Document:

Exhibit

Exhibit 10.5
EXECUTION COPY

 

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of November 3, 2016 and is effective as of November 3, 2016 among PUBLIC SERVICE COMPANY OF NEW MEXICO, a New Mexico corporation (the “Borrower”), the Lenders party hereto and U.S. BANK NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”).  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Credit Agreement (as defined below).

R E C I T A L S

WHEREAS, the Borrower, the Lenders party thereto and the Administrative Agent are parties to that certain Credit Agreement, dated as of January 8, 2014 (as amended or modified from time to time, the “Credit Agreement”);

WHEREAS, the Borrower has requested a modification to the Credit Agreement as described below; and

WHEREAS, the Administrative Agent and the Lenders party hereto are willing to agree to such modification, subject to the terms set forth herein as more fully set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

A G R E E M E N T

1.Amendments to Credit Agreement.  

(a)    The definition of “Material Lease” in Section 1.1 of the Credit Agreement is hereby deleted in its entirety. 
(b)    The following definition in Section 1.1 of the Credit Agreement is amended and restated in its entirety to read as follows:
“Indebtedness” means, with respect to any Person (without duplication), (a) all indebtedness and obligations of such Person for borrowed money or in respect of loans or advances of any kind, (b) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, (c) all reimbursement obligations of such Person with respect to surety bonds, letters of credit and bankers’ acceptances (in each case, whether or not drawn or matured and in the stated amount thereof), (d) all obligations of such Person  to  pay  the  deferred  purchase  price  of  property  or  services,  (e)  all  indebtedness

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person, (f) all obligations of such Person as lessee under leases that are or are required to be, in accordance with GAAP, recorded as capital leases, to the extent such obligations are required to be so recorded, (g) the net termination obligations of such Person under any Hedging Agreements, calculated as of any date as if such agreement or arrangement were terminated as of such date in accordance with the applicable rules under GAAP, (h) all Contingent Obligations of such Person, (i) all obligations and liabilities of such Person incurred in connection with any transaction or series of transactions providing for the financing of assets through one or more securitizations or in connection with, or pursuant to, any synthetic lease or similar off-balance sheet financing, (j) the aggregate amount of uncollected accounts receivable of such Person subject at the time of determination to a sale of receivables (or similar transaction) to the extent such transaction is effected with recourse to such Person (whether or not such transaction would be reflected on the balance sheet of such Person in accordance with GAAP) and (k) all indebtedness referred to in clauses (a) through (j) above secured by any Lien on any property or asset owned or held by such Person regardless of whether the indebtedness secured thereby shall have been assumed by such Person or is nonrecourse to the credit of such Person.

(c)    The following definitions are hereby added to Section 1.1 of the Credit Agreement in the appropriate alphabetical order: 
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

(d)    Clause (d) in the definition of “Defaulting Lender” in Section 1.1 of the Credit Agreement is hereby amended to read as follows:     
(d) has become or is insolvent or has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment, or has become the subject of a Bail-in Action.

(e)    Section 6.18 and Section 6.19 of the Credit Agreement are hereby deleted in their entirety and replaced with the following: 
6.18    [Reserved].

6.19    [Reserved].

(f)    Section 7.2 of the Credit Agreement is amended and restated in its entirety to read as follows:
7.2     Financial Covenant.

The ratio of (a) Consolidated Indebtedness to (b) Consolidated Capitalization shall be less than or equal to 0.65 to 1.0 as of the last day of any Fiscal Quarter.

(g)    Clause (o) of Section 8.5 of the Credit Agreement is amended to read as follows:
(o) Liens on Property that is subject to a lease that is classified as an operating lease as of the Closing Date but which is subsequently converted to a capital lease,
(h)    A new Section 11.22 is hereby added to the Credit Agreement to read as follows: 
11.22    Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  

Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising 

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

under any Credit Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b)    the effects of any Bail-in Action on any such liability, including, if applicable:

(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

(i)     Schedule 6.18 and Schedule 6.19 to the Credit Agreement are hereby deleted in their entirety. 
(j)    Footnote 2 in Schedule 1 to Exhibit 7.1(c) to the Credit Agreement is hereby deleted.
2.Effectiveness.  This Amendment shall be effective as of November 3, 2016; provided that on or before such date the Administrative Agent shall have received (i) copies of this Amendment duly executed by the Borrower, the Administrative Agent and the Required Lenders and (ii) the Administrative Agent’s and its affiliates’ fees and expenses (including fees and expenses of counsel for the Administrative Agent) in connection with this Amendment.
 
3.Ratification of Credit Agreement.  The term “Credit Agreement” as used in each of the Credit Documents shall hereafter mean the Credit Agreement as amended and modified by this Amendment and as amended and modified from time to time hereafter.  Except as herein specifically agreed, the Credit Agreement, as amended by this Amendment, is hereby ratified and confirmed and shall remain in full force and effect according to its terms.  Each party hereto acknowledges and consents to the modifications set forth herein and agrees that, other than as explicitly set forth in Section 1 above, this Amendment does not impair, reduce or limit any of its obligations under the Credit Documents (including, without limitation, the indemnity obligations 

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

set forth therein) and that, after the date hereof, this Amendment shall constitute a Credit Document.
 
4.Authority/Enforceability.  The Borrower represents and warrants as follows:

(a)    It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(b)    This Amendment has been duly executed and delivered by the Borrower and constitutes the Borrower’s legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws or similar laws affecting creditors’ rights generally or by general principles of equity.
(c)    Other than the filing of annual short-term financing plans with the New Mexico Public Regulation Commission in the normal course of business, and such Commission’s actions thereon, no consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in connection with the execution, delivery or performance by the Borrower of this Amendment that has not been obtained or completed.

5.Representations and Warranties.  The Borrower represents and warrants to the Lenders that (a) the representations and warranties of the Borrower set forth in Section 6 of the Credit Agreement are true and correct as of the date hereof, unless they specifically refer to an earlier date and except that, for purposes of the foregoing, the references to “December 31, 2012” in Section 6.7 of the Credit Agreement are hereby amended to “December 31, 2015,” (b) no event has occurred and is continuing which constitutes a Default or an Event of Default, and (c) it has no claims, counterclaims, offsets, credits or defenses to its obligations under the Credit Documents, or to the extent it has any, they are hereby released in consideration of the Lenders party hereto entering into this Amendment.

6.No Conflicts.  The Borrower represents and warrants that the execution and delivery of this Amendment, the consummation of the transactions contemplated herein and in the Credit Agreement (before and after giving effect to this Amendment), and the performance of and compliance with the terms and provisions hereof by the Borrower will not (a) violate, contravene or conflict with any provision of its articles or certificate of incorporation, bylaws or other organizational or governing document, (b) violate, contravene or conflict with any law, rule, regulation (including, without limitation, Regulation U and Regulation X), order, writ, judgment, injunction, decree or permit applicable to the Borrower, (c) violate, contravene or conflict with contractual provisions of, or cause an event of default under, any indenture, loan agreement, mortgage, deed of trust, contract or other agreement or instrument to which the Borrower is a party or by which it or its properties may be bound, the violation of which would have or would be reasonably expected to have a Material Adverse Effect or (d) result in or require the creation of any Lien upon or with respect to the Borrower’s properties.

7.Counterparts/Telecopy.  This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which 

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

shall constitute one and the same instrument.  Delivery of executed counterparts by telecopy or by electronic format (.pdf) shall be effective as an original.

8.GOVERNING LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

[remainder of page intentionally left blank]
 

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

Each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.

BORROWER:
 
PUBLIC SERVICE COMPANY OF NEW MEXICO,
a New Mexico corporation

By:    /s/ Elisabeth Eden            
Name:    Elisabeth Eden            
Title:    Vice President and Treasurer        

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

ADMINISTRATIVE AGENT:
 

U.S. BANK NATIONAL ASSOCIATION,
individually in its capacity as a Lender and in its capacity as Administrative Agent
 

By:    /s/ Raymond J. Palmer            
Name:    Raymond J. Palmer                
Title:    Sr. Vice President                
 

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

LENDERS:

BOKF, NA DBA BANK OF ALBUQUERQUE,
as a Lender 

By:    /s/ John Valentine            
Name:    John Valentine                
Title:    SVP                    

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

BANK OF THE WEST,
as a Lender 

By:    /s/ Philip Garlinghouse            
Name:    Philip Garlinghouse            
Title:    Vice President                

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

WASHINGTON FEDERAL N.A.,
as a Lender 

By:    /s/ Joshua Smith            
Name:    Joshua Smith                
Title:    V.P.                    

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST NATIONAL BANK OF SANTA FE,
as a Lender 

By:    /s/ Michael L. Roach            
Name:    Michael L. Roach            
Title:    Senior Vice President            

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

SOUTHWEST CAPITAL BANK,
as a Lender 

By:    /s/ Katja A. Fitz            
Name:    Katja A. Fitz                
Title:    Asst. Vice President            

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

NEW MEXICO BANK & TRUST,
as a Lender

By:    /s/ Robert W. Eaton            
Name:    Robert W. Eaton            
Title:    Executive VP                

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

FOUR CORNERS COMMUNITY BANK,
as a Lender

By:    /s/ Roger LaHart            
Name:    Roger LaHart                
Title:    Chief Lending Officer            

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENT

WESTERN COMMERCE BANK,  
CARLSBAD, NEW MEXICO,
as a Lender

By:    /s/ Mike Hoyl                
Name:    Mike Hoyl                
Title:    Executive Vice President        

PUBLIC SERVICE COMPANY OF NEW MEXICO
FIRST AMENDMENT TO CREDIT AGREEMENTEX-10.(q)

 Exhibit 10(q) 

PACCAR INC SAVINGS INVESTMENT PLAN 

Amendment and Restatement Effective September 1, 2016 

 TABLE OF CONTENTS 

 

									
	 	 	 	  	 	  	Page	 
		
	ARTICLE 1 PURPOSE AND SCOPE	  	 	1	  
				
		 	1.1	  	Purpose of Plan	  	 	1	  
				
		 	1.2	  	Scope of Plan	  	 	2	  
		
	ARTICLE 2 DEFINITIONS AND CONSTRUCTION	  	 	2	  
				
		 	2.1	  	General Definitions	  	 	2	  
				
		 	2.2	  	Construction	  	 	11	  
		
	ARTICLE 3 ELIGIBILITY AND MEMBERSHIP	  	 	11	  
				
		 	3.1	  	Commencement of Membership	  	 	11	  
				
		 	3.2	  	Enrollment Procedures	  	 	11	  
				
		 	3.3	  	Termination of Membership	  	 	11	  
				
		 	3.4	  	Restricted Membership	  	 	12	  
		
	ARTICLE 4 SALARY DEFERRALS AND ROLLOVER CONTRIBUTIONS	  	 	12	  
				
		 	4.1	  	Amount of Salary Deferrals	  	 	12	  
				
		 	4.2	  	Involuntary Reduction of Salary Deferral Rate	  	 	13	  
				
		 	4.3	  	Voluntary Change of Salary Deferral Rate	  	 	14	  
				
		 	4.4	  	Voluntary and Involuntary Suspension of Salary Deferrals	  	 	14	  
				
		 	4.5	  	Return of Excess Deferrals	  	 	14	  
				
		 	4.6	  	Average Deferral Percentage Limitation	  	 	15	  
				
		 	4.7	  	Determination of Maximum Actual Deferral Percentage and Dollar Amount of Excess Contributions	  	 	16	  
				
		 	4.8	  	Allocation of Excess Contributions to Highly Compensated Employees	  	 	16	  
				
		 	4.9	  	Distribution of Excess Contributions	  	 	16	  
				
		 	4.10	  	Qualified Company Contributions	  	 	16	  
				
		 	4.11	  	Special Rules	  	 	17	  
				
		 	4.12	  	Allocation of Salary Deferrals	  	 	18	  
				
		 	4.13	  	Diversification of Salary Deferral Account or Employee Account	  	 	18	  
				
		 	4.14	  	Rollover Contributions	  	 	18	  
				
		 	4.15	  	Age 50 Catch-Up Rules	  	 	19	  

  
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 TABLE OF CONTENTS 

(continued) 
  

									
	 	 	 	  	 	  	Page	 
		
	ARTICLE 5 COMPANY CONTRIBUTIONS	  	 	20	  
				
		 	5.1	  	Amount of Company Contributions	  	 	20	  
				
		 	5.2	  	Allocation of Company Contributions	  	 	20	  
				
		 	5.3	  	Average Contribution Percentage Limitation	  	 	21	  
				
		 	5.4	  	Determination of Maximum Actual Contribution Percentage and Dollar Amount of Excess Aggregate Contributions	  	 	22	  
				
		 	5.5	  	Allocation of Excess Aggregate Contributions to Highly Compensated Employees	  	 	23	  
				
		 	5.6	  	Distribution of Excess Aggregate Contributions	  	 	23	  
				
		 	5.7	  	Use of Salary Deferrals	  	 	23	  
				
		 	5.8	  	Special Rules	  	 	23	  
				
		 	5.9	  	Company Contributions in PACCAR Stock	  	 	24	  
				
		 	5.10	  	Diversification of Company Contributions Account	  	 	24	  
				
		 	5.11	  	Return of Company Contributions	  	 	25	  
		
	ARTICLE 6 THE TRUSTEE AND THE TRUST FUND	  	 	25	  
				
		 	6.1	  	The Trustee and Investment Managers	  	 	25	  
				
		 	6.2	  	Investment Funds	  	 	26	  
				
		 	6.3	  	Voting of PACCAR Stock	  	 	26	  
				
		 	6.4	  	Other Instructions by Members	  	 	26	  
				
		 	6.5	  	Trust Fund Investment Losses: Interest in Trust Fund	  	 	27	  
				
		 	6.6	  	ERISA 404(c) Requirements	  	 	27	  
				
		 	6.7	  	Expenses of Plan and Trust	  	 	28	  
				
		 	6.8	  	Forfeitures	  	 	29	  
		
	ARTICLE 7 ACCOUNTS AND VALUATIONS	  	 	29	  
				
		 	7.1	  	Types of Accounts	  	 	29	  
				
		 	7.2	  	Valuation of Accounts	  	 	29	  
				
		 	7.3	  	Statements for Members	  	 	30	  
		
	ARTICLE 8 AMOUNT AND DISTRIBUTION OF BENEFITS	  	 	31	  
				
		 	8.1	  	Vesting and Amount of Benefits	  	 	31	  
				
		 	8.2	  	Normal Time of Distribution	  	 	31	  
				
		 	8.3	  	Time of Distribution	  	 	31	  
				
		 	8.4	  	Special Rules Regarding Distribution	  	 	32	  
				
		 	8.5	  	Reemployment	  	 	32	  
				
		 	8.6	  	Available Forms of Distribution	  	 	33	  

  
 -ii- 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	 	 	  	 	  	Page	 
				
		 	8.7	  	Election of a Form of Distribution	  	 	33	  
				
		 	8.8	  	Small Benefits	  	 	33	  
				
		 	8.9	  	Survivors’ Benefits	  	 	34	  
				
		 	8.10	  	No Alienation of Benefits; Qualified Domestic Relations Order	  	 	35	  
				
		 	8.11	  	Facility of Payment	  	 	36	  
				
		 	8.12	  	Payments Discharge Plan; Adverse Claims	  	 	36	  
				
		 	8.13	  	Direct Rollovers	  	 	36	  
		
	ARTICLE 9 LOANS	  	 	38	  
				
		 	9.1	  	Amount of Loans	  	 	38	  
				
		 	9.2	  	Aggregate Loan Limitation	  	 	38	  
				
		 	9.3	  	Terms of Loans	  	 	39	  
				
		 	9.4	  	Company Consent	  	 	39	  
				
		 	9.5	  	Source of Loans	  	 	40	  
				
		 	9.6	  	Disbursement of Loans	  	 	40	  
				
		 	9.7	  	Valuation Date	  	 	40	  
				
		 	9.8	  	Loan Fees	  	 	40	  
		
	ARTICLE 10 WITHDRAWALS	  	 	40	  
				
		 	10.1	  	Regular Withdrawals	  	 	40	  
				
		 	10.2	  	Withdrawals After Age 59 1⁄2	  	 	40	  
				
		 	10.3	  	Hardship Withdrawals	  	 	41	  
				
		 	10.4	  	Source of Withdrawals	  	 	42	  
				
		 	10.5	  	Application for Withdrawals: Time and Form of Distribution	  	 	43	  
				
		 	10.6	  	Limitations on Withdrawals	  	 	43	  
		
	ARTICLE 11 SALE OF STOCK TO TRUSTEE	  	 	43	  
		
	ARTICLE 12 PLAN ADMINISTRATION	  	 	44	  
				
		 	12.1	  	Company as Plan Administrator	  	 	44	  
				
		 	12.2	  	Carrying out Fiduciary Duties	  	 	44	  
				
		 	12.3	  	Appointment of Public Accountant	  	 	44	  
				
		 	12.4	  	Reliance on Plan Records; Member’s Duty to Notify	  	 	44	  

  
 -iii- 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	 	 	  	 	  	Page	 
		
	ARTICLE 13 CLAIMS AND REVIEW PROCEDURES	  	 	45	  
				
		 	13.1	  	Applications for Benefits	  	 	45	  
				
		 	13.2	  	Denial of Applications	  	 	45	  
				
		 	13.3	  	Requests for Review	  	 	46	  
				
		 	13.4	  	Decision on Review	  	 	46	  
				
		 	13.5	  	Exhaustion of Administrative Remedies; Limitations	  	 	47	  
		
	ARTICLE 14 GENERAL PROVISIONS	  	 	47	  
				
		 	14.1	  	Information and Reports to Members	  	 	47	  
				
		 	14.2	  	Compliance With USERRA	  	 	47	  
				
		 	14.3	  	Applicable Law	  	 	48	  
				
		 	14.4	  	No Employment Rights Conferred	  	 	48	  
				
		 	14.5	  	Service Upon Plan; Limitations on Actions Against Plan	  	 	48	  
				
		 	14.6	  	Plan Office; Records	  	 	48	  
				
		 	14.7	  	Form of Applications, Elections and Other Communications	  	 	49	  
				
		 	14.8	  	Spousal Consents	  	 	49	  
				
		 	14.9	  	Merger, Consolidation and Transfer of Assets or Liabilities	  	 	49	  
		
	ARTICLE 15 CONTRIBUTION LIMITATIONS	  	 	49	  
				
		 	15.1	  	Basic Limitation	  	 	49	  
				
		 	15.2	  	Effect on Future Contributions	  	 	50	  
				
		 	15.3	  	Definitions	  	 	50	  
				
		 	15.4	  	Incorporation by Reference	  	 	51	  
		
	ARTICLE 16 AMENDMENT OR TERMINATION OF PLAN	  	 	51	  
				
		 	16.1	  	Plan May Be Amended or Terminated	  	 	51	  
				
		 	16.2	  	Amendments Cannot Reduce Accrued Benefits	  	 	51	  
				
		 	16.3	  	Procedure Upon Plan Terminations	  	 	51	  
				
		 	16.4	  	Partial Terminations	  	 	52	  
				
		 	16.5	  	Intent to Comply with ERISA	  	 	52	  
				
		 	16.6	  	Fiduciary Powers Continue Until Distribution Complete	  	 	52	  
		
	ARTICLE 17 PRIOR PROFIT SHARING PLAN	  	 	52	  
				
		 	17.1	  	No Reduction of Accrued Benefit	  	 	52	  
				
		 	17.2	  	Full Vesting	  	 	52	  
				
		 	17.3	  	Continuing Distributions	  	 	53	  
				
		 	17.4	  	Company Contributions	  	 	53	  
				
		 	17.5	  	Effective Date	  	 	53	  

  
 -iv- 

 TABLE OF CONTENTS 

(continued) 
  

									
	 	 	 	  	 	  	Page	 
		
	ARTICLE 18 SPECIAL TOP-HEAVY RULES	  	 	53	  
				
		 	18.1	  	Determination of Top-Heavy Status	  	 	53	  
				
		 	18.2	  	Minimum Allocations	  	 	53	  
				
		 	18.3	  	Definitions	  	 	54	  
		
	ARTICLE 19 EXECUTION	  	 	55	  

  
 -v- 

 PACCAR INC SAVINGS INVESTMENT PLAN 

(As Amended and Restated Effective September 1, 2016) 

Effective January 1, 1955, Pacific Car and Foundry Company, the corporate predecessor of PACCAR Inc (a Delaware corporation), adopted the Pacific Car and
Foundry Company Profit Sharing Plan and executed a Trust Agreement to provide profit-sharing benefits for its salaried employees. 
 The Plan has been
subsequently amended and restated and has been renamed the “PACCAR Inc Savings Investment Plan.” Effective April 1, 2005, PACCAR Inc amended and restated the Plan to provide that a portion of the Plan will constitute an employee stock
ownership plan within the meaning of IRC section 4975(e)(7). Effective January 1, 2006, PACCAR Inc amended and restated the Plan to comply with final regulations under IRC section 401(k) and to make certain other amendments. Effective
January 1, 2007, PACCAR Inc further amended and restated the Plan to incorporate amendments requested by the Internal Revenue Service in its October 23, 2008 determination letter for the Plan. Effective January 1, 2009, PACCAR Inc
amended and restated the Plan to comply with the Pension Protection Act of 2006 and to make certain other amendments. Effective September 1, 2016, PACCAR Inc amended and restated the Plan to incorporate previously adopted amendments and to make
certain other amendments. Certain provisions, which are specifically identified, have a different effective date. 
 ARTICLE 1 

PURPOSE AND SCOPE 
  

	1.1	Purpose of Plan 

 The purposes of this amended and restated Plan are: 

 

	 	(a)	To encourage systematic savings and investment by Eligible Employees as a means of building financial security; 

  

	 	(b)	To increase the identification of Eligible Employees with the Company’s financial success; 

  

	 	(c)	To provide Eligible Employees with a flexible savings and investment program enabling them to make decisions concerning the rate of return and relative risk of the investments made for their Accounts, as their personal
or economic conditions change; and 

  

	 	(d)	To offer additional inducements which will attract and retain Eligible Employees with the knowledge and skills necessary for the Company’s success. 

The Plan provides for contributions to be made by the Company to aid in accomplishing these purposes. 

  
 1 

 The Plan and the Trust Agreement are intended to meet the requirements of IRC sections 401(a),
401(k) and 501(a). The assets of the Plan are held in trust and are invested for the exclusive purpose of providing benefits to Members of the Plan and their Beneficiaries. 

The Plan is intended to qualify as an eligible individual account plan under section 407(d)(3) of ERISA, which is permitted to acquire and hold
any amount of qualifying employer securities, and a portion of the Plan is intended to qualify as an employee stock ownership plan under IRC section 4975(e)(7), which portion is designed to invest primarily in PACCAR Stock. 

 

	1.2	Scope of Plan 

 The Plan, as set forth herein, applies to Members who are in employment
as Employees on or after September 1, 2016. The rights and benefits, if any, of a former Employee shall be determined in accordance with the provisions of the Plan as in effect on the date when his employment terminated. 

ARTICLE 2  
 DEFINITIONS
AND CONSTRUCTION 
  

	2.1	General Definitions 

 The following words and phrases when used herein shall have the
following meanings, unless the context otherwise requires: 
  

	 	(a)	“Accounts” means a Member’s Employee, Salary Deferral and Company Contributions Accounts (to the extent applicable). 

 

	 	(b)	“Aggregate 401(k) Contributions” means, for any Plan Year, the sum of the following: (1) the Member’s Salary Deferrals for the Plan Year; and (2) the Company Contributions allocated
to the Member’s Accounts as of a date within the Plan Year, to the extent that such Company Contributions are aggregated with Salary Deferrals pursuant to Section 4.10. The foregoing Paragraph (1) to the contrary notwithstanding,
Aggregate 401(k) Contributions shall not include Age 50 Catch-Up Deferrals and the Excess Deferrals of a Nonhighly Compensated Employee that are refunded to such Nonhighly Compensated Employee pursuant to Section 4.5, provided that such
Excess Deferrals are solely attributable to elective deferrals (within the meaning of section 402(g)(3) of the IRC) under a plan or plans (including the Plan) maintained by PACCAR Inc or any Subsidiary (as defined in Section 2.1(mm) without
regard to the last sentence thereof). 

  

	 	(c)	“Aggregate 401(m) Contributions” means, for any Plan Year, the sum of the following: (1) the Company Contributions allocated to the Member’s Accounts as of a date within the Plan Year;
and (2) the Member’s Salary Deferrals for the Plan Year, to the extent that such Salary Deferrals are aggregated with Company Contributions pursuant to Section 5.7. 

  
 2 

	 	(d)	“Beneficiary” means a person designated pursuant to Section 8.9(c) who is entitled to receive all or part of a Member’s Benefit under the Plan in the event of such Member’s death prior to
the total distribution of such Benefit. 

  

	 	(e)	“Benefit” means the nonforfeitable balance in a Member’s Accounts (reduced by the amount of any loan balance that remains outstanding under Article 9 at the time such Benefit is paid or at the time
of the Member’s death, whichever is earlier, and reduced by any prior distribution to the Member) which is distributable to such Member under the Plan, determined pursuant to Article 8. 

 

	 	(f)	“Company” means (1) PACCAR Inc and (2) all of its Subsidiaries which have been designated to participate in the Plan by PACCAR Inc and which have accepted such designation in writing, while
such designation is in effect. 

  

	 	(g)	“Company Contributions” means amounts contributed to the Plan by the Company pursuant to Article 5. 

  

	 	(h)	“Company Contributions Account” means the account to which is credited a Member’s share of Company Contributions pursuant to Article 5, as more specifically described in Article 7.

  

	 	(i)	“Compensation” means “wages” paid to a Member by the Company while such Member is an Eligible Employee, and includes the amounts described in section 3401(a) of the IRC for purposes of
income tax withholding at the source, but determined: 

  

	 	(1)	Without regard to any rules that limit the remuneration included in “wages” based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in section
3401(a)(2) of the IRC); 

  

	 	(2)	By including elective deferrals excludable from the Member’s gross income under section 125, section 132(f)(4) or section 402(e)(3) of the IRC and made to a plan maintained by the Company, including amounts
contributed to the Plan as Salary Deferrals; 

  

	 	(3)	By excluding reimbursements or other expense allowances (such as, for example, hardship allowances, currency allowances, housing allowances, education allowances, car allowances, tuition reimbursement, tax equalization
payments to relocated Employees or Employees on foreign service, cost-of-living allowances to Employees on foreign service), fringe benefits (cash and non-cash), moving expenses, deferred compensation, payments received under an extended or
long-term disability plan maintained by the Company, welfare benefits, payments received under the Company’s Long Term Incentive Plan or any similar plan and amounts realized from the exercise, sale, exchange or other disposition of a stock
option or stock appreciation right; and 

  
 3 

	 	(4)	By excluding amounts in excess of the dollar amount set forth in section 401(a)(17)(A) of the IRC, as adjusted by the Commissioner of the Internal Revenue Service to reflect increases in the cost-of-living in accordance
with section 401(a)(17)(B). If the Plan Year is less than 12 consecutive months, the compensation limit shall be prorated accordingly. With respect to Salary Deferrals, the indexed compensation limit shall be applied as follows: the percentage
deferral elected by the Member under Section 4.1 shall apply to his or her entire Compensation for the payroll period (even if on an annualized basis Compensation would exceed the indexed compensation limit, provided, however, that aggregate
Salary Deferrals for the Plan Year shall not exceed the lesser of (i) the dollar limitation under section 402(g) of the IRC (described in Section 4.5) or (ii) the dollar amount determined by multiplying the indexed compensation limit
by the maximum deferral percentage permitted under Section 4.1. 

  

	 	(j)	“Eligible Employee” means any Employee of the Company who is receiving Compensation, as defined in Section 2.1(i). “Eligible Employee” does not include (1) any individual whose employment
is covered by a collective-bargaining agreement (unless the collective-bargaining agreement expressly provides for the individual’s participation in the Plan), (2) any individual who is neither a resident nor citizen of the United States,
(3) any “leased employee” (within the meaning of section 414(n) of the IRC) or any individual who would be a leased employee but for the period-of-service requirement under section 414(n) of the IRC, (4) any individual who is not
classified by the Company as an Employee (but, for example, is classified as an “independent contractor”) even if such individual is later determined to be an Employee, and (5) any individual who is subject to a written agreement that
provides that such individual shall not be eligible to participate in the Plan. If, during any period, the Company has not treated an individual as an Employee and, for that reason, has not withheld employment taxes with respect to that individual,
then that individual shall not be an Eligible Employee for that period, even in the event that the individual is determined, retroactively, to have been an Employee during all or any portion of that period. 

 

	 	(k)	“Employee” means any individual who (1) is a common-law employee of PACCAR Inc or any of its Subsidiaries under the customary employer-employee relationship or (2) is, with respect to PACCAR Inc or
any of its Subsidiaries, a “leased employee” (within the meaning of section 414(n) of the IRC). 

  

	 	(l)	“Employee Accounts” means the account to which a Member’s Member Contributions were credited, as further described in Section 7.1(c), and which is adjusted for any distributions and
withdrawals by the Member. 

  

	 	(m)	“ERISA” means the Employee Retirement Income Security Act of 1974 (P.L. 93-406) and includes subsequent amendments of such Act. Reference to a section of ERISA shall include such section and any
comparable section of any future legislation amending, supplementing or superseding such section. 

  

	 	(n)	“Excess Aggregate Contributions” means the amount by which the Aggregate 401(m) Contributions of Highly Compensated Employees are reduced pursuant to Section 5.6. 

  
 4 

	 	(o)	“Excess Contributions” means the amount by which the Aggregate 401(k) Contributions of Highly Compensated Employees are reduced pursuant to Section 4.9. 

 

	 	(p)	“Excess Deferrals” means the amount of a Member’s Salary Deferrals and elective deferrals (within the meaning of section 402(g)(3) of the IRC), other than Age 50 Catch-Up Deferrals, that exceed the
limits set forth in Section 4.5. 

  

	 	(q)	“Fiduciary” means a person having specific fiduciary responsibilities for Plan or Trust Fund administration, as further described in Article 12. 

 

	 	(r)	“Highly Compensated Employee” means any active Employee who: 

  

	 	(1)	Was a five-percent owner of PACCAR stock (as defined in Section 416 of the IRC taking into account the attribution rules as defined in Section 318(a) of the IRC) at any time during the Plan Year or the
preceding Plan Year; or 

  

	 	(2)	For the preceding Plan Year: 

  

	 	(i)	Received Total Compensation from PACCAR Inc and any Subsidiary (as defined in Section 2.1(mm) without regard to the last sentence thereof) of more than the dollar amount set forth in section 414(q) of the IRC (or
such larger amount as may be provided on account of cost of living adjustments pursuant to sections 414(q) and 415(d) of the IRC); and 

  

	 	(ii)	Provided the Company elects to apply this rule in accordance with the consistency and other requirements in regulations, was a member of the Top-Paid Group. 

The term “Highly Compensated Employee” shall also include a former Employee who separated from service (or was deemed to have
separated) prior to the determination year, performs no service for PACCAR Inc or any Subsidiary (as defined in Section 2.1(mm) without regard to the last sentence thereof) during the determination year, and was a Highly Compensated Employee as
an active Employee for either the separation year or any determination year ending on or after the Employee’s 55th birthday. 
 The
determination of who is a Highly Compensated Employee, including the determinations of the number and identity of Employees in the Top-Paid Group, will be made in accordance with section 414(q) of the IRC and regulations thereunder. 

 

	 	(s)	“Investment Options” means with respect to any Plan Year or portion of a Plan Year, the investment media selected by the Company and established under the Trust Fund for investment of one or more types
of contributions under the Plan. 

  
 5 

	 	(t)	“Investment Manager” means any person (other than the Trustee appointed pursuant to Article 6 and the Company): 

  

	 	(1)	Who has the power to manage, acquire or dispose of any assets of the Plan; 

  

	 	(2)	Who is (i) registered as an investment adviser under the Investment Advisers Act of 1940; (ii) a bank, as defined in such Act; or (iii) an insurance company qualified to perform services described in
(1) above under the laws of more than one state; and 

  

	 	(3)	Who has acknowledged in writing that he (it) is a Fiduciary with respect to the Plan. 

  

	 	(u)	“IRC” means the United States Internal Revenue Code of 1986 and includes subsequent amendments of such Code. Reference to a section of the IRC shall include such section and any comparable section of
any future legislation amending, supplementing or superseding such section 

  

	 	(v)	“Layoff” means one of the following types of layoff for lack of work: (1) layoff due to the closure of a plant or other facility, (2) layoff due to job elimination on account of technological
change, change in business focus or similar change, without reassignment of duties to another position (all as determined by the Company), (3) layoff due to a general or limited manpower reduction program mandated by the Company or
(4) layoff due to the sale or other transfer of all or substantially all of the assets of a division, facility or line of business to a buyer other than a Subsidiary. 

 

	 	(w)	“Member” means an individual who is included in Plan membership pursuant to Article 3. “Member” includes a Restricted Member, unless the Plan otherwise provides or the context otherwise
requires. 

  

	 	(x)	“Member Contributions” means any amounts contributed to the Plan by a Member prior to February 1, 1983. 

  

	 	(y)	“Nonhighly Compensated Employee” for any Plan Year means any active Employee who is not a Highly Compensated Employee. 

 

	 	(z)	“PACCAR Stock” means the common stock of PACCAR Inc or any of its Subsidiaries which is readily tradable on an established securities market. 

 

	 	(aa)	“PACCAR Stock Fund” is described in Section 6.2. 

  

	 	(bb)	Period of Service 

 An Employee’s “Period of Service” shall commence on
his Employment Date or Reemployment Date (as the case may be) and shall end when he quits, retires, is discharged, or dies. In determining whether an Employee has completed a 12-month Period of Service, the following rules shall apply: 

 

	 	(1)	Bridging Rule 

 In the case of an Employee who quit, retired or was discharged, his
Period of Service shall include the period following such quit, retirement or discharge, if he is rehired as an Employee within 12 months after the date when he first became absent from active employment (whether by reason of such quit, retirement
or discharge or for any other reason). 

  
 6 

	 	(2)	Aggregation Method 

 In the case of a reemployed Employee, all of his separate Periods
of Service shall be aggregated and treated as a single continuous Period of Service. When partial months are aggregated, 30 days shall be deemed to equal one full month. 
  

	 	(3)	Service Records; Additional Credit 

 An Employee’s Period of Service shall be
determined by the Company on the basis of employment records or on such other reasonable and nondiscriminatory basis as it may adopt. The Company, pursuant to its administrative rules, may recognize as a Period of Service any period of time not
otherwise described in this Section, subject to such conditions and limitations as it may adopt. 
  

	 	(4)	Definitions 

 As used in this Section, the following words and phrases shall have the
following meanings: 
  

	 	(A)	“Employment Date” means the date on which the Employee’s active employment as an Employee commences. 

  

	 	(B)	“Reemployment Date” means the date on which the Employee’s active employment as an Employee recommences following an absence which is not included in the Employee’s aggregate Period of Service
under (a) above. 

  

	 	(cc)	“Plan” means this PACCAR Inc Savings Investment Plan, as amended from time to time. 

  

	 	(dd)	“Plan Year” means the calendar year. 

  

	 	(ee)	“Required Beginning Date” means, with respect to a Member: 

  

	 	(1)	if he attains or attained age 70 1⁄2 before January 1, 1999 (and after January 1, 1989), April 1 of the
calendar year following the calendar year in which he attains or attained age 70 1⁄2; 

 

	 	(2)	if he attains age 70 1⁄2 on or after January 1, 1999, and is not a five-percent owner of PACCAR stock (as defined in
Section 416 of the IRC and taking into account any modifications under Section 401(a)(9) of the IRC), April 1 of the calendar year following the later of the calendar year in which he ceases to be an Employee or the calendar year in
which he attains age 70 1⁄2; and 

  
 7 

	 	(3)	if he attains age 70 1⁄2 on or after January 1, 1999, and is a five-percent owner of PACCAR stock (as defined in
Section 416 of the IRC and taking into account any modifications under Section 401(a)(9) of the IRC), April 1 of the calendar year following the calendar year in which he attains age
70 1⁄2. 

  

	 	(ff)	“Restricted Member” means a Member who has limited membership rights under the Plan, as further described in Section 3.4. 

 

	 	(gg)	“Retirement” means termination of employment as an Employee (for a reason other than death) after a Member has fulfilled all requirements for a normal or early retirement benefit under any Retirement
Plan. 

  

	 	(hh)	“Retirement Plan” means the PACCAR Inc Retirement Plan, the PACCAR Inc Retirement Plan for Weekly Paid Salaried Employees in effect prior to June 1, 1989, or any other defined-benefit or
defined-contribution plan (other than this Plan) maintained by PACCAR Inc or any of its Subsidiaries which covers a Member and which is intended primarily to provide retirement income to its members, as determined and designated by the Company.

  

	 	(ii)	“Rollover Contributions” means any amounts contributed to the Plan by an Eligible Employee under Section 4.14. 

 

	 	(jj)	“Salary Deferrals” means amounts paid to the Plan by the Company on a Member’s behalf pursuant to Section 4.1. 

 

	 	(kk)	“Salary Deferral Account” means the account to which a Member’s Salary Deferrals are credited, as further described in Section 7.1(b), and which is adjusted for any distributions and
withdrawals by the Member. 

  

	 	(ll)	“Section 414(s) Compensation” means any one of the following definitions of compensation received by an Employee from PACCAR Inc and any Subsidiary (as defined in Section 2.1(mm) without regard to
the last sentence thereof): 

  

	 	(1)	Compensation as defined in section 1.415-2(d) and (d)(3) of the Income Tax Regulations or any successor thereto; 

  

	 	(2)	Compensation as defined in Income Tax Regulation section 1.415-2(d)(10) or any successor thereto. 

  

	 	(3)	“Wages” within the meaning of section 3401(a) and all other payments of compensation (in the course of such employer’s trade or business) for which such employer is required to furnish the Employee a
written statement under sections 6041(d), 6051(a)(3), and 6052, but determined without regard to any rules under section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services
performed (such as the exception for agricultural labor in section 3401(a)(2)). 

  
 8 

 (Generally, this option is wages as reflected on the taxable federal wages box of the Form W-2
of the Employee.) 
  

	 	(4)	“Wages” as defined in section 3401(a) of the IRC for purposes of income tax withholding at the source, but determined without regard to any rules that limit the remuneration included in wages based on the
nature or location of the employment or the services performed (such as the exception for agricultural labor in section 3401(a)(2) of the IRC); 

  

	 	(5)	Any of the definitions of Section 414(s) Compensation set forth in Paragraphs (1), (2), (3) and (4) above, reduced by all of the following items (even if includable in gross income): reimbursements or
other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation and welfare benefits; 

  

	 	(6)	Any of the definitions of Section 414(s) Compensation set forth in Paragraphs (1), (2), (3), (4) and (5) above, modified to include any elective contributions made by a member of the Affiliated Group
on behalf of the Employee that are not includable in gross income under section 125, 132(f)(4), 402(e)(3), 402(h) or 403(b) of the IRC; or 

  

	 	(7)	Any reasonable definition of compensation that does not by design favor Highly Compensated Employees and that satisfies the nondiscrimination requirement set forth in section 1.414(s)-lT(d)(2) of the Income Tax
Regulations or the successor thereto. 

 Any definition of Section 414(s) Compensation shall be used consistently to
define the compensation of all Employees taken into account in satisfying the requirements of an applicable provision of this Plan for the relevant determination period. Section 414(s) Compensation shall not include compensation paid to an
Employee for a Plan Year in excess of the dollar amount set forth in section 401(a)(17)(A) of the IRC (as adjusted by the Commissioner of Internal Revenue to reflect increases in the cost-of-living in accordance with section 401(a)(17)(B)). For
purposes of these limitations, if the Plan Year is less than 12 consecutive months, the limitation shall be prorated accordingly. 
  

	 	(mm)	“Subsidiary” means any corporation which is a member of a “controlled group of corporations” (within the meaning of IRC section 1563(a), determined without regard to IRC sections 1563(a)(4)
and 1563(e)(3)(C)) of which group PACCAR Inc is also a member, while such a corporation. “Subsidiary” also means, to the extent and for the purposes specified by the Company from time to time, any other corporation in which PACCAR Inc, or
one or more of its Subsidiaries or affiliated corporations, has an ownership interest. 

  
 9 

	 	(nn)	“Top-Paid Group” for any Plan Year means the top 20 percent (in terms of Total Compensation) of all Employees of PACCAR Inc and its Subsidiaries (as defined in Section 2.1(mm) without regard to the
last sentence thereof) on a U.S. dollar payroll, excluding the following: 

  

	 	(1)	Any Employee covered by a collective bargaining agreement except to the extent otherwise provided under Income Tax Regulation 1.414(q)-lT; 

 

	 	(2)	Any Employee who has not completed six-month Period of Service at the end of the Plan Year; 

  

	 	(3)	Any Employee who normally works less than 17 1⁄2 hours per week; 

 

	 	(4)	Any Employee who normally works no more than six months during any year; and 

  

	 	(5)	Any Employee who has not attained the age of 21 at the end of the Plan Year. 

  

	 	(oo)	“Total Compensation” means “wages” as defined in section 3401(a) of the IRC for purposes of income tax withholding at the source, but determined: 

 

	 	(1)	Without regard to any rules that limit the remuneration included in “wages” based on the nature of location of the employment of the services performed (such as the exception for agricultural labor in section
3401(a)(2) of the IRC); and 

  

	 	(2)	By including amounts deferred but not refunded under a cafeteria plan, as such term is defined in section 125(c) of the IRC and under a plan, including this Plan, qualified under section 401(k) of the IRC, and
amounts excludable from a Member’s gross income under section 132(f)(4) of the IRC. 

  

	 	(pp)	“Totally Disabled” or “Total Disability” means, that because of injury or sickness the Member (1) has been paid long-term disability benefits for a period of at least 24 months
under the PACCAR Inc Long-Term Disability Plan or any other long-term disability plan maintained by the Company or any of its subsidiaries, and continues to be eligible for such benefits under such long-term disability plan, (2) is eligible to
receive disability benefits under the federal Social Security program, or (3) has a life expectancy of 24 months or less which has been certified in writing by an attending physician and approved by the Company. 

 

	 	(qq)	“Trust Agreement” means the trust agreement or agreements entered into by the Company and a Trustee pursuant to Section 6.1. 

 

	 	(rr)	“Trust Fund” means the assets of the Plan held in trust by a Trustee pursuant to a Trust Agreement. 

  

	 	(ss)	“Trustee” means the corporate Fiduciary or Fiduciaries appointed from time to time by the Company to hold the assets of the Plan in trust pursuant to a Trust Agreement. 

 

	 	(tt)	“USERRA” means the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended. 

  

	 	(uu)	“Valuation Date” means each business day. 

 Certain other defined terms used in
particular provisions of the Plan are defined where used. 

  
 10 

	2.2	Construction 

 Any gender, where appearing in the Plan, shall be deemed to include the
other gender, the singular shall include the plural, and the plural shall include the singular, unless the context otherwise requires. Titles are for reference only. In the event of a conflict between a title and the text of the Plan, the text of
the Plan shall control. In the event of a conflict between the text of the Plan and any summary, description or other information regarding the Plan, the text of the Plan shall control. 

ARTICLE 3  
 ELIGIBILITY
AND MEMBERSHIP 
  

	3.1	Commencement of Membership 

 Only an Eligible Employee may become a Member of the Plan.
Any other individual is excluded from becoming a Member until such time as he becomes an Eligible Employee. An Eligible Employee may elect to become a Member as soon as reasonably practicable as of or after the date he becomes an Employee, provided
that he is then an Eligible Employee. An Eligible Employee who does not elect to become a Member when he is first eligible to do so may elect to become such a Member at any time thereafter. 

 

	3.2	Enrollment Procedures 

 An Eligible Employee who wishes to become a Member shall apply
for membership in such manner as specified under the Company’s administrative procedures. In filing an application for membership, an Eligible Employee shall agree to abide by the terms and conditions of the Plan and to provide such elections,
designations or other information as the Company deems necessary for the proper administration of the Plan. An application to become a Member shall be implemented as soon as reasonably practicable after its receipt. 

Eligible Employees subject to automatic enrollment pursuant to Section 4.1 shall be deemed to have applied for membership in such manner
as specified under the Company’s administrative procedures. 
  

	3.3	Termination of Membership 

 An Eligible Employee, having become a Member, shall cease to
be such a Member upon the termination of his employment as an Eligible Employee (although he will continue as a Restricted Member until the earlier of (a) his death or (b) the full distribution of any Benefit to which he is entitled under
the Plan). 

  
 11 

	3.4	Restricted Membership 

  

	 	(a)	Status as Restricted Member 

 As long as any portion of the Benefit to which a Member is
entitled under the Plan has not been distributed, such Member (while living) shall have the status of a Restricted Member for any period with respect to which: 
  

	 	(1)	The Member is contributing no Salary Deferrals under the Plan, whether as a result of a suspension of contributions pursuant to Section 4.4, as a result of a determination by the Company pursuant to
Section 4.2, because the Member is receiving no Compensation, or for other reasons; 

  

	 	(2)	The Member fails to qualify as an Eligible Employee, whether by reason of a change in employment status, a transfer to a Subsidiary which does not participate in the Plan, or for other reasons, but remains an Employee;
or 

  

	 	(3)	Employment as an Employee has terminated but the distribution of any Benefit to which the Member is entitled has not been completed. 

An Employee (while living) shall also have the status of a Restricted Member if he is not a Member for all purposes of the Plan but has made a
Rollover Contribution and such Contribution has not been fully distributed. 
  

	 	(b)	Effect of Restricted Membership 

 The following rules shall apply to Restricted Members
and their Accounts with respect to periods during which they are Restricted Members: 
  

	 	(1)	Except as provided in Section 5.2, no Company Contributions shall be credited to a Restricted Member’s Company Contributions Account; and 

 

	 	(2)	No Salary Deferrals shall be contributed to a Restricted Member’s Salary Deferral Accounts. 

ARTICLE 4 
 SALARY DEFERRALS AND
ROLLOVER CONTRIBUTIONS 
  

	4.1	Amount of Salary Deferrals 

 Salary Deferrals are required of all Members other than
Restricted Members. Subject to Section 4.15 and the limitations of this Article 4 and Article 15, any such Member may elect to contribute Salary Deferrals equal to any whole percentage of his Compensation received each pay period after becoming
a Member, but not in excess of 75 percent of such Compensation. Salary Deferrals are not permitted to be made by a Member for any payday on which such Member is not an Eligible Employee. 

  
 12 

 If any individual who becomes an Eligible Employee on or after September 1, 2016 (other than
an individual who becomes an Eligible Employee on September 1, 2016 solely as a result of the inclusion of commissioned salesmen in the group of Eligible Employees effective September 1, 2016) fails to make a Salary Deferral election in
the manner specified by the Company’s administrative procedures, then with respect to the first payroll processed as soon as administratively feasible more than 45 days after such an Employee becomes an Eligible Employee, the Eligible Employee
shall be deemed to have elected to contribute Salary Deferrals equal to five percent of his Compensation received in that pay period and in each pay period thereafter. Unless an Eligible Employee files an investment election in the manner specified
by the Company’s administrative procedures, any amounts contributed to the Plan pursuant to this paragraph shall be invested in a default investment fund prescribed by the Company. An Eligible Employee may revoke or change any such deemed
contribution or investment election in the manner specified by the Company’s administrative procedures. 
 The amount of a Member’s
Salary Deferrals shall be withheld by the Company from his Compensation on each payday. All Salary Deferrals so withheld shall be paid by the Company to the Trustee as soon as reasonably practicable, but in no event later than the 15th day of the
month next following the month in which they would otherwise have been payable to the Member in cash. Salary Deferrals shall be fully vested and nonforfeitable at all times. 

For Federal income tax purposes (and, wherever permitted, for state and local tax purposes), Salary Deferrals shall be deemed to be employer
contributions to the Plan, and a Member’s election to commence or continue his membership in the Plan shall constitute an election to have his taxable compensation reduced by the amount of all of his Salary Deferrals. 

On or after February 1, 1983, no Member shall make any Member Contributions to the Plan. However, Member Contributions made before
February 1, 1983, shall remain credited to the Member’s Employee Accounts until they are withdrawn or distributed pursuant to the provisions of the Plan. 
  

	4.2	Involuntary Reduction of Salary Deferral Rate 

 At any time prior to or during a Plan
Year, the Company (at its sole discretion) may reduce the maximum rate at which any Member may contribute Salary Deferrals to the Plan for such Plan Year or during the remainder of such Plan Year, or the Company may require that any Member
discontinue all Salary Deferrals for the remainder of such Plan Year, for the purpose of meeting the special nondiscrimination rules under the IRC. Any reduction or discontinuance of Salary Deferrals may be applied selectively to individual Members
or to particular classes of Members, as the Company may determine. In addition to requiring a prospective reduction or discontinuance of Salary Deferrals, the Company may distribute to any Member such portion of the Salary Deferrals that he already
contributed for a Plan Year as it determines is necessary to meet the special nondiscrimination rules under the IRC for such year, as provided in Sections 4.5, 4.9 and 15.3 below. 

  
 13 

	4.3	Voluntary Change of Salary Deferral Rate 

 A Member may elect at any time to change the
rate of his Salary Deferrals prospectively to any other percentage permitted under this Article 4. Any election pursuant to this Section 4.3 shall be made in accordance with the Company’s administrative procedures applicable at the time of
the election. 
  

	4.4	Voluntary and Involuntary Suspension of Salary Deferrals 

 A Member may elect to suspend
all Salary Deferrals at any time, thereby becoming a Restricted Member pursuant to Section 3.4. Any such election shall be made in accordance with the Company’s administrative procedures. Any election to resume Salary Deferrals shall
become effective as soon as reasonably practicable after it is received. 
 A Member who takes a hardship withdrawal under Section 10.3
shall be suspended from making Salary Deferrals under the Plan, thereby becoming a Restricted Member pursuant to Section 3.4, for six months. Such suspension shall be made pursuant to the Company’s administrative procedures. 

When a Member resumes Salary Deferrals following a voluntary or involuntary suspension, he may make new elections under this Article 4
regarding the amount and allocation thereof; provided, however, that if he does not make such new elections, his previous elections shall be applicable. 
  

	4.5	Return of Excess Deferrals 

 Subject to Section 4.15, the aggregate Salary Deferrals
of any Member for any calendar year, together with his or her elective deferrals under any other plan or arrangement to which section 402(g) of the IRC applies and that is maintained by PACCAR Inc or any Subsidiary (as defined in
Section 2.1(mm) without regard to the last sentence thereof), shall not exceed the dollar amount set forth in section 402(g) of the IRC (or such larger amount as may be adopted by the Commissioner of Internal Revenue to reflect a cost-of-living
adjustment). In the event that such aggregate Salary Deferrals and elective deferrals of any Member for any calendar year exceed the dollar amount set forth in section 402(g) of the IRC (or such larger amount as may be adopted by the Commissioner of
Internal Revenue to reflect a cost-of-living adjustment), then such portion of the Excess Deferrals, and any income or loss allocable to such portion for the calendar year (but not for the period between the end of the calendar year and the date of
distribution of such Excess Deferrals) shall be refunded to the Member not later than the April 15 next following the close of such calendar year. Such income (and loss) allocable to Excess Deferrals shall be determined in accordance with
Treasury Regulation section 1.402(g)-l(e)(5). 
 In the event that a Member’s elective deferrals (within the meaning of section
402(g)(3) of the IRC) for a calendar year exceed the dollar amount set forth in section 402(g) of the IRC (or such larger amount as may be adopted by the Commissioner of Internal Revenue to reflect a cost-of-living adjustment) solely because such
Member participated in this Plan and a plan or arrangement maintained by an employer other than PACCAR Inc or any Subsidiary (as defined in Section 2.1(mm) without regard to the last sentence thereof), then such

  
 14 

 
Member may designate all or a portion of such Excess Deferrals as attributable to this Plan and may request a refund of such portion in accordance with the Company’s administrative
procedures on or before the March 1 next following the close of such calendar year. If timely notice is received, then such a Member’s Excess Deferrals, and any income or loss allocable thereto, shall be refunded to the Member from this
Plan no later than the April 15 next following the close of such calendar year. 
  

	4.6	Average Deferral Percentage Limitation 

 The Plan shall satisfy the average deferral
percentage test provided in section 401(k)(3) of the IRC and section 1.401(k)-1 of the Income Tax Regulations issued thereunder. Subject to the special rules described in Section 4.11, the Aggregate 401(k) Contributions of Highly
Compensated Employees shall not exceed the limits described below: 
  

	 	(a)	An Actual Deferral Percentage shall be determined for each Highly Compensated Employee who, at any time during the Plan Year, is a member (including a suspended Member) or is eligible to participate in the Plan, which
Actual Deferral Percentage shall be the ratio, computed to the nearest one-hundredth of one percent, of the Highly Compensated Employee’s Aggregate 401(k) Contributions for the Plan Year to the Highly Compensated Employee’s
Section 414(s) Compensation for the Plan Year; 

  

	 	(b)	An Actual Deferral Percentage shall be determined for each Nonhighly Compensated Employee who, at any time during the Plan Year, is a Member (including a suspended Member) or is eligible to participate in the Plan,
which Actual Deferral Percentage shall be the ratio, computed to the nearest one-hundredth of one percent, of the Nonhighly Compensated Employee’s Aggregate 401(k) Contributions for the Plan Year to the Nonhighly Compensated
Employee’s Section 414(s) Compensation for the Plan Year; 

  

	 	(c)	The Actual Deferral Percentages (including zero percentages) of Highly Compensated Employees and Nonhighly Compensated Employees shall be separately averaged to determine each group’s Average Deferral Percentage;
and 

  

	 	(d)	The Aggregate 401(k) Contributions of Highly Compensated Employees shall constitute Excess Contributions and shall be reduced, pursuant to Sections 4.8 and 4.9, to the extent that the Average Deferral Percentage of
Highly Compensated Employees exceeds the greater of (1) 125 percent of the Average Deferral Percentage of Nonhighly Compensated Employees or (2) the lesser of (A) 200 percent of the Average Deferral Percentage of Nonhighly Compensated
Employees or (B) the Average Deferral Percentage of Nonhighly Compensated Employees plus two percentage points. 

  
 15 

	4.7	Determination of Maximum Actual Deferral Percentage and Dollar Amount of Excess Contributions 

The maximum Actual Deferral Percentage shall be determined by use of a leveling process, whereby the Aggregate 401(k) Contributions of the
Highly Compensated Employee with the highest Actual Deferral Percentage are reduced to the extent required to (a) eliminate all Excess Contributions or (b) cause such Highly Compensated Employee’s Actual Deferral Percentage to equal
the Actual Deferral Percentage of the Highly Compensated Employee with the next-highest Actual Deferral Percentage. Such leveling process shall be repeated until the average deferral percentage test is satisfied. 

With regard to each Highly Compensated Employee whose Actual Deferral Percentage is in excess of the maximum permitted Actual Deferral
Percentage, a dollar amount of Excess Contributions shall then be determined by subtracting the product of the maximum permitted Actual Deferral Percentage and the Highly Compensated Employee’s Section 414(s) Compensation from the Highly
Compensated Employee’s Aggregate 401(k) Contributions. The amounts shall then be aggregated to determine the total dollar amount of Excess Contributions. 
  

	4.8	Allocation of Excess Contributions to Highly Compensated Employees 

 Any Excess
Contributions for a Plan Year shall be allocated to Highly Compensated Employees by use of a leveling process, whereby the Aggregate 401(k) Contributions of the Highly Compensated Employee with the highest dollar amount of Aggregate
401(k) Contributions are reduced to the extent required to (a) eliminate all Excess Contributions or (b) cause such Highly Compensated Employee’s Aggregate 401(k) Contributions to equal the Aggregate
401(k) Contributions of the Highly Compensated Employee with the next-highest Aggregate 401(k) Contributions. Such leveling process shall be repeated until all Excess Contributions for such Plan Year are allocated to Highly Compensated
Employees. 
  

	4.9	Distribution of Excess Contributions 

 Excess Contributions allocated to Highly
Compensated Employees for the Plan Year pursuant to Section 4.8, together with any income or loss allocable to such Excess Contributions for the Plan Year (but not for the period between the end of the Plan Year and the date of distribution of
such Excess Contributions) shall be distributed to such Highly Compensated Employees not later than the March 15 next following the close of such Plan Year, if possible, and in any event no later than 12 months following the close of such Plan
Year. Such income (and loss) allocable to Excess Contributions shall be determined in accordance with Treasury Regulation section 1.401(k)-2(b)(2)(iv). Any Salary Deferrals distributed pursuant to this Section 4.9 shall not be included in the
Salary Deferrals that attract a Company Contribution under Section 5.2. Notwithstanding the foregoing, to the extent Excess Contributions allocated to a Highly Compensated Employee for the Plan Year pursuant to Section 4.8 could otherwise
constitute Age 50 Catch-Up Deferrals pursuant to Section 4.15, such Excess Contributions shall be recharacterized as Age 50 Catch-Up Deferrals for the Plan Year rather than be distributed to the Highly Compensated Employee as described above.

  

	4.10	Qualified Company Contributions 

 The Company, in its sole discretion, may include all or
a portion of the Company Contributions for a Plan Year in Aggregate 401(k) Contributions taken into account in applying the Average Deferral Percentage limitation described in Section 4.6 for such Plan Year, provided that the requirements
of section 1.401(k)-2(a)(6) of the Income Tax Regulations are satisfied. 

  
 16 

	4.11	Special Rules 

 The following special rules shall apply for purposes of this Article 4:

  

	 	(a)	The amount of Excess Deferrals to be distributed to a Member for a calendar year pursuant to Section 4.5 shall be reduced by the amount of any Excess Contributions previously distributed to such Member for the Plan
Year ending within such calendar year; 

  

	 	(b)	The amount of Excess Contributions to be distributed to a Member for a Plan Year pursuant to Section 4.8 shall be reduced by the amount of any Excess Deferrals previously distributed to such Member for the calendar
year ending with such Plan Year; 

  

	 	(c)	For purposes of applying the limitation described in Section 4.6, the Actual Deferral Percentage of any Highly Compensated Employee who is eligible to make Salary Deferrals and to make elective deferrals (within
the meaning of section 402(g)(3) of the IRC) under any other plans, contracts or arrangements maintained by PACCAR Inc or any Subsidiary (as defined in Section 2.1(mm) without regard to the last sentence thereof) shall be determined as if all
such Salary Deferrals and elective deferrals were made under a single arrangement (other than those plans that may not be permissively aggregated); provided, however, that if such plans have different plan years, the plans are aggregated with
respect to contributions made within this Plan’s Plan Year only; 

  

	 	(d)	In the event that this Plan is aggregated with one or more other plans in order to satisfy the requirements of IRC section 401(a)(4), 401(k) or 410(b), then all such aggregated plans, including the Plan, shall be
treated as a single plan for all purposes under all such IRC sections (except for purposes of the average benefit percentage provisions of IRC section 410(b)(2)(A)(ii)); 

 

	 	(e)	In the event that the mandatory disaggregation rules of Treasury Regulation section 1.401(k)-1(b) apply to the Plan, or to the Plan and other plans with which it is aggregated as described in Subsection (d) above,
then the limitation described in Section 4.6 shall be applied as if each mandatorily disaggregated portion of the Plan (or aggregated plans) were a single arrangement 

 

	 	(f)	Provided this limit is applied uniformly in determining the Average Deferral Percentage limitation for the Plan Year, the Company may limit Section 414(s) Compensation to the amount of such compensation paid to the
Eligible Employee during the portion of the Plan Year that such Member was an Eligible Employee; and 

  

	 	(g)	 If the Plan permits participation in the 401(k) portion of the Plan prior to an Eligible Employee’s
satisfaction of the minimum age and service requirements of section 410(a)(1)(A) of the IRC and if section 410(b)(4)(B) of the IRC is applied in 

  
 17 

	 	
determining “whether the 401(k) portion of the Plan meets the requirements of section 410(b) of the IRC, then for purposes of performing the average deferral percentage test, the test
may be performed separately with regard to Eligible Employees who have not met the minimum age and service requirements of section 410(a)(1)(A) of the IRC or, alternatively, Eligible Employees who have not met the minimum age and service
requirements of section 410(a)(1)(A) of the IRC may instead be excluded in the determination of the Average Deferral Percentage for Nonhighly Compensated Employees, but not in the determination of the Average Deferral Percentage for Highly
Compensated Employees. 

  

	4.12	Allocation of Salary Deferrals 

 A Member shall elect to allocate his Salary Deferrals
among the Investment Options designated by the Company. Each Eligible Employee shall elect, when he enrolls in the Plan, to allocate Salary Deferrals to one or more Investment Options in any whole percentage increment. A Member who is an Employee
may elect to change the relative amounts of future Salary Deferrals being allocated to one or more Investment Options in any whole percentage increment. 
  

	4.13	Diversification of Salary Deferral Account or Employee Account 

 Any Member may elect to
transfer any whole percentage of the amount of the Member’s Salary Deferral Account or Employee Account then invested in one Investment Option to another Investment Option as permitted by the Company’s administrative procedures. 

An election under this Section 4.13 may be made at any time to be effective as soon as reasonably practicable after it is received. Any
election under this Section 4.13 shall be made in accordance with the Company’s administrative procedures. 
  

	4.14	Rollover Contributions 

 In accordance with the Company’s administrative procedures,
any Eligible Employee may make one or more Rollover Contributions to the Plan. An Eligible Employee who makes a Rollover Contribution at a time when he or she is not a Member for other purposes shall become a Restricted Member. A Rollover
Contribution shall be permitted only if it meets all of the following conditions: 
  

	 	(a)	The contribution must be made entirely in the form of U.S. dollars; 

  

	 	(b)	The Eligible Employee must demonstrate that the contribution is attributable to the Eligible Employee’s participation (or the participation of the Eligible Employee’s deceased spouse, or the participation of
the Eligible Employee’s former spouse and the Eligible Employee is an alternate payee as to such former spouse under such other plan pursuant to a qualified domestic relations order under section 414(p) of the IRC) in another
employer’s retirement plan, or in an individual retirement account or annuity described in section 408(a) or 408(b) of the IRC, and that the contribution qualifies as a rollover distribution from a plan that meets the requirements of section
401(a) or 403(a) of the IRC, an annuity contract described in section 403(b) of the IRC, an eligible plan under section 457(b) of the IRC which is maintained by a state, political subdivision of a state or any agency or instrumentality of a state or
political subdivision of a state, or an individual retirement account or annuity described in section 408(a) or 408(b) of the IRC; and 

  
 18 

	 	(c)	The contribution is not attributable to employee after-tax contributions. 

 A Rollover
Contribution shall be paid to the Trustee in a lump sum in cash in accordance with the Trustee’s administrative procedures. The Rollover Contribution shall be allocated among one or more Investment Options in any whole percentage increment as
the Member may elect. Such election shall be made in accordance with the Company’s administrative procedures. 
  

	4.15	Age 50 Catch-Up Rules 

 Eligible Members (as defined in Section 4.15(a) below) may
make additional Salary Deferrals (“Age 50 Catch-Up Deferrals”) up to the amounts specified in Section 4.15(b) below. 
  

	 	(a)	For purposes of this Section 4.15, “Eligible Member” means a Member who meets the following requirements: 

  

	 	(1)	The Member has attained the age of 50 before the close of the Plan Year. 

  

	 	(2)	The Member may make no other Salary Deferrals due to the limit described in Section 4.5 or the limits imposed under Section 4.1 or Section 15. 

 

	 	(b)	The maximum amount of Age 50 Catch-Up Deferrals an Eligible Member may make during a Plan Year shall not exceed the lesser of: 

  

	 	(1)	the Age 50 Catch-Up Amount; or 

  

	 	(2)	the excess, if any, of (i) the Eligible Member’s Compensation for the Plan Year, over (ii) any other Salary Deferrals made on behalf of the Eligible Member for such Plan Year without regard to this
Section 4.15. 

  

	 	(c)	The “Age 50 Catch-Up Amount” for each Plan Year shall be the amount set forth in section 414(v)(2)(B)(i) of the IRC. For Plan Years beginning after 2006, the Age 50 Catch-Up Amount specified in this
Section 4.15(c) shall be adjusted as provided in section 414(v)(2)(C) of the IRC. 

 Age 50 Catch-Up Deferrals made pursuant to this
Section 4.15 shall not be taken into account for purposes of the provisions of the Plan implementing the limitations of section 402(g) and section 415 of the IRC. The Plan shall not be treated as failing to satisfy the provisions of the Plan
implementing the requirements of sections 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of the IRC by reason of such Age 50 Catch-Up Deferrals. 

  
 19 

 ARTICLE 5 

COMPANY CONTRIBUTIONS 
  

	5.1	Amount of Company Contributions 

 The Company may, in its sole discretion, make one or
more Company Contributions during each Plan Year with respect to Members’ Salary Deferrals (other than Age 50 Catch-Up Deferrals). The Company’s rate of contribution and the frequency and manner in which the Company makes its contribution
shall be decided by the Company in its sole discretion with respect to each such Plan Year. Company Contributions initially may be paid to a suspense account maintained by the Trustee as part of the Plan. 

The last full Plan Year for which such discretionary Company Contributions may be made is the Plan Year ending December 31, 2015. The
period beginning January 1, 2016 and ending August 31, 2016 shall be treated as a short Plan Year for purposes of the above paragraph, and thereafter Company Contributions, if any, shall be made on a pay period basis, as described below.

 Effective with respect to pay periods ending on or after September 1, 2016, the Company may, in its sole discretion, make one or more
Company Contributions during each pay period with respect to Members’ Salary Deferrals (other than Age 50 Catch-Up Deferrals). The Company’s rate of contribution and the frequency and manner in which the Company makes its contribution
shall be decided by the Company in its sole discretion with respect to each such pay period. 
 The aggregate amount of Company Contributions
for each Plan Year or pay period shall be equal to the sum of the amounts allocated for such Plan Year or pay period to Members pursuant to Section 5.2. Company Contributions may be made in the form of PACCAR Stock. Company Contributions shall
be paid to the Trustee as soon as practicable following the end of the period for which the contributions are being made, but shall in no event be paid to the Trustee later than the due date for filing the Company’s federal income tax return
(including extensions) for the applicable Plan Year. 
  

	5.2	Allocation of Company Contributions 

 Company Contributions, determined under the first
two paragraphs of Section 5.1, shall be allocated as of the last day of each Plan Year to the Company Contributions Account of each Member who has completed a 12-month Period of Service on or before the last day of such Plan Year and who is an
Employee on such date, or who terminated employment during such Plan Year due to: 
  

	 	(a)	Death; 

  

	 	(b)	Total Disability; 

  

	 	(c)	Entry into the armed forces of the United States; 

  

	 	(d)	Layoff; 

  
 20 

	 	(e)	Retirement (as defined in Section 2.1(gg)); or 

  

	 	(f)	The Company’s decision to relocate the Member’s spouse who is also an Employee of the Company, if the Member relocates with the spouse and is not offered a job with the Company at the new location,

 provided such terminated Member defers distribution of his Plan Benefit to a date later than the last day of the Plan Year
in which he separates from service. 
 The allocation shall be in an amount equal to the lesser of (1) a percentage, to be determined
each Plan Year in the Company’s sole discretion, of the aggregate Salary Deferrals (other than Age 50 Catch-Up Deferrals) made by each eligible Member during the Plan Year, not including Salary Deferrals returned to the Member pursuant to
Sections 4.5, 4.9 or 15.3, or (2) a percentage, to be determined each Plan Year in the Company’s sole discretion, of Compensation received during the portion of the Plan Year that the eligible Member is an Eligible Employee and a Member
(including a Restricted Member) and has completed a 12-month Period of Service (in the current or a prior Plan Year). Company Contributions may be allocated in the form of PACCAR Stock which shall be valued for allocation purposes on the basis of
the average price per share of all shares of PACCAR Stock paid to the Plan as part of the Company Contributions and acquired with suspense-account funds during the Plan Year pursuant to Section 5.1. 

The period beginning January 1, 2016 and ending August 31, 2016 shall be treated as a short Plan Year for purposes of the above two
paragraphs. 
 Effective with respect to pay periods ending on or after September 1, 2016, Company Contributions, determined under
Section 5.1, shall be allocated as of the last day of each pay period to the Company Contributions Account of each Member. The allocation shall be in an amount equal to the lesser of (1) a percentage, to be determined with respect to each
pay period in the Company’s sole discretion, of the aggregate Salary Deferrals (other than Age 50 Catch-Up Deferrals) made by each eligible Member during the pay period, not including Salary Deferrals returned to the Member pursuant to Sections
4.5, 4.9 or 15.3, or (2) a percentage, to be determined with respect to each pay period in the Company’s sole discretion, of Compensation received during the pay periods in which the eligible Member is an Eligible Employee and a Member
(including a Restricted Member. In addition, the Company shall allocate additional Company Contributions as necessary during each pay period to ensure that each Member receives the full amount of Company Contributions based upon the aggregate Salary
Deferrals eligible to attract Company Contributions made by each eligible Member during the Plan Year. Company Contributions may be allocated in the form of PACCAR Stock. 
  

	5.3	Average Contribution Percentage Limitation 

 The Plan shall satisfy the average
contribution percentage test provided in section 401(m)(2) of the IRC and section 1.401(m)-1 of the regulations issued thereunder. Subject to the special rules described in Section 5.8, the Aggregate
401(m) Contributions of Highly Compensated Employees shall not exceed the limits described below: 

  
 21 

	 	(a)	An Actual Contribution Percentage shall be determined for each Highly Compensated Employee who is eligible to receive an allocation of Company Contributions under Section 5.2 (assuming, for this purpose, that
Salary Deferrals have been allocated to such individual’s Accounts), which Actual Contribution Percentage shall be the ratio, computed to the nearest one-hundredth of one percent, of the Highly Compensated Employee’s Aggregate 401(m)
Contributions for the Plan Year to the Highly Compensated Employee’s Section 414(s) Compensation for the Plan Year; 

  

	 	(b)	An Actual Contribution Percentage shall be determined for each Nonhighly Compensated Employee who, at any time during the Plan Year, is a Member (including a suspended Member) or is eligible to participate in the Plan,
which Actual Contribution Percentage shall be the ratio, computed to the nearest one-hundredth of one percent, of the Nonhighly Compensated Employee’s Aggregate 401(m) Contributions for the Plan Year to the Nonhighly Compensated
Employee’s Section 414(s) Compensation for the Plan Year; 

  

	 	(c)	The Actual Contribution Percentages (including zero percentages) of Highly Compensated Employees and Nonhighly Compensated Employees shall be separately averaged to determine each group’s Average Contribution
Percentage; and 

  

	 	(d)	The Aggregate 401(m) Contributions of Highly Compensated Employees shall constitute Excess Aggregate Contributions and shall be reduced, pursuant to Sections 5.5 and 5.6, to the extent that the Average Contribution
Percentage of Highly Compensated Employees exceeds the greater of (1) 125 percent of the Average Contribution Percentage of Nonhighly Compensated Employees or (2) the lesser of (A) 200 percent of the Average Contribution Percentage of
Nonhighly Compensated Employees or (B) the Average Contribution Percentage of Nonhighly Compensated Employees plus two percentage points. 

  

	5.4	Determination of Maximum Actual Contribution Percentage and Dollar Amount of Excess Aggregate Contributions 

The maximum Actual Contribution Percentage shall be determined by use of a leveling process, whereby the Aggregate 401(m) Contributions of the
Highly Compensated Employee with the highest Actual Contribution Percentage are reduced to the extent required to (a) eliminate all Excess Aggregate Contributions or (b) cause such Highly Compensated Employee’s Actual Contribution
Percentage to equal the Actual Contribution Percentage of the Highly Compensated Employee with the next-highest Actual Contribution Percentage. Such leveling process shall be repeated until the average contribution percentage test is satisfied. 

With regard to each Highly Compensated Employee whose Actual Contribution Percentage is in excess of the maximum permitted Actual Contribution
Percentage, a dollar amount of Excess Aggregate Contributions shall then be determined by subtracting the product of the maximum permitted Actual Contribution Percentage and the Highly Compensated Employee’s Section 414(s) Compensation
from the Highly Compensated Employee’s Aggregate 401(m) Contributions. The amounts shall then be aggregated to determine the total dollar amount of Excess Aggregate Contributions. 

  
 22 

	5.5	Allocation of Excess Aggregate Contributions to Highly Compensated Employees 

 Any Excess
Aggregate Contributions for a Plan Year shall be allocated to Highly Compensated Employees by use of a leveling process, whereby the Aggregate 401(m) Contributions of the Highly Compensated Employee with the highest Aggregate 401(m) Contributions
are reduced to the extent required to (a) eliminate all Excess Aggregate Contributions or (b) cause such Highly Compensated Employee’s Aggregate 401(m) Contributions to equal the Aggregate 401(m) Contributions of the Highly
Compensated Employee with the next-highest Aggregate 401(m) Contributions. Such leveling process shall be repeated until all Excess Aggregate Contributions for such Plan Year are allocated to Highly Compensated Employees. 

 

	5.6	Distribution of Excess Aggregate Contributions 

 Excess Aggregate Contributions allocated
to Highly Compensated Employees for the Plan Year pursuant to Section 5.5, together with any income or loss allocable to such Excess Aggregate Contributions for the Plan Year (but not for the period between the end of the Plan Year and the date
of distribution of such Excess Aggregate Contributions) shall be distributed to such Highly Compensated Employees not later than the March 15 next following the close of such Plan Year, if possible, and in any event no later than 12 months
following the close of such Plan Year. Such income (and loss) allocable to Excess Aggregate Contributions shall be determined in accordance with Treasury Regulation section 1.401(m)-2(b)(2)(iv). 

 

	5.7	Use of Salary Deferrals 

 The Company, in its sole discretion, may include all or a
portion of the Salary Deferrals (other than Age 50 Catch-Up Deferrals) for a Plan Year in Aggregate 401(m) Contributions taken into account in applying the Average Contribution Percentage limitation described in Section 5.3 for such Plan
Year, provided that the requirements of section 1.401(m)-2(b) (6) of the Income Tax Regulations are satisfied. 
  

	5.8	Special Rules 

 The following special rules shall apply for purposes of this Article 5:

  

	 	(a)	For purposes of applying the limitation described in Section 5.3, the Actual Contribution Percentage of any Highly Compensated Employee who is eligible to participate in the Plan and to make employee contributions
or receive an allocation of matching contributions (within the meaning of section 401(m)(4)(A) of the IRC) under any other plans, contracts or arrangements maintained by PACCAR Inc or any Subsidiary (as defined in Section 2.1(mm) without regard
to the last sentence thereof) shall be determined as if Company Contributions allocated to such Highly Compensated Employee’s Accounts and all such employee contributions and matching contributions were made under a single arrangement (other
than those plans that may not be permissively aggregated); provided, however, that if such plans have different plan years, the plans are aggregated with respect to contributions made within this Plan’s Plan Year only; 

  
 23 

	 	(b)	In the event that this Plan is aggregated with one or more other plans in order to satisfy the requirements of IRC section 401(a)(4), 401(m) or 410(b), then all such aggregated plans, including the Plan, shall be
treated as a single plan for all purposes under all such IRC sections (except for purposes of the average benefit percentage provisions of IRC section 410(b)(2)(A)(ii)); 

 

	 	(c)	In the event that the mandatory disaggregation rules of Treasury Regulation section 1.401(m)-1(b) apply to the Plan, or to the Plan and other plans with which it is aggregated as described in Subsection
(b) above, then the limitation described in Section 5.3 shall be applied as if each mandatorily disaggregated portion of the Plan (or aggregated plans) were a single arrangement; 

 

	 	(d)	Provided this limit is applied uniformly in determining the Actual Contribution Percentage limitation for the Plan Year, the Company may limit Section 414(s) Compensation to the amount of such compensation paid to
the Eligible Employee during the portion of the Plan Year that such Member was an Eligible Employee; and 

  

	 	(e)	If the Plan permits participation in the 401(m) portion of the Plan prior to an Eligible Employee’s satisfaction of the minimum age and service requirements of section 410(a)(1)(A) of the IRC and if section
410(b)(4)(B) of the IRC is applied in determining whether the 401(m) portion of the Plan meets the requirements of section 410(b) of the IRC, then for purposes of performing the average contribution percentage test, the test may be performed
separately with regard to Eligible Employees who have not met the minimum age and service requirements of section 410(a)(1)(A) of the IRC or, alternatively, Eligible Employees who have not met the minimum age and service requirements of section
410(a)(1)(A) of the IRC may instead be excluded in the determination of the Average Contribution Percentage for Nonhighly Compensated Employees, but not in the determination of the Average Contribution Percentage for Highly Compensated Employees.

  

	5.9	Company Contributions in PACCAR Stock 

 The Company may elect to pay all or part of any
Company Contribution in the form of PACCAR Stock. For purposes of determining the amount of the Company’s deduction under section 404 of the IRC, shares of PACCAR Stock so contributed shall be valued at the last-transaction price quoted by the
National Market System of the National Association of Securities Dealers and reported by The Wall Street Journal with respect to the date on which such shares are paid to the Plan. 

 

	5.10	Diversification of Company Contributions Account 

 Any Member may elect at any time to
transfer any whole percentage of the amount of the Member’s Company Contributions Account then invested in one Investment Option (including the PACCAR Stock Fund) to another Investment Option (including the 

  
 24 

 
PACCAR Stock Fund) in accordance with the Company’s administrative procedures. Any future Company Contributions allocated to such Member may, in the Company’s sole discretion, continue
to be allocated to the Member’s Company Contributions Account in the form of PACCAR Stock. 
 The Beneficiary of a deceased Member shall
have the same investment rights as herein described. 
  

	5.11	Return of Company Contributions 

 Any other provision of the Plan notwithstanding, each
Company Contribution under Section 5.1 is expressly conditioned upon the deductibility of such contribution under Section 404 of the IRC. If the deductibility of a Company Contribution is denied, then the amount for which a deduction is
disallowed (reduced by any losses incurred with respect to such amount) shall be returned to the Company within 12 months after the date of the disallowance. In addition, if all or part of a Company Contribution is attributable to a mistake of fact,
then the excess of such Company Contribution over the amount which would have been contributed in the absence of the mistake of fact (reduced by any losses incurred with respect to such excess) shall be returned to the Company within 12 months after
the date of such Company Contribution. 
 ARTICLE 6 

THE TRUSTEE AND THE TRUST FUND 
  

	6.1	The Trustee and Investment Managers 

 The exclusive authority and discretion to manage
and control the Trust Fund shall be vested in the Trustee, except to the extent that the Trust Agreement provides that the Trustee is subject to the directions of the Company or an Investment Manager appointed by the Company. Accordingly, subject to
the provisions of the Plan, the Company shall enter into one or more Trust Agreements in such form and containing such provisions as the Company may deem appropriate, including (without limitation) constraints on the investment of the Trust Fund and
the power and authority of the Trustee to amend the Trust Agreement or to terminate the trust. All Salary Deferrals, Rollover Contributions and Company Contributions under the Plan shall be paid to the Trustee to be held, invested and distributed
subject to the terms and conditions of the Plan and the Trust Agreement. 
 The Company from time to time may appoint one or more Investment
Managers with respect to all or any portion of the Trust Fund and may enter into an investment management agreement with any Investment Manager so appointed. Each Investment Manager so appointed shall have the exclusive authority and discretion to
manage and control the assets of the Trust Fund assigned to him (it), except to the extent that the applicable investment management agreement provides that such Investment Manager is subject to the directions of the Company or a Trustee. 

  
 25 

	6.2	Investment Funds 

 The Trust Fund shall consist of the PACCAR Stock Fund and one or more
Investment Options selected by the Company. For purposes of investment, the Trustee may divide any part of the Trust Fund into one or more sub-funds. The Trustee may physically segregate the assets of any sub-fund, invest the assets of such sub-fund
separately, and account separately for the income, gains, expenses and losses of such sub-fund. 
 The “PACCAR Stock Fund” shall be
invested in PACCAR Stock. The PACCAR Stock Fund shall consist of all PACCAR Stock held by the Trustee, and all cash held by the Trustee which is derived from dividends on PACCAR Stock, Company Contributions to be invested in PACCAR Stock, Salary
Deferrals by Members that are to be invested in PACCAR Stock, Member Contributions that are to be invested in PACCAR Stock, Rollover Contributions that are to be invested in PACCAR Stock, and proceeds from sales of PACCAR Stock (except while such
cash may be otherwise invested as provided under the Trust Agreement). All dividends on PACCAR Stock and all proceeds from the sale of PACCAR Stock shall be invested in the PACCAR Stock Fund, except as otherwise provided in the Plan. 

 

	6.3	Voting of PACCAR Stock 

 Trust Fund assets invested in PACCAR Stock may be registered in
the name of the Trustee or any nominee; provided that the Trustee’s records evidence the interest of the Trust Fund therein. Each Member shall be entitled to vote the whole number of shares of PACCAR Stock credited to him in his Company
Contributions Account, Salary Deferral Account, and Employee Account as of the most recent practicable Valuation Date prior to the record date for each meeting of shareholders of PACCAR Inc. Each Member, prior to such meeting, shall be furnished
with the proxy statement for such meeting, together with a form to be sent to the Trustee on which may be set forth the Member’s instructions as to the manner of voting such shares of PACCAR Stock. Upon receipt of such instructions (which the
Trustee shall hold in confidence), the Trustee shall vote such shares in accordance therewith. The Trustee shall vote all shares of PACCAR Stock held by it upon any matter as to which no instructions were given by Members within such reasonable
period of time prior to any shareholder meeting as may be specified by the Trustee, or which cannot be voted pursuant to Members’ instructions, in direct proportion to the shares of PACCAR Stock with respect to which it has received timely
voting instructions by Members. 
  

	6.4	Other Instructions by Members 

 In the event that any person or group of persons makes a
tender offer subject to section 14(d) of the Securities Exchange Act of 1934 to acquire all or part of the outstanding shares of PACCAR Stock, including the PACCAR Stock held in the Trust Fund (“Acquisition Offer”), each Member shall be
entitled to direct the Trustee confidentially to tender all or part of those shares of PACCAR Stock that would then be subject to such Member’s voting instructions under Section 6.3. If the Trustee receives an instruction by the date
communicated by the Company to Members, the Trustee shall tender such shares in accordance with such instruction. Any PACCAR Stock as to which the Trustee does not receive timely instructions shall not be tendered by the Trustee. The Company shall

  
 26 

 
distribute to each Member all appropriate materials pertaining to the Acquisition Offer, including the statement of the position of the Company with respect to such offer issued pursuant to Rule
14e-2 under the Securities Exchange Act of 1934, as soon as practicable after such materials are issued; provided, however, that if the Company fails to issue such statement within five business days after the commencement of such offer, the Company
shall distribute such materials to each Member without the statement by the Company and shall separately distribute such statement as soon as practicable after it is issued. 
  

	6.5	Trust Fund Investment Losses: Interest in Trust Fund 

 All payments of Benefits shall be
made solely from the assets of the Trust Fund. No Fiduciary guarantees the Trust Fund or any Company Contributions, Salary Deferrals, Rollover Contributions or Member Contributions in any manner against investment loss or depreciation in asset
value. Except only as expressly provided by the Plan, and then only to the extent of his Benefit payable under the Plan from the assets of the Trust Fund, no person shall have any right to, or interest in, any assets of the Trust Fund. 

 

	6.6	ERISA 404(c) Requirements 

 The Plan is intended to comply with section 404(c) of ERISA
with respect to Salary Deferral Accounts. Accordingly, with respect to the investment of such Accounts, the Plan shall satisfy, among other requirements, Subsections (a), (b) and (c) below. 

 

	 	(a)	Choice of Broad Range of Investment Alternatives. The Member shall be able to choose from at least three “core” investment alternatives. Each core investment alternative shall be diversified, shall
demonstrate materially different risk and return characteristics from each other core investment alternative and shall, when combined with other Investment Options, tend to minimize through diversification the overall risk of the Member’s
portfolio. In the aggregate, the three core investment alternatives shall constitute a broad range of alternatives such that, by choosing among them, a Member may achieve a portfolio with risk and return characteristics at any point within the range
normally appropriate to the Member’s portfolio. 

  

	 	(b)	Frequency of Investment Instructions. The Member shall be able to give investment instructions to a person designated by the Company as an agent for this purpose. The person shall be obligated to comply with the
instructions of the Member, except as otherwise permitted by law. The Member shall be able to give investment instructions for each investment alternative as frequently as is appropriate given the volatility of the investment, but no less frequently
than once within every three-month period. 

  

	 	(c)	Provision of Sufficient Information to Member or Beneficiary. The Member shall be provided information sufficient to make informed decisions regarding the Plan’s Investment Options. Such information shall
include: 

  

	 	(1)	An explanation that the Plan is intended to be in compliance with ERISA section 404(c) and that Plan fiduciaries may be relieved of liability for losses that arise from the Member’s investment choices;

  
 27 

	 	(2)	A description of all Investment Options, including a general description of the investment objectives of each and the level of diversification in each; 

 

	 	(3)	An explanation that Members and Beneficiaries may review any prospectuses or similar materials made available to the Plan for each Investment Option; 

 

	 	(4)	The identification of any designated investment manager; 

  

	 	(5)	An explanation of the circumstances under which a Member may give investment instructions, together with any limitations on those instructions; 

 

	 	(6)	A description of any transaction fees, charges or expenses to a Member’s Account in connection with the purchase or sale of any Investment Option; 

 

	 	(7)	The name, address and telephone number of the Plan fiduciary responsible for providing information on request with a description of such information available upon request; 

 

	 	(8)	An explanation of the established procedures designed to provide for the confidentiality of information concerning the purchase, holding or sale of PACCAR Stock; 

 

	 	(9)	A copy of the most recent prospectus in the case of an initial purchase in an Investment Option subject to the Securities Act of 1933; and 

 

	 	(10)	Any materials provided to the Plan that relate to the exercise of voting, tender or similar rights passed through to Members and Beneficiaries. 

Information that must be provided on request in accordance with Department of Labor Regulation 2550.404c-1(b)(2) includes certain information
relating to financial reports of Investment Options, operating expenses of the portfolio assets of the Investment Options, overall investment performance of the Investment Options and information relating to the shares of an investment in the
requesting Members’ Account. Additional information may be available upon request. 
 The Beneficiary of a Member shall have the same
investment rights as herein described where such Beneficiary becomes entitled to a Member’s Salary Deferral Account under the Plan. 
  

	6.7	Expenses of Plan and Trust 

 The fees of the Trustee and any Investment Manager, and the
expenses of administering the Trust Fund and the Plan, shall be paid out of the Trust Fund pursuant to the terms of the Trust Agreement, or by or through offsets attributable to the Plan’s investment options, except such expenses as are paid by
the Company. 

  
 28 

	6.8	Forfeitures 

 Any forfeitures that arise under the Plan shall be placed in an unallocated
Account, which may be invested in any Investment Option at the discretion of the Company, and which will be applied to correct administrative errors, pay reasonable administrative expenses, or reduce Company Contributions under Section 5, all
as determined in the sole discretion of the Company. 
 ARTICLE 7 

ACCOUNTS AND VALUATIONS 
  

	7.1	Types of Accounts 

 Accounts shall be established and maintained for each Member which
reflect his interest in contributions made under the Plan and the investment experience thereof. A Member’s interest in the Plan shall consist of one or more of the following Accounts: 

 

	 	(a)	Company Contributions Account 

 A Company Contributions Account, reflecting Company
Contributions made on behalf of a Member with respect to periods after June 30, 1978 and earnings, losses and expenses attributable to such Company Contributions. 
  

	 	(b)	Salary Deferral Accounts 

 A Salary Deferral Account, reflecting Salary Deferrals
(including Age 50 Catch-Up Deferrals) and Rollover Contributions made by a Member to the Plan and earnings, losses and expenses attributable to such Salary Deferrals (including Age 50 Catch-Up Deferrals) and Rollover Contributions. A Salary Deferral
Account may also include amounts transferred from a Prior Profit Sharing Account effective July 1, 1987, and earnings, losses and expenses attributable to such amounts. 
  

	 	(c)	Employee Accounts 

 An Employee Account, reflecting Member Contributions made by a
Member to the Plan prior to February 1, 1983 and earnings, losses and expenses attributable to such Member Contributions. 
 Such
separate Accounts are maintained for accounting purposes and shall not require a segregation of Trust Fund assets to each Account. 
  

	7.2	Valuation of Accounts 

 As of each Valuation Date, the fair market value and balance of
each Member’s Accounts shall be determined, as provided in (a), (b), (c) and (d) below. Any lawful procedure may be used for determining the fair market value and balance of Accounts; provided that such procedure is consistent with
this Section 7.2. 

  
 29 

	 	(a)	Valuation of Trust Fund 

 The Company shall ascertain from the Trustee the fair market
value of the assets of each portion of the Trust Fund as of the Valuation Date. The fair market value of PACCAR Stock shall be the last-transaction price quoted by the National Market System of the National Association of Securities Dealers and
reported by The Wall Street journal with respect to the Valuation Date. 
  

	 	(b)	Contributions Credited 

 Each Member’s Company Contributions Account shall be
credited with the amount of any Company Contributions allocated as of a day or days within the Plan Year as the Company shall determine in its sole discretion. Each Member’s Salary Deferral Accounts shall be credited with the amount of Salary
Deferrals withheld, transfers from Company Contributions Accounts received and Rollover Contributions received in such calendar month. 
  

	 	(c)	Charges Against Accounts 

 The amount of any transfers, withdrawals, loans and
distributions of Benefits effected during the calendar month ending with the Valuation Date shall be charged against each Member’s Company Contributions, Salary Deferral and Employee Accounts, as applicable. 

 

	 	(d)	Allocation of Dividends 

 Notwithstanding any other provision of the Plan, a Member may,
in accordance with procedures established by the Company, elect to have any cash dividends paid on PACCAR Stock that is held in the Member’s Company Contributions Account, Salary Deferral Account or Employee Account, as applicable, paid
directly to such Member in cash or allocated to the Member’s Account(s) and re-invested in PACCAR Stock. In the absence of a proper election by the Member, any such cash dividend shall be allocated to the Member’s Account(s) and
re-invested in PACCAR Stock. 
  

	7.3	Statements for Members 

 A statement for each Member shall be prepared and distributed to
the Member annually or more frequently, as determined by the Company. Such statement shall reflect the status (including the fair market value) of the Member’s Accounts and shall contain such other information as the Company may determine. 

  
 30 

 ARTICLE 8 

AMOUNT AND DISTRIBUTION OF BENEFITS 
  

	8.1	Vesting and Amount of Benefits 

 Each Member’s interest in his Accounts is 100
percent vested at all times. In the case of a reemployed Member who previously incurred a forfeiture from his Company Contributions Account under the Plan as in effect prior to January 1, 1989, any such forfeiture may be restored to the
Member’s Company Contributions Account if the Member satisfies the requirements of the Plan as in effect prior to January 1, 1989, concerning the repayment of prior forfeitures. Benefits to which a Member is entitled are distributable to
such Member or his Beneficiary, as the case may be, as further provided in this Article 8. The amount distributable to the Member shall be determined as of the later of (a) the Valuation Date coinciding with or immediately following the date of
the Member’s termination of employment or (b) the Valuation Date coinciding with or immediately preceding the distribution date elected by the Member under Section 8.2. 

 

	8.2	Normal Time of Distribution 

 Subject to Sections 8.3, 8.4 and 8.8, a Member’s
Benefit shall be distributed to him on (or as soon as reasonably practicable after) the date that he has elected. The distribution election shall be made in accordance with the Company’s administrative procedures, and where applicable, such
procedures shall require the consent (written, if necessary) of the Member to the distribution of his Benefit before he attains age 65. 
  

	8.3	Time of Distribution 

 A Member who is Totally Disabled may elect to receive his Plan
Benefit in accordance with the Company’s administrative procedures. In the case of a Member who is not Totally Disabled, the Benefit shall not be distributed before the later of the following dates: 

 

	 	(a)	The date when the Member ceases to be an Employee; or 

  

	 	(b)	The date when the election is received. 

 Notwithstanding Section 14.2(c), for purposes of
Plan distributions, a Member shall be treated as having ceased to be an Employee under the Plan during any period in which the Member is performing service in the uniformed services while on active duty for a period of more than thirty
(30) days (as described in section 3401(h)(2)(A) of the IRC). If a Member elects to receive a distribution by reason of such deemed cessation of employment, and the Member otherwise would not have been treated as having ceased to be an Employee
under the Plan, the Member may not make Salary Deferrals during the 6-month period beginning on the date of the distribution. 

  
 31 

	8.4	Special Rules Regarding Distribution 

  

	 	(a)	If a Member other than a five-percent owner of PACCAR stock (as defined in section 416 of the IRC and taking into account any modifications under section 401(a)(9) of the IRC) is still an Employee as of the
April 1 following the calendar year in which he attains age 70 1⁄2, in addition to the in-service withdrawal options available under Article 10, he may
elect (in the manner specified under the Company’s administrative procedures) to receive or commence payment of his Benefit in the form described in Subsection (b) below. If he does not so elect, payment shall be deferred to the date he
ceases to be an Employee, in which case his Benefit shall be paid or commence as soon as reasonably practicable thereafter, but not later than April 1 of the calendar year following the calendar year in which he ceases to be an Employee.

  

	 	(b)	A Member who is still an Employee as of April 1 of the calendar year following the calendar year in which he attains age
70 1⁄2 may elect annual installments consisting entirely of cash based upon his life expectancy or the joint life expectancy of himself and his Beneficiary.
Subject to such other administrative ordering rules as the Company may adopt, the installment payments shall be taken (1) first from the Member’s Member Contributions which were not previously withdrawn or distributed; and (2) from
the Investment Options in which the Member’s Accounts are invested on a pro rata basis. 

  

	 	(c)	Notwithstanding the foregoing, distributions otherwise required by this Section 8.4 and section 401(a)(9) of the IRC shall be waived with respect to the 2009 calendar year in accordance with the Worker, Retiree,
and Employer Recovery Act of 2008, unless the Member elects to continue them. If a Member elects to receive a distribution that would have been required by this Section 8.4 and section 401(a)(9) of the IRC with respect to the 2009 calendar year
without regard to this paragraph, such distribution will be treated as an eligible rollover distribution subject to Section 8.13. 

  

	 	(d)	All distributions under the Plan shall be made in accordance with section 401(a)(9) of the IRC and the regulations thereunder, including Income Tax Regulation sections 1.401(a)(9)-1 through 9. Such regulations are
incorporated in the Plan by reference and shall override any inconsistent provisions of the Plan. 

  

	8.5	Reemployment 

 In the event that a Member is reemployed and becomes a Member of the Plan
prior to the distribution of his entire Benefit relating to his earlier period of employment, then (a) any election of a deferred distribution date under Section 8.2 shall be disregarded; (b) any installment payments in process shall
be discontinued; and (c) the Member’s entire Benefit, including the Benefit relating to the period following his reemployment, shall be distributed in accordance with the latest distribution election form filed by the Member, after his
reemployment, pursuant to Section 8.2. 

  
 32 

	8.6	Available Forms of Distribution 

 A Member whose employment as an Employee terminates may
elect to have his Benefit distributed in one of the following forms: 
  

	 	(a)	A lump sum consisting of the whole shares of PACCAR Stock held in the Member’s Company Contributions Account, Salary Deferral Account and Employee Account as of the Valuation Date coincident with or immediately
preceding distribution of the Member’s Benefit, and cash equal to the balance of the Member’s Benefit; 

  

	 	(b)	A lump sum consisting entirely of cash; 

  

	 	(c)	Monthly, quarterly or annual installments consisting entirely of cash, payable over a period of at least one year and not to exceed 15 years, subject to the limitations of Section 8.4(d). Subject to such other
administrative ordering rules as the Company may adopt, installment payments shall be taken (1) first from the Member’s Member Contributions which were not previously withdrawn or distributed; and (2) from the Investment Options in
which the Member’s Accounts are invested on a pro rata basis. 

 A Member who has commenced installment payments under
this Subsection (c) may elect, in accordance with the Company’s administrative procedures, to terminate the remaining scheduled installments at any time, and shall be eligible to elect distribution of the remaining value of his Accounts in
any other form of distribution available under this Section 8.6; provided, however, that any new election of installment payments shall be subject to the same 15 year maximum payment period that applied to the original installment payments.

  

	8.7	Election of a Form of Distribution 

  

	 	(a)	General Rule 

 A Member entitled to a Benefit shall elect a form of distribution under
Section 8.6 in accordance with the Company’s administrative procedures. Such election shall include such information as the Company may reasonably require and, if the distribution is to be made prior to the Member’s attainment of age
65, the election shall be made no more than 180 days prior to the distribution date elected by the Member. 
  

	 	(b)	Member Who Fails to Elect Payment Form 

 If a Member’s Benefit must be paid after
he ceases to be an Employee on account of his Required Beginning Date, he shall elect a form of distribution under Section 8.6 for this Benefit. If the Member fails to elect any form of distribution for such Benefit before his Required
Beginning Date, then such Benefit shall be distributed in the form of annual installments consisting entirely of cash based upon his life expectancy described in Section 8.4(b). 

 

	8.8	Small Benefits 

 Any other provision of this Article 8 notwithstanding, effective for
distributions made on or after September 1, 2016, if the value of a Member’s entire Benefit equals $5,000 or less before the first payment of such Benefit is made, then the Benefit automatically shall be paid to such Member (or, in the
case of his termination as a result of his death, to his Beneficiary) 

  
 33 

 
in a single lump sum in cash no earlier than as soon as administratively practicable after the Member’s termination and without his consent. If the value of a benefit payable to an alternate
payee pursuant to a qualified domestic relations order (as defined in section 414(p) of the IRC) (“QDRO”) is not more than $5,000 and payment of such benefit has not commenced, such benefit shall be paid automatically to such alternate
payee in a single lump sum in cash no earlier than as soon as administratively practicable after the QDRO is received by the Plan and without the alternate payee’s consent. 

If an automatic lump sum distribution payable to a Member who has not attained age 65 is more than $1,000, and if the Member does not elect to
have such distribution paid directly to an Eligible Retirement Plan in accordance with Section 8.13 or to receive the distribution directly, then the distribution shall be directly rolled over to an individual retirement account designated by
the Company. The preceding sentence shall not apply to amounts distributed to a Beneficiary or to an alternate payee pursuant to a QDRO. 
  

	8.9	Survivors’ Benefits 

  

	 	(a)	Member Dies Before Benefit Distribution 

 This Subsection (a) shall apply in the
event that a Member dies before his Benefit has commenced. Such Member’s Benefit ordinarily shall be paid to his Beneficiary in the form of a single lump sum in cash, and the distribution ordinarily shall be made as soon as reasonably
practicable after the Member’s death. A Beneficiary may, however, make request to defer the distribution of the Benefit to which such Beneficiary is entitled. However, the distribution shall in no event be made later than five years after the
Member’s death. A Beneficiary shall make the request to receive the Benefit to which such Beneficiary is entitled or to defer receipt in accordance with the Company’s administrative procedures. 

 

	 	(b)	Member Dies After Benefit Distribution Has Commenced 

 This Subsection (b) shall
apply in the event that a Member dies after his Benefit has commenced in the form of installment payments under Section 8.4(b), 8.6(c) or 8.7(b), but before the total value of his Accounts has been distributed. 

If a Member dies after installment payments under Section 8.6(c), or annual installment payments based upon the Member’s life
expectancy under Section 8.4(b) or 8.7(b), have commenced, but before the total value of his Accounts has been distributed, the balance of the Member’s Accounts shall be paid to his Beneficiary in the form of a single lump sum in cash, and
the distribution shall be made as soon as reasonably practicable after the Member’s death. 
 If a Member dies after annual installment
payments based upon the joint life expectancy of the Member and his Beneficiary under Section 8.4(b) have commenced, but before the total value of his Accounts has been distributed, the scheduled annual installments shall continue to the
Beneficiary. However, the Beneficiary may elect at any time, in accordance with the Company’s administrative procedures, to terminate the remaining scheduled installments and to receive the balance of the Member’s Accounts in the form of a
single lump sum in cash. 

  
 34 

	 	(c)	Designating a Beneficiary 

 Upon commencement of membership, each Member shall name one
or more persons as the Beneficiary who will receive any distribution payable under the Plan in the event of the Member’s death in accordance with procedures established by the Company. If the Member has not made an effective designation of a
Beneficiary or if none of the named Beneficiaries is living when any distribution is to be made, then (1) the spouse of the deceased Member shall be the Beneficiary or (2) if the Member has no spouse living at the time of such
distribution, then the living children of the deceased Member shall be the Beneficiaries in equal shares or (3) if the Member has neither spouse nor children living at the time of such payment, the estate of the Member shall be the Beneficiary.
The Member may change his designation of a Beneficiary from time to time in accordance with procedures established by the Company. Any other provision of this Subsection (b) notwithstanding, in the case of a married Member, any designation of a
person other than his spouse as Beneficiary shall be effective only if the spouse consents to the designation in writing and such written consent is witnessed by a notary public. 

 

	8.10	No Alienation of Benefits; Qualified Domestic Relations Order 

 No benefit payable under
the Plan shall 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 such benefit under the terms of the 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. However, neither of the
following shall constitute a violation of this Section 8.10: 
  

	 	(a)	The creation or recognition of a right in an alternate payee to any pension payable with respect to a Member pursuant to a qualified domestic relations order (as defined in IRC Section 414(p)), as determined in
accordance with procedures established by the Company, and the payment of benefits in accordance with the applicable requirements of such order; or 

  

	 	(b)	The Trustee’s compliance with instructions from the Company to reduce a Member’s benefit by amounts the Member is ordered or required to pay the Plan, where such order or requirement: (i) arises under a
judgment of conviction for a crime involving the Plan, under a civil judgment (including a consent order or decree) entered by a court on or after August 5, 1997 in an action brought in connection with a violation of part 4 of subtitle B of
title I of ERISA or under a settlement entered into on or after August 5, 1997 with the Department of Labor asserting a violation of part 4 of subtitle B of title I of ERISA; and (ii) the judgment, order, decree or settlement expressly
provides for the offset of all or part of the amount ordered or required to be paid to the Plan against the Member’s benefits provided under the Plan. 

  
 35 

 Pursuant to a qualified domestic relations order, the Plan may distribute any benefit payable to
an alternate payee in the form of a single lump sum in cash prior to the earliest date upon which the Member could receive his Benefit. To the extent that a qualified domestic relations order creates, assigns, or recognizes the right of an alternate
payee to any portion of the Benefit otherwise payable to or with respect to a Member, such portion shall not thereafter be taken into account in determining the Benefit payable to or with respect to that Member under the Plan. 

 

	8.11	Facility of Payment 

 Whenever, in the Company’s opinion, a person entitled to
receive any distribution of a Benefit or installment thereof is under a legal disability or is physically or mentally incapacitated in any way so as to be unable to manage his financial affairs, the Company may direct the Trustee to make
distribution to such person or to his legal representative or to a relative or friend of such person for his benefit; or the Company may direct the Trustee to apply the payment for the benefit of such person in such manner as the Company considers
advisable. 
  

	8.12	Payments Discharge Plan; Adverse Claims 

 Any payment or distribution made to any person
in full compliance with the terms of the Plan shall fully discharge the Company, the Plan and any Trustee or insurance company making such payment from all adverse claims thereto respecting which prior written notice has not been given to any such
entity making or directing the payment or distribution. If the Company has received actual written notice of any adverse claim to any payment or distribution not yet made, the Company may suspend distribution and take such other action as it deems
necessary or advisable to protect the Plan or its Members and Beneficiaries, until the respective rights of all interested persons have been determined to the satisfaction of the Company. 

 

	8.13	Direct Rollovers 

  

	 	(a)	Direct Rollover Option 

 Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Distributee’s election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Company, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct Rollover. 
  

	 	(b)	Definition of Eligible Rollover Distribution 

 Effective with respect to distributions
made after December 31, 2006, an Eligible Rollover Distribution is any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s
designated beneficiary, or for a specified period of 10 years or more; 

  
 36 

 
any distribution to the extent such distribution is required under section 401(a)(9) of the IRC; the portion of any distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer securities), except to the extent that such portion is directly rolled over to a qualified trust described in section 401(a) of the IRC, or an annuity contract described in
section 403(b) of the IRC, which agrees to separately account for the portion which is not so includible, or such portion is rolled over to an individual retirement account or annuity described in section 408(a) or 408(b) of the IRC; and a
distribution which is made upon hardship of the Distributee. 
  

	 	(c)	Definition of Eligible Retirement Plan 

 Effective with respect to an Eligible Rollover
Distribution made after December 31, 2006, an Eligible Retirement Plan is an individual retirement account described in section 408(a) of the IRC; an individual retirement annuity described in section 408(b) of the IRC; an annuity plan
described in section 403(a) of the IRC; an annuity contract described in Section 403(b) of the IRC; an eligible plan under Section 457(b) of the IRC maintained by a state, political subdivision of a state, or any agency or instrumentality
of a state or political subdivision of a state, that agrees to account separately for the Eligible Rollover Distribution; or a qualified trust described in section 401(a) of the IRC that accepts the Distributee’s Eligible Rollover Distribution.
With respect to the portion of an Eligible Rollover Distribution that is not includible in gross income (if it were paid to the Distributee), an “Eligible Retirement Plan” is limited to a qualified trust described in section 401(a) of
the IRC, or an annuity contract described in section 403(b) of the IRC, that agrees to account separately for the portion which is includible in gross income and the portion which is not so includible, or an individual retirement account or annuity
described in section 408(a) or 408(b) of the IRC. Effective with respect to an Eligible Rollover Distribution made on or after July 1, 2007 to a Beneficiary who is not the Employee’s or former Employee’s surviving spouse, an
“Eligible Retirement Plan” is limited to an individual retirement account or annuity described in section 408(a) or 408(b) of the IRC established for the purpose of receiving the Eligible Rollover Distribution on behalf of such Beneficiary
and that agrees to be treated as an inherited individual retirement account or annuity within the meaning of section 402(c)(11) of the IRC. Effective with respect to an Eligible Rollover Distribution made after December 31, 2007, “Eligible
Retirement Plan” also includes a Roth IRA described in section 408A of the IRC. 
  

	 	(d)	Definition of Distributee 

 Effective with respect to distributions made on or after
July 1, 2007, a Distributee includes an Employee, former Employee, Beneficiary (other than the Member’s estate) or a spouse or former spouse who is an Alternate Payee under a qualified domestic relations order. 

  
 37 

	 	(e)	Definition of Direct Rollover 

 A Direct Rollover is a payment by the Plan directly to
the Eligible Retirement Plan specified by the Distributee. 
  

	 	(f)	Waiver of Waiting Period 

 An Eligible Rollover Distribution may commence less than 30
days after the notice required under Income Tax Regulation section 1.411(a)-11(c) and section 402(f) is given; provided that (1) the Member is clearly informed that the Member has the right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, the particular distribution option), and (2) the Member, after receiving the notice, affirmatively elects a distribution. 

ARTICLE 9  
 LOANS

  

	9.1	Amount of Loans 

 A Member or Restricted Member who is an Employee, and an Employee who
is not a Member but who is a Restricted Member as a result of making one or more Rollover Contributions to the Plan, may obtain a cash loan from his Employee and Salary Deferral Accounts; provided, however, that (a) he or she shall not be
permitted to obtain a loan under the Plan if, at any time in the prior 12 months, he or she defaulted on a Plan loan (as determined in accordance with the Company’s administrative procedures), and (b) he or she shall not be permitted to
obtain more than two new loans in any Plan Year. The minimum amount of the loan shall be $1,000. The maximum amount of the loan shall be subject to the limitations of Section 9.2. All loan amounts not evenly divisible by $100 shall be rounded
down to the nearest $100. 
  

	9.2	Aggregate Loan Limitation 

 No loan shall be granted under the Plan if it would cause the
aggregate balance of all loans which a Member or Restricted Member thereafter has outstanding under this Plan or under any other qualified plan maintained by any PACCAR Inc or any of its Subsidiaries (determined without regard to the last sentence
of Section 2.1(mm)) to exceed the least of the following: 
  

	 	(a)	$50,000, less the highest outstanding loan balance during the period of 12 consecutive months ending on the day before a new loan is made; or 

 

	 	(b)	One-half of the value of the Member’s or Restricted Member’s Accounts (or such lesser amount as may be required pursuant to Regulation 2550.408b-1(f) of the Department of Labor). 

  
 38 

	9.3	Terms of Loans 

 A loan to a Member or Restricted Member shall be made on such terms and
conditions as the Company may determine, provided that the loan shall: 
  

	 	(a)	Be evidenced by a promissory note signed by the Member or Restricted Member and secured by one-half of the value of his Accounts (regardless of whether a particular Account provided funds for the loan under
Section 9.1); 

  

	 	(b)	Bear interest at a fixed rate (determined by the Company) commensurate with the interest rates charged for similar loans by commercial lenders; 

 

	 	(c)	Provide for level amortization over its term with payments at monthly or more frequent intervals, as determined by the Company; 

  

	 	(d)	Provide for loan payments (1) to be withheld whenever possible through periodic payroll deductions from the Member’s or Restricted Member’s compensation from the Company or (2) to be paid by check or
money order whenever payroll withholding is not possible; 

  

	 	(e)	Provide for repayment in full on or before the earlier of (1) the distribution date elected by the Member pursuant to Section 8.2 or (2) the date five years after the loan is made (or the date 15 years
after the loan is made if the loan is used to acquire a dwelling which, within a reasonable period of time, is used as the principal residence of the Member); 

  

	 	(f)	Provide that a Member or Restricted Member may not receive any distribution from any of his Accounts under Article 8 until the loan obligation is repaid, except to the extent that all or any part of such distribution is
used to repay the outstanding balance of the loan; and 

  

	 	(g)	Provide that a Member’s or Restricted Member’s Accounts shall not be applied to the satisfaction of the Member’s loan obligations before the Accounts become distributable under Article 8, unless the
Company determines that the loan obligations are in default and takes such actions as the Company deems necessary or appropriate to cause the Plan to realize on its security for the loan as permitted under the IRC and the Income tax Regulations
thereunder. 

  

	9.4	Company Consent 

 The Company, based on the criteria set forth in this Article 9, may
withhold its consent to any loan or may consent only to the borrowing of a part of the amount requested by the Member. The Company shall act upon requests for loans in a uniform and nondiscriminatory manner, consistent with the requirements of
section 401(a), section 401(k), section 4975 and related provisions of the IRC. 

  
 39 

	9.5	Source of Loans 

 If a Member requests and is granted a loan, the amount of the loan
shall be disbursed from the Trust Fund. The promissory note executed by the Member shall be held by the Trustee or by the Company as agent of the Trustee and the promissory note shall be treated as an investment of the Trust Fund. 

 

	9.6	Disbursement of Loans 

 A Member may request a loan in accordance with the Company’s
administrative procedures. A loan shall be disbursed as soon as reasonably practicable after the date on which the prescribed loan request is received (subject to the Company’s consent). 

 

	9.7	Valuation Date 

 For purposes of this Article 9, the value of a Member’s Accounts
shall be determined as of the Valuation Date coinciding with or next following the date the prescribed loan request is received. 
  

	9.8	Loan Fees 

 A Member who obtains a loan under this Article 9 shall be required to pay
such fees as the Company may impose in order to defray the cost of administering loans from the Plan. 
 ARTICLE 10 

WITHDRAWALS 
  

	10.1	Regular Withdrawals 

 Any Member who is an Employee may withdraw an amount from his
Employee Accounts and Company Contributions Account not in excess of the sum of the following: 
  

	 	(a)	The previously unwithdrawn and undistributed value of the Member’s Employee Accounts as of the last Valuation Date in the 1988 Plan Year; and 

 

	 	(b)	The previously unwithdrawn and undistributed shares of PACCAR Stock allocated to the Member’s Company Contributions Account as of the last Valuation Date in the 1988 Plan Year. 

 

	10.2	Withdrawals After Age 59 1⁄2 

Any Member who is an Employee and who has attained age
59 1⁄2 may withdraw an amount from his Accounts in one of the following forms: 
  

	 	(a)	A lump sum consisting of all of the whole shares of PACCAR Stock held in the Member’s Accounts, and cash equal to the balance of the Member’s Accounts (excluding the amount of any loan balance that remains
outstanding under Article 9); or 

  
 40 

	 	(b)	Any amount from the Member’s Accounts (excluding the amount of any loan balance that remains outstanding under Article 9) in a lump sum consisting entirely of cash. 

 

	10.3	Hardship Withdrawals 

 Any Member who is an Employee, who has not attained age 59 1⁄2 and who has taken all other available distributions from the Plan may withdraw an amount from his Accounts not in excess of the amount necessary to satisfy an
immediate and heavy financial need, as long as the Member has demonstrated that no resources other than such withdrawal are reasonably available to meet such need. The maximum amount that may be withdrawn is the amount credited to the Member’s
Accounts, excluding any income credited to a Member’s Salary Deferrals (including Age 50 Catch-Up Deferrals) after the last Valuation Date in the 1988 Plan Year, qualified nonelective contributions and qualified matching contributions (and
income allocable thereto), and any other amounts that are prohibited from being withdrawable upon hardship under the rules applicable to qualified plans under section 401(a) of the IRC or the Income Tax Regulations issued thereunder. 

 

	 	(a)	Immediate and Heavy Financial Need 

  

	 	    	The following shall constitute an immediate and heavy financial need: 

  

	 	(1)	Unreimbursed medical expenses described in section 213(d) of the IRC previously incurred by the Member, the Member’s spouse, Beneficiary, children or any dependents of the Member (as defined in section 152 of the
IRC determined without regard to subsections 152(b)(1), 152(b)(2), or 152(d)(1)(b)) or necessary for these persons to obtain medical care described in section 213(d) of the IRC; 

 

	 	(2)	Costs related directly to the purchase (excluding mortgage payments) of a principal residence of the Member; 

  

	 	(3)	Payment of tuition and related educational fees and room and board expenses for the next twelve (12) months of post-secondary education for the Member, his or her spouse, Beneficiary, children, or dependents (as
defined in section 152 of the IRC determined without regard to subsections 152(b)(1), 152(b)(2), or 152(d)(1)(b)); 

  

	 	(4)	The need to prevent the eviction of the Member from his or her principal residence or foreclosure on the mortgage of the Member’s principal residence; 

 

	 	(5)	Payment of funeral expenses for a Member’s deceased parent, spouse, Beneficiary, children or any dependents of the Member (as defined in section 152 of the IRC determined without regard to subsection 152(d)(1)(b));

  

	 	(6)	The payment of expenses for the repair of damage to the Member’s principal residence that would qualify for the casualty deduction under section 165 of the IRC (determined without regard to whether the loss exceeds
10% of adjusted gross income); or 

  
 41 

	 	(7)	Any other expense or indebtedness which the Internal Revenue Service announces constitutes an immediate and heavy financial need, taking into account all of the relevant facts and circumstances as set forth under
section 1.401(k)-1(d)(3)(iii)(A) of the Treasury Regulations. The Plan will be nondiscriminatory. 

  

	 	(b)	Withdrawal Demonstrated as Necessary to Satisfy Need. 

  

	 	    	A withdrawal will be demonstrated as necessary to satisfy an immediate and heavy financial need of the Member if the amount of the withdrawal is not in excess of the amount of the Member’s immediate and heavy
financial need (including amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated to result from the withdrawal) and the Member certifies (and the Company does not have knowledge to the contrary) that
the need cannot be relieved: 

  

	 	(1)	Through reimbursement or compensation by insurance, or otherwise, 

  

	 	(2)	By reasonable liquidation of the Member’s assets, to the extent such liquidation would not itself cause an immediate and heavy financial need, 

 

	 	(3)	By cessation of Salary Deferrals under the Plan, or 

  

	 	(4)	By other distributions or nontaxable loans from plans (including the Plan) maintained by the Company or by any other employer, or by borrowing from commercial sources on reasonable commercial terms. 

 

	 	    	The Member’s resources shall be deemed to include those assets of his or her spouse and minor children that are reasonably available to the Member. 

 

	 	    	A Member who takes a hardship withdrawal hereunder shall be suspended from making Salary Deferrals under the Plan for six months, as described in Section 4.4. 

 

	10.4	Source of Withdrawals 

  

	 	(a)	Regular Withdrawals 

  

	 	    	Regular withdrawals pursuant to Section 10.1 shall be paid from the available sources in the following sequence, as necessary, until the full amount has been satisfied: 

 

	 	(1)	First, from the Member’s Member Contributions which were not previously withdrawn or distributed; 

  

	 	(2)	Second, from other amounts credited to the Member’s Employee Accounts (to the extent that the balance in the Member’s Employee Accounts exceeds his unwithdrawn and undistributed Member Contributions and to the
extent that such amounts are available under Section 10.1(a); and 

  
 42 

	 	(3)	Last, from the Member’s Company Contributions Account (to the extent that the Company Contributions Account is available under Section 10.1(b)). 

 

	 	    	Subject to the preceding sentence and such other administrative ordering rules as the Company may adopt, the withdrawal from a Member’s Accounts shall be taken from the Investment Options in which such Accounts are
invested on a pro rata basis. 

  

	 	(b)	Age 59 1⁄2 and Hardship Withdrawals 

 

	 	    	To the extent that less than the full value of the Member’s Accounts is being withdrawn and subject to such other administrative ordering rules as the Company may adopt, (1) age
59 1⁄2 withdrawals pursuant to Section 10.2 shall be taken first from the Member’s Member Contributions which were not previously withdrawn or
distributed; and (2) age 59 1⁄2 and hardship withdrawals pursuant to Sections 10.2 and 10.3, as applicable, shall be taken from the Investment Options in
which the Member’s Accounts are invested on a pro rata basis. 

  

	10.5	Application for Withdrawals: Time and Form of Distribution 

 A Member who wishes to make
any withdrawal under this Article 10 shall request a withdrawal in accordance with the Company’s administrative procedures. The withdrawal distribution shall be paid as soon as reasonably practicable after receipt of such request. Except as
provided in Section 10.2(a), withdrawal distributions shall be made only in cash. The amount available for withdrawal (including the value of any PACCAR Stock to be distributed in kind or converted to cash) shall be determined as soon as
reasonably practicable after the date on which the withdrawal request form is received. 
  

	10.6	Limitations on Withdrawals 

 The total value of any withdrawal distribution shall not be
less than $500, unless the aggregate amount available for withdrawal is less than $500, in which event only such aggregate amount may be withdrawn. 

ARTICLE 11  
 SALE OF
STOCK TO TRUSTEE 
 A Member or his Beneficiary may offer to sell to the Trustee any shares of PACCAR Stock distributed from the Member’s Company
Contributions Account, Salary Deferral Account, or Employee Account as a Benefit under Article 8. Any such offer shall be made in writing on the prescribed form. To the extent that the Trustee has cash available for investment in PACCAR Stock, it
may purchase pursuant to the Trust Agreement any shares of PACCAR Stock so offered at the last-transaction price quoted by the National Market System of the National Association of Securities Dealers and reported by The Wall Street Journal with
respect to the trading day on which such offer was received by the Trustee at the address prescribed by it for this purpose. No commission shall be paid in connection with any such purchase. 

  
 43 

 ARTICLE 12 

PLAN ADMINISTRATION 
  

	12.1	Company as Plan Administrator 

 The Company is the named Fiduciary which has the
discretionary authority to control and manage the operation and administration of the Plan, and it is the “administrator” of the Plan (as such term is used in ERISA). The Company shall make such regulations, rules, interpretations,
procedures and computations, and shall take such other action to administer the Plan, as it may deem appropriate. Any regulations, rules and interpretations adopted by the Company shall be conclusive and binding on all persons. Any regulations,
rules and procedures of general application established by the Company for the administration or operation of the Plan shall be consistent with any applicable requirements of ERISA and the IRC. In administering the Plan, the Company shall act in a
nondiscriminatory manner to the extent required by section 401(a) and related provisions of the IRC and shall at all times discharge its duties with respect to the Plan in accordance with the standards set forth in section 404(a)(1) of ERISA. 

 

	12.2	Carrying out Fiduciary Duties 

 Any person or group of persons may serve in more than one
Fiduciary capacity with respect to the Plan, and any Fiduciary may employ one or more persons to render advice with regard to such Fiduciary’s responsibilities under the Plan. 

The Company may designate, by written instrument signed by both parties, one or more persons to carry out the Company’s Fiduciary
responsibilities (other than Trustee responsibilities) under the Plan. The Company’s duties and responsibilities as administrator and sponsor of the Plan which have not been delegated to others pursuant to the preceding sentence shall be
carried out by its directors, officers and employees. Such directors, officers and employees shall act on behalf and in the name of the Company in their respective capacities as directors, officers and employees and not as individual Fiduciaries.

  

	12.3	Appointment of Public Accountant 

 The Company shall engage an independent qualified
public accountant to conduct such examinations and to express such opinions as may be required by section 103(a)(3) of ERISA. The Company in its discretion may remove and discharge the person so engaged, but in such case it shall appoint a successor
independent qualified public accountant to perform such examinations and to express such opinions. 
  

	12.4	Reliance on Plan Records; Member’s Duty to Notify 

 In connection with the
Company’s administration of the Plan, it is the responsibility of any person having rights under the Plan to notify the Company in writing of the current status of any matters affecting such rights, including (without limitation) the
designation of Beneficiaries, the exercise of elections, facts relevant to employment and marital status, and the correct address to which matters affecting such person shall be mailed or delivered. The Company may rely solely on the records of the
Plan, as modified by any such written notice, and on information otherwise available to the Company, in its administration of the Plan. The Company in administering the Plan may further rely on information or advice furnished by the Trustee,
actuaries, counsel or other persons retained to advise or assist the Plan. 

  
 44 

 ARTICLE 13 

CLAIMS AND REVIEW PROCEDURES 
  

	13.1	Applications for Benefits 

 Any application for benefits under the Plan shall be
submitted to the Company. Any application shall be in writing on the prescribed form and shall be addressed as follows: 
 Savings
Investment Plan 
 PACCAR Inc 

P.O. Box 1518 
 Bellevue,
Washington 98009 
  

	13.2	Denial of Applications 

 In the event that any application for benefits is denied in
whole or in part, the Company shall notify the applicant in writing of his right to an independent review of the denial. Such written notice shall set forth, in a manner calculated to be understood by the applicant, specific reasons for the denial,
specific references to the Plan provisions on which the denial is based, a description of any information or material necessary to perfect the application, an explanation of why such material is necessary, an explanation of the Plan’s review
procedure, (including an explanation of the applicant’s right to initiate a lawsuit under section 502(a) of ERISA if the applicant’s appeal is denied), and, in the case of a Disability Claim (defined below), each specific internal rule,
guideline, protocol or other similar criteria relied upon in making such denial (or a statement that such criteria were relied upon and will be provided free of charge to the applicant upon request), if any. An application shall be granted, or
written notice of a denial shall be given to the applicant, within 90 days (45 days in the case of a Disability Claim) after the Company receives a proper application, unless special circumstances (which are matters beyond the control of the Plan in
the case of a Disability Claim) require an extension of time for processing the application. In no event shall such an extension exceed a period of 90 days (30 days in the case of a Disability Claim) from the end of the initial 90-day period (45-day
period in the case of a Disability Claim). If such an extension is required, written notice thereof shall be furnished to the applicant before the end of the initial 90-day period (45-day period in the case of a Disability Claim) indicating the
circumstances requiring an extension of time and the date by which the Company expects to render a decision. If the Company determines that a decision on a Disability Claim cannot be rendered within the initial 30-day extension period due to matters
beyond the control of the Plan, the period for making a determination may be extended for an additional 30 days, provided that written notice is furnished to the applicant before the end of the initial 30-day extension period indicating the
circumstances requiring an additional extension of time and the date by which the Company expects to render a decision. In the case of any extension with respect to a Disability Claim, the notice of extension shall specifically explain the standards
on which benefit entitlement is based, the unresolved issues 

  
 45 

 
that prevent a decision on the Disability Claim, the additional information needed to resolve those issues and that the applicant shall have a period of 45 days within which to provide the
specified information. For purposes of this Article 13, “Disability Claim” shall mean a claim for benefits under the Plan based on an applicant’s Total Disability pursuant to Section 2.1(pp)(3) of the Plan. 

 

	13.3	Requests for Review 

 Any person whose application for benefits is denied in whole or in
part (or such person’s duly authorized representative) may appeal from the denial by submitting to the Company a request for an independent review of such application within 60 days (180 days in the case of a Disability Claim) after receiving
written notice of the denial. Such independent review shall take into consideration all relevant documents and other information submitted by the applicant, whether or not such information was submitted in the initial benefit determination and, in
the case of a Disability Claim, shall be conducted without deference to the initial determination. The Company shall give the applicant (or such applicant’s authorized representative), upon request and free of charge, copies of and/or an
opportunity to review pertinent documents (except legally privileged materials) in preparing such request for review and an opportunity to submit issues and comments in writing. In the case of a Disability Claim, the Company shall identify each
medical or vocational expert whose advice was obtained in connection with such denial, whether or not such advice was relied upon in making the denial. The request for review shall be in writing and shall be addressed as follows: 

Savings Investment Plan 
 PACCAR
Inc 
 P.O. Box 1518 

Bellevue, Washington 98009 
 The
request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the applicant deems pertinent. The Company may require the applicant to submit such additional facts,
documents or other material as it may deem necessary or appropriate in making its review. Any review of a denied application shall be conducted in the name of the Company by a panel of three or more individuals who did not take part in the initial
processing of such application and, in the case of a Disability Claim, who are not subordinate to any person who took part in such initial processing. The review panel shall be the named fiduciary that has the authority to act with respect to any
appeal from a denial of a claim for benefits. Any decision on appeal of a Disability Claim that is based in whole or in part on a medical judgment shall be made in consultation with an appropriate health care professional who did not take part in
the initial processing of such application and is not subordinate to any person who took part in such initial processing. 
  

	13.4	Decision on Review 

 The Company shall act upon each request for review within 60 days
(45 days in the case of Disability Claim) after receipt thereof, unless special circumstances require an extension of time for processing, but in no event shall the decision on review be rendered more than 120

  
 46 

 
days (90 days in the case of a Disability Claim) after the Company receives a proper request for review. If such an extension is required, written notice thereof shall be furnished to the
applicant before the end of the initial 60-day period (45-day period in the case of Disability Claim). The Company shall give prompt, written notice of its decision to the applicant. In the event that the Company confirms the denial of the
application for benefits in whole or in part, such notice shall set forth, in a manner calculated to be understood by the applicant, the specific reasons for such denial, specific references to the Plan provisions on which the decision is based, a
statement that the applicant (or the applicant’s duly authorized representative) has the right, upon request and free of charge, to receive copies of and/or to review all pertinent documents (other than legally privileged documents), an
explanation of the applicant’s right to initiate a lawsuit under section 502(a) of ERISA, and, in the case of a Disability Claim, each specific internal rule, guideline, protocol or other similar criteria relied upon in making such denial (or a
statement that such criteria were relied upon and will be provided free of charge to the applicant upon request). In the case of a Disability Claim, such notice shall also include the following statement: “You and the Plan may have other
voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact the local U.S. Department of Labor Office and your State insurance regulatory agency.” 

 

	13.5	Exhaustion of Administrative Remedies; Limitations 

 No legal or equitable action for
benefits under the Plan shall be brought unless and until the claimant (a) has submitted a written application for benefits in accordance with Section 13.1, (b) has been notified that the application is denied, (c) has filed a
written request for an independent review of the application in accordance with Section 13.3 and (d) has been notified in writing that the Company has affirmed the denial of the application; provided, however, that such an action may be
brought after the Company has failed to act on the claim within a time period prescribed by Sections 13.2 or 13.4. 
 ARTICLE 14 

GENERAL PROVISIONS 
  

	14.1	Information and Reports to Members 

 Each Member shall be advised periodically of the
general provisions and the financial condition of the Plan and his Benefit hereunder, as required by law. In addition, the Company shall also furnish to any Member or Beneficiary, upon written request, such information respecting the Plan and such
person’s Benefit hereunder as may be required by law, but may require payment of a reasonable charge covering the cost of providing such data, as permitted by law. 
  

	14.2	Compliance With USERRA 

  

	 	(a)	 Any other provision of the Plan notwithstanding, with regard to an Employee who after serving in the uniformed
services is reemployed within the time required by USERRA, contributions shall be made and benefits and service credit shall be provided under the Plan with respect to his or her qualified military service (as

  
 47 

	 	
defined in section 414(u)(5) of the IRC) in accordance with section 414(u) of the IRC. Furthermore, notwithstanding any provision of the Plan to the contrary, Member loan payments may be
suspended during a period of qualified military service. 

  

	 	(b)	In the case of a Member who dies on or after January 1, 2007 while performing qualified military service (as defined in section 414(u) of the IRC), the Member’s Beneficiary shall be entitled to any additional
benefits (other than contributions relating to the period of qualified military service) provided under the Plan as if the Member had resumed employment immediately prior to his or her death. 

 

	 	(c)	(i) An individual receiving “Differential Wage Payments” (as defined in section 3401(h)(2) of the IRC) shall be treated as an Employee, and (ii) the Differential Wage Payments shall be treated as
Compensation and as compensation under section 415(c)(3) of the IRC. 

  

	14.3	Applicable Law 

 The Plan and the Trust Agreement are intended to establish a
profit-sharing plan and trust qualified under IRC sections 401(a), 401(k) and 501 and maintained in conformity with said sections and regulations issued thereunder, and in conformity with other applicable provisions of Federal law and
regulations governing profit-sharing plans and trusts. Subject to the preceding sentence and to the extent not preempted by Federal law, the Plan shall be governed and construed in accordance with the laws of the State of Washington and shall be
governed thereby. 
  

	14.4	No Employment Rights Conferred 

 Nothing in the Plan shall be deemed to give any person
any right to remain in the employ of the Company. 
  

	14.5	Service Upon Plan; Limitations on Actions Against Plan 

 Valid service of any legal
process upon the Company shall constitute service of process upon the Plan. Any legal proceedings against the Plan shall be commenced within one year, or within any greater period allowed by ERISA section 413, after the cause of action arises, and
if not commenced within the applicable period above described, shall be deemed abandoned and forever barred. 
  

	14.6	Plan Office; Records 

 The records of the Plan shall be maintained on a Plan Year basis.
The principal office of the Plan, where all Plan records shall be kept, shall be located at the principal office of PACCAR Inc. Copies of all documents constituting a part of the Plan and any related documents shall also be made available at other
locations, as may be required by law. The Company shall allow any Member or Beneficiary reasonable access to any documents under which the Plan is established or operated, if a request for such access is made in accordance with the Company’s
administrative procedure. 

  
 48 

	14.7	Form of Applications, Elections and Other Communications 

 All applications,
authorizations, designations, elections, instructions or any other communications required or permitted of any person under the Plan shall be made in accordance with procedures established by the Company and, if it is deemed necessary or advisable,
shall include the consent of such person’s spouse. 
  

	14.8	Spousal Consents 

 This Section 14.8 shall apply whenever the consent of a
Member’s spouse is required for an election, waiver or designation made by such Member under the Plan. Any spousal consent shall be in writing and shall be witnessed by a Plan representative (if permitted by the Company) or by a notary public.
The spousal consent shall acknowledge the effect of the Member’s action and shall, if applicable, specify the non-spouse Beneficiary being designated (including any class of Beneficiaries or contingent Beneficiaries). The spousal consent shall
be irrevocable. Any other provision of the Plan notwithstanding, no spousal consent shall be required if (a) it is established in accordance with the Company’s administrative procedures that there is no spouse or that the spouse cannot be
located or (b) the Member is legally separated or has been abandoned (within the meaning of local law) and has an appropriate court order, unless a qualified domestic relations order provides otherwise. If the spouse is legally incompetent to
give consent, the spouse’s legal guardian (including the Member) may give consent. 
  

	14.9	Merger, Consolidation and Transfer of Assets or Liabilities 

 The Plan may not be merged
or consolidated with any other plan, and no assets or liabilities of the Trust Fund may be transferred to any other plan, unless each Member would (if the Plan then terminated) receive a Benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the Benefit such Member would have been entitled to receive immediately before such merger, consolidation or transfer (if the Plan had been terminated). 

ARTICLE 15  

CONTRIBUTION LIMITATIONS 
  

	15.1	Basic Limitation 

 A Member’s Annual Additions with respect to any calendar year
shall in no event exceed his Contribution Limitation for such calendar year. 
 In the event that a Member’s Contribution Limitation
would be exceeded, his Annual Additions shall be reduced to an amount equal to his Contribution Limitation by reducing the components of his Annual Additions as necessary in accordance with the correction methods specified in Section 6.06(2)
and (3) of Revenue Procedure 2008-50 or its successor. 
 In applying these rules, this Plan and any other plan required to be
aggregated with this Plan under Treas. Reg. § 1.415(f)-1 shall be treated as one plan. 

  
 49 

	15.2	Effect on Future Contributions 

 Articles 4 and 5 notwithstanding, the Salary Deferrals
which a Member is permitted to contribute and his share of Company Contributions shall be reduced prospectively to the extent required by Section 15.1. The aggregate amount of the Company Contributions that otherwise would be made under Article
5 shall be reduced accordingly. 
  

	15.3	Definitions 

 As used in this Article 15, the following words and phrases shall have the
following meanings: 
  

	 	(a)	“Affiliate” means any corporation which is a member of a “controlled group of corporations” (within the meaning of IRC section 1563(a), determined without regard to IRC sections 1563(a)(4) and
1563(e)(3)(C), and as modified by IRC section 415(h)) of which group PACCAR Inc is also a member. 

  

	 	(b)	“Annual Additions” with respect to any calendar year means the sum of the following: 

  

	 	(1)	Employee contributions made by the Member under all qualified defined-contribution or defined-benefit plans maintained by PACCAR Inc or any Affiliate, and any other plan required to be aggregated with this Plan pursuant
to Treas. Reg. § 1.415(f)-1, during such calendar year; 

  

	 	(2)	Employer contributions and forfeitures allocated to the Member under all qualified defined-contribution plans maintained by PACCAR Inc or any Affiliate, other than this Plan, and any other plan required to be aggregated
with this Plan pursuant to Treas. Reg. § 1.415(f)-1, as of any date within such calendar year; 

  

	 	(3)	Salary Deferrals contributed by the Member under this Plan during such calendar year; 

  

	 	(4)	Company Contributions allocated to the Member under this Plan as of any date within such calendar year; and 

  

	 	(5)	Any other amounts required to be included in Annual Additions by Treas. Reg. §1.415(c)-1(b). 

Notwithstanding the foregoing, Annual Additions shall not include any amounts required to be excluded from Annual Additions by Treas. Reg.
§ 1.415(c)-1(b). 
  

	 	(c)	“Compensation” for purposes of this Article 15 only, means compensation as described in Treas. Reg. § 1.415(c)-2(d)(4). Compensation shall also include
compensation paid after severance from employment to the extent permitted Treas. Reg. § 1.415(c)-2(e)(3). 

  
 50 

	 	(d)	“Contribution Limitation” with respect to any calendar year means the lesser of (1) 100 percent of the Member’s Compensation for such calendar year or (2) the dollar amount set forth in
section 415(c)(1)(A) of the IRC (as adjusted by the Commissioner of the Internal Revenue to reflect increases in the cost-of-living in accordance with section 415(d)(1)(C) of the IRC). 

 

	15.4	Incorporation by Reference. 

 To the extent not otherwise provided herein and to the
extent inconsistent with the provisions hereof and except as prohibited by applicable regulations under the IRC, the applicable limitations on contributions under section 415 of the IRC and the final regulations issued April 5, 2007 thereunder,
are incorporated by reference and shall control over any contrary or omitted provisions in the Plan. 
 ARTICLE 16  

AMENDMENT OR TERMINATION OF PLAN 
  

	16.1	Plan May Be Amended or Terminated 

 It is the intention of the Company that the Plan will
continue indefinitely, but the Company may, by action of its Board of Directors, its Executive Chairman, its Chief Executive Officer or a committee or individual(s) acting pursuant to a valid delegation of authority, at any time and for any reason,
amend the Plan retroactively or prospectively, terminate the Plan or permanently discontinue Company Contributions hereunder without terminating the Trust Agreement or the other provisions of the Plan. 

 

	16.2	Amendments Cannot Reduce Accrued Benefits 

 No amendment of the Plan shall reduce the
Benefit of any Member accrued under the Plan prior to the date when the amendment is adopted, except to the extent that a reduction in accrued benefits may be permitted by ERISA; and no amendment of the Plan nor any other action taken by the Company
shall divert any part of the assets of the Trust Fund to purposes other than the exclusive purposes of providing benefits to Members or Beneficiaries who have an interest in the Plan and of defraying the reasonable expenses of administering the Plan
and the Trust Fund, except as provided in Section 5.11. 
  

	16.3	Procedure Upon Plan Terminations 

 Upon termination of the Plan, the Company shall
perform the procedures which would have been required pursuant to the Plan had the Plan termination date been a Valuation Date. Upon completion of such procedures, the balances in each Member’s Accounts shall be distributed to such Member (or
his Beneficiary) as provided in Article 8. Upon termination of the Plan, no part of the Trust Fund shall revert to the Company, except as provided in Section 5.11. 

  
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	16.4	Partial Terminations 

 If any partial termination (as determined by the Company in
accordance with any applicable IRC provisions) of the Plan occurs, then the balances in the Accounts of those Members with respect to whom the Plan is so terminated shall be distributed as provided in Section 16.3. 

 

	16.5	Intent to Comply with ERISA 

 It is the intent of Sections 16.3 and 16.4 that a
termination or partial termination of the Plan be accomplished in accordance with ERISA section 403. In the event that the provisions of ERISA section 403(d)(1) or regulations adopted thereunder require that the assets of the Plan be allocated or
distributed in a different manner upon any termination of the Plan, then the assets of the Plan shall instead be allocated or distributed as such provisions may require. 
  

	16.6	Fiduciary Powers Continue Until Distribution Complete 

 Until the final distribution of
any Plan assets allocated on account of any termination or partial termination of the Plan, the Trust Fund shall continue, and the Company and the Trustee shall continue to have and may exercise all of the powers conferred upon them by the Plan and
the Trust Agreement. 
 ARTICLE 17 

PRIOR PROFIT SHARING PLAN 
 The Plan amends
and restates the PACCAR Inc Profit Sharing Plan, as in effect on June 30, 1978. The following rules apply with respect to the rights and benefits of Members under the Plan on such date: 

 

	17.1	No Reduction of Accrued Benefit 

 No provision of the amended and restated Plan is
intended to reduce or limit any benefit which accrued under the provisions of the Plan as in effect from time to time prior to July 1, 1978. 
  

	17.2	Full Vesting 

 The balance in the Prior Profit Sharing Account of a Member who was an
Employee on July 1, 1978 (plus the Member’s share of any Company Contributions or forfeitures made or imposed with respect to periods prior to July 1, 1978, but allocated thereafter), shall be fully vested and nonforfeitable,
effective as of July 1, 1978. Such balance shall remain fully vested and nonforfeitable on and after July 1, 1987, upon transfer of the Prior Profit Sharing Account balance to the Member’s Salary Deferral Accounts. 

  
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	17.3	Continuing Distributions 

 Amounts being paid to a Member or Beneficiary in accordance
with the provisions of the Plan in effect from time to time prior to July 1, 1978, shall continue to be paid in accordance with such provisions. 
  

	17.4	Company Contributions 

 No Company contribution shall be made to any Prior Profit Sharing
Account with respect to any period after June 30, 1978, but such a contribution may be made after June 30, 1978, with respect to a prior period. 
  

	17.5	Effective Date 

 With respect to periods prior to July 1, 1978, the rights of any
person regarding a Prior Profit Sharing Account shall be determined and administered exclusively under the provisions of the Plan as in effect at the applicable time. 

ARTICLE 18  
 SPECIAL
TOP-HEAVY RULES 
  

	18.1	Determination of Top-Heavy Status 

 Any other provision of the Plan notwithstanding, this
Article 18 shall apply to any Plan Year in which the Plan is a Top-Heavy Plan. The Plan shall be considered a “Top-Heavy Plan” for a Plan Year if, as of the Determination Date for such Plan Year, the Top-Heavy Ratio for the Aggregation
Group exceeds 60 percent. 
  

	18.2	Minimum Allocations 

 For any Plan Year during which the Plan is a Top-Heavy Plan,
Company Contributions allocated to the Accounts of each Member who is not a Key Employee, but who is an Employee on the last day of such Plan Year, shall not be less than the lesser of (a) three percent of Wages or (b) the greatest
allocation, expressed as a percentage of Compensation made to any Member who is a Key Employee. 
 This Section 18.2 shall not apply to
any Member for a Plan Year during which the Member received a minimum accrued benefit described in section 416(c)(1) of the IRC under a qualified defined-benefit plan maintained by PACCAR Inc or any of its Subsidiaries (determined without regard to
the last sentence of Section 2.1(mm)). However, this Section 18.2 shall apply to any Eligible Employee who could become a Member under Section 3.1 but who has not elected to do so. 

  
 53 

	18.3	Definitions 

 For purposes of this Article 18 only, the following definitions shall
apply: 
  

	 	(a)	“Aggregation Group” means either the Required Aggregation Group or any Permissive Aggregation Group, as the Company may elect. 

 

	 	(b)	“Determination Date” means the last day of the Plan Year prior to the applicable Plan Year. 

  

	 	(c)	“Key Employee” means a key employee, as defined in section 416(i) of the IRC. 

  

	 	(d)	“Permissive Aggregation Group” means a group of qualified plans which includes (1) the Required Aggregation Group and (2) one or more plans of the Company or a Subsidiary which are not part of
the Required Aggregation Group. A Permissive Aggregation Group, when viewed as a single plan, must satisfy the requirements of sections 401(a)(4) and 410 of the IRC. 

 

	 	(e)	“Required Aggregation Group” means a group of qualified plans which includes (1) each plan of the Company or a Subsidiary in which a Key Employee participates and (2) each other plan of the
Company or a Subsidiary which enables any plan in which a Key Employee participates to meet the requirements of sections 401(a)(4) or 410 of the IRC. 

  

	 	(f)	“Top-Heavy Ratio” means a percentage determined pursuant to section 416(g) of the IRC. In applying section 416(g) of the IRC, the valuation date shall be the Determination Date. 

 

	 	(g)	“Wages” means “wages” as defined in section 3401(a) of the IRC for purposes of income tax withholding at the source, but determined without regard to any rules that limit the remuneration
included in “wages” based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in section 3401(a)(2) of the IRC). “Wages” does not include Salary Deferrals or amounts
in excess of the dollar amount set forth in section 401(a)(17)(A) of the IRC (as adjusted by the Commissioner of Internal Revenue to reflect increases in the cost-of-living in accordance with section 401(a)(17)(B)). 

  
 54 

 ARTICLE 19 

EXECUTION 
 To record the amendment and
restatement of the Plan to read as set forth herein, generally effective as of September 1, 2016, PACCAR Inc has executed this Plan on July 5, 2016. 
  

			
	PACCAR Inc
		
	By	 	

	Title:	 	Executive Chairman
		
	Dated:	 	7/5/16

  

			
	By	 	

	Title:	 	Chief Executive Officer
		
	Dated:	 	June 30, 2016

  
 55

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