Allocation. The Tax Incidents shall be allocated as follows:

Allocation At least five (5) Business Days prior to the Closing Date, Seller shall deliver to Buyer a schedule (the “Allocation Schedule”) allocating the Purchase Price among the assets sold by Seller (the “Allocation”) The Allocation Schedule shall be prepared in accordance with Section 1060 of the Internal Revenue Code (“Code”) The Allocation Schedule shall be deemed final unless Buyer notifies Seller in writing that Buyer objects to one or more items reflected in the Allocation Schedule within thirty (30) days after delivery of the Allocation Schedule to Buyer In the event of any such objection, Seller and Buyer shall negotiate in good faith to resolve such dispute; provided, however, that if Seller and Buyer are unable to resolve any dispute with respect to the Allocation Schedule within sixty (60) days after the delivery of the Allocation Schedule to Buyer, such dispute shall be resolved by the parties The fees and expenses of such accounting firm shall be borne equally by Seller, on the one hand, and Buyer, on the other Seller and Buyer each agree to file and cause to be filed all of their respective IRS Forms 8594 and all federal, state and local Tax Returns in accordance with the Allocation Schedule

Allocation. In the event a claim is based partially on an indemnified claim and partially on a non-indemnified claim or based partially on a claim indemnified by one Party and partially on a claim indemnified by the other Party, any payments in connection with such claims are to be apportioned between the Parties in accordance with the degree of cause attributable to each Party,

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.

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

Election procedures and deadlines: deferrals of base salary

Salary Deferrals shall mean amounts credited to a Participant’s Account corresponding to Salary reductions elected pursuant to [Section 3.2].

By cessation of Salary Deferrals under the Plan, or

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.

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.