PACCAR INC SAVINGS INVESTMENT PLAN

 

TABLE OF CONTENTS

 

				Page
ARTICLE 1		PURPOSE AND SCOPE		1
1.1	Purpose of Plan			1
1.2	Scope of Plan			2
1.3	PACCAR Inc Administers for Participating Subsidiaries; Allocation of Cost			2
ARTICLE 2		DEFINITIONS AND CONSTRUCTION		2
2.1	General Definitions			2
	(a)		“Accounts”	2
	(b)		“Aggregate 401(k) Contributions”	2
	(c)		“Aggregate 401(m) Contributions”	3
	(d)		“Beneficiary”	3
	(e)		“Benefit”	3
	(f)		“Company”	3
	(g)		“Company Contributions”	3
	(h)		“Company Contributions Account”	3
	(i)		“Compensation”	3
	(j)		“Current or Accumulated Earnings and Profits”	4
	(k)		“Eligible Employee”	4
	(l)		“Employee”	4
	(m)		“Employee Accounts”	5
	(n)		“ERISA”	5
	(o)		“Excess Aggregate Contributions”	5
	(p)		“Excess Contributions”	5
	(q)		“Excess Deferrals”	5
	(r)		“Fiduciary”	5
	(s)		“Highly Compensated Employee”	5
	(t)		“Investment Options”	6
	(u)		“Investment Manager”	6
	(v)		“IRC”	6
	(w)		“Layoff”	6
	(x)		“Member”	6
	(y)		“Member Contributions”	6

 

i

 

TABLE OF CONTENTS

(continued)

 

				Page
	(z)		“Nonhighly Compensated Employee”	6
	(aa)		“PACCAR Stock”	6
	(bb)		“PACCAR Stock Fund”	6
	(cc)		Period of Service	7
	(dd)		“Plan”	7
	(ee)		“Plan Year”	7
	(ff)		“Required Beginning Date”	8
	(gg)		“Restricted Member”	8
	(hh)		“Retirement”	8
	(ii)		“Retirement Plan”	8
	(jj)		“Rollover Contributions”	8
	(kk)		“Salary Deferrals”	8
	(ll)		“Salary Deferral Account”	8
	(mm)		“Section 414(s) Compensation”	8
	(nn)		“Subsidiary”	9
	(oo)		“Top-Paid Group”	10
	(pp)		“Total Compensation”	10
	(qq)		“Totally Disabled”	10
	(rr)		“Trust Agreement”	10
	(ss)		“Trust Fund”	11
	(tt)		“Trustee”	11
	(uu)		“USERRA”	11
	(vv)		“Valuation Date”	11
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			12
3.4	Restricted Membership			12
ARTICLE 4		SALARY DEFERRALS AND ROLLOVER CONTRIBUTIONS		13
4.1	Amount of Salary Deferrals			13

 

ii

 

TABLE OF CONTENTS

(continued)

 

				Page
4.2	Involuntary Reduction of Salary Deferral Rate			13
4.3	Voluntary Change of Salary Deferral Rate			13
4.4	Voluntary 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			15
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			16
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
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			21
5.5	Allocation of Excess Aggregate Contributions to Highly Compensated Employees			22
5.6	Distribution of Excess Aggregate Contributions			22
5.7	Use of Salary Deferrals			22
5.8	Special Rules			22
5.9	Company Contributions Paid From Earnings and Profits; Other Limitations on Company Contributions			24
5.10	Company Contributions in PACCAR Stock			25
5.11	Diversification of Company Contributions Account			25
5.12	Return of Company Contributions			25

 

iii

 

TABLE OF CONTENTS

(continued)

 

				Page
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			27
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			29
ARTICLE 7		ACCOUNTS AND VALUATIONS		29
7.1	Types of Accounts			29
7.2	Valuation of Accounts			30
7.3	Statements for Members			31
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			32
8.4	Special Rules Regarding Distribution			32
8.5	Reemployment			32
8.6	Available Forms of Distribution			33
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			34
8.11	Facility of Payment			35
8.12	Unclaimed Benefits			35
8.13	Payments Discharge Plan; Adverse Claims			36
8.14	Direct Rollovers			36
ARTICLE 9		LOANS		37
9.1	Amount of Loans			37
9.2	Aggregate Loan Limitation			38
9.3	Terms of Loans			38

 

iv

 

TABLE OF CONTENTS

(continued)

 

				Page
9.4	Company Consent			39
9.5	Source of Loans			39
9.6	Disbursement of Loans			39
9.7	Valuation Date			39
9.8	Loan Fees			40
ARTICLE 10		WITHDRAWALS		40
10.1	Regular Withdrawals			40
10.2	Source of Withdrawals			40
10.3	Application for Withdrawals: Time and Form of Distribution			40
10.4	Limitations on Withdrawals			41
ARTICLE 11		SALE OF STOCK TO TRUSTEE		41
ARTICLE 12		PLAN ADMINISTRATION		41
12.1	Company as Plan Administrator			41
12.2	Carrying out Fiduciary Duties			41
12.3	Appointment of Public Accountant			42
12.4	Reliance on Plan Records; Member’s Duty to Notify			42
ARTICLE 13		CLAIMS AND REVIEW PROCEDURES		42
13.1	Applications for Benefits			42
13.2	Denial of Applications			42
13.3	Requests for Review			43
13.4	Decision on Review			44
13.5	Exhaustion of Administrative Remedies; Limitations			44
ARTICLE 14		GENERAL PROVISIONS		45
14.1	Information and Reports to Members			45
14.2	Compliance With USERRA			45
14.3	Applicable Law			45
14.4	No Employment Rights Conferred			45
14.5	Service Upon Plan; Limitations on Actions Against Plan			45
14.6	Plan Office; Records			46
14.7	Form of Applications, Elections and Other Communications			46
14.8	Spousal Consents			46

 

v

 

TABLE OF CONTENTS

(continued)

 

				Page
14.9	Merger, Consolidation and Transfer of Assets or Liabilities			46
ARTICLE 15		CONTRIBUTION LIMITATIONS		47
15.1	Basic Limitation			47
15.2	Effect on Future Contributions			47
15.3	Effect on Prior Contributions			47
15.4	Definitions			47
ARTICLE 16		AMENDMENT OR TERMINATION OF PLAN		48
16.1	Plan May Be Amended or Terminated			48
16.2	Amendments Cannot Reduce Accrued Benefits			49
16.3	Procedure Upon Plan Terminations			49
16.4	Partial Terminations			49
16.5	Intent to Comply with ERISA			49
16.6	Fiduciary Powers Continue Until Distribution Complete			49
ARTICLE 17		PRIOR PROFIT SHARING PLAN		49
17.1	No Reduction of Accrued Benefit			50
17.2	Full Vesting			50
17.3	Continuing Distributions			50
17.4	Beneficiary Designations			50
17.5	Company Contributions			50
17.6	Effective Date			50
ARTICLE 18		SPECIAL TOP-HEAVY RULES		50
18.1	Determination of Top-Heavy Status			50
18.2	Minimum Allocations			51
18.3	Definitions			51
ARTICLE 19		EXECUTION		52

 

vi

 

PACCAR INC SAVINGS INVESTMENT PLAN

 

(As Amended and Restated Effective January 1, 2007)

 

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.  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.

 

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.

 

1

 

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 January 1, 2007.  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.

 

1.3                                  PACCAR Inc Administers for Participating Subsidiaries; Allocation of Cost

 

All acts required of the Company hereunder shall be performed by PACCAR Inc for itself and each of its participating Subsidiaries.  The cost of the Plan shall be apportioned equitably among PACCAR Inc and its participating Subsidiaries; provided that if a Subsidiary is prevented from making any contribution which it otherwise would have made under the Plan by reason of having insufficient Current or Accumulated Earnings and Profits, then the contribution which such Subsidiary would have made shall be made by PACCAR Inc and its other participating Subsidiaries in such proportions as PACCAR Inc may determine, and in accordance with and subject to the deductible contribution limitations of IRC section 404 and the provisions of Article 5.

 

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(nn) without regard to the last sentence thereof).

 

2

 

(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.

 

(d)                                  “ Beneficiary ” means a person designated pursuant to Section 8.9(b) 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

 

3

 

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

 

(4)                                   By excluding amounts in excess of $200,000, as adjusted by the Commissioner of the Internal Revenue 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 $200,000 indexed limitation 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 $200,000 as indexed), 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 $200,000 indexed amount by the maximum deferral percentage permitted under Section 4.1.

 

(j)                                      “ Current or Accumulated Earnings and Profits ” of any corporation participating in the Plan means current or accumulated net income or profits, as determined by it upon the basis of its books of account in accordance with generally accepted accounting practices, without any deduction for taxes based on income or for Company Contributions made by such corporation under the Plan, and before consolidation of its financial statements with any other corporation affiliated with it.

 

(k)                                   “ 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 classified as a commissioned salesman, (3) any individual who is neither a resident nor citizen of the United States, (4) 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, (5) 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 (6) 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.

 

(l)                                      “ 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).

 

4

 

(m)                                “ 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.

 

(n)                                  “ 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.

 

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

 

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

 

(q)                                  “ 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.

 

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

 

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

 

(1)                                   Was a five-percent owner (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(nn) without regard to the last sentence thereof) of more than $85,000 (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(nn) 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.

 

5

 

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.

 

(t)                                     “ 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.

 

(u)                                  “ 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.

 

(v)                                  “ 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

 

(w)                                “ 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.

 

(x)                                    “ 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.

 

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

 

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

 

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

 

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

 

6

 

(cc)                             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).

 

(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 written 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.

 

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

 

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

 

7

 

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

 

(1)                                   if he attains or attained age 70½ 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 70½;

 

(2)                                   if he attains age 70½ on or after January 1, 1999, and is not a five-percent owner (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 70½; and

 

(3)                                   if he attains age 70½ on or after January 1, 1999, and is a five-percent owner (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 70½.

 

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

 

(hh)                           “ 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.

 

(ii)                                   “ 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.

 

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

 

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

 

(ll)                                   “ 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.

 

(mm)                       “ 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(nn) 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;

 

8

 

(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)).  (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)-1T(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 $200,000 (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.

 

(nn)                           “ 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

 

9

 

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.

 

(oo)                           “ 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(nn) 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)-1T;

 

(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 17½ 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.

 

(pp)                           “ 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.

 

(qq)                           “ 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.

 

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

 

10

 

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

 

(tt)                                 “ 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.

 

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

 

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

 

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

 

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 has completed a 30-day Period of Service, 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 written 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 by the Company.

 

11

 

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).

 

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.

 

12

 

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 35 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.

 

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.

 

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

 

13

 

Section 4.3 shall be made in accordance with the Company’s written procedures applicable at the time of the election.

 

4.4            Voluntary 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 written procedures.  Any election to resume Salary Deferrals shall become effective as soon as reasonably practical after it is received by the Company, but in no event earlier than a) 180 days after the effective date of the election to suspend Salary Deferrals or b) effective January 1, 2007, 90 days after the effective date of the election to suspend Salary Deferrals.

 

When a Member resumes Salary Deferrals following such 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(nn) without regard to the last sentence thereof), shall not exceed $15,000 (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 $15,000 (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, shall be refunded to the Member not later than the April 15 next following the close of such calendar year.

 

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 $15,000 (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(nn) without regard to the last sentence thereof), then such Member may designate all or a portion of such Excess Deferrals as attributable to this Plan and may request a refund of such portion by notifying the Company in writing 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.

 

Income (and loss) allocable to Excess Deferrals 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 determined pursuant to the provisions for allocating income (and loss) to a Participant’s Accounts under Section 7.2 of the Plan.

 

14

 

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.

 

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.

 

15

 

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, 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.  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.

 

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

 

16

 

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(nn) 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;

 

(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 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; and

 

17

 

(h)            Income (and loss) allocable to Excess Contributions for the Plan Year shall be determined in accordance with Treasury Regulation section 1.401(k)-2(b)(2)(iv)(C), and shall be determined for the period between the end of the Plan Year and the date of distribution of such Excess Contributions in accordance with Treasury Regulation section 1.401(k)-2(b)(2)(iv)(D).

 

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 written 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 by the Company.  Any election under this Section 4.13 shall be made in accordance with the Company’s written procedures.

 

4.14          Rollover Contributions

 

With the Company’s prior written approval, 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 to the Company’s satisfaction 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 Company in a lump sum in cash.  Each approved Rollover Contribution shall be transferred to the Trustee as soon as reasonably practicable after it was paid to the Company.  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 written 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)