<PAGE> 1
SCHEDULE 14A
Information Required in Proxy Statement
(Section 240.14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant ( )
Filed by a Party other than the Registrant ( X )
Check the appropriate box:
( ) Preliminary Proxy Statement
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Sections 240.14a-11(c) or
240.14a-12
PACCAR Inc
(Name of Registrant as Specified In Its Charter)
G. Glen Morie
Vice President, General Counsel and Secretary
(Name of Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box)
( X ) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction
applies:
not applicable
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2) Aggregate number of securities to which transaction
applies:
not applicable
---------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
not applicable
---------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
not applicable
---------------------------------------------------------
( ) Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11 (a)(2) and identify the filing for
which for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
---------------------------------
2) Form, Schedule or Registration Statement No.:
-----------
3) Filing Party:
-------------------------------------------
4) Date Filed:
---------------------------------------------
<PAGE> 2
[PACCAR Inc 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 26, 1994, 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 1997, and
until their successors are elected and qualified.
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, 1994.
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.
By order of the Board of Directors
[FACSIMILE SIGNATURE]
G. G. Morie
Vice President, General
Counsel and Secretary
Bellevue, Washington
March 18, 1994
<PAGE> 3
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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 26, 1994, 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 18, 1994.
Expenses for solicitation of proxies will be paid by the Company.
Solicitation will be by mail except for any telegraph, 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, 1994. 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, 1994, the Company had
outstanding 38,858,042 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, 1993:
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
BENEFICIAL OWNER OWNED(a) OF CLASS
------------------------------------------------ ------------ --------
<S> <C> <C>
BankAmerica Corporation 3,963,819 (b) 11.7
Seafirst Bank Trust Division
701 Fifth Avenue
Seattle, Washington 98124
Charles M. Pigott 2,280,849 (c)(d) 6.8
P.O. Box 1518
Bellevue, Washington 98009
James C. Pigott 2,008,118 (d)(e) 5.9
1405 42nd Ave. East
Seattle, Washington 98112
</TABLE>
<PAGE> 4
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, 1993:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
NAME OWNED(A) OF CLASS
--------------------------------------------------- ------------ --------
<S> <C> <C>
Richard P. Cooley.................................. 1,000 *
John M. Fluke, Jr.................................. 1,478 *
Carl H. Hahn....................................... 500 *
Harold J. Haynes................................... 3,478 *
David J. Hovind.................................... 16,794(d)(f) *
Charles M. Pigott.................................. 2,280,849(c)(d) 6.8
James C. Pigott.................................... 2,008,118(d)(e) 5.9
John W. Pitts...................................... 2,166 *
James H. Wiborg.................................... 28,478(g) *
William E. Boisvert................................ 836(f) *
Mark C. Pigott..................................... 321,999(d)(h) *
Michael A. Tembreull............................... 8,641(f) *
Total of all directors and executive officers
as a group (15 individuals)...................... 3,753,183(i) 11.1
</TABLE>
- ---------------
* does not exceed one percent.
(a) Numbers do not reflect the Company's 15% stock dividend paid on February 15,
1994 to stockholders of record at the close of business on January 10, 1994.
Amounts shown are rounded to whole-share amounts. As of the close of
business on December 31, 1993, the Company had outstanding 33,789,302 shares
of common stock.
(b) Of the 3,963,819 shares, BankAmerica Corporation and its subsidiaries have
sole voting power as to 3,209,826 shares, sole dispositive power as to
3,345,400 shares, shared voting power as to 22,274 shares and shared
dispositive power as to 448,321 shares.
(c) Includes 10,370 shares allocated in the Company's Savings Investment Plan
for which he has sole voting power but no dispositive power, 45,618 stock
units accrued for a deferred contingent cash award under the Long-Term
Incentive Plan and options to purchase 11,229 shares. Also includes 816,629
shares held by a charitable trust of which he is co-trustee and shares
voting and dispositive power, and 116,720 shares held by a corporation over
which he has sole voting power and sole dispositive power over 99,548 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 816,629 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:
D. J. Hovind (4,989), W. E. Boisvert (836) and M. A. Tembreull (3,247).
Includes stock units accrued for deferred contingent cash awards under the
Long-Term Incentive Plan as follows: D. J. Hovind (780) and M. A. Tembreull
(1,220). Also includes options to purchase shares as follows: D. J. Hovind
(6,561) and M. A. Tembreull (3,838).
(g) Includes 18,000 shares held in trust for which he is a trustee and shares
voting and dispositive power.
(h) Includes 2,075 shares allocated in the Company's Savings Investment Plan for
which he has sole voting power but no dispositive power, and the same
116,720 shares owned by the corporation referenced in note (c) over which he
has no voting or dispositive power. Also includes options to purchase 1,764
shares.
2
<PAGE> 5
(i) Reflects elimination of duplicate reporting of 816,629 shares referenced in
notes (c) and (e) and 116,720 shares referenced in notes (c) and (h).
ELECTION OF DIRECTORS
Three directors, constituting Class II Directors, are to be elected at the
meeting. The persons named below have been designated by the Board as nominees
for election as Class II Directors for a term expiring at the Annual Meeting of
Stockholders in 1997. All of the nominees are now directors of the Company and
have been nominated by the Board of Directors.
Under Delaware law, directors are elected by a plurality of the votes of
the shares present in person or represented by proxy at the meeting and entitled
to vote on 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 II 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 III and Class I Directors named
below have terms which expire in 1995 and 1996, respectively.
NOMINEES FOR TERMS EXPIRING AT THE ANNUAL MEETING IN 1997 (CLASS II DIRECTORS):
RICHARD P. COOLEY, age 70, Chairman of the Executive Committee of the Board
of Directors 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 Burlington Northern, Inc., Egghead, Inc. and UAL Corporation.
HAROLD J. HAYNES, age 68, 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 57, 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, also a director of the Company.
DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 1995 (CLASS III
DIRECTORS):
CARL H. HAHN, age 67, is the Chairman of Saurer Gruppe Holding AG, a
textile manufacturer. He was Chairman of the Board of Management of Volkswagen
AG from 1981 until his retirement in 1992, and became a member of its
Supervisory Board upon his retirement. He is also Deputy Chairman of the
Supervisory Board of AGIV, a chemical and industrial holding company, and sits
on the Supervisory Boards of several other European companies. He has served as
a director of the Company since 1993. He is also a director of Perot Systems
Corp. and TRW Inc.
CHARLES M. PIGOTT, age 64, 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
3
<PAGE> 6
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, also a director of the Company.
JOHN W. PITTS, age 67, 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 is also a director of BC Sugar Refinery Limited and BC TELECOM Inc.
DIRECTORS WHOSE TERMS EXPIRE AT THE ANNUAL MEETING IN 1996 (CLASS I DIRECTORS):
JOHN M. FLUKE, JR., age 51, 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 53, 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.
JAMES H. WIBORG, age 69, 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 Momentum Corporation, Seafirst Corporation,
Seattle-First National Bank, PENWEST, LTD., Univar Corporation, and VWR
Corporation.
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 9% 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 owns a fifty percent interest in an office building joint
venture whose books are maintained on a tax basis. In 1993, under generally
accepted accounting principles, Norcliffe's investment was reduced to $0. For
tax purposes, Norcliffe recognized an estimated loss of $96,000.
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.
In connection with the acquisition of Norcliffe in 1987, an escrow fund of
the Company's common stock was established by the selling shareholders of
Norcliffe (who include the NLP limited partners) to cover certain contingent
liabilities. In 1993, the Company was reimbursed from the escrow for $1.2
million of covered liabilities.
STOCK OWNERSHIP AND TRADING REPORTS
Prior to M. A. Tembreull's becoming an executive officer, his election to
defer a 1987 long-term incentive award into a stock account was erroneously
entered in the Company's records as a deferral into an income account. The error
was discovered in April, 1993 and the deferral was reported on a Form 4 for
April, 1993.
C. H. Hahn, a director of the Company, acquired 500 shares of the Company's
stock in October, 1993 which was reported on a Form 4 in January, 1994.
4
<PAGE> 7
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 18, 1994
to be considered for inclusion in the proxy materials for the Company's 1995
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 1993.
COMPENSATION COMMITTEE -- The Board of Directors has a standing
Compensation Committee. Members of the Compensation Committee are Messrs. R. P.
Cooley, J. M. Fluke, Jr., 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 three times in 1993.
The Company does not have a Nominating Committee.
The Board of Directors met four times during 1993, and each member attended
at least 75% of the meetings of the Board of Directors and the committees on
which he served.
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, 1993, 1992 and 1991 of those persons who were, at December
31, 1993, (a) the chief executive officer and (b) the other four most highly
compensated executive officers of the Company (the "Named Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
--------------------------
AWARDS
ANNUAL COMPENSATION ------------ PAYOUTS
----------------------------------- SECURITIES ----------- ALL OTHER
OTHER UNDERLYING LONG-TERM COMPENSATION(a)
ANNUAL OPTIONS/SARS INCENTIVE ----------------
NAME AND PRINCIPAL POSITION YEAR SALARY(b) BONUS(c) COMPENSATION (SHARES)(d) PAYOUTS(e)
- ------------------------------ ---- --------- -------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
C. M. Pigott.................. 1993 $750,000 $ $2,119(f) 4,457 $413,438 $8,994
Chairman and Chief 1992 773,308 525,000 4,812 0 8,728
Executive Officer 1991 630,000 441,000 5,798 0
D. J. Hovind.................. 1993 439,654 748(f) 2,021 121,481 8,994
President 1992 437,192 219,555 2,181 0 8,728
1991 335,000 174,200 2,261 0
W. E. Boisvert................ 1993 309,769 238(f) 1,307 0 8,994
Executive Vice President 1992 310,616 168,000 1,411 183,465 8,728
1991 280,000 138,432 0 0
M. A. Tembreull............... 1993 297,212 17(f) 1,242 69,694 8,994
Executive Vice President 1992 293,885 145,920 1,341 0 8,728
1991 240,000 108,108 1,472 0
M. C. Pigott.................. 1993 212,212 (f) 792 64,969 8,994
Executive Vice President 1992 206,769 78,400 855 0 8,728
1991 171,923 69,518 911 0
</TABLE>
- ---------------
(a) Amounts of All Other Compensation represent Company matching contributions
to the Company's Savings Investment Plan.
5
<PAGE> 8
(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) Amounts of bonuses earned in 1993 to be paid in 1994 were not determined on
the date this proxy statement was prepared.
(d) Share amounts do not reflect the Company's 15% stock dividend paid on
February 15, 1994 to stockholders of record at the close of business on
January 10, 1994. Pursuant to the terms of the 1991 Long-Term Incentive
Plan, the number of shares and the exercise price will be adjusted to
account for the stock dividend.
(e) Represents cash awards which were paid, or were payable but deferred at the
Named Officer's election, during 1991, 1992 and 1993 and earned during the
1988-1990, 1989-1991 and 1990-1992 Long-Term Incentive Plan performance
cycles, respectively.
(f) Amounts 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).
OPTION GRANTS -- Shown below is information on grants of stock options
pursuant to the 1991 Long-Term Incentive Plan in 1993 to the Named Officers
which are reflected in the Summary Compensation Table.
OPTION GRANTS IN LAST FISCAL YEAR(a)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ----------------------------------------------------------------------------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO MARKET PRICE GRANT DATE
OPTIONS EMPLOYEES IN EXERCISE OR ON DATE OF EXPIRATION PRESENT
NAME GRANTED FISCAL YEAR BASE PRICE GRANT DATE VALUE(b)
---- ---------- ------------- ----------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
C. M. Pigott................ 4,457 21.26% $53.64 $63.10 4/27/2003 $100,817
D. J. Hovind................ 2,021 9.64 53.64 63.10 4/27/2003 45,715
W. E. Boisvert.............. 1,307 6.23 53.64 63.10 4/27/2003 29,564
M. A. Tembreull............. 1,242 5.92 53.64 63.10 4/27/2003 28,094
M. C. Pigott................ 792 3.78 53.64 63.10 4/27/2003 17,915
</TABLE>
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(a) Amounts have not been adjusted to reflect the Company's 15% stock dividend
paid on February 15, 1994 to stockholders of record at the close of business
on January 10, 1994. Pursuant to the terms of the 1991 Long-Term Incentive
Plan, the number of shares and the exercise price will be adjusted to
account for the stock dividend. The exercise date for all options granted in
1993 is January 1, 1996. The exercise 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) 25.17% expected share price volatility, (ii) 5.97%
risk-free rate of return, (iii) an expected dividend yield of 2.2% and (iv)
an expected ten-year exercise period.
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<PAGE> 9
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 1993 or held by them at
December 31, 1993:
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT FY-END IN-THE-MONEY OPTIONS/
SHARES ACQUIRED EXERCISABLE/ SARS AT FY-END
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE(a) EXERCISABLE/UNEXERCISABLE
---- --------------- -------------- ---------------------- -------------------------
<S> <C> <C> <C> <C>
C. M. Pigott................ 0 $ 0 5,431 / 15,067 $131,702 / $243,877
D. J. Hovind................ 0 0 4,300 / 6,463 113,343 / 100,779
W. E. Boisvert.............. 2,368(b) 52,096 0 / 2,718 0 / 26,272
M. A. Tembreull............. 0 0 2,366 / 4,055 62,336 / 64,137
M. C. Pigott................ 0 0 853 / 2,558 20,685 / 40,161
</TABLE>
- ---------------
(a) Amounts have not been adjusted to reflect the Company's 15% stock dividend
paid on February 15, 1994 to stockholders of record at the close of business
on January 10, 1994. Pursuant to the terms of the Plans, the number of
shares and the exercise price will be adjusted to account for the stock
dividend.
(b) This transaction involved the exercise of SARs for cash; no shares were
acquired on the exercise.
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 1993 under the Long-Term Incentive Plan:
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON-STOCK PRICE-BASED PLANS
OTHER PERIOD UNTIL -----------------------------------
NAME MATURATION OR PAYOUT THRESHOLD TARGET MAXIMUM
---- -------------------- --------- -------- --------
<S> <C> <C> <C> <C>
C. M. Pigott............................ 1/1/93 - 12/31/95 $ 0 $281,250 $562,500
D. J. Hovind............................ 1/1/93 - 12/31/95 0 127,500 255,000
W. E. Boisvert.......................... 1/1/93 - 12/31/95 0 82,500 165,000
M. A. Tembreull......................... 1/1/93 - 12/31/95 0 78,375 156,750
M. C. Pigott............................ 1/1/93 - 12/31/95 0 50,000 100,000
</TABLE>
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.
7
<PAGE> 10
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
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
REMUNERATION 15 20 25 30 35
-------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 200,000.......... $ 43,296 $ 57,728 $ 72,160 $ 86,593 $101,025
250,000.......... 54,546 72,728 90,911 109,093 127,275
300,000.......... 65,796 87,728 109,661 131,593 153,525
400,000.......... 88,296 117,728 147,161 176,593 206,025
450,000.......... 99,546 132,728 165,911 199,093 232,275
500,000.......... 110,796 147,728 184,661 221,593 258,525
600,000.......... 133,296 177,728 222,161 266,593 311,025
700,000.......... 155,796 207,728 259,661 311,593 363,525
900,000.......... 200,796 267,728 334,661 401,593 468,525
1,200,000.......... 268,296 357,728 447,161 536,593 626,025
</TABLE>
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, 1993 for the Named Officers are: C. M. Pigott, 35 years; D. J.
Hovind, 29 years; W. E. Boisvert, 5 years; M. A. Tembreull, 23 years; M. C.
Pigott, 15 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 Service and to those deferring incentive
compensation bonuses. The benefit is equal to the amount of 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 competitive with comparable successful companies, 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 meets the objective of being competitive
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<PAGE> 11
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").
Annual Cash Bonuses. Annual cash bonuses may range from 15% to 50% 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 performance of the business units for which the executive
has direct responsibility, 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 1993 reflect an achievement in excess of 100% of the
Company's profitability goal for 1992. The amounts of bonuses earned in 1993 (to
be paid in 1994) were not determined on the date this proxy statement was
prepared.
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 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 judgement 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 some but not
all of those 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 calculation is
based upon each executive's meeting business unit and individual objectives.
These objectives are similar to 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
business unit and 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 1992, 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 1993 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
9
<PAGE> 12
entirely on the Company's profit goal as established by the Compensation
Committee. The bonus earned in 1992 and paid in 1993 reflects an achievement in
excess of 100% of the goal for 1992. The bonus earned in 1993 to be paid in 1994
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 1992, the Company achieved in excess of 100%
of this goal. The incentive cash award for the three-year cycle ended in 1993
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.
That portion of an individual executive's future compensation which may
exceed $1 million per annum will not be deductible by the Company as an expense
for Federal tax purposes. Although the amount of any additional tax is expected
to be insignificant to the Company, the Compensation Committee will consider
this issue in setting compensation policy in the future.
Based on executive compensation survey data, the Compensation Committee
believes that the overall compensation package for the Company's key executives
meets the objective of being competitive with the average compensation package
offered by similar companies while providing significant individual performance
incentives.
MEMBERS OF THE
COMPENSATION COMMITTEE
R. P. Cooley
J. M. Fluke, Jr.
H. J. Haynes
J. H. Wiborg
10
<PAGE> 13
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, 1988 and ending on December 31, 1993. 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, 1988 in the Company's common stock and in the
stated indices and assumes reinvestment of dividends.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) PACCAR Inc S & P 500 S & P Indices
<S> <C> <C> <C>
1988 100.00 100.00 100.00
1989 110.27 131.69 107.03
1990 85.55 127.61 89.85
1991 131.77 166.49 111.82
1992 159.10 179.18 131.84
1993 175.85 197.24 179.18
</TABLE>
COMPENSATION OF DIRECTORS
In 1993, each director who was not an employee was entitled to an annual
retainer of $35,000 and a fee of $3,000 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 1993 and have been selected to perform this function for
1994. Partners from the Seattle office of Ernst & Young 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.
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<PAGE> 14
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.
[FACSIMILE SIGNATURE]
G. G. Morie
Vice President, General
Counsel and Secretary
March 18, 1994
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<PAGE> 15
DIRECTIONS TO MEYDENBAUER CENTER:
[Map]
From I-405 take the N.E. 4th Street Exit, head west.
Turn right on 112th Avenue N.E. (heading north),
Turn left on N.E. 6th Street (heading west).
Parking garage entrance is on N.E. 6th Street.
<PAGE> 16
PROXY
PACCAR Inc
777 106TH AVE. N.E., BELLEVUE, WASHINGTON 98004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS APRIL 26, 1994
The undersigned hereby appoints Charles M. Pigott and John W. Pitts as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of common stock of
PACCAR Inc held of record by the undersigned on March 1, 1994, at the annual
meeting of stockholders to be held on April 26, 1994, or any adjournment
thereof.
Election of three Class II Directors to serve three-year terms ending in 1997:
Richard P. Cooley, Harold J. Haynes, James C. Pigott
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE.
SEE REVERSE SIDE
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED BY THE SAVINGS INVESTMENT PLAN TRUSTEE IN ACCORDANCE WITH THE PLAN.
1. Election of Directors. (see reverse)
FOR _____ WITHELD _____
For, except vote witheld from
the following nominee(s): _____________________________
2. In their discretion, Proxies are authorized to vote upon such other matters
as may properly come before the meeting.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by President or other authorized officer. If a
partnership, please sign partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
________________________________________
________________________________________
SIGNATURE(S) DATE
<PAGE> 17
PROXY
PACCAR Inc
777 106TH AVE. N.E., BELLEVUE, WASHINGTON 98004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS APRIL 26, 1994
The undersigned hereby appoints Charles M. Pigott and John W. Pitts as Proxies,
each with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated below, all the shares of common stock of
PACCAR Inc held of record by the undersigned on March 1, 1994, at the annual
meeting of stockholders to be held on April 26, 1994, or any adjournment
thereof.
Election of three Class II Directors to serve three-year terms ending in 1997:
Richard P. Cooley, Harold J. Haynes, James C. Pigott
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE DESIGNATED
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE SIDE
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL NOMINEES FOR DIRECTOR.
1. Election of Directors. (see reverse)
FOR _____ WITHELD _____
For, except vote witheld from
the following nominee(s): _____________________________
2. In their discretion, Proxies are authorized to vote upon such other matters
as may properly come before the meeting.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by President or other authorized officer. If a
partnership, please sign partnership name by authorized person.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
________________________________________
________________________________________
SIGNATURE(S) DATE
<PAGE> 18
APPENDIX A
DESCRIPTION OF GRAPHIC AND IMAGE MATERIAL
1. Location: Final page of proxy statement
Item: Map
Description: Map showing route to site of Annual Meeting
