-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, EPg4nFrmifmm9l4RgXes8qG3rYGTASKSckYYbu+TNWG5Dgo/YAjdcrCVwObU59m1 IJZUELywnJ5DCIw+PObVLg== 0000912057-95-003954.txt : 19950518 0000912057-95-003954.hdr.sgml : 19950518 ACCESSION NUMBER: 0000912057-95-003954 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950516 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PACCAR INC CENTRAL INDEX KEY: 0000075362 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLES & PASSENGER CAR BODIES [3711] IRS NUMBER: 910351110 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-06394 FILM NUMBER: 95540398 BUSINESS ADDRESS: STREET 1: 777 106TH AVE NE CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2064557400 MAIL ADDRESS: STREET 1: 777 106TH AVENUE NE CITY: BELLEVUE STATE: WA ZIP: 98004 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC CAR & FOUNDRY CO DATE OF NAME CHANGE: 19720707 10-K/A 1 PACCAR, INC. 10-K/A SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 to [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [Fee Required] FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 Commission File No. 0-6394 PACCAR INC (Exact name of Registrant as specified in its charter) Delaware 91-0351110 (State of incorporation) (I.R.S. Employer Identification No.) 777 - 106th Ave. N.E., Bellevue, Washington 98004 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (206) 455-7400 Securities registered pursuant to Section 12(g) of the Act: Common Stock, $12 par value Preferred Stock Purchase Rights (Title of Class) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing require ments for at least the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the voting stock held by non-affiliates of the registrant as of March 1, 1995: Common Stock, $12 par value -- $1,506,723,855 The number of shares outstanding of the issuer's classes of common stock, as of March 1, 1995: Common Stock, $12 par value -- 38,859,281 shares DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Report to Stockholders for the year ended December 31, 1994 are incorporated by reference into Parts I and II. Portions of the proxy statement for the annual stockholders meeting to be held on April 25, 1995 are incorporated by reference into Part III. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a) (1) and (2) - The response to this portion of Item 14 is submitted as a separate section of this report. (3) Listing of Exhibits (in order of assigned index numbers) (3) Articles of incorporation and bylaws (a) PACCAR Inc Certificate of Incorporation, as amended to April 27, 1990 (incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1990). (b) PACCAR Inc Bylaws, as amended to April 26, 1994 (incorporated by reference to the Quarterly Report on Form 10-Q for the quarter ended March 31, 1994). (4) Instruments defining the rights of security holders, including indentures (a) Rights agreement dated as of December 21, 1989 between PACCAR Inc and First Chicago Trust Company of New York setting forth the terms of the Series A Junior Participating Preferred Stock, no par value per share (incorporated by reference to Exhibit 1 of the Current Report on Form 8-K of PACCAR Inc dated December 27, 1989). (b) Indenture for Senior Debt Securities dated as of December 1, 1983 between PACCAR Financial Corp. and Citibank, N.A., Trustee (incorporated by reference to Exhibit 4.1 of the Annual Report on Form 10-K of PACCAR Financial Corp. for the year ended December 31, 1983). (c) First Supplemental Indenture dated as of June 19, 1989 between PACCAR Financial Corp. and Citibank, N.A., Trustee (incorporated by reference to Exhibit 4.2 to PACCAR Financial Corp.'s registration statement on Form S-3, Registration No. 33-29434). (d) Forms of Medium-Term Note, Series E (incorporated by reference to Exhibits 4.3A, 4.3B and 4.3C to PACCAR Financial Corp.'s Registration Statement on Form S-3 dated June 23, 1989, Registration Number 33-29434, and Forms of Medium-Term Note, Series E, incorporated by reference to Exhibit 4.3B.1 to PACCAR Financial Corp.'s Current Report on Form 8-K, dated December 19, 1991, under Commission File Number 0- 12553). Letter of Representation among PACCAR Financial Corp., Citibank, N.A. and the Depository Trust Company, Series E, dated July 6, 1989 (incorporated by reference to Exhibit 4.3 of PACCAR Financial Corp.'s Annual Report on Form 10-K, dated March 29, 1990. File Number 0-12553). -2- (e) Forms of Medium-Term Note, Series F (incorporated by reference to Exhibits 4.3A, 4.3B and 4.3C to PACCAR Financial Corp.'s Registration Statement on Form S-3 dated May 26, 1992, Registration Number 33-48118). Form of Letter of Representation among PACCAR Financial Corp., Citibank, N.A. and the Depository Trust Company, Series F (incorporated by reference to Exhibit 4.4 to PACCAR Financial Corp.'s Registration Statement on Form S-3 dated May 26, 1992, Registration Number 33-48118). (f) Forms of Medium-Term Note, Series G (incorporated by reference to Exhibits 4.3A and 4.3B to PACCAR Financial Corp.'s Registration Statement on Form S-3 dated December 8, 1993, Registration Number 33-51335). Form of Letter of Representation among PACCAR Financial Corp., Citibank, N.A. and the Depository Trust Company, Series G (incorporated by reference to Exhibit 4.4 to PACCAR Financial Corp.'s Registration Statement on Form S-3 dated December 8, 1993, Registration Number 33-51335). (10) Material contracts (a) PACCAR Inc Incentive Compensation Plan (incorporated by reference to Exhibit (10)(a) of the Annual Report on Form 10-K for the year ended December 31, 1980). (b) PACCAR Inc Deferred Compensation Plan for Directors (incorporated by reference to Exhibit (10)(b) of the Annual Report on Form 10-K for the year ended December 31, 1980). (c) Supplemental Retirement Plan (incorporated by reference to Exhibit (10)(c) of the Annual Report on Form 10-K for the year ended December 31, 1980). (d) 1981 Long Term Incentive Plan (incorporated by reference to Exhibit A of the 1982 Proxy Statement, dated March 25, 1982). (e) Amendment to 1981 Long Term Incentive Plan (incorporated by reference to Exhibit (10)(a) of the Quarterly Report on Form 10-Q for the quarter ended March 31, 1991). (f) PACCAR Inc 1991 Long-Term Incentive Plan (incorporated by reference to Exhibit (10)(h) of the Quarterly Report on Form 10-Q for the quarter ended June 30, 1992). (g) Amended and Restated Deferred Incentive Compensation Plan (incorporated by reference to Exhibit 10(g) of the Annual Report on Form 10-K for the year ended December 31, 1993). (13) Annual report to security holders Portions of the 1994 Annual Report to Shareholders have been incorporated by reference and are filed herewith. -3- (21) Subsidiaries of the registrant (23) Consent of independent auditors (24) Power of attorney Powers of attorney of certain directors (27) Financial Data Schedule (99) Proxy Statement, dated March 20, 1995 (b) No reports on Form 8-K were filed for the three months ended December 31, 1994. (c) Exhibits (d) Financial Statement Schedules -- The response to this portion of Item 14 is submitted as a separate section of this report. -4- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this amendment to its annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: March 15, 1995 PACCAR Inc (Registrant) By: /s/ G. G. Morie ------------------------------------ G. G. Morie Vice President, General Counsel and Corporate Secretary EX-99 2 NOTICE AND PROXY STATEMENT [LOGO] NOTICE OF ANNUAL MEETING OF STOCKHOLDERS The Annual Meeting of Stockholders of PACCAR Inc will be held at 10:30 a.m. on Tuesday, April 25, 1995, at the MEYDENBAUER CENTER, 11100 N.E. 6TH STREET, BELLEVUE, WASHINGTON for the following purposes: 1. To elect three directors to serve three-year terms ending in 1998. 2. To transact such other business as may properly come before the meeting. Pursuant to Section 3 of Article VI of the Bylaws, stockholders entitled to notice of and to vote at this meeting are those of record as of the close of business on March 1, 1995. IMPORTANT: The vote of each stockholder is important regardless of the number of shares held. Whether or not you plan to attend the meeting, you are requested to date and sign the enclosed proxy card and return it promptly in the enclosed postpaid envelope. DIRECTIONS TO THE MEYDENBAUER CENTER CAN BE FOUND ON THE BACK COVER OF THE ATTACHED PROXY STATEMENT. By order of the Board of Directors G. G. Morie VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY Bellevue, Washington March 20, 1995 ------------ PROXY STATEMENT ------------ The accompanying proxy is solicited by the Board of Directors of PACCAR Inc (the "Company") for use at the Annual Meeting of Stockholders of the Company to be held April 25, 1995, at the Meydenbauer Center, 11100 N.E. 6th Street, Bellevue, Washington. Execution of the proxy will not in any way affect a stockholder's right to attend the meeting or prevent voting in person. A proxy may be revoked by later dated proxy or by notice to the Secretary of the Company at any time before it is voted. The executive offices of the Company are located in the PACCAR Building, 777 - -106th Avenue N.E., Bellevue, Washington 98004. This proxy statement and proxy card were first sent to stockholders about March 20, 1995. Expenses for solicitation of proxies will be paid by the Company. Solicitation will be by mail except for any facsimile, telephone or personal solicitation by directors, officers and employees of the Company which may be made without additional compensation. The Company will request banks and brokers to solicit proxies from their customers and will reimburse those banks and brokers for reasonable out-of-pocket costs for this solicitation. VOTING RIGHTS Stockholders eligible to vote at the meeting are those of record at the close of business on March 1, 1995. Each outstanding share of common stock, par value $12 per share is entitled to one vote on all matters to be presented at the meeting. As of the close of business on March 1, 1995, the Company had outstanding 38,859,281 shares of common stock. STOCK OWNERSHIP CERTAIN OWNERS The following persons are known to the Company to be the beneficial owner of more than five percent of the Company's common stock at December 31, 1994:
SHARES NAME AND ADDRESS BENEFICIALLY PERCENT BENEFICIAL OWNER OWNED(A) OF CLASS ---------------------------------- ------------- --------- BankAmerica Corporation 4,171,762(b) 10.7 555 California Street San Francisco, California 94104 Charles M. Pigott 2,587,069(c)(d) 6.7 P.O. Box 1518 Bellevue, Washington 98009 James C. Pigott 2,200,819(d)(e) 5.7 1405 42nd Ave. East Seattle, Washington 98112
1 DIRECTORS AND EXECUTIVE OFFICERS The following tabulation sets forth the shares of common stock beneficially owned by each director and executive officer and by all directors and executive officers as a group at December 31, 1994:
SHARES BENEFICIALLY PERCENT NAME OWNED(A) OF CLASS ---------------------------------- ------------- --------- William E. Boisvert............... 2,811(f) * Richard P. Cooley................. 1,150 * John M. Fluke, Jr................. 1,699 * Carl H. Hahn...................... 835 * Harold J. Haynes.................. 3,999 * David J. Hovind................... 23,461(d)(f) * Charles M. Pigott................. 2,587,069(c)(d) 6.7 James C. Pigott................... 2,200,819(d)(e) 5.7 Mark C. Pigott.................... 370,645(d)(g) * John W. Pitts..................... 2,490(d) * Michael A. Tembreull.............. 12,301(f) * James H. Wiborg................... 24,743(h) * Total of all directors and executive officers as a group (15 individuals).................... 4,221,951(i) 10.9 - ------------ * does not exceed one percent. (a) Amounts shown are rounded to whole-share amounts. (b) Of the 4,171,762 shares, BankAmerica Corporation and/or its subsidiaries have sole voting power as to 3,759,424 shares, sole dispositive power as to zero shares, shared voting power as to 1,380 shares and shared dispositive power as to 3,898,381 shares. (c) Includes 13,044 shares allocated in the Company's Savings Investment Plan for which he has sole voting power but no dispositive power, 54,404 stock units accrued for a deferred contingent cash award under the Long-Term Incentive Plan and options to purchase 18,448 shares. Also includes 894,167 shares held by a charitable trust of which he is co-trustee and shares voting and dispositive power, and 134,228 shares held by a corporation over which he has sole voting power and sole dispositive power over 114,480 of such shares. (d) Does not include shares held in the name of a spouse and/or children to which beneficial ownership is disclaimed. (e) Includes the same 894,167 shares referenced in note (c) held by a charitable trust of which he is a co-trustee and shares voting and dispositive power. (f) Includes shares allocated in the Company's Savings Investment Plan for which the participant has sole voting power but no dispositive power as follows: W. E. Boisvert (1,188), D. J. Hovind (6,353) and M. A. Tembreull (4,187). Includes stock units accrued for deferred contingent cash awards under the Long-Term Incentive Plan as follows: D. J. Hovind (930) and M. A. Tembreull (1,693). Also includes options to purchase shares as follows: D. J. Hovind (10,053) and M. A. Tembreull (4,956).
2 (g) Includes 2,730 shares allocated in the Company's Savings Investment Plan for which he has sole voting power but no dispositive power, and the same 134,288 shares owned by the corporation referenced in note (c) over which he has no voting or dispositive power. Also includes options to purchase 2,031 shares. (h) Includes 12,900 shares held in trust for which he is a trustee and shares voting and dispositive power, and 1,365 shares owned by a university on whose board of trustees he sits. (i) Reflects elimination of duplicate reporting of 894,167 shares referenced in notes (c) and (e) and 134,288 shares referenced in notes (c) and (g).
ELECTION OF DIRECTORS Three directors, constituting Class III Directors, are to be elected at the meeting. The persons named below have been designated by the Board as nominees for election as Class III Directors for a term expiring at the Annual Meeting of Stockholders in 1998. All of the nominees are now directors of the Company. Under Delaware law, directors are elected by a plurality of the votes cast for the election of directors. Shares that are not voted for the election of directors (whether because authority to vote is withheld, the stockholder does not return a proxy, the broker holding the shares does not vote or otherwise) will not count in determining the total number of votes for each nominee. Unless otherwise instructed, proxies which are returned will be voted for the three nominees for director as Class III Directors. If any of the nominees is unable to act as a director because of an unexpected occurrence, the holders of the proxies, in their discretion, may vote the proxies for another person. In the alternative, the Board of Directors may make an appropriate reduction in the number of directors to be elected. The Class I and Class II Directors named below have terms which expire in 1996 and 1997, respectively. NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING IN 1998 (CLASS III DIRECTORS): CARL H. HAHN, age 68, served as Chairman of the board of Volkswagen AG from 1981 until his retirement at the end of 1992. Dr. Hahn is Chairman of the Board of Directors of Saurer AG, and a director of The British Petroleum Company p.l.c. and TRW Inc. He also serves as a member of the supervisory boards of a number of major European companies, including Volkswagen AG, Thyssen AG, Gerling and Commerzbank. In addition, Dr. Hahn is the honorary chairman of the supervisory boards of Audi AG, SEAT and Skoda, and is a member of the foreign trade advisory committee at the Federal Republic of Germany's Federal Economics Ministry. CHARLES M. PIGOTT, age 65, became the Chief Executive Officer of the Company in 1968 and Chairman of the Company in 1986. He was President of the Company from 1965 to January 1987 and has been a director since 1961. He is also a director of The Boeing Company, Chevron Corporation, and Seattle Times Company. Mr. Pigott is the brother of James C. Pigott, and the father of Mark C. Pigott, both directors of the Company. JOHN W. PITTS, age 68, has been President, Chief Executive Officer and a director of MacDonald, Dettwiler and Associates Ltd., a systems engineering company, since 1982. He was Chairman, President, Chief Executive Officer and a director of Okanagan Helicopters Ltd., a helicopter charterer, from 1970 to 1982. He has served as a director of the Company since 1964. He has served as a director of BC Sugar Refinery Limited, BC TELECOM Inc. and Radarsat International, Inc. 3 DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 1996 (CLASS I DIRECTORS): JOHN M. FLUKE, JR., age 52, is Chairman of Fluke Capital Management, L.P., private investments. He was Chairman of Fluke Corporation (formerly John Fluke Mfg. Co., Inc.), a manufacturer of electronic test and measurement equipment, from 1984 to 1990. He was Chief Executive Officer of that company from 1983 to 1987 and has been a director since 1976. He has served as a director of the Company since 1984. He is also a director of U.S. Bank of Washington, N.A. DAVID J. HOVIND, age 54, became President and a director of PACCAR Inc in January 1992. He was Executive Vice President of the Company from July 1987 to January 1992, Senior Vice President from December 1985 to July 1987 and Vice President from September 1985 to December 1985. MICHAEL A. TEMBREULL, age 48, became a Vice Chairman of the Company in January 1995. He served as Executive Vice President from January 1992 to January 1995, Senior Vice President from September 1990 to January 1992 and was previously General Manager of the Company's Peterbilt Motors Company division. Mr. Tembreull became a director of the Company in July 1994. JAMES H. WIBORG, age 70, has been Chairman of Univar Corporation, a distributor of chemicals, since September 1986. He has also been Chairman and Chief Strategist of VWR Corporation since March 1986. He was Chairman and Chief Executive Officer of Univar from 1983 to 1986 and he was President and Chief Executive Officer from 1966 to 1983. He has served as a director of the Company since 1975. He is also a director of PENWEST, Ltd., PrimeSource Corporation, Univar Corporation, and VWR Corporation. DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 1997 (CLASS II DIRECTORS): RICHARD P. COOLEY, age 71, an honorary director of Seafirst Corporation and Seattle-First National Bank, a holding corporation and banking company, was Chairman and Chief Executive Officer of Seafirst Corporation and Seattle-First National Bank from 1983 to 1990. Mr. Cooley has served as a director of the Company since 1991. He is also a director of Egghead, Inc. HAROLD J. HAYNES, age 69, has been Senior Counselor for Bechtel Group, Inc., a worldwide engineering and construction company, since 1981. He was Chairman, Chief Executive Officer and a director of Standard Oil Company of California (now Chevron Corporation), an integrated petroleum company, from 1974 until his retirement in 1981. Mr. Haynes has served as a director of the Company since 1981. He is also a director of The Boeing Company, Citicorp and Hewlett-Packard Company. JAMES C. PIGOTT, age 58, has been President of Pigott Enterprises, Inc., private investments, since 1983 and President and/or Chairman and Chief Executive Officer of Management Reports & Services, Inc., a provider of business services, since February 1986. He was President, Chief Executive Officer and a director of Stetson-Ross, Inc., a woodworking machinery manufacturer, from 1976 to 1983. He has served as a director of the Company since 1972. He is also a director of Americold Corporation. Mr. Pigott is the brother of Charles M. Pigott, and the uncle of Mark C. Pigott, both directors of the Company. MARK C. PIGOTT, age 41, became a Vice Chairman of the Company in January 1995. He served as Executive Vice President since December 1993; Senior Vice President from January 1990 to December 1993; and was previously Vice President. Mr. Pigott became a director of the Company in July 1994. He is also a director of Seattle-First National Bank. Mr. Pigott is the son of Charles M. Pigott, also a director of the Company, and nephew of James C. Pigott, a director of the Company. 4 TRANSACTIONS WITH MANAGEMENT AND OTHERS The Norcliffe Company ("Norcliffe") is a wholly owned subsidiary of the Company acquired in 1987. Norcliffe is the general partner and has a nine percent interest in the Norcliffe Limited Partnership ("NLP"). C. M. Pigott, J. C. Pigott, their three sisters, their sister-in-law and members of their families are limited partners of NLP. NLP owned a fifty percent interest in an office building joint venture, whose books are maintained on a tax basis. In 1994, NLP sold seventy percent of its interest in the joint venture and made a distribution of the proceeds to its partners. Norcliffe, whose GAAP basis in NLP is $0, recorded a gain on investment of $439,980 on this distribution. For tax purposes, Norcliffe also recognized an estimated loss of $99,000 as a result of the ongoing operations of the joint venture. Norcliffe is entitled to a nominal fee for its services in managing NLP. Norcliffe is also entitled to indemnification to the extent of NLP's assets for losses incurred in its capacity as general partner. STOCKHOLDER PROPOSALS A stockholder proposal must be received at the principal executive offices of the Company, P.O. Box 1518, Bellevue, Washington 98009 by November 21, 1995 to be considered for inclusion in the proxy materials for the Company's 1996 Annual Meeting. BOARD COMMITTEES AND MEETINGS AUDIT COMMITTEE -- The Board of Directors has a standing Audit Committee. Members of the Audit Committee are Messrs. J. M. Fluke, Jr., J. C. Pigott and J. W. Pitts. The functions of the Audit Committee include review of the independent accountant's report, modification of audit procedures as may be appropriate and performance of such other responsibilities as the Board of Directors may prescribe. The Committee met once in 1994. COMPENSATION COMMITTEE -- The Board of Directors has a standing Compensation Committee. Members of the Compensation Committee are Messrs. R. P. Cooley, H. J. Haynes and J. H. Wiborg. The functions of the Compensation Committee include reviewing and approving compensation of certain executives. The Committee also administers the Company's Long-Term Incentive Plan. The Committee met twice in 1994. The Company does not have a Nominating Committee. The Board of Directors met four times during 1994, and each member attended all of the meetings of the Board of Directors and the committees on which he served. 5 COMPENSATION OF EXECUTIVE OFFICERS AND RELATED MATTERS The information in the following table relates to the annual and long-term compensation for service in all capacities to the Company for the fiscal years ended December 31, 1994, 1993 and 1992 of those persons who were, during 1994 and at December 31, 1994, (a) the Chief Executive Officer and (b) the other four most highly compensated executive officers of the Company (the "Named Officers"): SUMMARY COMPENSATION TABLE
ALL OTHER ANNUAL COMPENSATION LONG-TERM COMPENSATION COMPENSATION(a) -------------------------------------- ------------------------- --------------- AWARDS PAYOUTS ------------ ---------- SECURITIES OTHER UNDERLYING LONG-TERM ANNUAL OPTIONS/SARS INCENTIVE NAME AND PRINCIPAL POSITION YEAR SALARY(b) BONUS COMPENSATION (SHARES) PAYOUTS(c) - ------------------------------ ---- --------- ----------- ------------ ------------ ---------- C. M. Pigott ................. 1994 $897,116 $ (d) (e) 6,441 $451,238 $7,500 Chairman and Chief Executive 1993 750,000 525,000 $6,594(e) 5,126 413,438 8,994 Officer 1992 773,308 525,000 (e) 5,534 0 8,728 D. J. Hovind ................. 1994 476,808 (d) (e) 2,605 138,740 7,500 President 1993 439,654 249,480 1,105(e) 2,324 121,481 8,994 1992 437,192 219,555 (e) 2,508 0 8,728 M. A. Tembreull .............. 1994 329,385 (d) (e) 1,627 84,780 7,500 Vice Chairman 1993 297,212 160,650 84(e) 1,428 69,694 8,994 1992 293,885 145,920 (e) 1,542 0 8,728 W. E. Boisvert ............... 1994 320,000 (d) (e) 1,679 0 7,500 Executive Vice President 1993 309,769 158,720 301(e) 1,503 0 8,994 1992 310,616 168,000 (e) 1,623 183,465 8,728 M. C. Pigott ................. 1994 298,269 (d) (e) 1,443 61,776 7,500 Vice Chairman 1993 212,212 91,853 (e) 911 64,969 8,994 1992 206,769 78,400 (e) 983 0 8,728 - --------------- (a) Amounts of All Other Compensation represent Company matching contributions to the Company's Savings Investment Plan. (b) The Company pays salaries every two weeks; in 1992 there were 27 salary payments rather than the usual 26. No executive officer's salary was reduced for 1993. (c) Represents cash awards which were paid, or were payable but deferred at the Named Officer's election, during 1992, 1993 and 1994 and earned during the 1989-1991, 1990-1992 and 1991-1993 Long-Term Incentive Plan performance cycles, respectively. (d) Amounts of bonuses earned in 1994 to be paid in 1995 were not determined on the date this proxy statement was prepared. (e) All amounts shown represent interest on deferred bonus payments and payments under the Long-Term Incentive Plan in excess of 120% of the applicable Federal long-term rate (as prescribed under Section 1274(d) of the Internal Revenue Code). The aggregate amount of perquisites and other personal benefits was less than the required reporting threshold (the lesser of $50,000 or 10% of the total of annual salary and bonus for the Named Officer).
6 OPTION GRANTS -- Shown below is information on grants of stock options pursuant to the 1991 Long-Term Incentive Plan in 1994 to the Named Officers which are reflected in the Summary Compensation Table. OPTION GRANTS IN LAST FISCAL YEAR(A)
INDIVIDUAL GRANTS - ----------------------------------------------------------------------------------------------- NUMBER OF PERCENT OF SECURITIES TOTAL OPTIONS GRANT UNDERLYING GRANTED TO MARKET PRICE DATE OPTIONS EMPLOYEES IN EXERCISE OR ON DATE OF EXPIRATION PRESENT NAME GRANTED FISCAL YEAR BASE PRICE GRANT DATE VALUE(B) - ------------------------- ---------- ------------- ----------- ------------ ---------- --------- C. M. Pigott............. 6,441 20.26% $44.54 $53.00 4/26/2004 $140,993 D. J. Hovind............. 2,605 8.19 44.54 53.00 4/26/2004 57,023 M. A. Tembreull.......... 1,627 5.12 44.54 53.00 4/26/2004 35,615 W. E. Boisvert........... 1,679 5.28 44.54 53.00 4/26/2004 36,753 M. C. Pigott............. 1,443 4.54 44.54 53.00 4/26/2004 31,587 - ------------ (a) The date that all options granted in 1994 become exercisable is January 1, 1997. This date may be accelerated in the event of a change in control of the Company (as defined in the 1991 Long-Term Incentive Plan). (b) The grant date present value was prepared by an independent consultant using a variation of the Black-Scholes option pricing model with the following assumptions: (i) 26.0% expected share price volatility, (ii) 6.97% risk-free rate of return, (iii) an expected dividend yield of 2.6% and (iv) an expected ten-year exercise period.
OPTION EXERCISES AND FISCAL YEAR-END VALUES -- Shown below is information concerning the exercise of stock appreciation rights and options to purchase the Company's common stock under the 1981 Long-Term Incentive Plan and the 1991 Long-Term Incentive Plan by the Named Officers in 1994 or held by them at December 31, 1994: AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/ SARS ACQUIRED ON OPTIONS/SARS AT FY-END AT FY-END NAME EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE - ------------------------- ----------- -------------- ---------------------- -------------------------- C. M. Pigott............. 0 $ 0 12,914 / 17,101 $ 169,671 / $5,811 D. J. Hovind............. 0 0 7,545 / 7,437 105,542 / 2,633 M. A. Tembreull.......... 1,000 15,950 3,414 / 4,597 46,302 / 1,609 W. E. Boisvert........... 0 0 0 / 4,805 0 / 1,704 M. C. Pigott............. 981 25,094 1,048 / 3,337 14,808 / 1,032
7 LONG-TERM INCENTIVE PLANS -- All stock-based awards under the Company's Long-Term Incentive Plan are shown in the Option Grant and Option Exercise tables set forth above. Shown below is information in respect of non-stock price-based awards made in 1994 under the Long-Term Incentive Plan: LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS UNDER PERFORMANCE OR NON-STOCK PRICE-BASED PLANS OTHER PERIOD UNTIL ------------------------------ NAME MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM - -------------------------- --------------------- --------- -------- -------- C. M. Pigott.............. 1/1/94 - 12/31/96 $30,713 $337,500 $675,000 D. J. Hovind.............. 1/1/94 - 12/31/96 26,379 136,500 273,000 M. A. Tembreull........... 1/1/94 - 12/31/96 25,191 85,250 170,500 W. E. Boisvert............ 1/1/94 - 12/31/96 26,004 88,000 176,000 M. C. Pigott.............. 1/1/94 - 12/31/96 22,347 75,625 151,250
Payments of awards under the Company's Long-term Incentive Plan are tied to achieving Company, business unit and individual goals over a three-year performance period. Goals established for Company performance are based on the Company's financial performance relative to a selected group of companies with similar business characteristics. Goals established for business unit and individual performance are based on financial and strategic objectives approved by the Compensation Committee on an individual basis. RETIREMENT BENEFITS -- The following table shows the estimated annual retirement benefit payable to participating employees, including the Named Officers, under the Company's noncontributory retirement plan and Supplemental Retirement Plan: PENSION PLAN TABLE
YEARS OF SERVICE ------------------------------------------------ REMUNERATION 15 20 25 30 35 - ------------------------------ -------- -------- -------- -------- -------- $ 350,000..................... $ 76,927 $102,569 $128,211 $153,853 $179,495 400,000..................... 88,177 117,569 146,961 176,353 205,745 500,000..................... 110,677 147,569 184,461 221,353 258,245 600,000..................... 133,177 177,569 221,961 266,353 310,745 700,000..................... 155,677 207,569 259,461 311,353 363,245 800,000..................... 178,177 237,569 296,961 356,353 415,745 1,400,000.................... 313,177 417,569 521,961 626,353 730,745 1,500,000.................... 335,677 447,569 559,461 671,353 783,245
The Company has a noncontributory retirement plan which has been in effect since 1947. Named Officers participate in this plan on the same basis as other salaried employees. The plan provides benefits based on years of service and salary. The benefit for each year of service, up to 35 years, is equal to 1% of salary plus 0.5% of salary in excess of the Social Security Covered Compensation level. Salary is defined as the average of the highest 60 consecutive months of an employee's cash compensation, which includes those amounts reported in the "Salary" and "Bonus" columns of the Summary Compensation Table, but it excludes compensation under the Long-Term Incentive Plan. Years of credited service as of December 31, 1994 for the Named Officers are: C. M. Pigott, 35 years; D. J. Hovind, 30 years; W. E. Boisvert, 6 years; M. A. Tembreull, 24 years; M. C. Pigott, 16 years. The Company's unfunded Supplemental Retirement Plan provides a retirement benefit to those affected by the maximum benefit limitations permitted for qualified plans by the Internal Revenue Code and to those deferring incentive compensation bonuses. The benefit is equal to the amount of 8 normal pension benefit reduction resulting from the application of maximum benefit and salary limitations and the exclusion of deferred incentive compensation bonuses from the retirement plan benefit formula. The Pension Plan Table illustrates approximate retirement benefits at age 65 and are based on single-life annuity amounts. They are not subject to any deduction for Social Security or other offset amounts. COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION -- The Compensation Committee of the Board of Directors has furnished the following report on executive compensation: Under the supervision of the Compensation Committee, the Company has designed its executive pay programs to provide a direct link between Company performance and executive compensation. These programs have been in use for a number of years. The compensation of Company executives under these programs is determined annually by the Compensation Committee. The Company believes that its overall executive compensation package should be sufficient to attract and retain highly qualified executives and should provide meaningful incentives for measurably superior performance. The Company's executive compensation program is comprised of three main components: (i) base salaries; (ii) annual cash bonuses intended to focus maximum effort on achieving profitability, individually assigned objectives, and the highest level of product quality; and (iii) long-term incentives in the form of stock options and cash awards intended to focus efforts on achieving long-term growth in net income, return on sales and return on capital. BASE SALARIES. Base salaries are compared with independent salary surveys, and consultants are utilized from time to time to assure that the overall compensation package is competitive with the average compensation packages offered by similar companies, including some of the selected companies described in the long-term incentive plan discussed below (the "Selected Companies"). The most recent survey compared the compensation packages of 335 companies with which the Company competes in the market for executive talent. Nine of the thirteen companies included in the Standard & Poor's indices used in the performance graph set forth below were included in the survey. The base salaries of the Company's executive officers were generally equivalent to the average salaries paid by these similar companies; the Chief Executive Officer's base salary was above the average. ANNUAL CASH BONUSES. Annual cash bonuses may range up to 77% of the executive's base salary. In general, from 50% to 60% of these bonuses are based on the Company's performance compared to an overall profit goal approved by the Compensation Committee. The balance of the executives' bonus calculation is based upon the attainment, in the subjective judgment of the Compensation Committee, of one or more individual goals. In general, these goals involve factors such as the financial performance of the business units for which the executive has direct responsibility, such as profitability or return on investment, as well as non-financial performance criteria such as market share improvement, product quality, product improvement, new product development, production efficiencies and similar specific individual assignments. The individual goals are changed annually, and a level of importance is assigned to each goal on a percentage basis. The calculation of the bonus takes into account both the level of achievement and the assigned importance of the goal. The achievement of each goal is determined separately, and no bonus for a specific goal is paid unless at least 70% of that goal is achieved. The bonuses paid in 1994 reflect an achievement in excess of 100% of the Company's overall profit goal for 1993. The amounts of bonuses earned in 1994 (to be paid in 1995) were not determined on the date this proxy statement was prepared. 9 LONG-TERM INCENTIVES. Given the cyclical nature of the Company's business, long-term incentives are based on a three-year performance period and are provided through annual grants of stock options and cash incentives. The Compensation Committee determines a target award for each executive officer, expressed as a percentage of salary at the date the award is granted. The target award is allocated one-half to stock options and one-half to the cash incentive award. Stock options automatically become exercisable at the end of the three-year performance period and are intended to link the interests of key employees directly with stockholders' interests through increased individual stock ownership. A significant portion (50% to 75%) of the long-term cash incentive award is based on overall Company performance measured in terms of the Company's ranking in compound growth of net income, return on sales, and return on capital (weighted equally) when compared to the Selected Companies, a group of Fortune-500 companies in similar industries. The Selected Companies have been used for this comparison for a number of years; these companies have been selected because, in the judgment of the Company's compensation consultants and the Compensation Committee, they are the most directly comparable in size and nature of business to the Company. The Selected Companies include eight of the thirteen companies which make up the published Standard & Poor's indices in the performance graph set forth below. The balance of the executives' long-term cash incentive award is based upon each executive's meeting business unit and individual objectives. These objectives are established on the same basis as the types of individual goals described above for the annual cash bonus, but they are measured over a three-year performance cycle. The actual amount of each individual's cash incentives related to the executive's business unit financial performance and other individual objectives is determined by the Compensation Committee at the end of a rolling three-year performance cycle, based on the Committee's subjective evaluation of each executive's performance during the preceding three years. The target amount will be earned if Company financial performance ranks above at least half of the Selected Companies and business unit and individual performance are at 100% of goal. The maximum award amount will be earned if Company financial performance ranks above all of the comparison companies and business unit and individual performance are at least 150% of goal. No award will be earned if Company financial performance ranks below 75% or more of the Selected Companies and business unit and individual performance is below 75% of goal. For the three-year cycle ended in 1993, the Company achieved in excess of 100% of the comparative performance goal. The incentive cash awards for each executive officer for the three-year cycle ended in 1994 were not determined on the date this proxy statement was prepared. CHIEF EXECUTIVE OFFICER'S COMPENSATION. The Chief Executive Officer's compensation is comprised of the same components as other executives: (i) base salary; (ii) an annual cash bonus; and (iii) a long-term incentive in the form of stock options and a cash award. However, the CEO's annual cash bonus is based entirely on the Company's profit goal as established by the Compensation Committee. The bonus earned in 1993 and paid in 1994 reflects an achievement in excess of 100% of the goal for 1993. The bonus earned in 1994 to be paid in 1995 was not determined on the date this proxy statement was prepared. The cash portion of the long-term incentive is likewise based entirely on the Company's performance during the three-year cycle as compared to the Selected Companies. For the three-year cycle ended in 1993, the Company achieved in excess of 100% of this goal. The incentive cash award for the three-year cycle ended in 1994 was not determined on the date this proxy statement was prepared. As with other executives, the size of the stock option award is determined on the basis of salary and not on the amount and terms of options already held. 10 Section 162(m) of the Internal Revenue Code, enacted in 1993, generally disallows a tax deduction to public companies for compensation over $1 million paid to the Company's executive officers. The Compensation Committee considers the net cost to the Company (including the availability of income tax deductions) in making all compensation decisions. OVERALL COMPENSATION. The overall compensation packages (base salary, annual cash bonuses and long-term incentives) for each of the Company's executive officers and the Chief Executive Officer was below the average compensation of executive officers in equivalent positions of similar companies surveyed. The Compensation Committee believes, however, that the overall compensation package for the Company's key executives meets the objective of providing significant individual performance incentives. MEMBERS OF THE COMPENSATION COMMITTEE R. P. Cooley H. J. Haynes J. H. Wiborg 11 SHAREOWNER RETURN PERFORMANCE PRESENTATION -- Set forth below is a line graph comparing the yearly percentage change in the cumulative total shareowner return on the Company's common stock to the cumulative total return of the Standard & Poor's Composite-500 Stock Index and an equally-weighted simple average of the Standard & Poor's Heavy-Duty Trucks & Parts and the Standard & Poor's Machinery (Diversified) indices for the period of five fiscal years commencing December 31, 1989 and ending on December 31, 1994. Management believes that the blending of these two indices provides a better comparison than either of the indices alone because the Company's performance can be compared to a larger number of comparable companies. The comparison assumes that $100 was invested on December 31, 1989 in the Company's common stock and in the stated indices and assumes reinvestment of dividends. EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
1989 1990 1991 1992 1993 1994 ------ ------ ------ ------ ------ ------ PACCAR Inc 100.00 77.58 119.50 144.28 159.47 141.32 S & P 500 100.00 96.89 126.41 136.05 149.76 151.74 S & P Indices 100.00 83.95 104.48 123.18 167.60 153.92
COMPENSATION OF DIRECTORS In 1994, each director who was not an employee was entitled to an annual retainer of $35,000 and a fee of $5,000 for each Board or committee meeting attended. A single meeting attendance fee is paid when more than one meeting is held on the same day. INDEPENDENT PUBLIC ACCOUNTANTS Ernst & Young have performed the audit of the Company's financial statements for the year 1994 and have been selected to perform this function for 1995. Partners from the Seattle office of Ernst & Young LLP are expected to be present at the stockholders' meeting with the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. 12 OTHER BUSINESS The Company knows of no other matters likely to be brought before the meeting. However, if other proposals are presented, proxies will be voted in respect thereof in accordance with the judgment of the person or persons voting such proxies. G. G. Morie VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY March 20, 1995 13 -----END PRIVACY-ENHANCED MESSAGE-----