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.  









7 










	 	(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.  









8 










	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.  









9 










        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. _______________________________________











10 










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.  











11 










	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. 


               








12 










	 	
“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). 











13