Mcgrath & Associates,

sted upon death, disability, or normal retirement (age 65 ). A participant is always fully ( 100 percent) vested in his or her salary reduction contributions, employer Safe Harbor matching contributions, and rollover contributions, plus actual earnings thereon. In the event the Company elects to make a discretionary non-elective contribution, the participant vests in his or her contributions over a six year graded vesting schedule as follows: Years of Credited Service Vesting Percentage Less than 2 years 0 % 2 years but less than 3 years 20 % 3 years but less than 4 years 40 % 4 years but less than 5 years 60 % 5 years but less than 6 years 80 % 6 or more years 100 % The vesting schedule will be accelerated and the Company’s contributions and KSOP allocations will be modified if the KSOP b

ctual earnings thereon. In the event the Company elects to make a discretionary non-elective contribution, the participant vests in his or her contributions over a six year graded vesting schedule as follows: Years of Credited Service Vesting Percentage Less than 2 years 0 % 2 years but less than 3 years 20 % 3 years but less than 4 years 40 % 4 years but less than 5 years 60 % 5 years but less than 6 years 80 % 6 or more years 100 % The vesting schedule will be accelerated and the Company’s contributions and KSOP allocations will be modified if the KSOP becomes a “top-heavy plan” under the Code. Forfeitures Any forfeited KSOP benefits are allocated in the same manner as the Company’s contributions among the accounts of participants who remain employed throughout the year and have worked a

stment income 13,980,402 Interest income on participants loans 166,674 Total additions to net assets 25,803,708 Deductions from Net Assets Benefits paid to participants 12,768,030 Administrative fees 107,998 Total deductions from net assets 12,876,028 Net increase in net assets available for benefits 12,927,680 Net assets available for benefits, at beginning of year 135,020,028 Net assets available for benefits, at end of year $ 147,947,708 The accompanying notes are an integral part of this financial statement. 4 MCGRATH RENTCORP EMPLOYEE STOCK OWNERSHIP AND 401(k) PLAN Notes to Financial Statements NO TE 1 - DESCRIPTION OF THE PLAN The following description of the McGrath RentCorp Employee Stock Ownership and 401(k) Plan (the “KSOP” or “Plan”) provides only general information. Participa