The allocation shall be in an amount equal to the lesser of # 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 # 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.

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 # 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 # 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.