SNAP-ON INCORPORATED

COMBINED PERFORMANCE SHARE AND
MANAGEMENT INCENTIVE AWARD AGREEMENT

        THIS AGREEMENT (“Agreement”) is made and entered into as of _______,
____ by and between SNAP-ON INCORPORATED, a Delaware corporation (the
“Company”), and _______________, an employee of the Company or of a subsidiary
of the Company (the “Key Employee”).

W I T N E S S E T H :

        WHEREAS, the Organization and Executive Compensation Committee of the
Board of Directors of the Company (such committee, whether acting as such or
through the ad hoc committee of the Board to which such committee delegated its
authority in connection with this Agreement, the “Committee”), by actions of the
Committee on ______, approved the grant (the “Grant”) to the Key Employee of
_______ (the “Grant Number”) Performance Shares and the opportunity to receive a
cash amount (the “Incentive Award”) pursuant to the Company’s 2001 Incentive
Stock and Awards Plan (the “Awards Plan”), to be effective ________;

        WHEREAS, the Key Employee may elect to defer receipt of the Performance
Shares and/or the Incentive Award by executing an Election to Defer Compensation
(the “Deferral Election”) at a later date; and

        WHEREAS, the Grant contemplated that the Grant will also be subject to
the terms of an award agreement, the form of which is to be determined by the
Company, and this Agreement is intended to serve as the additional agreement
that the Grant contemplated.

        NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements herein set forth, the parties hereby mutually covenant and agree
as follows:

1. Performance Shares. Subject to the terms and conditions set forth herein, as
of _______, _____, the Company hereby awards to the Key Employee ______
Performance Shares which the Key Employee shall have the right to receive
subject to the conditions set forth below. Except as otherwise provided herein,
no Performance Share may be sold, transferred or otherwise alienated or pledged.

  Performance Shares are used solely to calculate the number of actual Shares
that the Key Employee may earn in accordance with this Agreement, and do not
create any separate rights or entitlements. Performance Shares represent the
Company’s unfunded and unsecured promise to issue Shares at a future date,
subject to the terms and conditions of this Agreement and the Awards Plan. The
Key Employee has no rights under this Agreement other than the rights of a
general unsecured creditor of the Company.

  Capitalized terms used but not defined in this Agreement shall have the
meanings assigned to them in the Awards Plan.

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2. Right to Receive and Forfeiture Based on Performance. Subject to the terms
and conditions set forth herein,

  (a) The number of Performance Shares earned, and payment of the Incentive
Award, is dependent upon performance relative to revenue growth and RONAEBIT
goals during fiscal 2005, fiscal 2006 and fiscal 2007. The threshold, target and
maximum goals for revenue growth and RONAEBIT during fiscal 2005, fiscal 2006
and fiscal 2007 are as shown on Exhibit 1, and the Key Employee will be entitled
to Shares subject to Performance Shares, and the Incentive Award will be earned,
in accordance with the vesting matrix attached hereto as Exhibit 1 based on
actual performance of the Company relative to the goals subject to the terms
attached hereto as Exhibit 2. As soon as practicable after the Company’s audited
financial statements for fiscal 2005, fiscal 2006 and fiscal 2007 are available
to the Committee, the Committee shall calculate the Company’s revenue growth and
RONAEBIT data for such years in accordance with the terms attached hereto as
Exhibit 2. The Committee shall then plot the revenue growth and RONAEBIT data on
the vesting matrix. The resulting position on the matrix shall determine the
percentage of the Grant Number of Performance Shares and the Incentive Award
that the Key Employee will earn, as set forth below. In the course of
calculating the Company’s revenue growth and RONAEBIT data and plotting the
revenue growth and RONAEBIT data on the vesting matrix, the Committee shall have
the discretion to take action in light of the effects of Costs for Continuous
Improvement Initiatives (as defined on Exhibit 2) that reduces the resulting
percentage in such manner and to such extent as the Committee determines in its
sole discretion. However, the Committee shall have no discretion to take into
account the effects of Special Charges in a manner that increases the resulting
percentage. The Company shall promptly communicate this information to the Key
Employee.

  (b) Unless the Key Employee has previously forfeited such Performance Shares
and the Incentive Award, if the position on the matrix reflects a percentage
greater than 25% and less than or equal to 100%, then the number of Performance
Shares that the Key Employee shall earn shall be equal to the product of such
percentage and the Grant Number. In addition, the Key Employee will earn an
Incentive Award equal to the product of the number of the Performance Shares
that the Key Employee earned and $31.73 (the closing price for a share of the
Company’s Common Stock on March 18, 2005). Upon the Committee’s determination as
provided above, the Key Employee will forfeit any Performance Shares that the
Key Employee has not become entitled to.

  (c) If the position on the matrix reflects a percentage greater than 100%,
then the Key Employee shall earn the Grant Number of Performance Shares and cash
with respect to the Incentive Award equal to the Grant Number multiplied by
$31.73. Unless the Key Employee has previously forfeited the right to earn the
Incentive Award, if the position on the matrix reflects a percentage greater
than 100%, then the Key Employee will receive additional cash in respect the
Incentive Award equal to the product of the percentage in excess of 100%, but
not greater than 50%, multiplied by the Grant Number of Performance Shares
multiplied by two multiplied by $31.73.

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  (d) Following the Committee’s determination of the number of Performance
Shares that have been earned, such Performance Shares will be converted into an
equivalent number of Shares that will be distributed to the Key Employee or, in
the event of the Key Employee’s death, to the Beneficiary (as defined below), as
soon as practicable. The distribution to the Key Employee, or in the case of the
Key Employee’s death, to the Beneficiary, of Shares in respect of the
Performance Shares that were earned shall be evidenced by a stock certificate or
other appropriate means as determined by the Company.

  (e) If any calculation of Shares to be awarded would result in a fraction, any
fraction of 0.5 or greater will be rounded to one, and any fraction of less than
0.5 will be rounded to zero.

3. Forfeiture Based on Employment Status. Subject to the terms and conditions
set forth herein,

  (a) In addition to any rights of the Company under Section 4, the Key Employee
will not have a right to any Performance Shares or any Incentive Award payment
as to which the Committee has not made its determination under Section 2 and not
otherwise vested under Section 5 if the Key Employee’s employment with the
Company or its subsidiaries is terminated for any reason prior to such
determination unless in the case of termination by the Company or a subsidiary
the Committee determines, on such terms and conditions, if any, as the Committee
may impose, that there may nonetheless be the right to receive all or a portion
of the award at the time of such determination or at any other time. Absence of
the Key Employee on leave approved by a duly elected officer of the Company,
other than the Key Employee, shall not be considered a termination of employment
during the period of such leave.

  (b) Notwithstanding the foregoing, in the case of termination of employment as
a result of death, Disability (as defined below) or Retirement (as defined
below), the Key Employee will have the right to earn Performance Shares, and the
Key Employee’s entitlement to cash in respect of the Incentive Award will be
determined, based upon the Company’s actual performance relative to the revenue
growth and RONAEBIT goals over the full performance period, but in lieu of the
amounts under Section 2(b) and (c), the respective amounts, if any, determined
under those subsections shall be reduced by multiplying such amounts by a
fraction representing the portion of the three-year period that elapsed before
the termination of the Key Employee’s employment.

  (c) Whether or not a divestiture of a subsidiary, division or other business
unit (including through the formation of a joint venture) results in termination
of employment with the Company and its subsidiaries will be at the discretion of
the Committee, which discretion the Committee may exercise on a case by case
basis.

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  (d) As used herein,

  (i) “Disability” means a medically-determinable physical or mental condition
that is expected to be permanent and that results in the Key Employee being
unable to perform one or more of the essential duties of the Key Employee’s
occupation or a reasonable alternative offered by the Company or its
subsidiaries, all as determined by the Committee or any successor to such
committee that administers the Awards Plan (as the same may be amended).

  (ii) “Retirement” means termination of employment from the Company and its
subsidiaries on or after satisfying the early or normal retirement age and
service conditions specified in the retirement policy or retirement plan of the
Company or one of its subsidiaries applicable to such Key Employee as in effect
at the time of such termination.

4. Detrimental Activity.

  (a) Activity During Employment. If, prior to termination of the Key Employee’s
employment with the Company or during the one-year period following termination
of the Key Employee’s employment with the Company, the Company becomes aware
that, prior to termination, the Key Employee had engaged in detrimental
activity, then the Committee in its sole discretion, for purposes of this
Agreement, may characterize or recharacterize termination of the Key Employee’s
employment as a termination to which this Section 4 applies and may determine or
redetermine the date of such termination, and the Key Employee’s rights with
respect to the Grant shall be determined in accordance with the Committee’s
determination.

  (b) Activity Following Termination. If, within the three-month period
following the Key Employee’s termination of employment with the Company, the
Company becomes aware that the Key Employee has engaged in detrimental activity
subsequent to termination, then the Key Employee’s rights with respect to the
Grant shall be determined in accordance with any determination by the Committee
under this Section 4.

  (c) Remedies. If the Key Employee has engaged in detrimental activity as
described in subsections (a) and (b), then the Committee may, in its discretion,
declare that the Key Employee has forfeited the Grant in whole or in part and
cause the Company to cause the Key Employee to return any cash or property
actually realized by the Key Employee (directly or indirectly) in respect of the
Grant, in each case whether or not the Committee has made a vesting
determination under Section 2 in respect thereof before or after the date the
Key Employee engaged in the detrimental activity or before or after the date of
termination as determined or redetermined under subsection (a).

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  (d) Allegations of Activity. If an allegation of detrimental activity by the
Key Employee is made to the Committee, then the Committee may suspend the Key
Employee’s rights in respect of the Grant to permit the investigation of such
allegation.

  (e) Definition of “Detrimental Activity.” For purposes of this Agreement,
“detrimental activity” means activity that is determined by the Committee in its
sole discretion to be detrimental to the interests of the Company or any of its
subsidiaries, including but not limited to situations where the Key Employee (i)
divulges trade secrets of the Company, proprietary data or other confidential
information relating to the Company or to the business of the Company or any
subsidiaries, (ii) enters into employment with a competitor under circumstances
suggesting that the Key Employee will be using unique or special knowledge
gained as an employee of the Company to compete with the Company, (iii) uses
information obtained during the course of his prior employment with the Company
for his own purposes, such as for the solicitation of business and competition
with the Company, (iv) is determined to have engaged (whether or not prior to
termination due to retirement) in either gross misconduct or criminal activity
harmful to the Company, or (v) takes any action that harms the business
interests, reputation or goodwill of the Company and/or its subsidiaries.

5. Change in Control. In the event of a “Change of Control” (as defined in the
Awards Plan) prior to the Committee’s determination under Section 2(a),

  (a) Any Performance Shares shall be treated as provided in the Awards Plan,
unless the Key Employee has previously forfeited the right to receive such
Performance Shares; and

  (b) Notwithstanding their treatment under the terms of the Awards Plan, the
Company will immediately make payment in respect of the Incentive Award assuming
performance at maximum levels for the entire period.

6. Voting Rights; Dividends and Other Distributions.

  (a) Until the Key Employee receives Shares pursuant to Section 2(d), the Key
Employee will not have any voting rights with respect to the Performance Shares.

  (b) Until the Key Employee is entitled to receive Shares pursuant to Section
2(d) and subject to any forfeiture thereof, all dividends and other
distributions that would be paid with respect to the Performance Shares shall be
subject to the same restrictions as the Performance Shares with respect to which
they were paid.

  (c) There shall be no dividend right associated with the Incentive Award.

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  (d) Subject to the provisions of this Agreement, the Key Employee shall have,
with respect to the Performance Shares, all other rights of holders of Common
Stock.

7. Tax Withholding; Repurchase.

  (a) It shall be a condition of the obligation of the Company to issue Shares
subject to the Performance Share to the Key Employee or the Beneficiary, and the
Key Employee agrees, that the Key Employee shall pay to the Company, upon its
demand, such amount as may be requested by the Company for the purpose of
satisfying its liability to withhold federal, state, or local income or other
taxes incurred by reason of the award or as a result of the vesting hereunder or
shall provide evidence satisfactory to the Company that the Company has no
liability to withhold. The Company may withhold from cash payable in respect of
the Incentive Award such amount as may be determined by the Company for the
purpose of satisfying its liability to withhold federal, state, or local income
or other taxes incurred by reason of such payment.

  (b) At each time the Company is obligated to issue Shares subject to the
Performance Shares to the Key Employee or the Beneficiary, the Key Employee or
the Beneficiary, as the case may be, may elect to have the Company repurchase up
to 40% of the Shares to be so issued or released at a price equal to the Fair
Market Value (as defined below) on the Tax Date (as defined below). The election
must be delivered to the Company within 30 days after the Tax Date. If the
number of shares so determined shall include a fractional share, then the
Company shall not be obligated to repurchase such fractional share. All
elections shall be made in a form acceptable to the Company. As used herein, (i)
“Tax Date” means the date on which the Key Employee must include in his gross
income tax purposes the fair market value of the Performance Shares and (ii)
“Fair Market Value” means the per share closing price on the date in question in
the principal market in which the Common Stock is then traded or, if no sales of
Common Stock have taken place on such date, the closing price on the most recent
date on which selling prices were quoted.

8. Beneficiary.

  (a) The person whose name appears on the signature page hereof after the
caption “Beneficiary” or any successor that the Key Employee designates in
accordance herewith (the person who is the Key Employee’s Beneficiary at the
time of his death herein referred to as the “Beneficiary”) shall be entitled to
receive the Shares subject to the Performance Shares that the Key Employee was
entitled to and the Incentive Award that is earned following the death of the
Key Employee. The Key Employee may from time to time revoke or change his
Beneficiary without the consent of any prior Beneficiary by filing a new
designation with the Committee. The last such designation that the Committee
receives shall be controlling; provided, however, that no designation, or change
or revocation thereof, shall be effective unless received by the Committee prior
to the Key Employee’s death, and in no event shall any designation be effective
as of a date prior to such receipt.

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  (b) If no such Beneficiary designation is in effect at the time of the Key
Employee’s death, or if no designated Beneficiary survives the Key Employee or
if such designation conflicts with law, then the Key Employee’s estate shall be
entitled to receive the Shares subject to the Performance Shares that the Key
Employee was entitled to and the Incentive Award that is earned following the
death of the Key Employee. If the Committee is in doubt as to the right of any
person to receive such Shares and/or Incentive Award, then the Company may
retain such Performance Shares and the cash payment associated with the
Incentive Award, without liability for any interest thereon, until the Committee
determines the person entitled thereto, or the Company may deliver such Shares
and the cash payment associated with the Incentive Award to any court of
appropriate jurisdiction, and such delivery shall be a complete discharge of the
liability of the Company therefor.

9. Adjustments in Event of Change in Stock. In the event of any
reclassification, subdivision or combination of shares of Common Stock, merger
or consolidation of the Company or sale by the Company of all or a portion of
its assets, or other event which could, in the judgment of the Committee,
distort the implementation of the Grant or the realization of its objectives,
the Committee may make such adjustments in the Grant Number and the number of
Performance Shares under this Agreement, or in the terms, conditions or
restrictions of this Agreement, as the Committee deems equitable; provided that
in the absence of express action by the Committee, adjustments that apply
generally to Performance Shares granted under the Awards Plan shall apply
automatically to the Performance Shares under this Agreement.

10. Powers of the Company Not Affected. The existence of the Grant shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize any combination, subdivision or reclassification of the Common
Stock or any reorganization, merger, consolidation, business combination,
exchange of shares, or other change in the Company’s capital structure or its
business, or any issue of bonds, debentures or stock having rights or
preferences equal, superior or affecting the Common Stock or the rights thereof,
or dissolution or liquidation of the Company, or any sale or transfer of all or
any part of its assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise. Nothing in this Agreement shall
confer upon the Key Employee any right to continue in the employment of the
Company or interfere with or limit in any way the right of the Company to
terminate the Key Employee’s employment at any time.

11. Interpretation by Committee. The Key Employee agrees that any dispute or
disagreement that may arise in connection with this Agreement shall be resolved
by the Committee, in its sole discretion, and that any interpretation by the
Committee of the terms of this Agreement or the Awards Plan and any
determination made by the Committee under this Agreement or such plan may be
made in the sole discretion of the Committee and shall be final, binding, and
conclusive.

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12. Miscellaneous.

  (a) This Agreement shall be governed and construed in accordance with the laws
of the State of Wisconsin applicable to contracts made and to be performed
therein between residents thereof.

  (b) This Agreement may not be amended or modified except by the written
consent of the parties hereto.

  (c) The captions of this Agreement are inserted for convenience of reference
only and shall not be taken into account in construing this Agreement.

  (d) Any notice, filing or delivery hereunder or with respect to the Grant
shall be given to the Key Employee at either his usual work location or his home
address as indicated in the records of the Company, and shall be given to the
Committee or the Company at 10801 Corporate Drive, Kenosha, Wisconsin 53142,
Attention: Secretary. All such notices shall be given by first class mail,
postage pre-paid, or by personal delivery.

  (e) This Agreement shall be binding upon and inure to the benefit of the
Company and its successors and assigns and shall be binding upon and inure to
the benefit of the Key Employee, the Beneficiary and the personal
representative(s) and heirs of the Key Employee, except that the Key Employee
may not transfer any interest in any Performance Shares.

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        IN WITNESS WHEREOF, the Company has caused this instrument to be
executed by its duly authorized officer, and the Key Employee has hereunto
affixed his hand, all on the day and year set forth above.

  SNAP-ON INCORPORATED  

By: ______________________________________   Title:  

Key Employee:

__________________________________________  
Beneficiary: _________________________________  
Address of Beneficiary:

___________________________________________

___________________________________________  

Beneficiary Tax Identification  
No. _______________________________________

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Exhibit 2

1. “RONAEBIT” for purposes of the vesting matrix means a fraction expressed as a
percentage where (i) the numerator is Operating Income (as defined below) and
(ii) the denominator is average net assets employed. “Operating Income” means
earnings from continuing operations before income taxes (including net finance
income) plus interest expense less other income (expense) – net (i.e., less
other income plus other expense) plus Costs for Continuous Improvement
Initiatives (as defined below). “Net assets employed” means total assets minus
cash and cash equivalents and minus all liabilities excluding short-term and
long-term debt. “Average net assets employed” for a period means the average of
net assets employed at the end of the immediately preceding fiscal period and at
the end of each fiscal quarter during the period as reflected in the Company’s
final consolidated balance sheet for the quarter that is prepared as part of the
financial statements used in the preparation of the Company’s externally
reported financial statements.

2. RONAEBIT for purposes of the vesting matrix will be calculated based upon
Operating Income for the period consisting of fiscal 2005, fiscal 2006 and
fiscal 2007 and average net assets employed for the same period.

3. Revenue growth for purposes of the vesting matrix will be calculated by
comparing the Company’s consolidated net sales for fiscal 2007 with the net
sales amounts set forth on the matrix.

4. The amount of each component of a calculation will be determined by reference
to the Company’s audited financial statements for the year(s) in question or the
notes thereto to the extent reflected therein and, if not reflected therein, by
reference to the Company’s unaudited financial statements or the notes thereto
contained in the Company’s periodic reports filed with the Securities and
Exchange Commission to the extent reflected therein and, if not reflected
therein, by reference to the Company’s publicly disclosed earnings release for
the relevant period and, if not reflected therein, by reference to the Company’s
final consolidated balance sheet for the month that is prepared as part of the
financial statements used in the preparation of the Company’s externally
reported financial statements.

5. There is graduated, proportionate vesting between the threshold and target
goals. There is also graduated, proportionate vesting between the target and
outstanding goals.

6. “Costs for Continuous Improvement Initiatives” consist of costs associated
with exit or disposal activities (as defined by Statement of Financial
Accounting Standards (“SFAS”) No. 146), non-recurring charges and non-comparable
charges. Costs or charges will not be Cost for Continuous Improvement
Initiatives if: (i) the cost or charge would cause an award to fail to qualify
for the performance-based exception under Section 162(m) of the Internal Revenue
Code or (ii) the committee of the Board that the Board has established to assist
in the administration of the Plan (the “Ad Hoc Committee”) in its sole
discretion determines that a charge or other expense shall not be considered a
Cost for Continuous Improvement Initiatives (regardless of whether the cost or
charge would otherwise qualify as a Cost for Continuous Improvement
Initiatives). Non-recurring charges consist of charges related to exit or
disposal activities that do not meet the requirements of SFAS No. 146, such as
the write-off of inventory or transition costs that are incurred as a result of
exit or disposal activities and will benefit future operations, as well as
non-exit or disposal activity related charges that are considered non-recurring
in nature. Non-comparable charges consist of costs that do not qualify to be
included in one of the two proceeding categories but are considered one-time,
unusual charges and are reflected as such in the Company’s publicly disclosed
earnings release for the relevant period. To the extent terms used above have
meanings under U.S. GAAP, such meanings shall control.

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7. Except to the extent that doing so would cause an award to fail to qualify
for the performance-based exception under Section 162(m) of the Internal Revenue
Code, the threshold, target and maximum goals for revenue growth and RONAEBIT
will be adjusted upward or downward as appropriate to eliminate the effects of
acquisitions and divestitures subject to the following.

  (a) There will be adjustments only where there is an acquisition or
divestiture (or a combination of multiple acquisitions or divestitures) of a
subsidiary, division or other business unit that had revenues during its last
full fiscal year equal to 1% or more of the Company’s budgeted consolidated net
sales during the year the acquisition or divestiture occurs as reflected in the
Company’s overall annual operating plan as of the commencement of the year as
presented to the Company’s Board of Directors at its February meeting (the
“Final AOP”).

  (b) Adjustments to Revenue Goals. If an acquisition occurs in 2005 or 2006,
then the Ad Hoc Committee will adjust the net sales amounts set forth on the
vesting matrix upward by an amount that is at least equal to the projected
revenue for the acquired business in 2007 as reflected in the financial
projections for the acquired business used as the basis for approval of the
Company’s acquisition purchase price decision by the Company’s Board of
Directors or the highest authority within the Company approving that decision
(the “Pricing Projections”). If an acquisition occurs in 2007, then the Ad Hoc
Committee will adjust the net sales amounts set forth on the vesting matrix
upward by an amount that is at least equal to the projected revenue for the
acquired business in 2007, as reflected in the Pricing Projections for the
acquired business, multiplied by a fraction representing the portion of fiscal
2007 occurring after the acquisition. If a divestiture occurs in 2005 or 2006,
then the Ad Hoc Committee will adjust the net sales amounts set forth on the
vesting matrix downward by an amount that is no greater than the budgeted
revenue for the divested business in the last Final AOP for which the divested
business was included. If a divestiture occurs in 2007, then the Ad Hoc
Committee will adjust the net sales amounts set forth on the vesting matrix
downward on a pro rata basis by an amount that is no greater than the budgeted
revenue for the divested business in 2007, as reflected in the Final AOP as of
the commencement of fiscal 2007, multiplied by a fraction representing the
portion of fiscal 2007 occurring after the divestiture.

  (c) Adjustments to RONAEBIT Goals. If there is an acquisition or divestiture,
then the RONAEBIT percentages on the vesting matrix will be recalculated as set
forth below.

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  “Unadjusted Operating Income” will be estimated as the product obtained by
multiplying the RONAEBIT percentage on the vesting matrix by $1,291,800,000
(which is the net assets of the close of fiscal 2004).

  For an acquisition, the Company’s Unadjusted Operating Income will be adjusted
upward by an amount determined by the Ad Hoc Committee that is at least equal to
the projected Operating Income for the acquired business for the remaining term
of the plan cycle, as reflected in the Pricing Projections for the acquired
business, divided by the total number of years in the plan cycle. For an
acquisition, the Company’s net assets as of the close of fiscal 2004 will be
adjusted upward by an amount determined by the Ad Hoc Committee that is no
greater than the projected average net assets of the acquired business for the
remaining term of the plan cycle, as reflected in the Pricing Projections for
the acquired business, multiplied by the number of quarter ends remaining in the
plan cycle and divided by thirteen.

  For a divestiture, the Company’s Unadjusted Operating Income will be adjusted
downward by an amount determined by the Ad Hoc Committee that is no greater than
the budgeted Operating Income for the divested business for the year in which
the divestiture occurs as reflected in the Final AOP as of the commencement of
such year divided by twelve and multiplied by the number of months remaining in
the plan cycle divided by the total number of months in the plan cycle. For a
divestiture, the Company’s net assets as of the close of fiscal 2004 will be
adjusted downward by an amount determined by the Ad Hoc Committee that is at
least equal to the budgeted net assets for the divested business for the year in
which the divestiture occurs as reflected in the Final AOP as of the
commencement of such year multiplied by the number of quarter ends remaining in
the plan cycle divided by thirteen.

  The RONAEBIT percentages on the vesting matrix will be recalculated by
dividing the adjusted Operating Income by the adjusted net assets (on an
annualized basis).

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