Exhibit 10(a)


 


PACCAR Inc


Amended and Restated Supplemental Retirement
Plan


(Effective as of January 1, 2009)


 


SECTION 1. ESTABLISHMENT AND PURPOSE OF THE SUPPLEMENTAL PLAN


 


PACCAR Inc, a Delaware corporation (the “Company”), established the
PACCAR Inc Supplemental Retirement Plan (the “Supplemental Plan”) effective as
of January 1, 1975.  The sole
purpose of the Supplemental Plan is to supplement the benefits of certain
employees under the PACCAR Inc Retirement Plan, as amended from time to time
(the “Retirement Plan”).  The
Supplemental Plan has been amended from time to time, and was last amended on December 7,
2006.


 


The Company
hereby again amends and restates the Supplemental Plan effective as of January 1,
2009.  The Supplemental Plan, as amended
and restated, is intended to satisfy the requirements of, and shall be
implemented and administered in a manner consistent with, Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury
regulations promulgated thereunder.  Benefits
that commenced to be paid under the Supplemental Plan before January 1,
2005 shall be governed by the terms and conditions of the Supplemental Plan, as
in effect on December 31, 2004.


 


SECTION 2. PARTICIPATION


 


A Member who is an Employee (as both terms are defined
in the Retirement Plan) shall become a “Participant” in the Supplemental Plan
on the first day of the calendar year immediately following the calendar year
in which the earliest of (a), (b) or (c) below, occurs:


 


(a)                                  The
date the Employee elects to participate in the PACCAR Inc Deferred Incentive
Compensation Plan, Section 6 of the Administrative Guidelines of the
PACCAR Inc Long Term Incentive Plan or the PACCAR Inc Deferred Compensation
Plan, as they may be amended from time to time (collectively, the “Nonqualified
Plans”);


 


(b)                                 The
date the Employee’s monthly pension (determined in accordance with the
Retirement Plan) would, but for the limitation of Section 415 of the Code
and the maximum benefit limitations of the Retirement Plan, exceed the amount
of the monthly pension actually payable to such Employee under the Retirement
Plan after the application of such limitation.


 


(c)                                  The
date the Employee’s monthly pension (determined in accordance with the
Retirement Plan) would, but for the limitation of Section 401(a)(17) of
the Code, exceed the amount of the monthly pension actually payable to such
Employee under the Retirement Plan after the application of such limitation.


 


Notwithstanding
the foregoing, Participants shall be limited to, and may be more restrictive
than, the group of employees who are members of a select group of management or
highly-compensated employees (within the meaning of Sections 201, 301, and 401
of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).


 


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SECTION 3. SUPPLEMENTAL BENEFITS


 


A Participant’s Supplemental Benefit shall be the
amount (if any) by which the Total Pension Benefit exceeds the Participant’s
Retirement Plan Benefit.  The Total Pension
Benefit and the Retirement Plan Benefit shall be calculated as of the “Supplemental
Benefit Commencement Date.”


 


(a)                                  For
purposes of calculating a Participant’s Supplemental Benefit, “Total Pension
Benefit” shall equal the monthly pension which would be payable to such
Participant under Article 5 of the Retirement Plan (i) if the maximum
benefit limitations of Section 415 of the Code and of the Retirement Plan
did not apply, (ii) if the includable compensation limitations of Section 401(a)(17)
of the Code did not apply, and (iii) if the definition of “Salary” in the
Retirement Plan included any amount of base salary that is deferred or any
amount of incentive compensation that is deferred under the Company’s
Nonqualified Plans.  For purposes of this
paragraph, amounts deferred under the Company’s Nonqualified Plans shall be
deemed to be included in “Salary” for the calendar year in which such amounts
are earned.


 


(b)                                 For
purposes of calculating the Supplemental Benefit, as discussed above, “Retirement
Plan Benefit” shall equal the Participant’s monthly pension payable under the
Retirement Plan.


 


SECTION 4. SUPPLEMENTAL BENEFIT PAYMENTS


 


(a)                                  Supplemental
Benefit Commencement Date.  A
Participant’s “Supplemental Benefit Commencement Date” shall be the first day
of the first month immediately following the later of:


 


(1)                                  The
date of the Participant’s Termination of Employment; or


 


(2)                                  The
date the Participant attains age 55.


 


For purposes of the Supplemental Plan, “Termination of Employment”
shall mean a “separation from service” as defined in Section 409A of the
Code and the Treasury regulations promulgated thereunder.  Notwithstanding the foregoing, the “Supplemental
Benefit Commencement Date” for a Participant whose Termination of Employment
occurred before January 1, 2009 and who did not commence his or her
Supplemental Benefit prior to January 1, 2009, shall be determined in
accordance with the provisions of the January 1, 2005 amended and restated
Supplemental Plan.


 


(b)                                 Supplemental
Payment Form.  The Supplemental
Benefit shall be payable either in a single cash lump sum or in an annuity
(paid monthly).


 


(1)                                  Each
Participant shall elect the form in which the Supplemental Benefit (if any)
shall be paid within 30 days after first becoming a Participant.  If a Participant fails to specify the form in
which the Supplemental Benefit (if any) shall be paid, then such Participant’s
Supplemental Benefit shall be paid as an annuity; provided, however, that 


 


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the Participant
shall have the right to specify the type of actuarially equivalent annuity from
those available under the Retirement Plan at any time up to the Supplemental
Benefit Commencement Date.  In the event
a Participant fails to specify the type of annuity prior to the Supplemental
Benefit Commencement Date, the Supplemental Benefit shall be paid as a single
life annuity, if the Participant is not married on such Date, and as a 50%
joint and survivor annuity, if Participant is married on such Date.


 


(2)                                  A
Participant may change the form in which the Supplemental Benefit (if any)
shall be paid; provided, however that if such change is made more than 30 days
after the Employee first became a Participant, then the change will not be
effective for 12 months and the Supplemental Benefit Commencement Date shall be
delayed at least five (5) years from when payment otherwise would have
been made or commenced.  In this regard,
if a Participant first elects the form in which the Supplemental Benefit shall
be paid more than 30 days after such Employee first became a Participant, then
such initial election shall be deemed a change to a prior election and shall be
subject to the same conditions. 
Notwithstanding the foregoing, a change in the form of annuity shall not
be deemed a change in the form in which such Supplemental Benefit shall be
paid, provided that the annuities are actuarially equivalent under Section 409A
of the Code (and the Treasury regulations promulgated thereunder), and that the
change in the form of annuity is made prior to the Supplemental Benefit
Commencement Date.


 


(3)                                  The
amount of a Participant’s Supplemental Benefit (if any) shall be adjusted to
reflect the form in which such Supplemental Benefit is paid.  If paid as an annuity, such adjustment shall
be made in accordance with Section 6.1 of the Retirement Plan by applying
the actuarial factors and assumptions used for annuity conversions as described
in the definition of “Actuarial Equivalent” in the Retirement Plan.  If paid in a single cash lump sum, such
adjustment shall be made by applying the actuarial factors and assumptions used
for lump sum distributions as described in the definition of “Actuarial
Equivalent” in the Retirement Plan.


 


(c)                                  Specified
Employee.  Notwithstanding anything
to the contrary, if a Participant’s Supplemental Benefit becomes payable on
account of the Participant’s Termination of Employment (other than on account
of the Participant’s death) and such Participant is a Specified Employee, then
such Participant’s Supplemental Benefit shall be paid on the later of (1) the
first day of the first month immediately following the date that is six (6) months
after the Participant’s Termination of Employment, or (2) the date such
Supplemental Benefit otherwise would be payable pursuant to Section 4(a).  For purposes of this paragraph, “Specified
Employee” shall mean a Participant who is a “specified employee” as such term
is defined in Section 409A of the Code and the Treasury regulations
promulgated thereunder.


 


(d)                                 Death
Benefits.  Upon the death of a
Participant prior to the Supplemental Benefit Commencement Date, the
Participant’s surviving spouse (if any) shall be eligible to receive a Survivor
Pension.  The “Survivor Pension” shall be
the amount (if any) by which the Total Survivor Pension Benefit exceeds the
surviving spouse’s Retirement Plan Benefit. 
The Total Survivor Pension Benefit and the Retirement Plan Benefit shall
be calculated as of the date of the Participant’s death.


 


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(1)                                  For
purposes of calculating the Survivor Pension, “Total Survivor Pension Benefit”
shall equal the monthly pension payment which would be payable under Article 7
of the Retirement Plan (i) if the maximum benefit limitations of Section 415
of the Code and of the Retirement Plan did not apply, (ii) if the
includable compensation limitations of Section 401(a)(17) of the Code did
not apply, and (iii) if the definition of “Salary” in the Retirement Plan
included any amounts of base salary or incentive compensation deferred under
the Company’s Nonqualified Plans.  For
purposes of this paragraph, amounts deferred under the Company’s Nonqualified
Plans shall be deemed to be included in “Salary” for the calendar year in which
such amounts are earned.


 


(2)                                  For
purposes of calculating the Survivor Pension, as described above, the surviving
spouse’s “Retirement Plan Benefit” shall be the actual monthly pension payable
under Article 7 of the Retirement Plan.


 


(3)                                  The
Survivor Pension shall be paid on the Participant’s Supplemental Benefit
Commencement Date and in the form in which the Participant’s Supplemental
Benefit would have been paid.


 


(e)                                  Small
Plan Benefits.  Notwithstanding the
Participant’s form of payment election under this Section 4, if the lump sum
value of the Participant’s Supplemental Benefit is $50,000 (or less) as of the
Supplemental Benefit Commencement Date, then such Participant’s Supplemental
Benefit shall be paid in a single cash lump sum.  In addition, if the lump-sum value of a
surviving spouse’s Survivor Pension is $50,000 (or less), then such Survivor
Pension shall be paid in a single cash lump sum.  For the purpose of determining the
Supplemental Benefit under this section, the Company shall use the actuarial
factors and assumptions described in the definition of “Actuarial Equivalent”
in the Retirement Plan.


 


SECTION 5. FUNDING


 


The
Supplemental Plan shall be unfunded, and Supplemental Benefits shall be paid
only from the general assets of the Company.


 


SECTION 6. ADMINISTRATION


 


The Supplemental
Plan shall be administered by the Company. The Company shall make such rules,
interpretations and computations as it may deem appropriate; and any decision
with respect to the Supplemental Plan, including (without limitation) any
determination of eligibility to participate in the Supplemental Plan and any
calculation of Supplemental Benefits shall be within the discretion of the
Company.  To the extent not preempted by
ERISA, the Supplemental Plan shall be construed according to the laws of the State
of Washington.


 


SECTION 7.  CLAIMS PROCEDURE


 


(a)  Benefits Claim.  Claims for benefits and inquiries concerning
the Supplemental Plan (or concerning present or future rights to benefits under
the Supplemental Plan) shall be 


 


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submitted to the Company in writing.  A claim for benefits shall be submitted on
the prescribed form and shall be signed by the Participant (or, the
beneficiary, if applicable).


 


(b)  Benefit Claim Denial.  In the event that a claim for benefits is
denied in whole or in part, the Company shall notify the claimant in writing of
the denial and of the right to a review of the denial.  The written notice shall set forth, in a
manner calculated to be understood by the applicant, specific reasons for the
denial, specific references to the provisions of the Supplemental Plan on which
the denial is based, a description of any information or material necessary for
the claimant to perfect the claim, an explanation of why the material is necessary,
and an explanation of the review procedure under the Supplemental Plan.  The written notice shall be given to the
claimant within a reasonable period of time (not more than 90 days) after
the Company received the claim, unless special circumstances require further
time for processing and the claimant is advised of the extension.  In no event shall the notice be given more
than 180 days after the Company received the claim.


 


(c)  Review.  A claimant whose claim for benefits was
denied in whole or in part, or the claimant’s duly authorized representative,
may appeal the denial by submitting to the Company a request for a review of
the claim within 90 days after receiving written notice of the denial from the
Company.  The Company shall give the
claimant or his or her representative an opportunity to review pertinent
materials, other than legally-privileged documents, in preparing the request
for a review.  The request for a review
shall be in writing and addressed to the Company.  The request for a review shall set forth all
of the grounds on which it is based, all facts in support of the request, and
any other matters that the claimant (or representative) deems pertinent.  The Company may require the claimant to submit
such additional facts, documents or other material as it may deem necessary or
appropriate in making its review.


 


(d)  Review Decision.  The Company shall act on each request for an
appeal within 60 days after receipt, unless special circumstances require
further time for processing and the applicant is advised of the extension.  In no event shall the decision on review be
rendered more than 120 days after the Company received the request for a
review.  The Company shall give prompt
written notice of its decision to the claimant. 
In the event that the Company confirms the denial of the claim for
benefits in whole or in part, the notice shall set forth, in a manner
calculated to be understood by the claimant, the specific reasons for the
decision and specific references to the provisions of the Supplemental Plan on
which the decision is based.


 


(e)  Rules and Interpretations.  The Company shall adopt such rules,
procedures and interpretations of the Supplemental Plan as it deems necessary
or appropriate in carrying out its responsibilities under this Section 7.


 


(f)  Exhaustion of Remedies.  No legal action for benefits under the
Supplemental Plan shall be brought unless and until the claimant (i) has
submitted a written claim for benefits in accordance with this Section 7, (ii) has
been notified by the Company that the claim is denied, (iii) has filed a
written request for a review of the claim in accordance with this Section 7,
and (iv) has been notified in writing that the Company has affirmed the
denial of the claim; provided, however, that legal action may be brought after
the Company has failed to take any action on the claim within the time
prescribed by this Section 7.


 


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SECTION 8. AMENDMENT AND TERMINATION


 


The Company
expects to continue the Supplemental Plan indefinitely.  Future conditions, however, cannot be
foreseen, and the Company shall have the authority to amend or to terminate the
Supplemental Plan at any time; provided, however, that any such termination
shall be subject to the requirements of Section 409A of the Code and the
Treasury regulations promulgated thereunder. 
In the event of an amendment or termination of the Supplemental Plan, a
Participant’s Supplemental Benefit shall not be less than the Supplemental
Benefits to which the Participant would be entitled if the Participant’s
employment had terminated immediately prior to such amendment or termination of
the Supplemental Plan.


 


SECTION 9. CHANGE OF CONTROL


 


(a)                                  Vesting.  Notwithstanding any other provision of the
Supplemental Plan to the contrary, in the event of a Change of Control, each
Participant shall immediately be fully vested in the benefits under the
Supplemental Plan which have accrued through the date of the Change of Control.


 


(b)                                 Change
of Control.  For purposes of the
Supplemental Plan, “Change of Control” shall mean “Change in Control” as such
term is defined in Section 16.4 of the PACCAR Inc Long Term Incentive
Plan, as approved by the stockholders of the Company on April 25, 2006.


 


(c)                                  Termination.  Notwithstanding any provision to the
contrary, the Company may terminate the Supplemental Plan in its entirety
within the 30 days preceding or the 12 months following a “change in control
event” (as such term is defined in the Treasury regulations promulgated pursuant
to Section 409A of the Code); provided, that all substantially similar
arrangements also are terminated and that the Participants (or beneficiary, if
applicable) receive the benefit under the Supplemental Plan (if any) within 12
months of the date the Supplemental Plan is terminated.  The Company shall determine, in its sole
discretion, whether to terminate the Supplemental Plan pursuant to this Section 9
and to pay all Supplemental Benefits (or the remaining amount of Supplemental
Benefits that are in pay status) in single cash lump sums.  For purposes of calculating the present value
of the Supplemental Benefit to be paid upon such a termination of the
Supplemental Plan, the date the Plan is terminated shall be the Supplemental
Benefit Commencement Date for all Participants whose Supplemental Benefit is
not then in pay status, the interest rate shall be 0% and the assumed mortality
table shall be the “Applicable Mortality Table” described in the definition of “Actuarial
Equivalent” in the Retirement Plan.


 


SECTION 10. EMPLOYMENT RIGHTS


 


Nothing in the
Supplemental Plan shall be deemed to give any person any right to remain in the
employ of the Company or affect any right of the Company to terminate a person’s
employment with or without cause.


 


SECTION 11. FORFEITURE OF SUPPLEMENTAL BENEFITS


 


(a)                                  Forfeiture.  Benefits payable under the Supplemental Plan
to a Participant will be forfeited if service with the Company is terminated
for Cause.  Benefits shall also be
forfeited if, after Termination of Employment for reasons other Cause, a
Participant fails or refuses to 


 


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provide advice and counsel to the Company when
reasonably requested to do so.  The good
faith determination of the Board of the existence of facts justifying
forfeiture is considered conclusive under the Supplemental Plan.


 


(b)                                 Cause.  For purposes of the Supplemental Plan, “Cause”
is defined to include any of the following conduct:


 


(1)                                  an
act of embezzlement, fraud or theft;


 


(2)                                  deliberate
disregard of the rules of the Company or a subsidiary,


 


(3)                                  unauthorized
disclosure of any of the secrets or confidential information of the Company or
a subsidiary;


 


(4)                                  any
conduct which constitutes unfair competition with the Company or a subsidiary;


 


(5)                                  inducing
any customers of the Company to breach any contracts with the Company or a
subsidiary.


 


SECTION 12. NO ALIENATION


 


Benefits
payable under the Supplemental Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, prior to actually being received by the person entitled to the
benefit under the terms of the Supplemental Plan; and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose
of any right to a benefit payable hereunder shall be void with the exception of
payroll taxes paid on the participant’s behalf. The prohibition on assignment
or alienation shall apply to any judgment, decree or order (including approval
of a property settlement) which relates to the provisions of child support,
alimony or property rights to a present or former spouse, child or other
dependent of a Participant pursuant to a state domestic relations or community
property law.  The Company shall not in
any manner be liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to a benefit hereunder.


 


SECTION 13. EXECUTION


 


PACCAR Inc, by
its Chairman of the Board and Chief Executive Officer, has executed this
Supplemental Plan document on December 11, 2008.


 


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