Document:

exv10w25

 

Exhibit 10.25

BUSINESS OBJECTS S.A.

2001 STOCK INCENTIVE PLAN

Adopted on February 6, 2001 and amended on August 26, 2003, on December 11, 2003, on June 10, 2004,

on August 20, 2004, on August 12, 2005, on October 20, 2005, on March 15, 2006, on May 31, 2006, on

June 7, 2006 and July 20, 2006

     UNOFFICIAL TRANSLATION INTO ENGLISH FOR CONVENIENCE PURPOSES

     In conformity with the provisions of Articles L 225-177 et. seq. of the Law as defined herein,
Business Objects S.A. adopted a plan for the grant to Beneficiaries (defined below) of options
giving right by exercise to subscribe newly-issued shares of the Company or purchase existing
shares of the Company. In furtherance of such decision the board of directors has adopted the
Business Objects S.A. 2001 Stock Option Plan which was approved by the shareholders of the Company
on February 6, 2001.

     Minor amendments to the Plan were made in connection with the adoption of the Subsidiary Stock
Incentive Sub-Plan which were approved by the shareholders of the Company on June 10, 2004,
including renaming the Plan as the “2001 Stock Incentive Plan.”

     The terms and conditions of the Plan are set out below.

1. PURPOSES OF THE PLAN

     The purposes of this Plan are to attract and retain the best available personnel for positions
of substantial responsibility, to provide additional incentive to Beneficiaries and to promote the
success of the Company’s business.

     Options granted under the Plan to U.S. Beneficiaries are intended to be Incentive Stock
Options or Non-Statutory Stock Options, as determined by the Administrator at the time of grant of
an Option, and shall comply in all respects with Applicable U.S. Laws in order that they may
benefit from available fiscal advantages.

2. DEFINITIONS

     As used herein, the following definitions shall apply:

     (a) “Share” means an ordinary share of the Company.

     (b) “Director” means a member of the Board.

     (c) “ADR” means an American Depositary Receipt evidencing an American Depositary Share
corresponding to one Share.

     (d) “Shareholder Authorization” means the authorization given by the shareholders of the
Company in an extraordinary general meeting held on February 6, 2001 permitting the Board to grant
Options.

     (e) “Optionee” means a Beneficiary who holds at least one outstanding Option.

     (f) “Change in Control” shall mean, and shall be deemed to have occurred if:

          (i) any person or entity, other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company acting in such capacity or a corporation owned directly or
indirectly by

 

 

the shareholders of the Company in substantially the same proportions as their ownership of
stock of the Company, becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company’s then outstanding voting securities, or

          (ii) the shareholders of the Company approve a merger or consolidation of the Company with any
other corporation other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) more than 50% of
the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or

          (iii) the shareholders of the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company’s assets to an entity other than an
Affiliated Company.

     (g) “Code” means the United States Internal Revenue Code of 1986, as amended.

     (h) “Board” means the board of directors of the Company.

     (i) “Option Agreement” means a written agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan.

     (j) “Notice of Grant” means a written notice evidencing certain terms and conditions of an
individual Option grant, subject to the terms and conditions of the Plan. The Notice of Grant is
part of the Option Agreement.

     (k) “Beneficiary” means the Chairman of the Board (Président du Conseil d’administration), the
Managing director (Directeur général), the Deputy managing directors (Directeurs Généraux
Délégués), and any Officers or other person employed by the Company or any Affiliated Company.
Neither service as a Director nor payment of a director’s fee by the Company or an Affiliated
Company shall be sufficient to constitute “employment” by the Company or an Affiliated Company.

     (l) “U.S. Beneficiary” means a Beneficiary of the Company or an Affiliated Company residing in
the United States or otherwise subject to United States’ laws and regulations.

     (m) “Exchange Act” means the United States Securities Exchange Act of 1934, as amended.

     (n) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as
defined in Section 424(f) of the Code.

     (o) “Administrator” means the Board, as shall administer the Plan in accordance with Section 4
of the Plan, it being specified that pursuant to Article 11.3 of the by-laws of the Company, any
board member who is eligible to receive Options is prohibited from voting on decisions to grant
Options if such board member is the Beneficiary of such Options;

     (p) “Disability” means total and permanent disability.

     (q) “Incentive Stock Option” means any option granted only to U.S. Beneficiaries that intends
to qualify as an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

 

 

     (r) “Law” means the French Commercial Code.

     (s) “Applicable U.S. Laws” means the legal requirements relating to the administration of
stock option plans under state corporate and securities laws and the Code in force in the United
States of America.

     (t) “Non-statutory Stock Option” means an Option which does not qualify as an Incentive Stock
Option.

     (u) “Officer” means a Beneficiary who is an officer of an Affiliated Company, which is not
incorporated under laws of France, within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

     (v) “Option” means a stock option granted pursuant to the Plan as adjusted from time to time
in accordance with Section 11 of the Plan.

     (w) “Plan” means this 2001 Stock Incentive Plan, as amended from time to time.

     (x) “Option Exchange Program” means a program whereby outstanding Options are surrendered in
exchange for options with a lower exercise price.

     (y) “Continuous Status as a Beneficiary” means that the employment relationship with the
Company or any Affiliated Company is not interrupted or terminated. Continuous Status as a
Beneficiary shall not be considered interrupted in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the Company or any
Affiliated Company, or any successor. A leave of absence approved by the Company shall include
sick leave, military leave, or any other personal leave. For purposes of U.S. Beneficiaries and
Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon
expiration of such leave is guaranteed by statute or contract, including Company policies. If
reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on
the 91st day of such leave any Incentive Stock Option held by a U.S. Beneficiary shall
cease to be treated as an Incentive Stock Option and shall be treated for U.S. tax purposes as a
Non-statutory Stock Option.

     (z) “Company” means Business Objects S.A., a corporation organized under the laws of the
Republic of France.

     (aa) “Affiliated Company” means a company related to the Company in accordance with the
provisions set forth in Article L 225-180 of the Law. As a reminder, as of the day of the adoption
of the Plan:

	 	–	 	companies of which at least one tenth (1/10) of the share capital or voting
rights is held directly or indirectly by the Company;
	 
	 	–	 	companies which own directly or indirectly at least one tenth (1/10) of the
share capital or voting rights of the Company; and
	 
	 	–	 	companies of which at least fifty percent (50%) of the share capital or
voting rights is held directly or indirectly by a company which owns directly or
indirectly at least fifty percent (50%) of the share capital or voting rights of the
Company.

     (bb) “Parent” means a “parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code.

     (cc) “Fair Market Value” The Fair Market Value shall be the closing sale price in euros for
such Share (or the closing bid, if no sales were reported) as quoted on the Eurolist by Euronext
TM or on such other Regulated Market on which the Shares are traded, on the last market
trading day prior to the day of grant, as

 

 

reported by Euronext Paris S.A., or such other source as the Administrator deems reliable.
For the purpose of calculation under Section 5.1 of the Plan, Fair Market Value shall be also the
closing price (as determined here above) for a share subject to an Incentive Stock Option;

     (dd) “Regulated Market” shall mean, as of any date, a stock exchange or system on which the
Shares are traded which is a regulated market (“marché règlementé”) under Article L. 421-1 of the
French Monetary and Financial Code.

     (ee) “Election” shall mean agreement regarding the United Kingdom National Insurance
Liability.

     (ff) “Notification Date” shall mean the date at which the Company notifies to the Optionees
through its local representative the Option Agreement and, as the case may be, its exhibits,
Election, acceptance form, information form and any other exhibit or form attached to the Option
Agreement.

3. STOCK SUBJECT TO THE PLAN AND THE SUBSIDIARY STOCK INCENTIVE SUB-PLAN

     Subject to the provisions of Section 11 of the Plan, the maximum aggregate number of Shares
which may be optioned and issued under the Plan is 3,000,000 Shares per calendar year, being
provided, however, that the total number of Shares issued during each calendar year under the
sixteenth, the seventeenth, the eighteenth, the nineteenth and the twentieth resolutions of the
Company’s shareholders meeting held on June 7, 2006, shall not exceed, for each concerned calendar
year, 3% of the Company’s share capital as of December 31 of the previous calendar year. This
authorization is valid for 24 month and will expire on June 7, 2008.

     Notwithstanding the above, and pursuant to the Law, options issued and outstanding under all
option plans of the Company may not give the right to subscribe to a total number of Company’
shares in excess of one-third of the Company’s share capital.

     If an Option should expire or become unexercisable for any reason, the unsubscribed or
unpurchased Share which was subject thereto shall, unless the Plan shall have been terminated,
become available for future grant under the Plan.

     The pool of share mentioned above shall not be used for the purposed and under the Subsidiary
Stock Incentive Sub-Plan.

4. ADMINISTRATION OF THE PLAN

4.1 Procedure. The Plan shall be administered by the Administrator.

4.2 Powers of the Administrator. Subject to the provisions of the Law, the Shareholder
Authorization, the Plan and U.S. Applicable Laws, the Administrator shall have the authority, in
its discretion:

	 	–	 	to determine the Fair Market Value of the Shares, in accordance with Section 2(cc)
of the Plan;
	 
	 	–	 	to select the Beneficiaries to whom Options may be granted hereunder;
	 
	 	–	 	to determine whether and to what extent Options are granted hereunder;
	 
	 	–	 	to determine the number of Shares to be covered by each Option granted hereunder;
	 
	 	–	 	to approve forms of agreement for use under the Plan, if any;
	 
	 	–	 	to determine the terms and conditions, not inconsistent with the terms and
conditions of the Plan, of any Options granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when Options
may be exercised (which may be based on performance criteria), any vesting
acceleration or waiver of forfeiture restrictions, and any

 

 

	 	 	 	restriction or limitation regarding any Option or the Shares relating thereto, based
in each case on such factors as the Administrator, in its sole discretion, shall
determine;
	 
	 	–	 	to construe and interpret the terms of the Plan and Options granted pursuant to the
Plan;
	 
	 	–	 	to prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans to the Plan established for the
purpose of qualifying for preferred tax treatment under foreign tax laws;
	 
	 	–	 	to modify or amend the conditions and terms of each Option (subject to Section 13.3
of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the Plan;
	 
	 	–	 	to authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Option previously granted by the Administrator;
	 
	 	–	 	to decide and institute an Option Exchange Program subject to the express approval
of the Shareholders;
	 
	 	–	 	to determine the terms and restrictions applicable to Options, including without
limitation to limit or prohibit the exercise of an Option as well as the sale or
conversion into bearer form of Shares acquired pursuant to the exercise of an Option,
during certain periods or upon certain events which the Administrator shall determine
in its sole discretion; and
	 
	 	–	 	to make all other determinations deemed necessary or advisable for administering
the Plan.

4.3 Effect of Administrator’s Decision. The Administrator’s decisions, determinations and
interpretations shall be final and binding on all Optionees, subject to the provisions of Article
13.3 of the Plan.

5. LIMITATIONS

5.1 In the case of U.S. Beneficiaries, each Option shall be designated in the Notice of Grant
either as an Incentive Stock Option or as a Non-Statutory Stock Option. However, notwithstanding
such designation, to the extent that the aggregate Fair Market Value:

          (i) of shares subject to an Optionee’s Incentive Stock Options granted by the Company or any
Affiliated Company, which

          (ii) become exercisable for the first time during any calendar year (under all plans of the
Company or any Affiliated Company)

exceeds $100,000, such excess options shall be treated as Non-statutory Stock Options. For
purposes of this Section 5.1, Incentive Stock Options shall be taken into account in the order in
which they were granted, and the Fair Market Value shall be determined as of the time of the grant.

5.2 Neither the Plan nor any Option shall confer upon an Optionee any right with respect to
continuing the Optionee’s employment with the Company or any Affiliated Company, nor shall they
interfere in any way with the Optionee’s right or the Company’s or Affiliated Company’s right, as
the case may be, to terminate such employment at any time, with or without cause.

5.3 The following limitations shall apply to grants of Options to Beneficiaries:

          (i) No Beneficiary shall be granted, in any fiscal year of the Company, Options to subscribe
or purchase more than 225,000 Shares.

          (ii) Notwithstanding the foregoing, the Company may also make additional grants of up to
450,000 Shares to newly-hired Beneficiaries.

 

 

          (iii) The foregoing limitations shall be adjusted proportionately in connection with any
change in the Company’s capitalization as described in Section 11.

          (iv) No Options may be granted to a shareholder who holds more than 10% of the Company’s share
capital at the time of grant.

5.4 Each Option granted under the Plan in respect of UK Beneficiaries, who are subject to UK Income
Tax and Social Security withholding, shall only be granted provided that the Beneficiary enters
into an Election with the Company or any Affiliated Company. The Election shall be in such form
and contain such provision as the Board shall from time to time approved and as shall have been
agreed with the Board of the Inland Revenue.

5.5 Other than as expressly provided hereunder, including Section 2(k) above, no member of the
Board of Directors shall be eligible, in this sole position, to receive an Option under the Plan.

6. TERM OF PLAN

     The Plan is effective and Options may be granted as of February 6, 2001 the date of the Plan’s
adoption by the shareholders for the purpose of certain local laws. It shall continue in effect
until terminated under Section 13 of the Plan.

7. TERM OF OPTION

     The term of each Option shall be stated in the Notice of Grant, as seven (7) years from the
date of grant in accordance with the Shareholder Authorization. Notwithstanding the foregoing,
Options granted to Beneficiaries of the United Kingdom Affiliated Company or Beneficiaries who are
otherwise residents of the United Kingdom or who are subject to the laws of the United Kingdom and
Options granted to Beneficiaries of the Ireland Affiliated Company or Beneficiaries who are
otherwise residents of Ireland or who are subject to the laws of Ireland shall have a term of seven
(7) years less one (1) day from the day of grant.

8. OPTION EXERCISE PRICE AND CONSIDERATION

8.1 Exercise Price

In the case of an Option to subscribe to new shares, the subscription price of one share shall be
determined by the Board of Directors on the date of the grant of the option in accordance with the
following:

	 	(a)	 	In the case of Incentive Stock Options granted to a U.S. resident beneficiary or
subject to the U.S. laws and regulations at the option grant date, who owns stock
representing more than 10% of the voting rights of all classes of stock of the Company or
any affiliates, to the extent such beneficiary is legally authorized to receive option
grants, the subscription price per share shall be set in euros and shall not be lower than
the higher of the two following prices: (i) 110% of the closing price reported on the
market Eurolist by EuronextTM on the last trading day preceding the grant date,
or (ii) 100% of the average opening prices reported on such market over the twenty trading
days preceding the grant date; as reported by Euronext Paris S.A. or some other publication
that the Board of Directors deems reliable.
	 
	 	(b)	 	In the case of an Incentive Stock Option or Non-Statutory Stock Option granted to any
beneficiary other than a beneficiary described in paragraph (a) above, the subscription
price per share shall be set in euros and shall not be lower than the higher of the two
following prices: (i) 100% of the closing price reported on the market Eurolist by
EuronextTM on the last trading day preceding the grant date, or (ii) 100% of the
average opening prices reported on such market over the twenty trading days preceding the
grant

 

 

	 	 	 	date; as reported by Euronext Paris S.A. or some other publication that the Board of
Directors will deem reliable.

In case of options to purchase shares, which were repurchased by the Company and held as treasury
shares, the purchase price of one share shall be determined by the Board of Directors on the date
of the grant of the option in accordance with the following:

	 	(a)	 	In the case of an Incentive Stock Option granted to a U.S. resident beneficiary or
subject to the U.S. laws and regulations who, at the option grant date, owns stock
representing more than 10% of the voting rights of all classes of stock of the Company or
any affiliates, to the extent such beneficiary is legally authorized to receive option
grants, the purchase price per share shall be set in euros and shall not be lower than the
higher of the three following prices: (i) 110% of the closing price reported on the market
Eurolist by EuronextTM on the last trading day preceding the grant date, (ii)
100% of the average purchase price of the treasury shares held by the Company under
articles L.225-208 and L.225-209 of the French Commercial Code, according to article
L.225-179 of the French Commercial Code or (iii) 100% of the average opening prices
reported on such market over the twenty trading days preceding the grant date; as reported
by Euronext Paris S.A. or some other publication that the Board of Directors will deem
reliable.
	 
	 	(b)	 	In the case of an Incentive Stock Option or Non-Statutory Stock Option granted to any
beneficiary other than a beneficiary described in paragraph (a) above, the purchase price
per share shall be set in euros and shall not be lower than the higher of the three
following price: (i) 100% of the closing price reported on the market Eurolist by
EuronextTM on the last trading day preceding the grant date, (ii) 100% of the
average purchase price of the treasury shares held by the Company under articles L.225-208
and L.225-209 of the French Commercial Code, according to article L.225-179 of the French
Commercial Code or (iii) 100% of the average opening prices reported on such market over
the twenty trading days preceding the grant date; as reported by Euronext Paris S.A. or
some other publication that the Board of Directors will deem reliable.

8.2 Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator
shall fix the period within which the Option may be exercised and shall determine any conditions
which must be satisfied before the Option may be exercised. In so doing, the Administrator may
specify that an Option may not be exercised until the completion of a service period.

8.3 Form of Consideration. The consideration to be paid for the Shares upon exercise of
Options, including the method of payment, shall be determined by the Administrator (and, in the
case of an Incentive Stock Option, shall be determined at the time of grant) and shall consist
entirely of an amount in Euros corresponding to the exercise price which may be paid namely by:

	 	–	 	wire transfer;
	 
	 	–	 	check;
	 
	 	–	 	delivery of a properly executed notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect exercise of
the Option and delivery to the Company of the sale or loan proceeds required to pay
the exercise price;
	 
	 	–	 	proceeds from the resale of shares in case of cash-less exercise; or
	 
	 	–	 	any combination of the foregoing methods of payment.

 

 

9. EXERCISE OF OPTION

9.1 Procedure for Exercise; Rights as a Shareholder

     Any Option granted hereunder shall be exercisable,

	 	(i)	 	subject to the signature by the Optionee of his/her Option Agreement and, as the case may
be, its exhibits, Election, acceptance form, information form and any other exhibit or form
attached to the Option Agreement on or before the 90th day from the Notification Date.
	 
	 	(ii)	 	according to the terms of the Plan and at such times and
under such conditions as determined by the Administrator and set forth in the
Option Agreement.

     An Option may not be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives:

	 	(i)	 	exercise instructions from the person entitled to exercise the
Option:

	 	–	 	either in form of a written notice of exercise
(in accordance with the Option Agreement) together with a share
subscription or purchase form (bulletin d’achat ou de souscription),
	 
	 	–	 	or according to an electronic or other
withdrawal procedure prescribed by the Administrator; and

	 	(ii)	 	full payment for the Shares with respect to which the Option is
exercised. Full payment may consist of any consideration and method of payment
authorized by the Administrator and permitted by the Option Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Optionee or, if requested by the Optionee, in the name of the Optionee and
his or her spouse.

     Upon exercise of any Option in accordance herewith, the Shares issued to the Optionee shall be
assimilated with all other Shares of the Company and shall be entitled to dividends for the fiscal
year in course during which the Option is exercised.

     Granting of an Option in any manner shall result in a decrease in the number of Shares which
thereafter may be available for purposes of the Plan, by the number of Shares as to which the
Option is outstanding.

9.2 Termination of Employment. Upon termination of an Optionee’s Continuous Status as a
Beneficiary during the term of the Option, other than upon the Optionee’s death or Disability, the
Optionee may exercise his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to exercise it at the date
of termination (but in no event later than the expiration of the term of such Option as set forth
in the Notice of Grant). In the absence of a specified time in the Notice of Grant, the Option
shall remain exercisable for ninety (90) days following the Optionee’s termination of Continuous
Status as a Beneficiary. In the case of an Incentive Stock Option, such period of time shall not
exceed ninety (90) days from the date of termination. If, at the date of termination, the Optionee
is not entitled to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified by the Administrator, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

9.3 Disability of Optionee. In the event that an Optionee’s Continuous Status as a Beneficiary
terminates, during the term of the Option, as a result of the Optionee’s Disability, the Optionee
may exercise his or her Option at any time within six (6) months from the date of such termination,
and only to the extent that the

 

 

Optionee was entitled to exercise it at the date of such termination (but in no event later than
the expiration of the term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option, the Shares covered
by the unexercised portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

9.4 Death of Optionee. In the event of the death of an Optionee during the term of the Option, the
Option may be exercised at any time within six (6) months following the date of death, by the
Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent that the Optionee was entitled to exercise the Option at the
date of death (and in no event later than the expiration of the term of such Option as set forth in
the Notice of Grant). If, at the time of death, the Optionee was not entitled to exercise his or
her entire Option, the Shares covered by the unexercised portion of the Option shall immediately
revert to the Plan. If, after death, the Optionee’s estate or a person who acquired the right to
exercise the Option by bequest or inheritance does not exercise the Option within the time
specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.

10. NON-TRANSFERABILITY OF OPTIONS AND SHARES

     An Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any
manner other than by will or by laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.

     The Administrator may restrict the right of an Optionee to sell, convert into bearer form, or
otherwise dispose of the Shares acquired upon exercise of the Option. In accordance with the Law,
such restriction may not exceed three (3) years from the exercise date.

11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET SALE

11.1 Changes in capitalization. In the event of the carrying out by the Company of any of the
financial operations pursuant to Article L 225-181 of the Law such as:

	 	–	 	issuance of shares to be subscribed for in cash offered exclusively to the shareholders,
	 
	 	–	 	capitalization of reserves, profits, issuance premiums and distribution of free shares,
	 
	 	–	 	issuance of bonds convertible or exchangeable into shares offered
exclusively to shareholders,
	 
	 	–	 	distribution of reserves in cash or portfolio securities,
	 
	 	–	 	capital reduction motivated by losses, and
	 
	 	–	 	repurchase of its own Shares at a price higher than market value, pursuant
to Article 174-9A of the decree no. 67-236 of March 23, 1967,

the Administrator shall, in accordance with the conditions provided for in Articles 174-8 et seq.
of the decree no. 67-236 of March 23, 1967 concerning commercial companies, effect an adjustment of
the number and the price of the Shares subject to Option grants.

     The number of Shares which have been authorized for issuance under the Plan as to which no
Options have yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option shall be proportionately adjusted in the event the Company effects a share
capital increase by way of incorporation of reserves, premiums or profits, resulting either in an
increase of the nominal value of the shares or in a free allocation of shares, or effects a reverse
or forward stock split or a combination of shares.

 

 

11.2 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the
Company, to the extent that an Option has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The Administrator may, in the
exercise of its sole discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Administrator and give each Optionee the right to exercise his or her Option as
to which the Option would not otherwise be exercisable. The possibility to exercise Options will
be notified by the Administrator to the Beneficiary. Such notification shall provide the
Beneficiary with information regarding the dissolution or liquidation process.

11.3 Change in Control. In the event of a Change in Control of the Company, each outstanding
Option shall be assumed or an equivalent option or right shall be granted by the successor
corporation or an affiliated company of the successor corporation. The Administrator may, in lieu
of such assumption or new grant, provide for the Optionee the right to exercise the Option as to
the corresponding Shares as to which it would not otherwise be exercisable. If the Administrator
makes an Option exercisable in lieu of assumption or new grant in the event of a Change in Control,
the Administrator shall notify the Optionee that the Option shall be fully exercisable for a period
of fifteen (15) days from the date of such notice, and the Option will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the Change in Control, the Participant receives, with respect to each Option,
the right to purchase, for each Share of Optioned Stock subject to the Option immediately prior to
the Change in Control, the consideration (whether stock, cash, or other securities or property)
received in the Change in Control by holders of Shares or ADRs for each Share or ADR held on the
effective date of the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares); provided, however,
that if such consideration received was not solely common stock of the successor corporation, or
its Parent, the Administrator may, with the consent of the successor corporation, provide for the
consideration to be received upon the exercise of options or rights granted with respect to each
Share of Option Stock subject to the Option, to be solely common stock of the successor corporation
or its Parent equal in fair market value to the per share consideration received by holders of
Shares or ADRs in the merger or sale of assets within the limits set forth by the applicable laws
and regulations.

11.4 Shares subject to the Subsidiary Stock Incentive Sub-Plan. The article 11.1 is not applicable
to the shares issued under the Non-French Subsidiaries Stock Incentive Sub-Plan, for which
provisions of the Non-French Subsidiaries Stock Incentive Sub-Plan shall be applicable.

12. DATE OF GRANT

     The date of grant of an Option shall be, for all purposes, the date on which the Administrator
makes the determination granting such Option. A Notice of Grant shall be provided to each Optionee
within a reasonable time after the date of such grant.

13. AMENDMENT AND TERMINATION OF THE PLAN

13.1 Amendment and Termination. The Administrator may at any time amend, alter, suspend or
terminate the Plan.

13.2 Shareholder Approval. For the purpose of certain local laws, the Company shall obtain
shareholder approval of any Plan amendment to the extent necessary and desirable to comply with
Section 422 of the Code (or any successor rule or statute or other applicable law, rule or
regulation, including the requirements of any exchange or quotation system on which the Shares or
ADRs is listed or quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule or regulation.

13.3 Effect of Amendment or Termination. No amendment, alteration or suspension of the Plan shall
impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the

 

 

Administrator, which agreement must be in writing and signed by the Optionee and the Company. In
addition, the termination of the Plan will only have consequences in the future, and will have no
impact on the outstanding Options granted under the Plan.

14. CONDITIONS UPON ISSUANCE OF SHARES

14.1 Legal Compliance. Shares shall not be issued pursuant to the exercise of Options unless the
exercise of such Options and the issuance and delivery of such Shares shall comply with all
relevant provisions of law including, without limitation, the Law, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, Applicable U.S. Laws
and the requirements of any stock exchange or quotation system upon which the Shares may then be
listed or quoted.

14.2 Investment Representations. As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the time of any such exercise
that the Share is being subscribed only for investment and without any present intention to sell or
distribute such Share if, in the opinion of counsel for the Company, such a representation is
required.

15. LIABILITY OF COMPANY

     The inability of the Company to obtain authority from any regulatory body having jurisdiction,
which authority is deemed by the Company’s counsel to be necessary to the lawful issuance of any
Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue
such Shares as to which such requisite authority shall not have been obtained.

16. INFORMATION OF THE OPTIONEE OF THE GRANT OF THE OPTIONS

     The Company informs the Optionee of the grant of Options by sending him/her the Notice of
Grant to which a copy of the present Plan is attached. As of the time of receipt, the Optionee
reviews all the documents sent by the Company and returns to it an acknowledgement of receipt
provided by the Company for this purpose.

     In addition, the Company shall inform the Optionee within a reasonable time limit of any
modifications of the conditions of the Options granted under the present Plan.

17. LAW AND JURISDICTION AND LANGUAGE

     This Plan shall be governed by and construed in accordance with the laws of the Republic of
France. The Tribunal de Grande Instance of Nanterre, or the court otherwise competent, shall have
jurisdiction to determine any claim or dispute arising in connection herewith.

     The Plan has been adopted in the French language. As a result, only the French version shall
prevail. Any version hereof drafted in another language is for information purposes only.

 

 

BUSINESS OBJECTS S.A.

2001 STOCK OPTION GRANT AGREEMENT

Part I

NOTICE OF STOCK OPTION GRANT

Name:

Address:

You have been granted options to subscribe for Shares of the Company, subject to the
terms and conditions of the 2001 Stock Incentive Plan, as amended (the Plan) and this Option
Agreement, as follows. Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Option Agreement.

Grant Number:

Date of Grant:

Vesting Commencement Date:

Total Number of Options Granted:

Exercise Price per Option:

Total Exercise Price:

Term/Expiration Date:

     Type of Option (for US Beneficiaries only): These Options are intended to be Incentive
Stock Options (“ISOs”). However, in accordance with Section 422(d) of the Internal Revenue Code of
1986 as amended, to the extent that the aggregate fair market value of Shares subject to ISOs which
become exercisable for the first time during any calendar year (under all plans of the Company or
any Affiliated Company) exceeds $100,000, such excess Options is treated as Non-statutory Stock
Options (“NSO”).

     Vesting Schedule: These Options may be exercised, in whole or in part, in accordance
with the following schedule:

provided that the Beneficiary remains in Continuous Status as a Beneficiary, as defined in
section 2 (y) of the Plan, on such dates.

     Termination Period: These Options may be exercised for ninety (90) days after
termination of the Optionee’s employment with the Company or the Affiliated Company as the case may
be. Upon the death or Disability of the Optionee, these Options may be exercised for such longer
period as provided in the Plan. Save as provided in the Plan, in no event shall these Options be
exercised later than the Term/Expiration Date as provided above.

     By your signature and the signature of the Company’s representative below, you and the Company
agree that these Options are granted under and governed by the terms and conditions of the Plan and
this Option Agreement. Moreover, by signing this document you acknowledge receipt of the rules of
the Plan and of this Option Agreement, you represent that you have reviewed the Plan and this
Option Agreement in their entirety, had the opportunity to obtain the advice of counsel prior to
executing this Option Agreement and fully understand all provisions of the Plan and Option
Agreement. You hereby agree to accept as binding, conclusive and final all decisions or
interpretations of the Administrator upon any questions relating to the Plan and Option Agreement.
You further agree to notify the Company upon any change in the residence address indicated above.
You acknowledge and agree that this Option and its vesting schedule does not constitute an express
or implied promise of continued employment and shall not interfere in any way with your right or
the Company’s right to terminate your employment at any time. Further, the benefits, if any,
arising from your Option, shall not form any part of your wages, pay or remuneration or count as
wages, pay or remuneration for pension fund or other purposes. In no circumstances shall you on
ceasing to hold your office or employment be entitled to any compensation for any loss of any right
or benefit or prospective right or benefit under the Plan, which you might otherwise have enjoyed,
whether such compensation is claimed by way of damages for wrongful dismissal or other breach of
contract or by way of compensation for loss of office or otherwise.

     The Company and the Optionee recognize that the Plan has been adopted in the French language.
As a result, only the French version shall prevail. The translation in English is provided for
information purposes only.

	 	 	 	 	 
	OPTIONEE:

	 	FOR BUSINESS OBJECTS S.A.	 	 
	 
	 	 	 	 
	 

	 	 

On behalf of John Schwarz, Chief Executive Officer
	 	 

 

 

BUSINESS OBJECTS S.A.

2001 STOCK OPTION GRANT AGREEMENT

Part II

TERMS AND CONDITION

1. Grant of Options. The Plan Administrator of the Company hereby grants to the
Optionee named in the Notice of Grant attached as Part I of this Agreement (the “Optionee”), number
of options (“Options”) as set forth in the Notice of Grant each giving right by exercise to
subscribe one Share, at the exercise price per Option set forth in the Notice of Grant (the
“Exercise Price”), subject to the terms and conditions of the 2001 Stock Incentive Plan, which is
incorporated herein by reference. Subject to Section 13.3 of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of this Option Agreement,
the terms and conditions of the Plan shall prevail.

     If designated in the Notice of Grant as an ISO, this Option is intended to qualify as an ISO
under Section 422 of the Code. However, if this Option is intended to be an ISO, to the extent
that it exceeds the $100,000 rule of Code Section 422(d) it shall be treated as a Non-statutory
Stock Option.

2. Exercise of Options

(a) Right to Exercise. These Options are exercisable subject to the signature by the
Optionee of his/her Option Agreement and, as the case may be, its exhibits, Election, acceptance
form, information form and any other exhibit or form attached to the Option Agreement on or before
the 90th date from the Notification Date. These Options are exercisable during the term
in accordance with the Vesting Schedule set out in the Notice of Grant and the applicable
provisions of the Plan and this Option Agreement. In the event of Optionee’s death, Disability or
other termination of Optionee’s employment, the exercisability of the Options is governed by the
applicable provisions of the Plan and this Option Agreement.

(b) Method of Exercise. These Options are exercisable (i) by delivery of an exercise
notice, in the form attached hereto (the “Exercise Notice”), comprising a share subscription form
(bulletin de souscription) which shall state the election to exercise the number of Options
indicated in such Exercise Notice (the “Exercised Options”), and such other representations and
agreements as may be required by the Company pursuant to the provisions of the Plan, or (ii) by
following an electronic or other withdrawal procedure prescribed by the Administrator. In case of
method of exercise described in (i) above, he Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company or its designated representative
or by facsimile message to be immediately confirmed by certified mail to the Company. In cases (i)
and (ii) described above, the exercise instruction shall be accompanied by payment of the aggregate
Exercise Price as to all Exercised Options. These Options shall be deemed to be exercised upon
receipt by the Company of such fully executed Exercise Notice or the electronic exercise
instruction duly notified according to procedure prescribed by the Administrator, accompanied by
such aggregate Exercise Price.

     No Shares shall be issued pursuant to the exercise of these Options unless such issuance and
exercise complies with all relevant provisions of law and the requirements of any stock exchange or
quotation service upon which the Shares are then

listed. Assuming such compliance, for income tax purposes the Shares acquired by exercise of
Options shall be considered transferred to the Optionee on the date Options are exercised with
respect to such Shares.

3. Method of Payment. Payment of the aggregate Exercise Price shall be by any of the
following method, or a combination thereof, at the election of the Optionee: (i) wire transfer;
(ii) check; (iii) delivery of a properly executed notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect exercise of the Option and
delivery to the Company of the sale or loan proceeds required to pay the exercise price; (iv)
proceeds from the resale of shares in case of cash-less exercise, or (v) any combination of the
foregoing methods of payment.

     In accordance with Article 4.2.4 of the Company French Savings Plan, the beneficiary may use
holdings under the Company Savings Plan for the exercise of the Options. In such case, the
obtained shares are contributed to the Company Savings Plan and are subject to a five-year lock-up
period.

4. Non-Transferability of Options. These Options may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the
lifetime of the Optionee only by the Optionee. The terms of the Plan and this Option Agreement
shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

5. Terms of Options. Except as provided in the Plan, these Options may be exercised only
within the term set out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

6. UK National Insurance Liability. By virtue of your acceptance of the rules of the Plan,
you are required to enter into an Election with the Company or Affiliated Company in the form
attached to this Agreement marked attachment C. In the event that the Optionee fails to enter into
the Election as required by the terms of this Agreement, by signing and returning Attachment C to
the Company within a period of 28 days of the date of receipt of this Agreement, then these Options
shall terminate and shall there upon become null and void.

7. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The
Plan and this Option Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and agreements of the
Company and Optionee with respect to the subject matter hereof, and may not be modified adversely
to the Optionee’s interest except by means of a writing signed by the Company and Optionee. This
Agreement is governed by the laws of the Republic of France.

     Any claim or dispute arising under the Plan or this Agreement shall be subject to the
jurisdiction of the Tribunal de Grande Instance of Nanterre or the court otherwise competent.

 

 

BUSINESS OBJECTS S.A.

A Société Anonyme with a registered capital of 9,650,548.50 Euros

Registered office: 157-159 rue Anatole France 92309 Levallois – Perret Cedex

R. C. S.: Nanterre B 379 821 994

OPTION EXERCISE NOTICE AND SUBSCRIPTION FORM

Revised: August 22, 2005)

Complete and fax to Allecon Stock Associates prior to contacting Deutsche Bank Alex. Brown

Telephone: +01-248-353-7050                    Fax: +01-248-353-1445

IMPORTANT: If your Option Exercise Notice is illegible, incomplete, incorrect or unsigned, it will be rejected.

     Please Print

     Full
Name:                                                                                                                                             

     Date
of birth:                                         City/State/Country of birth:

     Mailing
Address:                                                             
                                                                                

1) Number, Street, Apartment Number

2)
                                                                              

3) City, State or Province, Postal Code, Country

	 	 	 	 	 	 	 	 	 
	Home Phone:

	 	 	 	 	 	Work Phone:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	Include Country Code (Non-U.S.)

	 	 	 	 	 	Include Country Code (Non-U.S.)
	 
	 	 	 	 	 	 	 	 
	E-mail Address:

	 	 	 	 	 	Work Fax:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 

	 	 	 	 	 	 	 	Include Country Code (Non-U.S.)

                   
                                      
                   
                   
    4) Upon completion of my exercise, please send my Exercise Confirmation Statement via:    
o Postal Service    o Email

I, the undersigned, hereby give notice, effective the date set forth below, that I exercise the
following stock options previously granted to me by Business Objects S.A. under the 1993, the
1994, and/or the 1999 Stock Options Plan(s) and/or the 2001 Stock Incentive Plan:

1

 

     (ii) OPTION EXERCISE INFORMATION

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	#	 	 	Exercise Price	 	 	(1) Total Exercise	 	 	 	 	 	 	(v) Shares to be	 
	 	 	(iv) Grant Date	 	 	Options to be	 	 	Per Option (B)	 	 	Price (A) x (B)	 	 	Shares	 	 	Retained	 
	(iii) Grant ID	 	(month/day/year)	 	 	Exercised (A)	 	 	(Euros)	 	 	(Euros)	 	 	to be Sold (C)	 	 	(A) – (C)	 
	 
	 	 	 	 	 	 	 	 	 	€	 	€	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	€	 	€	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	€	 	€	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	€	 	€	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	€	 	€	 	 	 	 	 	 	 	 
	17.2
	 	Totals	 	 	 	 	 	 	 	 	 	€	 	 	 	 	 	 	 	 

     I represent that the above shares are not subject to any encumbrance or other claims and that
Business Objects S.A., Deutsche Bank Alex. Brown, Allecon Stock Associates, and the transfer agent
may rely upon this notice as authorization for this purpose.

I acknowledge that I have received and understand the terms and conditions of the 1993, the
1994, and/or the 1999 Stock Options Plan(s) and/or the 2001 Stock Incentive Plan and the Option
Agreement, and agree to abide by and be bound by their terms and conditions.

18. SECURITIES LAW COMPLIANCE

I do NOT currently have access to, nor am I aware of, any material, non-public inside
information regarding Business Objects S.A. which could or has influenced my decision to purchase
and/or sell this stock. (If you are uncertain as to whether you are a corporate insider or possess
material inside information, please contact the Chief Financial Officer of Business Objects S.A.
prior to exercising any options.) Trading stock based upon your material, non-public inside
information could subject you to personal liability. I acknowledge that if I am subject to Rule
16(b) of the Securities Exchange Act of 1934, I may be liable to Business Objects S.A. for
“short-swing profits”.

2

 

Page 2
Option Excercise Notice and Subscription Form
                    Your
FullName:                               
          

	 	 	 	 	 	 	 
	18.1

	 	 	 	 	 	METHOD OF EXERCISE, PAYMENT OF OPTION EXERCISE PRICE, AND USE OF PROCEEDS
	 
	 	 	 	 	 	 
	o

	 	 	1.	 	 	Exercise and Hold
— (Cash Exercise only — No Sale) 
Please note, if you are a US resident and you do a Cash exercise, you might be subject to
Alternative Minimum Tax. Please consult your tax advisor.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Share Delivery:
	 

	 	 	 	 	 	o Deliver ADSs to my Deutsche Bank Alex. Brown account number                                                          
  .
	 

	 	 	 	 	 	o Register shares in a shareholder account opened in my name with BNP Paribas.

               I understand I must pay upon exercise the option price and additionally, I agree to pay
national, state/provincial, local & FICA/national insurance taxes due upon this exercise.

     You should select one of 2 following Methods of Payment below: 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	     Method of Payment #1:
	 

	 	 	 	o
	 	Deduct cost and, if applicable, taxes from existing funds in my Deutsche Bank Alex Brown Account.
	 

	 	 	 	o
	 	I will send funds for cost and, if applicable, taxes directly to Business Objects S.
A. Human Resources Department, 157-159 rue Anatole France, 92309 Levallois-Perret Cedex,
FRANCE (Note: Payment must be received within 10 days from the date Allecon Stock
Associates receives this form or the exercise will be canceled).
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	     Method of Payment #2: Available to employees of France ONLY
	 

	 	 	 	o
	 	I will pay the cost and applicable withholding taxes using the assets I owned under
the Plan d’Epargne d’Enterprise. FONGEPAR (the Plan Administrator) will send the total
amount directly to Business Objects S. A. (Payment form and instructions are available
on the France HR web site).
	 
	 	 	 	 	 	 
	o 2.	 	 	 	Exercise and Sell
All Shares — (Same Day Sale Exercise only)
	 
	 	 	 	 	 	 
	 	 	 	 	I must provide a verbal sale order to Deutsche Bank Alex. Brown at +01-800-776-7564 or
+01-410-895-4347 (Insiders call +01-415-617-2863). Proceeds after payment of the aggregate option
exercise price and all applicable taxes and fees should be:
	 

	 	 	 	o
	 	credited to my Deutsche Bank Alex. Brown account number                                                          .

	 

	 	 	 	o
	 	wired to my personal bank account. (Wire Instruction Form is available on the
website. You should work directly with a Deutsche Bank Alex. Brown representative to
arrange the wire transfer of your funds).
	 

	 	 	 	o
	 	send a check (US $only) to the address indicated on the first page of this form.
	 
	 	 	 	 	 	 
	o 3.	 	 	 	Exercise and Sell
Some Shares — (Cash and Same Day Sale Exercise) Please note, if you are a US
resident and you do a Cash exercise, you might be subject to Alternative Minimum Tax. Please
consult your tax advisor.
	 
	 	 	 	 	 	 
	 	 	 	 	Sell the number of ADSs
as follows: _______ I must also provide a verbal sale order to Deutsche Bank Alex.
Brown at +01-800-776-7564 or +01-410-895-4347 (Insiders call +01-415-617-2863). I understand cash proceeds
that I must exercise and sell enough ADSs at the market price to provide proceeds at least equal to the sum of the aggregate option exercise price and all applicable taxes and fees. Hold the balance
of my ADSs in my Deutsche Bank Alex. Brown account number _____. Any remaining cash proceeds should be:
	 
	 	 	 	 	 	 
	 

	 	 	 	o
	 	credited to my Deutsche Bank Alex. Brown account number________________________.
	 

	 	 	 	o
	 	wired to my personal bank account. (Wire Instruction Form is available on the
website. You should work directly with a Deutsche Bank Alex. Brown representative to
arrange the wire transfer of your funds)
	 

	 	 	 	o
	 	send a check (US $ only) to the address indicated on the first page of this form.

3

 

I authorize Deutsche Bank Alex. Brown to pay the aggregate amount of the option exercise
price to Business Objects S.A., representing the purchase price of the shares subscribed upon
exercise of the options, and any taxes due.
In the event sales proceeds are not sufficient to cover my tax liability, I will reimburse
Business Objects S.A. for any and all amounts paid by Business Objects S.A. on my behalf.

Optional/Additional Tax Withholding Percentage (US TAXPAYERS ONLY) Federal Tax: ____________% and/or

State Tax: _____________% Consult a tax professional for specific withholding rates.

The above rates will apply to all exercises mentioned on Page 1, unless otherwise indicated. Rates may vary depending on type of grant

exercised, grant restrictions and/or country of residence.

     Note: Above signature below, please print: “Valid for the subscription of                                         shares.”

     Number of Option Exercised

	 	 	 	 	 	 	 
	OPTIONEE SIGNATURE:

	 	 	 	DATE:	 	 
	 

	 	 
	 	 	 	 
	i.
	 	 	 	 	 	 
	STATUS:	 	o Current Employee o Former Employee Date of Termination                                        

     This form will expire at the close of business one month from the date it is received by
Allecon Stock Associates. For former employees, this form will expire in the lesser of one month
or the actual expiration date of your options. For Insiders, this form will expire at the close of
the trading window.

Allecon Stock Associates Approval

I confirm that the optionee is entitled to exercise the options indicated above as of the subscription date indicated above.

By:
                                        
Date:                     
                     Form Expiration Date:                                        

As Agent for Business Objects, S.A.

4SETTLEMENT AGREEMENT  

        This
Settlement Agreement (“Agreement”), dated May 12, 2006, is made and entered into
by and between the Representative Plaintiffs (as defined below) on behalf of themselves
and the Class Members (as defined below), and the Defendants (as defined below) in order
to settle and compromise the Pending Litigations (as defined below) according to the terms
and conditions set forth herein. 

I. RECITALS 

        WHEREAS
Aaron Reeves, Anthony Hobby, Paul Vladyka, Dwight Lankart, and Richard Fortuna are all
Former Franchisees (as defined below) of Snap-on Tools Company LLC, and are borrowers from
Snap-on Credit LLC; and 

        WHEREAS
Aaron Reeves, Anthony Hobby, Paul Vladyka, Dwight Lankart, and Richard Fortuna are
Representative Plaintiffs who filed Class Action Complaints on behalf of themselves and
all others similarly situated in the United States District Court for the District of New
Jersey against Snap-on Tools Company LLC (“Snap-on Tools”) (Civil Action No.
2:03 cv 04563 and Snap-on Credit LLC (“Snap-on Credit”) (Civil Action No. 2:04
cv 5411 (FSH)) (collectively “the New Jersey Actions”) alleging violation of the
federal RICO Act; violation of the Fair Labor Standards Act; violation of the New Jersey
Franchise Practices Act; violation of the New Jersey Consumer Fraud Act; fraud; negligent
misrepresentation; breach of contract; breach of fiduciary duty; breach of the covenant of
good faith and fair dealing; and for injunctive relief; and 

        WHEREAS
the District Court in New Jersey stayed the New Jersey Actions and referred them to
arbitration pursuant to the arbitration provisions of certain Franchise Agreements and the
arbitration provisions of certain Loan Agreements; and 

        WHEREAS,
separate Demands for Class Action Arbitration were filed with the American Arbitration
Association (“AAA”) by the Representative Plaintiffs in the New Jersey Actions,
including: 

	 	
Aaron
Reeves v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01821 04 (“the
ReevesArbitration”)  

	 	
Anthony
D. Hobby v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01884 04 (“the
HobbyArbitration”)  

	 	
Paul
Vladyka v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01814 04 (“the
VladykaArbitration”)  

	 	
Richard
Fortuna v. Snap-on Tools Company, LLC et al. 
AAA Docket No. 11 114 011818 04 (“the
FortunaArbitration”)  

	 	
Dwight
Lankart v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01931 04 (“the
LankartArbitration”)  

and; 

        WHEREAS
the Corporate Defendants (as defined below) filed counterclaims in certain of the
above-referenced arbitrations seeking monies alleged to be owed by the Representative
Plaintiffs; and 

-2- 

        WHEREAS
Clause Construction Hearings were conducted pursuant to the AAA’s Rules governing
class actions during 2005 in the Hobby, Fortuna and Lankart
Arbitrations; and 

        WHEREAS
the arbitrators in the Hobby and Fortuna Arbitrations ruled in
separate Opinions that the arbitration provisions in certain Franchise Agreements and Loan
Agreements drafted by the Corporate Defendants permitted class actions in arbitration; and 

        WHEREAS
the arbitrator reserved decision and has not yet rendered a decision on either the Clause
Construction issues or Snap-on Tools’ Motion to Dismiss the Complaint in the
Lankart Arbitration; and 

        WHEREAS
the Vladyka and Reeves Arbitrations have been stayed pending
settlement discussions; and 

        WHEREAS
Ronald DeSantis, Shawn Dickmyer, Scott Factor, William Bradley Freeman, Scott Ingenito,
and Matt Setser are all Former Franchisees of Snap-on Tools and are borrowers from Snap-on
Credit; and 

        WHEREAS
Ronald DeSantis, Shawn Dickmyer, Scott Factor, William Bradley Freeman, Scott
Ingenito, and Matt Setser are Representative Plaintiffs who filed a Class Action Complaint
on behalf of themselves and all others similarly situated against the Corporate Defendants
and Individual Defendants (as defined below) in the Circuit Court Of The Sixth Judicial
Circuit In And For Pinellas County, Florida, Civil Case No. 04-8709-Cl-7 (the
Florida Action) alleging violation of the Florida Deceptive Trade Practices and Unfair
Competition Act, violation of the Florida Franchise Act, fraud, breach of contract, breach
of fiduciary duty and breach of the covenant of good faith and fair dealing; and 

-3- 

        WHEREAS
the Florida Circuit Court in an Opinion and Order dated September 14, 2005, stayed the
Florida Action and referred it to arbitration pursuant to the arbitration provisions of
certain Franchise Agreements and certain Loan Agreements; and 

        WHEREAS
separate Demands for Class Action Arbitration were filed with the AAA by the
Representative Plaintiffs in the Florida Action, including: 

	 	
Ronald
DeSantis v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 0228605 (“the
DeSantisArbitration”)  

	 	
Shawn
Dickmyer v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02285 05 (the Dickmyer
Arbitration”)  

	 	
Scott
Factor v. Snap-on Tools Company, LLC et al. 
AAA Docket No. 11 114 02284 05 (“the
Factor Arbitration”)  

	 	
William
Bradley Freeman v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02283 05 (“the
Freeman Arbitration”)  

	 	
Scott
Ingenito v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02281 05 (“the
Ingenito Arbitration”)  

	 	
Matt
Setser v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02282 05 (“the
Setser Arbitration”) and;  

        WHEREAS
the AAA has of the date hereof appointed arbitrators in the DeSantis,
Dickmyer, Factor, Freeman, Ingenito and Setser
Arbitrations; and 

        WHEREAS
various appeals in both the Florida Action and New Jersey Action by Defendants (as defined
below) have been denied; and 

-4- 

        WHEREAS
there is currently pending in the Florida Action a Motion for Rehearing filed by the
Defendants before the Florida Circuit Court of Appeals; and 

        WHEREAS
the Parties (as defined below) deny any and all allegations of wrongdoing, fault,
liability or damages of any kinds; and 

        
WHEREAS the Parties and Counsel have conducted a thorough examination and
investigation of the facts and law relating to the subject matters set forth in the
Pending Litigations; and 

        WHEREAS
the Parties and Counsel have determined that settlement is desirable in order to avoid the
time and expense of the Pending Litigations; and 

        WHEREAS
this Settlement is in the public interest; and 

        WHEREAS
there have been intensive arm’s length negotiations between Class Counsel and
Defendants’ Settlement Counsel which resulted in this Agreement; and 

        WHEREAS
the Parties and Counsel believe that this Agreement offers significant benefits to the
Representative Plaintiffs , to the Class Members, to the public interest, and is fair,
reasonable, adequate and in the best interests of all members of the Class; 

        NOW
THEREFORE, the Parties and Counsel stipulate and agree that all claims of the Parties
by or against the other shall be finally settled, discharged and resolved in accordance
with the terms and conditions set forth below. 

-5- 

II. DEFINITIONS 

        2.1
     “Claim Deadline” means the date set forth in the Notice by which Class Members must
submit the Claim Form; 

        2.2
“Claim Form” means a document, substantially in the form of Exhibit A,
attached hereto, that a Class Member must complete and submit to receive the Class
benefits as defined below; 

        2.3
“Claimant” means a Class member who timely submits a properly completed
Claim Form in accordance with the procedures set forth in the Notice Order; 

        2.4
     “Class” means the following: 

          
All persons in the United States who are Former Franchisees or Current Franchisees as
those terms are defined in Paragraph 2.17. Excluded from the Class are (i)
Franchisees that have asserted a claim and were represented by counsel which resulted in a
signed settlement agreement, judgment or arbitration award, (ii) Franchisees not
represented by counsel against whom an arbitration award or a default judgment was entered
in favor of any of the Defendants, and (iii) those Franchisees on the list attached as
Exhibit B.  The Class also excludes all persons who timely and validly request
exclusion from the Class pursuant to the Notice disseminated in accordance with the Notice
Order.  The identities of the Class Members shall be primarily determined from the
databases and records of the Corporate Defendants 

-6- 

        2.5
     “Class Counsel” means the law firms of Marks & Klein, LLP, and McElroy, Deutsch,
Mulvaney & Carpenter, LLP 

        2.6
     “Class Member” means a person who falls within the definition of the Class set forth
in Paragraph 2.4. 

        2.7
“Corporate Defendants” means Snap-on Incorporated, and all subsidiary and
affiliated companies, including Snap-on Tools Company LLC and Snap-on Credit LLC. 

        2.8
     “Court” means the United States District Court for the District of New Jersey,
Newark vicinage. 

        2.9
     “Counsel” means collectively Class Counsel, Defendants’ Litigation Counsel and
Defendants’ Settlement Counsel. 

        2.10
    “Defendants” collectively means the Corporate Defendants and the Individual
Defendants. 

        2.11
    “Defendants’ Litigation Counsel” means the law firm of Jenkens & Gilchrist, Wolff & Samson,
PC; MacFarlane,  Ferguson & McMullen, and Schnader, Harrison Segal & Lewis, LLP  

        2.12
    “Defendants’ Settlement Counsel” means Lew Goldfarb Associates, LLC. 

-7- 

        2.13
“Effective Date” means the earliest date upon which all of the events and
conditions specified in Paragraph 11.1 have been met. 

        2.14
“Fee Application” means the application submitted to the Court by Class
Counsel for an award of attorneys’ fees and reimbursement of expenses and costs
incurred. As used in this Agreement, attorneys’ fees shall mean “reasonable
attorneys’ fees” and expenses and costs incurred shall mean “reasonable and
documented expenses and costs incurred”. 

        2.15
“Fee Award” means the attorneys’ fees and reimbursement of expenses
and costs awarded by the Court to Class Counsel. 

        2.16
“Final” means: 

            (a)          if
no appeal from the Judgment referred to in Paragraph 11.1(c) is filed: the           date
of the expiration of the time for the filing or noticing of any appeal from           the
Judgment; or  

            (b)          if
an appeal from the Judgment is filed, and the Judgment is affirmed or the
          appeal is dismissed: the date of such affirmance or dismissal; or  

            (c)          if
a petition for a writ of certiorari is filed and denied: the date the           petition
is denied; or  

            (d)          if
no petition for a writ of certiorari is filed: the date of expiration of the
          time for the filing of such a petition for a writ of certiorari; or  

-8-   

            (e)          If
such a petition for writ of certiorari is filed and granted: the date of           final
affirmance or final dismissal of the proceeding initiated by the petition           for a
writ of certiorari.  

        2.17
For purposes of this Agreement, “Franchisee” means all individuals or
entities in the United States who, from January 1, 1998 through April 18, 2006, operated
one or more franchises, independent dealerships, and/or conversion franchises, but does
not include trial franchisees or employees or independent contractors of Franchisees.
“Former Franchisee” is a Franchisee who has sent in a notice to terminate
or has been sent a letter of termination or has otherwise terminated by April 18, 2006 and
has checked in prior to May 30, 2006. “Current Franchisee” is a
Franchisee who is not a Former Franchisee. An individual or entity may be a Former
Franchisee as to a particular franchise or franchises and be a Current Franchisee as to
another franchise or franchises. 

        2.18
“Incentive Award” means an additional amount of money to be paid to
certain Class Members subject to Court approval. 

        2.19
“Individual Defendants” means the individually named defendants in the
Florida Action including Michael Montemurro, Kevin Gallagher, Carol Herald, Joseph
Kuebler, Larry Leighton, Rick Smith, David Spence, David Pence and Bart Wignall. 

        2.20
“Judgment” means the final judgment to be entered by the Court pursuant
to the Agreement. 

-9- 

        2.21
“Notice” means a document, substantially in the form of Exhibit C
hereto, to be disseminated by First Class Mail in accordance with the Notice Order,
informing class members of, among other things, the pendency of the Pending Litigations,
the material terms of the proposed Settlement, and their respective rights and obligations
with respect to the proposed Settlement. 

        2.22
“Notice Order” means an order, subject to Court approval, substantially
in the form of Exhibit D hereto, providing for, among other things, preliminary approval
of the Settlement and dissemination of Notice to the Class. 

        2.23
“Parties” means the Representative Plaintiffs and Defendants 

        2.24
“Pending Litigations” means the Florida and New Jersey Actions and the
eleven class action arbitrations pending before the AAA, including: 

	 	
Aaron
Reeves v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01821 04 (“the
ReevesArbitration”)  

	 	
Anthony
D. Hobby v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01884 04 (“the
HobbyArbitration”)  

	 	
Paul
Vladyka v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01814 04 (“the
VladykaArbitration”)  

	 	
Richard
Fortuna v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 011818 04 (“the
FortunaArbitration”)  

	 	
Dwight
Lankart v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 01931 04 (“the
LankartArbitration”)  

-10- 

	 	
Ronald
DeSantis v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 0228605 (“the
DeSantisArbitration”)  

	 	
Shawn
Dickmyer v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02285 05 (the Dickmyer
Arbitration”)  

	 	
Scott
Factor v. Snap-on Tools Company, LLC et al. 
AAA Docket No. 11 114 02284 05 (“the
Factor Arbitration”)  

	 	
William
Bradley Freeman v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02283 05 (“the
Freeman Arbitration”)  

	 	
Scott
Ingenito v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02281 05 (“the
Ingenito Arbitration”)  

	 	
Matt
Setser v. Snap-on Tools Company, LLC et al.  
AAA Docket No. 11 114 02282 05 (“the
Setser Arbitration”).  

        2.25
“Released Claims” means any and all claims, demands, rights, liabilities,
and causes of action of every nature and description whatsoever, known or unknown, at law
or in equity, existing under federal or state law, common or statutory, that any
Representative Plaintiff or other Class Member has asserted or could have asserted against
the Released Snap-on Group or that the Corporate Defendants could have asserted against
any Representative Plaintiff or Former Franchisee Class Member as of the Effective Date.
Nothing in this provision or Settlement Agreement shall be construed to release (i) any
Current Franchisee from its obligations under any agreement with Corporate Defendants,
except to the extent provided in Paragraph 4.2(a), (ii) the Franchisees identified in
Exhibit B, (iii) any Class Member who “opts out” under Paragraph 12.2, or (iv)
the Former Franchisees from their post termination obligations under their franchise
agreement relating to (a) confidentiality, (b) trade secrets, or (c) the use of the
Snap-on Program or trademarks. 

-11- 

        2.26
“Released Snap-on Group” means the Corporate Defendants, including their
present or former directors, officers, partners, joint venture partners, principals,
members, stockholders, owners, employees, agents, servants, attorneys, advisors, personal
or legal representatives, parent companies, divisions, related and affiliated entities,
predecessors and successors, and Individual Defendants. 

        2.27
“Representative Plaintiffs” means the eleven named Representative
Plaintiff Class Members in the Pending Litigations who represent the Class. 

        2.28
    “Settlement” means the settlement set forth in this Agreement. 

        2.29
“Settling Parties” means, collectively, the Released Snap-on Group,
the Representative Plaintiff Class Members and all Class Members. 

        2.30
“Third Party Class Action Administrator” means LECG, LLC, an independent
third party retained to administer the Settlement, if acceptable to the Court. 

        2.31
The plural of any defined terms includes the singular and the singular of any defined term
includes the plural, as the case may be. 

	III. 	RECOGNITION
OF THE CLASS FOR SETTLEMENT PURPOSES  ONLY

	 	3.1 	For
Settlement Purposes Only

-12- 

        This Settlement
Agreement is for settlement purposes only and shall have no precedential value in any
future proceeding as to any of the allegations in the Pending Litigations. This Agreement
further shall have no precedential value in any future proceeding with regard to the
certifiability of any proposed class(es). Corporate Defendants specifically reserve the
right to assert, among other things, that the language in the arbitration provision of the
franchise agreement prohibits class actions, that the putative class should not be
certified and that it would not be manageable to conduct a trial of a class action. It is
understood and agreed that the Parties do not waive any of their rights to contest the
amendment to the class definition in the event the Settlement is not consummated; all of
such rights being expressly reserved. 

	 	3.2 	If
Settlement Not Approved, Any Settlement Class Is Dissolved

        If
the Settlement provided for in this Settlement Agreement is not approved by the Court or
does not become Final following such approval, no class will be considered certified due
to the recitals in this Agreement or, if previously certified for purposes of settlement,
that certification will be voided nunc pro tunc, for all other purposes, without
prejudice to or effect on future motions for class certification. In such event, the
Corporate Defendants will not be deemed to have consented to certification of any class,
and will retain all rights to object to or oppose any motion for class certification,
including certification of the identical class provided for herein or any other class(es). 

	IV.  	SETTLEMENT
CONSIDERATION 

	 	4.1 	Former
Franchisees Shall Receive Monetary Compensation, Releases and Debt Forgiveness

        Former
Franchisees may select either one of the following two options for receiving monetary
compensation for each franchise operated by a Former Franchisee under a separate franchise
agreement: 

	 	
Option
A: To be eligible for monetary compensation under Option A, the Former Franchisee
must return a form that will set forth the Former Franchisee’s verifiable current
address, other required information and be signed by the Former Franchisee. Former
Franchisees exercising Option A shall receive a payment of $1,000 and a Release as
described in paragraph 6.2 hereof.  

-14- 

	 	
Option
B: To be eligible for monetary compensation under Option B, the Former Franchisee
must return a fully completed questionnaire substantially in the form of Exhibit E for
each franchise for which a claim is made. A Former Franchisee who selects Option B will
receive a Release as described in paragraph 6.2 hereof and will be eligible to receive an
amount of compensation not to exceed $20,000 for each franchise operated under a separate
franchise agreement for which he elects Option B. Factors that will enhance a Former
Franchisee’s entitlement to receive the $20,000 maximum amount of compensation
include the number of years of service and the weekly paid sales average at the time of
termination as further defined in Exhibit F. Factors that will detract from a Former
Franchisee’s entitlement to receive the $20,000 maximum amount of compensation
include the amount owed by the Former Franchisee at the time of termination, whether the
Former Franchisee signed a release of all claims against any of the Corporate Defendants
and whether the Former Franchisee is or was an employee of the Corporate Defendants. A
more detailed description of the method, formula, and process for determining
compensation under Option B is provided in the questionnaire attached hereto as Exhibit
E. In particular, the payment amount primarily shall be calculated based on the
application of the formula set forth in Exhibit F by the Third Party Class Action
Administrator.  

	 	        All
Former Franchisee Class Members who do not opt out or are not otherwise excluded from the
Settlement shall receive debt forgiveness as more particularly described in Section 6.2.  

	 	4.2 	Corporate
Defendants Modifications and Enhancements To
Current Business Practices and Monetary Compensation and Reimbursement To Current
Franchisees

-15- 

        Current
Franchisees, in addition to the technology credit described in Paragraph 4.2(d), may
qualify to receive an additional amount of money as a credit to their Snap-on Tools
statement for each franchise operated under a separate franchise agreement based on the
weekly average paid sales (excluding paid sales applicable to second vans) achieved by the
Current Franchisee during a 52 week period ended April 12, 2006 or, if the franchise has
not been operated for 52 weeks as of April 12, 2006, the entire period during which the
franchise operated through April 12, 2006. The amount of the credit, if any, is calculated
in accordance with the schedule included in Exhibit G. To be eligible for any credit, a
Current Franchisee must submit the Current Franchisee Verification Form, substantially in
the form attached as Exhibit J. Further, the Corporate Defendants agree to use reasonable
efforts to make a number of modifications to the Snap-on Tools franchise distribution
model and business practices that are intended to enhance franchisee prospects for
success. These modifications are as follows: 

	 	(a) 	Eliminate,
forever, the provision in the current franchise agreement that                provides as
follows: If, after any fifty two (52) consecutive weeks,
               Standard Franchisee’s average weekly purchases of Products from
Snap-on                during that period, measured by suggested retail prices,
are less than                seventy percent (70%) [or any other percentage] of
the average weekly                purchases of Products by all full-time Franchisees in
the Regional Sales                Office to which Standard Franchisee is assigned
for the same period.

-16- 

        (b)         Reduce
the investment in initial inventory required for new franchisees from
          approximately $83,750 to approximately $74,000;  

        (c)         Offer
financing to qualified franchisees, as determined by Snap-on Credit LLC,           who
have been on a credit hold for 5 of the last 10 weeks prior to the date of
          final approval of this Agreement. The rates and terms of any such financing
will           be based on individual creditworthiness.;  

        Additionally,
the Corporate Defendants will take the following actions. It is acknowledged by the
Parties that Defendants make no representations that the use or implementation of the
practices set forth below will result in success for the franchisee: 

        (d)          Provide
to Current Franchisees a one-time technology credit of up to $1,200 for           each
franchise operated under a separate franchise agreement by a Current           Franchisee
for future acquired technology. To be eligible for the technology           credit, the
Current Franchisee must submit documentation as required by the           Corporate
Defendants to establish that the Current Franchisee has acquired           (through
defined Snap-on Tools purchase/lease channels) one or more items of           technology
as specified in Exhibit H. Failure to provide the documentation to           Corporate
Defendants prior to the Claim Deadline will result in forfeiture of           the
technology credit.  

-17- 

        (e)       Make
reasonably available improved initial training for new franchisees;  

        (f)       Improve
recruitment training practices for Snap-on Tools personnel responsible           for
recruitment of new franchisees in order to maintain the consistency of
          representations made by such personnel with those in the Snap-on Tools’          Offering
Circular and as may be required by state law.  

        (g)       Use
reasonable efforts to improve the process of identifying the list of calls
          toward the goal of enhancing the franchisees’ chances of success. It is
          agreed by the Parties, however, that the outcome of this process may require
          changes to existing lists of calls and the availability of open routes or
          contiguous stops.  

        The
Corporate Defendants commit to use their reasonable efforts to implement the modifications
within a reasonable time period. The Settling Parties recognize that all businesses,
including Corporate Defendants, must adapt their business model over time to respond to
new challenges posed by changes in the business environment, innovations introduced by
competitors, compliance with legal requirements, and other unforeseen requirements
necessary to remain competitive. Nothing in this Settlement Agreement shall preclude
Corporate Defendants from making modifications in their business practices over time that
they deem necessary to the successful pursuit of their business and/or to enhance
franchisee prospects for success. 

-18- 

	 	4.3 	Non-Monetary
Class Benefits To Class Members

        The
Parties recognize that the modifications to current business practices outlined in
Paragraph 4.2 are part of the benefits that will inure to Current Franchisees and future
franchisees. Current Franchisees acknowledge that nothing in this Settlement Agreement may
be construed to relieve Current Franchisees of any obligations that are a part of any
agreement with Corporate Defendants, except to the extent provided in Paragraph 4.2(a). 

	V.  	NOTICE
TO THE CLASS AND ADMINISTRATION OF THE SETTLEMENT

	 	5.1 	Corporate
Defendants Will Bear All Costs and Expenses

        The
Corporate Defendants will undertake to administer this Settlement with the assistance of
the Third Party Class Action Administrator and will bear all costs and expenses of
disseminating the Notice in accordance with the Notice Order and all costs and expenses of
administering the Settlement including but not limited to costs and expenses associated
with receiving and processing Claim Forms and issuing and mailing payments. 

	 	5.2 	Representative
Plaintiffs, Class Members, and Class Counsel Will Not Incur Costs

        Under
no circumstances will the Representative Plaintiffs, Class Members, or Class Counsel have
any liability for any of the costs or expenses set forth in Paragraph 5.1 or any other
fees, costs, expenses, or charges in connection with the administration of the Settlement. 

-19- 

	 	5.3 	Individual
NoticeUnited States First Class Mail

        Within
10 days following the entry of the Notice Order, the Corporate Defendants will provide to
all Class Members direct mail Notice of the Settlement to the last known address of each
of the Class Members substantially in the form of Exhibit C. It is agreed, subject to the
approval of the Court, that there shall be a single mailing, as set forth herein, to each
Class Member and that the Corporate Defendants shall subscribe to a National Change of
Address (“NCOA”) database service offered by the United States Postal Service to
process for the most current known address of Class Members who are Former or Current
Franchisees. There will be no re-mailing for returned or non-delivered notices, except
that the Corporate Defendants will re-mail returned notices to those Class Members when
Notices are returned with a forwarding address. Where the NCOA database indicates that the
last known address in the Corporate Defendants’ databases is invalid and cannot
provide a forwarding address, no Notice will be mailed and such individual is not a Class
Member. 

	 	5.4 	Proof
of Notice

        The
Corporate Defendants shall provide affidavits to the Court, with a copy to Class Counsel,
attesting to the measures undertaken to provide the Notice. 

-20- 

	 	5.5 	Oversight
of Notice Program by Class Counsel

        The
Corporate Defendants shall allow Class Counsel sufficient, reasonable oversight of the
Notice mailing and publication to enable Class Counsel to verify that the Notice has been
mailed as provided herein. 

	VI.  	RELEASES 

	 	6.1 	Discharge
of the Released Snap-on Group

        Upon the
Effective Date, the Representative Plaintiffs and each of the Class Members will be deemed
to have fully, finally, and forever released, relinquished, and discharged the Released
Snap-on Group from all Released Claims, demands, liabilities and causes of action of every
nature and description whatsoever, known or unknown, whether or not concealed or hidden,
asserted or that might have been asserted, arising out of, based upon , or related to the
allegations in the Pending Litigations, the initiation, prosecution, assertion,
litigation, settlement, or resolution of the Pending Litigations or Released Claims
including any derivative claims, including but not limited to claims by any Class
Members’ spouse, offspring or other immediate family member. 

        With
respect to any and all Released Claims, specifically including Unknown Claims, the
Settling Parties stipulate and agree that, upon the Effective Date, the Representative
Plaintiffs and each of the Class Members shall be deemed to have expressly waived and
relinquished, to the fullest extent permitted by law, the provisions, rights and benefits
of Sec. 1542 of the California Civil Code (to the extent applicable), which provides: A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. 

-21- 

        The
Representative Plaintiffs and each of the Class Members, upon the Effective Date, shall be
deemed to have expressly waived and relinquished any and all provisions, rights and
benefits conferred by any law of any state or territory of the United States, or principle
of common law that is similar, comparable or equivalent to Sec. 1542 of the California
Civil Code. 

	 	6.2 	Release
of the Representative Plaintiffs and theClass Members, In Particular, Discharge of Debts

        Upon
the Effective Date, each of the Corporate Defendants will be deemed to have fully,
finally, and forever released, relinquished, and discharged the Representative Plaintiffs,
Class Counsel, and all Former Franchisee Class Members, their spouses, offspring or other
immediate family members from any and all claims, demands, liabilities and causes of
action of every nature and description whatsoever, known or unknown, whether or not
concealed or hidden, asserted or that might have been asserted, arising out of, based upon
, or related to the allegations in the Pending Litigations, the initiation, prosecution,
assertion, litigation, settlement, or resolution of the Pending Litigations or Released
Claims. 

-22- 

        Without
limitation, it is understood and agreed that all debts incurred by any Former Franchisee
Class Member, including all co-signatories and guarantors, to the Corporate Defendants or
their assignees shall be forgiven, released, and forever discharged as part of the
Settlement. It is further understood and agreed that the Corporate Defendants will notify
all Credit Reporting agencies of the discharge of any debt of any Former Franchisee Class
Member within 30 days of the Effective Date of this Agreement. Nothing in this provision
or Settlement Agreement shall be construed to release (i) any Current Franchisee from its
obligations under any agreement with Corporate Defendants, except to the extent provided
in Paragraph 4.2(a), (ii) the Franchisees identified in Exhibit B, (iii) any Class Member
who “opts out” under Paragraph 12.2., or (iv) the Former Franchisees from their
post termination obligations under their franchise agreement relating to (a)
confidentiality, (b) trade secrets, or (c) the use of the Snap-on Program or trademarks. 

	VII  	PROCESS
FOR COURT APPROVAL OF SETTLEMENT

	 	7.1 	Filing

        Within
10 days after the execution of this Agreement, Class Counsel will file a Complaint and
this Agreement together with its Exhibits with the Clerk of the Court. Simultaneous with
the filing of the Complaint, Class Counsel and Defendants’ Litigation Counsel will
jointly apply by motion for Preliminary Approval of the Settlement and entry of the Notice
Order. 

-23- 

	 	7.2 	Approval
of Settlement by the Court and Class Members

        The
Settling Parties shall take all necessary steps to obtain approval of this Settlement
Agreement and, having done so, shall take all necessary steps to obtain Final judicial
approval. As part of the approval process, the Settling Parties and Counsel agree to
cooperate and use their best efforts to finalize this Settlement. Class Counsel will make
a good faith effort to communicate the reasonableness and fairness of the Settlement to
their clients and to secure their clients’ agreement to the terms of Settlement. 

        It
is Defendants’ belief that Class Counsel’s advocating approval of this
Settlement Agreement creates a conflict with those of their current clients, if any, who
elect to opt out of or object to the Settlement. Defendants’ position is based, in
part, upon the plain meaning of ABA Formal Op. 93-371. Class Counsel believes they may
have a conflict but also believes they may have an ethical obligation that is informed by
R.P.C. 5.6(b) to continue to offer their services in representing these clients, if any.
Class Counsel will, however, at the time of presenting this Settlement Agreement to their
current clients, advise their clients that Defendants believe there is a conflict of
interest and that Defendants will seek to disqualify Class Counsel from their
representation of such clients. Class Counsel will advise those clients that it may be in
their best interest to seek new counsel in the event they wish to pursue a separate claim
against Defendants. Class Counsel have no present intention of representing any persons
who are not Class Members with respect to Defendants. 

-24- 

	 	7.3 	Motion
For Preliminary Approval

        The
Motion For Preliminary Approval shall seek one or more orders, in substantially the same
form as Exhibit D, which provide, by their terms, for the following: 

            (a)          Preliminary
approval of the terms of the Agreement;  

            (b)          Provisional
certification of the Class for purposes of the Settlement;  

            (c)          Determination
and approval of the Notice advising the Class Members of the           Settlement, the
rights that will be extinguished under the Agreement, and their           rights and the
processes by which to comment on, object to, or exclude           themselves from the
Settlement, and of the Final Fairness Hearing, which is a           hearing to be held to
determine the fairness, reasonableness, and adequacy of           the Settlement;  

            (d)          Scheduling
of a Final Fairness Hearing to review comments regarding the           Settlement and to
consider the fairness, reasonableness, and adequacy of the           Settlement and the
application for an award of attorneys’ fees and           reimbursement of expenses,
and to issue a Final Order approving the Settlement           and awarding and allocating
reasonable attorneys’ fees and reasonable costs           and expenses to Class
Counsel; and  

-25- 

            (e)          Establishing
procedures and deadlines for Class Members to either request           exclusion from the
Settlement Class, object to the Settlement, or to file papers           in support of the
Settlement with the Court.  

	 	7.4 	Class
Certification

        For
settlement purposes only, the Parties agree that the Court may certify the Class. The
Parties agree to this class certification for, and only for, the purpose of effectuating
the Settlement of the Pending Litigations and is subject to the provisions of Paragraph
3.1. 

	 	7.5 	Efforts

        In
the event the Court fails to grant Preliminary Approval or fails to issue a Final Order,
the Parties and Counsel agree to work in good faith to cure any defect causing such
failure, except that under no circumstance will Defendants be required to consider curing
any defect that would increase the cost of this Settlement to Defendants. 

	 	7.6 	Final
Judgment 

        The
Parties and Counsel shall use all reasonable efforts to promptly obtain a Final Judgment
and satisfy all conditions to make this Settlement Effective pursuant to paragraph 11.1. 

	VIII  	CLAIMS
ADMINISTRATION AND CLAIM DISPUTES 

	 	8.1 	Filing
of Claims

-26- 

        Class
Members shall have 60 days from the mailing of the Notice to submit a Claim Form to the
Third Party Class Action Administrator. The receipt date of the Claim Form will be based
on the postmarked date. 

	 	8.2 	Processing
and Distribution

        Upon submission
of a properly completed Claim Form, Corporate Defendants will use their best efforts to
distribute any settlement benefits to Class Members within 120 calendar days after the
Final Judgment. In the event a Class Member does not agree with the computed amounts of
the settlement benefits, Class Member must provide a letter to the Third Party Class
Action Administrator in writing within 15 calendar days of receipt of their settlement
benefit, explaining the reasons the Class Member does not believe the benefit is correct
and providing supporting documentation. The Third Party Class Action Administrator will
process the received information within 45 days of receipt of the information from Class
Member and provide a written reply to Class Member upon completion of processing. The
Third Party Class Action Administrator will refer any unresolved disputes to Snap-on
Tools. 

	 	8.3 	Notification

        Class
Counsel agrees to notify the Chief Legal Officer of Snap-on Tools within fifteen (15)
business days of the receipt of any written communication from Class Members who dispute
whether benefits were provided or the amount of benefits received pursuant to the
Settlement. Corporate Defendants similarly agree to provide such communications within
fifteen (15) business days to Class Counsel, provided that, if Corporate Defendants, in
their discretion, resolve any such complaint in favor of the complainant within fifteen
(15) business days, then Corporate Defendants are not required to provide a report to
Class Counsel regarding that complaint. 

-27- 

	 	8.4 	Class
Counsel and Snap-on Tools Will Confer

        Class
Counsel and Snap-on Tools shall confer in good faith and use their best efforts to agree
upon the proper resolution of disputes. 

	IX  	ATTORNEYS’ FEES
AND EXPENSES 

	 	         9.1 	Submission
of Fees and Expenses by Class Counsel to                   Court (“Fee Application”)

        Class
Counsel will submit a Fee Application to the Court. The Court shall decide the Fee Award
to Class Counsel. The Fee Award shall be final, binding, and non-appealable. The Fee
Application shall be submitted to the Court at the time of seeking final approval of this
Settlement. The Fee Application will seek an amount not to exceed $13,000,000 in respect
of Class Counsel fees and will also seek reimbursement for costs and expenses reasonably
incurred by Class Counsel. Without objection, Corporate Defendants stipulate and agree to
pay the Fee Award up to $13,000,000 in respect of Class Counsel fees and whatever amount
the Court approves in documented costs and expenses. Class Counsel covenants and agrees
that Class Counsel will not accept any award of attorneys fees in excess of the amount
contained in the Fee Application nor under any circumstances will Defendants be obligated
to pay an award in excess of such amount. Should any counsel other than Class Counsel
petition for an award of attorneys’ fees, expenses or costs, resulting from the
Pending Litigations or the Settlement Agreement, Class Counsel will cooperate with the
Corporate Defendants’ Counsel in opposing any such petition. 

-28- 

	 	9.2. 	Payment
of the Fee Award and Expense Award

        No
later than five (5) business days after the last to occur of either (i) Court Approval of
the Fee Awards, or (ii) Final Judgment as defined in Section 2.16, the Corporate
Defendants, upon reasonable receipt of banking coordinates from Class Counsel, shall
transfer the total amount of the Fee Award to a joint bank account in the name of Marks
and Klein, LLP and McElroy, Deutsch, Mulvaney & Carpenter, LLP, for distribution to
Class Counsel. 

	 	9.3 	Allocation
of the Fee Award

        Class
Counsel shall have neither recourse to nor any claims of any nature whatsoever against
Defendants in the event of a disagreement relative to the allocation of the Fee Award. 

	 	9.4 	Finality
of Settlement Without Approval of Fee Application

        The
procedure for and the allowance or denial by the Court of the Fee Application are not part
of the Settlement, and are to be considered by the Court separately from the Court’s
consideration of the fairness, reasonableness, and adequacy of the Settlement, and any
order or proceedings relating to the Fee Application will not operate to terminate or
cancel this Agreement or affect or delay the finality of the Judgment approving this
Settlement. 

-29- 

	X. 	INCENTIVE
AWARDS FOR REPRESENTATIVE PLAINTIFFS AND  FOR OTHER CLASS           MEMBERS WHO ARE
REPRESENTED BY  COUNSEL AS OF APRIL 18, 2006.

	 	10.1 	Incentive
Awards for Representative Plaintiffs

        It
is understood and agreed that the time and effort expended by the Representative
Plaintiffs including but not limited to the delay incurred in resolving their claims
against the Defendants and the damages incurred to their credit histories, entitle them to
an Incentive Award. Class Counsel will submit an Incentive Award Application for an
Incentive Award to be paid by the Corporate Defendants to each Representative Plaintiff
who has not opted out of the Class. The Incentive Award shall not diminish any of the
other benefits provided to any Class Member. Class Counsel shall seek an Incentive Award
to each Representative Plaintiff who has not opted out of the Class of not more than
$50,000 with the final amount of the Incentive Award to be determined by the Court as
required by law. Defendants agree not to oppose, directly or indirectly, any Incentive
Award Application up to this amount. The Parties agree that the amount of the Incentive
Award allowed by the Court shall be final, binding, non-reviewable, and not a basis for
objecting to or withdrawing from the Settlement. 

-30- 

	 	10.2 	Incentive
Awards For Other Class Members Who Have Been Represented By Counsel On Or Before April 18,
2006 

        Exhibit
I is a list of Former Franchisees, other than the Representative Plaintiffs, who, on or
before April 18, 2006, retained attorneys to represent them in connection with disputes
concerning their franchise which attorneys have contacted Corporate Defendants on their
behalf. Corporate Defendants also recognize that many of these represented Former
Franchisees may have delayed filing Demands for Arbitration in anticipation of becoming a
Class Member. Corporate Defendants acknowledge that should this group of represented
Former Franchisees file Demands for Arbitration, the AAA fees and costs would be expensive
and the defense of the claims time consuming for the Corporate Defendants. Therefore,
Class Counsel will submit an Incentive Award Application for an Incentive Award to be paid
to each Former Franchisee designated on Exhibit I, who has not opted out of the Class, in
connection with disputes concerning their franchise. The Incentive Award shall not
diminish any of the other benefits provided to any Class Member. The amount of the
Incentive Award shall not be more than $15,000 with the final amount of the Incentive
Award to be determined by the Court as required by law. Defendants agree not to oppose,
directly or indirectly, any Incentive Award Application within the terms set forth above.
The Parties agree that the amount of the Incentive Award allowed by the Court shall be
final, binding, non-reviewable, and not a basis for objecting to or withdrawing from the
Settlement. 

-31- 

	XI  	CONDITIONS
FOR EFFECTIVE DATE 

	 	11.1 	The
Effective Date

        The
Effective Date of this Agreement is conditioned on the occurrence of all of the following
events: 

        (a)         The
Court has granted Preliminary Approval of the Settlement;  

        (b)         The
Court has entered the Notice Order;  

        (c)         The
Court has entered the Judgment;  

        (d)         The
Judgment has become Final, as defined in Paragraph 2.16.  

	XII  	OBJECTIONS
AND OPT-OUTS BY CLASS MEMBERS 

	 	12.1 	Objections

        Any
Class Member who intends to object to the fairness, reasonableness or adequacy of the
Settlement must sign and file a written Objection with the Third Party Class Action
Administrator in accordance with the Preliminary Approval Order (Exhibit D hereto) and the
Notice to Class Members (Exhibit C hereto). Class Counsel will file the original
objections with the Clerk of the Court no later than five (5) days prior to the scheduled
Final Fairness Hearing date. 

-32- 

        Class
Members making Objections must set forth their full name, current address, and telephone
number. Objecting Class Members must also state in writing all Objections and the reasons
therefore, and a statement whether the Objector intends to appear at the Final Fairness
Hearing and whether he or she is represented by separate legal counsel. Class Members who
fail to file and serve timely written objections in the manner specified above shall be
deemed to have waived any Objections and shall be permanently foreclosed from making any
Objections (whether by appeal or otherwise) to the Settlement Agreement. 

	 	12.2 	Opt
Outs

        Any
Class Members who elect to exclude themselves or “Opt out” of this Settlement
Agreement must file a written Request to Opt Out with the Third Party Class Action
Administrator in accordance with the Preliminary Approval Order (Exhibit D hereto) and the
Notice to Class Members (Exhibit C hereto). Class Counsel will file the original Requests
to Opt Out with the Clerk of the Court no later than five (5) days prior to the scheduled
Fairness Hearing date. The Request to Opt Out must be signed by the Class Member, and it
must include the Class Member’s name, address, and telephone numbers as well as the
following language: 

REQUEST TO OPT OUT 

-33- 

	 	
I
understand that I am requesting to be excluded from the Class Settlement and that by
opting out, I will receive no benefit under the Class Settlement. I further understand
that if I am excluded from the Class Settlement, I may bring a separate legal action, on
my own behalf, but I may receive nothing or less than what I would have received if I had
filed a claim for benefits under the Settlement of this case. I also understand that to
the extent I would be released under this Settlement, if I opt out, Snap-on Tools and/or
Snap-on Credit have the right to file a claim against me for such matters as debts that
may be alleged by them to be due and owing by me to either or both of them. I understand
that it is Defendants’ belief that Class Counsel’s advocating approval of this
Settlement Agreement creates a conflict with those of their current clients who elect to
opt out of or object to the Settlement, if any. I also understand Class Counsel believe
they may have a conflict but also believe they may have an ethical obligation that is
informed by R.P.C. 5.6(b) to continue to offer their services in representing these
current clients. I further understand that Defendants will seek to disqualify Class
Counsel from their representation of such clients.  

-34- 

	 	12.3 	Relinquishment
of Rights

        Class Members
who opt out of the Settlement relinquish their rights to benefits hereunder and will
neither release their claims against Defendants nor receive a release of claims from
Defendants. Class Members who fail to submit a valid and timely request for exclusion in
accordance with the Preliminary Approval Order (Exhibit D hereto) and the Notice to Class
Members (Exhibit C hereto) are bound by all terms of the Agreement and the Final Order and
Judgment, regardless of whether they have requested exclusion from the Settlement. 

	 	12.4 	Opt
Outs May Not File Objections

        Any
Class Member who submits a timely and valid request for exclusion and opt-out may not file
an Objection to the Settlement and shall be deemed to have waived any rights or benefits
under this Agreement. 

	 	12.5 	Rescission
of Exclusions and Opt-Outs

        The
Parties recognize that some Class Members who initially submit opt-out forms seeking
exclusion may, upon further reflection, wish to withdraw or rescind such opt-out
statements. The Parties agree that Class Members shall be permitted to withdraw or rescind
their opt-out statements by submitting a written “Rescission of Opt-out”
statement to the Third Party Class Action Administrator that includes their name, address,
and telephone number as well as a signed statement that they are rescinding their prior
opt-out statement and now wish to be part of the Settlement. Such written Rescission of
opt-out must be received by the Third Party Class Action Administrator no later than three
days prior to the scheduled Fairness Hearing Date. 

-35- 

	XIII  	RESCISSION
BY CORPORATE DEFENDANTS 

	 	13.1 	Corporate
Defendants’ Option To Rescind Settlement

        Corporate
Defendants shall not have the option to set aside or rescind this Agreement except as
follows: 

	 	(a) 	If
the number of opt-outs is eight percent (8%) or more of the total number of
               Class Members; 

	 	(b) 	If
the number of opt outs of Representative Plaintiffs and Former Franchisees
               who are designated by asterisk as listed on Exhibit I exceed three or
twenty,                respectively; 

	 	(c) 	If
the Court requires a material deviation from the terms of the Settlement
               Agreement; or 

	 	(d) 	If
the number of opt-outs is eight percent (8%) or more of the total number of
               Current Franchisees. 

        Corporate
Defendants may exercise the option to rescind this Settlement by filing with the Court
written notice of such election, with proof of service on Class Counsel, no later than
three days before the Fairness Hearing date set by the Court. Class Counsel has the right
to be heard by the Court in opposition to Corporate Defendants’ attempt to exercise
their option. 

-36- 

	 	13.2 	Bankruptcy
Filing by the Corporate Defendants

        The
Corporate Defendants warrant that none of them have a current intention of filing for
protection under the Bankruptcy laws of the United States and that the economic condition
of all of them are stable and that all of them are financially able to pay all sums
contemplated by this Agreement. With that understanding and representation by the
Corporate Defendants, it is agreed that if a case is commenced with respect to either
Snap-on Tools or Snap-on Credit under the United States Bankruptcy Code, or if a trustee,
receiver or conservator is appointed under any similar law, and if a final order of a
court of competent jurisdiction is entered determining that such Corporate
Defendant’s provision of benefits to Class Members pursuant to the Settlement is a
preference, voidable transfer, fraudulent transfer, or similar transaction, then the
release given and Judgment entered pursuant to this Agreement will be null and void with
respect to such Corporate Defendant. 

	XIV  	MISCELLANEOUS
PROVISIONS 

	 	14.1 	Parties’ Intent
To Consummate Settlement

-37- 

        The
Parties and Counsel acknowledge that it is their intent to consummate this Settlement as
expeditiously as possible. They agree to cooperate to the extent reasonably necessary to
effectuate and implement this Agreement. 

	 	14.2 	Final
and Complete Resolution

        The
Parties intend this Agreement to be a final and complete resolution of all disputes
between them with respect to the Pending Litigations. This Agreement compromises claims
that are contested and will not be deemed an admission by any Settling Party as to the
merits of any claim, defense or to whether the class could be properly certified. The
Parties and Counsel agree that the consideration provided to the Class Members and the
other terms of the Agreement were negotiated in good faith by the Parties and Counsel, and
reflect a Settlement that was reached voluntarily after consultation with competent legal
counsel. 

	 	14.3 	No
Admission of Fault or Liability

        Neither
this Agreement nor the Settlement, nor any act performed or document executed pursuant to
or in furtherance of this Agreement or the Settlement is or may be deemed to be or may be
used as an admission of, or evidence of, the validity of any Released Claims, or of any
wrongdoing or liability of the Parties; or is or may be deemed to be or may be used as an
admission of, or evidence of, any fault, omission, wrongdoing or liability of the Parties
in any civil, criminal, or administrative proceeding in any court, administrative agency
or other tribunal. Defendants may file this Agreement and/or the Judgment in any action
that may be brought against them in order to support any defense or counterclaim,
including without limitation those based upon principles of res judicata,
collateral estoppel, release, good-faith settlement, judgment bar or reduction, or any
other theory of claim preclusion or issue preclusion or similar defense or counterclaim. 

-38- 

	 	14.4 	Confidentiality 

        All
agreements made and orders entered during the course of the Pending Litigations relating
to the confidentiality of information will survive this Agreement. In addition, Class
Counsel will not distribute or contribute to any communication that refers to Corporate
Defendants for the purpose of marketing their services and will not issue any press
releases or make any other public statement through any media, including the internet that
reflects negatively upon or disparages any Parties to this Agreement. Defendants intend to
fully exercise all remedies available to Defendants as the result of any breach of this
Paragraph. 

	 	14.5 	Exhibits
Are Material

        All
of the Exhibits to this Agreement are material and integral parts hereof and are fully
incorporated herein by this reference. 

	 	14.6 	Writing
Required For Modification

-39- 

        This
Agreement may be amended or modified only by a written instrument signed by Corporate
Defendants and by or on behalf of the Parties. 

	 	14.7 	Entire
Agreement

        This
Agreement and the Exhibits attached hereto constitute the entire Agreement among the
Parties and no representations, warranties, or inducements have been made to any Party
concerning this Agreement or its Exhibits other than the representations, warranties and
covenants covered and memorialized herein. 

	 	14.8 	Class
Counsel Authorized To Take All Actions

        Class Counsel,
on behalf of the Class, are expressly authorized by the Representative Plaintiffs to take
all appropriate action required or permitted to be taken pursuant to this Agreement to
effectuate its terms, and are expressly authorized to enter into any modifications or
amendments to this Agreement that Class Counsel deems appropriate. 

	 	14.9 	Authority
of All Persons Executing the Agreement

        Each
counsel or other person executing this Agreement or any of its Exhibits hereby warrants
that such person has the full authority to do so. 

	 	14.10 	Counterparts

        This
Agreement may be executed in one or more counterparts. All executed counterparts and each
of them will be deemed to be one and the same instruments. A complete set of original
counterparts will be filed with the Court. 

-40-  

	 	14.11 	Successors
and Assigns

        This
Agreement will be binding upon, and inure to the benefit of, the successors and assigns of
the Settling Parties. 

	 	14.12 	Court
Will Retain Jurisdiction

        The
Court will retain jurisdiction with respect to implementation and enforcement of all of
the terms of this Agreement, and all Parties hereto submit to the jurisdiction of the
Court for purposes of implementing and enforcing the Settlement. 

	 	14.13 	Language
Not To Be Construed Against Any PartyAs the Drafter 

        None
of the Settling Parties, or their respective Counsel, will be deemed the drafter of this
Agreement or its Exhibits for purposes of construing the provisions thereof. The language
in all parts of this Agreement and its Exhibits will be interpreted according to its fair
meaning, and will not be interpreted for or against any of the Settling Parties as the
drafter thereof. 

	 	14.14 	Choice
of Law and Forum

        This
Agreement and the Exhibits hereto will be construed and enforced in accordance with, and
governed by, the internal, substantive laws of the State of New Jersey without giving
effect to that State’s choice-of-law provisions. The Fee Application and Allocation
shall be determined in accordance with federal law as interpreted and applied by the
United States Court of Appeals, Third Circuit and the United States Supreme Court. 

-41- 

	 	14.15 	Decisions
in Lankart and the Florida Action Not Binding After Approval of Settlement by the
CorporateDefendants 

        It
is understood that various motions and decisions are currently before the courts and
arbitrators in some of the Pending Litigations.  Therefore, it is agreed by the
Parties that any decisions rendered in the Lankart Arbitration will not disqualify
Mr. Lankart as a Representative Plaintiff or as a Class Member. The parties, after
execution of the Agreement by Corporate Defendants, will notify the AAA and Florida Second
District Court of Appeals that the matter has resolved in principle and all Pending
Litigation should be stayed pending a Final Judgment as defined in Section 2.16 of this
Settlement Agreement. 

	 	14.16 	Claimant’s
Tax Obligations

        It
is understood that any payments to Claimants calculated pursuant to this Settlement
Agreement is the gross total due and that no State, Federal or local withholding of taxes
will be made. To the extent that form 1099s are required to be issued as a result of this
settlement, Corporate Defendants, LECG, LLC or any entity associated with the
administration of the Settlement Agreement will issue Claimants 1099s. Each Claimant
agrees to indemnify and hold Corporate Defendants harmless for any amounts that may be
assessed, levied, or otherwise charged against the Corporate Defendants by any taxing or
governmental authority on account of any obligation such Claimants may have for State,
Federal or local income taxes pursuant to this Agreement, or on account of the failure of
the Corporate Defendant to withhold any taxes or make any contributions or other
deductions with respect to such Claimant as a result of the settlement. 

-42- 

        WE
HEREBY AGREE TO THE TERMS, CONDITIONS, AND PROVISIONS OF THIS AGREEMENT. 

	Corporate Defendants:	The Representative Plaintiffs
	
Snap-on Incorporated
	
By:  /s/ Jack D. Michaels	By: /s/ Gerald Marks
	         Jack D. Michaels	         Marks & Klein, LLP
	         Chairman, President and Chief
	         Executive Officer
	
Snap-on Tools Company LLC
	
 	By: /s/ Edward B. Deutsch
		         McElroy, Deutsch, Mulvaney and
	By: /s/ Alan T. Biland	         Carpenter, LLP
	         Alan T. Biland
	         President
	
Snap-on Credit LLC	_____________________________
		Aaron Reeves
	
By: /s/ Joseph Burger
	         Joseph Burger	_____________________________
	         General Manager	Anthony Hobby

-43- 

	Counsel for Corporate Defendants	 
	
By: /s/ Susan F. Marrinan	_____________________________
	       Susan F. Marrinan	Paul Vladyka
	       Vice President, Secretary and
	       Chief Legal Officer
	
By: /s/ Lewis H. Goldfarb	_____________________________
	         Lewis H. Goldfarb	Dwight Lankart
	         Associates, LLC
	         Settlement Counsel
		_____________________________
		Richard Fortuna
	
 	_____________________________
		Ronald DeSantis
	
 	_____________________________
		Shawn Dickmyer
	
 	_____________________________
		Scott Factor
	
 	_____________________________
		William Bradley Freeman
	
 	_____________________________
		Scott Ingenito
	
 	_____________________________
		Matt Setser

-44- 

EXHIBIT A  

CLAIM FORM  

TO FORMER
FRANCHISEES: To make a claim in the above case, please select either
Option A or Option B, and complete and return the appropriate form
along with the required documentation no later than ____________, 2006. 

If you select Option A,
please fill out and return the attached post card. No further documentation
is required. The choice of this Option will qualify you to receive a check for $1,000. 

If you select Option
B, please request the Option B Questionnaire from the
Snap-on Settlement Claim Administrator. The choice of this Option, along with
the furnishing of all required documentation, will qualify you to receive a check in an
amount not to exceed $20,000. The calculation of the amount you may qualify for is
based primarily on a formula set forth in Exhibit F. 

TO CURRENT FRANCHISEES:
To make a claim in the above case, please complete and return the attached Current
Franchisee Verification form, Exhibit J, no later than ______________, 2006. This
form requires that you verify that you are a Snap-on franchisee, the date your franchise
began and your weekly paid sales average for the 52 week period ending April 12, 2006.
Current franchisees may qualify for a technology credit of up to $1,200 and a credit to
their account of up to $8,000, the latter depending on their weekly paid sales average for
the 52 week period ending April 12, 2006. See Exhibit G for the formula to be
applied to calculate the amount of the credit and Exhibit H for a description
of the items eligible for the technology credit. 

Return Claim Form to the following
address. 

	 	
Snap-on
Settlement Claim Administrator 
LECG, LLC
P.O. Box _______________
_____________________________  

Under Penalty of Perjury,
the undersigned claimant swears that all information and documentation submitted
in support of any Claim is true.  

Signed:
___________________________________  

   Dated:  ___________________________________ 

Attachments: Exhibits F,
G, H, J and Option A Postcard 

EXHIBIT B  

Excluded Franchisees  

	 	
Williams,
Scott                          
Haskins, Christopher                 
Stedman, Thomas
                         
Guntrum Andrew                 
Gray, Cy
                         
Townson, Keith                 
Smith, Sean
                         
Newman, Rocky 

EXHIBIT C  

NOTICE OF PENDENCY OF
CLASS ACTION AND PROPOSED SETTLEMENT  

THIS IS A LEGAL
NOTICE. YOUR LEGAL RIGHTS ARE AFFECTED WHETHER YOU ACT OR DON’T ACT. PLEASE READ IT
  CAREFULLY.  

A Settlement has been reached which
resolves a class action lawsuit involving Snap-on Tools Company LLC (“Snap-on
Tools”), Snap-on Credit LLC (“Snap-on Credit), and Snap-on Incorporated,
(“Incorporated”). Snap-on Tools, Snap-on Credit, and Snap-on Incorporated are
collectively referred to herein as “Snap-on”. Snap-on has denied any wrongdoing,
but has agreed to the Settlement described below. By resolving this litigation, the
Settlement enables Snap-on to concentrate its time and resources on the execution of its
forward-focused strategies and business plans for profitable growth. This Notice
summarizes the terms of the Settlement, and tells you how to protect your rights and
participate in the Settlement. The entire Settlement Agreement is available for review at
the Office of the Clerk of the Court, United States District Court for the District of New
Jersey, M.L. King, Jr. Federal Building & U.S. Courthouse, 50 Walnut Street, Newark,
New Jersey 07102. 

1. The Litigation 

On May 16, 2006, a lawsuit entitled
DeSantis et al. v. Snap-on Tools Company, LLC; Snap-on Credit, LLC; and Snap-on
Incorporated, Case No. ___________ was filed in the United States District Court for
the District of New Jersey (the “Court”) as a class action, alleging that
Snap-on engaged in unfair and deceptive business practices (the “Litigation”).
Snap-on denies any wrongdoing whatsoever and assert that their practices and policies
throughout the relevant period were designed and intended to promote the success of its
franchisees, an objective essential to its own ability to succeed and thrive in the
marketplace. 

The Court did not decide in favor of
Snap-on or the plaintiffs. Instead, both sides agreed to a Settlement. By resolving this
issue now, the Settlement enables Snap-on to concentrate its time and resources on the
execution of its forward-focused strategies and business plans for profitable growth. 

2. Class Actions 

In a class action, one or more
persons or businesses called Class Representatives sue on behalf of those with similar
claims. All of these people and businesses together are called a Class or Class Members.
One court resolves the issues for all Class Members, except for those who previously ask
to be excluded (opt-out) from the Class. The Class Members are the people described in
section 3 below. 

3. Class Members 

For purposes of the Settlement, the
Court has preliminarily certified the Class as all individuals or entities in the United
States who, from January 1, 1998 through April 18, 2006, operated a Snap-on 

	 	• 	franchise,

	 	•  	independent
dealership, or

	 	•  	conversion
franchise.

4. Exceptions to the
Class 

The following persons are excluded
from the Class: 

	 	•  	Snap-on
trial franchisees,

	 	•  	employees
or independent contractors of Class members,

	 	•	persons
who have asserted a claim against Snap-on and were represented by counsel which resulted
in a signed settlement agreement, judgment or arbitration award, 

	 	•	franchisees
not represented by counsel against whom an arbitration award or a default judgment was
entered in favor of Snap-on, and 

	 	•  	certain
franchisees identified in the Settlement Agreement.

5. Claim Forms 

If you are a Class member and
Former Franchisee, to make a claim for compensation under Option A of
the Settlement Agreement you must complete the attached Claim Form, and send it along with
any additional information required by the form by regular or express mail to the address
listed on the Claim Form. If you elect Option A and properly complete the Claim Form you
will receive a check for $1,000. To make a claim under Option B of the Settlement
Agreement you must request an Option B Claim Form from the Class Action Settlement Claims
Administrator at the address listed in this Notice. Whether you choose Option A or
Option B, the completed Claim Form must be received by _________________________.
 If you elect Option B you will be eligible to
receive an amount not to exceed $20,000. 

If you are a Class member and
Current Franchisee, to make a claim in the above case, you must complete the attached
Claim Form, and send it, along with any additional information required by the Form, by
regular or express mail to the address listed on the Claim Form. The Claim Form must be
received by _________________. If the Court approves the Settlement and the judgment is
not appealed, you will receive the compensation provided for in this Settlement within 90
days of expiration of any time for appeal. 

6. Settlement Benefits 

To settle the allegations in the
Litigation, Snap-on has agreed to provide Class members with the benefits described below.
For a detailed explanation of the Settlement Benefits you should obtain the Settlement
Agreement in the manner described herein. 

Current franchisees who are Class
members will receive from Snap-on Tools a credit to the accounts of such franchisees in an
amount up to $9,200. Snap-on Tools will also make several changes in its business
practices intended to benefit current and future franchisees and to enhance franchisee
prospects for success. 

Former franchisees who are Class
members, will receive monetary compensation from Snap-on Tools according to a formula set
forth in the Settlement. If you select benefits under Option A you will receive a check
for $1,000. If you qualify for benefits under Option B you may receive an amount not to
exceed $20,000. Snap-on Tools and/or Snap-on Credit will also forgive certain debt
outstanding at the time of the former franchisees’ termination whether you choose
Option A or Option B. 

7. Forfeiture of Rights 

If the Court approves the Settlement,
it will enter a judgment dismissing the Litigation with prejudice as to all Class members
and releasing all claims they may have against Snap-on, including their affiliates and
personnel, arising from the practices alleged in the Litigation. (A complete description
of these released claims is set forth in the parties’ Settlement Agreement. This
means that Class members will be barred from bringing their own lawsuits for recovery on
any such claims. 

8. Attorney’s Fees 

Plaintiffs’ counsel in this and
related cases in other states have pursued these matters on an entirely contingent basis,
and have not received any compensation for their services or any reimbursement of their
out-of-pocket expenses from the inception of the Litigation. Plaintiffs’ counsel
commenced work on this Litigation in May, 2003 and has worked several thousands of hours
to help effectuate this Settlement. As part of the Settlement, Plaintiffs’ counsel
will apply for attorneys’ fees in an amount not to exceed $13,000,000 and
reimbursement of their costs and expenses. In addition, Plaintiffs’ counsel will ask
the Court to award a $50,000 incentive payment to each of the Class representatives, or
named plaintiffs, in recognition of the time, effort, and risks they undertook in pursuing
the lawsuit, and in obtaining the benefits conferred on the Class by the Settlement. 

Any award of attorneys’ fees and
expenses or incentive awards to the named plaintiffs will not reduce the value of benefits
provided to the Class under the Settlement, and will be paid separately by Snap-on. Under
no circumstances will you be required to pay any attorneys’ fee or costs as a
consequence of your decision to participate in the Settlement. 

9. Exclusions from the
Class 

If you meet the Class definition but
choose to exclude yourself from the class and do not want to be barred from bringing your
own lawsuit on such claims, you must validly and timely request exclusion from the class,
as set forth below. 

You do not have to take part in the
Settlement or be a Class member. This is called “excluding” yourself or
“opting-out”. To exclude yourself, you must send a signed Request for Exclusion
to the Snap-on Settlement Claims Administrator, LECG, P.O. Box ______________________ so
that it is received on or before  __________. If you submit a valid and timely Request for
Exclusion, you will not participate in the Settlement. You will not be bound by the
judgment dismissing the Litigation with prejudice, and your claims will not be released
nor will Snap-on claims against you be released. If you exclude yourself, you cannot get
any benefits from the Settlement and you cannot tell the Court you don’t like the
Settlement (which is called “objecting”). If you request to opt-out you must
sign the following statement: 

	 	
I
understand that I am requesting to be excluded from the Class Settlement and that by
opting out, I will receive no benefit under the Class Settlement. I further understand
that if I am excluded from the Class Settlement, I may bring a separate legal action, on
my own behalf, but I may receive nothing or less than what I would have received if I had
filed a claim for benefits under the Settlement of this case. I also understand that to
the extent I would be released under this Settlement, if I opt out, Snap-on Tools and/or
Snap-on Credit have the right to file a claim against me for such matters as debts that
may be alleged by them to be due and owing by me to either or both of them. I understand
that it is Defendants’ belief that Class Counsel’s advocating approval of this
Settlement Agreement creates a conflict with those of their current clients who elect to
opt out of or object to the Settlement, if any. I also understand Class Counsel believe
they may have a conflict but also believe they may have an ethical obligation that is
informed by R.P.C. 5.6(b) to continue to offer their services in representing these
current clients. I further understand that Defendants will seek to disqualify Class
Counsel from their representation of such clients. 

10. Objecting 

If you are a Class member and do not
exclude yourself, you can tell the Court you don’t like the Settlement or some part
of it. This is called objecting to the Settlement and the Court will consider your views.
To do so, you must file your objection with the Court and send copies by regular or
express mail to the Snap-on Class Action Settlement Claims Administrator, LECG, at
 _______________________________________ so that it is received on or before  __________.
Your written objection must include (1) your name, address, and telephone number; (2) a
statement of your views regarding the settlement; (3) any supporting documentation you
wish to submit; and (4) a reference to this Litigation. If you wish to appear and present
your objection orally at the Fairness Hearing, your written objection must contain a
notice that you intend to appear and be heard, a statement of the positions you intend to
present at the hearing and any supporting arguments. You may, but need not, appear in the
Litigation through your own counsel. If you do so, you will be responsible for your own
attorneys’ fees and expenses. You may also comment in support of the Settlement by
following the same procedure set forth above. 

11. Fairness Hearing 

A hearing will be held on
 ___________ before the Honorable  __________ of the United States District Court for the
District of New Jersey. The purpose of the hearing will be to determine (a) whether the
proposed settlement should be approved as fair, reasonable and adequate; (b) whether the
application by Plaintiffs’ counsel for an award of attorneys’ fees and expenses
should be granted; and (c) whether the Litigation and Class members’ claims should be
dismissed with prejudice pursuant to the Settlement. The Court, in the exercise of its
discretion, may defer consideration of the application of Plaintiffs’ Counsel for an
award of attorneys’ fees and expenses until the conclusion of the period for Class
Members to file claims. The Court may decide to adjourn or continue the Fairness Hearing
without further notice to the Class. You may attend the hearing if you wish, but are
not required to do so to participate in the Settlement. 

12. Tax Considerations 

All Class Members are urged to
consult with their tax advisors to determine the particular tax consequences to them
(including the application and effect of federal, state, and local income and other tax
laws) of the Settlement. Nothing contained in this Notice or the Settlement Agreement
shall constitute the provision of any tax advice and neither the representative Plaintiffs
(the Defendants) nor Counsel are providing or making, and shall not be deemed to have
provided any advice or made any representations as to any tax consequences with respect to
any Class Member. 

13. Additional Details 

You can get more information about
this Settlement by contacting the Snap-on Settlement Claim Administrator, LECG at the
address set forth above or at the following telephone number  _________________. Complete
copies of the Settlement Agreement and all other pleadings and papers filed in the
Litigation are available to you for inspection and copying, during regular business hours,
at the Office of the Clerk of the Court, United States District Court for the District of
New Jersey,  _______________________________. Please do not contact the Court regarding
this Notice. 

Dated: ___________________,
2006 

By Order of the United States
District Court for the District of New Jersey. 

EXHIBIT D  

Notice Order  

McELROY, DEUTSCH, MULVANEY & CARPENTER,
LLP 
1300 Mt. Kemble Avenue 
P.O. Box 2075 
Morristown, New Jersey 07962-2075 

(973)
         993-8100

Ronald J. Riccio, Esq. 
Donna duBeth Gardiner, Esq.  

MARKS & KLEIN, LLP 
63
Riverside Avenue 
Red Bank NJ 07701 
(732) 747-7100 
Gerald A. Marks, Esq. 
Justin Klein,
Esq.  

Attorneys for Plaintiffs  

IN THE UNITED STATES
DISTRICT COURT 
FOR THE DISTRICT OF
NEW JERSEY 

 

	
	
	RONALD DESANTIS, MATT SETSER, SHAWN DICKMYER, WILLIAM	 
	BRADLEY FREEMAN, SCOTT FACTOR,SCOTT INGENITO, AARON	Civil Action
	REEVES, ANTHONY HOBBY, DWIGHT LANKART, RICHARD
	FORTUNA,and PAUL VLADYKA,
		Civil Action No.                          
	On behalf of themselves and 
	others similarly situated,
		ORDER GRANTING PRELIMINARY
	                           Plaintiffs,	APPROVAL OF SETTLEMENT
		AND PROVIDING CLASS NOTICE
	vs
	
SNAP-ON TOOLS COMPANY, LLC, 
SNAP-ON CREDIT LLC, and
	SNAP-ON INCORPORATED,
	
                           Defendants
	
	

        WHEREAS,
on May ____, 2006, the Class Representative plaintiffs, Ronald DeSantis, Matt Setser,
Shawn Dickmyer, William Bradley Freeman, Scott Factor, Scott Ingenito Aaron Reeves,
Anthony Hobby, Dwight Lankart, Richard Fortuna and Paul Vladyka, (collectively
“Plaintiffs”), on behalf of themselves and others similarly situated, filed a
Class Action Complaint against defendants Snap-On Tools Company, LLC, Snap-On Credit LLC,
and Snap-on Incorporated (collectively “Defendants”); 

        WHEREAS,
on May ___________, Plaintiffs entered into a settlement agreement (the “Settlement
Agreement”) with Defendants providing for settlement of the class action claims
asserted in Plaintiffs’ Complaint. The Settlement Agreement and Exhibits thereto is
attached hereto as Exhibit A; 

        WHEREAS,
Plaintiffs have moved for, and Defendants have not objected to, entry of this Preliminary
Approval of Settlement Order, inter alia, (i) certifying a class for settlement
purposes only and approving Plaintiffs’ definition of the Settlement Class; (ii)
approving the Settlement as fair, reasonable, and adequate; (iii) establishing a procedure
for Notice to Class Members and filing objections to the Settlement; (iv) establishing a
procedure for opt-outs; and (v) scheduling a hearing for final approval of the Settlement
Agreement; 

        NOW,
THEREFORE, after due consideration and upon a showing of good and sufficient cause for
the entry of this Order 

        IT
IS, ON THIS _____ day of ___________, 2006, ORDERED: 

        1.                 This
Order incorporates by reference the definitions contained in the Settlement
          Agreement.  

        2.                 The
Court hereby certifies, for the purposes of settlement only, pursuant to
          Fed.R.Civ.P. 23(a) and 23(b)(3), the definition of the class that is contained
          in the Settlement Agreement which definition is incorporated herein by
reference           and made a part hereof.  

        3.                 The
Court finds that the Settlement Agreement is preliminarily approved as fair,
          reasonable and adequate.  

        4.                 A
hearing (the “Fairness Hearing”) shall be held before this Court on
          ______________, 2006, at _________, to determine, inter alia, whether
          (i) the proposed Class should be finally certified for settlement purposes;
(ii)           the Settlement Agreement is fair, reasonable, and adequate and should be
          approved by the Court; (iii) a Final Judgment should be entered approving the
          Settlement Agreement in all respects; and (iv) to approve the request of Class
          Counsel for the payment of and allocation among Class Counsel of attorneys fees
          and reimbursement of expenses.  

        5.                 The
Defendants shall cause the Notice, attached to the Settlement Agreement as Exhibit C,
to be provided in accordance with the Settlement Agreement.  

        6.                 Any
interested person permitted by the Court may appear at the Fairness Hearing           to
show cause why the Settlement Agreement should or should not be approved as
          fair, reasonable, and adequate; provided, however, that the Court shall not
          permit any person to be heard or entitled to contest the approval of the terms
          and conditions of the Settlement Agreement, unless that person has complied
with           the applicable provisions of the Settlement Agreement and has (i) served
written           objections and copies of any supporting papers and briefs so that they
are           received no later than ___________, 2006, upon counsel below:  

	 	
McELROY,
DEUTSCH, MULVANEY & CARPENTER, LLP 
1300 Mt. Kemble Avenue 
P.O. Box 2075  
Morristown,
New Jersey 07962-2075 
(973)                      993-8100 
Edward B. Deutsch, Esq. 
Ronald
J. Riccio, Esq. 
Donna duBeth Gardiner,                     Esq.  

	 	
MARKS
& KLEIN, LLP  
63 Riverside Avenue 
Red Bank NJ 07701 
(732) 747-7100 
Gerald A.
Marks, Esq. 
Justin Klein, Esq.  

	 	
Lew
Goldfarb Associates, LLC 
875 Third Avenue, Suite 2710
New York, New York 10022
Attorneys
for Defendants  

	 	
Snap-on
Incorporated          
2801 - 80th Street          
Kenosha, Wisconsin  53143
         
(262) 656-5550          
Susan F. Marrinan          
Chief Legal Officer 

and (ii) has filed said objections,
papers, and briefs, showing proof of service upon said counsel with the Clerk of the
United States District Court for the District of New Jersey, on or before the same date.
Any Class Member who does not submit an objection in the manner provided above shall be
deemed to have waived any objection to the Settlement Agreement and shall forever be
foreclosed from making any objection to class certification, to the fairness, adequacy or
reasonableness of the Settlement, and to any attorneys’ fees and reimbursements,
including the allocation thereof, that is approved by the Court. 

        7.                 All
memoranda, affidavits, declarations and other evidence to be submitted in
          support of the request for final approval of the Settlement Agreement and Class
          Counsel’s request for final approval of attorneys’ fees, costs and
          reimbursement of expenses, including the allocation thereof, shall be filed on
          or before _____________________, 2006.  

        8.                 The
Court expressly reserves the right to adjourn the Fairness Hearing from time           to
time without further notice, other than to counsel of record, and to approve
          the Settlement Agreement and request for approval of attorneys’ fees and
          expenses, including the allocation thereof, at or after the originally
scheduled           Fairness Hearing.  

        9.                 This
Order shall not be construed or deemed to be a finding by this Court or
          evidence of a presumption, implication, concession, or admission by Defendants
          concerning (i) any liability, fault, or wrongdoing by Defendants; or (ii) the
          appropriateness of class certification for any purposes other than settlement.
          If the Settlement Agreement is not approved or consummated for any reason
          whatsoever, the Settlement Agreement and all proceedings had in connection
          therewith shall be without prejudice to the status quo ante rights of
the           Parties to this Litigation. In that event, this Order shall be vacated, the
          class certification shall be dissolved ab initio, and all of the status
quo ante rights of the Parties shall be restored including, but           not limited
to, Defendants’ rights to oppose certification of a class           and/or the
merits of Plaintiffs’ claims on any grounds, legal or equitable.  

	 	
SO
ORDERED

	 	
____________________________

U.S.D.J.  

EXHIBIT E  

OPTION B — QUESTIONAIRE  

Please provide the following
information regarding your experience as a Snap-on Tools franchisee: 

	 	1. 	Indicate
the Dealer number for which the questionnaire is completed. 

	 	2. 	On
what dates did your franchise begin and end? 

	 	3. 	What
amount, if any, were you billed or told you owed to Snap-on Tools and/or
               Snap-on Credit after your termination? 

	 	4. 	Did
you turn in your entire inventory at the time of check in? If not, what was
               the value, at Dealer Cost, of the inventory you retained? 

	 	5. 	Did
you sell any Snap-on products after the termination of your franchise?
               Describe type of product and the amount 

	 	6. 	Did
you sign a release of claims against Snap-on Tools? 

	 	7. 	What
were your average weekly paid sales during the last two years of your
               franchise? Please provide a copy of your Federal Income Tax Returns for
the                final two years of your franchise(s). 

	 	8. 	Were
you ever an employee of Snap-on Tools at any time before or after your
               franchise terminated? If so, what were your dates of employment? 

	 	9. 	Was
your franchise(s) terminated involuntarily? 

	 	10. 	What
were the reasons for the termination of your franchise? 

	 	11. 	To
the extent available, provide evidence of your termination if it occurred
               after January 1, 2006 and prior to April 18, 2006. 

	 	12. 	Indicate
whether you fully remitted all monies collected from customers for                debts
owed to Corporate Defendants. 

Corporate Defendants reserve the
right to request documentary corroboration for responses requested on this claim form. 

Under Penalty of Perjury,
the undersigned claimant swears that all information and documentation submitted
in support of any Claim is true.  

Signed: ___________________________________  

   Dated: ___________________________________ 

EXHIBIT F  

Settlement Payout
Formula for Former Franchisees selecting Option B 

For Former Franchisees selecting
Option B, the Franchisee will be required to complete the Option B questionnaire,
detailing certain information and the payout will be calculated as follows: 

ADD OR SUBTRACT EACH OF
THE FOLLOWING COMPONENTS IN THE FOLLOWING ORDER: 

1)           Add Paid Sales
Component:  

	 	
$8,000
if Franchisee Weekly Paid Sales Average during final 24 months was less 
    than or equal to
$3,000 (if Franchisee for less than 24 months, the 
    calculation is adjusted to be the
total Paid Sales divided by the total Weeks 
    Worked)  

	 	
$6,000
if Franchisee Weekly Paid Sales Average during final 24 months 
    was greater than $3,000
but less than or equal to $5,000  

	 	
$4,000
if Franchisee Weekly Paid Sales Average during final 24 months was 
    greater than $5,000
but less than or equal to $6,500  

	 	
$0
       if Franchisee Weekly Paid Sales Average during final 24 months was  
    greater than
$6,500 

2)           Add Years of Service
Component:  

	 	
$12,000
 if Franchisee for period less than or equal to 2 years 

	 	
$
10,000 if Franchisee for period greater than 2 years but less than or equal
                        
    to 5 years 

	 	
$
 8,000  if Franchisee for period greater than 5 years but less than or equal
                        
    to 10 years 

	 	
$
 4,000  if Franchisee for period over 10 years 

3)           Reduce by Employment
Component:  

	 	
If
Franchisee is currently employed by Snap-on, apply a 90% reduction in all Component
payments.  

	 	
If
Franchisee terminated and became an employee, but is no longer an employee, apply a 50%
reduction in all Component payments.  

4)           Reduce by the
uncollected amount (before debt forgiveness under this Agreement)           owed to
Snap-on Tools and Snap-on Credit together (the “Former Franchisee           Loss
Component”)  

	 	
If
Former Franchisee Loss less than or equal to $5,000, no reduction.  

	 	
If
Former Franchisee Loss greater than $5,000 but less than or equal to $30,000, apply a 20%
reduction in all Component payments. 

	 	
If
Former Franchisee Loss greater than $30,000 but less than or equal to $50,000, apply a 40%
reduction in all Component payments. 

	 	
If
Former Franchisee Loss greater than $50,000 but less than or equal to $90,000, apply a 60%
reduction in all Component payments. 

	 	
If
Former Franchisee Loss was over $90,000, apply a 95% reduction in all Component payments.  

5)           Reduce by Release
Agreement Component:  

	 	
If
Former Franchisee signed a release, apply a 60% reduction to the aggregate amount
calculated from Items 1 through 4. 

Example 

Franchisee terminated the franchise
after 3 years with a Weekly Paid Sales Average of $3,500 and a Former Franchisee Loss of
$10,000. Franchisee also signed a Release Agreement. Franchisee was never an employee of
Snap-on. 

$6,000 (Paid Sales Component) +
$10,000 (Years of Service Component) = $16,000 less 20% (Former Franchisee Loss Component)
= $12,800 less 60% (Release Agreement Component) = $5,120 Final Payment. 

EXHIBIT G 

Settlement Payout
Formula for Current Franchisees 

The following amount will be
processed as a statement credit for each franchise operated under a separate Franchise
Agreement based on the weekly average paid sales (excluding paid sales applicable to a
second van) for a 52 week period ended April 12, 2006 or if the franchise has not been
operated for 52 weeks as of April 12, 2006, the entire period of operation through April
12, 2006, the calculation is adjusted to be the total Paid Sales divided by the total
Weeks Worked: 

	 	
$8,000
if Current Franchisee’s Weekly Paid Sales Average was less than $3,000  

	 	
$6,000
if Current Franchisee's Weekly Paid Sales Average was greater than
    $3,000 but less than
                  $5,000 

	 	
$4,000
if Current Franchisee Weekly Paid Sales Average was greater than $5,000 
    but less than
                  $6,500 

	 	
$0
       if Current Franchisee’s Weekly Paid Sales Average was greater than 
    $6,500 

EXHIBIT H  
Technology
Credit  

	Product
	Equipment or Software
	Price
	Snap-on Purchase/Lease

Channels
	Notes

	
Computer	Dell 610 Laptop Computer	$1,800	www.dell.com/snapon	 
	Software	Intuit QuickBooks Pro Version, 2006	   $300	Local retailer or web sites
	
Power	600 watt true sign wave/AC inverter	   $550	Lynch Display Vehicles
	
Accessory	Topaz SigLite SL electronic	     $55	Snap-on Credit	This price goes up to
		signature pad			$150 per pad after the
					initial launch quantity
					of 4,000 this year.
	
Printer	Laser Printer, HP 1020	   $179	Local retailer or web sites
	
Wireless  	Wireless Data Service Plan (up to 2 	$60/mo	Local retailer or web sites	
	Network	years) with Verizon, Cingular or
		Sprint
	
Accessory	External Antenna for Wireless	     $60	Through wireless provider
		Service

EXHIBIT I  
Former Franchisees
Represented By Counsel On Or Before April 18, 2006 

	1.	Acevedo, Steven*	49.	Jones, Randy*
	2.	Attardi, Gino H*	50.	Ketcheside, Justin D*
	3.	Bagarella, Robert C*	51.	Kretchmer, Frederick M “Mickey”*
	4.	Baker, Kevin*	52.	Kuhn, Hebert*
	5.	Barnes, Michael	53.	Lagnese, Anthony*
	6.	Barnes, Tim	54.	Larocca, Michael*
	7.	Barrett, Robert S*	55.	Leto, Gary J*
	8.	Barrios, Bernard*	56.	Leuis, Michael*
	9.	Bell, Alan J*	57.	Ligato, Joseph*
	10.	Blank, Richard*	58.	Lightsey, Lloyd*
	11.	Bly, Oran M*	59.	Lockett, Kevin D*
	12.	Boswell, Gary D	60.	Littlejohn, Perry
	13.	Canaveral Luis	61.	MacMurdo, David L*
	14.	Canetti, Darin*	62.	Markey Jr., Phillip*
	15.	Catrini, Richard J*	63.	Markwood III, Paul W
	16.	Cerezola, Larry*	64.	Marron, Michael*
	17.	Coccaro, Nicholas J*	65.	Masui, Tucker M*
	18.	Cockcroft, Robert M*	66.	McCoy, Patrick L*
	19.	Cox Thomas L*	67.	Mihalik, Andrew*
	20.	Crist, John*	68.	More, Gary*
	21.	Cusack, Corey B*	69.	Nieven, Robert R*
	22.	Dahn, Brian*	70.	Ortiz, Ismael*
	23.	Defendini, Felix L*	71.	Ott, Kevin*
	24.	Einecker, Gregory S*	72.	Paulsen, Bryant A*
	25.	Fain, James M*	73.	Pessolano Jr., James*
	26.	Farmer, Bill J*	74.	Pires, Louis*
	27.	Geiger, Mark*	75.	Randall, Karl*
	28.	Geisel, Timothy*	76.	Robinson, Stephen T*
	29.	Gerber, Mitchell L*	77.	Rowley, Michael
	30.	Ginter, Dan	78.	Salacinski, Stephen J*
	31.	Goldman, Robert M*	79.	Savoia, Anthony*
	32.	Grady, Jon P	80.	Schena, Phillip*
	33.	Griswold, Adam F*	81.	Smith, Lee
	34.	Guge, Kenneth L	82.	Smith, Patrick D*
	35.	Hannum, Darren L*	83.	Spanner, James R
	36.	Harker, Lance G*	84.	Stotz, John*
	37.	Harris, James M*	85.	Sullivan, William J*
	38.	Hasher, Alan*	86.	Suter, James*
	39.	Hass, Jr. Donald W*	87.	Tindell, David
	40.	Hayden, Kenneth J*	88.	Trozzi, Gustavo*
	41.	Hayes, Robin	89.	Wadsworth, Larry T*
	42.	Hebert, Andrew A*	90.	Walls, Ronald*
	43.	Hill, Charles M*	91.	Wilkes, Jeff*
	44.	Howell, Honathan T*	92.	Wilkinson Jr., Warren “Leroy”*
	45.	Ingles, Anthony J*	93.	Williams, Bryan R*
	46.	Jackson, Mark “Stephen”*	94.	Wootton, Craig*
	47.	Janickas, Jeffrey*
	48.	Jasper, John R

EXHIBIT J  

Current Franchisee
Verification Form  

Complete a separate form for each franchise
you have. 

Indicate your Dealer
number  ___________. 

You understand that the appropriate
credit to your statement will be calculated from the paid sales information in the records
of Snap-on Tools Company LLC. 

Enclosed is the documentation
supporting the expenses incurred that qualify for the technology credit. 

By signing below you certify that you
were operating a franchise under the foregoing Dealer number as of April 30, 2006. 

Under Penalty of Perjury,
the undersigned claimant swears that all information and documentation submitted
in support of any Claim is true.  

Signed: ___________________________________ 

   Dated: ___________________________________ 

_______________________________________

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