DEF 14A

DEF 14A 1 d871894ddef14a.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant x Filed by a Party other than the Registrant ¨

Check the appropriate box:

¨	Preliminary Proxy Statement

¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x	Definitive Proxy Statement

¨	Definitive Additional Materials

¨	Soliciting Material under §240.14a-12

SNAP-ON INCORPORATED

(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

x	No fee required

¨	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

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Title of each class of securities to which the transaction applies:

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Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

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Total fee paid:

¨	Fee paid previously with preliminary materials.

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

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Amount Previously Paid:

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Form, Schedule or Registration Statement No.:

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LOGO

NOTICE OF 2015 ANNUAL MEETING OF SHAREHOLDERS

AND PROXY STATEMENT

HELP US REDUCE COSTS

If you receive more than one set of proxy materials, it means your shares are held in more than one account. You should vote the shares on all of your Proxy Cards. You may help us reduce costs by consolidating your accounts so that you receive only one set of proxy materials in the future. To consolidate your accounts, please contact our transfer agent, Computershare Trust Company, N.A., toll-free at 1-800-446-2617.

ADMISSION TO THE ANNUAL MEETING

All shareholders of record as of the close of business on March 2, 2015, may attend the meeting. Seating, however, is limited and will be on a first arrival basis.

To attend the Annual Meeting, please follow these instructions:

•

Bring proof of ownership of Snap-on stock and a form of identification; or

•

If a broker or other nominee holds your shares, bring proof of ownership of Snap-on stock through such broker or nominee and a form of identification.

HOW TO VOTE

While we offer four methods for you to vote your shares at the Annual Meeting, we encourage you to vote through the Internet as it is the most cost-effective method. We also recommend that you vote as soon as possible, even if you are planning to attend the Annual Meeting, so that the vote count will not be delayed. Both the Internet and the telephone provide convenient, cost-effective alternatives to returning your Proxy Card by mail. If you vote your shares through the Internet, you may incur costs associated with electronic access, such as usage charges from Internet access providers. If you choose to vote your shares through the Internet or by telephone, there is no need for you to mail back your Proxy Card.

You may (i) vote in person at the Annual Meeting or (ii) authorize the persons named as proxies on the enclosed Proxy Card to vote your shares by returning the enclosed Proxy Card by mail, through the Internet or by telephone.

To vote over the Internet:

Log on to the Internet and go to www.investorvote.com/sna. Have your Proxy Card available when you access the website. You will need the control number from your Proxy Card to vote.

To vote by telephone:

On a touch-tone telephone, call 1-800-652-VOTE (1-800-652-8683) 24 hours a day, 7 days a week. Have your Proxy Card available when you make the call. You will need the control number from your Proxy Card to vote.

To vote by Proxy Card:

Complete, sign and return the Proxy Card to the address indicated on the Proxy Card.

If your shares are not registered in your name, then you vote by giving instructions to the firm that holds your shares rather than using any of the methods discussed above. Please check the voting form of the firm that holds your shares to see if it offers Internet or telephone voting procedures.

LOGO

2801 80th Street

Kenosha, Wisconsin 53143

Notice of the 2015 Annual Meeting of Shareholders

March 12, 2015

Dear Shareholder:

Snap-on Incorporated will hold its 2015 Annual Meeting of Shareholders on Thursday, April 30, 2015, at 10:00 a.m. Central Time, at the IdeaForge located within the Snap-on Innovation Works at the Company’s headquarters, 2801 80th Street, Kenosha, Wisconsin 53143. This year’s meeting is being held for the following purposes:

to elect seven directors to each serve a one-year term ending at the 2016 Annual Meeting;

to ratify the Audit Committee’s selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2015;

to amend and restate the Snap-on Incorporated 2011 Incentive Stock and Awards Plan;

to hold an advisory vote to approve the compensation of the Company’s named executive officers, as disclosed in “Compensation Discussion and Analysis” and “Executive Compensation Information” in the Proxy Statement; and

to transact any other business that may properly come before the Annual Meeting or any adjournment or postponement thereof.

In addition to the formal business, there will be a short presentation on Snap-on’s performance.

Only shareholders who had shares registered in their names at the close of business on March 2, 2015, will be able to vote at the Annual Meeting. If you are a shareholder and plan to attend the Annual Meeting in person, please refer to the section of the Proxy Statement titled “Commonly Asked Questions and Answers about the Annual Meeting” for information about attendance requirements.

If you have any questions or comments, please direct them to Snap-on Incorporated, Investor Relations, 2801 80th Street, Kenosha, Wisconsin 53143. Please also contact Investor Relations if you would like directions to the Annual Meeting. If you prefer, you may e-mail questions or comments to shareholders@snapon.com. We always appreciate your interest in Snap-on and thank you for your continued support.

Your vote is important. Thank you for voting.

Sincerely,

Irwin M. Shur

Vice President, General Counsel and Secretary

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on April 30, 2015. The proxy statement and annual report to security holders are available at www.snapon.com/SNA.

The Board of Directors recommends the following votes:

•

FOR each of the Board’s nominees for election;

•

FOR the ratification of the Audit Committee’s selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2015;

•

FOR approval of the amendment to, and restatement of, the Snap-on Incorporated 2011 Incentive Stock and Awards Plan; and

•

FOR approval of the compensation of the Company’s named executive officers.

To vote in person at the Annual Meeting, you will need to request a ballot to vote your shares. If you vote by proxy, either by Internet, telephone or mail, and later find that you will be present at the Annual Meeting, or for any other reason desire to revoke your proxy, you may do so at any time before it is voted.

LOGO

PROXY STATEMENT

TABLE OF CONTENTS


COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING			1

ITEM 1: ELECTION OF DIRECTORS			6
Nominees for Election			6
Continuing Directors Not Standing for Election at this Meeting			9

CORPORATE GOVERNANCE PRACTICES AND BOARD INFORMATION			10
Nomination of Directors			10
Communications with the Board			11
Annual Meeting Attendance			11
Board Information			11
Board Compensation			14
Table 1—Director Compensation			15
Stock Ownership Guidelines for Directors			16

ITEM 2: RATIFY THE AUDIT COMMITTEE’S SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2015			17

AUDIT COMMITTEE REPORT			17

DELOITTE & TOUCHE LLP FEE DISCLOSURE			18

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			19
Table 2—Security Ownership of Certain Beneficial Owners and Management			19

EXECUTIVE COMPENSATION			21
Compensation Discussion and Analysis			21
Compensation Committee Report			41
Executive Compensation Information			42
Table 3—Summary Compensation Table			42
Table 4—Grants of Plan-Based Awards			45
Table 5—Outstanding Equity Awards at Fiscal Year-End			47
Table 6—Option Exercises and Stock Vested			49
Table 7—Pension Benefits			51
Table 8—Non-qualified Deferred Compensation			53
Potential Payments on Change of Control and Other Employment-related Agreements			54
Table 9—Potential Payments on Change of Control			55

COMPENSATION AND RISK			56

ITEM 3: APPROVAL OF THE AMENDMENT TO, AND RESTATEMENT OF, THE SNAP-ON INCORPORATED 2011 INCENTIVE STOCK AND AWARDS PLAN			57

ITEM 4: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION			68

OTHER INFORMATION			69

APPENDIX A—SNAP-ON INCORPORATED 2011 INCENTIVE STOCK AND AWARDS PLAN, AS AMENDED AND RESTATED			A-1

APPENDIX B—CATEGORICAL STANDARDS FOR DIRECTOR INDEPENDENCE			B-1

COMMONLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Q: WHEN WILL PROXY MATERIAL FIRST BE MAILED TO SHAREHOLDERS?

A: Snap-on Incorporated (“Snap-on,” “we” or the “Company”) expects to begin mailing proxy material (including this Proxy Statement) to shareholders on or about March 12, 2015. The proxy material is also being made available to shareholders by Internet posting on or about March 12, 2015.

Q: WHAT AM I VOTING ON?

A: At the 2015 Annual Meeting you will be voting on four proposals:

The election of seven directors to each serve a one-year term ending at the 2016 Annual Meeting. This year’s Board nominees are:

• Karen L. Daniel

• Ruth Ann M. Gillis

• Nathan J. Jones

• Henry W. Knueppel

• Nicholas T. Pinchuk

• Gregg M. Sherrill

• Donald J. Stebbins

A proposal to ratify the Audit Committee’s selection of Deloitte & Touche LLP (“D&T”) as the Company’s independent registered public accounting firm for 2015.

A proposal to amend and restate the Snap-on Incorporated 2011 Incentive Stock and Awards Plan (the “2011 Stock and Incentive Plan”).

An advisory proposal to approve the compensation of the Company’s named executive officers, as disclosed in “Compensation Discussion and Analysis” and “Executive Compensation Information” herein.

Q: WHAT ARE THE BOARD’S VOTING RECOMMENDATIONS?

A: The Board of Directors is soliciting this proxy and recommends the following votes:

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FOR each of the Board’s nominees for election;

•

FOR the ratification of the Audit Committee’s selection of D&T as the Company’s independent registered public accounting firm for 2015;

•

FOR approval of the amendment to, and restatement of, the 2011 Stock and Incentive Plan; and

•

FOR approval of the compensation of the Company’s named executive officers.

Q: WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?

A: To conduct the Annual Meeting, more than 50% of the shares entitled to vote must be present in person or by proxy. This is referred to as a “quorum.” Abstentions and shares that are the subject of broker non-votes will be counted for the purpose of determining whether a quorum exists; shares represented at the meeting for any purpose are counted in the quorum for all matters to be considered at the meeting. All of the voting requirements below assume that a quorum is present.

Directors are elected by a majority of the votes cast in person or by proxy at the meeting and entitled to vote on the election of directors. Abstentions and broker non-votes are not considered as votes cast with respect to each director-nominee and, therefore, will have no impact on the election of directors.

An affirmative vote of a majority of the shares represented at the meeting is required for the ratification of the Audit Committee’s selection of D&T as the Company’s independent registered public accounting firm for 2015. Abstentions will act as votes against this proposal. Since brokers have discretionary authority to vote on this proposal, we do not anticipate any broker non-votes with regard to this matter.

An affirmative vote of a majority of the shares represented at the meeting is required to approve the amendment and restatement of the 2011 Stock and Incentive Plan. Abstentions will act as votes against this proposal; however, broker non-votes will have no effect on this vote.

An affirmative vote of a majority of the shares represented at the meeting is required to approve the compensation of the Company’s named executive officers on an advisory basis. Abstentions will act as votes against this proposal; however, broker non-votes will have no effect on this vote.

Q: WHAT IF I DO NOT VOTE?

A: The effect of not voting will depend on how your share ownership is registered. If you own shares as a registered holder and you do not vote, then your unvoted shares will not be represented at the meeting and will not count toward the quorum requirement. If a quorum is obtained, then your unvoted shares will not affect whether a proposal is approved or rejected.

If you are a shareholder whose shares are not registered in your name and you do not vote, then your bank, broker or other holder of record may still represent your shares at the meeting for purposes of obtaining a quorum. In the absence of your voting instructions, your bank, broker or other holder of record may not be able to vote your shares in its discretion depending on the particular proposal before the meeting. Your broker may not vote your shares in its discretion in the election of directors; therefore, you must vote your shares if you want them to be counted in the election of directors. In addition, your broker is not permitted to vote your shares in its discretion regarding matters related to executive compensation, including the approval of the amendment and restatement of the 2011 Stock and Incentive Plan and the advisory vote to approve executive compensation. However, your broker may vote your shares in its discretion on routine matters such as the ratification of the Company’s independent registered public accounting firm.

Q: WHO MAY VOTE?

A: You may vote at the Annual Meeting if you were a shareholder of record as of the close of business on March 2, 2015 (the “Record Date”). As of the Record Date, Snap-on had 58,321,868 shares of common stock outstanding. Each outstanding share of common stock is entitled to one vote on each proposal.

Q: HOW DO I VOTE?

A: While we offer four methods for you to vote your shares at the Annual Meeting, we encourage you to vote through the Internet as it is the most cost-effective method. We also recommend that you vote as soon as possible, even if you are planning to attend the Annual Meeting, so that the vote count will not be delayed. Both the Internet and the telephone provide convenient, cost-effective alternatives to returning your Proxy Card by mail. If you vote your shares through the Internet, you may incur costs associated with electronic access, such as usage charges from Internet access providers. If you choose to vote your shares through the Internet or by telephone, there is no need for you to mail back your Proxy Card.

You may (i) vote in person at the Annual Meeting or (ii) authorize the persons named as proxies on the enclosed Proxy Card, Messrs. Pinchuk and Shur, to vote your shares by returning the enclosed Proxy Card by mail, through the Internet or by telephone.

To vote over the Internet:

Log on to the Internet and go to www.investorvote.com/sna. Have your Proxy Card available when you access the website. You will need the control number from your Proxy Card to vote.

To vote by telephone:

To vote by Proxy Card:

Complete, sign and return the Proxy Card to the address indicated on the Proxy Card.

Q: WHAT DOES IT MEAN IF I RECEIVE MORE THAN ONE PROXY CARD?

A: It means your shares are held in more than one account. You should vote the shares on all of your Proxy Cards. You may help us reduce costs by consolidating your accounts so that you receive only one set of proxy materials in the future. To consolidate your accounts, please contact our transfer agent, Computershare Trust Company, N.A. (“Computershare”), toll-free at 1-800-446-2617, or as otherwise provided in our annual report.

Q: WHO WILL COUNT THE VOTE?

A: Computershare, our transfer agent, will use an automated system to tabulate the votes. Its representatives will also serve as the election inspectors.

Q: WHO CAN ATTEND THE ANNUAL MEETING?

A: All shareholders of record as of the close of business on the Record Date may attend the Annual Meeting. Seating, however, is limited and will be on a first arrival basis.

To attend the Annual Meeting, please follow these instructions:

•

Bring proof of ownership of Snap-on stock and a form of identification; or

•

If a broker or other nominee holds your shares, bring proof of ownership of Snap-on stock through such broker or nominee and a form of identification.

Q: CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?

A: Yes. Even after you have submitted your proxy, you can revoke your proxy or change your vote at any time before the proxy is exercised by appointing a new proxy or by providing written notice to the Corporate Secretary and voting in person at the Annual Meeting. Presence at the Annual Meeting of a shareholder who has appointed a proxy does not in itself revoke a proxy.

Q: MAY I VOTE AT THE ANNUAL MEETING?

A: If you complete a Proxy Card, or vote through the Internet or by telephone, then you may still vote in person at the Annual Meeting. To vote at the meeting, please give written notice that you would like to revoke your original proxy to one of the following:

•

the Corporate Secretary, in advance of the Annual Meeting; or

•

the authorized representatives at the Annual Meeting.

Street name holders who wish to vote in person at the meeting will not be permitted to vote in person at the meeting unless they first obtain a proxy issued in their name from the bank, broker or other holder of record.

Q: WHAT IF I OWN SHARES AS PART OF SNAP-ON’S 401(k) SAVINGS PLAN?

A: Shares held by the Snap-on Incorporated 401(k) Savings Plan for which participant designations are received will be voted in accordance with those designations. Those shares for which designations are not received will be voted proportionally, based on the votes for which voting directions have been received from participants as of April 27, 2015.

Q: WHO IS MAKING THIS SOLICITATION AND HOW MUCH DOES IT COST?

A: This solicitation is being made on behalf of Snap-on Incorporated by its Board of Directors. Our officers and employees may make solicitations by mail, telephone, facsimile or in person. We have retained Georgeson Inc. to assist us in the solicitation of proxies for $14,000 plus expenses. This assistance will include requesting that brokerage houses, depositories, custodians, nominees and fiduciaries forward proxy soliciting material to the beneficial owners of the stock they hold; such assistance will also include the preparation of an institutional shareholder contact list that contains these shareholders’ voting guidelines. We will bear the cost of this solicitation and reimburse Georgeson Inc. for these expenses.

Q: WHEN ARE SHAREHOLDER PROPOSALS DUE FOR THE 2016 ANNUAL MEETING?

A: The Corporate Secretary must receive a shareholder proposal no later than November 13, 2015, for the proposal to be considered for inclusion in our proxy materials for the 2016 Annual Meeting. To otherwise bring a proposal or nomination before the 2016 Annual Meeting, you must comply with our Bylaws. Currently, our Bylaws require written notice to the Corporate Secretary between January 31, 2016, and March 1, 2016. If we receive your notice after March 1, 2016, then your proposal or nomination will be untimely. In addition, your proposal or nomination must comply with the procedural provisions of our Bylaws. If you do not comply with these procedural provisions, your proposal or nomination can be excluded. Should the Board nevertheless choose to present your proposal, the named Proxies will be able to vote on the proposal using their best judgment.

Q: WHAT IS THE ADDRESS OF THE CORPORATE SECRETARY?

A: The address of the Corporate Secretary is:

Snap-on Incorporated

Attention: Corporate Secretary

2801 80th Street

Kenosha, Wisconsin 53143

Q: WILL THERE BE OTHER MATTERS TO VOTE ON AT THIS ANNUAL MEETING?

A: We are not aware of any other matters that you will be asked to vote on at the Annual Meeting. Other matters may be voted on if they are properly brought before the Annual Meeting in accordance with our Bylaws. If other matters are properly brought before the Annual Meeting, then the named Proxies will vote the proxies they hold in their discretion on such matters.

ITEM 1: ELECTION OF DIRECTORS

Nominees for Election

The Board of Directors is comprised of ten directors. This year’s Board nominees for election for one-year terms expiring at the 2016 Annual Meeting are Karen L. Daniel, Ruth Ann M. Gillis, Nathan J. Jones, Henry W. Knueppel, Nicholas T. Pinchuk,
Gregg M. Sherrill and Donald J. Stebbins.

The classification of the Company’s Board of Directors into three classes is in the process of being phased out pursuant to the Company’s Restated Certificate of Incorporation, as amended by shareholders at the 2013 Annual Meeting, and its Bylaws. Since the 2014 Annual Meeting, directors whose terms have expired have been elected to one-year terms expiring at the next year’s Annual Meeting. The Board will no longer be classified as of the 2016 Annual Meeting and, at that time, all directors will be elected annually to one-year terms expiring at the next Annual Meeting, and until their successors are elected and qualified.

Ms. Gillis and Mr. Stebbins were elected to the Board effective July 18, 2014, and January 4, 2015, respectively, between meetings of shareholders. If elected by shareholders at the 2015 Annual Meeting, Ms. Gillis and Mr. Stebbins will each serve for a one-year term expiring at the 2016 Annual Meeting.

It is our policy that the Board of Directors should reflect a broad variety of experience and talents. When the Corporate Governance and Nominating Committee of the Board determines which directors to nominate for election at any meeting of shareholders, or appoints a new director between meetings, it reviews our director selection criteria and seeks to choose individuals who bring a variety of expertise to the Board within these criteria. For further information about the criteria used to evaluate Board membership, see “Corporate Governance Practices and Board Information—Nomination of Directors” below.

The following is information about the experience and attributes of the nominees and Snap-on’s other directors. Together, the experience and attributes included below provide the reasons that these individuals were selected for Board membership and/or nominated for election or re-election, as well as why they continue to serve on the Board.

Nominees for Election for Terms Expiring at the 2016 Annual Meeting

Karen L. Daniel

Director since 2005

Ms. Daniel, age 57, has served as Division President and the Chief Financial Officer for Black & Veatch Corporation, a leading global engineering, construction and consulting company specializing in infrastructure development in the areas of energy, water and information, since 2000. Ms. Daniel is being re-nominated as a director because, among her other qualifications, she possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, accounting/finance (including as a chief financial officer), mergers and acquisitions and strategy development; in addition, Ms. Daniel is a Certified Public Accountant. Ms. Daniel earned a Bachelor of Science degree in accounting from Northwest Missouri State University and a Master of Science degree in accounting from the University of Missouri-Kansas City.

Ruth Ann M. Gillis

Director since 2014

Ms. Gillis, age 60, retired in July 2014 as Executive Vice President and Chief Administrative Officer of Exelon Corporation, a utility services holding company engaged in energy generation and delivery, after serving in those roles since 2005. She was also President of Exelon Business Services Company, a subsidiary of Exelon that provides transactional and corporate services to Exelon’s operating companies. Previous roles included service as Executive Vice President of ComEd, an Exelon subsidiary, and as the Chief Financial Officer of Exelon. Prior to the merger that formed Exelon in 2000, Ms. Gillis was the Chief Financial Officer of Unicom Corp., a producer, purchaser, transmitter,

distributor and seller of electricity. She also serves as a director of KeyCorp, a bank holding company, and its subsidiary, KeyBank National Association, and was previously a director of Potlatch Corporation until 2013. Ms. Gillis is being nominated as a director because, among her other qualifications, she possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, product innovation/development, information technology, operations, accounting/finance (including as a chief financial officer), mergers and acquisitions, strategy development, executive compensation and leadership development. Ms. Gillis earned a Bachelor of Arts degree in economics from Smith College and a Master of Business Administration degree from the University of Chicago Graduate School of Business.

Nathan J. Jones

Director since 2008

Mr. Jones, age 58, retired in 2007 from Deere & Company, a manufacturer of agricultural, commercial and consumer equipment, where he most recently served as President, Worldwide Commercial & Consumer Equipment Division. Prior thereto, he was Deere & Company’s Senior Vice President and Chief Financial Officer, and previously served as its Vice President and Treasurer. Mr. Jones is being re-nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, information technology, operations, accounting/finance (including as a chief financial officer), mergers and acquisitions, strategy development, executive compensation and leadership development. Mr. Jones earned a Bachelor of Business Administration degree in accounting from the University of Wisconsin-Eau Claire and a Master of Business Administration degree from the University of Chicago.

Henry W. Knueppel

Director since 2011

Mr. Knueppel, age 66, retired in 2011 as Chairman of the Board and Chief Executive Officer of Regal-Beloit Corporation, a manufacturer of electric motors, generators and controls, as well as mechanical motion control products. Mr. Knueppel previously served as Regal-Beloit’s President and Chief Operating Officer and as an Executive Vice President prior thereto. Mr. Knueppel continues to serve as a director of Regal-Beloit. In addition, he is Non-Executive Chairman of the Board of Harsco Corporation, a global industrial services and engineering company; he served as Interim Chairman and Chief Executive Officer of Harsco during 2012. Mr. Knueppel also serves as a director of Wisconsin Energy Corporation and its subsidiary, Wisconsin Electric Power Company. Mr. Knueppel is being re-nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, manufacturing, marketing, product innovation/development, operations, accounting/finance, mergers and acquisitions, strategy development, executive compensation and leadership development. Mr. Knueppel earned a Bachelor of Arts degree in economics from Ripon College and a Master of Business Administration degree from the University of Wisconsin-Whitewater.

Nicholas T. Pinchuk

Director since 2007

Mr. Pinchuk, age 68, has been Snap-on’s President and Chief Executive Officer since 2007 and Chairman of the Board since 2009. Prior to his appointment as President and CEO, Mr. Pinchuk served as Snap-on’s President and Chief Operating Officer, and before that as Snap-on’s Senior Vice President and President–Worldwide Commercial & Industrial Group. Before joining Snap-on in 2002, Mr. Pinchuk served in several executive operational and financial management positions at United Technologies Corporation and held various financial and engineering positions at Ford Motor Company. Mr. Pinchuk also serves as a director of Columbus McKinnon Corporation. In addition to his other experience and expertise, Mr. Pinchuk is being re-nominated as a director because it is the Company’s traditional practice to have its Chief Executive Officer serve as a member of the Board. Mr. Pinchuk earned Master and Bachelor of Science degrees in engineering from Rensselaer Polytechnic Institute and a Master of Business Administration degree from Harvard Business School.

Gregg M. Sherrill

Director since 2010

Mr. Sherrill, age 62, has served as Chairman and Chief Executive Officer of Tenneco Inc., a producer of automotive emission control and ride control products and systems, since 2007. Previously, Mr. Sherrill was Corporate Vice President and President, Power Solutions of Johnson Controls Inc., a global diversified technology and industrial company. Prior to joining Johnson Controls in 1998, Mr. Sherrill held various engineering and manufacturing positions during his 22 year career at Ford Motor Company. Mr. Sherrill is being re-nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, manufacturing, product innovation/development, operations, accounting/finance, mergers and acquisitions, strategy development, executive compensation and leadership development. Mr. Sherrill earned a Bachelor of Science degree in mechanical engineering from Texas A&M University and a Master of Business Administration degree from Indiana University’s Graduate School of Business.

Donald J. Stebbins

Director since 2015

Mr. Stebbins, age 57, has served as President and Chief Executive Officer, and also as a director, of Superior Industries International, Inc., a manufacturer of aluminum wheels for the automotive industry, since May 2014. Prior thereto, he provided consulting services to various private equity firms since 2012. Mr. Stebbins previously served as Chairman, President and Chief Executive Officer of Visteon Corporation, an automotive components manufacturer, from 2008 until 2012, after having served as Visteon’s President and Chief Operating Officer from 2005 until 2008. Visteon filed for Chapter 11 bankruptcy protection in 2009 and emerged from bankruptcy in 2010. Before joining Visteon, Mr. Stebbins held various positions with increasing responsibility at Lear Corporation, a supplier of automotive seating and electrical distribution systems, including President and Chief Operating Officer – Europe, Asia and Africa, President and Chief Operating Officer – Americas, and Senior Vice President and Chief Financial Officer. Mr. Stebbins also serves as a director of WABCO Holdings Inc., and was previously a director of ITT Corporation until 2014 and of Visteon until 2012. Mr. Stebbins is being nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, manufacturing, sales, product innovation/development, operations, accounting/finance (including as a chief financial officer), mergers and acquisitions, strategy development, executive compensation and leadership development. Mr. Stebbins earned a Bachelor of Science degree in finance from Miami University and a Master of Business Administration degree from the University of Michigan.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH OF THE SEVEN NOMINEES.

Shares represented by proxies will be voted according to instructions on the Proxy Card. Only cards clearly indicating a vote against will be considered as a vote against the nominee. If the Board learns prior to the Annual Meeting that a nominee is unable to serve, then the Board may name a replacement, in which case the shares represented by proxies will be voted for the substitute nominee.

Continuing Directors Not Standing for Election at this Meeting

Directors Continuing to Serve Until the 2016 Annual Meeting

John F. Fiedler

Director since 2004

Mr. Fiedler, age 76, retired in 2003 as the Chairman of the Board and Chief Executive Officer of BorgWarner Inc., a supplier of engineered systems and components primarily for automotive powertrain applications. Prior to joining BorgWarner, Mr. Fiedler held various management positions globally during his 30 year career at The Goodyear Tire & Rubber Company. Mr. Fiedler serves as a director of Mohawk Industries, Inc. and WABCO Holdings Inc., and was previously a director of AirTran Holdings, Inc. until 2011. Mr. Fiedler was last re-nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, manufacturing, marketing, product innovation/development, operations, accounting/finance, mergers and acquisitions, strategy development, executive compensation, leadership development and franchising. Mr. Fiedler earned a Bachelor of Science degree in chemistry from Kent State University and a Master of Business Administration degree from the Massachusetts Institute of Technology.

James P. Holden

Director since 2007

Mr. Holden, age 63, has been our Lead Director since 2009. He served 27 years in the automotive industry, including 19 years with DaimlerChrysler and its predecessor, Chrysler Corporation. He was President and Chief Executive Officer of DaimlerChrysler Corporation, a U.S. subsidiary of DaimlerChrysler AG, until 2000. Mr. Holden also serves as a director of Speedway Motorsports, Inc. and SIRIUS XM Holdings Inc. He previously served as non-executive Chairman of Meridian Automotive Systems, Inc. until 2009, and was a director of Motors Liquidation Company until 2011 and of SMobile Systems until 2010. Mr. Holden was last re-nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, manufacturing, sales, marketing, product innovation/development, information technology, operations, accounting/finance, strategy development, executive compensation, leadership development and franchising. Mr. Holden earned a Bachelor of Science degree in political science from Western Michigan University and a Master of Business Administration degree from Michigan State University.

W. Dudley Lehman

Director since 2003

Mr. Lehman, age 63, retired in 2006 as Group President for Kimberly-Clark Corporation, a manufacturer and marketer of a wide range of consumer and business-to-business products from natural fibers. He previously served as Group President–Business to Business and as Group President–Infant and Child Care Sectors for Kimberly-Clark. Mr. Lehman was last re-nominated as a director because, among his other qualifications, he possesses experience and/or expertise in the following areas: knowledge of Snap-on’s industry/market, international business, manufacturing, sales, marketing, product innovation/development, operations, strategy development, executive compensation and leadership development. Mr. Lehman earned a Bachelor of Arts degree in political science from the University of North Carolina at Chapel Hill and a Master of Business Administration degree from Wake Forest University.

CORPORATE GOVERNANCE PRACTICES AND BOARD INFORMATION

Nomination of Directors

The Corporate Governance and Nominating Committee fulfills the role of a nominating committee. The material terms of the Committee’s role are included in its charter, which is available on the Company’s website at www.snapon.com. The charter requires that all members of the Committee meet the independence requirements of applicable laws and regulations, including, without limitation, the requirements imposed by the listing standards of the New York Stock Exchange (the “NYSE”).

The Committee uses a variety of means to identify prospective Board members, including the Committee’s contacts and recommendations from other sources. In addition, it may also retain a professional search firm to identify candidates. Pursuant to its charter, the Committee has the sole authority to retain and terminate any search firm to be used to identify director candidates and has the sole authority to approve the search firm’s fees and other retention items.

The Committee will consider director candidates recommended by shareholders provided that the shareholders submitting recommendations follow the procedures set forth below. The Committee does not intend to alter the manner in which it evaluates candidates based on whether the candidate was recommended by a shareholder or not. If a shareholder wishes to suggest an individual for consideration as a nominee for election to the Board at the 2016 Annual Meeting, and possible inclusion in the Proxy Statement, we recommend that you submit your suggestion in writing to the Corporate Secretary before October 1, 2015, for forwarding to the Committee.

To bring a nomination before the 2016 Annual Meeting from the floor during the meeting, you must comply with our Bylaws. Our Bylaws require written notice to the Corporate Secretary between January 31, 2016, and March 1, 2016. If we receive your notice after March 1, 2016, then your proposal or nomination will be untimely. The notice must also meet the requirements set forth in our Bylaws. If you do not comply with these requirements, your nomination can be excluded.

The Committee has a procedure under which all director candidates are evaluated. The Company’s Corporate Governance Guidelines provide that the Board will not nominate individuals for election or re-election as directors after they have attained age 75. When evaluating a candidate’s capabilities to serve as a member of the Board, the Committee uses the following criteria: independence, the relationships that the candidate has with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company), conflicts of interest, ability to contribute to the oversight and governance of the Company, the candidate’s skill set and positions held at other companies, existing time commitments and diversity. Further, the Committee reviews the qualifications of any candidate with those of the Company’s current directors to augment and complement the skill sets of the current Board members. The Company believes that it is important for its Board to be comprised of individuals with diverse backgrounds, skills and experiences. The composition of the Board, as well as the experience and the qualities brought to the Board by our directors, are reviewed annually. While the Committee does not have a formal diversity policy and identifies qualified potential candidates without regard to any candidate’s race, color, disability, gender, national origin, religion or creed, it does seek to ensure the fair representation of all shareholder interests on the Board. The Board believes that the use of these general criteria, along with a non-discriminatory policy, will best result in a Board that evidences that diversity in many respects. The Board believes that it currently maintains that diversity.

Ms. Gillis and Mr. Stebbins, who were elected to the Board by our other directors effective July 18, 2014, and January 4, 2015, respectively, are independent directors. Ms. Gillis was initially identified to the Board of Directors as a director candidate as a result of a search conducted by Spencer Stuart, an outside consulting firm retained by the Committee and paid a fee for its services, which consisted of researching and recommending potential candidates. Mr. Stebbins was first recommended as a director candidate by Mr. Fiedler, one of our other independent directors.

Communications with the Board

Shareholders and other interested parties who wish to communicate with the Board of Directors, individually or as a group, should send their communications to the Corporate Secretary at the address listed below. The Corporate Secretary is responsible for forwarding communications to the appropriate Board members and screens these communications for security purposes.

Snap-on Incorporated

Attention: Name of Director

c/o Corporate Secretary

2801 80th Street

Kenosha, Wisconsin 53143

Annual Meeting Attendance

All continuing directors are expected to attend the Annual Meeting of Shareholders either in person or by telephone. If a director attends by phone, he or she is also able to answer questions asked at the Annual Meeting. All directors serving at the time attended the 2014 Annual Meeting of Shareholders in person.

Board Information

The primary responsibility of the Board is to oversee the business and affairs of the Company. The Board met eight times in 2014. All directors attended at least 75% of the total meetings of the Board and committees of which they were members in 2014; for Ms. Gillis, this refers to the period in which she served as a director. Mr. Stebbins did not join the Board until fiscal 2015. The Board also conducts regularly scheduled executive sessions of non-management directors. At these executive sessions, our Lead Director presides. Interested persons may communicate about appropriate subject matter with our Lead Director, as described above under the section titled “Communications with the Board.”

The Board is organized so that its committees focus on issues that may require more in-depth scrutiny. The present committee structure consists of the (i) Audit, (ii) Corporate Governance and Nominating, and (iii) Organization and Executive Compensation Committees. Committee reports are presented to the full Board for discussion and review.

The Board has adopted Corporate Governance Guidelines, which are available on the Company’s website at www.snapon.com.

Director Independence

The Board reviewed the independence of its members considering the independence tests promulgated by the NYSE, and has adopted categorical standards to assist it in making its determinations of director independence. These categorical standards are attached to this Proxy Statement as Appendix B. The Board has affirmatively determined that Ms. Daniel and Ms. Gillis and each of Messrs. Fiedler, Holden, Jones, Knueppel, Lehman, Sherrill and Stebbins are independent on the basis that they had no relationships with the Company that would be prohibited under the independence standards of the NYSE or in the categorical standards. Mr. Pinchuk, our Chairman, President and Chief Executive Officer, is not considered independent. An immediate family member of Mr. Holden’s is an employee of the Company, but is not an executive officer nor is that individual compensated in an amount requiring disclosure under Securities and Exchange Commission (“SEC”) rules; this relationship is permitted by the categorical standards and the Board determined that it did not affect Mr. Holden’s independence.

See “Other Information—Transactions with the Company” for information about Snap-on’s policies and practices regarding transactions with members of the Board.

Board’s Role in Oversight of Risk

The Audit Committee is primarily responsible for evaluating the Company’s policies with respect to risk assessment and risk management. The Audit Committee reviews and discusses the Company’s major financial risk exposures and the steps management has taken to monitor and control such risks. The Organization and Executive Compensation Committee oversees risks related to our compensation policies and practices. The Organization and Executive Compensation Committee receives reports and discusses whether the Company’s compensation policies and practices create risks that are reasonably likely to have a material adverse effect on the Company. The Corporate Governance and Nominating Committee is responsible for the oversight of risks associated with corporate governance and compliance. Periodically, the full Board itself conducts a review of risk management at the Company.

Board Leadership Structure

The Board has established the position of Lead Director to assist in overseeing the affairs of both the Company and the Board. The Lead Director is appointed by the Board and must be an independent director. The Lead Director’s responsibilities include: (i) presiding at Board meetings when the Chairman is not present; (ii) providing input to the Chairman regarding the agendas for Board and Committee meetings; (iii) presiding at all meetings of the independent directors; (iv) acting as the principal liaison between the independent directors and the Chairman on sensitive issues; and (v) being available for meetings with shareholders upon the request of the Chairman. Mr. Holden, an independent director, has served as our Lead Director since 2009.

Our Chairman is also our Chief Executive Officer and thus is not an independent director. The Company believes that having one person serve as chairman and chief executive officer allows that individual to leverage the substantial amount of information gained from both roles to lead the Company most effectively and to act as a unified spokesperson on behalf of the Company. Further, the Company believes that the designation of an independent Lead Director provides essentially the same benefits as having an independent chairman in terms of access and an independent voice with significant input into corporate governance, while maintaining Snap-on’s historical practice of generally having its chief executive officer also serve as chairman (other than at times when providing for an orderly transition of chief executive officers).

Audit Committee

The Audit Committee is composed entirely of non-employee directors who meet the independence and accounting or financial management expertise standards and requirements of the NYSE and the SEC. The Audit Committee assists the Board’s oversight of the integrity of the Company’s financial statements, the Company’s independent public accounting firm’s qualifications and independence, the performance of the Company’s independent registered public accounting firm, the Company’s internal audit function and the Company’s compliance with legal and regulatory requirements. The Audit Committee conducts an annual evaluation of its own performance. During fiscal 2014, the Committee met eight times. The Board has adopted a written charter for the Audit Committee, which is located on the Company’s website at www.snapon.com. The Committee’s duties and responsibilities are discussed in greater detail in the charter. Currently, Ms. Daniel (Chair), Ms. Gillis and Mr. Jones serve on the Audit Committee. Mr. Holden served on the Committee until July 2014. The Board has determined that each member of the Audit Committee qualifies as an audit committee financial expert within the meaning of regulations promulgated by the SEC pursuant to the Sarbanes-Oxley Act of 2002.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee is composed entirely of non-employee directors who meet the independence requirements of the NYSE. This Committee makes recommendations to the Board regarding Board policies and structure including size and composition of the Board, corporate governance, number and responsibilities of committees, tenure policy, qualifications of potential Board nominees, including nominees recommended by shareholders, and director compensation. In addition

to conducting an annual evaluation of its own performance, the Committee oversees the annual evaluation of the Board. Currently, Messrs. Lehman (Chair), Fiedler and Knueppel serve on the Corporate Governance and Nominating Committee. During fiscal 2014, the Committee met four times. The Board has adopted a written charter for the Corporate Governance and Nominating Committee, which is located on the Company’s website at www.snapon.com. The Committee’s duties and responsibilities are discussed in greater detail in the charter. See the section titled “Nomination of Directors” for more information regarding recommending and nominating director candidates.

Organization and Executive Compensation Committee

The Organization and Executive Compensation Committee is composed entirely of non-employee directors who meet the independence requirements of the NYSE and the SEC. This Committee oversees our corporate organization, executive succession and executive compensation programs. It recommends to the Board the appropriate level of compensation for our Chief Executive Officer and, after consulting with the Chief Executive Officer, approves the compensation of our other officers. This Committee also administers our incentive stock and compensation plans and the employee stock ownership and franchisee stock ownership plans. This Committee has also been designated by the Board to consider and conduct succession planning for the chief executive officer position with the oversight of the Board. The Committee may, in its sole discretion, retain or obtain the advice of compensation consultants, legal counsel or other advisers as it deems appropriate in connection with the discharge of its duties; prior to selecting any such adviser, the Committee considers all factors relevant to the adviser’s independence from management, including those set forth in SEC and NYSE rules. The Committee conducts an annual evaluation of its own performance. Currently, Mr. Sherrill (Chair), Mr. Holden and Mr. Stebbins serve on the Organization and Executive Compensation Committee. Edward H. Rensi and Roxanne J. Decyk were also members of this Committee until they left the Board in February 2014 and June 2014, respectively. During fiscal 2014, the Committee met four times. The Board has adopted a written charter for the Organization and Executive Compensation Committee, which is located on the Company’s website at www.snapon.com. The Committee’s duties and responsibilities are discussed in greater detail in the charter. The Committee’s processes and procedures are described in the section titled “Compensation Discussion and Analysis.”

Availability of Certain Corporate Governance Documents

The Board has adopted Corporate Governance Guidelines, a Code of Business Conduct and Ethics, and a written charter for each of the Audit Committee, Corporate Governance and Nominating Committee and the Organization and Executive Compensation Committee. The Corporate Governance Guidelines, the Code of Business Conduct and Ethics (and information about any waivers from the Code that are granted to directors or executive officers) and the committees’ charters are available on the Company’s website at www.snapon.com.

Board Compensation

Employee Directors

Directors who are employees do not receive additional compensation for serving on the Board or its Committees.

Non-employee Directors

The annual cash retainer for each of our non-employee directors was $85,000 in fiscal 2014. Annual committee chair fees were the following: Audit Committee—$20,000; Organization and Executive Compensation Committee—$15,000; and Corporate Governance and Nominating Committee—$12,500. Audit Committee members, excluding the Audit Committee Chair, received an additional annual fee of $7,500; members of the Corporate Governance and Nominating Committee and the Organization and Executive Compensation Committee, other than each committee’s chair, did not receive additional annual fees for such service. Our Lead Director received an additional annual fee of $25,000 for serving in that role. Non-employee directors do not receive Board or committee meeting attendance fees.

On February 13, 2014, the Board of Directors approved a grant of $130,000 worth of restricted stock to each continuing non-employee director under our 2011 Stock and Incentive Plan. The number of restricted shares granted was based on the average closing price for the Company’s stock for the 30 business days prior to the grant date. Therefore, in fiscal 2014, each continuing non-employee director, other than Ms. Gillis and Mr. Stebbins, received 1,237 restricted shares. Ms. Gillis, who was appointed to the Board in July 2014, received a prorated grant of 502 restricted shares in August 2014. The restrictions on these shares generally lapse upon the earliest of the first anniversary of the grant date, the director’s death or disability or a change of control, as defined in the 2011 Stock and Incentive Plan. The directors have full voting rights with respect to these shares and are entitled to receive cash dividends at the same rate as the dividends paid to our other shareholders. Mr. Stebbins did not receive a restricted stock grant from the Company in fiscal 2014 because he did not join the Board until fiscal 2015.

Directors have the option to receive up to 100% of their fees, including the annual retainer, in cash or shares of common stock under the Amended and Restated Directors’ 1993 Fee Plan, which we refer to as the “Directors’ Fee Plan.” Under the Directors’ Fee Plan, non-employee directors receive shares of our common stock based on the fair market value of a share of our common stock on the last day of the month in which the fees are paid. Directors may choose to defer the receipt of all or part of their shares and fees to a deferral account. The Directors’ Fee Plan credits deferred cash amounts with earnings based on market rates of return. Earnings on deferred cash amounts were based on the applicable market rates, which from January 1, 2014 to December 31, 2014, averaged 3.72%. Dividends on deferred shares of common stock are automatically reinvested.

Directors also are entitled to reimbursement for reasonable out-of-pocket expenses they incur in connection with their travel to and attendance at meetings of the Board or committees thereof. In addition, non-employee directors who are not eligible to participate in another group health plan may participate in our medical plans on the same basis as our employees; however, non-employee directors must pay the full premium at their own expense. Eligibility to participate in our medical plans ceases upon termination of service as a director. In addition, pursuant to the Company’s employee tool purchase plan, directors are eligible to take advantage of employee discount prices up to a maximum of $5,000 per year, the same limit applicable to Company retirees, who are also eligible to participate in the plan.

Set forth below is a summary of compensation for each non-employee director in fiscal 2014:

Table 1: Director Compensation


Name	Fees Earned or Paid in Cash ($)⁽¹⁾		Stock Awards ($)⁽²⁾⁽³⁾		All Other Compensation ($)⁽⁴⁾		Total ($)
Karen L. Daniel		$105,000	$	130,000		$30,662	$	265,662
Roxanne J. Decyk⁽⁵⁾		42,500		130,000		14,585		187,085
John F. Fiedler		85,000		130,000		30,662		245,662
Ruth Ann M. Gillis		47,813		59,569		487		107,869
James P. Holden		117,500		130,000		26,298		273,798
Nathan J. Jones		92,500		130,000		22,716		245,216
Henry W. Knueppel		85,000		130,000		8,307		223,307
W. Dudley Lehman		97,500		130,000		30,662		258,162
Edward H. Rensi⁽⁶⁾		21,250		—		—		21,250
Gregg M. Sherrill		100,000		130,000		10,530		240,530
Donald J. Stebbins⁽⁷⁾		—		—		—		—

⁽¹⁾	Includes annual retainer, committee and chair fees. For Mr. Holden this amount also includes his fee for serving as Lead Director.

⁽²⁾

Amounts shown represent the grant date fair value of restricted stock granted to non-employee directors in fiscal 2014. The Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 (“ASC 718”) requires us to recognize compensation expense for stock awards granted to our directors based on the estimated fair value of the equity awards at the time of grant. The fair value for the restricted stock awards granted to non-employee directors is expensed over the contractual term of the awards. The assumptions used to determine the valuation of such restricted stock awards are discussed in Note 13 to our Consolidated Financial Statements.

⁽³⁾	Each current non-employee director had the following stock awards outstanding as of the end of fiscal 2014:


Name	Stock Awards
Name	Number of Shares of Stock That Have Not Vested (#)
Karen L. Daniel		16,574
John F. Fiedler		16,574
Ruth Ann M. Gillis		502
James P. Holden		14,215
Nathan J. Jones		12,279
Henry W. Knueppel		4,490
W. Dudley Lehman		16,574
Gregg M. Sherrill		5,692
Donald J. Stebbins		—

The restrictions on the shares of restricted stock granted to non-employee directors in fiscal 2014 generally lapse upon the earliest of the first anniversary of the grant date, the director’s death or disability or a change of control, as defined in the 2011 Stock and Incentive Plan. The restrictions on the restricted stock units (“RSUs”) granted from fiscal 2009 through fiscal 2012, and on the shares of restricted stock granted prior to fiscal 2009, lapse upon the earliest of the director’s retirement from the Board, the director’s death or a change of control, as defined in the 2011 Stock and Incentive Plan or its predecessor.

⁽⁴⁾	Includes cash dividends paid on shares of restricted stock and dividend equivalents with respect to the number of shares of common stock represented by RSUs to the extent not reflected in the grant date fair value of these awards.

⁽⁵⁾	Ms. Decyk served as a director through June 27, 2014.

⁽⁶⁾	Mr. Rensi served as a director through February 13, 2014.

⁽⁷⁾	Mr. Stebbins was elected as a director effective January 4, 2015, and did not receive any compensation from the Company during fiscal 2014.

Stock Ownership Guidelines for Directors

Snap-on believes that it is important for directors to maintain an equity stake in Snap-on to further align their interests with those of our shareholders. Directors must comply with stock ownership guidelines as determined from time to time by our Board. The ownership guidelines for directors require that each director must own Snap-on shares equal to three times the director’s annual base cash retainer within five years from the start of the next calendar year after such director’s initial election or appointment. Currently, seven of our nine non-employee directors have met the ownership guidelines. Ms. Gillis and Mr. Stebbins have until January 1, 2020, and January 1, 2021, respectively, to comply with these guidelines.

ITEM 2:

RATIFY THE AUDIT COMMITTEE’S SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2015

The Board of Directors proposes that shareholders ratify the selection by the Audit Committee of Deloitte & Touche LLP (“D&T”) to serve as the Company’s independent registered public accounting firm for the 2015 fiscal year. Pursuant to the Sarbanes-Oxley Act of 2002 and regulations promulgated by the SEC thereunder, the Audit Committee is directly responsible for the appointment of the independent registered public accounting firm. Although shareholder ratification of the Audit Committee’s selection of the independent registered public accounting firm is not required by our Bylaws or otherwise, we are submitting the selection of D&T to our shareholders for ratification to permit shareholders to participate in this important decision. If the shareholders fail to ratify the Audit Committee’s selection of D&T as the Company’s independent registered public accounting firm for 2015 at the Annual Meeting, the Audit Committee will reconsider the selection, although the Audit Committee will not be required to select a different independent registered public accounting firm. Representatives of D&T will be at the Annual Meeting to answer your questions and to make a statement if they so desire.

THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE AUDIT COMMITTEE’S SELECTION OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2015.

AUDIT COMMITTEE REPORT

The duties and responsibilities of the Audit Committee are set forth in a written charter adopted by the Board, which is located on the Company’s website at www.snapon.com. The Audit Committee reviews and reassesses this charter annually and recommends any changes to the Board for approval.

During fiscal 2014, the Audit Committee met eight times. In the exercise of its duties and responsibilities, the Committee members reviewed and discussed the audited financial statements for fiscal 2014 with management and the independent registered public accounting firm. In addition, the Audit Committee members met to discuss the earnings press releases and interim financial information contained in each earnings press release with the Chairman, President and Chief Executive Officer, the Senior Vice President-Finance and Chief Financial Officer, the Vice President and Controller, and the independent registered public accounting firm prior to public release.

The Audit Committee also discussed with the independent registered public accounting firm those matters required to be discussed by the Public Company Accounting Oversight Board’s (“PCAOB”) Auditing Standard No. 16, Communication with Audit Committees. In addition, the independent registered public accounting firm provided to the Audit Committee the written disclosures required by PCAOB Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, and the Audit Committee discussed with the independent registered public accounting firm their independence. Based on their review and discussions and subject to the limitations on the role and responsibilities of the Audit Committee in its charter, the Audit Committee recommended to the Board that the audited financial statements be included in Snap-on’s Annual Report to shareholders on Form 10-K to be filed with the Securities and Exchange Commission.

Karen L. Daniel, Chair

Ruth Ann M. Gillis

Nathan J. Jones

DELOITTE & TOUCHE LLP FEE DISCLOSURE

The Audit Committee selects our independent registered public accounting firm for each fiscal year. During the fiscal year ended January 3, 2015, D&T was employed principally to perform the annual audit, including audit services related to the Company’s Sarbanes-Oxley Section 404 compliance, and to render tax advice and compliance services. The following table sets forth the amount of fees for professional services rendered by D&T as of and for the fiscal years ended January 3, 2015 (fiscal 2014) and December 28, 2013 (fiscal 2013).


	Fiscal 2014		Fiscal 2013
Audit⁽¹⁾	$	3,555,745	$	3,724,562
Audit Related⁽²⁾		25,541		26,327
Tax⁽³⁾		1,614,434		1,476,506
All Other Fees		—		—

Total Fees	$	5,195,720	$	5,227,395

⁽¹⁾	Includes fees related to the issuance of the audit opinions, including audit requirements pursuant to Sarbanes-Oxley 404 and the PCAOB, and timely quarterly reports on Form 10-Q, statutory audits and consents for other SEC filings.

⁽²⁾	Includes accounting advisory services and attestation services that are not required by statute or regulation.

⁽³⁾	Includes U.S. and international tax advice and compliance services.

The Audit Committee has adopted a policy for pre-approving all audit and non-audit services provided by the independent registered public accounting firm. These procedures include reviewing a budget for audit and permitted non-audit services. The budget includes a description of, and a budgeted amount for, particular categories of non-audit services that are recurring in nature or anticipated at the time the budget is submitted. Audit Committee pre-approval is required to exceed the budgeted amount for a particular category of services and to engage the independent registered public accounting firm for any service that was not pre-approved. The Audit Committee considers whether the provision of such services are consistent with the SEC’s rules on auditor independence and whether the independent registered public accounting firm is best positioned to provide the most effective and efficient service. The Audit Committee considered the non-audit services provided by D&T in fiscal 2014 and 2013 and determined that the provision of those services is compatible with maintaining auditor independence. The Audit Committee has also delegated pre-approval authority to the Committee Chair, provided that any pre-approval by the Committee Chair is reported to the Audit Committee at its next regularly scheduled meeting. The Audit Committee periodically receives a report from members of management and the independent registered public accounting firm on the services rendered and fees paid to the independent registered public accounting firm to ensure that such services are within the pre-approved amounts.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table shows the number of shares of Snap-on common stock beneficially owned by each non-employee director or nominee for director, Messrs. Kassouf, Pagliari, Pinchuk, Shur and Ward (the “named executive officers” or “NEOs”), and all current directors and executive officers as a group, as well as each person or entity known to us to be the beneficial owner of more than 5% of our common stock, as of March 2, 2015 (the “Record Date”). Beneficial owners include the directors and executive officers, their spouses, minor children and family trusts. Unless otherwise indicated in the footnotes, the individuals and entities listed below have sole voting and investment power over their shares.

Table 2: Security Ownership of Certain Beneficial Owners and Management


Name	Shares Beneficially Owned⁽¹⁾		Percentage of Shares Outstanding
Karen L. Daniel		10,440	*
John F. Fiedler		10,342	*
Ruth Ann M. Gillis		3,007	*
James P. Holden		15,065	*
Nathan J. Jones		5,125	*
Thomas L. Kassouf		146,887	*
Henry W. Knueppel		4,852	*
W. Dudley Lehman		8,056	*
Aldo J. Pagliari		134,663	*
Nicholas T. Pinchuk		1,047,934	1.8%
Gregg M. Sherrill		3,743	*
Irwin M. Shur		55,927	*
Donald J. Stebbins		1,168	*
Thomas J. Ward		206,933	*

All current directors and executive officers as a group (17 persons)		1,732,326	2.9%

The Vanguard Group, Inc.⁽²⁾		4,251,172	7.3%
BlackRock, Inc.⁽³⁾		3,315,132	5.7%

*	Less than 1%

⁽¹⁾

Amounts for directors and executive officers include deferred share units payable in shares of common stock on a one-for-one basis. Amounts also include shares subject to options granted under Snap-on’s option plans that are exercisable currently or within 60 days of the Record Date. The options include those held by the following individuals for the indicated number of shares: Mr. Kassouf (116,334), Mr. Pagliari (103,920), Mr. Pinchuk (759,001), Mr. Shur (40,501), and Mr. Ward (168,000), and all current executive officers and directors as a group (1,245,963).

⁽²⁾

The Vanguard Group, Inc., 100 Vanguard Boulevard, Malvern, PA 19355, has reported on Schedule 13G/A, filed on February 11, 2015, the beneficial ownership of 4,251,172 shares of common stock as of December 31, 2014, representing approximately 7.3% of the shares outstanding. Vanguard reports sole voting power as to 95,254 of these shares, sole dispositive power as to 4,163,418 shares and shared dispositive power as to 87,754 shares.

⁽³⁾

BlackRock, Inc., 40 East 52nd Street, New York, NY 10022, has reported on Schedule 13G, filed on February 2, 2015, the beneficial ownership of 3,315,132 shares of common stock as of December 31, 2014, representing approximately 5.7% of the shares outstanding. BlackRock reports sole dispositive power as to all of these shares and sole voting power as to 2,734,443 shares.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

The Compensation Discussion and Analysis provides information regarding the objectives and elements of our compensation program with respect to the compensation of the executive officers named in the Summary Compensation Table herein (the “named executive officers” or “NEOs”) and listed below:

•

Nicholas T. Pinchuk: Chairman, President and Chief Executive Officer

•

Aldo J. Pagliari: Senior Vice President–Finance and Chief Financial Officer

•

Thomas J. Ward: Senior Vice President and President–Repair Systems & Information Group

•

Thomas L. Kassouf: Senior Vice President and President–Snap-on Tools Group

•

Irwin M. Shur: Vice President, General Counsel and Secretary

At the 2014 Annual Meeting, we held a shareholder advisory vote to approve our executive compensation policies and decisions. Over 98% of shares voted supported the proposal and, therefore, the advisory resolution regarding executive compensation was approved. Although the vote was non-binding, the Company, the Board of Directors and the Organization and Executive Compensation Committee of the Board (the “Committee”) all pay close attention to our shareholders’ views regarding the Company’s executive compensation policies and decisions. Based on the vote, the Committee believes that our shareholders generally support the Company’s executive compensation philosophy, program and decisions.

Executive Summary

Performance Overview

We believe our 2014 financial results reinforced the strength of Snap-on’s value proposition of making work easier for serious professionals performing critical tasks in workplaces of consequence. Our commitment to this positioning guides our path along our runways for coherent growth: enhancing the franchise network, expanding with repair shop owners and managers, extending to critical industries and building in emerging markets. At the same time, we remain dedicated to runways for improvement embodied in our Snap-on Value Creation Processes in the areas of safety, quality, customer connection, innovation and rapid continuous improvement (“RCI”). This balanced approach again yielded encouraging results in 2014. Net sales for the year of $3.3 billion increased 7.2% from 2013, including 6.9% organic sales growth (excluding acquisition-related sales and foreign currency translation). Operating margin before financial services of 16.3% improved 120 basis points from 15.1% a year ago, reflecting both higher sales and savings from RCI initiatives. Operating earnings from financial services grew to $149.1 million in 2014, primarily due to the growth of our financial services portfolio. Net earnings of $421.9 million increased 20.4% over 2013 levels, and diluted earnings per share reached a record at $7.14. We believe our commitment to our strategic initiatives for both growth and improvement will enable us to create long-term value for our shareholders. The table below provides 2014 financial highlights:


Performance Metric	2014	2013	Change
Net Sales	$3.28 billion	$3.06 billion	+7.2% (+6.9% excluding the impact of foreign currency and acquisitions)
Operating Earnings before Financial Services	$535.6 million	$460.5 million	+16.3%
Operating Earnings before Financial Services as a Percent of Net Sales	16.3%	15.1%	+120 basis points
Consolidated Operating Earnings	$684.7 million	$586.2 million	+16.8%
Diluted Earnings Per Share	$7.14	$5.93	+20.4%

Our executive compensation philosophy and programs are structured to pay for operating and individual performance, as described in this section and in “Executive Compensation Information” below. Our positive results are driven by our executives, and their teams, who are rewarded for this performance. In 2014, our overall executive compensation levels generally increased from 2013 as a consequence of the Company’s positive results. Our pay program is aligned with our key long-term and short-term strategic business objectives. As results improve, our shareholders and associates, including our executives, are rewarded. However, if results decline or do not improve, our executives’ compensation is reduced accordingly.

•

Based on 2014 corporate financial performance and personal strategic business goals, annual incentive payments to our NEOs ranged from 127% to 135% of target. See “Total Direct Compensation—Cash and Incentive—Annual Incentives” below for a more detailed discussion.

•

In February 2015, the Committee approved the vesting of long-term performance-based share units granted in 2012 based on financial performance during fiscal 2012, 2013 and 2014. As a result of the actual performance during that period, these units were earned at 121.8% of target. See “Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Long-term Performance-Based Share Units” below for a more detailed discussion.

•

Performance-based restricted stock units (“RSUs”) are earned based on the corporate financial performance component of the annual incentive plan. Based on corporate financial performance in 2014, 133.3% of the RSUs were earned and will vest at the end of fiscal 2016, assuming continued employment. See “Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Performance-Based Restricted Stock Units” below for a more detailed discussion.

Compensation Strategy and Objectives

Snap-on’s executive compensation program is designed to:

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Attract and retain high quality executive officers that are critical to the long-term success of the Company;

•

Pay for operating performance funded by positive financial results, based on individual contributions and progress toward strategic goals;

•

Pay at competitive levels, consistent with our peer group;

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Increase the percentage of pay-at-risk with increasing levels of responsibility; and

•

Encourage adherence to the Company’s values of integrity, respect and uncompromising safety.

Our goal is to design a compensation program that rewards executive officers for operating performance, as well as corporate and personal performance goals. As such, the majority of our executive officers’ total compensation opportunity is placed at risk by tying it to annual and long-term performance incentive plans. In addition, our objective is to properly balance financial and strategic performance, short- and long-term performance and cash and equity compensation.

Our overall compensation program consists of base salary, cash-based annual incentives and long-term incentives, which are granted in the form of stock options, performance share units and performance-based RSUs. The total targeted direct compensation mix for the Chief Executive Officer (“CEO”) and the other named executive officers is illustrated in the following pie charts:

LOGO

Our current annual and long-term incentive programs balance a number of different performance metrics:

LOGO

We believe that the performance metrics outlined above, coupled with stock price, focus our executives on the important factors that drive our business and create value for our shareholders.

Governance

Over the past several years, we have maintained sound compensation practices and adjusted our program to better reflect good governance practices and standards. For example,

•

we do not have employment agreements other than the change of control agreements described below;

•

our change of control agreements utilize a double trigger and do not provide excise tax gross-up payments;

•

we have a recoupment policy (the “Clawback Policy”) that covers all elements of the Company’s incentive compensation program;

•

we have executive stock ownership guidelines that cover all the Company’s executive officers, including the named executive officers;

•

we do not provide perquisites to our executive officers;

•

we have a policy that prohibits the hedging and pledging of Company securities;

•

we do not pay above-market earnings on our executives’ deferred compensation accounts; and

•

we retain an independent compensation consultant employed solely by the Committee.

Compensation Program and Philosophy

The Committee is composed solely of independent directors, as determined under NYSE listing standards. The Committee oversees Snap-on’s executive compensation program. The Committee’s responsibilities are set forth in its charter, which is available on the Company’s website at www.snapon.com.

Snap-on’s philosophy is to place a significant amount of each executive officer’s pay at risk so that he or she is rewarded for achieving Snap-on’s long-term and short-term strategic business goals taking into consideration both internal business and external shareholder perspectives. We determine target total direct compensation levels (base salary plus target annual and long-term incentives) for our executive officers based on several factors, including:

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Each individual’s role and responsibilities;

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Operating and individual performance and projected contribution to Snap-on’s future success;

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Total compensation of executives who perform similar duties at companies in our peer group;

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Historical compensation of each executive officer; and

•

Other circumstances as appropriate.

We believe that:

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Our compensation program should influence, not be the primary driver of, our executives’ performance;

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The design of our program should encourage collective behavior and emphasize success of the overall Company;

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Our pay strategy should fall within reasonable competitive boundaries;

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We should have flexibility to reward as needed for key jobs and roles; and

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Incentive plans should generally require continuous financial improvement in order for payouts to occur, while also being adaptable to economic realities within a general set of guidelines.

To further emphasize our pay for performance philosophy, we generally derive base salaries from the median for comparable positions reflected in the Market Data (described below). Our targeted total direct compensation levels are designed to generally fall within reasonable competitive boundaries, which we believe are at or somewhat above the median of the Market (described below), with stretch goals built into our incentive plans to achieve above the 50th percentile. In fiscal 2014, reflective of our continuing positive performance, we expect our actual total direct compensation levels to fall near the 70th percentile of Market Data based on information used during the compensation planning process. Each element of our compensation program is outlined below.

In addition to base salary and incentive compensation, the Committee also oversees benefits and other amounts payable to executive officers, including retirement benefits and potential benefits that may be payable in a situation involving a change of control of the Company. Retirement benefits are intended both to recognize, over the long term, services rendered to the Company and to ensure that we can attract and retain high quality executive officers. The Committee periodically reviews market practices with respect to these other types of compensation. For further discussion about these benefits, see “Other Benefits,” “Retirement and Deferred Benefits” and “Change of Control and Other Employment-related Agreements” below.

The Company does not provide other perquisites to executive officers.

The Company does not have any specific compensation agreements with the NEOs other than the change of control agreements described below. The Committee periodically reviews these agreements and compares the level of benefits payable thereunder to those offered at other companies, and believes these types of agreements remain important to the Company.

Severance for executive officers, outside of a change of control event, is determined on a case-by-case basis; there are no special agreements with the NEOs.

Committee Practices

The Committee has the sole authority to retain and terminate a consulting firm to assist in the evaluation of the compensation of the CEO and other executive officers and has the sole authority to approve the consultant’s fees and other retention terms. As part of the process to retain an executive compensation consultant, the Committee considers the consultant’s representations with respect to their practices and approach to maintaining independence. To further ensure independence, our executive compensation consultant reports directly to the Committee. The analyses performed by our consultant on competitive marketplace practices are referred to as the “Market” or “Market Data.”

The Committee reviews data that reflects the Market as a benchmark to provide one reference point for compensation practices as well as a source of comparative information to assist in determining various components of an executive officer’s direct compensation; however, it does not use this information to mathematically calculate compensation nor limit itself to the range produced by the Market Data. The Committee reviews the Market Data in general terms, and we believe it is important for the Committee to use its judgment and discretion to address individual circumstances rather than to simply aim for a level of compensation that falls within a specific range of the Market Data. Therefore, the information in the Market Data is not used to limit the discretion of the Committee in establishing compensation levels for executive officers.

The Committee has retained Semler Brossy Consulting Group, LLC (“Semler Brossy”) to provide ongoing advisory services to the Committee. These services include, but are not limited to: providing updates on trends in executive compensation practices; reviewing and making recommendations on the Company’s overall compensation strategy; providing input and reviewing CEO and other executive

officer salary increases and incentive targets; reviewing incentive program design; updating the peer group; and performing market analyses. Semler Brossy does no other work for the Company other than acting as an advisor to the Committee. The Committee reviewed the independence factors set forth in applicable SEC and NYSE rules, and determined that the retention of Semler Brossy did not give rise to any conflict of interest in fiscal 2014.

The following 16 publicly-traded companies comprised the Company’s peer group for the fiscal 2014 compensation planning cycle:


Actuant Corporation	AMETEK, Inc.	Crane Co.	Donaldson Company, Inc.

Flowserve Corporation	IDEX Corporation	Kennametal Inc.	Lincoln Electric Holdings, Inc.

Newell Rubbermaid Inc.	Pall Corporation	Pentair plc	Rockwell Automation Inc.

Roper Industries, Inc.	SPX Corporation	Stanley Black & Decker, Inc.	The Timken Company

Peer companies are reviewed on a biennial basis. Peer companies’ revenue and/or market value are within a reasonable range relative to the Company, are direct competitors of the Company and/or have similar business characteristics or compete with us for executive talent. We believe that the peer group data provides an understanding of specific pay levels and mix for named executive officers, as well as broader pay designs and practices for a specific group of companies. We also believe that this data provides us with a good basis for an external review of the relationship between pay and performance. To supplement peer group compensation data, our compensation consultant gathers and reviews information from surveys that are available from widely recognized experts in the compensation field, namely Towers Watson & Co.

The same peer group shown above is being used for the fiscal 2015 compensation planning cycle.

The Committee annually reviews and approves, in consultation with its compensation consultant, the base salaries of each executive officer in view of Market Data, an annual performance review and any related merit adjustment recommended by our CEO. Salary adjustments are generally made annually (“merit increase”) or in conjunction with a change in responsibility.

Generally, the Committee begins its consideration of the next year’s total compensation at its November meeting. During these meetings, matters such as changes in Market Data, plan philosophy and design, expected performance and historical performance are discussed. Final determinations of plan designs, annual incentive targets and long-term incentive compensation awards are made at the Committee’s February meeting, which is held in conjunction with a regularly scheduled Board meeting shortly after the public release of the prior year’s financial results. At that meeting, the Committee also is able to review prior year performance and the status of prior awards of long-term incentive compensation. The Committee has found that considering those matters at a February meeting allows the Committee to factor in both the prior year’s actual financial results and the current year’s operating plan. In some cases, financial goals for incentive plan awards may be finalized shortly after the February meeting, allowing the Committee to further consider items from that meeting. Occasionally, grants of long-term incentive compensation are made at other meetings in special cases such as promotions or new hires.

Stock options and other long-term incentives are awarded effective as of the Board or Committee meeting date and have an exercise price equal to the closing price of Snap-on common stock as reported on the NYSE on the grant date, which is either that date or a specified future date (the “grant date”).

Upon the request of the Committee, various Company personnel compile and organize information, arrange meetings and act as Company support for the Committee’s work. As discussed in further detail below, our CEO is also involved in making compensation recommendations for other executive officers, which are considered by the Committee; however, management (including the CEO) does not have any involvement in the determination of the CEO’s compensation.

Total Direct Compensation—Cash and Incentive

Three elements comprised the total direct cash and incentive compensation for Snap-on’s executive officers in 2014:

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Base salary;

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Annual incentives; and

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Long-term incentive compensation.

Base Salary

We provide base salaries in order to attract and retain high quality individuals. The median of base salaries in the Market Data is generally used as a reference point to compare and assist in the establishment of our executive officers’ base salaries. Base salaries, however, are not mathematically derived from these medians because we believe that it is appropriate for the Committee to use its discretion in setting base salaries. There are variances from the median due to factors such as performance, individual experience, tenure in the position and prior salary. The Committee reviews executive officers’ salaries, including those that are substantially above or below the median, and also considers a number of other factors such as job responsibilities and changes in job responsibilities, achievement of specified Company goals, retention, demonstrated leadership, performance potential and Company performance when determining base salary. While the factors that are considered in setting base salaries are not weighted or ranked in any particular way, it is expected that individuals would gradually move higher in salary ranges as their performance improves and as they gain experience with the Company and in their position.

The Committee regularly monitors and considers appropriate adjustments to the base salaries of those executives who fall significantly outside our compensation philosophy. In November 2013, after reviewing Market Data prepared by Semler Brossy and considering the factors discussed above, we determined that the base salaries of our executive officers were, in the aggregate, below Market median. The base salaries of our NEOs ranged from 15% below Market median to 4% above Market median. We inherently expect variances among executives, and the differences among current salary levels largely reflect specific intent and situations (e.g., internal equity or experience).

Messrs. Pagliari, Kassouf and Shur were determined to be below Market median. In March 2014, a 5.5% increase was awarded to Mr. Pagliari, in April 2014, an increase of 5.0% was awarded to Mr. Kassouf, and in August 2014, Mr. Shur received an increase of 4.7%, bringing their base salaries closer to Market median. Messrs. Pinchuk and Ward were determined to be at Market median. The Board of Directors approved a base salary increase of 3.0% for Mr. Pinchuk, effective in August 2014, consistent with the overall level of merit increases across the Company. In April 2014, Mr. Ward received a 4.5% base salary increase. See the Summary Compensation Table below for base salaries of the NEOs.

Annual Incentives

We provide annual cash incentives for our executive officers and approximately 1,000 other salaried employees under the 2011 Incentive Stock and Awards Plan (the “2011 Stock and Incentive Plan”). At the Annual Meeting, we are asking our shareholders to approve the amendment of the 2011 Stock and Incentive Plan so that we can continue to offer incentives to participants under the plan; for more information, see “Item 3: Approval of the Amendment to, and Restatement of, the Snap-on Incorporated 2011 Incentive Stock and Awards Plan” below.

Annual incentive compensation is intended to place a significant part of each executive officer’s total annual compensation at risk (i.e., pay for performance only). While base salaries are generally compared to Market median, as previously discussed, annual incentive targets are designed to generally fall within reasonable competitive boundaries, with stretch goals built into our incentive plans to achieve above the 50th percentile. However, as is the case with base salaries, the Committee exercises discretion and is not bound by the range provided by the Market Data. In aggregate, our 2014 annual

incentive targets for our NEOs, excluding Mr. Pinchuk, were at the 50th percentile of the Market. Mr. Pinchuk was deemed to be below the 50th percentile. As a result, the Committee approved an annual incentive target increase for Mr. Pinchuk from 100% to 125% of his base salary.

The 2014 annual incentive targets for each of the NEOs are set forth in the following table:


Name		Target Bonus as a Percentage of Base Salary
Nicholas T. Pinchuk		125%
Aldo J. Pagliari		75%
Thomas J. Ward		75%
Thomas L. Kassouf		75%
Irwin M. Shur		65%

The general plan design for all participants in the annual incentive plan, including the NEOs, in 2014 provided for a 50% weighting on consolidated financial results, focused on operating income and return on net assets employed before interest and taxes (“RONAEBIT”), and a 50% weighting for personal strategic business goals, which included additional quantifiable measures where possible. These proportions reflect the Committee’s belief that annual incentives should drive shareholder value by focusing employees on the success of the overall Company and encouraging collective behavior, while still allowing for flexibility to meet changing business challenges. It is the philosophy of the Committee and management that to receive a payout on the consolidated financial results component of the annual incentive award, the Company needs to achieve a RONAEBIT at least equal to its weighted- average cost of capital (“WACC”) since the Committee and Board believe that a return greater than WACC represents the threshold for enhancing value to shareholders.

Annual goals were set and approved by the Committee at its February 2014 meeting. Bonus awards earned during the year were paid in February 2015. See the table below for the weighting of the components of the 2014 annual incentive plan:


Component		Weighting
Consolidated financial results		50%
Personal strategic business goals		50%
Total		100%

Consolidated Financial Results Component

The Committee utilized operating income and RONAEBIT as the operating performance measures for the Company-wide portion of the 2014 annual incentive award. These measures were chosen because they are consistent with the Company’s growth goals and objectives. The Committee believes they are important factors in driving shareholder value, and these measures are regularly used to assess consolidated financial performance internally, as well as externally.

For each operating performance measure, the Committee set three different performance levels (in order of rank)—“threshold,” “target” and “maximum.” Participants could earn up to twice their target percentage for performance at the “maximum” level and 25% of their target percentage for performance at the “threshold” level. Payments were adjusted proportionately and interpolated for actual performance that fell between the “threshold,” “target” and “maximum” levels.

Under the relevant plans, the Committee has broad discretion in determining goals, results and payments, including modifying goals to reflect corporate developments, such as acquisitions, adjusting results or changing an individual’s goals. However, it only uses this discretion after setting goals when it believes it is appropriate to better reflect the intentions of these incentives and further the interests of

the Company and its shareholders. The Committee also can consider unusual financial circumstances. During fiscal 2014, corporate goals were adjusted to reflect the May 2014 Pro-Cut International, Inc. (“Pro-Cut”) acquisition. Other than adjusting for that acquisition, the Committee did not use its discretion to otherwise change corporate goals or the amount of any annual incentive award to executive officers as compared to the amounts calculated according to the goals.

2014 Consolidated Financial Goals and Results

The 2014 goals and actual results for Company financial performance are set forth in the table below and are further explained in this section. Unless otherwise indicated in the discussion below, the corporate goals are presented as adjusted for the Pro-Cut acquisition.

Company Goals

Threshold

Target

Maximum

Actual

Operating Income⁽¹⁾

$465.8 million

$517.0 million

$582.2 million

$538.6 million

RONAEBIT⁽²⁾⁽³⁾

23.8%

28.8%

33.7%

30.5%

Incentive earned, as a percentage of the Target bonus amount:

133.3%

⁽¹⁾	Operating income represents income from continuing operations, excluding financial services income and the effect of foreign currency translation.

⁽²⁾	RONAEBIT is calculated using a thirteen-month average and represents return on net assets employed before interest and taxes, excluding financial services and the effect of foreign currency translation. This methodology is consistent with that employed to calculate a company’s WACC.

⁽³⁾	As described below, there is no payout if the Company does not achieve its WACC.

In setting the 2014 operating income targets, the Committee considered the then-projected macroeconomic outlook, the annual operating plans approved by the Board and the performance of Snap-on as well as its peers. The “threshold” operating income metric was set at $465.8 million, essentially equal to the prior year’s result. The “target” operating income metric was set 11% over the “threshold,” and “maximum” was set 25% above the “threshold.” The Committee considered the “target” operating income metric a substantial improvement over the results achieved in 2013 and the “maximum” operating income metric the product of achieving exceptional stretch goals.

In setting the 2014 RONAEBIT goals, the Committee adhered to its philosophy that the Company should achieve at least its WACC for participants to receive any payout based on consolidated financial results. It also considered the projected macroeconomic outlook, the annual plan approved by the Board and the Company’s growth strategies, as well as their impact on assets. The “threshold” level of RONAEBIT was set at 23.8%, a level that the Committee believed added shareholder value when coupled with a substantial level of operating income. The “target” level was set 5.0 percentage points higher than the “threshold” level, reflecting reasonable performance above the Company’s WACC, and the “maximum” level required an additional 4.9 percentage point increase beyond the “target” level and was considered a significant stretch.

A payment at the “threshold” level could be earned in one of three ways: (i) if the Company achieved the “threshold” level on both operating income and RONAEBIT; (ii) if operating income at 10% below the level realized in 2013 was achieved and RONAEBIT equaled the “target” level; or (iii) if RONAEBIT equaled the Company’s WACC and the Company achieved 5.5% above the “threshold” level operating income. Realizing at least a 25% “threshold” payment was considered minimally acceptable because it would require recognizable improvement in one of the measures while maintaining acceptable levels of performance on the other measure.

In February 2015, after comparing the Company’s consolidated financial results for 2014 to the consolidated financial performance goals, the Committee approved a vested award amount of 133.3%

relative to the consolidated financial results component of the annual incentive plan. The Company achieved a RONAEBIT performance of 30.5%, between the “target” and “maximum” levels. Operating income improvement of 15.6% as compared to 2013, excluding the effect of foreign currency translation, resulted in performance between the “target” and “maximum” levels.

Personal Strategic Business Goals Component

As previously discussed, 50% of each executive officer’s annual incentive is based on the achievement of personal strategic business goals. Inclusion of these personal strategic business goals is intended to incent a focus on specific objectives that are critical to the individual’s role at the Company. Our objective is to set goals under the plan that are quantitative and measurable where possible; however, certain personal strategic business goals are, by necessity, somewhat subjective in nature. Each personal strategic business goal was weighted individually and scored separately; therefore, not all goals had to be achieved in order to receive a payout on this component of the plan.

Achievement of personal strategic business goals ranges from 0% to 200% of target. The 2014 personal strategic business goals for each of the NEOs and the weighting of each individual goal, as well as the Committee’s determinations related to the goals, where appropriate, are summarized as follows:

Mr. Pinchuk:

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Execute on the strategic roadmap for growth by building the Company’s position in emerging markets, driving continued extension of our business in critical industries, maintaining customer coverage through net van count stability, reinforcing our position in repair shops and pursuing an active acquisition strategy—40% weighting.

Asian expansion continued through significant new product launches, the addition of distributors and resellers and the extension of training seminars; sales increased in targeted critical industries; the net van count remained stable and franchisees’ selling time continued to increase through productivity improvements; repair shops’ product portfolio was further enhanced; Pro-Cut was successfully acquired and integrated; and multiple further acquisition opportunities continue to be assessed.

•

Execute strategic funding and investor relations strategies, including driving profitable performance of Snap-on Credit LLC (“SOC”) and reinforcing our position with the institutional investor community—20% weighting.

SOC exceeded its profitability and performance targets; communication and interaction with the investment community were positively maintained; and the strategic funding strategy continues to be successfully executed.

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Strengthen the Snap-on management team—20% weighting.

The Snap-on management team continued to be strengthened through external hiring, with a particular focus on engineering talent, and internal development of key, high-potential associates, along with the advancement of CEO succession planning.

•

Drive overall performance improvement, reflecting enterprise-wide engagement in the Snap-on Value Creation Processes, including the areas of safety, quality, customer connection, innovation and RCI, and extend profit expansion in Europe—20% weighting.

Snap-on Value Creation is embraced across the organization—in manufacturing, distribution, and office locations; safety, quality and RCI efforts drove margin and operating profit improvements; customer connection and innovation resulted in significant expansion to product offerings in critical industries; and the Company registered an encouraging increase in operating income margin compared to last year, including significant margin increases in its European-based hand tools business.

After a review of Mr. Pinchuk’s performance, the Committee determined that Mr. Pinchuk’s resulting payout was 130% for his personal strategic business goals.

Mr. Pagliari:

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Drive the long-term financial, acquisition and investor relations strategies of Snap-on—50% weighting.

The Company exceeded its full year financial plan for both sales and net income and continued to increase its overall financial strength; corporate business development worked closely with operating management to assess potential acquisition opportunities; and communication and interaction with the investment community were positively maintained.

•

Actively drive cooperation and collaboration between groups that contribute to profit improvements—30% weighting.

Collaboration between finance and the business groups was broad based, resulting in improved potential for long-term profit generation, RCI cost savings and a strong internal control environment.

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Achieve profit and performance targets at SOC—20% weighting.

SOC’s operating income exceeded expectations and portfolio net losses were lower than planned.

After a review of Mr. Pagliari’s performance, the Committee approved a payout of 130% for his personal strategic business goals.

Mr. Ward:

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Drive significant financial profitability improvement for the Repair Systems & Information (“RS&I”) Group—30% weighting.

The RS&I Group significantly increased its profitability, achieving new sales and operating income records.

•

Increase the Company’s innovation pipeline, together with the launch of several significant products, including those developed for emerging markets—25% weighting.

Several major new products were launched successfully both domestically and internationally, including in emerging markets.

•

Drive further development and engagement of the Snap-on Value Creation Processes, including the continuation of enterprise-wide customer connection—25% weighting.

The RS&I Group drove continued development of Snap-on Value Creation across its businesses through expanded customer surveys, seminars and customer observations, further strengthening its connection to customers. Snap-on Value Creation has been introduced to the Pro-Cut team and integration of safety and RCI principles is underway.

•

Actively drive cooperation and collaboration between groups that contribute to profit improvements for divisions outside Mr. Ward’s overall span of responsibility—20% weighting.

Teams within Mr. Ward’s organization continued to work closely with businesses throughout the Company to develop new products and programs that directly benefited areas outside of his overall span of responsibility. RS&I associates worked along-side the Company’s Asia Pacific management and engineers to enhance the equipment product line in that region.

After a review of Mr. Ward’s performance, the Committee approved a payout of 122% for his personal strategic business goals.

Mr. Kassouf:

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Achieve the Snap-on Tools Group’s business plan and significantly expand its financial profitability—30% weighting.

The Snap-on Tools Group achieved significant increases in sales and profitability, while reaching all of its business plan targets.

•

Actively drive cooperation and collaboration between groups that contribute to profit improvements for divisions outside Mr. Kassouf’s overall span of responsibility—20% weighting.

The Snap-on Tools Group worked closely with the Company’s Asia Pacific management to procure product and establish distribution stores for mid-tier brands in that region. Product launches were initiated through the van channel resulting in increased sales and profitability of several business units in the company. In addition, the Group’s marketing and logistics support was expanded to benefit other Snap-on groups.

•

Achieve profit and performance targets at SOC—20% weighting.

SOC’s operating income exceeded expectations and portfolio net losses were lower than planned.

•

Maintain customer coverage through net van count stability—20% weighting.

Net van count was maintained at a stable and effective level.

•

Further build the engagement of the Snap-on Value Creation Processes, including establishing clear customer connection goals in the Snap-on Tools Group and further enhancing innovation and technology—10% weighting.

The Snap-on Value Creation Process continued to drive deeper customer connection, further enhancing innovation and technology, to establish and encourage safer working environments, and to identify areas of continuous improvement. Safety metrics continued to exceed industry benchmarks. RCI resulted in increased cost savings and profitability.

After a review of Mr. Kassouf’s performance, the Committee approved a payout of 137% for his personal strategic business goals.

Mr. Shur:

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Drive cooperation and collaboration between the legal department, the other staff groups and the operating divisions—30% weighting.

Personnel from the legal department remain engaged with business units providing guidance on negotiations and contracts with key customers and on applicable issue resolution, as needed.

•

Continue to improve efficiency and integration of legal function—30% weighting.

Integration of the legal team continues to advance, and cross-training and the expansion of roles improved both domestically and globally.

•

Continue to improve internal compliance programs—30% weighting.

Compliance programs have expanded to include sales agents, distributors and freight forwarders. Legal training in areas such as franchising law, competition compliance, government contracts and workplace harassment have been widely provided to Snap-on associates.

•

Continue government affairs activities—10% weighting.

Annual visits with state and federal legislators continued.

After a review of Mr. Shur’s performance, the Committee approved a payout of 121% for his personal strategic business goals.

Overall payments to the NEOs based on the achievement of consolidated financial results and personal strategic business goals, ranged from 127% to 135% of target. See the Summary Compensation Table below for payouts made to our NEOs under the Company’s annual incentive plan.

Long-term Incentive Compensation

We also provide long-term incentive compensation to our executive officers and other key employees through the 2011 Stock and Incentive Plan. The 2011 Stock and Incentive Plan allows the granting of stock options, stock appreciation rights (“SARs”), performance shares, performance-based share units, restricted stock and RSUs (in addition to cash-based incentives, as previously discussed). We believe stock-based awards help align the financial interests of management with those of our shareholders since the ultimate value of stock-based awards is tied to the value of Snap-on’s stock. At the Annual Meeting, we are asking our shareholders to approve the amendment of the 2011 Stock and Incentive Plan so that we can continue to offer these types of incentives to participants under the plan; for more information, see “Item 3: Approval of the Amendment to, and Restatement of, the Snap-on Incorporated 2011 Incentive Stock and Awards Plan” below.

Similar to annual incentive targets, long-term incentive targets are designed to generally fall within reasonable competitive boundaries, with stretch goals built into our incentive plans to achieve above the 50th percentile. However, as indicated above, we do not aim for any particular numerical equivalency and use our judgment to respond to specific circumstances. Additionally, the actual payouts of long-term incentives can vary significantly from target because of the potential variation in performance over the period measured (in the case of long-term performance-based awards) and because of changes in the market price of our stock (in the case of both stock options and stock-based awards). These types of awards reward financial and personal performance over a longer period of time than base salary and annual incentives.

In 2014, our long-term incentive compensation grants for executive officers, as in past years, were comprised of stock options, performance-based share units and performance-based RSUs. We targeted more value in performance-based vehicles because we believe they focus executive officers and key employees on financial performance that is more under their control and which the Committee believes drives shareholder value over the long term. We continued to provide a portion of long-term compensation in stock options with time-based vesting, which reward employees based upon the appreciation of the market value of our shares and, thus, directly mirror our investors’ experience. In 2014, the aggregate long-term incentive compensation level of our NEOs was above Market median, reflecting the Company’s positive financial results.

In granting long-term incentive awards, we take into account the following subjective and objective factors:

•

Each executive officer’s level of responsibility;

•

Each executive officer’s contributions to Snap-on’s financial results;

•

Retention considerations; and

•

The practices of companies in the Market.

The Committee believes that using Company stock for a significant portion of these awards provides executive officers with an additional potential equity stake in the Company and helps further align the interests of the executive officers with those of our shareholders.

Grants of long-term incentives are generally made at the Committee’s February meeting, which is held in conjunction with a regularly scheduled Board meeting and after the public release of the prior year’s financial results, although the final financial targets may be set after the February meeting, allowing the

Committee to consider items from that meeting. Options have an exercise price equal to the closing price of Snap-on common stock as reported on the NYSE on the grant date and generally vest in three equal annual increments beginning on the first anniversary of the grant. Occasionally, grants of long-term incentives are made at other meetings in special cases, such as promotions or new hires.

Prior to making a grant, the Committee considers potential dilution, the Company’s share price and the volatility of our share price. When determining eligibility and granting awards, the Committee considers market practice, levels of responsibility and the individual’s contributions to the Company. In 2014, in order to develop the grant range guidelines for various personnel grades (including both executive officers and other participants), the Committee reviewed market conditions and practice, as well as the estimated value of each grant. The grant date present value is determined using the Black-Scholes valuation model for comparison to the Market.

Stock Options

In February 2014, we granted stock options and stock-settled SARs that vest over a three year period to approximately 260 employees. The Committee considered the total recommended grant size for all participants and reviewed the specific recommendations made by Mr. Pinchuk for grants to the executive officers. After considering the recommendations as compared to outstanding shares and expected dilution, the Committee then made the final grant decisions related to the executive officers and also approved the total grant size for all other participants.

We granted our NEOs options to purchase 255,000 shares, consisting of individual grants ranging from options to purchase 14,000 to 130,000 shares. In the aggregate, the number of options granted to executive officers was between the target and the maximum of the guidelines, reflecting the Committee’s evaluation of Company performance and individual contributions. The Committee approved the amounts awarded to each NEO based on their contributions and individual performance. We estimated that the total February 2014 stock option and stock-settled SARs grants would result in a 1.2% “burn rate” (options and stock-settled SARs granted as a percentage of fully diluted common shares outstanding), which fell within the guidelines established by the Committee and near the 50th percentile of our peer group. See the Grants of Plan-Based Awards Table below for further information regarding stock options awarded to each of the NEOs.

Long-term Performance-Based Share Units

In February 2014, the Committee made grants to 45 key employees of performance-based share units that vest depending upon the achievement of operating performance criteria over a three year period; each unit is equivalent to one share of our common stock. The Committee believes that the use of these criteria serves to focus executive officers and key employees on Company operating and financial performance that the Committee believes drives shareholder value over the long term. In addition, the Committee believes that providing for the payout of these awards in shares rather than cash further aligns the interests of management with those of our shareholders.

Similar to the process discussed above related to the granting of options, the Committee made the final long-term performance plan grant decisions for executive officers and approved the total recommended grant size for other participants. In 2014, we granted our NEOs 30,899 long-term performance-based share units. Individual grants to the NEOs ranged from 1,611 to 15,620 units. In the aggregate, the number of performance-based share units granted to executive officers was between the target and maximum of the guidelines again reflecting the Committee’s evaluation of Company performance and individual contributions.

Vesting of the performance-based share units awarded in 2014 will depend upon cumulative performance relative to the goals set for fiscal years 2014, 2015 and 2016, which are based upon revenue growth and RONAEBIT. These two measures have been consistently used for our prior long-term plans. We use these measures because they are consistent with the Company’s growth goals and objectives to

increase returns to shareholders. We regularly use RONAEBIT as a measure of return to evaluate performance. As previously noted, the methodology used to calculate RONAEBIT is consistent with that used to calculate WACC. The table below provides examples of vesting at the performance levels under these plans:


Performance Level		Amount of Performance Award Vesting
Threshold (see below for discussion)		25% of the Award
Target (for both criteria)		100% of the Award
Maximum (for both criteria)		200% of the Award

We intend that payments at the “target” level for performance-based share units and RSUs (which are discussed below), combined with the value of stock options, would provide total long-term compensation within reasonable competitive boundaries of Market Data. In setting the levels of performance required to earn various percentages of long-term performance-based share units, the Committee considered current levels of RONAEBIT and sales, the current year’s plan, industry and Gross Domestic Product (“GDP”) growth rates, and past performance. In addition, the Committee considered longer range strategic plans establishing expectations for improved performance over the three-year performance period.

In order to achieve “target” levels of performance on the matrix, revenue for the 2014 to 2016 period would need to improve from recent performance and RONAEBIT would need to significantly exceed the Company’s WACC. “Target” level revenue growth was set at the 2013 revenue level, plus the projected average GDP growth rate plus 3% annually, which was considered reasonably challenging given the prevailing economic and industry environment. “Target” RONAEBIT was set at a level 67% greater than the Company’s WACC, which the Committee believes would result in significant enhancement of shareholder value.

The “maximum” level of revenue growth was set at the 2013 revenue level, plus the projected average GDP growth rate plus 6% annually. This was considered an exceptional stretch over “target.” The “maximum” RONAEBIT metric was also set at a level that was considered an exceptional stretch because, assuming a consistent net asset base, it would require an additional $260 million, or 20%, in annual operating income above “target” over the three-year performance period.

The “threshold” level of revenue growth was set at the 2013 revenue level, plus the projected average GDP growth rate. The “threshold” RONAEBIT metric was set 33% above the Company’s WACC. This was considered acceptable given that the Committee believes that any return over the Company’s WACC would add shareholder value. A “threshold” level of payment could be earned by achieving the “threshold” on both the revenue growth and RONAEBIT metrics. It could also be earned in one of two other ways. If revenues remain at 2013 levels, RONAEBIT would need to grow to the “target” level. Alternatively, if RONAEBIT met the Company’s WACC, revenues would need to achieve the “target” level. Realizing at least a 25% “threshold” payment was considered minimally acceptable because it would require recognizable improvement in one of the measures while maintaining at least current levels, or modest increases, on the other measure.

As part of the long-term performance plans, the Committee considers any acquisitions and divestitures or other significant changes in business practices that occur during the performance period and makes what it considers appropriate adjustments to performance measures to reflect the financial effects of these events on those measures. The 2012 to 2014 and 2013 to 2015 plans were adjusted to reflect the May 2013 acquisition of Challenger Lifts, Inc.

In February 2015, the Committee approved the outcome of long-term performance-based share units granted in 2012 based on financial performance during fiscal 2012, 2013 and 2014. The metrics for those awards and actual performance are set forth in the table below:


Criteria	Threshold	Target	Maximum	Actual
Sales⁽¹⁾	$3,154 million	$3,438 million	$3,739 million	$3,278 million
RONAEBIT⁽²⁾⁽³⁾	19.9%	22.4%	24.9%	28.6%

⁽¹⁾

Sales represents the 2014 fiscal year Net Sales.

⁽²⁾

RONAEBIT is a three-year average for fiscal 2012, 2013 and 2014, calculated as a fraction expressed as a percentage where (i) the numerator is operating income (earnings from continuing operations before income taxes plus interest expense less other income (expense) – net), and (ii) the denominator is average net assets employed (total assets minus cash and cash equivalents and minus all liabilities excluding short-term and long-term debt).

⁽³⁾

As described above, there is no payout if the Company does not achieve its WACC.

Actual performance during the period on these metrics was a RONAEBIT of 28.6% and revenues of $3,278 million; as a result, performance-based share units were earned at 121.8% based on financial performance during the 2012 to 2014 plan period.

In February 2015, the Committee also had discussions relating to targets for the 2015 to 2017 plan. The Committee continued the same approach as used in 2014 and the same general financial metrics for these future goals. The Committee believes that the current structure and metrics continue to incent management appropriately and thereby enhance shareholder value.

Performance-Based Restricted Stock Units

The Committee also grants performance-based units, designated as RSUs, that have a one-year performance period based on operating income and RONAEBIT performance reflected in the consolidated financial results component of the Company’s annual incentive plan and an additional two year cliff vesting schedule. The Committee’s intent in continuing to grant these awards is to emphasize the importance of the first year’s results in setting the future growth of the Company, while also adding an important retention element for our executive officers.

Consistent with the granting of options, SARs and performance-based share units discussed above, the Committee made the final RSU grant decisions for executive officers and approved the total recommended grant size for other participants. In 2014, we granted our NEOs 30,898 RSUs. Individual grants to the NEOs ranged from 1,611 to 15,620 RSUs. In the aggregate, the number of RSUs granted to executive officers was between the target and maximum of the guidelines, again reflecting the factors discussed above.

Based on the Company’s performance on the financial metrics (operating income and RONAEBIT), reported above in “Total Direct Compensation—Cash and Incentive—Annual Incentives—Consolidated Financial Results Component,” executive officers earned approximately 133.3% of the RSUs granted. The RSUs earned will vest at the end of fiscal 2016, assuming continued employment, and will be paid out shortly thereafter.

Stock Ownership Guidelines

The Company’s stock ownership guidelines for its top executives are based on a multiple of base salary using a six month average stock price to value the holdings. Stock ownership includes shares held outright, deferred shares, those in 401(k) plans, shares purchased through a dividend reinvestment and direct stock purchase plan, RSUs that have been earned (but have yet to vest) and the “in the money” value of vested stock options, net of an assumed 40% tax rate. The ownership multiples range from one to six times, based on an executive’s salary grade and level of responsibility. Executives are expected to reach the stock ownership guidelines within a five year time frame. The Committee has the authority to pay up to 50% of the annual incentive payout in restricted stock if it is determined that an executive is not making reasonable progress towards reaching the guidelines. The Committee reviews progress toward ownership guidelines annually at its August meeting. In August 2014, based on our six month average stock price, all of our executive officers had met their current ownership guidelines.

Clawback Policy

The Company’s Clawback Policy covers all elements of its incentive compensation program. Pursuant to the policy, the Company has the right to clawback, or recoup, an incentive award (in whole or in part), including annual and long-term incentives, received by an employee in the event that the employee benefited from an incentive award and it is later discovered that: (i) a financial statement error resulted in a restatement or an inaccurate operating metric measurement resulted in an inappropriate incentive award; (ii) the employee engaged in misconduct that caused the financial statement restatement or inaccurate operating metric measurement; and (iii) a lower payment would have been made to the employee based on the restated financial result/operating metric. The Committee also has the right to recoup any such incentive compensation (in whole or in part) from the Company’s top 25 executives. The Committee has the sole discretion to determine whether an employee’s conduct has or has not met any particular standard of conduct under law or Company policy. The Committee may, in determining appropriate remedial action, take into account penalties or punishments imposed by third parties, such as law enforcement agencies, regulators or other authorities. The Committee’s ability to determine the appropriate punishment for the wrongdoer is in addition to, and not in replacement of, any remedies or sanctions imposed by such authorities or any other third party actions.

Other Benefits

Our executive officers receive additional benefits also available to other salaried employees. For example, we provide executive officers and other U.S. salaried employees with health insurance (where the employee pays a portion of the premium), vacation pay and sick pay. The Company does not provide its executive officers with automobiles or club memberships, nor does it reimburse “social expenses,” except to the extent that they are specifically, directly and exclusively used to conduct Company business. There are no other perquisites or similar benefits for executive officers that are not consistent with those of other salaried employees. Perquisites were compared against our peers, and we found our policy to be conservative relative to the market.

Retirement and Deferred Benefits

The Company maintains two types of retirement plans covering its executive officers, a defined benefit pension program and a defined contribution program where eligible employees and executives may receive matching contributions. Benefits are provided through both “qualified” and “non-qualified” plans; the non-qualified plans are designed to “restore” the benefit levels that may be limited by Internal Revenue Service (“IRS”) regulations. The Company also maintains a deferred compensation plan that functions as a defined contribution plan.


	Defined Benefit Program		Defined Contribution Program
	Snap-on Incorporated Retirement Plan (“Pension Plan”)	Snap-on Incorporated Supplemental Retirement Plan for Officers (“Supplemental Plan”)	Snap-on Incorporated 401(k) Savings Plan (“401(k) Plan”)	Snap-on Incorporated Deferred Compensation Plan (“Deferred Compensation Plan”)
Plan Type:	Defined Benefit Pension	Defined Benefit Pension	401(k) Defined Contribution	Deferred Compensation
IRS Tax- Qualified:	Yes	No	Yes	No
Employee Contributions:	No	No	Yes	Yes
Company Contributions:	Yes	Yes	Matching	Restoration Match
When paid:	At termination or retirement	At termination or retirement	At termination or retirement	As elected by the participant

The Defined Benefit Program includes the Snap-on Incorporated Retirement Plan (the “Pension Plan”) and the Snap-on Incorporated Supplemental Retirement Plan for Officers (the “Supplemental Plan”). The Pension Plan is a defined benefit retirement plan that covers substantially all U.S. salaried employees, with minimum service requirements. (The Company maintains separate retirement arrangements for hourly employees.) The Pension Plan is a “qualified” retirement plan under the Internal Revenue Code (the “Code”) and is, therefore, subject to the Code’s limits on covered compensation and benefits payable. The NEOs also participate in the Supplemental Plan, which is a non-qualified excess benefit and supplemental retirement plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

The Pension Plan has been established for over 70 years as a general benefit for salaried employees. We have made periodic changes to incorporate various regulatory changes and trends in the employment market. The most recent significant plan change occurred in 2001 when an account-balance formula was incorporated for new employees; a 401(k) plan matching contribution was also adopted in 2001 to complement the account-balance feature. At that time, participants were given a choice of converting their benefit to the account-based formula (with an opportunity for a 401(k) plan match) or continuing with the final average pay times years of service formula. Precise benefits also depend upon the payment alternative chosen by the participant. In order to ensure compliance with IRS nondiscrimination requirements, in 2008, the pay-credit schedule for the account-based formula was modified and a minimum interest credit of 3.75% was adopted, and in 2012, several subsidies, including early retirement subsidies, were frozen in the final average pay formula, effective December 31, 2012.

The Supplemental Plan, commonly referred to as a supplemental executive retirement plan or “SERP,” was established in 1983 and covers approximately 90 active and former executives, including the NEOs. The Supplemental Plan was also changed in 2001 to incorporate the account-balance formula. Active executives participating in the Supplemental Plan at that time were given a choice to have their Supplemental Plan retain the final average pay times years of service formula or to switch to the new account-balance formula, without regard to the choice they made in the Pension Plan. The same changes that were made during 2008 and 2012 to the Pension Plan were also made to the Supplemental Plan.

The Defined Contribution Program includes the Snap-on Incorporated 401(k) Savings Plan (the “401(k) Plan”), and the Snap-on Incorporated Deferred Compensation Plan (the “Deferred Compensation Plan”). Depending upon the Pension Plan formula applicable to the participant (account-based or final average pay times years of service), the Company matches a portion of employee contributions to the 401(k) Plan. The Deferred Compensation Plan is primarily intended to allow eligible participants to defer base salary and incentive compensation; however, the Company may also make matching contributions to restore 401(k) Plan matching contributions limited by IRS regulations. Some participants may use this plan for retirement savings or to defer base salary or incentive compensation.

Focusing on retention considerations and reflecting our belief that these benefits should be earned over time, employees step-vest in the Company’s 401(k) Plan match over a period of four years, and an employee must have three years of continuous employment before becoming vested in account-based benefits under the Defined Benefit Program.

The Committee believes it is appropriate to maintain all four of these plans, taken together, to provide adequate retirement benefits that are comparable to the competitive market and are an additional incentive for the participants to provide for their own retirement.

Change of Control and Other Employment-related Agreements

Snap-on does not generally enter into employment-related agreements, including with its executive officers. Although the Committee believes that it is appropriate to have change of control agreements in place, as described below, it believes that the Company is better served by maintaining the ability to continuously evaluate performance of its executive officers without the constraints of specific employment agreements. Snap-on occasionally enters into severance or other agreements with individuals that the Company hires from outside in order to provide for severance or retirement benefits in recognition of foregone opportunities at such individual’s prior employer. Snap-on does not currently have any such agreements covering its executive officers.

The Company maintains change of control agreements with all of its current NEOs, as well as selected other key personnel. In the event of a transaction involving a change of control of the Company, senior executives and key personnel would typically face a great deal of pressure, including uncertainty concerning their own future. Such arrangements help assure their full attention and cooperation in the negotiation process.

The Committee periodically reviews the change of control agreements and believes that the Company’s agreements are conservative compared to the Market as evidenced by: the “double trigger” element of the agreements, which narrows the circumstances in which payments might be made; two times multiples for severance and other benefits; a provision for the continuation of health, disability, life and other insurance benefits, pension credit and 401(k) Plan matching for two years; and the lack of a tax gross-up feature. The change of control agreements allow for a reduction in payments so as to avoid adverse excise tax consequences to the executive officer.

See “Potential Payments on Change of Control and Other Employment-related Agreements” below for further information about these agreements.

Tax Aspects of Executive Compensation

Section 162(m) of the Code generally limits the corporate tax deduction for compensation paid to certain executive officers that is not “performance based” to $1 million annually. While it is our intention to structure most compensation so that Section 162(m) does not adversely impact Snap-on’s tax deduction, there may be instances in which we determine that we cannot structure compensation accordingly. In those instances, the Compensation Committee may elect to structure elements of compensation (such as the CEO’s base salary or certain qualitative factors in annual incentives) to accomplish business objectives that it believes are in the best interests of the Company and its shareholders, even though doing so may reduce the amount of Snap-on’s tax deduction for related compensation. We believe that substantially all compensation paid in 2014 will be tax deductible. Shareholder approval of the amendment to, and restatement of, the 2011 Stock and Incentive Plan at the Annual Meeting is intended to allow full tax deductibility of any performance-based awards granted under that plan for the next five years.

Other provisions of the Code also can affect the decisions that we make. Under Section 280G of the Code, a 20% excise tax is imposed upon executive officers who receive “excess” payments upon a change of control of a public corporation to the extent the payments received by them exceed an amount approximating three times their average annual compensation. The excise tax applies to all payments over one times annual compensation, determined by a five year average. A company also loses its tax deduction for “excess” payments. There are no gross-up features in our change of control agreements.

In addition, the Code was amended to provide a surtax under Section 409A of the Code with respect to various features of deferred compensation arrangements of publicly-held corporations, mostly for compensation deferred on or after January 1, 2005. We made the appropriate changes to our Defined Contribution and Defined Benefit Programs and employment agreements to help ensure there are no adverse effects on the Company or executive officers as a result of these Code amendments. We do not expect these changes to have a material tax or financial consequence on the Company.

Compensation Committee Report

The duties and responsibilities of the Organization and Executive Compensation Committee of the Board of Directors (the “Compensation Committee” or the “Committee”) are set forth in a written charter adopted by the Board and can be found on the Company’s website at www.snapon.com. The Compensation Committee reviews and reassesses this charter annually and recommends any changes to the Board for approval.

As part of the exercise of its duties, the Compensation Committee has reviewed and discussed the above “Compensation Discussion and Analysis” contained in this Proxy Statement with management. Based upon that review and those discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be incorporated by reference in the Company’s Annual Report on Form 10-K and included in this Proxy Statement.

Gregg M. Sherrill, Chair

James P. Holden

Donald J. Stebbins

Executive Compensation Information

Table 3: Summary Compensation Table


Name and Principal Position	Year		Salary ($)		Bonus ($)⁽¹⁾	Stock Awards ($)⁽²⁾		Option Awards ($)⁽²⁾		Non-Equity Incentive Plan Compensation ($)⁽³⁾		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)⁽⁴⁾		All Other Compensation ($)⁽⁵⁾		Total ($)
Nicholas T. Pinchuk		2014	$	1,012,500	—	$	3,418,594	$	2,811,900		$1,666,184		$ 255,933		$375,882	$	9,540,993
Chairman, President and Chief Executive Officer		2013		984,454	—		3,325,529		2,497,300		1,099,136		200,385		526,142		8,632,946
Chairman, President and Chief Executive Officer		2012		946,313	—		3,514,260		1,935,000		1,054,665		201,915		455,392		8,107,545
Aldo J. Pagliari		2014		438,799	—		881,350		713,790		431,500		94,891		80,896		2,641,226
Senior Vice President–Finance and Chief Financial Officer⁽⁶⁾		2013		415,735	—		753,409		576,300		362,163		51,242		72,315		2,231,164
		2012		391,390	$250,000		732,120		417,960		310,510		72,540		56,949		2,231,469
Thomas J. Ward		2014		511,396	—		1,175,169		908,460		489,320		1,063,301		115,741		4,263,387
Senior Vice President and		2013		488,459	—		1,143,156		806,820		422,396		8,608		178,485		3,047,924
President–Repair Systems & Information Group		2012		467,761	—		1,288,560		650,160		373,178		849,455		154,787		3,783,901
Thomas L. Kassouf		2014		459,734	—		934,752		778,680		465,273		98,933		95,430		2,832,802
Senior Vice President and		2013		436,882	—		883,351		672,350		390,927		61,301		109,648		2,554,459
President–Snap-on Tools Group		2012		414,261	—		878,580		510,840		345,901		77,314		90,717		2,317,613
Irwin M. Shur		2014		383,338	—		352,584		302,820		316,856		61,118		52,839		1,469,555
Vice President, General Counsel and Secretary⁽⁶⁾		2013		365,531	—		332,521		268,940		266,496		25,596		67,119		1,326,203
Vice President, General Counsel and Secretary⁽⁶⁾		2012		347,182	275,000		363,120		208,980		234,599		51,322		67,539		1,547,742

⁽¹⁾

The “Bonus” column includes only discretionary bonus payments apart from our annual incentive plan. Payments under the annual incentive plan, including payments for achieving personal goals, are set forth in the “Non-Equity Incentive Plan Compensation” column. Since our executive officers’ goals are specific and the officers’ performance against them is measured, we believe that payments under the annual incentive plan that relate to the achievement of personal strategic business goals are properly reflected in the “Non-Equity Incentive Plan Compensation” column.

The amounts in the “Bonus” column for 2012 for Messrs. Pagliari and Shur reflect cash payments pursuant to their retention agreements (the “Retention Agreements”), which vested on December 17, 2012. The Retention Agreements were entered into in 2009 and were intended to help ensure that the Company continued to retain the services of these employees as well as to motivate these individuals in challenging economic times. Under the Retention Agreements, the employee was entitled to receive a stated cash payment three years from the grant date, provided that the individual remained employed by the Company through such date.

⁽²⁾

Represents the grant date fair value computed in accordance with ASC 718 of outstanding performance-based unit grants (“Stock Awards” column) and option awards (“Option Awards” column) under the 2011 Stock and Incentive Plan; the related grants and awards were made in 2012, 2013 and 2014, respectively. See the Grants of Plan-Based Awards table and “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation” for further discussion regarding the awards granted in 2014, and the Outstanding Equity Awards at Fiscal Year-End table regarding all outstanding awards. ASC 718 requires us to recognize compensation expense for stock options and other stock-related awards granted to our employees based on the estimated fair value under ASC 718 of the equity instrument at the time of grant. The assumptions used to determine the valuation of the awards are discussed in Note 13 to our Consolidated Financial Statements.

The actual value, if any, that an optionee will realize upon exercise of an option will depend on the excess of the market price of our common stock over the exercise price on the date the option is

exercised, which cannot be forecasted with reasonable accuracy. The ultimate value of performance-based share units and performance-based restricted stock units (“RSUs”) will depend upon the number of units that vest and the market price of our common stock at vesting. Performance-based share units and RSUs vest based upon actual performance as compared to pre-defined goals for revenue growth or operating income and RONAEBIT; performance-based share units have a three-year performance period and RSUs have a one-year performance period followed by a two-year cliff vesting. In all years presented in the Summary Compensation Table above, each named executive officer (the “NEOs”) could earn up to two times the value listed in the “Stock Awards” column for performance at “maximum.”

As a result of the Company’s performance, approximately 121.8% of the 2012-2014 performance-based share units were earned, as discussed above in “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Long-term Performance-Based Share Units.”

Based on the Company’s performance in 2014, approximately 133.3% of the RSUs granted in 2014 were earned by each NEO. These RSUs will vest at the end of fiscal 2016, assuming continued employment, and will be paid out shortly thereafter. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Performance-Based Restricted Stock Units” for more information.

Based on the Company’s performance in 2013, approximately 108.3% of the RSUs granted in 2013 were earned by each NEO. These RSUs will vest at the end of fiscal 2015, assuming continued employment, and will be paid out shortly thereafter.

Based on the Company’s performance in 2012, approximately 87.9% of the RSUs granted in 2012 were earned by each NEO. These RSUs vested at the end of fiscal 2014 and were paid out shortly thereafter.

⁽³⁾	Amounts shown represent the annual incentive earned under the 2011 Stock and Incentive Plan. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Annual Incentives” for further discussion regarding the awards.

⁽⁴⁾

Represents the increase in the actuarial present value of pension benefits between fiscal year-end 2013 and 2014, 2012 and 2013, and 2011 and 2012. See the Pension Benefits and Non-qualified Deferred Compensation tables below for further discussion regarding our Pension and Deferred Compensation Plans.

⁽⁵⁾

The amounts listed under the column entitled “All Other Compensation” in the Summary Compensation Table above include Company contributions to the 401(k) Plan, Deferred Compensation Plan and life insurance, as well as dividend equivalents on vested performance-based share units and vested RSUs in the year earned, to the extent not reflected in the grant date fair value calculation. The amounts included in the “All Other Compensation” column are listed in the following table:


Name	Year		Company Matching Contribution to 401(k) Plan ($)		Company Matching Contribution to Deferred Compensation Plan ($)		Value of Life Insurance Premiums Paid by the Company ($)		Dividend Equivalents on Vested Stock Awards ($)		Total ($)
Pinchuk		2014		$7,800		$55,549		$ 975		$311,558	$	375,882
		2013		7,650		53,524		900		464,068		526,142
		2012		7,500		57,087		1,080		389,725		455,392
Pagliari		2014		7,800		16,229		1,316		55,551		80,896
		2013		7,650		14,137		1,247		49,281		72,315
		2012		7,500		22,526		1,409		25,514		56,949
Ward		2014		—		—		1,500		114,241		115,741
		2013		—		—		1,465		177,020		178,485
		2012		—		—		1,684		153,103		154,787
Kassouf		2014		7,800		17,720		1,379		68,531		95,430
		2013		7,650		15,834		1,311		84,853		109,648
		2012		7,500		16,785		1,491		64,941		90,717
Shur		2014		7,800		11,695		1,150		32,194		52,839
		2013		7,650		10,354		1,097		48,018		67,119
		2012		7,500		19,500		1,250		39,289		67,539

⁽⁶⁾

The Company sponsors a non-qualified Deferred Compensation Plan to which participants may defer all or a portion of each of their base salary, stock awards or non-equity incentive plan compensation. See the further discussions in “Compensation Discussion and Analysis—Retirement and Deferred Benefits” and under “Non-qualified Deferred Compensation” below. Of the amounts included in the table above, Mr. Pagliari deferred $4,388 of base salary in fiscal 2014, $4,157 of base salary in fiscal 2013 and $3,914 of base salary in fiscal 2012, and Mr. Shur deferred $498,044 of stock awards upon vesting in fiscal 2014.

Table 4: Grants of Plan-Based Awards 2014


Name	Grant Date		Plan Name*	Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards							All Other Option Awards: Number of Securities Underlying Options (#)			Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards⁽⁵⁾
Name	Grant Date		Plan Name*	Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)						Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards⁽⁵⁾
					—		—		—		3,905		15,620		31,240	⁽¹⁾		—			—	$	1,709,297
Pinchuk		2/13/14	Long-term awards		—		—		—		3,905		15,620		31,240	⁽²⁾		—			—		1,709,297
					—		—		—		—		—		—			130,000	⁽³⁾	$	109.43		2,811,900
		2/13/14	Annual incentive⁽⁴⁾	$	316,404	$	1,265,616	$	2,531,232		—		—		—			—			—		—
					—		—		—		1,007		4,027		8,054	⁽¹⁾		—			—		440,675
Pagliari		2/13/14	Long-term awards		—		—		—		1,007		4,027		8,054	⁽²⁾		—			—		440,675
					—		—		—		—		—		—			33,000	⁽³⁾		109.43		713,790
		2/13/14	Annual incentive⁽⁴⁾		81,941		327,763		655,526		—		—		—			—			—		—
					—		—		—		1,343		5,370		10,740	⁽¹⁾		—			—		587,639
Ward		2/13/14	Long-term awards		—		—		—		1,342		5,369		10,738	⁽²⁾		—			—		587,530
					—		—		—		—		—		—			42,000	⁽³⁾		109.43		908,460
		2/13/14	Annual incentive⁽⁴⁾		95,833		383,330		766,660		—		—		—			—			—		—
					—		—		—		1,068		4,271		8,542	⁽¹⁾		—			—		467,376
Kassouf		2/13/14	Long-term awards		—		—		—		1,068		4,271		8,542	⁽²⁾		—			—		467,376
					—		—		—		—		—		—			36,000	⁽³⁾		109.43		778,680
		2/13/14	Annual incentive⁽⁴⁾		86,146		344,584		689,168		—		—		—			—			—		—
					—		—		—		403		1,611		3,222	⁽¹⁾		—			—		176,292
Shur		2/13/14	Long-term awards		—		—		—		403		1,611		3,222	⁽²⁾		—			—		176,292
					—		—		—		—		—		—			14,000	⁽³⁾		109.43		302,820
		2/13/14	Annual incentive⁽⁴⁾		62,300		249,198		498,396		—		—		—			—			—		—

*	All awards were made pursuant to our 2011 Stock and Incentive Plan.

⁽¹⁾

The awards relate to grants of performance-based share units and may be earned over a term of three years. The related grant date fair value of these awards in fiscal 2014 is also included in the “Stock Awards” column of the Summary Compensation Table. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Long-term Performance-Based Share Units” for further discussion regarding the awards.

⁽²⁾

Consists of performance-based RSUs awarded in fiscal 2014 under the 2011 Stock and Incentive Plan. Vesting of the RSUs is dependent upon the achievement of consolidated financial metrics (operating income and RONAEBIT) over a one-year performance period, as well as continued employment during the subsequent two-year service period. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Performance-Based Restricted Stock Units” for more information.

⁽³⁾

The options were granted at the regularly scheduled February 13, 2014 meeting of the Organization and Executive Compensation Committee (the “Compensation Committee” or the “Committee”) and have an exercise price equal to the closing price of Snap-on stock as reported on the NYSE on the date of grant ($109.43). One-third of the options granted vest on each of February 13, 2015, February 13, 2016, and February 13, 2017, respectively. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Stock Options” for further information regarding the awards.

⁽⁴⁾

Amounts represent the annual incentive opportunity available under the 2011 Stock and Incentive Plan. The annual incentive actually paid to each of the NEOs is set forth above in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Annual Incentives” for further discussion regarding the awards. Payouts are made annually, dependent upon performance as compared to pre-defined goals. Our targets relate to quantifiable consolidated Company financial performance—operating income and return on net assets. In addition, a portion of the annual incentive is based on the attainment of personal strategic business goals.

Payments related to the total Company financial measures can increase from twenty-five percent of the target amount if a threshold level of performance has been reached to two hundred percent of such amount if a maximum level of performance has been achieved, and are adjusted proportionately and interpolated between performance levels. Achievement of the personal strategic business goals can range from zero percent to the maximum based on personal attainment of those goals.

⁽⁵⁾	For stock awards and options, this amount represents the grant date fair value calculated in accordance with ASC 718. See also Note 13 to our Consolidated Financial Statements.

The Company sponsors a Non-qualified Deferred Compensation Plan to which participants may defer all or a portion of each of their base salary, non-equity incentive plan compensation or stock awards.

Table 5:

Outstanding Equity Awards at Fiscal Year-End January 3, 2015


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable⁽¹⁾		Number of Securities Underlying Unexercised Options (#) Unexercisable⁽¹⁾		Option Exercise Price ($)⁽¹⁾		Option Expiration Date⁽¹⁾		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)⁽²⁾
Pinchuk		42,000				39.35		2/16/2016
		40,000				50.22		2/15/2017
		99,000				51.75		2/13/2018
		120,000				29.69		2/11/2019
		120,000				41.01		2/10/2020
		125,000				58.94		2/9/2021
		83,333		41,667		60.00		2/8/2022
		43,334		86,666		79.04		2/13/2023
				130,000		109.43		2/13/2024
										35,670	⁽³⁾		$4,861,464
										42,074	⁽³⁾		5,734,265
										15,620	⁽³⁾		2,128,850
										22,783	⁽⁴⁾		3,105,095
										20,821	⁽⁵⁾		2,837,694
Pagliari		6,480				39.35		2/16/2016
		6,480				50.22		2/15/2017
		6,480				51.75		2/13/2018
		6,480				29.69		2/11/2019
		6,480				41.01		2/10/2020
		20,000				58.94		2/9/2021
		18,000		9,000		60.00		2/8/2022
		10,000		20,000		79.04		2/13/2023
				33,000		109.43		2/13/2024
										7,431	⁽³⁾		1,012,771
										9,532	⁽³⁾		1,299,116
										4,027	⁽³⁾		548,840
										5,162	⁽⁴⁾		703,529
										5,368	⁽⁵⁾		731,605
Ward		42,000				41.01		2/10/2020
		42,000				58.94		2/9/2021
		28,000		14,000		60.00		2/8/2022
		14,000		28,000		79.04		2/13/2023
				42,000		109.43		2/13/2024
										13,079	⁽³⁾		1,782,537
										14,464	⁽³⁾		1,971,299
										5,370	⁽³⁾		731,877
										7,831	⁽⁴⁾		1,067,287
										7,157	⁽⁵⁾		975,428
Kassouf		6,480				50.22		2/15/2017
		6,000				54.50		4/30/2017
		20,000				51.75		2/13/2018
		28,000				58.94		2/9/2021
		22,000		11,000		60.00		2/8/2022
		11,667		23,333		79.04		2/13/2023
				36,000		109.43		2/13/2024
										8,918	⁽³⁾		1,215,434
										11,176	⁽³⁾		1,523,177
										4,271	⁽³⁾		582,095
										6,052	⁽⁴⁾		824,827
										5,693	⁽⁵⁾		775,899
Shur		13,000				58.94		2/9/2021
		9,000		4,500		60.00		2/8/2022
		4,667		9,333		79.04		2/13/2023
				14,000		109.43		2/13/2024
										3,686	⁽³⁾		502,365
										4,208	⁽³⁾		573,508
										1,611	⁽³⁾		219,563
										2,278	⁽⁴⁾		310,469
										2,147	⁽⁵⁾		292,615

(1)

Option awards granted under the 2011 Stock and Incentive Plan or the predecessor plan. All options have an exercise price equal to the value of our common stock on the grant date, vest in three annual increments beginning on the first anniversary following the award and expire ten years from the respective grant date.

(2)	Based on the $136.29 per share closing price of our common stock on January 2, 2015, the last trading day of fiscal 2014.

(3)

Consists of performance-based share units awarded in fiscal years 2012, 2013 and 2014 under the 2011 Stock and Incentive Plan or the predecessor plan. Vesting of the performance-based share units will be dependent upon cumulative performance relative to revenue growth and RONAEBIT over the three-year performance periods. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Long-term Performance-Based Share Units” for additional information regarding awards.

On February 12, 2015, the Committee and the Board reviewed actual performance for the 2012 long-term award and approved a vesting percentage of 121.8% for the 2012 long-term award; the amounts reported in the table above reflect this performance.

As of the end of fiscal 2014, performance for the 2013 long-term award was between the target and maximum levels; therefore, the value of the award is shown at the maximum grant number, which is the reporting value required to be presented in this situation. Actual performance will be reviewed by the Committee and the Board of Directors at their February 2016 meetings.

As of the end of fiscal 2014, performance for the 2014 long-term award was at the target level; therefore, the value of the award is shown at the target grant number, which is the reporting value required to be presented in this situation. Actual performance will be reviewed by the Committee and the Board of Directors at their February 2017 meetings.

(4)

Consists of performance-based RSUs awarded in fiscal 2013 under the 2011 Stock and Incentive Plan, and earned based on Company performance on the consolidated financial metrics set in its annual incentive plan, operating income and return on net assets, during that fiscal year. The number reported above represents approximately 108.3% of the RSUs originally granted. These RSUs will vest at the end of fiscal 2015, assuming continued employment, and will be paid out shortly thereafter.

(5)

Consists of performance-based RSUs awarded in fiscal 2014 under the 2011 Stock and Incentive Plan. Vesting of the RSUs is dependent upon the achievement of the consolidated financial metrics set in the Company’s annual incentive plan—operating income and return on net assets—over the one-year performance period, as well as continued employment during the two-year service period. See “Compensation Discussion and Analysis—Total Direct Compensation—Cash and Incentive—Long-term Incentive Compensation—Performance-Based Restricted Stock Units” for more information. On February 12, 2015, the Compensation Committee and Board of Directors reviewed the Company’s actual performance and determined that approximately 133.3% of the RSUs originally granted were earned; the amounts reported in the table above reflect this performance. These RSUs will vest at the end of fiscal 2016, assuming continued employment, and will be paid out shortly thereafter.

Table 6:

Option Exercises and Stock Vested 2014


	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise ($)⁽¹⁾		Number of Shares Acquired on Vesting (#)⁽²⁾		Value Realized on Vesting ($)⁽²⁾
Pinchuk		35,000	$	2,657,565		69,486	$	8,295,283
Pagliari		4,320		328,330		12,290		1,488,945
Ward		40,000		3,517,762		25,479		3,041,699
Kassouf		8,333		633,792		15,185		1,834,539
Shur		12,500		947,008		7,180		857,155

(1)

Based on the difference between the exercise price and the sale price on the date of exercise with the exception of shares that were held upon the exercise of options; in such case, the value realized on exercise is based on the difference between the exercise price and the average of the high and low trading prices of our stock on the NYSE on the date of exercise.

(2)

The 2011 long-term incentive program had a three-year performance period that ended in 2013. On February 13, 2014, the Compensation Committee and Board of Directors reviewed actual performance during 2011-2013 and determined that performance was between target and maximum; therefore, approximately 148.2% of the 2011 long-term award vested for each executive officer and was paid out on that date. The value realized on vesting for this award was based on the closing price of our stock on the NYSE on February 13, 2014, the vesting date.

The performance-based RSUs awarded in fiscal 2012 vested on January 3, 2015. The value realized on vesting for this award was based on the closing price of our stock on the NYSE on January 2, 2015, the last trading day of fiscal 2014.

Defined Benefit Plans

Snap-on Incorporated Retirement Plan

The Snap-on Incorporated Retirement Plan (the “Pension Plan”) is a defined benefit retirement plan that covers substantially all U.S. salaried employees, with minimum service requirements. The Pension Plan is a “qualified” retirement plan under the Internal Revenue Code (the “Code”) and is therefore subject to the Code’s limits on eligible compensation and benefits payable. Benefits are determined using either final average earnings and years of credited service or an account-balance formula. We do not make any specific contributions for the NEOs. All salaried employees hired on or after January 1, 2001, participate under the account-balance formula in the Pension Plan. The table below shows the number of years of credited service, the present value of accumulated benefits and the payments made during the last fiscal year under the Pension Plan and Snap-on Incorporated Supplemental Retirement Plan for Officers (the “Supplemental Plan”). See below for a discussion of the Supplemental Plan. The assumptions used to determine the present value of the accumulated benefit are discussed in Note 11 to our Consolidated Financial Statements.

There are no provisions in the plans for granting additional years of credited service beyond an employee’s working career, including the named executive officers. There are provisions in the change of control agreements, which are described below, that indicate that two additional years of service may be granted for covered executives.

Supplemental Retirement Plan

Approximately 90 active and former executives, including the NEOs, participate in the Supplemental Plan. The Supplemental Plan is a non-qualified excess benefit and supplemental retirement plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); it provides benefits that would be payable to participants under the Pension Plan except for the limitations provided for qualified plans under the Code. The Supplemental Plan has a final average pay formula and an account-balance benefit formula, both of which are based on the final average pay and account-balance formulas in the Pension Plan. Under the Supplemental Plan, each participant will receive the difference, if any, between the full amount of retirement income due under the Supplemental Plan formula that applies to the participant and the amount of retirement income payable to the participant under the Pension Plan formula when applicable IRS limitations are applied. The Supplemental Plan also includes deferred compensation as eligible pay for pension purposes. Qualified retirement plan compensation limits per participant were $250,000 per annum for 2012, $255,000 for 2013 and $260,000 for 2014 under Section 401(a)(17) of the Code.

Table 7: Pension Benefits


Name	Plan Name	Number of Years Credited Service (#)*		Present Value of Accumulated Benefit ($)**		Payments During Last Fiscal Year ($)
Pinchuk	Snap-on Incorporated Retirement Plan⁽¹⁾		12.5		$ 258,521		—
Pinchuk	Supplemental Retirement Plan⁽¹⁾		12.5		1,191,267		—
Pagliari	Snap-on Incorporated Retirement Plan⁽¹⁾		12.1		179,438		—
Pagliari	Supplemental Retirement Plan⁽¹⁾		12.1		239,115		—
Ward	Snap-on Incorporated Retirement Plan⁽²⁾⁽³⁾		27.0		1,495,344		—
Ward	Supplemental Retirement Plan⁽²⁾⁽³⁾		27.0		3,892,527		—
Kassouf	Snap-on Incorporated Retirement Plan⁽¹⁾		12.0		210,662		—
Kassouf	Supplemental Retirement Plan⁽¹⁾		12.0		284,015		—
Shur	Snap-on Incorporated Retirement Plan⁽¹⁾		6.7		100,653		—
Shur	Supplemental Retirement Plan⁽¹⁾		6.7		123,243		—

*	Mr. Ward’s credited service includes service years from participating in the Sun Electric Pension Plan prior to the acquisition of Sun Electric by Snap-on in 1992. The Sun Electric Pension Plan was merged into the Pension Plan in 2000.

**	At January 3, 2015.

⁽¹⁾

The defined benefit is determined using an account-based cash balance plan formula with pay credits ranging from 3% to 10% based on years of credited service and age. Interest is credited annually based on the five-year Treasury rate as calculated in November of the preceding year, with a minimum interest rate of 3.75%. The values shown are the present value of the account balances that would be available upon termination of employment. There are no subsidized optional forms of payment. The Pension Plan is a tax-qualified retirement plan. The Supplemental Plan is a non-qualified deferred compensation plan providing benefits using the same formulas as in the Pension Plan, but without regard to IRS imposed limits.

⁽²⁾

The total pension benefit is determined as described in footnote 3 below except that the Supplemental Plan benefit is offset by the benefit payable from the Pension Plan. Benefits from the Pension Plan are as calculated in footnote 3 below for service since August 5, 1996. For service prior to August 5, 1996, benefits are calculated according to the following formula:

[(2% x Final Average Pay x Projected Service) - (2.4% of Social Security benefit x Projected Service)]

multiplied by

(Current Service divided by Projected Service)

Early retirement on the latter calculation is age 50 with 10 years of service.

“Final Average Pay” is an individual’s average annual earnings during the last three completed consecutive calendar years of employment and generally includes only base salary and commissions paid in a given year.

“Projected Service” means the total number of years a participant could have been eligible to earn a pension benefit if he/she participated in the plan until age 65.

“Current Service” means the total number of years a participant actually earned a pension benefit.

⁽³⁾	The total defined benefit is determined using the final average pay formula under the Pension Plan and provides, at the normal retirement age of 65, that retirement benefits will be calculated using the following benefit formula:

[1.2% x Final Average Pay x Years of Credited Service]

plus

[0.45% x {Final Average Pay minus Social Security Covered Compensation} x Years of Credited Service]

“Final Average Pay” is an individual’s average annual earnings during the five highest completed consecutive calendar years of employment and generally includes base salary, commission and bonus amounts paid in a given year.

“Social Security Covered Compensation” is a 35-year average of the Social Security Maximum Taxable Wage Base (according to federal regulations) for each calendar year to age 65.

“Years of Credited Service” is the number of years and fractional number of years of continuous employment up to 35 years.

The Normal Form of Benefit (as defined in the Pension Plan) for benefits earned through 2012, is a 50% joint and survivor benefit with five years certain, which is unreduced since Mr. Ward has attained age 60. For benefits earned after 2012, the Normal Form of Benefit is a single life annuity, which is reduced if payable before age 65. There is also an $800 temporary benefit payable from retirement until age 65.

Non-qualified Deferred Compensation

The Snap-on Incorporated Deferred Compensation Plan (the “Deferred Compensation Plan”) is primarily intended to allow eligible participants to defer base salary and incentive compensation; however, the Company may also make contributions to restore 401(k) Plan matching contributions otherwise limited by IRS regulations. Approximately 50 active and retired executives, including the NEOs, are eligible to participate in the Deferred Compensation Plan.

The Deferred Compensation Plan is a non-qualified excess benefit and supplemental retirement plan as defined by Sections 3(36) and 201(2) of ERISA. Participants are allowed to defer amounts into a cash fund or into a Snap-on common stock fund. Participants are allowed to take a distribution of deferrals and matching contributions following a participant’s termination of employment or retirement or to schedule a specific deferral period. Information for each of the NEOs is set forth below relating to the Deferred Compensation Plan.

The Deferred Compensation Plan complies with the requirements of Section 409A of the Code.

Table 8: Non-qualified Deferred Compensation


Name	Executive Contributions in Last Fiscal Year ($)⁽¹⁾		Registrant Contributions in Last Fiscal Year ($)⁽¹⁾		Aggregate Earnings in Last Fiscal Year ($)		Aggregate Withdrawals/ Distributions ($)⁽²⁾		Aggregate Balance at Last Fiscal Year End ($)⁽³⁾
Pinchuk		—		$55,549		$697,089		—		$5,787,313
Pagliari		$ 4,388		16,229		25,591		$109,507		709,473
Ward		—		—		5,697		—		155,343
Kassouf		—		17,720		57,326		—		284,585
Shur		498,044		11,695		77,147		—		642,640

⁽¹⁾	Amounts reported as Executive Contributions are discussed in footnote 6 to the Summary Compensation Table and amounts reported as Registrant Contributions are reported in the “Other Compensation” column of the Summary Compensation Table.

⁽²⁾	These amounts were deferred in prior years. Mr. Pagliari’s distribution was paid according to a scheduled deferral election.

⁽³⁾

Of the amounts reported in the “Aggregate Balance at Last Fiscal Year End” column, the following amounts were previously reported in the Summary Compensation Tables in the Company’s Proxy Statements for its prior Annual Meetings of Shareholders: Mr. Pinchuk—$2,620,295; Mr. Pagliari—$68,214; Mr. Ward—$81,623; Mr. Kassouf—$93,543; and Mr. Shur—$19,500.

Potential Payments on Change of Control

and Other Employment-related Agreements

We have change of control agreements with the NEOs to provide continued compensation and benefits in the event of a change of control as defined in the agreements. The agreements are for one-year terms and are automatically extended each year for another one year term, unless notice is given. The agreements also provide that if there is a change of control, then the terms will continue for 24 months.

The circumstances under which benefits are payable pursuant to the agreements generally are a change of control plus one of the following: the termination of the employee without cause by the Company or by the employee for other defined reasons within two years after a change of control; or the termination of the officer’s employment by the Company without cause in anticipation of a change of control. Under these agreements, a “change of control” is a defined term that includes a merger or similar transaction involving the Company, a third party acquiring more than 25% of the shares which includes, in general, a person or entity becoming a 25% or greater shareholder of the Company, a covered removal of directors on the Company’s Board, or a liquidation of the Company.

Benefits under the change of control agreements include:

•

A lump sum payment equal to two times the sum of the officer’s base salary prior to termination and bonus or incentive compensation “target” for the fiscal year in which the termination of employment occurs or, if higher, for the fiscal year in which the change of control of the Company occurs;

•

All annual bonus or incentive awards that were earned but not yet paid are to be paid, and all annual bonus or incentive awards that were not yet earned are deemed to have been earned pro rata, as if the performance goals were attained as of the effective date of the change of control, based on the individual’s target award opportunity for the fiscal year multiplied by the percentage of the fiscal year elapsed as of the date of the change of control;

•

Continuation of health, disability, life and other insurance benefits for two years;

•

Two years’ credit for service for the purposes of any pension benefit plan in which the officer participated;

•

401(k) Plan matching payments will be given for two years;

•

Payment of any accrued but unpaid compensation; and

•

A reduction in payments in certain circumstances so as to avoid adverse excise tax consequences to the officer.

Such benefits under the agreements are payable regardless of the former officer seeking or obtaining employment following termination, provided that the level of any health, disability, life or other insurance benefits are to be reduced if the executive officer obtains other employment.

Under the 2011 Stock and Incentive Plan, accelerated vesting will be provided for certain awards only if there is a termination of employment following a change of control, except to the extent the Committee provides a result more favorable to holders of awards.

The following table sets forth the estimated current value of benefits that could be paid to our NEOs upon a change of control under the individual change of control agreements. These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the NEOs, which would only be known at the time that they become eligible for payment and would only be payable if a change of control were to occur.

Table 9: Potential Payments on Change of Control


Name	Severance Amount⁽¹⁾		Pension Enhancement⁽²⁾		Early Vesting of Stock Options⁽³⁾		Early Vesting of Long-term Performance- Based Units⁽⁴⁾		Other⁽⁵⁾		Estimated Tax Gross Up⁽⁶⁾		Total
Pinchuk		$4,635,000		$564,976		$11,632,202		$16,253,527		$25,542		—		$33,111,247
Pagliari		1,549,256		181,157		2,717,990		3,907,161		26,250		—		8,381,814
Ward		1,809,365		712,116		3,799,180		5,587,349		26,592		—		11,934,602
Kassouf		1,628,456		195,377		3,141,965		4,373,519		26,385		—		9,365,702
Shur		1,299,030		113,571		1,253,661		1,647,898		25,956		—		4,340,116

⁽¹⁾

This amount represents two times the sum of the executive officer’s base salary immediately prior to the termination of employment and the bonus or incentive compensation opportunity at the “target” level for the fiscal year in which the termination of employment occurs or, if higher, for the fiscal year in which the change of control of the Company occurs, as specified by the change of control agreements. These amounts are based on the base salary and annual incentive target amounts in effect on January 3, 2015.

⁽²⁾

This amount represents the present value of an additional two years of service under the Pension Plans and an additional two years of 401(k) Plan matching payments, as specified by the change of control agreements. These amounts are based on the calculation included in the footnotes to the Pension Benefits table.

⁽³⁾

Accelerated vesting would only occur for outstanding unvested stock options granted under the 2011 Stock and Incentive Plan if there was a termination of employment following a change of control. The amounts shown represent the value of such unvested stock options based on the $136.29 per share closing price of our common stock on January 2, 2015, the last trading day of fiscal 2014.

⁽⁴⁾

These amounts represent the value of the unvested performance-based share units and performance-based RSUs (as well as related dividend equivalents) held by the executive officer, which would become vested only if there was a termination of employment following a change of control, based on the $136.29 per share closing price of our common stock on January 2, 2015.

⁽⁵⁾	These amounts include payments for two years of life insurance and medical and dental benefits, as specified by the change of control agreements.

⁽⁶⁾	The agreements do not provide a tax gross up; however, they do allow for a reduction in payments in certain circumstances so as to avoid adverse excise tax consequences to the executive officer.

In addition to the agreements discussed in this section, the NEOs also participate in, and will be entitled to payments under, the various retirement and deferred compensation plans discussed above under “Defined Benefit Plans” and “Non-qualified Deferred Compensation.”

COMPENSATION AND RISK

The Company performed a risk assessment to determine whether the amount and make-up of the compensation paid to our associates promotes excessive risk-taking. This assessment examined the following factors: overall compensation program design; performance metrics and goal setting; administrative procedures; and communication as well as disclosure. To further evaluate the risks associated with our compensation program, the Company’s internal audit function identified the internal controls within our compensation plans and policies and mapped these controls to the tests performed under the framework used by the Company to evaluate its internal controls for financial reporting purposes.

With regard to compensation plans for our senior executives, whose actions may expose the Company to the most significant business risks, the Company believes that our performance-based compensation and equity programs create appropriate incentives to increase long-term shareholder value without exposing the Company to material adverse risks. In addition to the internal controls mentioned above, we believe the following factors also mitigate the likelihood of excessive risk-taking: stock ownership guidelines, annual caps on cash bonuses, the percentage of long-term equity in the compensation mix, formal recoupment policies and the discretion granted to the Organization and Executive Compensation Committee to monitor payouts.

Therefore, as a result of this assessment, we have concluded that the risks arising from our employee compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

ITEM 3:

APPROVAL OF THE AMENDMENT TO, AND RESTATEMENT OF, THE SNAP-ON INCORPORATED 2011 INCENTIVE STOCK AND AWARDS PLAN

At the Annual Meeting, we are seeking shareholder approval of the amendment to, and restatement of, the Company’s 2011 Incentive Stock and Awards Plan (the “2011 Stock and Incentive Plan” or, in this section, the “Plan”). The Plan was originally approved by shareholders on April 28, 2011, and was amended and restated by the Board of Directors on February 12, 2015, subject to approval by the Company’s shareholders at the Annual Meeting.

As a result of the Company’s positive performance in recent years, it is anticipated there will not be enough shares reserved under the 2011 Stock and Incentive Plan to sustain grants beyond fiscal 2015; therefore, the Company is asking shareholders to approve the amendment to, and restatement of, the Plan primarily to increase the number of shares authorized for future issuance pursuant to the Plan by 4,100,00 shares.

The 2011 Stock and Incentive Plan is designed to motivate participants by offering them the opportunity to acquire shares of the Company’s common stock, receive monetary payments based on the value of those shares or receive other incentive compensation. The Plan provides a means of compensating the Company’s officers, directors and employees in a way that is performance-driven because the value of many of the awards depends on either our corporate performance or the performance of our stock. The Plan is a cash and stock-based incentive plan, and allows the Company to grant participants stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), performance shares or performance units, and other management incentive awards, including awards that may be based upon the achievement of specific performance goals.

The Board believes that shareholder approval of the amendment to, and restatement of, the 2011 Stock and Incentive Plan is desirable because it will promote the interests of the Company and its shareholders by continuing to provide the Company with the ability to attract and retain outstanding people as officers, directors and employees, and by encouraging such individuals to maintain a personal interest in the Company’s continued success and progress. In addition, shareholder approval will allow the Company to maintain the Plan as a means of linking personal compensation to the creation of shareholder value.

We are also requesting shareholder approval of the amendment to, and restatement of, the Plan so that certain benefits under the plan will continue to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code (the “Code”) and not adversely affect the Company’s tax deduction. Section 162(m) generally limits the corporate tax deduction for compensation paid to executive officers that is not “performance based” to $1 million per executive officer. Performance-based compensation meeting certain requirements is not counted against the $1 million limit and remains fully deductible for tax purposes. Shareholder approval of the general business criteria of the 2011 Stock and Incentive Plan and the maximum amounts that may be awarded under the Plan, even without shareholder approval of specific targeted levels of performance, will qualify the incentive awards under the Plan as performance-based compensation and is expected to allow full tax deductibility of any performance-based awards under the Plan for the next five years.

The summary of the 2011 Stock and Incentive Plan provided herein is not complete and is qualified in its entirety by the full text of the Plan, as amended and restated subject to shareholder approval, which is attached as Appendix A to this Proxy Statement.

Summary of Amendments

The Board originally authorized, and on April 28, 2011 our shareholders approved, the issuance of 5,000,000 shares pursuant to awards under the 2011 Stock and Incentive Plan. As a result of the

Company’s positive performance in recent years, we have reviewed our projections of share usage under the Plan and have determined that additional shares are necessary to allow us to make future grants that fulfill the objectives of the Plan and our current compensation practices. Therefore, subject to shareholder approval at the Annual Meeting, the Plan, as amended and restated, authorizes an additional 4,100,000 shares that may be issued pursuant to future awards under the Plan, which we currently estimate will provide enough shares to sustain grants for approximately four years. Other minor, and primarily administrative or clarifying, changes are also being made to the Plan.

If shareholders do not approve the amendment to, and restatement of, the 2011 Stock and Incentive Plan, the Company will no longer be able to grant awards under the Plan after the original share reserve is exhausted and it will need to evaluate other alternatives for providing equity and other incentive compensation to its officers, directors and employees.

Administration and Eligibility

The 2011 Stock and Incentive Plan is administered by the Organization and Executive Compensation Committee (in this section, the “Committee”). The Committee is required to be comprised of at least two directors, each of whom qualifies as a “non-employee director” under the Securities Exchange Act of 1934 (the “Exchange Act”) and as an “outside director” under the Code. Each member of the Committee currently meets these requirements. The Committee has the authority to:

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interpret the provisions of the Plan;

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make, amend and rescind rules and regulations relating to the Plan;

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correct any defect, supply any omission or reconcile any inconsistency in any award or agreement covering an award; and

•

make all other determinations necessary or advisable for administering the Plan.

The Board approves grants of awards to non-employee directors. In this summary, reference to the “Committee” shall be deemed to include the Board in its capacity with respect to non-employee director awards.

To the extent permitted by law, the Board can delegate to another committee of the Board or to one or more of our officers the authority and responsibility of the Committee. However, for actions related to individuals subject to the provisions of Section 16 of the Exchange Act, the Board can delegate that authority and responsibility only to another committee of the Board consisting entirely of non-employee directors.

Participants in the 2011 Stock and Incentive Plan are our non-employee directors, officers and other employees, or individuals engaged to become officers or employees, who the Committee has designated to receive an award under the Plan. As of February 13, 2015, there were nine non-employee directors and approximately 1,000 officers and employees eligible to participate in the Plan.

Awards Under the Plan; Available Shares

The 2011 Stock and Incentive Plan permits the grant of:

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stock options, which may be either “incentive stock options” meeting the requirements of section 422 of the Code (which we refer to as “ISOs”) or “non-qualified stock options” that do not meet the requirements of section 422 of the Code;

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stock appreciation rights (“SARs”);

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restricted stock;

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restricted stock units (“RSUs”);

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performance shares;

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performance units; and

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management incentive awards (provided that non-employee directors may not be granted management incentive awards).

The Committee has the full power and authority to determine:

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the types of awards to be granted to each participant;

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the number of shares of our common stock with respect to which an award is granted; and

•

any terms and conditions of awards.

The Committee can grant awards under the 2011 Stock and Incentive Plan either alone or in addition to any other award (or any other award granted under our other plans).

The Company originally reserved 5,000,000 shares of common stock for issuance pursuant to the 2011 Stock and Incentive Plan; as of February 13, 2015, 847,815 shares remained available for future issuance under the Plan. Subject to shareholder approval of the amendment to, and restatement of, the Plan at the Annual Meeting, the Company will be reserving an additional 4,100,000 shares for future issuance under the Plan, all of which may be issued pursuant to the exercise of ISOs.

Any shares issued pursuant to the exercise of stock options and stock-settled SARs are counted against the share limit on a one-for-one basis and any shares issued pursuant to awards other than options and stock-settled SARs are counted against the share limit on a two-for-one basis. The number of shares reserved for issuance is reduced by the number of shares delivered to or withheld by the Company to pay the exercise price of stock options or to pay the withholding taxes related to awards. In general, if an award lapses, expires, terminates or is canceled without the issuance of shares or a cash payment, or if shares are issued under any award and we reacquire such shares, then these shares may be reused for new awards under the 2011 Stock and Incentive Plan.

The 2011 Stock and Incentive Plan also provides that, subject to adjustment to prevent dilution, no individual participant may be granted awards that could result in such participant receiving in any single fiscal year:

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stock options for more than 1,000,000 shares of our common stock;

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SARs for more than 1,000,000 shares of our common stock;

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awards of restricted stock relating to more than 500,000 shares;

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awards of RSUs relating to more than 500,000 shares;

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performance shares relating to more than 500,000 shares;

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awards of performance units for more than 500,000 shares; or

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incentive award payments greater than $5,000,000.

Terms of Awards

Stock Options. The Committee establishes the exercise price for each stock option, which may not be less than the fair market value of the shares subject to the stock option as determined on the grant date. Stock options are exercisable on the terms and conditions the Committee specifies, except that a stock option must terminate no later than ten years after the grant date. In all other respects, unless the Committee determines otherwise, the terms of any ISO must comply with the provisions of Section 422 of the Code.

If the Company grants stock options to non-employee directors, each such option will, except as otherwise provided, terminate in ten years, or a lesser period of time, depending on the director’s age, years of service and reason the director ceases to serve on the Board.

SARs. The Committee establishes the exercise price for each SAR, which may not be less than the fair market value of the shares subject to the SAR on the grant date. SARs are exercisable on the terms and conditions that the Committee specifies, except that a SAR must terminate no later than ten years after the grant date. The Committee may determine to pay SARs in cash, in shares or in a combination of cash and shares.

Restricted Stock, RSUs, Performance Shares and Performance Units. Each award of restricted stock, RSUs, performance shares or performance units may be subject to such terms and conditions as the Committee deems appropriate, including, without limitation, the achievement of one or more performance goals. However, except for awards to non-employee directors, a restricted stock award must have a restriction period of at least one year if it requires the achievement of performance goals, and at least three years if it is not subject to performance goals; provided that up to 5% of the shares available for issuance pursuant to awards (including awards to non-employee directors) may be granted without any minimum vesting period.

For purposes of the 2011 Stock and Incentive Plan, performance goals are generally goals that relate to the achievement of certain financial results by the Company or any one or more of its subsidiaries or business units, including results with respect to revenue, cash flow, net cash provided by operating activities, net cash provided by operating activities less net cash used in investing activities, cost of goods sold, ratio of debt to debt plus equity, profit before tax, gross profit, net profit, net sales, operating income, operating income (before financial services), earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, fair market value per share, basic earnings per share, diluted earnings per share, return on shareholder equity, average accounts receivable (calculated by taking the average of accounts receivable at the end of each month), average inventories (calculated by taking the average of inventories at the end of each month), return on average total capital employed, return on net assets employed before interest and taxes, economic value added, return on year-end equity, and/or in the case of awards that the Committee determines will not be considered “performance-based compensation” under Section 162(m) of the Code, other goals the Committee may establish in its discretion.

The Committee may also provide for the acceleration of restrictions on such awards, and deemed achievement of performance goals subject to an award, upon a participant’s death, disability or retirement. The Committee may determine to pay RSUs or performance units in cash, in shares or in a combination of cash and shares.

Management Incentive Awards. Under the 2011 Stock and Incentive Plan, the Committee may grant incentive awards to such officers as it selects and determines all terms and conditions of the incentive awards. However, payment of all or any portion of the amount subject to an incentive award must be contingent on the achievement or partial achievement of one or more of the performance goals during the specified period.

Non-employee Director Awards. The 2011 Stock and Incentive Plan provides that the non-employee directors will receive awards under the Plan subject to the terms and conditions set by the Board. Non-employee directors will not be eligible to receive ISOs or management incentive awards.

Other Terms. Any award granted under the 2011 Stock and Incentive Plan may also be subject to other provisions as the Committee determines appropriate, including, without limitation, provisions to:

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defer the delivery of shares or recognition of taxable income relating to awards or cash payments derived from the awards (provided that such a deferral will not result in an increase in the number of shares issuable under the Plan);

•

purchase shares under stock options or SARs in installments;

•

pay for stock options using cash or other shares or other securities of the Company;

•

allow the participant to receive dividend payments or dividend equivalent payments for the shares subject to the award (both before and after such shares are earned, vested or acquired), which payments may be either made currently or credited to an account for the participant (but no payments may be made for performance shares or performance units that are not earned);

•

restrict resale or other disposition; and

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comply with federal or state securities law and stock exchange requirements.

The terms of awards may vary between participants. In addition, all awards granted under the Plan shall be subject to the terms of the Company’s Clawback Policy, which is described above in “Executive Compensation—Compensation Discussion and Analysis—Clawback Policy.”

Adjustments

If the Committee determines that certain corporate transactions (which could include among other things a dividend or other distribution, recapitalization, stock split, reorganization, merger, repurchase, exchange of shares, issuance of warrants or other rights to purchase shares or other Company securities, or other similar corporate transactions) affect the shares such that a proportionate substitution or adjustment is appropriate to prevent dilution or enlargement of the benefits intended to be made available under the 2011 Stock and Incentive Plan, then the Committee will adjust:

•

the number and type of shares subject to the Plan, and that may, after the event, be made the subject of awards;

•

the number and type of shares subject to outstanding awards; and

•

the grant, purchase or exercise price with respect to any award.

The Committee may, in connection with any merger, consolidation, acquisition of property or stock, or reorganization, and without affecting the number of shares otherwise reserved or available under the 2011 Stock and Incentive Plan, authorize the issuance or assumption of awards upon terms it deems appropriate.

Change of Control

Except to the extent the Committee provides a more favorable result to holders of awards, upon a participant’s termination of employment following a Change of Control (as defined in the Plan):

•

all outstanding options and SARs shall vest automatically;

•

the restrictions on restricted stock and RSUs shall lapse;

•

the restrictions on performance shares and performance units shall lapse as provided in the agreements evidencing the awards;

•

each holder of RSUs, performance shares or performance units that have been earned but not yet paid will receive cash equal to the value of the RSUs, performance shares and/or performance units;

•

all incentive awards that are earned but not yet paid will be paid, and all incentive awards that are not yet earned will be deemed to have been earned pro rata, as if the performance goals were attained as of the effective date of the Change of Control, based on the participant’s target award opportunity with respect to such award multiplied by the percentage of the period elapsed as of the date of the Change of Control; and

•

all holders of awards with respect to which dividend equivalents or similar amounts have been credited will receive a cash payment equal to the value of such dividend equivalents or similar amounts.

Transferability

Awards granted under the 2011 Stock and Incentive Plan are not transferable other than by will or by law. Additionally, the Committee may allow a participant to designate a beneficiary to exercise the award after the participant’s death.

Further Amendment and Termination of the 2011 Stock and Incentive Plan

The 2011 Stock and Incentive Plan will terminate, and awards may not be granted, more than ten years after the date our shareholders last approve the Plan, unless the Board earlier terminates the Plan.

The Board may amend, alter, suspend, discontinue or terminate the 2011 Stock and Incentive Plan at any time, except that shareholders must approve any amendment of the Plan if (i) such approval is required by law or regulation or the listing requirements of the New York Stock Exchange (the “NYSE”) or any principal securities exchange or market on which our common stock is then traded; or (ii) the amendment materially increases the number of shares reserved for issuance or relates to participant limitations (subject to the adjustment provisions provided in the Plan), shortens the restriction periods for restricted stock, RSUs, performance shares or performance units, or amends the repricing provisions.

Repricing

The Committee may not decrease the exercise price for any outstanding stock option or SAR granted under the Plan after the grant date or allow a participant to surrender an outstanding stock option or SAR granted under the Plan for a new stock option or SAR with a lower exercise price.

Amendment, Modification or Cancellation of Awards

Subject to the requirements of the 2011 Stock and Incentive Plan and its restrictions on repricing, and so long as any amendment or modification does not increase the number of shares issuable under the Plan (except as permitted by the adjustment provisions described previously), the Committee can:

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change any award or waive any restrictions or conditions applicable to any award; and

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amend or cancel the terms applicable to any awards by mutual agreement between the Committee and the participant or any other persons as may then have an interest in the award.

The Committee does not need the consent of a participant (or other interested party) to cancel an award pursuant to the adjustment provisions described previously.

Withholding

The Company may withhold the amount of any tax attributable to any amount payable or shares deliverable under the 2011 Stock and Incentive Plan after giving notice to the person entitled to receive such amount or shares, and we can defer making payment or delivery if any such tax may be pending. The Committee may, in its discretion, permit a participant to pay any related withholding taxes by having the Company withhold shares otherwise issuable under the award, tendering back shares received in connection with such award or delivering other previously owned shares, in each case such shares having a fair market value equal to the amount to be withheld.

New Plan Benefits; Stock Price

The number of awards that will be granted under the 2011 Stock and Incentive Plan in the future to any single key employee or group of key employees is not determinable at this time. However, the following awards were issued on February 12, 2015, pursuant to the Plan, and are not subject to shareholder approval:

NEW PLAN BENEFITS


Name and Position	Dollar Value ($)⁽¹⁾		Number of Units⁽²⁾		Options
Nicholas T. Pinchuk Chairman, President and Chief Executive Officer	$	8,086,294		25,316		130,000
Aldo J. Pagliari Senior Vice President–Finance and Chief Financial Officer		2,107,250		6,521		34,000
Thomas J. Ward Senior Vice President and President–Repair Systems & Information Group		2,625,726		8,439		42,000
Thomas L. Kassouf Senior Vice President and President–Snap-on Tools Group		2,253,815		6,904		37,000