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 # eliminate all Excess Contributions or # 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.

-1 If allocation of Employer contributions in accordance with Section 4.1 will result in an allocation of more than one-third the total contributions for a Plan Year to the accounts of Highly Compensated Employees, and such allocation would cause any Highly Compensated Employee to exceed the limitations under Code Section 415(c) or the Employer to exceed the deduction limits under Code Section 404, then no more than one-third of the Employer contributions used for repayment of any Exempt Loan in accordance with Section 4.2 shall be allocated to the accounts of Highly Compensated Employees (within the meaning of Code Section 414(q)), with the remaining Employer contributions to be made to non-Highly Compensated Employees in the manner specified under Section 8.1. Such adjustments shall be made before any allocations occur.

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

Excess Contributions shall mean, with respect to any plan year, the excess of: # The aggregate amount of employer contributions actually taken into account in computing the ADP of highly compensated employees for such plan year, over # The maximum amount of such contributions permitted by the ADP test (determined by hypothetically reducing contributions made on behalf of highly compensated employees in order of the ADPs, beginning with the highest of such percentages).

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 # 125 percent of the Average Deferral Percentage of Nonhighly Compensated Employees or # the lesser of # 200 percent of the Average Deferral Percentage of Nonhighly Compensated Employees or # the Average Deferral Percentage of Nonhighly Compensated Employees plus two percentage points.

The excess Aggregate Contributions or ESOP Contributions (as applicable), if any, of each Participant who is among the Highly Compensated Employees shall be determined by computing the maximum Contribution Percentage under [(a) or (b) of Section 4.9]. Any distribution of the excess Aggregate Contributions or ESOP Contributions (as applicable) for any Plan Year shall be made to Highly Compensated Employees on the basis of the amount of contributions on behalf, or by, each such employee. Forfeitures of excess Aggregate Contributions or ESOP Contributions (as applicable) may not be allocated to Participants whose contributions are reduced under this paragraph.

Notwithstanding any other provision of this plan, excess contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each plan year to participants to whose accounts such excess contributions were allocated for the preceding plan year, except to the extent such excess contributions are classified as catch-up contributions. If such excess amounts (other than catch-up contributions) are distributed more than 2½ months after the last day of the plan year in which such excess amounts arose, a 10% excise tax will be imposed on the employer maintaining the plan with respect to such amounts. Notwithstanding the preceding, the excise tax will not be imposed if the distribution is made within 6 months after the last day of such plan year if the plan is an eligible automatic contribution arrangement within the meaning of Code section 414(w) that covers all eligible nonhighly compensated employees and highly compensated employees for the entire portion of the plan year for which they are eligible and provides the notice described in [Section 5.5(f)(4)] even after an affirmative deferral election has been made. Excess contributions shall be allocated to the highly compensated employees with the largest amounts of contributions taken into account in calculating the ADP test for the plan year in which the excess arose, beginning with the highly compensated employee with the largest amount of such contributions and continuing in descending order until all of the excess contributions have been allocated. To the extent a highly compensated employee has not reached his catch-up contribution limit under the plan, excess contributions allocated to such highly compensated employee shall be recognized as catch-up contributions and will not be treated as excess contributions.

Highly Compensated Employee or HCE – Includes highly compensated active Employees and highly compensated former Employees. “Highly compensated active Employee” means any Employee who # was a 5% owner (as defined in Code Section 416(i)(I)) of the Employer at any time during the current or the preceding year, or # for the preceding year had compensation from the Employer in excess of $135,000 (the limit for 2022) (as adjusted by the Secretary of the Treasury pursuant to Code Section 415(d), except that the base period shall be the calendar quarter ending September 30, 1996).

Corrective distribution or Forfeiture. On or before the close of the following Plan Year, the Highly Compensated Participant having the largest allocation of "contribution percentage amounts" shall have a portion of such "contribution percentage amounts" (and "income" allocable to such amounts) distributed or, if non-Vested, Forfeited (including "income" allocable to such Forfeitures) until the total amount of Excess Aggregate Contributions has been distributed, or until the amount of the Participant's "contribution percentage amounts" equals the "contribution percentage amounts" of the Highly Compensated Participant having the next larges t amount of "contribution percentage amounts." This process shall continue until the total amount of Excess Aggregate Contributions has been distributed or forfeited. Any distribution and/or Forfeiture of "contribution percentage amounts" shall be made in t he following order:

reduce the Pre-Tax Contributions beginning with the Highly Compensated Employee with the highest dollar amount of Pre-Tax Contributions to equal the dollar amount of the Highly Compensated Employee with the next highest dollar amount of Pre-Tax Contributions;