Document:

pcar-ex4j_578.htm

Exhibit 4(j)

 

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934

PACCAR Inc (the “Corporation”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended:  its Common Stock.

Description of Common Stock

The following description of PACCAR’s Common Stock is a summary and does not purport to be complete.  It is subject to and qualified in its entirety by reference to PACCAR’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and Sixth Amended and Restated Bylaws (the “Bylaws”), each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4(j) is a part. For additional information, you should read the Certificate of Incorporation, the Bylaws and the applicable provisions of the Delaware General Corporation Law.

Authorized Capital Shares

The Corporation is authorized to issue 1,201,000,000 shares of capital stock for all classes, consisting of 1,200,000,000 shares of common stock, $1.00 par value per share (“Common Stock”) and 1,000,000 shares of preferred stock, no par value (“Preferred Stock”). The outstanding shares of Common Stock are fully paid and nonassessable.

Voting Rights

Holders of Common Stock are entitled to one vote per share on all matters voted on by the stockholders, including the election of directors. The Common Stock does not have cumulative voting rights.

Dividend Rights

Subject to the rights of holders of outstanding shares of Preferred Stock, if any, the holders of Common Stock are entitled to receive dividends, if any, as may be declared from time to time by the Board of Directors in its discretion out of funds legally available for the payment of dividends.

Liquidation Rights

Subject to any preferential rights of outstanding shares of Preferred Stock, holders of Common Stock will share ratably in all assets legally available for distribution to the Corporation’s stockholders in the event of dissolution.

Other Rights and Preferences

The Common Stock has no sinking fund or redemption provisions or preemptive, conversion or exchange rights. 

Certain Anti-Takeover Effects of Delaware Law

The Corporation is subject to Section 203 of the Delaware General Corporation Law (“Section 203”). In general, Section 203 prohibits a publicly held Delaware corporation from engaging in various “business combination” transactions with any interested stockholder for a period of three years following the date of the transactions in which the person became an interested stockholder, unless:

 

 

	
 
	
•
	
the business combination or the transaction which resulted in the stockholder becoming an interested stockholder is approved by the board of directors prior to the date the interested stockholder obtained such status;

	
 
	
•
	
upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (1) by persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

	
 
	
•
	
on or subsequent to such date the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders by the affirmative vote of at least 66 and 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

 

A “business combination” is defined to include mergers, asset sales, and other transactions resulting in financial benefit to a stockholder. In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts with respect to the Corporation and, accordingly, may discourage attempts to acquire the Corporation even though such a transaction may offer the Corporation’s stockholders the opportunity to sell their stock at a price above the prevailing market price. 

 

Certain Anti-Takeover Provisions of the Certificate of Incorporation and Bylaws

Certain provisions of the Certificate of Incorporation and Bylaws could have the effect of delaying, deterring or preventing another party from acquiring or seeking to acquire control of the Corporation. For example, the Certificate of Incorporation and Bylaws include provisions that:

 

	
 
	
•
	
authorize the board of directors, without vote or other action by stockholders, to cause the issuance of preferred stock in one or more series from time to time and, with respect to each series, to establish the number of shares constituting that series and to fix the rights and other terms of that series, which may include, without limitation, voting rights, dividend rights and preferences, liquidation rights and preferences and rights to convert the preferred stock of such series into other securities or property;

	
 
	
•
	
provide that, subject to the rights of any series of preferred stock that may be outstanding, vacancies on the board of directors or newly created directorships resulting from an increase in the number of directors may be filled only by a majority of the remaining directors then in office, even though less than a quorum;

	
 
	
•
	
provide that the number of directors on the board of directors shall be determined by the board of directors;

 

 

	
 
	
•
	
establish advance notice procedures and other requirements for stockholders to submit nominations of candidates for election to the board of directors and other proposals to be brought before a stockholders meeting;

	
 
	
•
	
require that actions to be taken by stockholders must be taken at an annual or special meeting of stockholders and not by written consent; 

	
 
	
•
	
provide that, subject to the rights of any series of preferred stock that may be outstanding and except as may be required by law, special meetings of stockholders may be called only pursuant to a resolution approved by a majority of the entire board of directors; 

	
 
	
•
	
require an affirmative vote of holders of two-thirds (2/3) of the outstanding shares of stock entitled to vote for the following actions: amendment of the Certificate of Incorporation; adoption of an agreement of merger or consolidation; sale, lease or exchange of all or substantially all of the Corporation’s property and assets; dissolution of the Corporation; and  approval of a stockholder action to make, alter or repeal the Bylaws; and

	
 
	
•
	
provide that if, after the record date for the 1986 stockholders’ meeting, any stockholder becomes the beneficial owner of twenty percent (20%) or more of the outstanding shares of stock of the Corporation (a “Suitor”), then in any merger, consolidation, sale or other disposition of all or substantially all of the Corporation’s property and assets (each called “a Business Combination”), (1) the cash, or fair market value of other consideration, to be received per share by stockholders of the Corporation in any Business Combination in which the Suitor has a direct or indirect material interest (other than solely as a stockholder of the Corporation), shall not be less than the highest per share price (including brokerage commissions and/or soliciting dealers’ fees) paid by the Suitor in acquiring any of its holdings of the Corporation’s common stock; and (2) the Suitor shall not have received any loans, advances, guarantees, pledges or other financial assistance or tax benefits provided by the Corporation. The term Suitor includes any party with which the Suitor has a direct or indirect agreement, understanding or arrangement for the purpose of acquiring, holding or voting stock of the Corporation.

 

Listing

The common Stock is traded on The Nasdaq Stock Market LLC under the trading symbol “PCAR.”pcar-ex10g_464.htm

 

Exhibit 10(g)

SENIOR EXECUTIVE YEARLY INCENTIVE COMPENSATION PLAN

 

	
 
	
1.
	
PURPOSE

 

The Plan was approved by the Company’s stockholders in 1997, 2002, 2006, 2011 and 2016. The purpose of the Plan is to promote the success of the Company and the creation of shareholder value by

(a)encouraging senior executives to focus maximum effort on achieving high-quality performance objectives, Company profitability, and continued Company growth, and (b) encouraging the attraction and retention of senior executives with exceptional qualifications.

 

	
 
	
2.
	
ELIGIBILITY

 

The Company’s chief executive officer and such other senior executives as are designated by the Committee shall be eligible to participate in the Plan.

 

	
 
	
3.
	
ADMINISTRATION

 

The Plan shall be administered by the Committee.  The Committee shall have the authority to interpret the Plan and make all other decisions relating to the administration of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to administer the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons.

 

	
 
	
4.
	
AWARD DETERMINATION

 

Incentive awards paid under the Plan will be based solely on the attainment of specified performance goals established by the Committee during the first 90 days of the Plan Year; provided, however, that the Committee may establish or amend goals after the first 90 days for new hires or to reflect significant changes in a participant’s responsibilities. Performance goals will be based on objective criteria specifically defined by the Committee on a Company, business unit or peer group comparison basis, which may include or exclude specified items of an unusual or non-recurring nature and are based on one or more of the following: net income, return on assets, return on net assets, return on sales, return on capital, return on equity, return on revenue, sales growth, market share, cash flow, cost reduction, total shareholder return, economic value added, cash flow return on investment and cash value added. The Committee may also establish performance goals based on subjective and/or objective criteria relating to leadership or strategic 

-1-

 
 

 

objectives at the Company or business unit level, which may include or exclude specified items of an unusual or non-recurring nature. Performance goals may include a minimum, maximum and target level of performance with the size of individual awards, if any, based on the level attained. Actual goal attainment will be certified in writing by the Committee before payout.

 

The Committee, in its sole discretion, may reduce or eliminate any award otherwise earned based on an assessment of individual performance, but in no event may any such reduction result in an increase of the award payable to any other participant. The Committee shall determine the amount of any such reduction by taking into account such factors as it deems relevant including, without limitation: (a) performance against other financial or strategic objectives; (b) its subjective assessment of the executive’s overall performance for the year; and (c) prevailing levels of total compensation among similar companies.

 

The maximum amount that may be paid to any eligible participant in any year under the Plan is $4,500,000.

 

	
 
	
5.
	
CHANGE IN CONTROL

 

If a Change of Control occurs, each participant will be entitled to the maximum prorated award based on the number of full or partial months completed prior to the Change in Control during the Plan Year in which the Change in Control occurs.

 

	
 
	
6.
	
TERMINATION OF EMPLOYMENT

 

Participants who retire, resign or are terminated before the end of the Plan Year are not eligible for an award for the Plan Year. In the event of death or disability, payout will be prorated based on actual goal achievement and salary received for the portion of the year worked.

 

	
 
	
7.
	
EMPLOYMENT RIGHTS

 

Neither the Plan, nor the payment of an award, nor any other action taken pursuant to the Plan, shall constitute or be evidence of any agreement or understanding, express or implied, that the Company or a Subsidiary will employ any individual for any period of time, in any position or at any particular rate of compensation.

 

	
 
	
8.
	
EFFECT OF MATERIAL RESTATEMENTS

 

The Board, in its sole discretion may recover all or part of an award under the Plan if it determines that all of the following have occurred:

-2-

 
 

 

 

	
 
	
(i)
	
any award under the Plan has been received by a Section 16 Officer or former Section 16 Officer of the Company;
	
 

	
 
	
(ii)
	
the Section 16 Officer engaged in fraud that caused or substantially contributed to material restatement of the Company’s financial statements; and
	
 

 

	
 
	
(iii)
	
the award was based in whole or in part based on financial results that were subsequently subject to the material restatement.
	
 

 

 

	
 
	
9.
	
AMENDMENT OR TERMINATION OF THE PLAN

 

The Board may alter, amend or terminate the Plan at any time. An amendment of the Plan shall be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations or rules. No awards shall be granted under the Plan after the termination thereof.

 

	
 
	
10.
	
EFFECTIVE DATE

 

The Plan shall be effective as of January 1, 2020.

 

	
 
	
11.
	
DEFINITIONS

 

	
 
	
(a)
	
“Board” means the Board of Directors of the Company, as constituted from time to time.
	
 

 

	
 
	
(b)
	
“Change in Control” for purposes of this Plan has the meaning proscribed in the Long Term Incentive Plan.
	
 

 

	
 
	
(c)
	
“Committee” means the Compensation Committee of the Board.

 

	
 
	
(d)
	
“Company” means PACCAR Inc, a Delaware corporation.

 

	
 
	
(e)
	
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
	
 

 

	
 
	
(f)
	
“Long Term Incentive Plan” means the PACCAR Inc Long Term Incentive Plan first adopted by the Board on February 11, 1991 and amended from time-to-time thereafter.
	
 

 

	
 
	
(g)
	
“Plan” means this amended and restated PACCAR Inc Senior Executive Yearly Incentive Compensation Plan, as it may be amended from time to time.
	
 

 

-3-

 
 

 

	
 
	
(h)
	
“Plan Year” means a calendar year.

 

	
 
	
(i)
	
“Section 16 Officer” means an executive officer as defined in section 16 of the Exchange Act.
	
 

 

	
 
	
(j)
	
“Subsidiary” means an entity in which the Company directly or indirectly owns a majority of all classes of outstanding equity.
	
 

-4-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00304-of-00352.parquet"}]]