proxy Statement and the proxy card were first
mailed to shareholders on or about March 14, 1997.
The Corporation had 60,879,788 shares of common stock ("Common Stock")
outstanding on February 25, 1997, and no other voting securities. Each share of
record as of the February 25, 1997 record date will be entitled to one vote.
The affirmative vote of the holders of a plurality of the shares present in
person or by proxy at the meeting is required to elect the Director candidates.
The affirmative vote of the holders of the majority of the shares of Common
Stock outstanding and entitled to vote is required to amend the Corporation's
Restated Certificate of Incorporation.
An automated system administered by the Corporation's transfer agent tabulates
the votes. Abstentions and broker nonvotes (which arise from proxies delivered
by brokers and others where the broker has not received authority to vote on one
or more matters) are each included in the determination of the number of shares
present and voting and are tabulated separately. Abstentions are counted in
tabulations of the votes cast on proposals presented to shareholders and have
the effect of a vote against the proposal, except in Director elections, where
they have no effect. Broker nonvotes have no effect on the votes concerning the
election of Directors and have the effect of a vote against the proposal to
amend the Corporation's Restated Certificate of Incorporation.
Execution and delivery of a proxy in response to this solicitation will not
affect a shareholder's right to attend the meeting and to vote in person.
Presence at the meeting does not itself revoke a properly executed and
previously delivered proxy. Each proxy granted may be revoked by the person
giving it at any time before its exercise by giving written notice to such
effect to the Corporation's Secretary or the Corporation's authorized
representative or agents at the meeting or by execution and delivery of a
subsequent proxy, except as to any matter upon which a vote has been cast
pursuant to the authority conferred by such proxy prior to such revocation.
The expense of this solicitation of proxies will be paid by the Corporation.
Initial solicitation will be by mail; however, Officers and other employees of
the Corporation may make solicitations by mail, telephone, facsimile or in
person. Brokerage houses, depositories, custodians, nominees and fiduciaries
will be requested to forward the proxy soliciting material to the beneficial
owners of the stock held of record by them, and the Corporation will reimburse
them for their expenses. Morrow & Co., Inc. will aid in the solicitation of
proxies for a fee of $7,000, plus expenses, which will be paid by the
Corporation.
PROXY STATEMENT ITEM I
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation and the Bylaws of the Corporation give
the Directors the authority to set the size of the Board of Directors at any
number between five and fifteen members. The Board is currently set at 11
members divided into three classes, with one class elected each year to serve
for a three-year term.
Messrs. Beronja and Hadley became Directors of the Corporation in January, 1997.
In accordance with the Corporation's Bylaws, the Board of Directors has
apportioned the increase in the number of Directors resulting from the election
of Messrs. Beronja and Hadley among the three classes of Directors so as to make
all classes as nearly equal in number as possible. Accordingly, Mr. Hadley has
been nominated for election to serve in the class of Directors whose terms
expire at the 1998 Annual Meeting, and Mr. Beronja has been nominated to serve
in the class of Directors whose terms expire at the 1999 Annual Meeting. The
remaining nominees have been nominated for election to serve in the class of
Directors whose terms expire at the 2000 Annual Meeting.
SHARES REPRESENTED BY PROXIES WILL BE VOTED ACCORDING TO INSTRUCTIONS ON THE
PROXY CARD. UNLESS THE PROXY CARD CLEARLY REFLECTS THAT A VOTE HAS BEEN
WITHHELD, SHARES WILL BE VOTED TO ELECT MESSRS. BERONJA, CHELBERG, HADLEY, AND
KELLY AND MS. DECYK. IF ANY NOMINEE SHOULD BE UNABLE TO SERVE, THE PROXIES WILL
BE VOTED FOR SUCH PERSON DESIGNATED AS A REPLACEMENT BY THE BOARD.
2
<PAGE>
NOMINEE FOR ELECTION TO SERVE UNTIL THE 1998 ANNUAL MEETING
Leonard A. Hadley - age 62. Mr. Hadley became a Director effective January 1,
1997. He has been Chairman and Chief Executive Officer of Maytag Corporation, a
manufacturer of appliances, since 1993 and served as its President and Chief
Operating Officer since 1991. He currently serves on Maytag's Board and is also
a Director of Deere & Company.
NOMINEE FOR ELECTION TO SERVE UNTIL THE 1999 ANNUAL MEETING
Branko M. Beronja - age 62. Mr. Beronja became a Director on January 24, 1997
and has been an employee of the Corporation since 1963. He has served as Senior
Vice President - Diagnostics, North America since April, 1996. He was President
- -North American Operations from April, 1994 to April, 1996 and Vice President -
Sales, North America from August, 1989 to April, 1994.
NOMINEES FOR ELECTION TO SERVE UNTIL THE 2000 ANNUAL MEETING
Bruce S. Chelberg - age 62. Mr. Chelberg has been a Director since 1993. He has
been Chairman of the Board and Chief Executive Officer of Whitman Corporation, a
consumer goods company, since 1992 and prior thereto served as its Executive
Vice President. He has served on Whitman's Board since 1988. Mr. Chelberg is
also a Director of First Midwest Bancorp, Inc. and Northfield Laboratories, Inc.
Roxanne J. Decyk - age 44. Ms. Decyk has been a Director since 1993. She has
been Vice President - Corporate Planning for Amoco Corporation, a petroleum
products company, since 1994. She was Vice President - Marketing and Sales -
Polymers of Amoco Chemical Company from 1993 to 1994, and Vice President -
Commercial and Industrial Sales from 1991 to 1993. Ms. Decyk is also a Director
of Material Sciences Corporation.
Arthur L. Kelly - age 59. Mr. Kelly has been a Director since 1978. He has been
the managing partner of KEL Enterprises L.P., a holding and investment company,
since 1982. He is a Director of Bayerische Motoren Werke (BMW) A.G., The
Northern Trust Corporation, Deere & Company, Nalco Chemical Company and Tejas
Gas Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF
THESE DIRECTORS.
DIRECTORS CONTINUING TO SERVE UNTIL THE 1998 ANNUAL MEETING
Robert A. Cornog - age 56. Mr. Cornog has been a Director since 1982. He was
elected President, Chief Executive Officer, and Chairman of the Board of
Directors of the Corporation in 1991. Mr. Cornog is also a Director of Johnson
Controls, Inc., Wisconsin Energy Corporation and Wisconsin Electric Power
Company.
Raymond F. Farley - age 72. Mr. Farley has been a Director since 1988. He was
Chief Executive Officer from 1988 and President from 1980 of S. C. Johnson &
Son, Inc., a maker of home, personal-care, insecticide and specialty chemical
products, until his retirement in 1990. Mr. Farley is also a Director of
Hartmarx Corporation and Johnson Worldwide Associates, Inc.
Edward H. Rensi - age 52. Mr. Rensi has been a Director since 1992. He has been
President and Chief Executive Officer of McDonald's U.S.A., a food service
organization, since 1991 and served as President and Chief Operating Officer
from 1984 to 1991. He is a Director of McDonald's Corporation and International
Speedway Corporation.
DIRECTORS CONTINUING TO SERVE UNTIL THE 1999 ANNUAL MEETING
Donald W. Brinckman - age 66. Mr. Brinckman has been a Director since 1992. He
has been Chairman of the Board of Directors of Safety-Kleen Corp. since 1994 and
served as its Chief Executive Officer from 1968 through 1994. He also served as
President of Safety-Kleen from 1968 to 1990 and from December, 1991 to May,
1993. Safety-Kleen is a recycler of automotive and industrial hazardous and
non-hazardous fluids. Mr. Brinckman is also a Director of Johnson Worldwide
Associates, Inc. and Paychex, Inc.
George W. Mead - age 69. Mr. Mead has been a Director since 1985. He has been
Chairman of the Board of Consolidated Papers, Inc., a maker of paper products,
since 1971. He was Chief Executive Officer of Consolidated Papers, Inc. from
1971 through 1993. Mr. Mead is also a Director of Firstar Corporation.
Jay H. Schnabel - age 54. Mr. Schnabel has been a Director since 1989 and has
been an employee of the Corporation since 1965. He has served as Senior Vice
President - Europe since April, 1996. He was Senior Vice President - Diagnostics
from April, 1994 to April, 1996 and Senior Vice President - Administration from
1990 to April, 1994.
3
<PAGE>
BOARD COMMITTEES
The AUDIT COMMITTEE reviews the scope of the independent audit of the
Corporation's books and records to determine the adequacy of accounting,
financial and operating controls, recommends an independent auditor to the Board
and considers whether proposals made by the Corporation's auditors to perform
consulting services beyond the ordinary audit function might result in a loss of
independence. This Committee also reviews Corporate policies concerning
environmental, health and safety matters, and the Corporation's government
contract program and related training, compliance and reporting. This Committee
met four times in 1996. In addition, the Chairman of the Audit Committee,
through powers delegated by the Board of Directors, reviewed certain financial
information with the Corporation's management during the year. The members of
this Committee are Messrs. Rensi - Chair, Chelberg, Kelly and Mead.
The BOARD AFFAIRS AND NOMINATING COMMITTEE makes recommendations to the Board
regarding the size and composition of the Board, the number and responsibilities
of Board Committees, the Board's tenure policy, qualifications of potential
Board nominees, including those recommended by shareholders, and matters
relating to corporate governance. This Committee met twice in 1996. The members
of this Committee are Messrs. Brinckman - Chair, Cornog and Kelly, and Ms.
Decyk.
Any shareholder wishing to suggest a nominee for election to the Board of
Directors at the 1998 Annual Meeting should submit a written recommendation to
the Board Affairs and Nominating Committee, c/o Corporate Secretary, Snap-on
Incorporated, 2801-80th Street, P.O. Box 1410, Kenosha, Wisconsin 53141-1410, by
October 1, 1997. Additional requirements relating to shareholder nominations are
contained in the Bylaws of the Corporation.
The EXECUTIVE COMMITTEE of the Board of Directors may exercise all of the powers
of the Board in the management of the business and the affairs of the
Corporation, subject to limitations found in the Restated Certificate of
Incorporation, the Bylaws and applicable state laws. The Executive Committee
acts in the interim between Board meetings. This Committee did not meet in 1996.
The members of this Committee are Messrs. Cornog - Chair, Farley and Schnabel.
The FINANCE COMMITTEE discusses, analyzes and recommends to the Board
appropriate actions regarding the Corporation's long-term financial objectives;
capital structure; issuance of additional shares and the repurchase of currently
issued and outstanding shares; type, amount and timing of long-term financing;
dividend policy and the declaration of dividends; shareholder rights plan and
other financial matters that it may deem appropriate to analyze and submit to
the Board for consideration. This Committee met four times in 1996. The members
of this Committee are Messrs. Kelly - Chair, Farley and Mead, and Ms. Decyk. Mr.
Cornog is an EX OFFICIO member of this Committee.
The ORGANIZATION AND EXECUTIVE COMPENSATION COMMITTEE provides oversight
regarding corporate organization, executive succession and the Corporation's
executive compensation programs. This Committee recommends to the Board the
appropriate level of compensation for the Chief Executive Officer and
determines, after consultation with the Chief Executive Officer, the
compensation of all other Executive Officers. This Committee also has
administrative authority for matters relating to incentive compensation plans,
including the incentive stock program, employee stock ownership and director fee
plans. This Committee met twice in 1996. The members of this Committee are
Messrs. Farley - Chair, Brinckman, Chelberg and Rensi.
INFORMATION CONCERNING THE BOARD OF DIRECTORS AND BOARD COMMITTEES
The Board of Directors met five times in 1996.
Directors who are not employees of the Corporation receive an annual retainer
fee of $26,000. These Directors also receive an attendance fee of $1,250 for
each regular or special Board meeting, $1,000 for each Committee meeting and
$1,000 for each Board or Committee meeting by telephone. Committee chairs also
receive an annual chairmanship fee of $4,000. Directors may elect to defer the
receipt of all or a part of these fees through the Directors' 1993 Fee Plan.
Amounts so deferred earn returns based upon rates of return under various
investment vehicles. Under the terms of the Directors' 1993 Fee Plan,
non-employee Directors receive a mandatory minimum of 25% and an elective
maximum of up to 100% of their fees and retainer in shares of Common Stock based
upon the fair market value of a share of Common Stock on the last day of the
month in which such fees are paid. Directors may elect to defer receipt of all
or a part of these shares, and such deferred share units are maintained in a
deferral account with the Corporation. Dividends on these deferred share units
are automatically reinvested.
4
<PAGE>
The Corporation maintains life insurance and accidental death and dismemberment
policies for all non-employee Directors. Non-employee Directors who are not
eligible to participate in another group health plan by virtue of employment may
also participate at their own expense in the Corporation's group medical and
prescription drug plans maintained for the Corporation's employees. The
Corporation also reimburses all expenses incurred by Directors in connection
with the conduct of the business of the Board. In addition, non-employee
Directors currently receive an annual automatic grant of an option to purchase
3,000 shares of Common Stock pursuant to the terms of the Amended and Restated
1986 Incentive Stock Program. The exercise price of the option shares is equal
to the closing price on the New York Stock Exchange on the date of grant. The
date of grant is the date of the Annual Meeting.
All Directors attended at least 75% of the aggregate number of the meetings of
the Board and the Board Committees of which they were members.
INFORMATION CONCERNING SECURITY OWNERSHIP
FMR Corp., 82 Devonshire Street, Boston, MA 02109, a parent holding company, and
related persons have reported on a Schedule 13G filed on February 13, 1997 for
fiscal year 1996 the beneficial ownership of 6,488,120 shares of Common Stock,
representing 10.65% of the total shares outstanding.
Putnam Investments, Inc., Putnam Investment Management, Inc. and The Putnam
Advisory Company, Inc., One Post Office Square, Boston, MA 02109 and Marsh &
McLennan Companies, Inc., 1166 Avenue of the Americas, New York, NY 10036, the
parent holding company, together have reported on a Schedule 13G filed on
January 27, 1997 for fiscal year 1996 the beneficial ownership of 4,034,115
shares of Common Stock representing 6.6% of the total shares outstanding.
The Corporation knows of no other person or group who is the beneficial owner of
more than 5% of its Common Stock.
Table 1 shows the number of shares of Common Stock held by each Director and by
each of the Executive Officers shown in Table 2, as well as the total number of
shares held by all current Directors and Executive Officers as a group as of
February 25, 1997.
TABLE 1: SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
Shares Option
Beneficial Owner Owned(1) Shares(2)
- ----------------------------------- --------- -----------
<S> <C> <C>
Robert A. Cornog 50,657 438,934
Branko M. Beronja 19,687 91,069
Donald W. Brinckman 12,596 7,500
Bruce S. Chelberg 2,692 6,000
Roxanne J. Decyk 3,451 3,000
Raymond F. Farley 26,917 13,500
Leonard A. Hadley 734 0
Frederick D. Hay 19,174(3) 45,000
Donald S. Huml 11,571 81,000
Arthur L. Kelly 14,355 13,500
George W. Mead 11,580 13,500
Edward H. Rensi 8,870 5,601
Jay H. Schnabel 15,465 109,474
All current Directors and Executive
Officers as a group (16 persons) 315,230 1,043,519
</TABLE>
The above amounts include shares owned by spouses and minor children. None of
the named individuals beneficially owns more than 1% of the outstanding Common
Stock. As a group, the Directors and Executive Officers beneficially own
approximately 2.2% of the outstanding Common Stock, including option shares.
(1) Includes (a) shares of stock the receipt of which has been deferred by
certain non-employee Directors pursuant to the Directors' 1993 Fee Plan and
(b) share units credited to certain Executive Officers in respect of
compensation deferred under the Deferred Compensation Plan (the "Deferred
Plan"). The number of share units credited to an Executive Officer under the
Deferred Plan is based upon the fair market value of a share of Common Stock
on the date the units are credited, and the value of share units at a later
date when compensation is paid out under the Deferred Plan or an Executive
Officer disposes of share units under the Deferred Plan will be based upon
the fair market value of a share of Common Stock at such later date. All
such shares are included in the reports filed by such Executive Officers and
Directors under Section 16 of the Securities Exchange Act of 1934, as
amended.
(2) Represents shares that the individual has the right to acquire pursuant to
options that are currently exercisable or exercisable within 60 days.
(3) Includes 9,000 share units deferred under the Deferred Plan which are
scheduled to vest in 3,000 unit increments on January 27, 1998, 1999 and
2000.
5
<PAGE>
ORGANIZATION AND EXECUTIVE COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
During the 1996 fiscal year, the Organization and Executive Compensation
Committee of the Board of Directors (the "Committee"), a body composed entirely
of independent non-employee Directors, provided oversight regarding the
Corporation's executive compensation programs in order to further the
Corporation's compensation objectives and philosophy. In accordance with its
charter, one of the principal responsibilities of the Committee is to recommend
to the Board the appropriate level of compensation for the Chief Executive
Officer and to determine, after consultation with the Chief Executive Officer,
the compensation of all other Executive Officers.
COMMITTEE APPROACH. All Executive Officer positions are assigned compensation
rate ranges based on their roles and the impact of their positions in order to
link total compensation to market practices for comparable positions. The
Committee's overall approach to executive compensation is designed to establish
a performance orientation within these ranges so that compensation levels will
vary based upon corporate and individual performance.
COMPENSATION-RELATED COMMITTEE ACTIVITIES. For 1996, the Committee employed W.
T. Haigh & Company, Inc., an independent outside consulting firm specializing in
executive compensation, to conduct a study to determine market pay levels of
comparable positions. This study compared the compensation levels of Executive
Officers with those of comparable positions in a comparator group of companies
with the following characteristics: business profile similar to the
Corporation's, comparable to the Corporation in size as defined by revenues,
global in scope, recognized as industry leaders, and well-managed professional
organizations. Because the Corporation believes that its competitors for
executive talent include all types of industrial companies, the comparator group
of companies was not limited to the companies included in the industry indices
used in the performance graphs in this Proxy Statement. The result of this study
and a review of national compensation surveys provided the Committee with
competitive compensation data against which the Committee established and
monitored compensation based on performance and market practices.
ELEMENTS OF COMPENSATION. The Corporation's executive compensation program
consists of three elements: Base Salary, Annual Incentives and long-term
compensation in the Amended and Restated 1986 Incentive Stock Program (the
"Incentive Stock Program").
BASE SALARY. In determining the appropriate base salaries for Executive
Officers as set forth in Table 2, the Committee targeted base salaries at the
median of comparator companies in the W. T. Haigh & Company, Inc. study. The
Committee also considered such factors as experience, leadership and individual
performance. These factors were not ranked or weighted in any particular way. In
1996, Mr. Cornog's base salary was raised from $530,000 to $580,000 based upon
his strategic vision, the Corporation's results and strong leadership. At that
level, Mr. Cornog's base salary continued to approximate the median for the
comparator companies.
ANNUAL INCENTIVE PLAN. The Corporation has an Annual Incentive Plan for its
Executive Officers. The Committee and, with respect to the Chief Executive
Officer, the Board of Directors, approve percentage targets for threshold,
target and maximum annual achievement levels under the Plan to recognize
increases in sales, return on net assets employed before interest and taxes
("RONAEBIT"), and earnings per share growth. These percentages, if earned, are
applied to participants' base compensation. The three components are equally
weighted with a maximum potential payout of 150% of base salary for the Chief
Executive Officer and 120% of base salary for other Named Executive Officers.
The maximum potential payout for each of the Named Executive Officers is
intended to provide a bonus opportunity at the 75th percentile for the
comparator group of companies described above. For 1996, the following
percentages were paid:
<TABLE>
<CAPTION>
Sales Growth RONAEBIT EPS Growth
------------ --------------- ------------
<S> <C> <C> <C>
CEO 46.5% 28.6% 43.2%
Other Named Executive
Officers 37.2% 22.9% 34.6%
</TABLE>
Based upon these measures, Mr. Cornog received a bonus of $666,198 for 1996. The
payment to the Chief Executive Officer with respect to the sales growth
component represents payment at a level near the maximum level, the payment with
respect to the RONAEBIT component represents payment at slightly above the
target level, and the payment with respect to the EPS growth component
represents payment near the maximum level.
INCENTIVE STOCK PROGRAM AND STOCK OWNERSHIP. The Incentive Stock Program is a
long-term incentive plan designed to link the contributions of key employees to
shareholder value. The Incentive Stock Program authorizes, among other things,
grants of incentive and nonqualified stock options to Executive Officers and
other key employees to purchase shares of Common Stock at 100% of fair market
6
<PAGE>
value on the date of grant. The Committee recommends to the Board of Directors
the number of options to be granted to the Chief Executive Officer and
determines the number of options to be granted to the other Executive Officers
and key employees.
In granting stock options, the Committee takes into account the executive's
level of responsibility and past contributions as well as the practices of the
comparator group of companies described above. The Committee's objective is to
grant stock options at a level approximating the 75th percentile of comparator
group practices. For purposes of this comparison, the Committee considers the
relationship between the current market value of shares underlying a grant of
options relative to an executive's base salary, and takes into account the
frequency of and the vesting schedule for grants. Based upon these criteria and
the size of the option grants made in 1995, and subject to one exception in
connection with the employment of a new Executive Officer, the Committee made no
option grants in 1996.
Based upon the recommendation of W. T. Haigh & Company, Inc. and in accordance
with the Corporation's belief in aligning the interests of Executive Officers
with those of shareholders, the Committee has established guidelines for levels
of stock ownership to be acquired over a five-year period commencing in the 1995
fiscal year. These guidelines will apply to a group of key executives, including
the Chief Executive Officer and the other Named Executive Officers. For the
Chief Executive Officer, the minimum stock ownership guideline is three times
base salary, and for the other Named Executive Officers it is one and one-half
times base salary. While compliance with these guidelines is voluntary, the
Committee believes that encouraging ownership will significantly benefit the
Corporation and shareholders.
The Committee believes that the provisions of Section 162(m) of the Internal
Revenue Code, which limits the deductibility of certain executive compensation,
will not adversely affect the Corporation based upon the compensation payable to
the Named Executive Officers in 1996. Therefore, the Committee has not adopted
any policy concerning this limitation, but will continue to evaluate Section
162(m) of the Internal Revenue Code in future years.
RAYMOND F. FARLEY, CHAIRMAN
DONALD W. BRINCKMAN
BRUCE S. CHELBERG
EDWARD H. RENSI
Table 2 shows the total cash compensation paid, payable and/or accrued for
services rendered during the 1996, 1995 and 1994 fiscal years to each of the
five most highly compensated Executive Officers.
TABLE 2: SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Securities
Other Annual Restricted Underlying All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Stock(#) Options(#) Compensation ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Robert A. Cornog 1996 563,333 666,198 0 0 0
Chairman, President and 1995 515,354 578,897 0 187,500 0
Chief Executive Officer 1994 466,667 342,534 0 0 0
Branko M. Beronja 1996 242,667 229,611 0 0 0
Senior Vice President- 1995 206,851 185,876 0 46,500 0
Diagnostics, North America 1994 188,219 115,134 0 0 0
Frederick D. Hay 1996(1) 320,833 303,572 0 15,000(2) 45,000 14,914(3)
Senior Vice President-
Transportation
Donald S. Huml 1996 277,000 262,097 0 0 0
Senior Vice President- 1995 265,333 238,428 0 46,500 0
Finance and Chief 1994 86,667 65,000 0 37,500 100,000
Financial Officer
Jay H. Schnabel 1996 220,000 208,164 0 0 0
Senior Vice President- 1995 207,000 186,010 0 46,500 0
Europe 1994 190,000 116,223 0 0 0
</TABLE>
(1) Mr. Hay joined the Corporation on February 1, 1996.
(2) Effective February 15, 1996, Mr. Hay was awarded 15,000 shares of Common
Stock, which Mr. Hay elected to receive in the form of deferred share units
pursuant to the Deferred Plan. Three thousand deferred share units vested on
each of February 15, 1996 and January 27, 1997, and the balance vest in 3,000
unit increments on January 27 of 1998, 1999 and 2000.
(3) Consists of premiums paid on a universal life insurance policy.
7
<PAGE>
TABLE 3: OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Grant
Options Employees Exercise or Date
Granted in Fiscal Base Price Expiration Present
Name + Year ($/Sh) Date Value**
- --------- ------------ -------------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C>
Hay 45,000 100% $29.84 2/1/06 $288,450
</TABLE>
+ On 2/1/96 options were granted to Mr. Hay. One-half of these options became
exercisable on 2/1/96 and the remaining one-half became exercisable on 1/27/97.
** The estimated grant date per-share present value under the Black-Scholes
Option Pricing Model is $6.41. The material assumptions and adjustments
incorporated in the Black-Scholes Model in estimating the value of the options
reflected in the above table include the following: an exercise price of the
option ($29.84) equal to the fair market value of the underlying stock on the
date of grant; an option term of ten years; an interest rate (5.8%) that
represents the interest rate on a U. S. Treasury security with a maturity date
corresponding to that of the option term; volatility (19.1%) calculated using
daily stock prices for the one-year period prior to the grant date; dividends at
the rate of $.72 per share, representing the annualized dividends paid with
respect to a share of Common Stock as of the date of grant; and a (4.5%)
reduction to reflect the probability of forfeiture due to termination prior to
vesting and a (23.2%) reduction to reflect the probability of a shortened option
term due to termination of employment prior to the option expiration date. There
is no adjustment for nontransferability. The ultimate values of the options will
depend on the future market price of the Corporation's stock, which cannot be
forecast with reasonable accuracy. The actual value, if any, an optionee will
realize upon exercise of an option will depend on the excess of the market value
of Common Stock over the exercise price on the date the option is exercised.
TABLE 4: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION
VALUES
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Value FY-End (#) FY-End ($)+
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($) Unexercisable Unexercisable
- ------------- ------------ --------- -------------- -------------------
<S> <C> <C> <C> <C>
Cornog 4,500 $47,520 379,434/62,500 5,646,119/965,937
Beronja 0 $0 75,569/15,500 1,156,186/239,552
Hay 0 $0 22,500/22,500 147,037/147,037
Huml 3,000 $17,640 65,500/15,500 888,792/239,552
Schnabel 0 $0 93,974/15,500 1,422,641/239,552
</TABLE>
+The closing price on December 27, 1996, the Friday prior to the fiscal
year-end, was $36.375. This amount was used to calculate the value of
unexercised options with an exercise price of less than $36.375.
EXECUTIVE AGREEMENTS
Historically, the Corporation has entered into agreements with its Officers,
including each of the five Named Executive Officers, which provide for continued
compensation and benefits in the event of a change of control of the Corporation
as defined in the agreements. The agreements are for one-year terms and are
automatically extended from year to year unless notice is given, PROVIDED,
HOWEVER, that upon a change of control, the agreements continue for a
twenty-four month period. These agreements were amended and restated on January
26, 1996.
In the event of a change of control, upon termination without cause or
constructive termination in anticipation of or within two years following such
change of control or voluntary termination between twelve and eighteen months
following the change of control, each of Messrs. Cornog, Beronja, Hay, Huml and
Schnabel will receive a lump-sum payment equal to three times the sum of his
highest base salary rate in effect during the three-year period immediately
prior to termination of employment and an amount intended to approximate his
highest annual bonus opportunity or payment during the year of termination or
during the three-year period immediately prior to termination of employment or
prior to the change of control.
In addition, the agreements provide for the Executives to receive health and
life insurance benefits substantially similar to those received immediately
prior to the change of control (or termination of employment if benefits have
increased) for a three-year period subsequent to termination of employment,
subject to a reduction upon receipt of comparable benefits from subsequent
employment.
In the event that payments under the agreements are subject to an excise tax
under Section 4999 of the Internal Revenue Code of 1986 as amended, the
Executives will receive a gross-up payment equal to the amount of the excise
tax.
* * * * * *
8
<PAGE>
Table 5 shows estimated covered compensation for representative Average Pay and
Years of Credited Service before reductions for early retirement.
TABLE 5: PENSION PLAN TABLE
<TABLE>
<CAPTION>
Annual compensation based on the pension plan formula with the years of
service indicated, including amounts which would be payable under the
Administrative and Field Employee Pension Plan taking into account
limitations imposed by Internal Revenue Code Section 415 for amounts
payable in 1996 for participants age 65, and also based upon the
Supplemental Retirement Plan.
Years of Service
Average ---------------------------------------------------------------------------
Annual 5 10 15 20 25 30 35
Earnings Years Years Years Years Years Years Years
- ----------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 150,000 11,700 23,400 35,100 46,800 58,500 70,200 81,900
$ 200,000 15,825 31,650 47,475 63,300 79,125 94,950 110,775
$ 250,000 19,950 39,900 59,850 79,800 99,750 119,700 139,650
$ 300,000 24,075 48,150 72,225 96,300 120,375 144,450 168,525
$ 400,000 32,325 64,650 96,975 129,300 161,625 193,950 226,275
$ 500,000 40,575 81,150 121,725 162,300 202,875 243,450 284,025
$ 600,000 48,825 97,650 146,475 195,300 244,125 292,950 341,775
$ 700,000 57,075 114,150 171,225 228,300 285,375 342,450 399,525
$ 800,000 65,325 130,650 195,975 261,300 326,625 391,950 457,275
$ 900,000 73,575 147,150 220,725 294,300 367,875 441,450 515,025
$ 1,000,000 81,825 163,650 245,475 327,300 409,125 490,950 572,775
$ 1,100,000 90,075 180,150 270,225 360,300 450,375 540,450 630,525
$ 1,200,000 98,325 196,650 294,975 393,300 491,625 589,950 688,275
$ 1,300,000 106,575 213,150 319,725 426,300 532,875 639,450 746,025
$ 1,400,000 114,825 229,650 344,475 459,300 574,125 688,950 803,775
</TABLE>
ADMINISTRATIVE AND FIELD EMPLOYEE PENSION PLAN
The Corporation's Administrative and Field Employee Pension Plan (the "Pension
Plan") is a qualified noncontributory defined benefit plan. No specific
contribution by the Corporation is calculated with respect to the Named
Executive Officers.
The Pension Plan covers administrative and field employees and provides, at the
normal retirement age of 65, that the retirement benefits will be calculated
using the following benefit formula: (a) 1.2% times Average Pay times Years of
Credited Service plus (b) 0.45% times [Average Pay minus Social Security Covered
Compensation] times Years of Credited Service. "Average Pay" is the average
annual earnings during the five highest consecutive calendar years and generally
includes base salary and bonus amounts paid to an individual in a given year.
"Social Security Covered Compensation" is the average of the Social Security
Maximum Taxable Wage Base (according to federal regulations) for each calendar
year to age 65. "Years of Credited Service" is the number of years and
fractional number of years of continuous employment up to 35 years. The most
commonly chosen payout provision is a 100% pension payout with a five-year
certain period in the event of death, and thereafter a 50% yearly payout to the
surviving spouse. Two other actuarial equivalent optional forms of payout are
available.
SUPPLEMENTAL RETIREMENT PLAN
Elected Officers of the Corporation, who are participants in the Pension Plan,
currently participate in a Supplemental Retirement Plan. The Supplemental
Retirement Plan is a nonqualified excess benefit and supplemental retirement
plan as defined by Sections 3(36) and 201(2) of the Employee Retirement Income
Security Act (ERISA).
Under the Supplemental Retirement Plan the difference, if any, between the full
amount of retirement income due under the Pension Plan formula and the amount of
retirement income payable under applicable I.R.S. or ERISA limitations is paid
to Supplemental Retirement Plan participants. Qualified retirement plan
compensation is currently limited to $150,000 per annum per retiree by Section
401(a)(17) of the Internal Revenue Code.
The Corporation has entered into an agreement with Mr. Cornog to credit him two
years of service for every year worked, rather than the one-year arrangement
under the Pension Plan.
As of February 25, 1997, the years of credited service for the Officers in Table
2 are: Mr. Cornog, 11 years; Mr. Beronja, 33 years; Mr. Hay, 1 year; Mr. Huml, 2
years and Mr. Schnabel, 31 years.
PERFORMANCE GRAPHS
Pursuant to the requirements of the Securities and Exchange Commission, the
Corporation has included below a graph of the Corporation's cumulative total
shareholder return, which measures the returns on stock with dividends
reinvested. While cumulative total shareholder return is one measure of
corporate performance, the Corporation has also included another graph of a
financial measure used by the Corporation: return on net assets employed before
interest and taxes ("RONAEBIT"). This return measures pre-tax and pre-interest
expense return on net assets (total assets less each and all noninterest bearing
liabilities). This performance measure is also used as a component of the
Incentive Compensation Plan for the Corporation's Executive Officers, as
discussed in the Organization and Executive Compensation Committee Report on
Executive Compensation on pages 6 and 7. The total shareholder return table and
graph below illustrate the Corporation's performance compared to (a) the
Standard & Poor's 500 Stock Index and (b) the Standard & Poor's Hardware and
Tool Index (the "Tool Index"). The RONAEBIT graph and table below illustrate the
Corporation's performance compared to the average RONAEBIT of the companies in
the Tool Index.
9
<PAGE>
TOTAL SHAREHOLDER RETURN(1)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SNAP-ON S & P 500 S & P HARDWARE & TOOLS
<S> <C> <C> <C>
FYE 1991 $100.00 $100.00 $100.00
FYE 1992 100.13 107.61 103.87
FYE 1993 124.43 118.41 118.02
FYE 1994 112.52 120.01 115.56
FYE 1995 157.38 164.95 169.37
FYE 1996 190.22 202.73 159.19
</TABLE>
<TABLE>
<CAPTION>
Snap-on
Fiscal Year Ending(2) Incorporated S&P 500 Tool Index
- --------------------- ------------- ----------- -----------
<S> <C> <C> <C>
December 31, 1991 $ 100.00 $ 100.00 $ 100.00
December 31, 1992 100.13 107.61 103.87
December 31, 1993 124.43 118.41 118.02
December 31, 1994 112.52 120.01 115.56
December 31, 1995 157.38 164.95 169.37
December 31, 1996 190.22 202.73 159.19
</TABLE>
(1) ASSUMES $100 INVESTED ON THE LAST DAY OF DECEMBER, 1991 AND DIVIDENDS ARE
REINVESTED QUARTERLY.
(2) ALTHOUGH THE CORPORATION'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO
DECEMBER 31 OF EACH YEAR, DECEMBER 31 IS USED FOR EASE OF CALCULATION.
RETURN ON NET ASSETS EMPLOYED BEFORE INTEREST AND TAXES
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FISCAL YEAR ENDING SNAP-ON HARDWARE & TOOLS*
<S> <C> <C>
1991 19.1% 16.1%
1992 15.1% 12.8%
1993 17.1% 14.5%
1994 18.7% 16.7%
1995 21.1% 15.3%
1996 24.4% Information Currently Unavailable
</TABLE>
<TABLE>
<CAPTION>
Snap-on
Fiscal Year Ending(2) Incorporated
- ----------------------------------------------------------------------------------------------------------------- -----------------
<S> <C>
December 31, 1991 19.1%
December 31, 1992 15.1%
December 31, 1993 17.1%
December 31, 1994 18.7%
December 31, 1995 21.1%
December 31, 1996 24.4%
<CAPTION>
Fiscal Year Ending(2) Tool Index(1)
- ----------------------------------------------------------------------------------------------------------------- --------------
<S> <C>
December 31, 1991 16.1%
December 31, 1992 12.8%
December 31, 1993 14.5%
December 31, 1994 16.7%
December 31, 1995 15.3%
December 31, 1996 --(3)
</TABLE>
(1) THE TOOL INDEX RETURN ON NET ASSETS EMPLOYED BEFORE INTEREST AND TAXES
PERCENTAGES FOR EACH YEAR IS AN AVERAGE OF THE COMPANIES IN THE TOOL INDEX.
(2) ALTHOUGH THE CORPORATION'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO
DECEMBER 31 OF EACH YEAR, DECEMBER 31 IS USED FOR EASE OF CALCULATION.
(3) INFORMATION CURRENTLY UNAVAILABLE.
PROXY STATEMENT ITEM II
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION INCREASING AUTHORIZED
COMMON STOCK
The Corporation currently has 125,000,000 shares of Common Stock authorized. The
Board of Directors has approved for submission to shareholders and recommends an
amendment to the Corporation's Restated Certificate of Incorporation to increase
the total number of authorized shares of Common Stock to 250,000,000.
As of February 25, 1997, 60,879,788 shares of Common Stock were outstanding. In
addition, there were approximately 8,850,000 shares of Common Stock reserved for
issuance under the Corporation's various plans and programs involving Common
Stock. The Corporation also has authorized 15,000,000 shares of Preferred Stock,
none of which are issued and
10
<PAGE>
450,000 of which are reserved for issuance in
connection with the Corporation's outstanding Preferred Stock Purchase Rights.
The Board of Directors believes it is desirable and in the best interests of the
Corporation and its shareholders to increase the number of shares of Common
Stock to ensure that the Corporation will have a sufficient number of authorized
shares available in the future to provide it with the desired flexibility to
meet its business needs. If shareholders approve the proposed amendment, then
the Corporation will have additional shares available for general corporate
purposes, including stock splits, issuing stock in connection with various
incentive or employee plans, potential acquisitions, raising additional capital
and other uses.
The additional shares may be issued by the Board of Directors without further
shareholder approval unless required by the Delaware General Corporation Law,
the Internal Revenue Code, New York Stock Exchange rules, the Corporation's
Restated Certificate of Incorporation or other applicable law, regulation or
rule. The authorization of additional shares of Common Stock will enable the
Corporation, in many instances as the need may arise, to take timely advantage
of market conditions and the availability of favorable opportunities without the
delay and expense associated with the holding of a special meeting of
shareholders. The Corporation's Board of Directors believes that the delay
necessary for shareholder authorization of additional shares in the context of a
specific issuance could be detrimental to the Corporation and its shareholders.
The additional shares of Common Stock for which authorization is sought would be
identical to the shares of Common Stock now authorized. Existing shareholders of
the Corporation do not currently have preemptive rights to purchase any shares
of Common Stock and will not have any such rights to purchase Common Stock
issued in the future.
The Board of Directors does not intend to issue any shares of Common Stock
except on terms that the Board believes to be in the best interests of the
Corporation and its shareholders. Depending on the terms of issuance, the
issuance of additional shares of Common Stock may or may not have a dilutive
effect on the Corporation's then existing shareholders. Although the Corporation
does consider from time to time proposals or transactions involving the issuance
of additional shares of Common Stock, there is currently no specific transaction
contemplated that would result in the issuance of the additional shares of
Common Stock that the Corporation is requesting shareholders to authorize.
Article FOURTH of the Corporation's Restated Certificate of Incorporation
currently provides that the number of shares of Common Stock that the
Corporation is authorized to issue is 125,000,000 shares and the number of
shares of Preferred Stock the Corporation is authorized to issue is 15,000,000.
The proposed amendment would amend and restate the first paragraph of Article
FOURTH of the Corporation's Restated Certificate of Incorporation to read as
follows:
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is two hundred fifty million
(250,000,000) shares of Common Stock with the par value of one dollar
($1.00) per share and fifteen million (15,000,000) shares of Preferred
Stock with the par value of one dollar ($1.00) per share.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR ADOPTION OF THE
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION.
INDEPENDENT AUDITOR
Arthur Andersen LLP will serve as the Corporation's independent auditor for
1997. Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting to answer questions and to make statements if they so desire.
Arthur Andersen LLP has been the Corporation's independent auditor for the past
fifteen fiscal years.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation believes that during 1996 its Officers and Directors complied
with all filing requirements under Section 16(a) of the Securities Exchange Act
of 1934, except as described below. The Corporation has assumed the
responsibility of filing required reports on behalf of its Officers and
Directors. Since January 1, 1996, the Corporation was late in filing reports on
behalf of each of Messrs. Farley, Hadley, Huml and Montemurro (a single
transaction and report in each case) to report the acquisition of Common Stock
or of rights to acquire Common Stock.
11
<PAGE>
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be included in the 1998 Proxy Statement
must be received by the Secretary of the Corporation by November 16, 1997.
Additional requirements relating to the timeliness and content of proposals to
be submitted at an Annual Meeting are found in the Bylaws of the Corporation.
DIVIDEND REINVESTMENT PLAN
The Dividend Reinvestment Plan offers shareholders three voluntary methods of
building their holdings of Common Stock. Shareholders may elect to reinvest cash
dividends on either (a) all of their Common Stock of the Corporation or (b) any
portion of their Common Stock of the Corporation. Shareholders can also make
cash investments of more than $100 per investment and less than $5,000 per
calendar quarter for Shares. Shares under all three methods will be purchased at
100% of the average high and low price of the Common Stock on the day of
purchase. There are no participation, commission, administrative or service
fees. Further information is available through Harris Trust and Savings Bank at
1-800-524-0687.
DIRECTIONS TO ANNUAL MEETING
FROM CHICAGO'S O'HARE INTERNATIONAL AIRPORT TO THE RACINE MARRIOTT -- I-294
North to I-94 West (Milwaukee, Wisconsin) to Racine, Wisconsin, Highway 20 (exit
333-Racine/Waterford). Highway 20 East (right) to Racine Marriott (on right).
FROM MILWAUKEE'S MITCHELL INTERNATIONAL AIRPORT TO THE RACINE MARRIOTT -- I-94
East to Racine Highway 20 (exit 333-Racine/Waterford). Highway 20 East (left) to
Racine Marriott (on right).
If you would like to take advantage of transportation provided by the
Corporation to the General Offices following the meeting for a plant tour or to
see old friends, please call 1-800-786-6600, extension 4780, before April 21,
1997.
* * * *
12
<PAGE>
PROXY SNAP-ON INCORPORATED PROXY
2801-80TH STREET
KENOSHA, WI 53141-1410
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints D. W. Brinckman, G. W. Mead and J. H. Schnabel as
Proxies, each with power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all shares of the common
stock of Snap-on Incorporated held of record by the undersigned on February
25, 1997, at the Annual Meeting of Shareholders to be held at the Racine
Marriott, 7111 Washington Avenue, Racine, Wisconsin at 10:00 a.m. on Friday,
April 25, 1997, or at any adjournment thereof.
THIS PROXY WILL BE VOTED "FOR" THE DIRECTOR NOMINEES AND "FOR" ITEM 2 IF NO
CHOICE IS SPECIFIED.
IN THE ABSENCE OF AN INSTRUCTION TO THE CONTRARY, THIS PROXY WILL BE VOTED
FOR THE PROPOSALS STATED HEREIN AND AT THE DISCRETION OF THE PROXIES ON ANY
OTHER BUSINESS.
PLEASE MARK YOUR VOTE ON REVERSE SIDE, SIGN, DATE AND RETURN THIS PROMPTLY IN
ENCLOSED ENVELOPE.
<PAGE>
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY /X/
VOTE WITHHOLD
For all nominees authority to vote
(except as indicated) for all nominees
1. Election of Directors: / / / /
Three-year terms - B. S. Chelberg,
A. L. Kelly, and R. J. Decyk
Two-year term - B. M. Beronja
One-year term - L. A. Hadley
TO WITHHOLD YOUR VOTE FOR ANY NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME
IN THE LIST ABOVE.
For Against Abstain
2. Proposal to amend the Restated
Certificate of Incorporation to / / / / / /
increase authorized common stock.
3. In their discretion, the Proxies are
authorized to vote on such other
matters as may properly come before
the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR ITEMS 1 AND 2.
Please sign exactly as name appears
herein. For joint accounts, all holders
should sign. Executors, administrators,
trustees and guardians should give full
title. If a corporation, sign in
corporation name by authorized officer.
If a partnership, please sign in
partnership name by authorized person.
Dated: ___________________________, 1997
Receipt of Notice of the Annual Meeting
and Proxy Statement is hereby
acknowledged.
----------------------------------------
Signature
