-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Sn8iKDY6HxxhDaqG6l53yPK/IQJPXge0EmF10GSxOlmJ7vLn0qQRB9G+eWgIkUPK UD2FyeLWcGUjF2NelyU4FQ== 0000897069-03-000743.txt : 20030714 0000897069-03-000743.hdr.sgml : 20030714 20030714111926 ACCESSION NUMBER: 0000897069-03-000743 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SNAP ON INC CENTRAL INDEX KEY: 0000091440 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 390622040 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07724 FILM NUMBER: 03784812 BUSINESS ADDRESS: STREET 1: 10801 CORPORATE DRIVE CITY: KENOSHA STATE: WI ZIP: 53141-1430 BUSINESS PHONE: 4146565200 MAIL ADDRESS: STREET 1: 10801 CORPORATE DRIVE CITY: KENOSHA STATE: WI ZIP: 53141 FORMER COMPANY: FORMER CONFORMED NAME: SNAP ON TOOLS CORP DATE OF NAME CHANGE: 19920703 11-K 1 irm390.txt FORM 11-K SECURITIES & EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 or [ ] TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to _______________ Commission File Number: 1-7724 A. Full title of the plan and address of the plan, if different from that of the issuer named below: SNAP-ON INCORPORATED 401(k) SAVINGS PLAN SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR SUBSIDIARIES B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: SNAP-ON INCORPORATED 10801 Corporate Drive Pleasant Prairie, WI 53158-1603 REQUIRED INFORMATION -------------------- The following financial statements and schedules of the Snap-on Incorporated 401(k) Savings Plan, the Snap-on Incorporated 401(k) Personal Savings Plan for Collective Bargained Groups and the Snap-on Incorporated 401(k) Personal Savings Plan for Subsidiaries, prepared in accordance with the financial reporting requirements of the Employee Retirement Income Securities Act of 1974, as amended, are filed herewith. 2 EXHIBIT INDEX FORM 11-K Exhibit No. Exhibit - ---------- ------- (23.1) Consent of Deloitte & Touche LLP (99.1) Financial statements and schedules of the Snap-on Incorporated 401(k) Savings Plan, the Snap-on Incorporated 401(k) Personal Savings Plan for Collective Bargained Groups, and the Snap-on Incorporated 401(k) Personal Savings Plan for Subsidiaries, prepared in accordance with the financial reporting requirements of the Employee Retirement Income Securities Act of 1974, as amended. 3 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator of each Plan has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Kenosha, and State of Wisconsin, on this 11th day of July, 2003. SNAP-ON INCORPORATED 401(k) SAVINGS PLAN By: /s/ Paul C. Prickett --------------------------------------------- Paul C. Prickett, as Plan Administrator SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS By: /s/ Paul C. Pricket --------------------------------------------- Paul C. Prickett, as Plan Administrator SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR SUBSIDIARIES By: /s/ Paul C. Prickett --------------------------------------------- Paul C. Prickett, as Plan Administrator EX-23.1 3 irm390a.txt CONSENT OF DELOITTE & TOUCHE LLP EXHIBIT 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 11-K into the previously filed Snap-on Incorporated Form S-8 Registration Statements (Nos. 33-21277, 33-57898 and 33-91712) for the Snap-on Incorporated 401(k) Savings Plan, Snap-on Incorporated 401(k) Personal Savings Plan for Collective Bargained Groups and Snap-on Incorporated 401(k) Savings Plan for Subsidiaries. /s/ Deloitte & Touche LLP DELOITTE & TOUCHE LLP Milwaukee, Wisconsin July 11, 2003 EX-99.1 4 irm390b.txt FINANCIAL STATEMENTS AND SCHEDULES SNAP-ON INCORPORATED 401(k) SAVINGS PLAN Financial Statements and Supplemental Schedule as of December 31, 2002 and 2001 Independent Auditors' Report SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT TO DEPARTMENT OF LABOR'S RULES AND REGULATIONS SNAP-ON INCORPORATED 401(k) SAVINGS PLAN TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-8 SUPPLEMENTAL SCHEDULE - Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at Year End)- December 31, 2002 9 Schedules not filed herewith are omitted because of the absence of conditions under which they are required. INDEPENDENT AUDITORS' REPORT To the Administrative Committee of the Snap-on Incorporated 401(k) Savings Plan: We have audited the accompanying statement of net assets available for benefits of the Snap-on Incorporated 401(k) Savings Plan (the "Plan"), formerly known as the Snap-on Incorporated 401(k) Personal Savings Plan, as of December 31, 2002, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. The statement of net assets available for benefits as of December 31, 2001, and the related statement of changes in net assets available for benefits were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those statements in their report dated May 14, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits as of December 31, 2002, and the changes in its net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule referred to in the accompanying table of contents is presented for purposes of additional analysis and is not a required part of the 2002 basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2002 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the 2002 basic financial statements taken as a whole. /s/ Deloitte & Touche LLP June 11, 2003 Milwaukee, WI SNAP-ON INCORPORATED 401(k) SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2002 AND 2001 - -------------------------------------------------------------------------------- 2002 2001 ACCRUED INCOME $ 2,948 $ 2,304 CONTRIBUTION RECEIVABLE $ 493,527 INVESTMENTS, at fair value (Note 3) 107,435,974 114,992,265 OVERDRAFT (420,431) (427,246) ------------- ------------- NET ASSETS AVAILABLE FOR BENEFITS $ 107,512,018 $ 114,567,323 ============= ============= See notes to financial statements. -2-
SNAP-ON INCORPORATED 401(k) SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2002 AND 2001 - -------------------------------------------------------------------------------------------------- 2002 2001 ADDITIONS: Investment income (loss): Net depreciation in fair value of investments (Note 3) $(18,108,752) $(10,401,167) Interest and dividend income 2,092,989 4,948,605 Other income (loss) 481,472 (2,181) ------------ ------------ Total investment (loss) (15,534,291) (5,454,743) CONTRIBUTIONS: Participant 12,486,663 10,584,999 Employer 2,506,295 431,476 Rollovers 351,880 449,128 ------------ ------------ Total contributions 15,344,838 11,465,603 ------------ ------------ Total additions (189,453) 6,010,860 ------------ ------------ DEDUCTIONS: Benefits paid to participants 6,957,155 5,442,163 Administrative expenses 16,286 11,381 ------------ ------------ Total deductions 6,973,441 5,453,544 ------------ ------------ TRANSFERS (TO) FROM AFFILIATED PLANS, net (107,589) 17,311,102 ------------ ------------ NET (DECREASE) INCREASE (7,055,305) 17,868,418 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 114,567,323 96,698,905 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $107,512,018 $114,567,323 ============ ============ See notes to financial statements.
-3- SNAP-ON INCORPORATED 401(k) SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN General - The following brief description of the Snap-on Incorporated 401(k) Savings Plan (the "Plan") is provided for general information purposes only. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. Participants should refer to the Plan document for more complete information. The Plan was adopted effective January 1, 1992, and was amended and restated January 1, 2001. Effective August 1, 2001, the name of the Plan was changed from the Snap-on Incorporated 401(k) Personal Savings Plan to the Snap-on Incorporated 401(k) Savings Plan. The purpose of the Plan is to provide eligible employees an opportunity to accumulate savings on a tax-advantage basis. Effective August 1, 2001, assets in the amount of $17,641,954 from Snap-on Tools Company 401(k) Matching Plan merged into the Plan. Eligibility - All regular and full-time employees of Snap-on Incorporated and participating subsidiaries (the "Company") who have attained age 21 and who do not participate in a collective bargaining group are eligible to participate in the Plan after a three-month period of employment during which at least 250 hours of service are completed. Effective January 1, 2001, each eligible employee, other than a temporary employee, who has attained age 18 shall become a participant on the date he or she performs an hour of service as defined in the Plan document. Effective July 1, 1995, employees of the Company classified as temporary who have attained age 21 and who do not participate in a collective bargaining group are eligible to participate in the Plan on the first January 1 or July 1 after a 12-month period of employment in which at least 1,000 hours of service is completed. Contributions - Eligible employees are able to make contributions to the Plan via salary deferral agreements. The annual contribution per participant is limited to the lesser of (a) the maximum 401(k) contribution allowed under the Internal Revenue Code ("IRC") or (b) 50% of the participant's compensation (10% for highly compensated participants). Participants have the option to allocate their account balances between 28 investment options: Snap-on Incorporated Common Stock, BGI Midcap Equity Index Fund, Master works BGI Alpha Stock Fund, International Equity Fund, BGI S&P 500 Stock Fund, BGI Bond Index Fund, BGI Asset Allocation Fund, The Managers Special Equity Fund, Merrill Lynch Aggregate Bond Index Fund, Templeton Foreign Fund, Franklin Balance Sheet Fund, PIMCO PEA Renaissance Fund Class A, Merrill Lynch Aggregate Bond Index Fund Class A Gm, Oppenheimer Capital Fund Gm, Oppenheimer Capital Fund, Oppenheimer High Yield Fund Class A, The Managers Special Equity Fund Gm, Alliance Growth and Income Fund Gm, Templeton Foreign Fund Gm, PIMCO PEA Renaissance Fund Class A Gm, Franklin Balance Sheet Fund Gm, Alliance Growth and Income Fund, Oppenheimer High Yield Fund Class A Gm, Merrill Lynch Retirement Reserves Money Market Fund Goal Manager Investment Fund, MFS Emerging Growth Fund Class A, BGI Money Market Fund and the Merrill Lynch Retirement Reserves Money Market Fund Gm. -4- Prior to July 1, 2001, matching Company contributions were neither required nor permitted. Effective July 1, 2001, participants meeting certain criteria as defined in the Plan document, are eligible for a matching contribution ("Company Stock Match") in amounts determined at the discretion of their respective employers. Matching contributions for each eligible participant are made each calendar quarter in an amount equal to no greater than 50% of the eligible participant's 401(k) pretax contributions for that quarter, not to exceed a maximum of 6% (5% for participants at the East Troy, Elkhorn, Lincolnshire and EquiServ Field locations) of the eligible participant's pay for that calendar quarter, provided the eligible participant is an active employee on the last day of the calendar quarter or has retired, suffered a disability or died during the calendar quarter. The Company Stock Match is invested directly in Snap-on Incorporated common stock. A participant, prior to attaining age 55, shall not be eligible to direct the investment of his or her Company Stock Match account. Participant Accounts - Each participant's account is credited with the participant's contributions and allocations of (a) the Company Stock Match, when applicable and (b) Plan earnings, and charged with an allocation of administrative expenses. Allocations are based on the proportion that each participant's account balance bears to the total of all participant account balances. Vesting - Participants are 100% vested in their pretax contributions and actual earnings thereon. Participants become fully vested in the Company Stock Match as follows: Years of Vested Service Percentage Less than 1 0 % 1 25 2 50 3 75 4 or more 100 Participants at the East Troy, Elkhorn, Lincolnshire and EquiServe Field locations are fully vested in the Company Stock Match. Participant Loans - Participant loans are limited to 50% of the participant's account balance, not to exceed $50,000. The minimum loan amount is $1,000, and participants can only have one loan at any particular time. The loans bear interest at a fixed reasonable rate determined from time to time by the Plan administrator and are commensurate with local prevailing rates in effect at the time the loans are issued, with a maximum loan term of 5 years (personal loans) or 15 years (mortgage loans). Payment of Benefits - The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. On termination of service due to death, disability or retirement, a participant may elect to be paid in the form of a single lump sum. A participant who is an employee at the time he or she is required by law to commence distribution, or anytime thereafter, may instead elect to receive annual installments not to exceed the life or the joint and last survivor life expectancy of the participant or his or her beneficiary. In-service and hardship withdrawals are also available. Forfeited Accounts - At December 31, 2002, forfeited nonvested accounts totaled $11,493. These accounts will be used to reduce future Company contributions. Plan Administration - The Plan's assets are held by Merrill Lynch Trust Company, FSB, the Trustee of the Plan. Contributions and Snap-on Incorporated stock are remitted to the Trustee, which invests cash -5- received, interest and dividend income and makes distributions to participants. The Company is the Plan administrator. Investment management fees and other transaction-based fees are paid by the Plan. Loan fees are paid by the participant. Administrative fees for accounts of separated employees and beneficiaries are paid by the former employees or beneficiaries. All other expenses are paid by the Company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The financial statements have been prepared on the accrual basis of accounting. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation and Income Recognition - All investments are stated at fair value based upon quoted market prices. Dividend income is recorded on the record date. Interest earned on investments is recorded on the accrual basis. Net Appreciation/Depreciation in Fair Value of Investments - The net depreciation in fair value of investments consists of realized gains or losses and unrealized appreciation (depreciation) in the fair value of such investments. Distributions - Benefits paid to participants are based upon the fair value of each participant's investment account as of the date of distribution and are recorded on the date of distribution. At December 31, 2002, benefit payments in the amount of $71,957 have been requested and are awaiting payment. 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets at December 31: 2002 2001 BGI S&P 500 Stock Fund 24,291,014 32,344,254 BGI Asset Allocation Fund 22,619,950 27,897,627 BGI Midcap Equity Index Fund 13,515,672 16,133,342 ML Retirement Reserves* 12,510,542 BGI Bond Index Fund 9,796,621 7,764,496 Snap-On Incorporated Common Stock* 6,905,306 BGI Money Market Fund 10,870,909 *Represents a party-in-interest -6- During 2002 and 2001, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows: 2002 2001 Mutual funds $(13,709,476) $(11,854,169) Common stock (787,382) 1,128,489 Common collective trusts (3,611,894) 324,513 ------------ ------------ $(18,108,752) $(10,401,167) ============ ============ The Plan provides for investments in common stock, mutual funds and common collective trusts that, in general, are exposed to various risks such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for Plan benefits. 4. NONPARTICIPANT-DIRECTED INVESTMENTS Effective July 1, 2001, a nonparticipant-directed Company matching contribution to the Snap-on stock fund was established. Information about the net assets and the significant components of the changes in net assets relating to the Snap-on stock fund is as follows: 2002 2001 Net assets - Snap-on Incorporated common stock* $6,905,306 $5,325,646 ========== ========== Changes in net assets: Contributions $2,557,464 $1,265,508 Earnings 186,283 1,207,613 Distributions (576,333) (158,703) Transfers, net (41,047) (566,193) ---------- ---------- $2,126,367 $1,748,225 ========== ========== *Includes some shares that are participant directed. 5. PLAN TERMINATION Although it has not expressed any intention to do so, the Company reserves the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants would become 100% vested in their Company Stock Match. 6. TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated March 29, 1996, that the Plan and related trust are designed in accordance with applicable sections of the IRC. Although the Plan has been amended since receiving the determination letter, the Plan administrator -7- believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 7. RELATED-PARTY TRANSACTIONS The Plan's trustee fees, as well as most administrative fees, are borne by the Company. The Plan also invests in Snap-on Incorporated common stock and mutual funds and money market funds managed by the Plan's trustee. These transactions are not considered prohibited transactions by statutory exemptions under ERISA regulations. * * * * * -8-
SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT YEAR END) DECEMBER 31, 2002 - ----------------------------------------------------------------------------------------------- Identity of Issuer/ Current Description of Investment Cost (a) Value SNAP-ON INCORPORATED COMMON STOCK, 245,653 shares $ 7,571,308 $ 6,905,306 =========== COMMON COLLECTIVE TRUSTS: BGI Midcap Equity Index Fund 13,515,672 Masterworks Alpha Stock Fund 4,078,796 MUTUAL FUNDS: BGI Asset Allocation Fund 22,619,950 The Managers Special Equity Fund 2,762,452 BGI S&P 500 Stock Fund 24,291,014 BGI Bond Index Fund 9,796,621 Templeton Foreign Fund 1,786,610 PIMCO PEA Renaissance Fund Class A 1,375,321 Franklin Balance Sheet Fund 978,161 ML AGR Bond Index Fund* 952,356 ML AGR Bond Index Fund Class A Gm* 772,686 Oppenheimer Capital Fund Gm 569,661 Templeton Foreign Fund Gm 198,465 Alliances Growth and Income Fund Gm 192,827 The Manager Special Equity Fund Gm 179,264 Alliance Growth and Income Fund Gm 174,844 Oppenheimer High Yield Fund Class A 132,228 Oppenheimer Capital Fund 126,254 PIMCO PEA Renaissance Fund Class A Gm 100,449 Franklin Balance Sheet Fund Gm 95,633 Oppenheimer High Yield Fund Class A Gm 81,821 MONEY MARKET FUNDS: ML Retirement Reserves* 12,510,542 ML Retirement Reserves Gm* 180,840 ------------ 104,377,773 LOANS TO PARTICIPANTS (interest rates ranging from 8.25% to 10%)* 3,056,407 ------------ $107,434,180 ============ *Party-in-interest. (a) Cost information required only for nonparticipant-directed investment.
-9- SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS Financial Statements and Supplemental Schedule as of December 31, 2002 and 2001 and Independent Auditors' Report SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT TO DEPARTMENT OF LABOR'S RULES AND REGULATIONS SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-6 SUPPLEMENTAL SCHEDULE - Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets (Held at Year End) - December 31, 2002 7 Schedules not filed herewith are omitted because of the absence of conditions under which they are required. INDEPENDENT AUDITORS' REPORT To the Administrative Committee of the Snap-on Incorporated 401(k) Personal Savings Plan for Collective Bargained Groups: We have audited the accompanying statement of net assets available for benefits of the Snap-on Incorporated 401(k) Personal Savings Plan for Collective Bargained Groups (the "Plan") as of December 31, 2002, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. The statement of net assets available for benefits, as of December 31, 2001, and the related statement of changes in net assets available for benefits, were audited by other auditors who have ceased operations. These auditors expressed an unqualified opinion on those statements in their report dated May 14, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the 2002 financial statements referred to above present fairly, in all material respects, the net assets available for benefits as of December 31, 2002, and the changes in its net assets available for benefits for the year then ended, in conformity with accounting principles generally accepted in the United States. Our audit was made for the purpose of forming an opinion on the 2002 basic financial statements taken as a whole. The supplemental schedule referred to in the accompanying table of contents is presented for purposes of additional analysis and is not a required part of the 2002 basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2002 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the 2002 basic financial statements taken as a whole. /s/ Deloitte & Touche LLP June 11, 2003 Milwaukee, WI SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2002 AND 2001 - -------------------------------------------------------------------------------- 2002 2001 CASH $ 101 $ 121 ACCRUED INCOME 935 889 INVESTMENTS, at fair value (Note 3) 13,776,890 15,457,222 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $13,777,926 $15,458,232 ============ =========== See notes to financial statements. -2-
SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2002 AND 2001 - ------------------------------------------------------------------------------------------------- 2002 2001 ADDITIONS: Investment income (loss): Net depreciation in fair value of investments (Note 3) $ (2,395,490) $ (1,802,448) Interest and dividend income 282,946 804,177 Other income (loss) (105,300) 622 ------------ ------------ Total investment (loss) (2,217,844) (997,649) CONTRIBUTIONS: Participant 1,447,342 1,418,894 Rollovers 3,406 598 ------------ ------------ Total contributions 1,450,748 1,419,492 ------------ ------------ Total additions (767,096) 421,843 ------------ ------------ DEDUCTIONS: Benefits paid to participants 910,419 592,326 Administrative expenses 2,791 3,989 ------------ ------------ Total deductions 913,210 596,315 ------------ ------------ TRANSFERS (TO) FROM AFFILIATED PLANS, net (37,914) ------------ ------------ NET (DECREASE) (1,680,306) (212,386) NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 15,458,232 15,670,618 ------------ ------------ NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 13,777,926 $ 15,458,232 ============ ============ See notes to financial statements.
-3- SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN General - The following brief description of the Snap-on Incorporated 401(k) Personal Savings Plan for Collective Bargained Groups (the "Plan") is provided for general information purposes only. The Plan is subject to the provisions of the Employee Retirement Income Security Act ("ERISA") of 1974, as amended. Participants should refer to the Plan document for more complete information. The Plan was adopted effective June 1, 1992, and was amended and restated January 1, 2001. The purpose of the Plan is to provide eligible employees an opportunity to accumulate savings on a tax-advantage basis. Eligibility - All regular and full-time union employees of Snap-on Incorporated (the "Company") whose conditions of employment are covered by a collective bargaining agreement are eligible to participate on the first day of the next month after the date he or she attains age 21 and completes a three-month eligibility period in which he or she is credited with at least 250 hours of service. Effective July 1, 1995, employees of the Company classified as temporary whose conditions of employment are covered by a collective bargaining agreement are eligible to participate on the first January 1 or July 1 after the date he or she attains age 21 and completes a 12-month eligibility period in which he or she is credited with at least 1,000 hours of service. Contributions - Eligible employees are able to make contributions to the Plan via salary deferral agreements. The annual maximum contribution per participant is limited to the lesser of (a) the maximum 401(k) contribution allowed under the Internal Revenue Code ("IRC") or (b) 50% of the participant's compensation (6% for highly compensated employees). Participants have the option to allocate their account balances between 27 investment options: Snap-on Incorporated Common Stock, BGI Midcap Equity Index Fund, Masterworks Alpha Stock Fund, International Equity Fund, BGI Money Market Fund, BGI S&P 500 Stock Fund, BGI Bond Index Fund, BGI Asset Allocation Fund, The Managers Special Equity Fund, Merrill Lynch Aggregate Bond Index Fund, Templeton Foreign Fund, Franklin Balance Sheet Fund, PIMCO PEA Renaissance Fund Class A, Merrill Lynch Aggregate Bond Index Fund Class A Gm, Oppenheimer Capital Fund Gm, Oppenheimer Capital Fund, Oppenheimer High Yield Fund Class A, The Managers Special Equity Fund Gm, Alliance Growth and Income Fund Gm, Templeton Foreign Fund Gm, PIMCO PEA Renaissance Fund Class A Gm, Franklin Balance Sheet Fund Gm, Alliance Growth and Income Fund, Oppenheimer High Yield Fund Class A Gm, Merrill Lynch Retirement Reserves Money Market Fund, and the Company makes no contributions to the Plan. Participant Accounts - Individual accounts are maintained for each of the Plan's participants to reflect the participant's contributions as well as the participant's share of the Plan's income and any related administrative expenses. Allocations are based on the proportion that each participant's account balance bears to the total of all participant account balances. -4- Vesting - Participants are 100% vested in their contributions including the earnings attributable to them. Participant Loans - Participant loans are limited to 50% of the participant's account balance, not to exceed $50,000. The minimum loan amount is $1,000, and participants can only have one loan at any particular time. The loans bear interest at a fixed reasonable rate determined from time to time by the Plan administrator and are commensurate with local prevailing rates in effect at the time the loans are issued, with a maximum loan term of 5 years (personal loans) or 15 years (mortgage loans). Payment of Benefits - The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. On termination of service due to death, disability or retirement, a participant shall be paid in the form of a single lump sum. A participant who is an employee at the time he or she is required by law to commence distribution, or anytime thereafter, may instead elect to receive annual installments not to exceed the life or the joint and last survivor life expectancy of the participant or his or her beneficiary. In-service and hardship withdrawals are also available. Rollovers - Rollovers represent amounts transferred to the Plan by new participants from other qualified plans. Plan Administration - The Plan's assets are held by Merrill Lynch Trust Company, FSB, the Trustee of the Plan. Contributions are remitted to the Trustee, which invests cash received, interest and dividend income and makes distributions to participants. The Company is the Plan administrator. Investment management fees and other transaction-based fees are paid by the Plan. Loan fees are paid by the participants. Administrative fees for accounts of separated employees and beneficiaries are paid by the former employees or beneficiaries. All other expenses are paid by the Company. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The financial statements have been prepared on the accrual basis of accounting. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation and Income Recognition - All investments are stated at fair value based upon quoted market prices. Dividend income is recorded on the record date. Interest earned on investments is recorded on the accrual basis. Net Appreciation/Depreciation in Fair Value of Investments - The net appreciation/depreciation in fair value of investments consists of realized gains or losses and unrealized appreciation (depreciation) in the fair value of such investments. Distributions - Benefits paid to participants are based upon the fair value of each participant's investment account as of the date of distribution. Distributions to participants are recognized when paid. There were no benefit payments awaiting payment as of December 31, 2002. -5- 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets at December 31: 2002 2001 BGI Asset Allocation Fund $4,265,502 $5,036,221 BGI S&P 500 Stock Fund 3,521,822 4,832,717 BGI Midcap Equity Index Fund 1,500,356 1,623,174 ML Retirement Reserve 1,423,344 - BGI Bond Index Fund 1,110,199 903,569 BGI Money Market Fund - 1,122,509 During 2002 and 2001, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows: 2002 2001 Mutual funds $(2,000,438) $(1,759,888) Common stock (50,247) 75,331 Common collective trusts (344,805) (117,891) ----------- ----------- $(2,395,490) $(1,802,448) =========== =========== The Plan provides for investments in common stock, common collective trusts and mutual funds that, in general, are exposed to various risks such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for Plan benefits. 4. PLAN TERMINATION Although it has not expressed any intention to do so, the Company reserves the right to terminate the Plan at any time. If the Plan is terminated, all accounts will automatically become payable as determined by the Plan administrator. 5. TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated April 3, 1995, that the Plan and related trust are designed in accordance with applicable sections of the IRC. Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 6. RELATED-PARTY TRANSACTIONS The Plan's trustee fees, as well as most administrative fees, are borne by the Company. The Plan also invests in Snap-on Incorporated common stock. These transactions are not considered prohibited transactions by statutory exemption under the ERISA regulations. * * * * * -6-
SNAP-ON INCORPORATED 401(k) PERSONAL SAVINGS PLAN FOR COLLECTIVE BARGAINED GROUPS FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT YEAR END) DECEMBER 31, 2002 - ----------------------------------------------------------------------------------------- Identity of Issuer/ Current Description of Investment Value COMMON COLLECTIVE TRUSTS: BGI Midcap Equity Index Fund $ 1,500,356 Masterworks Alpha Stock Fund 254,040 MUTUAL FUNDS: BGI Asset Allocation Fund 4,265,502 BGI S&P 500 Stock Fund 3,521,822 BGI Bond Index Fund 1,110,199 The Managers Special Equity Fund 301,236 Templeton Foreign Fund 213,281 PIMCO PEA Renaissance Fund Class A 52,264 ML AGR Bond Index Class A Gm* 50,947 ML AGR Bond Index Fund* 47,165 Oppenheimer Capital Fund GM 30,688 Franklin Balance Sheet Fund 24,735 Alliance Growth and Income Fund Gm 11,784 Templeton Foreign Fund Gm 9,090 The Managers Special Equity Fund Gm 9,047 PIMCO PEA Renaissance Fund Class A Gm 6,735 Franklin Balance Sheet Fund Gm 6,415 Oppenheimer Capital Fund 5,436 Alliance Growth and Income Fund 5,194 Oppenheimer High Yield Fund Class A Gm 2,534 Oppenheimer High Yield Fund Class A 1,602 MONEY MARKET FUNDS: ML Retirement Reserves* 1,423,344 ML Retirement Reserves Gm* 6,756 12,860,172 SNAP-ON INCORPORATED COMMON STOCK* 322,004 LOANS TO PARTICIPANTS (interest rates ranging from 5.25% to 12.5%)* 594,714 $ 13,776,890 *Party-in-interest.
-7- SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FOR SUBSIDIARIES Financial Statements and Supplemental Schedule as of December 31, 2002 and 2001 and Independent Auditors' Report SUPPLEMENTAL SCHEDULE FURNISHED PURSUANT TO DEPARTMENT OF LABOR'S RULES AND REGULATIONS SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FOR SUBSIDIARIES TABLE OF CONTENTS - -------------------------------------------------------------------------------- Page INDEPENDENT AUDITORS' REPORT 1 FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001: Statements of Net Assets Available for Benefits 2 Statements of Changes in Net Assets Available for Benefits 3 Notes to Financial Statements 4-7 SUPPLEMENTAL SCHEDULE - Form 5500, Schedule H, Part IV, Line 4i - Schedule of Assets Held at Year End - December 31, 2002 8 Schedules not filed herewith are omitted because of the absence of conditions under which they are required. INDEPENDENT AUDITORS' REPORT To the Administrative Committee of the Snap-on Incorporated 401(k) Savings Plan for Subsidiaries: We have audited the accompanying statement of net assets available for Plan benefits of the Snap-on Incorporated 401(k) Savings Plan for Subsidiaries (the "Plan") as of December 31, 2002, and the related statement of changes in net assets available for Plan benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. The statement of net assets available for Plan benefits as of December 31, 2001, and the related statement of changes in net assets available for benefits of the Plan, were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those statements in their report dated May 14, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the 2002 financial statements referred to above present fairly, in all material respects, the net assets available for Plan benefits as of December 31, 2002, and the changes in its net assets available for Plan benefits for the year then ended, in conformity with accounting principles generally accepted in the United States. Our audit was made for the purpose of forming an opinion on the 2002 basic financial statements taken as a whole. The supplemental schedule referred to in the accompanying table of contents is presented for purposes of additional analysis and is not a required part of the 2002 basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2002 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic 2002 financial statements taken as a whole. /s/ Deloitte & Touche LLP June 11, 2003 Milwaukee, WI SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FOR SUBSIDIARIES STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2002 AND 2001 - ------------------------------------------------------------------------------- 2002 2001 CASH $ 67 ACCRUED INCOME 1,481 $ 1,066 EMPLOYER CONTRIBUTION RECEIBABLE 218,750 INVESTMENTS, at fair value (Note 3) 20,848,236 24,100,596 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $20,849,784 $24,320,412 =========== =========== See notes to financial statements. -2-
SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FOR SUBSIDIARIES STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEARS ENDED DECEMBER 31, 2002 AND 2001 - ----------------------------------------------------------------------------------------------- 2002 2001 ADDITIONS: Investment income (loss): Net depreciation in fair value of investments (Note 3) $(3,504,569) $(2,454,283) Interest and dividend income 382,937 838,042 Other income (loss) (316,660) (12,445) ----------- ----------- Total investment (loss) (3,438,292) (1,628,686) CONTRIBUTIONS: Participant 1,877,737 1,807,499 Employer 626,768 1,026,040 Rollovers 185,296 430,882 ----------- ----------- Total contributions 2,689,801 3,264,421 ----------- ----------- Total additions (748,491) 1,635,735 ----------- ----------- DEDUCTIONS: Benefits paid to participants 2,718,026 1,149,281 Administrative expenses 4,110 2,551 ----------- ----------- Total deductions 2,722,136 1,151,832 ----------- ----------- TRANSFERS (TO) FROM AFFILIATED PLANS, net (1) 405 ----------- ----------- NET (DECREASE) INCREASE (3,470,628) 484,308 NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 24,320,412 23,836,104 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $20,849,784 $24,320,412 =========== =========== See notes to financial statements.
-3- SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FOR SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN General - The following brief description of the Snap-on Incorporated 401(k) Savings Plan for Subsidiaries (the "Plan") is provided for general information purposes only. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. Participants should refer to the Plan document for more complete information. The Plan was adopted effective April 1, 1998, and was amended and restated January 1, 2001. The purpose of the Plan is to provide eligible employees an opportunity to accumulate savings on a tax-advantage basis. Effective July 1, 1999, the assets of Edge Diagnostic Systems 401(k) Savings Plan were merged into the Plan. Effective August 1, 1999, the assets of Sioux Tools, Inc. 401(k) Plan were merged into the Plan. Effective February 1, 2000, the assets of the Thomson Holding Inc. Savings Plan and Snap-on Incorporated 401(k) Savings Plan (for Snap-on Diagnostics, San Jose, CA) merged into the Plan. Eligibility - The Plan covers the employees of J.H. Williams Company, Automotive Data Systems, Sioux Tools, Snap-on Diagnostics San Jose, and Mitchell Repair Information Company. Any employee satisfying the above requirement with at least three months service is eligible to participate in the Plan for the purpose of pretax contributions, unless he or she is covered by a collective bargaining agreement, is leased from another company, is a nonresident alien who receives no income from U.S. sources subject to U.S. income taxes or is employed in a U.S. territory. Effective January 1, 2001, each eligible employee, other than a temporary employee, who has attained age 18 shall become a participant on the date he or she first performs an hour of service. Effective January 1, 2001, each eligible employee who is a temporary employee shall become a participant on the first January 1 or July 1 after the date he or she attains age 21 and completes a year of service. Contributions - Eligible employees are able to make contributions to the Plan via salary deferral agreements. The annual contribution per participant is limited to the lesser of (a) the maximum 401(k) contribution allowed under the Internal Revenue Code ("IRC") or (b) 50% of the participant's compensation. Participants have the option to allocate their account balances between 24 investment options: Snap-on Incorporated Common Stock, BGI Midcap Equity Index Fund, BGI Alpha Stock Fund, BGI S&P 500 Stock Fund, BGI Bond Index Fund, BGI Asset Allocation Fund, The Managers Special Equity Fund, Merrill Lynch Aggregate Bond Index Fund, Templeton Foreign Fund, Franklin Balance Sheet Fund, PIMCO PEA Renaissance Fund Class A, Merrill Lynch Aggregate Bond Index Fund Class A Gm, Oppenheimer Capital Fund Gm, Oppenheimer Capital Fund, Oppenheimer High Yield Fund Class A, The Managers Special Equity Fund Gm, Alliance Growth and Income Fund Gm, Templeton Foreign Fund Gm, PIMCO PEA Renaissance Fund Class A Gm, Franklin Balance Sheet Fund Gm, Alliance Growth and Income Fund, Oppenheimer High Yield Fund Class A Gm, Merrill Lynch Retirement Reserves Money Market Fund, and the Merrill Lynch Retirement Reserves Money Market Fund Gm. -4- For employees of J.H. Williams, for each pretax dollar contributed (up to the first 12% of eligible pay), the employer will contribute 50%. For employees of Sioux Tools, Inc., Snap-on Diagnostics, San Jose, Mitchell Repair Information Company, and Automotive Data Systems, for each pretax dollar contributed (up to the first 6% of eligible pay), the employer will contribute 50%. Participant Accounts - Individual accounts are maintained for each of the Plan's participants to reflect the participant's contributions and related employer contributions as well as the participant's share of the Plan's income and any related administrative expenses. Allocations are based on the proportion that each participant's account balance bears to the total of all participant account balances. Vesting - Participants are 100% vested in their pretax contributions including the earnings thereon. Participants become fully vested in the employer contribution as follows: Years of Vested Service Percentage Less than 1 0 % 1 25 2 50 3 75 4 or more 100 Participant Loans - Participant loans are limited to 50% of the participant's account balance, not to exceed $50,000. The minimum loan amount is $1,000, and participants can only have one loan at any particular time. The loans bear interest at a fixed reasonable rate determined from time to time by the Plan administrator and are commensurate with local prevailing rates in effect at the time the loans are issued, with a maximum loan term of 5 years (personal loans) or 15 years (mortgage loans). Payment of Benefits - The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. On termination of service due to death, disability or retirement, a participant may elect to be paid in the form of a single lump sum or annual installments not to exceed the life or the joint and last survivor life expectancy of the participant or his or her beneficiary. In-service and hardship withdrawals are also available. Forfeited Accounts - At December 31, 2002, forfeited nonvested accounts totaled $19,456. These accounts will be used to reduce future employer contributions. Also, in 2002, employer contributions were reduced by $4,763 from forfeited accounts from previous years. Rollovers - Rollovers represent amounts transferred to the Plan by new participants from other qualified plans. Plan Administration - The Plan's assets are held by Merrill Lynch Trust Company, FSB, the Trustee of the Plan. Contributions and Snap-on stock are remitted to the Trustee, which invests cash received, interest and dividend income and makes distributions to participants. The Company is the Plan administrator. Investment management fees and other transaction-based fees are paid by the Plan. Loan fees are paid by the participant. Administrative fees for accounts of separated employees and beneficiaries are paid by the former employees or beneficiaries. All other expenses are paid by the Company. -5- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting - The financial statements have been prepared on the accrual basis of accounting. Accounting Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Investment Valuation and Income Recognition - All investments are stated at fair value based upon quoted market prices. Dividend income is recorded on the record date. Interest earned on investments is recorded on the accrual basis. Net Depreciation in Fair Value of Investments - The net depreciation in fair value of investments consists of realized gains or losses and unrealized appreciation (depreciation) in the fair value of such investments. Distributions - Benefits paid to participants are based upon the fair value of each participant's investment account as of the date of distribution and are recorded on the date of the distribution. At December 31, 2002 there were no benefit payments requested and awaiting payment. 3. INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets at December 31: 2002 2001 BGI S&P 500 Stock Fund $ 3,818,180 $5,555,043 BGI Midcap Equity Index Fund 3,755,961 5,826,971 ML Retirement Reserves* 3,749,219 BGI Bond Index Fund 2,086,884 BGI Asset Allocation Fund 2,001,446 2,443,523 BGI Money Market Fund 4,854,206 MFS Emerging Growth Fund Class A 2,035,468 *Represents a party-in-interest During 2002 and 2001, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) depreciated in value as follows: 2002 2001 Mutual funds $(2,589,857) $(2,205,338) Common stock (22,027) 26,975 Common collective trusts (892,685) (275,920) ----------- ----------- $(3,504,569) $(2,454,283) =========== =========== -6- The Plan provides for investments in common stock, mutual funds and common collective trusts that, in general, are exposed to various risks such as interest rate, credit and overall market volatility risks. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for Plan benefits. 4. PLAN TERMINATION Although it has not expressed any intention to do so, the Company reserves the right to terminate the Plan at any time. If the Plan is terminated, all accounts will automatically become payable as determined by the Plan administrator. 5. TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated January 18, 1996, that the Plan and related trust are designed in accordance with applicable sections of the IRC. Although the Plan has been amended since receiving the determination letter, the Plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 6. RELATED-PARTY TRANSACTIONS The Plan's trustee fees, as well as most administrative fees, are borne by the Company. The Plan also invests in Snap-on Incorporated common stock. The Plan invests in mutual funds and money market funds managed by the Plan's trustee. These transactions are not considered prohibited transactions by statutory exemptions under ERISA regulations. 7. RECONCILIATION TO FORM 5500 The following is a reconciliation of Employer contributions per the financial statements to the Form 5500 for the year ended December 31, 2001: Net assets available for benefits per Form 5500 $24,101,662 Employer contribution receivable 218,750 ----------- Net assets available per financial statements $24,320,412 =========== Employer contributions per the Plan's Form 5500 are different than the amount reported in the financial statements due to a difference in the timing of recognizing such amounts. * * * * * -7-
SNAP-ON INCORPORATED 401(k) SAVINGS PLAN FOR SUBSIDIARIES FORM 5500, SCHEDULE H, PART IV, LINE 4i - SCHEDULE OF ASSETS (HELD AT YEAR END) DECEMBER 31, 2002 - ------------------------------------------------------------------------------------------- Identity of Issuer/ Current Description of Investment Value COMMON COLLECTIVE TRUSTS: BGI Midcap Equity Index Fund $ 3,755,961 BGI Alpha Stock Fund 495,844 MUTUAL FUNDS: BGI S&P 500 Stock Fund 3,818,180 BGI Bond Index Fund 2,086,885 BGI Asset Allocation Fund 2,001,446 The Managers Special Equity Fund 1,000,025 ML AGR Bond Index Fund* 553,686 Templeton Foreign Fund 404,742 Franklin Balance Sheet Fund 370,177 PIMCO PEA Renaissance Fund Class A 357,984 ML AGR Bond Index Fund Class A Gm* 321,350 Oppenheimer Capital Fund Gm 267,577 Oppenheimer Capital Fund 129,814 Oppenheimer High Yield Fund Class A 106,357 The Managers Special Equity Fund Gm 84,564 Alliance Growth and Income Fund Gm 83,918 Templeton Foreign Fund Gm 83,288 PIMCO PEA Renaissance Fund Class A Gm 52,204 Franklin Balance Sheet Fund Gm 48,018 Alliance Growth and Income Fund 42,592 Oppenheimer High Yield Fund Class A Gm 33,754 MONEY MARKET FUNDS: ML Retirement Reserves* 3,749,219 ML Retirement Reserves Gm* 41,822 ----------- 19,889,171 SNAP-ON INCORPORATED COMMON STOCK* 172,539 LOANS TO PARTICIPANTS (interest rates ranging from 5.75% to 10.5%)* 786,290 ----------- $20,848,236 =========== *Party-in-interest.
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