Exhibit 4.1
PACCAR INC
RESTRICTED STOCK AND DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE OF THE PLAN
The COMPANY has established this PLAN to provide NON-EMPLOYEE DIRECTORS with
financial incentives to promote the success of the COMPANY'S long-term business
objectives, and to encourage qualified persons to accept nominations as a
NON-EMPLOYEE DIRECTOR. The PLAN is unfunded and benefits are payable in the form
of shares of PACCAR COMMON STOCK or cash.
2. DEFINITIONS
(a) BOARD OF DIRECTORS means the Board of Directors of PACCAR Inc.
(b) COMMITTEE means the Executive Committee of the BOARD OF DIRECTORS
or any successor to such committee.
(c) COMMON STOCK means common shares of PACCAR Inc with $1.00 par value
and any class of common shares into which such common shares hereafter may be
converted.
(d) COMPANY means PACCAR Inc, a Delaware corporation.
(e) DEFERRED ACCOUNTS means either the unfunded Stock Unit or Income
Account maintained by the COMPANY into which a NON-EMPLOYEE DIRECTOR may defer
payment of his or her cash compensation (retainer and fees) for service as a
COMPANY DIRECTOR.
(f) FAIR MARKET VALUE means the closing price of the COMMON STOCK on
NASDAQ reported for the date specified for determining such value.
(g) GRANT DATE means the date each year that NON-EMPLOYEE DIRECTORS
receive a grant of RESTRICTED STOCK.
(h) GRANTEE means the NON-EMPLOYEE DIRECTOR receiving the RESTRICTED
STOCK or his or her legal representative, legatees, distributees or alternate
payees, as the case may be.
(i) MANDATORY RETIREMENT means retirement as a DIRECTOR at age
seventy-two (72) or at such other age as may be specified in the bylaws for the
BOARD OF DIRECTORS in effect at the time of a NON-EMPLOYEE DIRECTOR'S
TERMINATION.
(j) NON-EMPLOYEE DIRECTOR means a member of the COMPANY'S BOARD OF
DIRECTORS who is not a current employee of the COMPANY.
(k) PLAN means this Restricted Stock and Deferred Compensation Plan for
Non-Employee Directors as it may be amended from time to
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time, or any successor plan that the COMMITTEE or BOARD OF DIRECTORS may adopt
from time to time with respect to the grant of DIRECTOR RESTRICTED STOCK or
other stock-based grants.
(l) RESTRICTED STOCK means COMMON STOCK that may not be sold,
transferred or otherwise disposed of by the GRANTEE except under such
circumstances as may be specified by the COMMITTEE.
(m) TERMINATION occurs when a NON-EMPLOYEE DIRECTOR ceases to be a
member of the BOARD OF DIRECTORS.
3. PARTICIPATION
Each NON-EMPLOYEE DIRECTOR of the COMPANY shall be a participant in the PLAN
during his tenure as a DIRECTOR.
4. AWARDS OF RESTRICTED STOCK
(a) On July 5, 2000 and on the first business day of each calendar year
thereafter for the duration of the PLAN (the GRANT DATE), each person who is a
NON-EMPLOYEE DIRECTOR shall receive a grant of RESTRICTED STOCK in an amount to
be determined in accordance with the following formula: The number of shares of
RESTRICTED STOCK granted to each NON-EMPLOYEE DIRECTOR each calendar year shall
be determined by (i) dividing ten thousand dollars ($10,000) by the FAIR MARKET
VALUE of the COMMON STOCK on the GRANT DATE, and (ii) rounding the resulting
number up to the nearest whole share.
(b) Shares of RESTRICTED STOCK shall become unrestricted on the third
anniversary of the applicable GRANT DATE subject to the provisions of Section
10. Shares of RESTRICTED STOCK may not be resold or otherwise transferred by a
GRANTEE until such shares become unrestricted in accordance with the provisions
of this Section 4(b).
(c) Each RESTRICTED STOCK grant shall be evidenced by a written
RESTRICTED STOCK GRANT AGREEMENT that shall be executed by the GRANTEE and an
authorized COMPANY representative which shall indicate the date of the
RESTRICTED STOCK award, the number of shares of COMMON STOCK awarded, and
contain such terms and conditions as the COMMITTEE shall determine with respect
to such RESTRICTED STOCK grant consistent with the PLAN.
5. SHARES OF STOCK SUBJECT TO THE PLAN
There shall be reserved for use under the PLAN (subject to the provisions of
Section 8 hereof) a total of 50,000 shares of COMMON STOCK, which shares may be
authorized but unissued shares of COMMON STOCK, treasury shares or issued shares
of COMMON STOCK that shall have been reacquired by the COMPANY.
6. DIVIDEND, VOTING AND OTHER SHAREHOLDER RIGHTS
Except as otherwise provided in the PLAN, each GRANTEE shall have all of the
rights of a shareholder of the COMPANY with respect to all
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outstanding shares of RESTRICTED STOCK registered in his name, including the
right to receive dividends and other distributions paid or made with respect to
such shares and the right to vote such shares.
7. DEFERRAL OF COMPENSATION
In addition to the grant of RESTRICTED STOCK a NON-EMPLOYEE DIRECTOR
may elect, on or before December 31 of any year, to defer payment of at least
25% of the cash compensation to be paid to the NON-EMPLOYEE DIRECTOR for
services as a COMPANY director during the following calendar year. Before the
term of a new NON-EMPLOYEE DIRECTOR begins, he may elect to defer payment for
the remainder of the first calendar year of his term.
Each participating NON-EMPLOYEE DIRECTOR may elect to have all or a
portion of his cash compensation placed into one or both of two unfunded
accounts maintained by the COMPANY (hereafter DEFERRED ACCOUNTS).
(a) STOCK UNIT ACCOUNT. The initial account balance will be
equal to the number of shares of COMMON STOCK that the amount deferred could
have purchased at the FAIR MARKET VALUE on the date the NON-EMPLOYEE DIRECTOR'S
cash compensation is payable. Thereafter any dividends earned will be treated as
if those dividends had been invested in additional shares of COMMON STOCK at the
FAIR MARKET VALUE on the date the dividend is payable. Payment from the PACCAR
Stock Unit Account will be in shares of COMMON STOCK from those authorized under
Section 5 of this PLAN. Fractional shares will be paid in cash.
(b) INCOME ACCOUNT. Interest shall accrue on the balance in
the account commencing as of the date the NON-EMPLOYEE DIRECTOR'S cash
compensation is payable. Interest is credited at a rate equal to the simple
combined average of the monthly Aa Industrial Bond yield averages for the
immediately preceding calendar quarter as reported in Moody's Bond Record.
Interest is compounded quarterly.
8. ADJUSTMENTS TO THE NUMBER OR VALUE OF SHARES OF COMMON STOCK
If there are any changes in the number or value of shares of COMMON STOCK by
reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, consolidations or other events that increases or
decreases the number or value of issued and outstanding shares of COMMON STOCK,
the BOARD OF DIRECTORS or COMMITTEE may make such adjustments as it shall deem
appropriate, in order to prevent dilution or enlargement of rights. This
provision does not, however, authorize the delivery of a fractional share of
COMMON STOCK under the PLAN.
9. NON-TRANSFERABILITY
Shares of RESTRICTED STOCK, and any DEFERRED ACCOUNTS shall not be assigned,
attached, or otherwise subject to any creditor's process or transferred by the
GRANTEE otherwise than by will or the laws of descent and distribution, or
pursuant to a trust created for the
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benefit of the NON-EMPLOYEE DIRECTOR or his family or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code, Title I of
ERISA or the rules thereunder. The restrictions set forth in Section 4(b) shall
apply to the shares of RESTRICTED STOCK in the hands of the trustee or
NON-EMPLOYEE DIRECTOR'S former spouse.
10. TERMINATION OF STATUS AS A NON-EMPLOYEE DIRECTOR
(a) In the event of a TERMINATION by reason of MANDATORY RETIREMENT,
disability or death all shares of RESTRICTED STOCK held by the GRANTEE shall
become fully vested, notwithstanding the provisions of Section 4(b) hereof, and
the GRANTEE (or the GRANTEE'S estate or a person who acquired the shares of
RESTRICTED STOCK by bequest or inheritance) shall have the right to resell or
transfer such shares at any time.
(b) In the event of a TERMINATION for any reason other than those
specified in subparagraph (a) above, any shares of RESTRICTED STOCK granted
hereunder shall be forfeited and the GRANTEE shall return to the COMPANY for
cancellation any stock certificates representing such forfeited shares which
shall be deemed to be canceled and no longer outstanding as of the date of
TERMINATION; and from and after the date of TERMINATION, the GRANTEE shall cease
to be a shareholder with respect to such forfeited shares and shall have no
dividend, voting or other rights with respect thereto.
(c) Upon TERMINATION for any reason, any balance in the deferred Stock
Unit Account in Section 7(a) will be paid in shares of COMMON STOCK. Payment
from the Income Account in Section 7(b) will be paid in a lump sum or, if the
NON-EMPLOYEE DIRECTOR elects, in quarterly, semi-annual or annual installments
over a period not in excess of 15 years.
(d) Notwithstanding the provisions of subparagraphs (a) through (c)
above, the BOARD OF DIRECTORS may, in its sole discretion, establish different
terms and conditions pertaining to the effect of TERMINATION, to the extent
permitted by applicable federal and state law.
11. CHANGE IN CONTROL
Upon the occurrence of a change in control of the Company, all time periods
relating to shares of RESTRICTED STOCK becoming unrestricted shall be
accelerated so that all such shares immediately become unrestricted. Any
DEFERRED ACCOUNTS will be payable within 30 days of the change in control in a
lump sum.
12. PLAN ADMINISTRATION
The PLAN will be administered by the Executive Committee of the BOARD OF
DIRECTORS (the COMMITTEE). The COMPANY will pay all costs of administration of
the PLAN. The COMMITTEE shall have sole discretion to interpret the PLAN, amend
and rescind rules relating to its implementation and make all determinations
necessary for
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administration of the PLAN. Any determination, decision or action of the
COMMITTEE in connection with the interpretation, administration or application
of the PLAN shall be final, conclusive and binding on all persons. The COMMITTEE
may employ consultants or other persons and rely upon their advice. All
elections taken and all determinations made by the COMMITTEE in good faith shall
be final and binding upon all GRANTEES, the COMPANY and all interested persons.
No member of the COMMITTEE shall be personally liable for any action,
determination or interpretation made in good faith with respect to the PLAN.
The COMMITTEE may make such amendments or modifications in the terms and
conditions of any grant of RESTRICTED STOCK as it may deem advisable, or cancel
or annul any grant of RESTRICTED STOCK, provided, however, that no such
amendment, modification, cancellation or annulment may, without the consent of
the GRANTEE, adversely affect his rights with respect to such grant.
13. TAX WITHHOLDING
To the extent required by law, the GRANTEE may make such arrangements
satisfactory to the COMPANY to satisfy any tax withholding or employment tax
obligations resulting from the grant of RESTRICTED STOCK.
14. AMENDMENT AND TERMINATION OF THE PLAN
The BOARD OF DIRECTORS or the COMMITTEE may at any time suspend, terminate,
modify or amend the PLAN in any respect; provided, however, shareholder approval
of any PLAN amendment shall be obtained only if required by law or the
requirements of any stock exchange on which the COMMON STOCK is listed or
quoted. No suspension, termination, modification or amendment of the PLAN may,
without the consent of the GRANTEE, adversely affect his or her rights with
respect to the RESTRICTED STOCK granted to such GRANTEE or his DEFERRED
ACCOUNTS.
15. BENEFICIARY DESIGNATION
Each NON-EMPLOYEE DIRECTOR may designate a beneficiary for each outstanding
grant of RESTRICTED STOCK and for payment of his DEFERRED ACCOUNTS in the event
of his death. If no beneficiary is designated or the beneficiary does not
survive the NON-EMPLOYEE DIRECTOR, the award shall be made to the NON-EMPLOYEE
DIRECTOR'S surviving spouse or if there is none, to his estate.
16. EFFECTIVE DATE OF THE PLAN AND DURATION
This PLAN will become effective upon approval by the shareholders of the COMPANY
and will remain in effect until terminated by the COMMITTEE or the BOARD OF
DIRECTORS.
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