SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended January 3, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-7724
SNAP-ON INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 39-0622040
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10801 Corporate Drive, Kenosha, Wisconsin 53141-1430
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (414) 656-5200
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
Common stock, $1 par value New York Stock Exchange
Preferred stock purchase rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months, and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in a definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [X]
Aggregate market value of voting stock held by nonaffiliates of the
registrant at February 24, 1998:
$2,475,359,776
Number of shares outstanding of each of the registrant's classes of common
stock at February 24, 1998:
Common stock, $1 par value, 60,005,182 shares
Documents incorporated by reference
Portions of the Corporation's Annual Report to Shareholders for the fiscal
year ended January 3, 1998, are incorporated by reference into Parts I, II
and IV of this report.
Portions of the Corporation's Proxy Statement, dated March 13, 1998,
prepared for the Annual Meeting of Shareholders scheduled for April 24,
1998, are incorporated by reference into Part III of this report.
<PAGE>
TABLE OF CONTENTS Page
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Description of Properties . . . . . . . . . . . . . . . . 9
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . 10
Item 4. Submission of Matters to a Vote of Security Holders . . 10
Item 4.1. Executive Officers of the Registrant . . . . . . . . . . 10
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . 11
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . 11
Item 7. Management Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 11
Item 8. Financial Statements and Supplementary Data . . . . . . 11
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure . . . . . . . . . . 11
PART III
Item 10. Directors and Executive Officers of the Registrant . . . 11
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . 11
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . . 11
Item 13. Certain Relationships and Related Transactions . . . . . 11
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . 12
Auditor's Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Signature Pages . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
PART I
Item I: Business
Snap-on Incorporated (the "Corporation" or "Snap-on") is a leading
manufacturer and distributor of high-quality hand tools, power tools, tool
storage products, diagnostics equipment, shop equipment, emissions/safety
equipment, collision repair equipment and systems, diagnostics software,
business management software for automotive repair shops, and related
products and services. Snap-on's mission is to create value by providing
innovative solutions to the transportation service and industrial markets
worldwide; therefore, the Corporation's products and services are used
mainly by professional technicians and managers in vehicle service and
industrial applications. Customers include professional technicians,
independent automotive repair and body shops, franchised service centers,
specialty repair shops, automotive dealerships, vehicle manufacturers,
industrial and government entities, and other professional tool and
equipment users.
The Corporation was incorporated under the laws of the state of Wisconsin
in 1920 and reincorporated under the laws of the state of Delaware in
1930. Its corporate headquarters are located in Kenosha, Wisconsin. The
Corporation has operations throughout the world. Its largest markets
include the United States, Australia, Brazil, Canada, France, Germany,
Japan, Mexico, the Netherlands, Spain and the United Kingdom. Products and
services are marketed and distributed in more than 150 countries through
distribution channels that include dealer vans, direct sales forces and
distributors.
In 1997 the Corporation acquired business operations that expanded its
product line, distribution channels and geographic reach. A 50% interest
was acquired in The Thomson Corporation's Mitchell Repair Information
business, a provider of print and electronic versions of vehicle
mechanical and electrical system repair information to vehicle repair and
service establishments throughout North America. The Corporation is
obligated to purchase the remaining business over the next four years. A
70% interest was acquired in Texo S.r.l., an Italian manufacturer of lifts
for motor vehicles. Several other businesses were acquired in their
entirety. Service Equipment France, S.A. is a French distributor of
automotive service and repair equipment; its subsidiary, JPL Services,
S.A., provides service and repair for equipment products. Computer Aided
Service, Inc. ("CAS") is a developer of repair shop management systems,
point of sale systems and diagnostics equipment. CAS provides shop-wide
connectivity by networking business management computers with diagnostics
systems. Nu-Tech Industries, Inc., more commonly known as Brewco Collision
Repair, is a manufacturer and supplier of frame straightening equipment,
vehicle measuring systems, paint booths and other collision repair
equipment. The acquisition of this company represents Snap-on's entry into
the collision repair industry. Hofmann Werkstatt-Technik GmbH ("Hofmann"),
a German company, is a leading producer of under-car equipment including
wheel balancers, lifts, tire changers and aligners. Hofmann's products are
sold in Europe, North America and the Asia/Pacific region.
Products and Services
The Corporation derives income from the manufacture, marketing and
distribution of its products and related services, and the financing of
certain of its products. The Corporation's manufacturing, marketing and
distribution operation offers a broad line of products and complementary
services which can be divided into two groups: tools and equipment and
related services. The following table shows the approximate percentage of
consolidated sales for each of these product groups in each of the past
three years.
Product Group % of Sales
1997 1996 1995
Tools
Hand tools 38% 40% 40%
Power tools 8% 8% 10%
Tool storage 9% 10% 10%
---- ---- ----
55% 58% 60%
Equipment and Related
Services 45% 42% 40%
---- ---- ----
100% 100% 100%
The tools product group includes hand tools, power tools and tool storage
products. Hand tools include wrenches, screwdrivers, sockets, pliers,
ratchets and other similar products, and instruments developed for medical
applications and for the manufacture and servicing of electronic
equipment. Power tools include pneumatic (air), cord-free (battery) and
corded (electric) tools such as impact wrenches, ratchets, chisels,
drills, sanders, polishers and similar products. Tool storage units
include tool chests, roll cabinets and other similar products for
automotive, industrial, aerospace and other storage applications. The
majority of products are manufactured by Snap-on; to complete the product
line, some items are purchased from external manufacturers.
The equipment and related services group includes hardware and software
solutions for the diagnosis and service of automotive and industrial
equipment. Products include engine and emissions analyzers, air
conditioning service equipment, brake service equipment, wheel balancing
and alignment equipment, transmission troubleshooting equipment, vehicle
safety testing equipment, battery chargers, lifts and hoists, diagnostics
equipment and collision repair equipment. Also included are service and
repair information products, on-line diagnostics services, management
systems, point of sale systems, integrated systems for automotive repair
shops, and purchasing facilitation services. In the United States the
Corporation supports the sale of its diagnostics and shop equipment by
offering training programs to technician customers. These programs offer
certification in both specific automotive technologies and in the
application of specific diagnostics equipment developed and marketed by
the Corporation.
Tools and equipment and related services are marketed under a number of
brand names and trademarks, many of which are well known in the automotive
and industrial markets served. Some of the major trade names and
trademarks and the products and services with which they are associated
include the following:
Trade Names/Trademarks Products and Services
Snap-on Hand tools, power tools, tool storage
units, and certain equipment
Blue Point Hand tools, power tools
Wheeltronic Hoists and lifts for vehicle service
shops
J. H. Williams (Williams) Hand tools
A. T. I. Tools (ATI) Tools and equipment for aerospace and
industrial applications
Sioux Tools (Sioux) Power tools
Snap-on Medical Products Tools for orthopedic applications
Sun Electric (Sun) Diagnostics and service equipment
Balco Engine diagnostics and wheel balancers
CAS Repair shop management systems, point of
sale systems, diagnostics equipment
John Bean Under-car and other service equipment
Hofmann Wheel balancers, lifts, tire changers
and aligners
Brewco Frame straightening equipment, vehicle
measuring systems, paint booths and
other collision repair equipment
Mitchell Repair and service information and shop
management systems
Edge Diagnostic Systems Software to diagnose vehicle computer
systems
ShopKey Repair and service information and shop
management software
Equipment Solutions Custom programs for vehicle
manufacturers and their dealerships
Equiserve Equipment repair services
The Corporation's financing activities are conducted primarily through its
Snap-on Credit Corporation ("Credit Corp") subsidiary. The Credit Corp is
responsible for certain credit and non-credit services used to support
sales and to provide dealer financing options. Currently, the majority of
its revenues are derived from the automotive service industry in North
America.
Credit programs facilitate the sale of many of the Corporation's products
and services. Through a contractual arrangement, extended credit is
offered to technicians to enable them to purchase tools and equipment that
can be used to generate income while they pay for the products over time.
Financing, in a lease format, is also offered to shop owners, both
independent and national chains, who purchase equipment items, which
typically are higher price point products than tools. The duration of
lease contracts is often two to three times that of extended credit
contracts.
Credit Corp also makes available financing to new dealers, whereby a 10-
year loan is originated to enable the dealer to fund the purchase of the
franchise and the related working capital needs, particularly inventory
and customer receivables.
Market Sectors Served
The Corporation markets and distributes its products and related services
primarily to professional users around the world in two market sectors:
the vehicle service and repair sector, and the industrial sector.
Additional information about the Corporation's international and domestic
operations is provided in Note 13 on page 35 of the Corporation's 1997
Annual Report, incorporated herein by reference.
Vehicle Service and Repair Sector
The vehicle service and repair sector has three main customer groups:
professional technicians, primarily in the vehicle service industry, who
purchase tools and equipment for themselves; service and repair shop
owners and managers - including independent shops, national chains and
automotive dealerships - who purchase equipment for use by multiple
technicians within a service or repair facility; and vehicle manufacturers
(OEMs).
The Corporation provides innovative tool and equipment solutions, as well
as technical sales support and training, to meet technicians' evolving
needs. Snap-on's dealer van distribution system offers technicians the
convenience of purchasing quality tools with minimal disruption of their
work routine. The Corporation also serves owners and managers of shops
where technicians work with tools, diagnostics equipment, repair and
service information, and shop management products. Snap-on provides
vehicle manufacturers products and services including tools, facilitation
services for the purchase and distribution of equipment, and consulting
services.
Major challenges for the Corporation and the vehicle service and repair
industry include the increasing rate of technological change within motor
vehicles, and the evolution in the conduct of business by both suppliers
and customers that is necessitated by such change.
Industrial Sector
The Corporation markets its products to a wide variety of industrial
customers, including industrial maintenance and repair facilities;
manufacturing and assembly operations; industrial distributors; government
facilities; schools; and original equipment manufacturers ("OEMs") who
require instrumentation or service tools and equipment for their products.
Major challenges in the industrial market include a highly competitive,
cost-conscious environment, and a trend toward customers making all of
their tool purchases through one integrated supplier. The Corporation
believes it is currently a meaningful participant in the market for
industrial tools and equipment.
Distribution Channels
The Corporation serves customers primarily through three channels of
distribution: dealer/tech reps, company direct sales, and distributors.
The following discussion represents the Corporation's general approach in
each channel, and is not intended to be all-inclusive.
Dealer/Tech Rep Organization
In the United States, the majority of sales to the automotive repair
industry are conducted through the Corporation's dealer/tech rep network;
the market served by this network centers on professional technicians and
shop owners. Snap-on's mobile dealer van system covers automotive
technicians and independent shop owners, calling weekly at the customer's
place of business. Dealers' sales are concentrated in hand and power tools
and some small equipment, which can easily be transported in a van and
demonstrated during a brief sales call, as well as in tool storage units.
Dealers purchase the Corporation's products at a discount from suggested
retail prices and resell them at prices of the dealer's choosing. Although
some dealers have sales areas defined by other methods, most U.S. dealers
are provided a list of places of business which serves as the basis of the
dealer's sales route.
The dealer sales force is supported by the Snap-on/Sun Tech Systems
employee sales force ("Tech Specialists"), who work with dealers in the
demonstration and sale of diagnostics equipment and also sell higher-end
diagnostics and shop equipment on their own. Tech Specialists are
compensated primarily on the basis of commission; dealers receive a
commission for referring business to Tech Specialists.
Most products sold through the dealer/tech rep organization are sold under
the Snap-on or Sun brand names.
Since 1991, all new U.S. dealers, and a majority of existing U.S. dealers,
have been enrolled as franchisees of the Corporation. The Corporation
currently charges initial and ongoing monthly license fees, which do not
add materially to the Corporation's revenues. The Corporation makes it
possible for prospective dealer candidates to work as employee sales
representatives, at salary plus commission, for up to one year prior to
making an investment in a franchise. In addition, through Snap-on
Financial Services, Inc. and its subsidiary, Snap-on Credit Corporation,
the Corporation provides financial assistance for newly converted
franchise dealers and other new franchise dealers, which could include
financing for initial license fees, inventory, revolving accounts
receivable acquisition, equipment, fixtures, other expenses and an initial
checking account deposit. At year end 1997, approximately 88 percent of
all U.S. dealers were enrolled as franchisees.
The Corporation services and supports its dealers with an extensive field
organization of branch offices and service and distribution centers. The
Corporation also provides sales training, customer and dealer financial
assistance, and marketing and product promotion programs to help maximize
dealer sales. A National Dealer Advisory Council, composed of and elected
by dealers, assists the Corporation in identifying and implementing
enhancements to the franchise program.
The Corporation has replicated its dealer van method of distribution in
certain countries, including Australia, Canada, Germany, Mexico, the
Netherlands, Japan and the United Kingdom. In these markets, as in the
United States, purchase decisions are generally made by professional
technicians. The Corporation markets products in certain other countries
through its subsidiary, Snap-on Tools International, Ltd., which sells to
foreign distributors under license or contract with the Corporation.
Company Direct Sales
In the United States, a growing proportion of sales of Snap-on and Sun
equipment are made by a direct sales force that has responsibility for
national accounts. As the automotive service and repair industry
consolidates, with more business conducted by national chains, automotive
dealerships and franchised service centers, these larger organizations can
be serviced most effectively by sales people who can demonstrate and sell
the full line of products and services. The Corporation also sells its
products and services directly to vehicle manufacturers.
Tools and equipment are marketed to industrial and governmental customers
and for the medical profession in the United States through industrial
sales representatives, who are employees, and independent industrial
distributors. The sales representatives focus on industrial customers
whose main purchase criteria are quality and service, as well as on
certain OEM accounts. At the end of 1997, the Corporation had industrial
sales representatives in the United States, Canada, Australia, Japan,
Mexico, Puerto Rico, and some European countries, with the United States
representing the majority of the Corporation's total industrial sales.
Tools and equipment for the U.S. industrial and government markets are
sold through a direct sales force as well as through industrial
distributors. In most markets outside the United States, industrial sales
are conducted through distributors.
Distributors
Sales of certain tools and equipment are made through automotive and
industrial distributors, who purchase the items from Snap-on and resell
them to the end users. Products sold through distributors in North
America, Europe and select other parts of the world include under-car and
other service equipment. These products are sold under brands including
John Bean, Hofmann, Irimo, Palmero and Acesa, and are differentiated from
those sold through the dealer/tech rep and direct sales channels. Sun
brand equipment is marketed through distributors in South America and
Asia, and through both a direct sales force and distributors in Europe.
Competition
The Corporation competes on the basis of its product quality, service,
brand awareness and technological innovation. While no one company
competes with the Corporation across all of its product lines and
distribution channels, various companies compete in one or more product
categories and/or distribution channels.
The Corporation believes that it is a leading manufacturer and distributor
of its products for the customers it serves in the vehicle service
industry, and that it offers the broadest line of products to the vehicle
service industry. The major competitors selling to professional
technicians in the vehicle service and repair sector through the mobile
van channel include MAC Tools (The Stanley Works) and Matco (Danaher
Corporation). The Corporation also competes with companies that sell
through non-mobile-van distributors; these competitors include The Stanley
Works, Sears, Roebuck and Co., and Strafor Facom. In the industrial
sector, major competitors include Armstrong (Danaher Corporation), Cooper
Industries and Proto (The Stanley Works). The major competitors selling
diagnostics and shop equipment to shop owners in the vehicle service and
repair sector include SPX Corporation and Hunter Engineering.
Raw Material & Purchased Product
The Corporation's supply of raw materials (various grades of steel bars
and sheets) and purchased components are readily available from numerous
suppliers.
The majority of 1997 consolidated net sales consisted of products
manufactured by the Corporation. The remainder was purchased from outside
suppliers. No single supplier's products accounted for a material portion
of 1997 consolidated net sales.
Patents and Trademarks
The Corporation vigorously pursues and relies on patent protection to
protect its inventions and its position in the market. As of January 3,
1998, the Corporation and its subsidiaries held over 721 patents
worldwide, with more than 466 pending patent applications. No sales
relating to any single patent represent a material portion of the
Corporation's revenues.
Examples of products that have features or designs that benefit from
patent protection include engine analyzers, serrated jaw open-end
wrenches, wheel alignment systems, wheel balancers, sealed ratchets,
electronic torque wrenches, ratcheting screwdrivers, emissions sensing
devices and air conditioning equipment.
Much of the technology used in the manufacturing of automotive tools and
equipment is in the public domain. The Corporation relies primarily on
trade secret protection to protect proprietary processes used in
manufacturing. Methods and processes are patented when appropriate.
Trademarks used by the Corporation are of continuing importance to the
Corporation in the marketplace. Trademarks have been registered in the
United States and 72 other countries, and additional applications for
trademark registrations are pending. The Corporation rigorously polices
proper use of its trademarks.
The Corporation's right to manufacture and sell certain products is
dependent upon licenses from others. These products do not represent a
material portion of the Corporation's sales.
Working Capital
Because most of the Corporation's business is not seasonal, and its
inventory needs are relatively constant, no unusual working capital needs
arise during the year.
The Corporation's use of working capital to extend credit to its dealers
and to purchase installment credit receivables from dealers is discussed
in "Management's Discussion and Analysis of Results of Operations and
Financial Condition," which is found on pages 16 to 20 of the
Corporation's 1997 Annual Report and is incorporated herein by reference.
The Corporation does not depend on any single customer, small group of
customers or government for any material part of its sales, and has no
significant backlog of orders.
Environment
The Corporation complies with applicable environmental control
requirements in its operations. Compliance has not had a material effect
upon the Corporation's capital expenditures, earnings or competitive
position.
Employees
At the end of 1997, the Corporation employed approximately 11,700 people,
of whom approximately 40 percent are engaged in manufacturing activities.
Item 2: Description of Properties
The Corporation maintains both leased and owned manufacturing, warehouse,
distribution and office facilities throughout the world. The Corporation
believes that its facilities are well maintained and have a capacity
adequate to meet the Corporation's present and foreseeable future demand.
The Corporation's U.S. facilities occupy approximately 4.5 million square
feet, of which approximately 78 percent is owned. The Corporation's
facilities outside the U.S. contain approximately 1.9 million square feet,
of which approximately 70 percent is owned.
The Corporation's principal manufacturing locations and distribution
centers are as follows:
Location Type of property Owned/Leased
Conway, Arkansas Manufacturing Owned
City of Industry, California Manufacturing Leased
Escondido, California Manufacturing Owned
San Jose, California Manufacturing Leased
Sunnyvale, California Manufacturing Leased
Columbus, Georgia Manufacturing Owned
Crystal Lake, Illinois Distribution and
manufacturing Owned
Mt. Carmel, Illinois Manufacturing Owned
Ottawa, Illinois Distribution Owned
Algona, Iowa Manufacturing Owned
Sioux City, Iowa Manufacturing Owned
Central City, Kentucky Manufacturing Leased
Natick, Massachusetts Manufacturing Owned
Olive Branch, Mississippi Distribution Leased
and owned
Carson City, Nevada Distribution Leased
and owned
Robesonia, Pennsylvania Distribution Owned
Johnson City, Tennessee Manufacturing Owned
Elizabethton, Tennessee Manufacturing Owned
East Troy, Wisconsin Manufacturing Owned
Elkhorn, Wisconsin Manufacturing Owned
Kenosha, Wisconsin Manufacturing Owned
Milwaukee, Wisconsin Manufacturing Owned
Sydney, Australia Distribution Leased
Barbara D'oeste, Brazil Manufacturing Owned
Calgary, Canada Distribution Leased
Mississagua, Canada Manufacturing Leased
Newmarket, Canada Distribution and
manufacturing Owned
Kettering, England Distribution Owned
King's Lynn, England Distribution and
manufacturing Owned
Altmittweida, Germany Distribution Owned
Pfungstadt, Germany Manufacturing Leased
Sopron, Hungary Manufacturing Owned
Cork, Ireland Manufacturing Leased
Shannon, Ireland Manufacturing Leased
Tokyo, Japan Distribution Leased
Amsterdam, the Netherlands Distribution Owned
Irun, Spain Manufacturing Owned
Soria, Spain Manufacturing Owned
Urretxu, Spain Manufacturing Owned
Vitoria, Spain Distribution and
manufacturing Owned
Item 3: Legal Proceedings
The Corporation intervened in litigation commenced by Tejas Testing
Technology One, L.C. and Tejas Testing Technology Two, L.C. (the "Tejas
Companies"), as described in Note 12 to the Financial Statements of the
Corporation on pages 34 and 35 of its 1997 Annual Report, which is
incorporated herein by reference.
Item 4: Submission of Matters to a Vote of Security Holders
There was no matter submitted to a vote of the shareholders during the
fourth quarter of the fiscal year ending January 3, 1998.
Item 4.1: Executive Officers of the Registrant
The executive officers of the Corporation, their ages as of January 3,
1998, and their current titles and positions held during the last five
years are listed below.
Robert A. Cornog (57) - Chairman, President and Chief Executive Officer
since July 1991. A Director since 1982.
Branko M. Beronja (63) - Senior Vice President - Diagnostics since
February 1998. Senior Vice President - Diagnostics, North America from
April 1996 to February 1998. President - North American Operations from
April 1994 to April 1996, and Vice President - Sales, North America from
August 1989 to April 1994. A Director since January 1997.
Frederick D. Hay (53) - Senior Vice President - Transportation since
February 1996. Prior to joining Snap-on, he was President of the Interior
Systems and Components Division of UT Automotive, a business unit of
United Technologies Corporation, from December 1989 to January 1996.
Donald S. Huml (51) - Senior Vice President - Finance and Chief Financial
Officer since August 1994. Prior to joining Snap-on, he was Vice
President and Chief Financial Officer of Saint-Gobain Corporation from
December 1990 to August 1994.
Michael F. Montemurro (49) - Senior Vice President - Financial Services
and Administration since August 1994. Senior Vice President - Financial
Services, Administration and Chief Financial Officer from April 1994 to
August 1994. Senior Vice President - Finance and Chief Financial Officer
from March 1990 to April 1994.
Jay H. Schnabel (55) - Senior Vice President - Europe since April 1996.
Senior Vice President - Diagnostics from April 1994 to April 1996. Senior
Vice President - Administration from April 1990 to April 1994. A Director
since August 1989.
Neil T. Smith (43) - Controller since November 1997. Financial Controller
from June 1997 to November 1997. Director of Financial Analysis and
Planning from December 1994 to May 1997. Prior to joining Snap-on, he was
Director of Finance for the Nielsen Marketing Research Division of Dun and
Bradstreet Corporation from January 1991 to December 1994.
Susan F. Marrinan (49) - Vice President, Secretary and General Counsel
since January 1992.
There is no family relationship among the executive officers and there has
been no involvement in legal proceedings during the past five years that
would be material to the evaluation of the ability or integrity of any of
the executive officers. Executive officers may be elected by the Board of
Directors or appointed by the Chief Executive Officer at the regular
meeting of the Board which follows the Annual Shareholders' Meeting, held
on the fourth Friday of April each year, and at such other times as new
positions are created or vacancies must be filled.
PART II
Item 5: Market for Registrant's Common Equity and Related Stockholder
Matters
At January 3, 1998, the Corporation had 60,515,814 shares of common stock
outstanding.
On June 27, 1997, the Corporation's board of directors authorized the
repurchase of $100 million of the Corporation's common stock over a two-
year period. At the end of 1997, substantially all of the authorization
remained available. In 1996, the Corporation's board of directors
approved an ongoing authorization to repurchase stock in an amount
equivalent to that necessary to prevent dilution created by shares issued
for stock options, employee and dealer stock purchase plans, and other
corporate purposes. In 1997, the Corporation repurchased 986,333 shares
of its common stock at an average price of $42.91.
Additional information required by Item 5 is contained on pages 37 and 41
of the Corporation's 1997 Annual Report and is incorporated herein by
reference to said Annual Report.
Item 6: Selected Financial Data
The information required by Item 6 is contained on pages 36 and 37 of the
Corporation's 1997 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 7: Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by Item 7 is contained on pages 16 to 20 of the
Corporation's 1997 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 8: Financial Statements and Supplementary Data
The information required by Item 8 is contained on pages 21 to 35 of the
Corporation's 1997 Annual Report and is incorporated herein by reference
to said Annual Report.
Item 9: Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10: Directors and Executive Officers of the Registrant
The identification of the Corporation's directors as required by Item 10
is contained in the Corporation's Proxy Statement, dated March 13, 1998,
and is incorporated herein by reference to said Proxy Statement. With
respect to information about the Corporation's executive officers, see
caption "Executive Officers of the Registrant" at the end of Part I of
this report.
The disclosure of late filers pursuant to Item 405 of Regulation S-K is
contained on page 19 of the Corporation's Proxy Statement, dated March 13,
1998, and is incorporated herein by reference to said Proxy Statement.
Item 11: Executive Compensation
The information required by Item 11 is contained on pages 10 to 18 of the
Corporation's Proxy Statement, dated March 13, 1998, and is incorporated
herein by reference to said Proxy Statement.
Item 12: Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 is contained on pages 8 to 9 of the
Corporation's Proxy Statement, dated March 13, 1998, and is incorporated
herein by reference to said Proxy Statement.
Item 13: Certain Relationships and Related Transactions
None.
PART IV
Item 14: Exhibits, Financial Statement Schedules and Reports on Form 8-K
Item 14(A): Document List
1. List of Financial Statements
The following consolidated financial statements of Snap-on Incorporated,
and the Auditors' Report thereon, each included in the 1997 Annual Report
of the Corporation to its shareholders for the year ended January 3, 1998,
are incorporated by reference in Item 8 of this report:
Consolidated Balance Sheets as of January 3, 1998 and December 28, 1996.
Consolidated Statements of Earnings for the years ended January 3, 1998,
December 28, 1996 and December 30, 1995.
Consolidated Statements of Shareholders' Equity for the years ended
January 3, 1998, December 28, 1996 and December 30, 1995.
Consolidated Statements of Cash Flows for the years ended January 3, 1998,
December 28, 1996 and December 30, 1995.
Notes to Consolidated Financial Statements.
2. Financial Statement Schedule
The following consolidated financial statement schedule of Snap-on
Incorporated is included in Item 14(d) as a separate section of this
report.
Schedule II Valuation and Qualifying Accounts and Reserves Page 17
All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are
inapplicable and, therefore, have been omitted, or are included in the
Corporation's 1997 Annual Report in the Notes to Consolidated Financial
Statements for the years ended January 3, 1998, December 28, 1996 and
December 30, 1995, which are incorporated by reference in Item 8 of this
report.
3. List of Exhibits
The exhibits filed with or incorporated by reference in this report are as
specified in the exhibit index. Page 16
Item 14(B): Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
Subsequent to year-end, the Corporation reported on Form 8-K dated
February 17, 1998 that the Corporation and Tejas Testing Technologies have
completed an agreement, approved by the U.S. Bankruptcy Court in Austin,
Texas, that will fully satisfy the Corporation's liability related to a
loan guaranty by the Corporation of certain Tejas lease obligations.
Subsequent to year-end, the Corporation reported on Form 8-K dated March
17, 1998 those portions of its fiscal 1997 Annual Report to Shareholders
that the Corporation has incorporated by reference herein.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE
We have audited, in accordance with generally accepted auditing standards,
the financial statements included in Snap-on Incorporated's (the
"Corporation") Annual Report to Shareholders, incorporated by reference in
this Form 10-K, and have issued our report thereon dated January 27, 1998.
Our audit was made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed on page 18 is the
responsibility of the Corporation's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states in all material
respects the financial data required to be set forth therein in relation
to the basic financial statements taken as a whole.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
January 27, 1998
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our reports included (or incorporated by reference) in this Form 10-K,
into the Corporation's previously filed Registration Statement File Nos.
2-53663, 2-53578, 33-7471, 33-22417, 33-37924, 33-39660, 33-57898, 33-
55607, 33-58939, 33-58943, 333-14769, 333-21277, 333-21285 and 333-41359.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Chicago, Illinois
March 27, 1998
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Corporation has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
SNAP-ON INCORPORATED
By: /s/ R. A. Cornog Date: March 27, 1998
R. A. Cornog, Chairman of the Board
of Directors, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the
Corporation and in the capacities as indicated.
/s/ R. A. Cornog Date: March 27, 1998
R. A. Cornog, Chairman of the Board
of Directors, President and Chief
Executive Officer
/s/ D. S. Huml Date: March 27, 1998
D. S. Huml, Principal Financial Officer,
and Senior Vice President - Finance
/s/ N. T. Smith Date: March 27, 1998
N. T. Smith, Principal Accounting Officer,
and Controller
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the
Corporation and in the capacities as indicated.
By: /s/ B. M. Beronja Date: March 27, 1998
B. M. Beronja, Director
By: /s/ D. W. Brinckman Date: March 27, 1998
D. W. Brinckman, Director
By: /s/ B. S. Chelberg Date: March 27, 1998
B. S. Chelberg, Director
By: /s/ R. J. Decyk Date: March 27, 1998
R. J. Decyk, Director
By: /s/ R. F. Farley Date: March 27, 1998
R. F. Farley, Director
By: /s/ L. A. Hadley Date: March 27, 1998
L. A. Hadley, Director
By: /s/ A. L. Kelly Date: March 27, 1998
A. L. Kelly, Director
By: /s/ G. W. Mead Date: March 27, 1998
G. W. Mead, Director
By: /s/ E. H. Rensi Date: March 27, 1998
E. H. Rensi, Director
By: /s/ J. H. Schnabel Date: March 27, 1998
J. H. Schnabel, Director
By: /s/ R. F. Teerlink Date: March 27, 1998
R. F. Teerlink, Director
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
Balance of
Balance at Subsidiary Charged to
beginning of at time of Costs and Deductions Balance at
Description year acquisition expenses (1) end of year
Allowance for doubtful
accounts
<S> <C> <C> <C> <C> <C>
Year ended
January 3, 1998 $16,902,581 $ 2,220,474 $21,039,748 $19,518,127 $20,644,676
Year ended
December 28, 1996 $14,650,458 $ 296,140 $13,611,414 $11,655,431 $16,902,581
Year ended
December 30, 1995 $13,180,862 $ 205,414 $12,999,732 $11,735,550 $14,650,458
(1) This amount represents write-offs of bad debts.
</TABLE>
<PAGE>
EXHIBIT INDEX
Item 14(c): Exhibits
(3) (a) Restated Certificate of Incorporation of the Corporation as
amended through April 25, 1997
(b) Bylaws of the Corporation, effective as of January 26, 1996
(incorporated by reference to Exhibit (3)(b) to the
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 30, 1996 (Commission File No. 1-7724))
(4) (a) Rights Agreement between the Corporation and First Chicago
Trust Company of New York, effective as of August 22, 1997
(incorporated by reference to the Corporation's Form 8-A12B
dated October 17, 1997 (Commission File No. 1-7724))
The Corporation and its subsidiaries have no long-term debt
agreement for which the related outstanding debt exceeds 10%
of consolidated total assets as of January 3, 1998. Copies of
debt instruments for which the related debt is less than 10%
of consolidated total assets will be furnished to the
Commission upon request.
(10) Material Contracts
(a) Amended and Restated Snap-on Incorporated 1986 Incentive
Stock Program (incorporated by reference to Exhibit
(10)(a) to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 28, 1996 (Commission
File No. 1-7724))*
(b) Form of Restated Senior Officer Agreement between the
Corporation and each of Robert A. Cornog, Branko M. Beronja,
Frederick D. Hay, Donald S. Huml, Michael F. Montemurro and
Jay H. Schnabel (incorporated by reference to Exhibit
(10)(b) to the Corporation's Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 (Commission File No.
1-7724))*
(c) Form of Restated Executive Agreement between the Corporation
and each of Richard V. Caskey, Dan G. Craighead, Dale F.
Elliott, Gregory D. Johnson, Nicholas L. Loffredo, Denis J.
Loverine, Susan F. Marrinan, Lynn L. McHugh, Neil T. Smith
and William R. Whyte (incorporated by reference to Exhibit
(10)(b) to the Corporation's Annual Report on Form 10-K for
the fiscal year ended December 30, 1995 (Commission File No.
1-7724))*
(d) Form of Indemnification Agreement between the Corporation
and each of the Directors, Frederick D. Hay, Donald S.
Huml, Susan F. Marrinan and Michael F. Montemurro effective
October 24, 1997*
(e) Amended and Restated Snap-on Incorporated Directors' 1993
Fee Plan (incorporated by reference to Exhibit (10)(e) to
the Corporation's Annual Report on Form 10-K for the fiscal
year ended December 28, 1996 (Commission File No. 1-7724))*
(f) Snap-on Incorporated Deferred Compensation Plan
(incorporated by reference to Exhibit (10)(f) to the
Corporation's Annual Report on Form 10-K for the fiscal year
ended December 28, 1996 (Commission File No. 1-7724))*
(g) Snap-on Incorporated Supplemental Retirement Plan for
Officers (incorporated by reference to Exhibit (10)(b) to
the Corporation's Annual Report on Form 10-K for the fiscal
year ended December 30, 1995 (Commission File No. 1-7724))*
(12) Computation of Ratio of Earnings to Fixed Charges
(13) Annual Report to Shareholders (incorporated by reference to
Exhibit 99 to the Corporations Current Report on Form 8-K date
March 17, 1998 (Commission File No. 1-7724))
(21) Subsidiaries of the Corporation
(23) Consent of Independent Public Accountants (included in Report of
Independent Public Accountants on Financial Statement Schedule)
(27.1) Restated Fiscal 1995 Financial Data Schedule.
(27.2) Restated Financial Data Schedule for the first quarter of 1996.
(27.3) Restated Financial Data Schedule for the second quarter of 1996.
(27.4) Restated Financial Data Schedule for the third quarter of 1996.
(27.5) Restated Fiscal 1996 Financial Data Schedule.
(27.6) Restated Financial Data Schedule for the first quarter of 1997.
(27.7) Restated Financial Data Schedule for the second quarter of 1997.
(27.8) Restated Financial Data Schedule for the third quarter of 1997.
(27.9) Fiscal 1997 Financial Data Schedule.
* Denotes management contract or compensatory plan or arrangement
RESTATED
CERTIFICATE OF INCORPORATION
OF SNAP-ON INCORPORATED
SNAP-ON INCORPORATED, a corporation organized and existing under
the laws of the State of Delaware, does hereby certify as follows:
1. The name of the corporation is "SNAP-ON INCORPORATED"
(hereinafter referred to as the "Corporation"), and the name under which
the Corporation was originally incorporated is "Snap-on Tools, Inc." The
date of filing its original Certificate of Incorporation with the
Secretary of State was April 7, 1930.
2. This Restated Certificate of Incorporation was duly adopted
by the Board of Directors of the Corporation in accordance with Section
245 of the General Corporation Law of the State of Delaware.
3. This Restated Certificate of Incorporation restates and
integrates the provisions of the Restated Certificate of Incorporation of
the Corporation as heretofore amended or supplemented and there is no
discrepancy between those provisions and the provisions of this Restated
Certificate of Incorporation.
4. The text of the Restated Certificate of Incorporation as
heretofore amended or supplemented is hereby further restated to read as
herein set forth in full:
FIRST: The name of the Corporation is Snap-on Incorporated.
SECOND: The location of its principal office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, State of Delaware. The name of its
resident agent therein, and in charge of said office, is The Corporation
Trust Company whose address is Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware.
THIRD: The nature of the business or objects or purposes to be
transacted, promoted or carried on by the Corporation are to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of Delaware.
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 following is a description of each of the classes of stock
of the Corporation and a statement of the powers, preferences and rights
of such stock, and the qualifications and restrictions thereof:
(a) At all meetings of the shareholders of the Corporation the
holders of the Common Stock shall be entitled to one vote for each share
of Common Stock held by them respectively.
(b) Shares of the Preferred Stock may be issued from time to
time in one or more series as may from time to time be determined by the
Board of Directors of the Corporation. Each series shall be distinctly
designated. Except as otherwise provided in the resolution setting forth
the designations and rights of the series of Preferred Stock, all shares
of any one series of the Preferred Stock shall be alike in every
particular, except that there may be different dates from which dividends
(if any) thereon shall be cumulative, if made cumulative.
The relative preferences, participating, optional and other
special rights of each such series, and limitations thereof, if any, may
differ from those of any and all other series at any time outstanding.
The Board of Directors of the Corporation is hereby expressly granted
authority to fix by resolution or resolutions adopted prior to the
issuance of any shares of each particular series of the Preferred Stock,
the designation, relative preferences, participating, optional and other
special rights and limitations thereof, if any, of such series, including,
but without limiting the generality of the foregoing, the following:
(1) the distinctive designation of, and the number of
shares of the Preferred Stock which shall constitute the series,
which number may be increased (except as otherwise fixed by the
Board of Directors) or decreased (but not below the number of
shares thereof then outstanding) from time to time by action of
the Board of Directors;
(2) the rate and times at which, and the terms and
conditions upon which, dividends, if any, on shares of the
series may be paid, the extent of preferences or relation, if
any, of such dividends to the dividends payable on any other
class or classes of stock of the Corporation, or on any series
of the Preferred Stock or of any other class or classes of stock
of the Corporation, and whether such dividends shall be
cumulative, partially cumulative or non-cumulative;
(3) the right, if any, of the holders of shares of the
series to convert the same into, or exchange the same for,
shares of any other class or classes of stock of the
Corporation, and the terms and conditions of such conversion or
exchange;
(4) whether shares of the series shall be subject to
redemption and the redemption price or prices and the time or
times at which, and the terms and conditions upon which, shares
of the series may be redeemed;
(5) the rights, if any, of the holders of shares of the
series upon voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or
winding-up of the Corporation;
(6) the terms of the sinking fund or redemption or purchase
account, if any, to be provided for shares of the series; and
(7) the voting powers, if any, of the holders of shares of
the series which may, without limiting the generality of the
foregoing, include the right, voting as a series by itself or
together with other series of the Preferred Stock or all series
of the Preferred Stock as a class, (1) to vote more or less than
one vote per share on any or all matters voted upon by the
shareholders, (2) to elect one or more directors of the
Corporation in the event there shall have been a default in the
payment of dividends on any one or more series of the Preferred
Stock or under such other circumstances and upon such conditions
as the Board of Directors may fix.
(c) The relative preferences, rights and limitations of each
series of Preferred Stock in relation to the preferences, rights and
limitations of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the resolution
or resolutions adopted pursuant to authority granted in this Article
FOURTH, and the consent by class or series vote or otherwise, of the
holders of the Preferred Stock of such of the series of the Preferred
Stock as are from time to time outstanding shall not be required for the
issuance by the Board of Directors of any other series of Preferred Stock
whether the preferences and rights of such other series shall be fixed by
the Board of Directors as senior to, or on a parity with, the preferences
and rights of such outstanding series, or any of them; provided, however,
that the Board of Directors may provide in such resolution or resolutions
adopted with respect to any series of Preferred Stock that the consent of
the holders of a majority (or such greater proportion as shall be therein
fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(d) Subject to the provisions of the preceding paragraph (c),
shares of any series of Preferred Stock may be issued from time to time as
the Board of Directors shall determine and on such terms and for such
consideration, not less than the par value thereof, as shall be fixed by
the Board of Directors.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of Article
FOURTH of its Certificate of Incorporation, a series of Preferred Stock,
par value $1.00 per share, of the Corporation be and it hereby is created,
and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights
of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Preferred Stock" (the
"Series Preferred Stock") and the number of shares constituting such
series shall be 450,000.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends
payable in cash on the fifteenth day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $20.00, or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock of the Corporation (the
"Common Stock") since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series Preferred
Stock. In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each of those cases the multiplier set
forth in clause (b) of the preceding sentence shall be adjusted by
multiplying such multiplier by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
The Corporation shall declare a dividend or distribution on the
Series Preferred Stock as provided in this paragraph (A) immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event
no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $20.00 per share
on the Series Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
Dividends shall begin to accrue and be cumulative on outstanding
shares of Series Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series Preferred Stock,
unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 60 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of
Common Stock; or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater
or lesser number of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of Series Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series Preferred
Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall mark
the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for
the current quarterly dividend period on all shares of Series
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, the
holders of Preferred Stock, voting as a class, irrespective of
series, shall have the right to elect two Directors, which
Directors shall be in addition to the then otherwise authorized
number of Directors.
(ii) During any default period, such voting right of the
holders of Series Preferred Stock may be exercised initially at
a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, provided
that such voting right shall not be exercised unless the holders
of 25% in number of shares of Preferred Stock outstanding shall
be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. After the
holders of the Preferred Stock shall have exercised their right
to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be
increased or decreased except by vote of the holders of
Preferred Stock as herein provided.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the
Chairman of the Board, the President, a Vice-President or the
Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled
to vote pursuant to this paragraph (C)(iii) shall be given to
each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on
the books of the Corporation. Such meeting shall be called for
a time not earlier than 20 days and not later than 60 days after
such order or request or in default of the calling of such
meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 10% of the
total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) In any default period the holders of Common Stock, and
other classes of stock of the Corporation, if applicable, shall
continue to be entitled to elect the whole number of Directors
then otherwise authorized.
(v) The Directors elected by the holders of Preferred
Stock shall continue in office until the next annual meeting of
stockholders and until their successors shall have been elected
by such holders or until the expiration of the default period.
Any vacancy in the Board of Directors may be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill
vacancies as provided in the foregoing sentence.
(vi) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to
elect Directors shall cease, (y) the term of any Directors
elected by the holders of Preferred Stock as a class shall
terminate, and (z) the number of Directors shall be such number
as may then be authorized by the Board of Directors.
(D) Except as set forth herein, holders of Series Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series Preferred
Stock outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series Preferred Stock, except dividends paid ratably
on the Series Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up)
with the Series Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares of
any such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series Preferred Stock, or any shares of stock ranking
on a parity with the Series Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series Preferred Stock unless, prior thereto, the holders of
shares of Series Preferred Stock shall have received $125.00 per share,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, provided
that the holders of shares of Series Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount
to be distributed per share to holders of Common Stock, or (2) to the
holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series Preferred Stock,
except distributions made ratably on the Series Preferred Stock and all
other such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution
or winding up. In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to
100 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series Preferred
Stock shall not be redeemable.
Section 9. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series
Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of two-thirds or more of the outstanding shares of
Series Preferred Stock, voting together as a single class.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The private property of the stockholders of the
Corporation shall not be subject to the payment of corporate debts to any
extent whatever.
SEVENTH: The number of directors which shall constitute the
whole Board of Directors shall be fixed by, or in the manner provided in,
the By-laws; provided that in no event shall the total number of directors
be less than five or more than fifteen. The Board of Directors shall be
divided into three classes as nearly equal in number as may be, with the
term of office of one class expiring each year, and at the annual meeting
of stockholders in 1970 directors of the first class shall be elected to
hold office for a term expiring at the next succeeding annual meeting;
directors of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting; and directors of the
third class shall be elected to hold office for a term expiring at the
third succeeding annual meeting. When the number of directors is changed,
any newly created directorships or any decrease in directorships shall be
so apportioned among the classes as to make all classes as nearly equal in
number as possible. When the number of directors is increased by the
Board of Directors and any newly created directorships are filled by the
Board of Directors, there shall be no classification of the additional
directors until the next annual meeting of stockholders.
Subject to the foregoing, at each annual meeting of stockholders
the successors to the class of directors whose term shall then expire
shall be elected to hold office for a term expiring at the third
succeeding annual meeting.
EIGHTH: The following additional provisions are inserted for
the regulation of the business and for the conduct of the affairs of the
Corporation and its directors and stockholders:
(a) Subject to the provisions of Article SEVENTH, the Board of
Directors shall have power to make, alter, amend or repeal the By-laws of
the Corporation without the assent or vote of the stockholders.
(b) The Board of Directors, in addition to the powers and
authority expressly conferred upon it hereinbefore and by statute and by
the By-laws, is hereby empowered to exercise all such powers as may be
exercised by the Corporation, subject nevertheless to the provisions of
the Statutes of the State of Delaware, of this Certificate of
Incorporation, and to any regulations that may from time to time be made
by the stockholders, provided that no regulations so made shall invalidate
any provisions of this Certificate of Incorporation or any power or act of
the Board of Directors which would have continued valid if such regulation
had not been made.
NINTH: (a) Except as set forth in part (b) of this Article
NINTH, the affirmative vote or consent of the holders of shares of all
classes of stock of the Corporation possessing four-fifths of the voting
rights in elections of directors, considered for the purposes of this
Article NINTH as one class, shall be required (i) for the adoption of any
agreement for the merger or consolidation of the Corporation with or into
any Other Corporation (as hereinafter defined), or (ii) to authorize any
sale, lease, exchange, mortgage, pledge or other disposition of all, or
substantially all, or any Substantial Part (as hereinafter defined) of the
assets of the Corporation or any Subsidiary (as hereinafter defined) to
any Other Corporation, or (iii) to authorize the issuance or transfer by
the Corporation of any Substantial Amount (as hereinafter defined) of
securities of the Corporation in exchange for the securities or assets of
any Other Corporation. Such affirmative vote or consent shall be in
addition to the vote or consent of the holders of the stock of the
Corporation otherwise required by law, this Certificate of Incorporation
or any agreement or contract to which the Corporation is a party.
(b) The provisions of part (a) of this Article NINTH shall not
be applicable to any transaction described therein if such transaction is
approved by resolution of the Board of Directors of the Corporation,
provided that a majority of the members of the Board of Directors voting
for the approval of such transaction were duly elected and acting members
of the Board of Directors prior to the time any such Other Corporation may
have become a Beneficial Owner (as hereinafter defined) of shares of stock
of the Corporation possessing more than 10% of the voting rights in
elections of directors.
(c) For purposes of part (b) of this Article NINTH, the Board
of Directors shall have the power and duty to determine for the purposes
of this Article NINTH, on the basis of information known to such Board, if
and when any Other Corporation is the Beneficial Owner of more than 10% of
the outstanding shares of stock of the Corporation entitled to vote in
elections of directors. Any such determination shall be conclusive and
binding for all purposes of this Article NINTH.
(d) As used in this Article NINTH, the following terms shall
have the meanings as set forth below:
"Other Corporation" means any person, firm, corporation or
other entity, other than a Subsidiary of the Corporation.
"Substantial Part" means any assets having a then fair
market value, in the aggregate, of more than $5,000,000.
"Subsidiary" means any corporation in which the Corporation
owns, directly or indirectly, more than 50% of the voting
securities.
"Substantial Amount" means any securities of the
Corporation having a then fair market value of more than
$5,000,000.
"Beneficial Owner" of stock means a person, or an
"affiliate" or "associate" of such person (as such terms are
defined in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934 as in effect on March 1,
1970), who directly or indirectly controls the voting of such
stock, or who has any option, warrants, conversion or other
rights to acquire such stock.
TENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and
all rights conferred upon stockholders herein are granted subject to this
reservation; provided that no amendment to this Certificate of
Incorporation shall amend, alter, change or repeal any of the provisions
of Article SEVENTH or Article NINTH or this Article TENTH, unless the
amendment effecting such amendment, alteration, change or repeal shall
receive the affirmative vote or consent of the holders of shares of all
classes of stock of this Corporation possessing four-fifths of the voting
rights in elections of directors, considered for this purpose as one
class.
ELEVENTH: (a) The provisions of this Article ELEVENTH shall
apply independently of any other provision of this Restated Certificate of
Incorporation if any Other Corporation (as hereinafter defined) seeks to
accomplish a Business Combination (as hereinafter defined) following the
date the Acquiring Entity (as hereinafter defined) becomes an Acquiring
Entity.
(b) (1) As used in Article ELEVENTH, the following terms shall
have the meanings set forth below:
"Acquiring Entity" means any Other Corporation
which is the Beneficial Owner of more than 10% of the
outstanding shares of stock of the Corporation
entitled to vote in elections of directors.
"Beneficial Owner" of stock means a person or an
"affiliate" or "associate" of such person (as such
terms are defined in Rule 12b-2 of the General Rules
and Regulations ["Regulations"] under the Securities
Exchange Act of 1934 as in effect on January 1, 1984)
who is a "beneficial owner" of stock, as that term is
defined under Rule 13d-3 of the Regulations as in
effect on January 1, 1984, together with successors or
assigns of that person.
"Business Combination" means any merger or
consolidation of the Corporation with or into any
Acquiring Entity (or any affiliate of any Acquiring
Entity), any sale, lease, exchange, mortgage, pledge
or other disposition of all, or any Substantial Part
(that is, assets having a then fair market value in
the aggregate of more than $5,000,000) of the assets
of the Corporation or any subsidiary of the
Corporation, to any Acquiring Entity (or any affiliate
of any Acquiring Entity), or any issuance or transfer
by the Corporation of any Substantial Amount (that is,
any securities of the Corporation having a then fair
market value of more than $5,000,000) of securities of
the Corporation in exchange for the securities or
assets of any Acquiring Entity (or any affiliate of
any Acquiring Entity).
"Continuing Director" means a director duly
elected to the Board of Directors prior to the time
the Acquiring Entity becomes an Acquiring Entity, or a
person recommended to succeed a Continuing Director by
a majority of the Continuing Directors.
"Other Corporation" means any person, firm,
corporation or other entity, other than a subsidiary
of the Corporation.
(2) For purposes of this Article ELEVENTH, the Board of
Directors shall have the power and duty to determine, on the basis of
information known to the Board, if and when any Other Corporation is or
has become an Acquiring Entity. Any such determination shall be
conclusive and binding for all purposes of this Article ELEVENTH.
(c) The affirmative vote or consent of holders of 67% of the
shares of all classes of stock of the Corporation entitled to vote for
directors, considered for the purpose of this Article ELEVENTH as one
class, other than voting stock of which the Acquiring Entity is the
Beneficial Owner, shall be required for approval of any Business
Combination with any Acquiring Entity (or any affiliate of any Acquiring
Entity), unless all of the following conditions are fulfilled:
(1) The cash or fair market value of other consideration to be
received per share by common stockholders of the Corporation in the
Business Combination will not, at the time the Business Combination
is effected, be less than the greater of:
(A) the highest per share price, including
brokerage commissions and/or soliciting dealers' fees
(with appropriate adjustments for recapitalizations
and for stock splits, stock dividends and like
distributions), paid by the Acquiring Entity at any
time in acquiring any of its holdings of the
Corporation's Common Stock; or
(B) the highest per share price quoted in any
market in which the Corporation's Common Stock is
traded during the 12 months immediately prior to the
public announcement of the Business Combination.
(d) In connection with a proposed Business Combination, the
Continuing Directors may retain special outside legal counsel, an
investment banking firm, or such other experts as they, in their
discretion, may deem necessary or appropriate to assist them in their
evaluation of the Business Combination. In the event that an investment
banking firm is retained by the Continuing Directors to give an opinion as
to the value of the other consideration or as to the fairness (or lack of
fairness) of the terms of any Business Combination from the point of view
of the remaining public stockholders of the Corporation or otherwise, any
proxy statement required to be mailed to the public stockholders of the
Corporation shall contain in a prominent place at the front of the proxy
statement any recommendation of the Continuing Directors as to the
advisability (or inadvisability) of the Business Combination. If the
Continuing Directors so determine, the opinion of the investment banking
firm shall also be included in the proxy statement. All fees and expenses
of outside legal counsel, any investment banking firm or other expert
selected by the Continuing Directors shall be paid by the Corporation.
(e) In addition to any other provision of this Restated
Certificate of Incorporation or By-laws, there shall be required to amend,
alter, change or repeal, directly or indirectly, this Article ELEVENTH the
affirmative vote or consent of 80% of the shares of all classes of stock
of the Corporation entitled to vote for directors, considered for the
purpose of this Article ELEVENTH as one class.
(f) Nothing contained in this Article ELEVENTH shall be
construed to relieve any Acquiring Entity from any fiduciary obligation
imposed by law. The conditions and voting requirements of this Article
ELEVENTH shall be in addition to the conditions and voting requirements
imposed by law or other provisions of this Restated Certificate of
Incorporation, including, without limitation, the conditions and voting
requirements imposed by Article NINTH.
TWELFTH: A director of the Corporation shall not be personally
liable to the Corporation or its shareholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware or
(iv) for any transaction from which the director derived an improper
personal benefit.
If the General Corporation Law of the State of Delaware is
amended after approval of this Article by the shareholders to authorize
the further elimination or limitation of the liability of directors, then
the liability of directors shall be eliminated or limited to the full
extent authorized by the General Corporation Law of the State of Delaware,
as so amended.
Any repeal or modification of this Article shall not adversely
affect any right or protection of a director of the Corporation existing
at the time of such repeal or modification.
5. The capital of said Corporation will not be reduced under
or by reason of any amendment in this Restated Certificate of
Incorporation.
INDEMNIFICATION AGREEMENT
This Agreement is entered into and effective this _____ day of
______________, 1997, by and between Snap-on Incorporated, a Delaware
corporation (the "Company"), and _________________ ("Indemnitee").
WHEREAS, highly competent persons are becoming more reluctant to
serve publicly-held corporations as directors or officers unless they are
provided with adequate protection through insurance and adequate indem-
nification against inordinate risks of claims and actions against them
arising out of their service to and activities on behalf of the
corporation;
WHEREAS, Indemnitee is a director or officer of the Company;
WHEREAS, both the Company and Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors and
officers of public companies in today's environment;
WHEREAS, the current impracticability of obtaining adequate
insurance and the uncertainties relating to indemnification have increased
the difficulty of attracting and retaining such persons;
WHEREAS, the Board of Directors of the Company has determined
that the inability to attract and retain such persons would be detrimental
to the best interests of the Company and its stockholders and that the
Company should act to assure such persons that there will be increased
certainty of such protection in the future;
WHEREAS, the By-laws of the Company require the Company to
indemnify and advance expenses to its directors and officers to the
fullest extent permitted by law and the Indemnitee has been serving and
continues to serve as a director or officer of the Company in part in
reliance on such By-laws; and
WHEREAS, in recognition of Indemnitee's need for substantial
protection against personal liability so that Indemnitee may continue to
serve the Company free from undue concern for litigation claims for
damages arising out of or related to the performance of such service, the
increasing difficulty in obtaining satisfactory director and officer
liability insurance coverage, and Indemnitee's reliance on the aforesaid
By-laws, and in part to provide Indemnitee with specific contractual
assurance that the protection promised by such By-laws will be available
to Indemnitee (regardless of, among other things, any amendment to or
revocation of such By-laws, or any change in the composition of the
Company's Board of Directors, or any acquisition transaction relating to
the Company), it is reasonable, prudent and necessary for the Company to
provide in this Agreement for the indemnification of and the advancing of
expenses to Indemnitee to the fullest extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under
the Company's directors' and officers' liability insurance policies.
NOW, THEREFORE, in consideration of the foregoing premises and of
Indemnitee continuing to serve the Company directly or, at its request,
another enterprise, and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall
have the meaning given here:
I.1. "Board" shall mean the Board of Directors of the Company.
1.2. "Change in Control" shall be deemed to have occurred if (i)
any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended), other than a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders
of the Company in substantially the same proportions as their ownership of
stock of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the
Company representing 15% or more of the total voting power represented by
the Company's then outstanding Voting Securities, or (ii) during any
period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors of the Company and any new
director whose election by the Board of Directors or nomination for
election by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company
approve a merger or consolidation of the Company with any other
corporation other than a merger or consolidation which would result in the
Voting Securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into Voting Securities of the surviving entity) at least 85% of
the total voting power represented by the Voting Securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of trans-
actions) all or substantially all the Company's assets.
1.3. "Corporate Status" describes the status of a person who is
or was a director, officer, employee, trustee, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise which such person is or was
serving at the express written request of the Company.
1.4. "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
1.5. "Enterprise" shall mean the Company and any other corpora-
tion, partnership, joint venture, trust, employee benefit plan or other
enterprise of which Indemnitee is or was serving at the express written
request of the Company as a director, officer, employee, agent or
fiduciary.
1.6. "Expenses" shall include all attorneys' fees, retainers,
court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements,
costs, expenses and obligations paid or incurred in connection with
investigating, prosecuting, defending, being a witness in, or partici-
pating in (including on appeal), or preparing to prosecute, defend, be a
witness in, or participate in, any Proceeding relating to any
Indemnifiable Event.
1.7. "Good Faith" shall mean Indemnitee having acted in good
faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any
criminal Proceeding, having had no reasonable cause to believe
Indemnitee's conduct was unlawful.
1.8. "Indemnifiable Event" shall mean any event or occurrence
(including events or occurrences prior to the date hereof) related to the
fact that Indemnitee is or was a director, officer, employee, agent or
fiduciary of the Company or another Enterprise, or by reason of anything
done or not done by Indemnitee in any such capacity.
1.9. "Independent Legal Counsel" shall mean an attorney or firm
of attorneys, selected in accordance with the provisions of Section 7.1,
who shall not have otherwise performed services for the Company or
Indemnitee within the last five years (other than with respect to matters
concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).
1.10. "Potential Change in Control" shall be deemed to have
occurred if (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control; (ii) any
person (including the Company) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a Change
in Control; or (iii) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control has occurred.
1.11. "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative
hearing or any other actual, threatened or completed proceeding whether
civil, criminal, administrative or investigative.
1.12. "Voting Securities" shall mean any securities of the
Company which vote generally in the election of directors.
ARTICLE II
INDEMNIFICATION
Section II.1. In General. The Company shall indemnify and
advance Expenses to Indemnitee in connection with any Proceeding by reason
of (or arising in part out of) an Indemnifiable Event as provided in this
Agreement and to the fullest extent permitted by applicable law in effect
on the date hereof and to such greater extent as applicable law may
thereafter from time to time permit. Prior to a Change in Control,
Indemnitee shall not be entitled to indemnification (including any
advancement of Expenses) pursuant to this Agreement in connection with any
Proceeding initiated by Indemnitee unless either (i) the Board of
Directors has authorized or consented to the initiation of such Proceeding
or (ii) such Proceeding seeks to enforce Indemnitee's rights under this
Agreement.
Section II.2. Basic Indemnification Arrangement. If Indemnitee
was or is a party or is threatened to be made a party to any Proceeding by
reason of (or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee to the fullest extent permitted by law as soon
as practicable but in any event no later than thirty (30) days after
written demand is presented to the Company, against any and all Expenses,
judgments, fines, ERISA excise taxes or penalties, and amounts paid in
settlement (including all interest, assessments, and other charges paid or
payable in connection with or in respect of such Expenses) incurred by or
for him in connection with the investigation, defense, settlement or
appeal of such Proceeding or any claim, issue or matter therein if
Indemnitee acted in Good Faith. If so requested by Indemnitee, the
Company shall advance (within two (2) business days of such request) any
and all Expenses to Indemnitee (an "Expense Advance"). The obligation of
the Company to make an Expense Advance pursuant to this Section 2.2 shall
be subject to the condition that, if, when and to the extent that it is
determined by the forum selected by Indemnitee pursuant to Section 4.3
that Indemnitee would not be permitted to be so indemnified under appli-
cable law, the Company shall be entitled to be reimbursed by Indemnitee
(who hereby agrees to reimburse the Company) for all such amounts
theretofore paid; provided that the Company's obligation to make the
Expense Advances under this Section 2.2 or any advance of Expenses under
Article III shall not be qualified or conditioned in any manner by the
Company on the Indemnitee's ability to reimburse the Company; and pro-
vided, further, that if Indemnitee has commenced or thereafter commences
legal proceedings in a court of competent jurisdiction to secure a
determination that Indemnitee should be indemnified under applicable law,
any determination made by such forum that Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto
(as to which all rights of appeal therefrom have been exhausted or
lapsed).
Section II.3. Indemnification of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is, by reason of an Indemnifiable Event, a party to
and is successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified to the maximum extent permitted by law,
against any and all Expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes or
penalties, and amounts paid in settlement) actually and reasonably
incurred by or for him in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters
in such Proceeding, the Company shall indemnify Indemnitee to the maximum
extent permitted by law, against all Expenses and liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA taxes
or penalties, and amounts paid in settlement) actually and reasonably
incurred by or for him in connection with each successfully resolved
claim, issue or matter. For purposes of this Section 2.3 and without
limitation, the termination of any claim, issue or matter in such a
Proceeding by dismissal, with or without prejudice, shall be deemed to be
a successful result as to such claim, issue or matter, so long as there
has been no finding (either adjudicated or pursuant to Article IV) that
Indemnitee did not act in Good Faith.
ARTICLE III
INDEMNIFICATION AND ADVANCEMENT
FOR ADDITIONAL EXPENSES
Notwithstanding any other provision in this Agreement to the
contrary, the Company shall indemnify Indemnitee against any and all
Expenses (including attorney's fees) and, if requested by Indemnitee,
shall (within two (2) business days of such request) advance such Expenses
to Indemnitee, which are incurred by Indemnitee in connection with (i) any
hearing or proceeding under Article IV involving Indemnitee and against
all Expenses incurred by Indemnitee in connection with any other action
between the Company and Indemnitee involving the interpretation or
enforcement of the rights of Indemnitee under this Agreement and/or (ii)
any action brought by Indemnitee for recovery under any directors' and
officers' liability insurance policies maintained by the Company, regard-
less of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the
case may be. The obligation of the Company to make the expense advance
pursuant to this Article III shall be subject to the condition that if,
when and to the extent that a final judicial determination is made that
Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore
paid.
ARTICLE IV
DETERMINATION OF RIGHT TO INDEMNIFICATION
Section IV.1. No Determination Necessary when Indemnitee was
Successful. To the extent Indemnitee has been successful on the merits or
otherwise in defense of any Proceeding referred to in Section 2.2 of this
Agreement or in the defense of any claim, issue or matter described
therein, the Company shall indemnify Indemnitee against Expenses incurred
by or for Indemnitee in connection with the investigation, defense, or
appeal of such Proceeding.
Section IV.2. Determination of Good Faith. In the event that
Section 4.1 is inapplicable, the Company shall also indemnify Indemnitee
unless, and only to the extent that, the Company shall prove by clear and
convincing evidence to a forum listed in Section 4.3 below that Indemnitee
did not act in Good Faith.
Section IV.3. Forum for Determination. Indemnitee shall be
entitled to select the forum in which the validity of the Company's claim
under Section 4.2 hereof that Indemnitee is not entitled to
indemnification will be heard from among the following:
(a) A committee of the Disinterested Directors, even
though the Disinterested Directors be less than a quorum;
(b) The stockholders of the Company;
(c) Legal counsel selected by Indemnitee, and reasonably
approved by the Board, which counsel shall make such determination in
a written opinion; or
(d) A panel of three arbitrators, one of whom is selected
by the Company, another of whom is selected by Indemnitee and the last
of whom is selected by the first two arbitrators so selected.
As soon as practicable, and in no event later than thirty (30) days after
written notice of Indemnitee's choice of forum pursuant to this Section
4.3, the Company shall, at its own expense, submit to the selected forum
in such manner as Indemnitee or Indemnitee's counsel may reasonably
request, its claim that Indemnitee is not entitled to indemnification, and
the Company shall act in the utmost Good Faith to assure Indemnitee a
complete opportunity to defend against such claim.
Section IV.4. Right to Appeal. In the case of a determination
by any forum listed in Section 4.3 hereof that Indemnitee is not entitled
to whole or partial indemnification with respect to a specific Proceeding,
or a failure by any such forum to make any determination, Indemnitee shall
have the right to apply to the court in which that Proceeding is or was
pending for the purpose of enforcing Indemnitee's right to indemnification
pursuant to this Agreement or to commence litigation in any court in the
States of Wisconsin or Delaware having subject matter jurisdiction thereof
and in which venue is proper seeking an initial determination by the court
or challenging any such determination by such forum or any aspect thereof,
including the legal or factual bases therefor, and the Company hereby con-
sents to service of process and to appear in any such proceeding. Any
determination such forum otherwise shall be conclusive and binding on the
Company and Indemnitee.
ARTICLE V
PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS
Section V.1. Burden of Proof. In making a determination with
respect to entitlement to indemnification hereunder, the person or persons
or entity making such determination shall presume that Indemnitee is
entitled to indemnification under this Agreement and the Company shall
have the burden of proof to overcome that presumption in connection with
the making by any person, persons or entity of any determination contrary
to that presumption.
Section V.2. Effect of Other Proceedings. The termination of
any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not of itself adversely affect the right of Indemnitee
to indemnification or create a presumption that Indemnitee did not act in
Good Faith. In addition, neither the failure of any forum listed in
Section 4.3 to have made a determination as to whether Indemnitee has met
any particular standard of conduct or had any particular belief, nor an
actual determination by any such forum that Indemnitee has not met such
standard of conduct or did not have such belief, prior to the commencement
of legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law shall be a defense
to Indemnitee's claim or create a presumption that Indemnitee has not met
any particular standard of conduct or did not have any particular belief.
Section V.3. Reliance as Safe Harbor. For purposes of any
determination of Good Faith, Indemnitee shall be deemed to have acted in
Good Faith if Indemnitee's action is based on the records or books of
account of the Company, including financial statements, or on information
supplied to Indemnitee by the officers of the Company in the course of
their duties, or on the advice of legal counsel for the Company or on
information or records given or reports made to the Company by an
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Company. The provisions of this
Section 5.3 shall not be deemed to be exclusive or to limit in any way the
other circumstances in which the Indemnitee may be deemed to have met the
applicable standard of conduct set forth in this Agreement.
Section V.4. Actions of Others. The knowledge and/or actions,
or failure to act, of any director, officer, agent or employee of the
Company shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.
ARTICLE VI
NON-EXCLUSIVITY, INSURANCE,
SUBROGATION, PERIOD OF LIMITATIONS
Section VI.1. Non-Exclusivity. The rights of indemnification
and to receive advances of Expenses as provided by this Agreement shall
not be deemed exclusive of any other rights to which Indemnitee may at any
time be entitled under applicable law, the Articles of Incorporation, the
Bylaws, any agreement, a vote of shareholders or a resolution of
directors, or otherwise.
Section VI.2. Insurance. The Company may maintain an insurance
policy or policies against liability arising out of this Agreement or
otherwise. To the extent that the Company maintains such a policy or
policies, Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.
Section VI.3. Subrogation. In the event of any payment under
this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute
all papers required and take all action necessary to secure such rights,
including execution of such documents as are necessary to enable the
Company to bring suit to enforce such rights.
Section VI.4. No Duplicative Payment. The Company shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that Indemnitee has otherwise
actually received such payment under any insurance policy, By-law,
contract, agreement or otherwise.
Section 6.5. Period of Limitations. No legal action shall be
brought and no cause of action shall be asserted by or in the right of the
Company against Indemnitee, Indemnitee's spouse, heirs, executors or
personal or legal representatives after the expiration of two years from
the date of the facts which gave rise to such cause of action, and any
claim or cause of action of the Company shall be extinguished and deemed
released unless asserted by the timely filing of a legal action within
such two-year period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action such
shorter period shall govern.
ARTICLE VII
CHANGE IN CONTROL
Section 7.1. Change in Control. The Company agrees that if
there is a Change in Control of the Company, then with respect to all
matters thereafter arising concerning the rights of Indemnitee to
indemnity payments and advances of any Expenses under this Agreement or
any other agreement or Company By-Law now or hereafter in effect relating
to Proceedings for Indemnifiable Events, the Company shall seek legal
advice only from Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably with-
held). Such counsel, among other things, shall render its written opinion
to the Company and Indemnitee as to whether and to what extent the
Indemnitee would be permitted to be indemnified under applicable law. The
Company agrees to pay the reasonable fees of the Independent Legal Counsel
referred to above and to indemnify fully such counsel against any and all
expenses (including attorney's fees), claims, liabilities and damages
arising out of or relating to this Agreement or its engagement pursuant
hereto.
Section 7.2. Establishment of Trust. In the event of a
Potential Change in Control, the Company shall, upon written request by
Indemnitee, create a trust for the benefit of Indemnitee and from time to
time upon written request of Indemnitee shall fund such trust in an amount
sufficient to satisfy any and all Expenses reasonably anticipated at the
time of each such request to be incurred in connection with investigating,
preparing for and defending any Claim relating to an Indemnifiable Event,
and any and all judgments, fines, penalties and settlement amounts of any
and all Claims relating to an Indemnifiable Event from time to time
actually paid or claimed, reasonably anticipated or proposed to be paid.
The amount or amounts to be deposited in the trust pursuant to the
foregoing funding obligation shall be determined by the Independent Legal
Counsel referred to in Section 7.1. The terms of the trust shall provide
that upon a Change in Control (i) the trust shall not be revoked or the
principal thereof invaded, without the written consent of the Indemnitee,
(ii) the trustee shall advance, within two business days of a request by
the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee
hereby agrees to reimburse the trust under the circumstances under which
the Indemnitee would be required to reimburse the Company under Section
2.2 of this Agreement), (iii) the trust shall continue to be funded by the
Company in accordance with the funding obligation set forth above, (iv)
the trustee shall promptly pay to Indemnitee all amounts for which
Indemnitee shall be entitled to indemnification pursuant to this Agreement
or otherwise, and (v) all unexpended funds in such trust shall revert to
the Company upon a final determination by any forum listed in Section 4.3
or a court of competent jurisdiction, as the case may be, that Indemnitee
has been fully indemnified under the terms of this Agreement. The trustee
shall be chosen by Indemnitee. Nothing in this Section 7.2 shall relieve
the Company of any of its obligations under this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.1. Binding Effect, Etc. This Agreement shall be bind-
ing upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business and/or assets of the Company,
spouses, heirs, executors and personal and legal representatives. This
Agreement shall continue in effect regardless of whether Indemnitee
continues to serve as an officer or director of the Company or of any
other enterprise at the Company's request.
Section 8.2. Severability. The provisions of this Agreement
shall be severable in the event that any of the provisions hereof
(including any provision within a single section, paragraph or sentence)
are held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.
Section 8.3. No Adequate Remedy. The parties declare that it is
impossible to measure in money the damages which will accrue to either
party by reason of a failure to perform any of the obligations under this
Agreement. Therefore, if either party shall institute any action or
proceeding to enforce the provisions hereof, such party against whom such
action or proceeding is brought hereby waives the claim or defense that
such party has an adequate remedy at law, and such party shall not urge in
any such action or proceeding the claim or defense that the other party
has an adequate remedy at law.
Section 8.4. Identical Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall for all purposes
be deemed to be an original but all of which together shall constitute one
and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the
existence of this Agreement.
Section 8.5. Headings. The headings of the paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
Section 8.6. Modification and Waiver. No supplement, modifica-
tion or amendment of this Agreement shall be binding unless executed in
writing by both of the parties hereto. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any
other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.
Section 8.7. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have
been duly given if (i) delivered by hand and receipted for by the party to
whom said notice or other communication shall have been directed, or (ii)
mailed by certified or registered mail with postage prepaid, on the third
business day after the date of which it is so mailed:
If to Indemnitee, as shown with Indemnitee's signature below,
If to the Company to:
Snap-on Incorporated
10801 Corporate Drive
Post Office Box 1430
Kenosha, Wisconsin 53141-1430
Attention: President
or to such other address as may have been furnished to Indemnitee by the
Company or to the Company by Indemnitee, as the case may be.
Section 8.8. Governing Law. The parties agree that this Agree-
ment shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware without application of the conflict of
laws principles thereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
THE COMPANY:
By:____________________________
Robert A. Cornog
Chairman, President and CEO
INDEMNITEE: _______________________
____________
ADDRESS: 10801 Corporate Drive
Kenosha, WI 53142
Exhibit (12)
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(amounts in thousands)
1997 1996 1995
Net Earnings 150,366 131,451 113,330
Add (Deduct):
Income taxes 88,310 77,202 66,559
Minority interest in earnings of
consolidated subsidiaries 4,461 - -
------- ------- -------
Net Earnings as Defined 243,137 208,653 179,889
Fixed Charges:
Interest on debt 17,654 12,649 13,327
Interest element of rentals 3,630 3,276 3,036
------- ------- -------
Total Fixed Charges 21,284 15,925 16,363
Total Adjusted Earnings Available for
For Payment of Fixed Charges 264,421 224,578 198,252
------- ------- -------
Ratio of Earnings to Fixed Charges 12.4 14.1 12.0
======= ======= =======
For purpose of computing this ratio, "earnings" consist of (a) income from
continuing operations before income taxes (adjusted for minority interest)
and (b) "fixed charges" consist of interest on debt and the estimated
interest portion of rents.
Exhibit (21)
SUBSIDIARIES OF THE CORPORATION
State or other jurisdiction of
Name organization
Consolidated Devices, Inc. California
CreditCorp SPC, LLC Wisconsin
Edge Diagnostic Systems California
Herramientas Eurotools, S.A. Spain
Hoffman Werkstatt-Technik GmbH Germany
John Bean Company Wisconsin
Mitchell Repair Information
Company (Joint Venture) Delaware
Nu-Tech Industries, Inc. Kentucky
Sioux Tools, Inc. Iowa
Snap-on Credit Corporation Wisconsin
Snap-on Equipment Europe Ireland
Snap-on Financial Services, Inc. Nevada
Snap-on Global Holdings, Inc. Delaware
Snap-on Technologies, Inc. Illinois
Snap-on Tools (Australia) Pty. Ltd. Australia
Snap-on Tools Company Wisconsin
Snap-on Tools International, Ltd. Virgin Islands
Snap-on Tools Japan, K.K. Japan
Snap-on Tools Limited United Kingdom
Snap-on Tools of Canada Ltd. Canada
Sun Electric Deutschland GmbH Germany
Sun Electric do Brasil Brazil
Sun Electric Europe B.V. Netherlands
Sun Electric Nederland B.V. Netherlands
Sun Electric U.K. Limited England
Wheeltronic Ltd. Ontario
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR THE
YEAR ENDED DECEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-30-1995
<CASH> 16,211
<SECURITIES> 0
<RECEIVABLES> 624,714
<ALLOWANCES> 14,650
<INVENTORY> 250,434
<CURRENT-ASSETS> 946,689
<PP&E> 468,878
<DEPRECIATION> 248,811
<TOTAL-ASSETS> 1,360,973
<CURRENT-LIABILITIES> 336,075
<BONDS> 143,763
0
0
<COMMON> 43,571
<OTHER-SE> 707,161
<TOTAL-LIABILITY-AND-EQUITY> 1,360,973
<SALES> 1,292,125
<TOTAL-REVENUES> 1,292,125
<CGS> 628,634
<TOTAL-COSTS> 628,634
<OTHER-EXPENSES> 538,021
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,327
<INCOME-PRETAX> 179,889
<INCOME-TAX> 66,559
<INCOME-CONTINUING> 113,330
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 113,330
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.83
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR
THE PERIOD ENDED MARCH 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> MAR-30-1996
<CASH> 23,549
<SECURITIES> 0
<RECEIVABLES> 592,539
<ALLOWANCES> 14,396
<INVENTORY> 245,422
<CURRENT-ASSETS> 927,022
<PP&E> 477,704
<DEPRECIATION> 253,341
<TOTAL-ASSETS> 1,343,104
<CURRENT-LIABILITIES> 325,591
<BONDS> 109,895
0
0
<COMMON> 43,693
<OTHER-SE> 727,027
<TOTAL-LIABILITY-AND-EQUITY> 1,343,104
<SALES> 344,364
<TOTAL-REVENUES> 344,364
<CGS> 170,535
<TOTAL-COSTS> 170,535
<OTHER-EXPENSES> 139,699
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,942
<INCOME-PRETAX> 47,064
<INCOME-TAX> 17,414
<INCOME-CONTINUING> 29,650
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29,650
<EPS-PRIMARY> .49
<EPS-DILUTED> .48
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND
FOR THE PERIOD ENDED JUNE 29, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER<F1>
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> JUN-29-1996
<CASH> 26,570
<SECURITIES> 0
<RECEIVABLES> 624,850
<ALLOWANCES> 15,493
<INVENTORY> 267,300
<CURRENT-ASSETS> 981,054
<PP&E> 488,446
<DEPRECIATION> 260,026
<TOTAL-ASSETS> 1,489,065
<CURRENT-LIABILITIES> 370,125
<BONDS> 119,642
0
0
<COMMON> 43,932
<OTHER-SE> 742,158
<TOTAL-LIABILITY-AND-EQUITY> 1,489,065
<SALES> 728,918
<TOTAL-REVENUES> 728,918
<CGS> 360,960
<TOTAL-COSTS> 360,960
<OTHER-EXPENSES> 291,430
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,252
<INCOME-PRETAX> 101,870
<INCOME-TAX> 37,692
<INCOME-CONTINUING> 64,178
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,178
<EPS-PRIMARY> 1.05
<EPS-DILUTED> 1.04
<FN>
<F1> 26 weeks
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR THE
THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER<F1>
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> SEP-28-1996
<CASH> 19,461
<SECURITIES> 0
<RECEIVABLES> 635,646
<ALLOWANCES> 16,235
<INVENTORY> 279,178
<CURRENT-ASSETS> 998,524
<PP&E> 504,891
<DEPRECIATION> 265,729
<TOTAL-ASSETS> 1,524,097
<CURRENT-LIABILITIES> 355,689
<BONDS> 150,611
0
0
<COMMON> 65,935
<OTHER-SE> 740,197
<TOTAL-LIABILITY-AND-EQUITY> 1,524,097
<SALES> 1,076,120
<TOTAL-REVENUES> 1,076,120
<CGS> 541,684
<TOTAL-COSTS> 541,684
<OTHER-EXPENSES> 432,828
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,312
<INCOME-PRETAX> 150,703
<INCOME-TAX> 55,760
<INCOME-CONTINUING> 94,943
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 94,943
<EPS-PRIMARY> 1.56
<EPS-DILUTED> 1.54
<FN>
<F1> Schedule is for 39 weeks.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR
THE YEAR ENDED DECEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-28-1996
<PERIOD-START> DEC-31-1995
<PERIOD-END> DEC-28-1996
<CASH> 15,350
<SECURITIES> 0
<RECEIVABLES> 668,642
<ALLOWANCES> 16,903
<INVENTORY> 269,750
<CURRENT-ASSETS> 1,017,324
<PP&E> 510,239
<DEPRECIATION> 264,945
<TOTAL-ASSETS> 1,520,788
<CURRENT-LIABILITIES> 341,371
<BONDS> 149,804
0
0
<COMMON> 65,972
<OTHER-SE> 762,189
<TOTAL-LIABILITY-AND-EQUITY> 1,520,788
<SALES> 1,485,279
<TOTAL-REVENUES> 1,485,279
<CGS> 734,495
<TOTAL-COSTS> 734,495
<OTHER-EXPENSES> 594,527
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,649
<INCOME-PRETAX> 208,653
<INCOME-TAX> 77,202
<INCOME-CONTINUING> 131,451
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 131,451
<EPS-PRIMARY> 2.16
<EPS-DILUTED> 2.13
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR THE
THIRTEEN WEEKS ENDED MARCH 29, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER<F1>
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> MAR-29-1997
<CASH> 9,129
<SECURITIES> 0
<RECEIVABLES> 674,624
<ALLOWANCES> 16,947
<INVENTORY> 299,203
<CURRENT-ASSETS> 1,052,046
<PP&E> 517,451
<DEPRECIATION> 270,069
<TOTAL-ASSETS> 1,617,688
<CURRENT-LIABILITIES> 370,746
<BONDS> 200,065
0
0
<COMMON> 66,083
<OTHER-SE> 778,023
<TOTAL-LIABILITY-AND-EQUITY> 1,617,688
<SALES> 375,299
<TOTAL-REVENUES> 375,299
<CGS> 182,332
<TOTAL-COSTS> 182,332
<OTHER-EXPENSES> 151,319
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,381
<INCOME-PRETAX> 53,737
<INCOME-TAX> 19,883
<INCOME-CONTINUING> 33,854
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,854
<EPS-PRIMARY> .56
<EPS-DILUTED> .55
<FN>
<F1> 13 weeks
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR THE
TWENTY-SIX WEEKS ENDED JUNE 28, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER <F1>
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> JUN-28-1997
<CASH> 9,828
<SECURITIES> 0
<RECEIVABLES> 653,854
<ALLOWANCES> 16,438
<INVENTORY> 316,260
<CURRENT-ASSETS> 1,050,813
<PP&E> 502,236
<DEPRECIATION> 253,779
<TOTAL-ASSETS> 1,617,981
<CURRENT-LIABILITIES> 367,864
<BONDS> 182,624
0
0
<COMMON> 66,141
<OTHER-SE> 792,537
<TOTAL-LIABILITY-AND-EQUITY> 1,617,981
<SALES> 784,530
<TOTAL-REVENUES> 784,530
<CGS> 383,896
<TOTAL-COSTS> 383,896
<OTHER-EXPENSES> 310,431
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,860
<INCOME-PRETAX> 115,595
<INCOME-TAX> 42,770
<INCOME-CONTINUING> 72,825
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 72,825
<EPS-PRIMARY> 1.20
<EPS-DILUTED> 1.18
<FN>
<F1> 26 WEEKS
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR THE
THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER<F1>
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> SEP-27-1997
<CASH> 15,442
<SECURITIES> 0
<RECEIVABLES> 618,495
<ALLOWANCES> 18,204
<INVENTORY> 367,314
<CURRENT-ASSETS> 1,070,785
<PP&E> 532,122
<DEPRECIATION> 276,611
<TOTAL-ASSETS> 1,658,234
<CURRENT-LIABILITIES> 363,727
<BONDS> 200,061
0
0
<COMMON> 66,330
<OTHER-SE> 819,165
<TOTAL-LIABILITY-AND-EQUITY> 1,658,234
<SALES> 1,175,692
<TOTAL-REVENUES> 1,175,692
<CGS> 575,764
<TOTAL-COSTS> 575,764
<OTHER-EXPENSES> 464,775
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,979
<INCOME-PRETAX> 171,967
<INCOME-TAX> 63,628
<INCOME-CONTINUING> 108,339
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 108,339
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 1.76
<FN>
<F1> Thirty-nine weeks.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SNAP-ON INCORPORATED AS OF AND FOR THE
YEAR ENDED JANUARY 3, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-03-1998
<PERIOD-START> DEC-29-1996
<PERIOD-END> JAN-03-1998
<CASH> 25,679
<SECURITIES> 0
<RECEIVABLES> 560,234
<ALLOWANCES> 20,645
<INVENTORY> 373,155
<CURRENT-ASSETS> 1,021,709
<PP&E> 547,580
<DEPRECIATION> 281,815
<TOTAL-ASSETS> 1,641,357
<CURRENT-LIABILITIES> 352,530
<BONDS> 151,016
0
0
<COMMON> 66,472
<OTHER-SE> 825,665
<TOTAL-LIABILITY-AND-EQUITY> 1,641,357
<SALES> 1,672,215
<TOTAL-REVENUES> 1,672,215
<CGS> 828,387
<TOTAL-COSTS> 828,387
<OTHER-EXPENSES> 650,182
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,654
<INCOME-PRETAX> 238,676
<INCOME-TAX> 88,310
<INCOME-CONTINUING> 150,366
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 150,366
<EPS-PRIMARY> 2.47
<EPS-DILUTED> 2.44
</TABLE>
