Corporate Governance

NYSE SNA $145.620.00December 17, 2018 4:00 PM EDT

Board Committees

Shown below are the Snap-on Board committees and corresponding charters. To read more about a committee member, click on the member's name. 


Audit Committee

Nathan J. Jones
Chairperson
Financial Expert

Karen L. Daniel
Member
Financial Expert

Ruth Ann M. Gillis
Member
Financial Expert

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  SNAP-ON INCORPORATED AUDIT COMMITTEE CHARTER

Purpose

The purpose of the Audit Committee is (a) to assist the Board's oversight of (i) the integrity of the Company's financial statements, (ii) the Company's independent auditors' qualifications and independence, (iii) the performance of the Company's independent auditors and the Company's internal audit function, and (iv) the Company's compliance with legal and regulatory requirements, and (b) to prepare the report that the rules of the Securities and Exchange Commission (the "SEC") require be included in the Company's annual proxy statement.

Organization

The Audit Committee shall be comprised of at least three directors. Each member of the Audit Committee shall meet the independence, experience and financial literacy requirements of applicable law and regulation, including, without limitation, the New York Stock Exchange (“NYSE”) listing standards and the Sarbanes-Oxley Act of 2002 (the "Act") and the rules and regulations promulgated by the SEC pursuant to the Act. The members of the Audit Committee shall be appointed by the Board. The Committee may form and delegate authority to subcommittees when appropriate.

Duties and Responsibilities

The Company’s management is responsible for preparing the Company’s financial statements and the independent auditors are responsible for auditing those financial statements. The Audit Committee is responsible for overseeing the conduct of these activities by the Company’s management and the independent auditors. Consequently, in carrying out its oversight responsibilities, the Audit Committee is not providing any expert or special assurance as to the Company’s financial statements or any professional certification as to the independent auditor’s work.

The Audit Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company, and each such registered public accounting firm must report directly to the Audit Committee. The Audit Committee shall have sole authority to preapprove (unless applicable law permits otherwise) all audit and permitted non-audit services (as determined by applicable law or regulatory body, from time to time), to be provided by the independent auditor. In connection with the foregoing, the Audit Committee may consult with, but shall not delegate, these responsibilities to management. Unless otherwise required by law or exchange requirements, the provisions of this paragraph regarding Audit Committee approval of auditors shall not apply to the hiring of local public accounting firms outside the United States to (i) perform audits of foreign pension and/or benefit plans; or (ii) file local statutory accounts in foreign countries.

The Audit Committee shall have the authority to engage independent counsel and other advisors, as the Audit Committee determines necessary to carry out its
duties. The Company will provide the Audit Committee with appropriate funding, as determined by the Audit Committee, in its capacity as a committee of the
Board, for payment of: (i) compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing
other audit, review or attest services for the Company; (ii) compensation to any advisors employed by the Audit Committee; and (iii) ordinary administrative
expenses of the Audit Committee that are necessary or appropriate in carrying out its duties. The Audit Committee may request any officer or employee of the
Company or the Company's outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the
Committee. Periodically, the Audit Committee shall meet with management, the internal auditors (or other persons responsible for the internal audit function) and
with independent auditors in separate sessions.

The Audit Committee shall:

1. Make regular reports to the Board.

2. Meet with the internal auditors and with the independent auditor to discuss the overall scope and plans for their respective audits, including responsibilities, budget, staffing and compensation.

3. Review (i) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles, and any major issues related to the adequacy and effectiveness of the internal accounting and financial controls of the Company and any special audit steps adopted in light of material control deficiencies; (ii) analyses prepared by management and/or the independent auditor setting forth
significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods on the financial statements; and (iii) the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements of the Company.

4. Discuss the Company’s policies with respect to risk assessment and risk management, including a discussion and review of the Company’s major financial risk exposures and the steps management has taken to monitor and control such risk exposures.

5. Discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit.

6. Review with the independent auditor any problems or difficulties encountered in the course of the audit work and management's response, including any restrictions on the scope of the independent auditor’s activities or on access to requested information, and any significant disagreements with management.

7. Obtain from the independent auditor and review any information that the independent auditor is required to provide to the Audit Committee pursuant to Section 10A of the Securities Exchange Act of 1934, as amended.

8. At least annually, obtain and review a report by the independent auditor describing (i) the firm’s internal quality-control procedures, (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, and (iii) (to assess the auditor’s independence) all relationships between the auditor and the Company. Evaluate the qualifications, performance and independence of the independent auditor, including a review and evaluation of the lead partner of the independent auditor, taking into account the opinions of management and the Company’s internal auditors. The Audit Committee shall, to the extent it determines appropriate, discuss such reports with the auditor and, if so determined by the Audit Committee, recommend that the Board take appropriate action to satisfy itself of the qualifications, performance and independence of the auditor.

9. Annually review and evaluate all related-party transactions greater than $120,000, defined as those transactions required to be disclosed under Items 404(a) and (b) of Regulation S-K, NYSE Rule 314.00, and NASDAQ Corporate Governance Rule 5630. Discuss with the independent auditor its evaluation of the company’s identification of, accounting for, and disclosure of its relationships with related parties as set forth under the standards of the Public Company Accounting Oversight Board.

10. Ensure that the lead audit partner and the audit partner responsible for reviewing the audit are rotated at least every five years or as required by the requirements of applicable law and regulation, and further consider rotation of the independent auditor firm itself.

11. Review the summary reports to management prepared by the internal auditors, together with any management actions and other responses to such reports.

12. Meet to review and discuss the annual audited financial statements and quarterly financial statements with management and the independent auditor, including reviewing the Company's specific disclosures under "Management's Discussion and Analysis of Financial Condition and Audit Committee Results of Operations." Based on the reviews and discussions, recommend to the Board whether the annual audited financial statements should be included in the Company's Annual Report on Form 10-K.

13. Discuss earnings press releases (paying particular attention to any use of “pro forma,” or “adjusted” non-GAAP, information), as well as financial information and earnings guidance provided to analysts and rating agencies.

14. Establish clear Company policies regarding the hiring of employees or former employees of the independent auditors.

15. Review periodically Company policies relating to compliance with federal and state laws, regulations, and proceedings involving environmental, health, and safety issues.

16. Review periodically with a representative of the Company’s legal department the current state of material legal matters within the Company.

17. Review periodically the Company's participation in government contracts, including issues relating to training of employees, compliance with applicable laws and regulations, and reporting requirements arising from the Company's performance of government contracts.

18. Review periodically the Company's use of swaps as required under the Commodity Exchange Act (“CEA”) and the rules and regulations of the Commodity Futures Trading Commission governing the end-user exception to clearing requirements under the CEA.

19. Establish procedures for (i) the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

20. Review and reassess the adequacy of the Charter annually and recommend any proposed changes to the Board for approval.

21. Annually evaluate the Audit Committee's own performance.

While the Audit Committee has the functions set forth in this Charter, the Audit Committee is not responsible for planning or conducting an audit, for determining whether the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles or for ensuring that the Company complies with all laws and regulations. As the Committee performs its functions, the Committee’s policies and procedures should remain flexible, so that it may be in a position to best react or respond to changing circumstances or conditions.

Adopted by the Audit Committee on January 23, 2004, and revised on February 18, 2005, November 6, 2008, April 22, 2010, November 7, 2013, and April 28, 2016.

 

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Corporate Governance & Nominating Committee

Henry W. Knueppel
Chairperson

David C. Adams
Member

W. Dudley Lehman
Member

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  SNAP-ON INCORPORATED CORPORATE GOVERNANCE AND NOMINATING COMMITTEE CHARTER

Organization

Each member of the Corporate Governance and Nominating Committee (the “Committee”) shall meet the independence requirements of applicable law and regulation, including, without limitation, the requirements imposed by the New York Stock Exchange listing standards and the Sarbanes-Oxley Act of 2002 (the "Act") and the rules and regulations promulgated by the U.S. Securities and Exchange Commission pursuant to the Act. The members of the Committee shall be appointed and replaced by the Board. The Committee may form and delegate authority to subcommittees when appropriate. The Committee shall report regularly to the Board.

Purpose and Responsibilities

The purpose and responsibilities of the Committee shall be to:

1. Develop and recommend to the Board a set of corporate governance guidelines, which shall be consistent with any applicable laws, regulations and listing standards.

2. Periodically review and make recommendations to the Board with respect to the Company’s Articles of Incorporation, Bylaws and Corporate Governance Guidelines.

3. Identify individuals qualified to become Board members, consistent with criteria approved by the Board, and recommend to the Board qualified individuals as director nominees for the next annual meeting of shareholders. In doing so, the Committee shall consider the director qualification standards contained in the corporate governance guidelines. When evaluating a candidate’s capabilities to serve as a member of the Board, the Committee uses the following criteria:  independence, the relationships that the candidate has with the Company (either as a partner, shareholder or officer of an organization that has a relationship with the Company), conflicts of interest, ability to contribute to the oversight and governance of the Company, the candidate’s skill set and positions held at other companies, existing time commitments and diversity.  Further, the Committee will review the qualifications of any candidate with those of the Company’s current directors to augment and complement the skill sets of the current Board members.  The Committee shall identify candidates without regard to any candidate’s race, color, disability, gender, national origin, religion or creed.

4. Review qualifications of incumbent Directors in determining whether to recommend them for re-election.

5. Annually review and make recommendations to the Board regarding Board policies and structure, including size and composition of the Board, corporate governance, number and responsibilities of committees, director committee assignments and rotation of committee membership and leadership, taking into consideration director interest, continuity, expertise, and tenure as well as the independence, financial literacy, and financial expertise qualifications for Audit Committee membership or as Audit Committee Financial Experts, in accordance with the rules and regulations of the SEC and the New York Stock Exchange Listing Standards.

6. Review and recommend to the Board policies with respect to (a) director retirement and (b) changes relating to director employment or primary occupation.

7. Oversee the evaluation of the Board as a whole and assess the independence of non-management directors.

8. Review, and periodically recommend to the Board, changes to compensation and benefits for the members of the Board, based upon review of pertinent compensation data.

9. Annually review the Company's director and officer liability insurance and indemnification arrangements, and recommend to the Board, as appropriate, changes to these programs.

10. Annually review the Company's shareholder relations and institutional investor programs, including a review, when necessary, of the Company's rights plan, and recommend appropriate actions to the Board with respect to these matters.

11. Recommend to the Board the annual shareholder meeting location.

12. The Committee shall have the sole authority to retain and terminate (i) any search firm to be used to identify director candidates and (ii) any consulting firm to assist in the evaluation of director compensation and shall have the sole authority to approve the firms’ fees and other retention items.

13. Periodically review the duties contained in each Board committee charter, or ensure that each Board committee has undertaken a review, and recommend changes to the full Board for consideration as necessary.

14. Annually evaluate the Committee’s own performance and make any recommendations to the Board that may be appropirate.

Amended and restated by the Board of Directors on January 23, 2004, and further amended and restated on April 27, 2006, and November 8, 2018.

 

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Organization &
Executive 
Compensation
Committee

Gregg M. Sherrill
Chairperson

James P. Holden
Member

Donald J. Stebbins
Member

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  SNAP-ON INCORPORATED ORGANIZATION & EXECUTIVE COMPENSATION COMMITTEE CHARTER

Organization

Each member of the Organization and Executive Compensation Committee (the “Committee”) shall meet the independence requirements of applicable law and regulation, including, without limitation, the requirements imposed by the New York Stock Exchange (the “NYSE”) listing standards, the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the Securities and Exchange Commission (the “SEC”) thereunder, and Section 162(m) of the Internal Revenue Code and the regulations promulgated thereunder. The members of the Committee shall be appointed and replaced by the Board. One of the members of the Committee shall be appointed as Committee Chairperson by the Board.

The Committee may form and delegate authority to subcommittees when appropriate. The Committee shall report regularly to the Board.

Purpose and Responsibilities

The purpose and responsibilities of the Committee shall be to:

Make recommendations to the Board with respect to the Company’s incentive compensation plans and equity-based plans and, except as further delegated by the Committee to other committees, to administer existing annual and long-term incentive plans as these plans apply to all individuals who may qualify under the terms of said plans. Further, to review on an ongoing basis, these plans and, if appropriate, to make amendments thereto or to discontinue them.

Except as further delegated by the Committee to other committees, oversee, create, amend, administer, and terminate (i) any and all welfare benefit plans (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), (ii) any and all equity compensation plans or other arrangements, (iii) any and all deferred compensation plans or other arrangements, (iv) any and all other plans and arrangements for the delivery of compensation to the Company’s associates, former directors or selected others that are in addition to current compensation for services rendered that are now or in the future sponsored or maintained by the Company or one or more of its affiliates, and (v) any and all plans and arrangements for the delivery of compensation, remuneration or benefits to former directors.

Review and approve the corporate goals and objectives relevant to compensation for the Chairman and Chief Executive Officer.

Evaluate the performance of the Chairman and Chief Executive Officer in light of those goals and objectives and to establish in consultation with those independent directors who are not members of the Committee, the Chairman and Chief Executive Officer’s compensation based on the evaluation. In addition to other factors that the Committee may deem appropriate in determining the long-term incentive component of the Chairman and Chief Executive Officer compensation, the Committee should consider the Company’s performance and relative shareholder return, the value of similar incentive awards to Chairman and Chief Executive Officers at comparable companies, and the awards given to the Company’s Chairman and Chief Executive Officer in past years.

Consult with the Chairman and Chief Executive Officer and determine the appropriate compensation for all other officers.

Recommend to the Board the compensation of the Chairman of the Board of Directors (if such person is not also the Chief Executive Officer of the Company), including base compensation, equity compensation and other appropriate incentive plans, and perquisites, if any.

The Committee shall have the sole authority to retain and terminate any consulting firm to assist in the evaluation of the Chairman and Chief Executive Officer's or executive's compensation and shall have the sole authority to approve the consultant’s fees and other retention items.

The Committee may, in its sole discretion, retain or obtain the advice of compensation consultants, legal counsel or other advisers, including persons and entities independent of the Company and its management, as it deems appropriate in connection with the discharge of its duties, without seeking the approval of the Board or the Company’s management. The Committee shall be directly responsible for the appointment, termination, compensation and oversight of the work of any such adviser. When selecting any such adviser, the Committee shall consider all factors relevant to the adviser’s independence from management, including any applicable independence standards promulgated by the SEC or the NYSE. The Company shall provide for appropriate funding, as determined by the Committee, in its capacity as a committee of the Board, for the payment of compensation to any of the advisers employed by the Committee and for the ordinary administrative expenses of the Committee that are necessary or appropriate in carrying out its duties.

Oversee the evaluation of management.

Produce a Committee report on executive compensation as required by the SEC to be included in the Company’s annual proxy statement filed with the SEC.

Oversee risks related to the Company’s compensation policies and practices.

Consult, as the Committee deems appropriate, with the Chairman and Chief Executive Officer on matters of organization structure.

Consult, as the Committee deems appropriate, with the Chairman and Chief Executive Officer on planning for executive succession.

Recommend to the Board the titles of all elected officers of the Company.

Oversee safety programs of the Company.

Review and determine stock ownership guidelines applicable to executive officers and directors, and evaluate each individual’s compliance with such guidelines.

Annually evaluate the Committee’s own performance.

Annually review and reassess the adequacy of this Charter and recommend any proposed changes to the Board.

Amended and restated by the O&E Committee on April 25, 2013.

 

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