<PAGE>
[LOGO]
CHAIRMAN'S LETTER
NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
PROXY STATEMENT
<PAGE>
[LOGO]
CHAIRMAN'S LETTER
March 13, 1998
Dear Snap-on Shareholder,
I invite you to attend our Annual Meeting of Shareholders at 10:00 a.m. on
Friday, April 24, 1998, at the Racine Marriott, 7111 Washington Avenue, Racine,
Wisconsin. We will be reviewing the results of another record-setting year for
Snap-on, as well as discussing how we are positioning your investment in Snap-on
for the future.
Your vote is important, and whether or not you plan to attend the meeting, we
encourage you to return your Proxy Card early or take advantage of the new and
convenient way to vote your shares electronically by telephone.
The proxy materials, written this year in a new format, are enclosed, along with
the 1997 Annual Report. We welcome your comments.
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>
[LOGO]
NOTICE OF THE 1998 ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of Snap-on Incorporated will be held:
Friday, April 24, 1998
10:00 a.m.
The Racine Marriott
7111 Washington Avenue
Racine, Wisconsin
DIRECTIONS TO THE ANNUAL MEETING ARE ON PAGE 20.
MEETING PURPOSES
1. To elect four Directors:
- The following three Directors will stand for election for three-year terms
to expire at the 2001 Annual Meeting: Robert A. Cornog, Leonard A. Hadley
and Edward H. Rensi.
- One Director, Richard F. Teerlink, who is also our newest Director, will
stand for election for a one-year term to expire at the 1999 Annual
Meeting, in order to place him in the class of Directors eligible for
reelection in 1999.
2. To transact any other business appropriate to the Annual Meeting.
RECORD DATE
Shareholders of record at the close of business on February 24, 1998, will be
able to vote at the Annual Meeting in person, by proxy or electronically by
telephone.
IMPORTANT: COMPLETE AND RETURN YOUR PROXY CARD EARLY
We encourage all shareholders--even those planning to attend the Annual
Meeting--to return their Proxy Cards well in advance of the Annual Meeting so
that the vote count will not be delayed. To ensure your representation at the
Annual Meeting, please complete and sign the Proxy Card and return it promptly
in the enclosed envelope. Alternatively, you may take advantage of our new and
convenient way by which you may vote your shares electronically by telephone.
Voting instructions are provided on the Proxy Card. If you attend the Annual
Meeting, you may revoke your proxy, whether previously delivered in the form of
an executed Proxy Card or by telephone, and vote your shares in person.
Sincerely,
Susan F. Marrinan
VICE PRESIDENT,
SECRETARY AND
GENERAL COUNSEL
March 13, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SUMMARY OF PROXY INFORMATION........................................................... 2
Proposal to be Voted on: Election of Directors....................................... 4
BOARD OF DIRECTORS..................................................................... 5
Directors Not Standing for Election.................................................. 5
Board Committees..................................................................... 6
Board Compensation................................................................... 7
Security Ownership of Management and Certain Beneficial Owners....................... 8
TABLE 1 -- SECURITY OWNERSHIP OF MANAGEMENT........................................ 8
EXECUTIVE COMPENSATION................................................................. 10
Five-Year Performance................................................................ 10
Report of the Organization and Executive Compensation Committee...................... 12
TABLE 2 -- SUMMARY COMPENSATION.................................................... 15
TABLE 3 -- OPTION GRANTS IN LAST FISCAL YEAR....................................... 16
TABLE 4 -- AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES................................................... 17
Administrative and Field Employee Pension Plan....................................... 17
TABLE 5 -- PENSION PLAN............................................................ 17
OTHER INFORMATION...................................................................... 19
Directions to Annual Meeting......................................................... 20
</TABLE>
<PAGE>
SUMMARY OF PROXY INFORMATION
BACKGROUND ON THE BOARD OF DIRECTORS
This year, Raymond F. Farley, a Director since 1988, and Jay H. Schnabel, a
Director since 1989 and Snap-on's Senior Vice President-Europe, will retire from
the Board.
The size of the Board is set by the Directors at any number between five and 15
members. With the retirement of Mr. Farley and Mr. Schnabel, the Board will have
10 Directors, divided into three classes. Each year one class is elected to a
three-year term, helping to assure continuity of leadership.
ELECTION OF DIRECTORS
The primary business of the Annual Meeting will be to elect four Directors. The
Board's nominees are:
- Robert A. Cornog
- Leonard A. Hadley
- Edward H. Rensi
- Richard F. Teerlink
See page 4 for more information on the nominees. Directors will be elected based
on the affirmative vote of a majority of the votes cast at the Annual Meeting.
You may vote your shares by returning the enclosed Proxy Card, by telephone (see
the Proxy Card for instructions) or by voting in person at the Annual Meeting.
We recommend you complete and return the Proxy Card or vote by telephone even if
you are planning to attend the Annual Meeting so that the vote count will not be
delayed.
HOW TO VOTE
Shareholders of record as of the close of business on February 24, 1998 (the
"Record Date") are entitled to vote at the Annual Meeting. Each share of Common
Stock outstanding is entitled to one vote. As of the Record Date, Snap-on had
60,005,182 shares of Common Stock outstanding.
To vote, complete, sign and return the enclosed Proxy Card as soon as possible.
You may also vote electronically by telephone.
All shareholders are also invited to attend the Annual Meeting, although space
is limited. If you complete a Proxy Card, or vote by telephone, you may still
vote in person at the Annual Meeting. To do so, give written notice that you
would like to revoke your original proxy to one of the following:
- the Corporate Secretary, in advance of the Annual Meeting; or
- the authorized representatives at the Annual Meeting.
You may also make a change to your proxy by returning a later-dated proxy.
If you return your signed Proxy Card but do not indicate your voting preference,
your shares will be voted FOR the Director nominees on your behalf.
2
<PAGE>
HOW THE VOTES ARE TABULATED
First Chicago Trust Company of New York, Snap-on's transfer agent, will use an
automated system to tabulate the votes. Abstentions and broker nonvotes are
included in the tally of shares, although they have no effect on the election of
Directors. (Broker nonvotes are proxies delivered by brokers where the broker
has not received authority to vote from the shareholder.)
MORE ABOUT THE PROXY SOLICITATION
This year the proxy materials were first mailed to shareholders on or about
March 13, 1998. In addition, officers and employees of Snap-on may make
solicitations by mail, telephone, facsimile or in person.
Morrow & Co., Inc. has been retained for $7,000 plus expenses to assist Snap-on
in the solicitation of proxies. This will include requesting brokerage houses,
depositories, custodians, nominees and fiduciaries to forward proxy soliciting
material to the beneficial owners of the stock held by them. Snap-on will
reimburse Morrow & Co., Inc. for the forwarding expenses.
INDEPENDENT AUDITOR
Arthur Andersen LLP has been Snap-on's independent auditor for the past 16 years
and will serve as Snap-on's independent auditor again in 1998. Representatives
of the auditing firm will be at the Annual Meeting to answer your questions.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE BOARD
If you wish to suggest an individual for consideration as a nominee for election
to the Board at the 1999 Annual Meeting, please submit a written recommendation
to the Corporate Secretary for forwarding to the Board Affairs and Nominating
Committee before October 1, 1998.
If you wish to propose business at the 1999 Annual Meeting and would like your
proposal to be included in Snap-on's proxy materials in accordance with
Securities and Exchange Commission requirements, please submit appropriate
materials to the Corporate Secretary by November 13, 1998.
Snap-on's Bylaws, a copy of which you may obtain from the Corporate Secretary by
submitting a written request, contain requirements relating to the timeliness
and content of formal nominations for election to the Board and other proposals
for consideration at the Annual Meeting.
The address of the Corporate Secretary is:
Corporate Secretary
Snap-on Incorporated
2801 - 80th Street
P.O. Box 1410
Kenosha, Wisconsin 53141-1410
3
<PAGE>
PROPOSAL TO BE VOTED ON: ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
With the retirement of Mr. Farley and Mr. Schnabel, the Board has 10 members,
who are divided into three classes, of which one class is elected each year to a
three-year term. Mr. Teerlink, our newest Director, is nominated to a one-year
term to join the class of Directors eligible for reelection in 1999.
Nominees for election to the Board are Robert A. Cornog, Leonard A. Hadley and
Edward H. Rensi, to stand for election for terms expiring at the 2001 Annual
Meeting, and Richard F. Teerlink to stand for election for a term expiring at
the 1999 Annual Meeting.
NOMINEES FOR ELECTION FOR TERMS EXPIRING AT THE 2001 ANNUAL MEETING
ROBERT A. CORNOG
DIRECTOR SINCE 1982
Mr. Cornog, age 57, has been President, Chief Executive Officer, and Chairman of
the Board of Directors of Snap-on since 1991. He is also a Director of Johnson
Controls, Inc., Wisconsin Electric Power Company and Wisconsin Energy
Corporation.
LEONARD A. HADLEY
DIRECTOR SINCE 1997
Mr. Hadley, age 63, has been Chairman and Chief Executive Officer of Maytag
Corporation, a manufacturer of appliances, since 1993 and was its President and
Chief Operating Officer since 1991. He also serves as a Director of Deere &
Company.
EDWARD H. RENSI
DIRECTOR SINCE 1992
Mr. Rensi, age 53, has been a consultant and retired President and Chief
Executive Officer of McDonald's U.S.A., a food service organization, since July,
1997. He served as McDonald's U.S.A. President and Chief Operating Officer from
1984 to 1991 and as President and Chief Executive Officer from 1991 to 1997. He
also serves as a Director of International Speedway Corporation.
NOMINEE FOR ELECTION FOR A TERM EXPIRING AT THE 1999 ANNUAL MEETING
RICHARD F. TEERLINK
DIRECTOR SINCE 1997
Mr. Teerlink, age 61, has been Chairman of Harley-Davidson, Inc., a manufacturer
of motorcycles, since 1996, and served as its Chief Executive Officer from 1989
to 1997 and President from 1987 to 1997. He also serves as a Director of Johnson
Controls, Inc.
THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THESE NOMINEES.
Shares represented by proxies will be voted according to instructions on the
Proxy Card. Only cards clearly indicating a vote withheld will be considered as
a vote against the nominees. If any nominee is unable to serve, the Board will
name a replacement and the shares represented by proxies will be voted for the
substitute Director.
4
<PAGE>
BOARD OF DIRECTORS
DIRECTORS NOT STANDING FOR ELECTION
DIRECTORS CONTINUING TO SERVE UNTIL THE 1999 ANNUAL MEETING
BRANKO M. BERONJA
DIRECTOR SINCE 1997
Mr. Beronja, age 63, has been an employee of Snap-on since 1963. He served as
Vice President-Sales, North America from 1989 to 1994 and President-North
American Operations from 1994 to 1996. From 1996 to 1998, he was Senior Vice
President-Diagnostics, North America, and is currently Senior Vice
President-Diagnostics.
DONALD W. BRINCKMAN
DIRECTOR SINCE 1992
Mr. Brinckman, age 67, is the founder of Safety-Kleen Corporation and has been
Chairman of its Board of Directors since 1994. He served as Chief Executive
Officer of Safety-Kleen from 1968 to 1994 and again since August, 1997. He also
served as President of Safety-Kleen from 1991 to 1993. Safety-Kleen is a
recycler of automotive and industrial hazardous and nonhazardous fluids. Mr.
Brinckman also serves as a Director of Paychex, Inc.
GEORGE W. MEAD
DIRECTOR SINCE 1985
Mr. Mead, age 70, 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 from 1971 through 1993.
DIRECTORS CONTINUING TO SERVE UNTIL THE 2000 ANNUAL MEETING
BRUCE S. CHELBERG
DIRECTOR SINCE 1993
Mr. Chelberg, age 63, has been Chairman of the Board and Chief Executive Officer
of Whitman Corporation, a consumer goods company, since 1992. He has served on
Whitman's Board since 1988. Mr. Chelberg also serves as a Director of First
Midwest Bancorp, Inc., and Northfield Laboratories, Inc.
ROXANNE J. DECYK
DIRECTOR SINCE 1993
Ms. Decyk, age 45, has been a strategy and business development consultant since
April, 1997, and from 1994 to 1997 served as Vice President-Corporate Planning
for Amoco Corporation, a petroleum products company. 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 also serves as a Director of Material Sciences Corporation.
ARTHUR L. KELLY
DIRECTOR SINCE 1978
Mr. Kelly, age 60, has been the managing partner of KEL Enterprises L.P., a
holding and investment company, since 1982. He also is a Director of Bayerische
Motoren Werke (BMW) A.G., Deere & Company, Nalco Chemical Company, The Northern
Trust Corporation and Thyssen Industrie A.G.
5
<PAGE>
BOARD COMMITTEES
BOARD COMMITTEE MEMBERSHIP AND 1997 ACTIVITY
<TABLE>
<CAPTION>
BOARD AFFAIRS &
NAME AUDIT NOMINATING EXECUTIVE FINANCE
----------------------- ----------- ------------------- --------------- -------------
<S> <C> <C> <C> <C>
B. M. Beronja................................ X
D. W. Brinckman.............................. X*
B. S. Chelberg............................... X
R. A. Cornog................................. X X* X
R. J. Decyk.................................. X X
R. F. Farley................................. X
L. A. Hadley................................. X
A. L. Kelly.................................. X X X*
G. W. Mead................................... X X
E. H. Rensi.................................. X*
J. H. Schnabel............................... X
R. F. Teerlink...............................
NO. OF MEETINGS IN 1997...................... 4 2 1 5
<CAPTION>
ORGANIZATION &
EXECUTIVE
NAME COMPENSATION
----------------------- ---------------------
<S> <C>
B. M. Beronja................................
D. W. Brinckman.............................. X
B. S. Chelberg............................... X*
R. A. Cornog.................................
R. J. Decyk..................................
R. F. Farley................................. X*
L. A. Hadley................................. X
A. L. Kelly..................................
G. W. Mead...................................
E. H. Rensi.................................. X
J. H. Schnabel...............................
R. F. Teerlink...............................
NO. OF MEETINGS IN 1997...................... 3
</TABLE>
*Committee Chair
The Board met six times in 1997. All Directors attended at least 75% of the
total meetings of the Board and Committees of which they were members in 1997,
except for Mr. Brinckman, who attended 67%.
AUDIT COMMITTEE
The Audit Committee oversees the independent audit of Snap-on's operations and
financials, including recommending an independent auditor to the Board,
reviewing the audit for adequate accounting, financial and operating controls,
and determining whether any of the auditor's proposals to perform additional
services may result in a loss of independence. This Committee also reviews
corporate environmental, health and safety policies, as well as Snap-on's
government contract program and related training, compliance and reporting.
BOARD AFFAIRS AND NOMINATING COMMITTEE
This Committee makes recommendations to the Board regarding Board policies and
structure including size and composition of the Board, corporate governance,
number and responsibilities of Committees, tenure policy, and qualifications of
potential Board nominees, including nominees recommended by shareholders.
EXECUTIVE COMMITTEE
The Executive Committee acts in the interim between Board meetings, providing
review and oversight of Snap-on's business.
6
<PAGE>
FINANCE COMMITTEE
The Finance Committee analyzes and makes recommendations concerning Snap-on's
long-term financial objectives. This includes issues of capital structure,
issuance and repurchase of shares, long-term financing and dividend policy.
ORGANIZATION AND EXECUTIVE COMPENSATION COMMITTEE
This Committee oversees corporate organization, executive succession and
Snap-on's executive compensation programs. It recommends to the Board the
appropriate level of compensation for the Chief Executive Officer and, after
consulting with the Chief Executive Officer, determines the compensation of all
other Executive Officers. This Committee also administers Snap-on's incentive
compensation plans, which include the incentive stock program, employee stock
ownership and franchised dealer stock ownership plans, and Director
compensation.
BOARD COMPENSATION
EMPLOYEE DIRECTORS
Directors who are employees of Snap-on, currently Messrs. Beronja, Cornog, and
Schnabel, receive no additional compensation for serving on the Board or its
Committees.
NON-EMPLOYEE DIRECTORS
Directors who are not employees of Snap-on receive an annual retainer fee of
$26,000. They also receive $1,250 for every Board and Committee meeting they
attend, including meetings conducted by phone. Committee chairs also receive an
annual chairmanship fee of $4,000. Snap-on reimburses Directors for all
Board-related expenses.
DIRECTORS' FEE PLAN
Directors receive at least 25% and, at their election, up to 100% of their fees
in Common Stock through the Directors' 1993 Fee Plan (the "Fee Plan"). Under the
terms of the Fee Plan, non-employee Directors receive shares based on the fair
market value of a share of Common Stock on the last day of the month in which
the fees are paid. Directors may choose to defer the receipt of all or part of
these shares and fees to a deferral account with Snap-on. The Fee Plan credits
deferred cash amounts with earnings based on market rates of return. Dividends
on deferred share units are automatically reinvested.
STOCK OPTIONS
Non-employee Directors currently receive an annual automatic grant of an option
to purchase 3,000 shares of Common Stock. The exercise price of the option
shares is equal to the closing price on the New York Stock Exchange on the date
of the grant, which coincides with the Annual Meeting.
INSURANCE
Snap-on maintains life insurance and accidental death and dismemberment policies
for all non-employee Directors. In addition, Directors who are not eligible to
participate in another group health plan may participate at their own expense in
the Snap-on medical and prescription drug plans maintained for employees.
7
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following Table 1 shows the number of shares of Common Stock beneficially
owned by each Director and by Messrs. Cornog, Beronja, Hay, Huml and Schnabel
(the "Named Executive Officers"), as well as the total number of shares held by
all current Directors and Executive Officers as a group, as of February 24,
1998. Beneficial owners include the Directors and Executive Officers, their
spouses and minor children.
TABLE 1: SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
SHARES OPTION
BENEFICIAL OWNER OWNED(1) SHARES(2)
- - ---------------------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
Robert A. Cornog........................................................................ 57,617 485,534
Branko M. Beronja....................................................................... 21,287 105,069
Donald W. Brinckman..................................................................... 12,828 10,500
Bruce S. Chelberg....................................................................... 3,235 9,000
Roxanne J. Decyk........................................................................ 4,379 6,000
Raymond F. Farley....................................................................... 13,349 16,500
Leonard A. Hadley....................................................................... 1,815 3,000
Frederick D. Hay........................................................................ 23,074(3) 59,000
Donald S. Huml.......................................................................... 13,920 95,000
Arthur L. Kelly......................................................................... 15,102 16,500
George W. Mead.......................................................................... 12,697 16,500
Edward H. Rensi......................................................................... 9,361 8,601
Jay H. Schnabel......................................................................... 29,841 32,193
Richard F. Teerlink..................................................................... 1,412 0
All current Directors and Executive Officers as a group (17 persons).................... 243,861 1,056,580
</TABLE>
None of these individuals beneficially owns more than 1% of the outstanding
Common Stock. As a group, the Directors and Executive Officers beneficially own
approximately 2.1% of the outstanding Common Stock, including option shares.
- - ------------------------
(1)This column includes:
- shares of stock credited to certain non-employee Directors who have made
deferral elections under the Directors' 1993 Fee Plan; and
- share units credited to certain Executive Officers relating to
compensation they have deferred under a deferred compensation plan. The
number of share units credited to an Executive Officer under the plan is
based on the fair market value of a share of Common Stock on the date the
units are credited. The value of share units at a later date--when
compensation is paid out under the plan or when an Executive Officer
disposes of share units under the plan--will be based on the fair market
value of a share of Common Stock at the later date.
(2)This column represents shares which may be acquired on the exercise of
options now or within 60 days.
(3)This figure includes 6,000 share units deferred under the Deferred
Compensation Plan which are scheduled to vest in 3,000 unit increments on
January 27, 1999 and January 27, 2000.
8
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following information, reported to the Securities and Exchange Commission,
concerns each person or entity known to Snap-on to be the beneficial owner of
more than 5% of Snap-on's stock:
AVZ, INC., A I M MANAGEMENT GROUP, INC., AMVESCAP GROUP SERVICES, INC., INVESCO,
INC., INVESCO NORTH AMERICAN HOLDINGS, INC., INVESCO CAPITAL MANAGEMENT, INC.,
INVESCO FUNDS GROUP, INC., INVESCO MANAGEMENT & RESEARCH, INC., INVESCO REALTY
ADVISORS, INC., AND AMVESCAP, PLC, the parent holding company, 11 Devonshire
Square, London, England EC2M 4YR, together have reported on a Schedule 13G filed
on February 11, 1998 for fiscal year 1997 that they are the beneficial owners of
4,594,515 shares of Common Stock, representing 7.5% 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, 1998 for fiscal year 1997 the beneficial ownership of 4,156,750
shares of Common Stock representing 6% of the total shares outstanding.
Snap-on knows of no other person or group who is the beneficial owner of more
than 5% of its Common Stock.
9
<PAGE>
EXECUTIVE COMPENSATION
FIVE-YEAR PERFORMANCE
The graph below illustrates the cumulative total shareholder return on Snap-on
stock since 1992, assuming that dividends are reinvested. The graph compares
Snap-on's performance to that of the Standard & Poor's 500 Stock Index and the
Standard & Poor's Hardware and Tools Index.
TOTAL SHAREHOLDER RETURN(1) SNAP-ON INCORPORATED
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
<S> <C> <C> <C>
Snap-on Incorporated S&P 500 S&P Hardware & Tools
1992 $100.00 $100.00 $100.00
1993 $124.27 $110.03 $113.57
1994 $112.38 $111.53 $111.20
1995 $157.18 $153.30 $162.99
1996 $189.98 $188.40 $153.19
1997 $237.24 $251.17 $234.90
</TABLE>
<TABLE>
<CAPTION>
SNAP-ON S&P HARDWARE
FISCAL YEAR ENDING(2) INCORPORATED S&P 500 & TOOLS
- - ----------------------------------- -------------- --------- ----------------
<S> <C> <C> <C>
December 31, 1992 $ 100.00 $ 100.00 $ 100.00
December 31, 1993 $ 124.27 $ 110.03 $ 113.57
December 31, 1994 $ 112.38 $ 111.53 $ 111.20
December 31, 1995 $ 157.18 $ 153.30 $ 162.99
December 31, 1996 $ 189.98 $ 188.40 $ 153.19
December 31, 1997 $ 237.24 $ 251.17 $ 234.90
</TABLE>
- - ------------------------
(1)Assumes $100 invested on the last day of December, 1992 and dividends are
reinvested quarterly.
(2)Although Snap-on's fiscal year ends on the Saturday closest to December 31 of
each year, December 31 is used for ease of calculation.
10
<PAGE>
RETURN ON NET ASSETS EMPLOYED BEFORE INTEREST AND TAXES
While cumulative total shareholder return is one measure of corporate
performance, Snap-on also uses the return on net assets employed before interest
and taxes, illustrated below. This return measures pre-tax and pre-interest
expense return on net assets (total assets minus all non-interest-bearing
liabilities). This performance measure is also used as a component of the
incentive compensation plan for Snap-on's Executive Officers, as is discussed in
the Organization and Executive Compensation Committee Report on Executive
Compensation. Snap-on derives its profits from two operations: (i)
manufacturing, marketing, and distribution of its product lines, and (ii) the
financing of such products. The graphs and tables illustrate Snap-on's
performance for its operations in the aggregate compared to the companies in the
Standard & Poor's Hardware & Tools Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
<S> <C> <C> <C>
Snap-on Actual Snap-on Adjusted Hardware & Tools
1992 17.1% 15.1% 12.8%
1993 18.6% 17.1% 14.5%
1994 18.7% 18.7% 16.7%
1995 21.1% 21.3% 15.3%
1996 24.4% 22.4% 14.1%
1997 25.1% 24.6% Information Currently Unavailable
</TABLE>
<TABLE>
<CAPTION>
SNAP-ON SNAP-ON S&P HARDWARE
FISCAL YEAR ENDING(1) ACTUAL(2) ADJUSTED(3) & TOOLS(4)
- - --------------------------------------------------------------------- ----------- ------------- ----------------
<S> <C> <C> <C>
December 31, 1992.................................................... 17.1% 15.1% 12.8%
December 31, 1993.................................................... 18.6% 17.1% 14.5%
December 31, 1994.................................................... 18.7% 18.7% 16.7%
December 31, 1995.................................................... 21.1% 21.3% 15.3%
December 31, 1996.................................................... 24.4% 22.4% 14.1%
December 31, 1997.................................................... 25.1% 24.6% Not Available
</TABLE>
- - ------------------------
(1)Although Snap-on's fiscal year ends on the Saturday closest to December 31 of
each year, December 31 is used for ease of calculation.
(2)Amounts are calculated using a thirteen-month average of net assets employed.
(3)Amounts are calculated using a method comparable to that of the Standard &
Poor's Hardware & Tools Index.
(4)The Standard & Poor's Hardware & Tools return on net assets employed before
interest and taxes percentages are an average of the companies that comprise,
for each respective year, the Standard & Poor's Hardware & Tools Index.
11
<PAGE>
REPORT OF THE ORGANIZATION AND EXECUTIVE COMPENSATION COMMITTEE
During the 1997 fiscal year, the Organization and Executive Compensation
Committee of the Board of Directors, a body composed entirely of independent
non-employee Directors, provided oversight regarding Snap-on's executive
compensation programs in order to further Snap-on'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 1997, the Committee employed W. T. Haigh & Company, Inc., an independent
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 Snap-on's,
- comparable to Snap-on in size as defined by revenues,
- global in scope,
- recognized as industry leaders,
- well-managed professional organizations.
Because Snap-on 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
Snap-on'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.
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 1997, Mr. Cornog's base salary was raised from $580,000 to $620,000 based
upon his strategic vision, Snap-on's results and strong leadership. At that
level, Mr. Cornog's base salary continued to approximate the median for the
comparator companies.
12
<PAGE>
ANNUAL INCENTIVE PLAN
Snap-on 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 1997, the following percentages were paid:
<TABLE>
<CAPTION>
SALES GROWTH RONAEBIT EPS GROWTH
----------------- ------------- ---------------
<S> <C> <C> <C>
Chief Executive Officer............................................ 50% 23.5% 41.7%
Other Named Executive Officers..................................... 40% 18.8% 33.4%
</TABLE>
Based upon these measures, Mr. Cornog received a bonus of $698,819 for 1997. The
payment to the Chief Executive Officer with respect to the sales growth
component represents payment at the maximum level, the payment with respect to
the RONAEBIT component represents payment at slightly below the target level,
and the payment with respect to the earnings per share 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 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. Consistent with these
guidelines, in 1997 Mr. Cornog was granted options to purchase 100,000 shares.
Based upon the recommendation of W. T. Haigh & Company, Inc. and in accordance
with Snap-on'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 encouraging ownership will significantly benefit Snap-on and its
shareholders.
13
<PAGE>
The Committee believes the provisions of Section 162(m) of the Internal Revenue
Code, which limits the deductibility of certain executive compensation, will not
adversely affect Snap-on based upon the compensation payable to the Named
Executive Officers in 1997. 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.
Bruce S. Chelberg, Co-Chair
Raymond F. Farley, Co-Chair
Donald W. Brinckman
Leonard A. Hadley
Edward H. Rensi
14
<PAGE>
TABLE 2: SUMMARY COMPENSATION
Table 2 shows the total compensation paid, payable and/or accrued for services
rendered during the 1997, 1996 and 1995 fiscal years to each of the Named
Executive Officers.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL -------------------------------------------
COMPENSATION RESTRICTED SECURITIES
---------------------- OTHER ANNUAL STOCK UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) ($ VALUE/ GRANT) OPTIONS(#)
- - ----------------------------- --------- ----------- ----------- ------------------------- ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ROBERT A. CORNOG............. 1997 606,666 698,819 0 0 100,000
Chairman, President and 1996 563,333 666,198 0 0 0
Chief Executive Officer 1995 515,354 578,897 0 0 187,500
BRANKO M. BERONJA............ 1997 269,500 248,317 0 0 28,000
Senior Vice President- 1996 242,667 229,611 0 0 0
Diagnostics 1995 206,851 185,876 0 0 46,500
FREDERICK D. HAY............. 1997 360,000 331,704 0 0 28,000
Senior Vice President- 1996(2) 320,833 303,572 0 438,750(3) 45,000
Transportation
DONALD S. HUML............... 1997 290,500 267,666 0 0 28,000
Senior Vice President- 1996 277,000 262,097 0 0 0
Finance and Chief 1995 265,333 238,428 0 0 46,500
Financial Officer
JAY H. SCHNABEL.............. 1997 230,833 212,689 0 0 24,000
Senior Vice President- 1996 220,000 208,164 0 0 0
Europe 1995 207,000 186,010 0 0 46,500
<CAPTION>
ALL OTHER
NAME AND PRINCIPAL POSITION COMPENSATION($)
- - ----------------------------- -------------------
<S> <C>
ROBERT A. CORNOG............. 0
Chairman, President and 0
Chief Executive Officer 0
BRANKO M. BERONJA............ 0
Senior Vice President- 0
Diagnostics 0
FREDERICK D. HAY............. 14,914(1)
Senior Vice President- 14,914(1)
Transportation
DONALD S. HUML............... 0
Senior Vice President- 0
Finance and Chief 0
Financial Officer
JAY H. SCHNABEL.............. 0
Senior Vice President- 0
Europe 0
</TABLE>
- - ------------------------
(1)Consists of premiums paid on a universal life insurance policy.
(2)Mr. Hay joined Snap-on on February 1, 1996.
(3)Effective February 15, 1996, Mr. Hay was awarded 15,000 restricted Common
Stock units under a deferred compensation plan with a grant date value of
$29.25 per share. Nine thousand units were not vested as of January 2, 1998.
Those units had a value of $381,375 (based on a price of $42.375 per share).
Such units vest in equal amounts on January 27 of 1998, 1999 and 2000.
15
<PAGE>
TABLE 3: OPTION GRANTS IN LAST FISCAL YEAR
Table 3 shows information about the Snap-on stock options granted to the five
Named Executive Officers in 1997. One-half of these options vested and became
exercisable on January 24, 1998, and the remaining one-half will become
exercisable on January 24, 1999.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING % OF TOTAL OPTIONS
OPTIONS GRANTED TO EMPLOYEES IN EXERCISE OR BASE GRANT DATE
NAME GRANTED FISCAL YEAR PRICE ($/SH) EXPIRATION DATE PRESENT VALUE(1)
- - -------------- ------------ ------------------------- ------------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Cornog........ 100,000 19.85% $ 37.125 1/24/07 $ 858,000
Beronja....... 28,000 5.56% $ 37.125 1/24/07 $ 240,240
Hay........... 28,000 5.56% $ 37.125 1/24/07 $ 240,240
Huml.......... 28,000 5.56% $ 37.125 1/24/07 $ 240,240
Schnabel...... 24,000 4.76% $ 37.125 1/24/07 $ 205,920
</TABLE>
- - ------------------------
(1)The estimated grant date present value per share under the Black-Scholes
Option Pricing Model is $8.58. The material assumptions and adjustments
incorporated in the Black-Scholes Option Pricing Model in estimating the
value of the options reflected in the above table include the following:
- an exercise price on the option ($37.125) is equal to the fair market
value of the underlying stock on the date of grant;
- an option term of ten years;
- an interest rate (6.6%) that represents the interest rate on a U. S.
Treasury security with a maturity date corresponding to that of the option
term;
- volatility (16.9%) calculated using Snap-on's daily stock prices for the
one-year period before the grant date;
- dividends at the rate of $.80 per share, representing the annualized
dividends paid with respect to a share of Common Stock as of the date of
grant; and
- a 13.3% reduction to reflect the probability of forfeiture due to
termination prior to vesting and a 16.1% reduction to reflect the
probability of a shortened option term due to termination of employment
prior to the option expiration date.
The ultimate value of the options will depend on the future market price of
Common Stock, which cannot be forecast with reasonable accuracy. The actual
value, if any, realized 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.
16
<PAGE>
TABLE 4: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
This table shows the number and value of exercised and unexercised stock options
for the five Named Executive Officers during 1997. The closing price of Common
Stock on January 2, 1998, the Friday before the fiscal year-end, was $42.375.
This amount was used to calculate the value of unexercised options with an
exercise price of less than $42.375.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED OPTIONS VALUE OF UNEXERCISED
AT FISCAL YEAR-END IN-THE-MONEY OPTIONS AT
(#) FISCAL YEAR-END ($)
SHARES ACQUIRED ON EXERCISABLE/ EXERCISABLE/
NAME EXERCISE VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- - ------------------------- ------------------ ------------------- ------------------- -----------------------
<S> <C> <C> <C> <C>
Cornog................... 3,400 60,697 438,534/100,000 9,190,714/525,000
Beronja.................. 0 0 91,069/28,000 1,942,152/147,000
Hay...................... 0 0 45,000/28,000 564,075/147,000
Huml..................... 0 0 81,000/28,000 1,614,345/147,000
Schnabel................. 101,281 2,233,507 8,193/24,000 158,448/126,000
</TABLE>
ADMINISTRATIVE AND FIELD EMPLOYEE PENSION PLAN
TABLE 5: PENSION PLAN
Table 5 shows the estimated annual pension benefits payable to covered
participants at normal retirement age under the plans discussed on page 18.
YEARS OF SERVICE
<TABLE>
<CAPTION>
AVERAGE
ANNUAL
EARNINGS 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 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
$ 1,500,000 123,075 246,150 369,225 492,300 615,375 738,450 861,525
$ 1,600,000 131,325 262,650 393,975 525,300 656,625 787,950 919,275
$ 1,700,000 139,575 279,150 418,725 558,300 697,875 837,450 977,025
</TABLE>
Annual compensation is based on the pension plan formula detailed on page 18
using the years of service indicated above, including amounts which would be
payable under the Administrative and Field Employee Pension Plan (the "Pension
Plan"), and taking into account limitations imposed by Internal Revenue Code
Section 415 for amounts payable in 1997 for participants age 65, and also based
on the Supplemental Retirement Plan. There is no offset in benefits under the
Pension Plan for Social Security benefits other than for disability retirement
benefits.
17
<PAGE>
CALCULATING THE PENSION BENEFIT
The Pension Plan is a qualified noncontributory defined benefit plan. No
specific contribution by Snap-on is calculated with respect to the Named
Executive Officers. The Pension Plan covers eligible salaried employees and
provides, at the normal retirement age of 65, that retirement benefits will be
calculated using the following benefit formula:
[1.2% X Average Pay X Years of Credited Service]
plus
[0.45% X {Average Pay - Social Security Covered Compensation} X Years of
Credited Service]
"Average Pay" is the average annual earnings during the five highest completed
consecutive calendar years of employment and generally includes base salary and
bonus amounts paid to an individual in a given year.
"Social Security Covered Compensation" is a 35-year 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 also available.
SUPPLEMENTAL RETIREMENT PLAN
Elected Officers of Snap-on who are participants in the Pension Plan also
participate in a Supplemental Retirement Plan. The Supplemental Retirement Plan
is a nonqualified excess benefit and supplement 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 Pension Plan participants will
receive 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. Qualified retirement plan compensation
is currently limited to $160,000 per annum per retiree by Section 401(a)(17) of
the Internal Revenue Code.
As of February 24, 1998, the full years of credited service for the Named
Executive Officers are: Mr. Cornog, 13 years; Mr. Beronja, 34 years; Mr. Hay, 2
years; Mr. Huml, 3 years and Mr. Schnabel, 32 years. Under an agreement with Mr.
Cornog, Snap-on credits him two years of service for every year worked, rather
than the one-year arrangement under the Pension Plan.
18
<PAGE>
OTHER INFORMATION
EXECUTIVE AGREEMENTS
Snap-on has agreements with its Executive Officers, including the five Named
Executive Officers, to provide continued compensation and benefits in the event
of a change of control of Snap-on as defined in the agreements. The agreements
are for one-year terms and are automatically extended from year to year, unless
notice is given. The agreements also provide that if there is a change of
control, the terms will continue for 24 months.
In the event of such change of control, if one of the Named Executive Officers
is terminated and is entitled to termination benefits, then he will receive
lump-sum payments equal to three times the sum of his highest base salary and
highest annual bonus target opportunity or payment during the three years before
the change of control. The Named Executive Officer will also receive an
additional payment to cover any excise taxes (and related income taxes) that may
result from the lump-sum payments and may continue to receive health and life
insurance benefits, if desired, for three years. A Named Executive Officer will
be entitled to the termination benefits if his employment is constructively
terminated without cause in anticipation of or within two years following the
change of control or he voluntarily terminates employment between 12 and 18
months following the change of control.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Snap-on believes that during 1997 its Officers and Directors complied with all
filing requirements under Section 16(a) of the Securities Exchange Act of 1934,
except as previously reported. Snap-on files the required reports on behalf of
its Officers and Directors.
DIVIDEND REINVESTMENT AND DIRECT STOCK PURCHASE PLAN
The Dividend Reinvestment and Direct Stock Purchase Plan, established in 1997,
provides for automatic dividend reinvestment in shares of Common Stock and
allows shareholders and investors the opportunity to purchase shares of Common
Stock directly from Snap-on without using a broker through a variety of methods
including:
- investments of cash dividends on all or a portion of Common Stock; and
- periodic cash investments of more than $100 per investment, up to an
annual maximum of $150,000.
Shares acquired under these methods will be purchased at 100% of the average
high and low price of the Common Stock on the day of purchase. For purchases,
there are no participation, commission or administrative fees.
More information is available from First Chicago Trust Company of New York at
1-800-446-2617.
19
<PAGE>
DIRECTIONS TO SNAP-ON ANNUAL MEETING
[MAP]
FROM CHICAGO'S O'HARE INTERNATIONAL AIRPORT TO THE RACINE MARRIOTT
Take 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
Take I-94 East to Racine, Wisconsin, Highway 20 (exit 333-Racine/Waterford).
Highway 20 East (left) to Racine Marriott (on right).
TRANSPORTATION TO SNAP-ON
If you would like to take advantage of transportation provided by Snap-on to the
General Offices in Kenosha following the meeting for a plant tour or to see old
friends, please call 1-800-786-6600, extension 4780, before April 20, 1998.
20
<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 Bruce S. Chelberg, Arthur L. Kelly and Roxanne J. Decyk
as Proxies, each with power to appoint his or her 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 24, 1998, at the Annual Meeting of Shareholders, such meeting to be
held at the Racine Marriott, 7111 Washington Avenue, Racine, Wisconsin at 10:00
a.m. on Friday, April 24, 1998, or at any adjournment thereof.
THIS PROXY WILL BE VOTED "FOR" THE DIRECTOR NOMINEES IF NO CHOICE IS SPECIFIED.
IN THE ABSENCE OF AN INSTRUCTION TO THE CONTRARY, THIS PROXY WILL BE VOTED AT
THE DISCRETION OF THE PROXIES ON ANY OTHER BUSINESS.
NOMINEES FOR THE ELECTION OF DIRECTORS ARE:
1) Robert A. Cornog 3) Edward H. Rensi
2) Leonard A. Hadley 4) Richard F. Teerlink
PLEASE MARK YOUR VOTE ON THE REVERSE SIDE, SIGN, DATE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
TRIANGLE FOLD AND DETACH HERE TRIANGLE
MAP OF RACINE MARRIOTT
<PAGE>
/X/ PLEASE MARK YOUR 2406
VOTES AS IN THIS
EXAMPLE.
VOTE WITHHOLD
For all nominees authority to vote
(except as indicated) for all nominees
1. Election of Directors: / / / /
Three-year terms -
Robert A. Cornog,
Leonard A. Hadley
and Edward H. Rensi;
One-year term - Richard F. Teerlink
______________________________________________________________________________
(Except nominees written above)
2. 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 ITEM 1.
Please sign exactly as your name appears hereon. If this is a joint account,
all holders should sign. Executors, administrators, trustees and guardians
should give full title. If a corporation, sign in corporation's name by an
authorized officer. If a partnership, please sign in partnership's name by an
authorized person.
This card is also intended for use by the participants of any eligible
benefit plans of Snap-on Incorporated.
Receipt of Notice of the Annual Meeting and Proxy Statement is hereby
acknowledged.
Signature_______________________________________________Date___________________
NOTE: Please sign exactly as name appears herein, joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
Dear Shareholder:
Snap-on Incorporated encourages you to take advantage of a new and convenient
way by which you can vote your shares. You can vote your shares electronically
through the telephone. This eliminates the need to return the proxy card.
To vote your shares electronically you must use the control number printed in
the box above, just below the perforation. The series of numbers that appear in
the box above must be used to access the system.
To vote over the telephone:
On a touch-tone telephone call 1-800-OK2-VOTE (1-800-652-8683) 24 hours a
day, 7 days a week
Your electronic vote authorizes the named proxies in the same manner as if you
marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for you to
mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
