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[LOGO]
MOORE-HANDLEY, INC.
ANNUAL REPORT
Year ended December 31, 1994
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(Logo)
MOORE HANDLEY INC.
March 8, 1995
Dear Shareholders:
A year ago in our annual report to you we said, "We expect profitability to
improve in 1994 as a result of higher sales and a continued improvement in
operating ratios."
In the event, sales increased from $129.4 millions to $136.2 millions, gross
margin percentages stabilized at lower levels and operating costs continued
their downward trend. As a result, earnings per share in 1994 increased, from
36c to 65c, the best in the Company's history. The bottom line improvement was
due in part to good general economic conditions and in part to continued
implementation of policies put in place about five years ago.
The Directors of Moore-Handley, who also are its principal owners, decided
that the path the Company had taken in the late 80's -- growing revenue through
the addition of salesmen and their customers with limited regard for the size
and quality of the latter -- was unsustainable.
This conclusion was based on analyses which indicated that operating costs
related more closely to the number of customers than any other single factor. It
also was based on the business environment in which Moore-Handley's customers
increasingly found themselves, with competitive pressure from Home Depot and its
imitators, so that they required more competitive prices for their own survival.
We then set several interrelated objectives:
1. Productivity had to be increased and operating costs driven down
(while improving quality of service), allowing the company to lower prices,
so that
2. The Company could offer steep volume discounts, with prices well
below those then in place, leading to
3. The ability to compete effectively with larger (mainly co-op)
distributors for market share of larger and better dealers -- a $2.0-to
$2.5-billion market in our region, according to our estimates.
The results of this program through 1994 have been:
- Sales were $136 millions, up 46% over the past five years despite a
deliberate reduction in customer numbers from 2,400 to 1,200 over the same
period. (And from 4,000 customers in 1986, our first year as a public
company, when sales were $85 millions.)
- Sales per customer were $114 thousand in 1994, up from $39 thousand
five years ago, an almost threefold growth. (And up from $21 thousand in
1986, an increase of 443%.)
- The direct sales force, which reached 127 in 1991 (when a number of
salesmen from a defunct competitor were added), was reduced to 82 by
year-end 1994, a reduction of 35%. Sales per salesman were $1.7 millions in
1994, up 70% from five years ago.
- To achieve these sales increases from larger and better customers
required more competitive pricing, and gross margin percentages declined
from 19.3% five years ago to 17.0% in 1994 -- 230 basis points.
- During the same period, however, operating costs have been reduced
from 19.5% to 14.9% of sales, a decline of 460 basis points. As a result,
the Company turned an operating deficit of 0.2% in 1989 into an operating
profit of 2.1% in 1994.
The principal means by which operating costs were reduced has been the
development and use of electronic aids to increase the productivity of
Moore-Handley employees:
1. Over several years the Company has developed a copyrighted,
computerized, in-house program that enables its salesmen to carry with them
a laptop computer containing full information on 38,000 items stocked by
the Company, along with additional useful information concerning customer
purchases, and complete E.D.I. (electronic data interchange) capability for
transmitting orders to the
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<PAGE> 3
Company's mainframe computer. Similar programs, for either laptops or
desktops, are now being made available to customers. Selling expense as a
percentage of sales was 5.1% in 1994, down from 6.6% five years ago and a
high of 7.2% in 1991.
2. The Company purchased a sophisticated computerized routing package in
1992, which, along with greater sales per customer, has reduced unit
delivery costs. Delivery costs as a percentage of stock sales were 3.8% in
1994, down from 5.1% five years ago and a high of 5.9% in 1987.
3. In 1991 the Company installed a bar-code-driven sorting and routing
conveyor for the warehouse. In 1993 and 1994 the Company introduced
additional hand-carried barcoding controls at several points throughout the
warehouse and in the delivery system as a first step toward installation of
a computerized warehouse management and delivery system. These controls
have increased warehouse costs to an unsatisfactory extent, even though
these increases have been offset partially by savings from error reduction
resulting in greater customer satisfaction and lower credit charge-backs to
sales. We believe a computerized warehouse management system, together with
a planned follow-on automated picking system, will make it possible to
continue reducing errors while enabling employees to increase productivity
and lower unit warehouse costs.
4. Strict control of general and administrative costs has resulted in
their decline from 6.1% five years ago to 4.2% of sales in 1994. We
anticipate this trend will continue.
5. The Company has continued to use its capital effectively. Total
capital (equity plus long-term debt including current maturities) was $21.3
millions in 1994 compared to $20.3 millions five years ago. Meanwhile the
equity component in capital has grown, from 64% in 1989 to 74% in 1994. We
have, however, made greater use of seasonal borrowing through short-term
credit lines and expect to continue to do so.
6. Productivity improvements throughout most of the Company have enabled
us to keep employee numbers about equal to five years ago and 20% below the
high point reached in 1987.
For 1995 and beyond we expect a continuation of these trends which began
several years ago -- competitive pricing enabling us to increase sales to larger
and better customers with continuing reductions in operating expenses offsetting
lower gross margins. Because we have largely completed the reduction in customer
numbers which penalized sales growth in recent years, we expect that the average
year-over-year gains in revenues may be greater in the next five years than in
the past five.
We urge you to read the Company's "10-K" which follows.
/s/ Pierce E. Marks, Jr. /s/ William Riley
------------------------ -----------------
PIERCE E. MARKS, JR. WILLIAM RILEY
President and Chairman of the Board
Chief Executive Officer
/s/ John L. Sawyer
------------------
JOHN L. SAWYER
Executive Vice-President
General Manager
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<PAGE> 4
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[XX] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 0-14324
MOORE-HANDLEY, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 63-0819773
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OF ORGANIZATION) IDENTIFICATION NO.)
3140 Pelham Parkway, Pelham, Alabama 35124
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
Registrant's telephone number, including area code (205) 663-8011
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 Par Value
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
X
---
As of March 3, 1995, 2,209,543 shares of the Registrant's Common Stock were
outstanding, and the aggregate market value of such shares held by
non-affiliates was approximately $6,151,958. For this computation, the
Registrant has excluded the market value of all common stock beneficially owned
by officers and directors of the Registrant and their associates. Such exclusion
does not constitute an admission that any such person is an "affiliate" of the
Registrant.
DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the following documents are incorporated by reference into
Part III of this Annual Report on Form 10-K: the Registrant's definitive Proxy
Statement to be filed with the Commission not later than 120 days after the end
of the fiscal year covered hereby.
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1
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MOORE-HANDLEY, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ITEM NO. PAGE NO.
---------- --------
<C> <S> <C>
Part I.
1. Business....................................................... 3
2. Properties..................................................... 5
3. Legal Proceedings.............................................. None
4. Submission of Matters to a Vote of Security Holders
(none during the fourth quarter of 1994)..................... None
Part II.
5. Market for Registrant's Common Equity and Related
Stockholder Matters.......................................... 6
6. Selected Financial Data........................................ 7
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................ 8
8. Financial Statements and Supplementary Data.................... 12
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure......................................... None
Part III.
Part III (other than Item 401(b) of Regulation S-K, which is
included in Item 1 of this Form 10-K) is incorporated by
reference to the Registrant's definitive Proxy Statement to
be filed with the Commission not later than 120 days after
the end of the fiscal year covered hereby.
Part IV.
14. Exhibits, Financial Statements Schedule and Reports on
Form 8K
(a) Financial Statements...................................... 12
(b) Financial Statement Schedules Filed (Financial Statement
Schedules have been omitted because they are not
required, not applicable or the required information is
set forth in the Financial Statements or Notes thereto
or in the discussion of Liquidity and Capital Resources
in Item 7 of this Form 10-K.)........................... None
(c) Exhibits Filed............................................ 23
(d) Reports on Form 8-K....................................... None
</TABLE>
NOTE: Copies of the exhibits may be obtained by stockholders upon
written request directed to the Secretary, Moore-Handley, Inc., P. O. Box
2607, Birmingham, Alabama 35202, and payment of processing and mailing
costs.
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2
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BUSINESS
Moore-Handley, Inc. (the "Company") is a full-service, wholesale distributor
of plumbing and electrical supplies, power and hand tools, lawn and garden
equipment and other hardware and building materials products. The Company's
customers include retail home centers, hardware stores, building materials
dealers, combination stores and a limited number of mass merchandisers. These
customers are located mainly in the Southeast. The Company has approximately
1,200 active customers located throughout the Southeast which it services from a
430,000 square foot distribution center located in Pelham, Alabama, a suburb of
Birmingham, and 20,000 square foot redistribution centers located in
Winston-Salem, North Carolina and Ocala, Florida.
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DESCRIPTION OF BUSINESS
In connection with its wholesale distribution activities, the Company offers a
wide range of marketing, advertising and other support services which are
designed to assist customers in maintaining and improving their market
positions. These support services include computer-generated systems for the
control of inventory, pricing and gross margin, as well as advertising and store
installation and design services.
Home centers and hardware and building supply retailers have a continuing need
for a wide variety of items produced by a number of different manufacturers.
Purchasing from a distributor rather than directly from manufacturers allows
independent retailers to simplify the purchasing process and to place smaller
orders on an as-needed basis, thereby reducing their inventory carrying costs
and excess stock risks. Moreover, wholesale distributors purchase products in
quantities that enable them to obtain favorable prices and payment terms, which
are reflected in prices and payment terms to independent retailers. Finally, the
support services the Company offers to customers (in most instances at or near
the Company's cost) are generally not available from manufacturers, nor can most
customers afford to develop them independently. The Company believes that its
ability to provide a broad range of merchandise from a single source on a timely
basis and at competitive prices, together with support services, offers its
customers a substantial advantage over purchasing directly from manufacturers.
In recent years there has been a trend towards consolidation in many wholesale
industries, including the grocery, drug and hard goods distribution businesses.
This trend also is apparent in the building supply and hardware wholesale
business.
The Company believes that this consolidating trend is attributable to, among
other things, the inability of small distributors to provide a full range of
advertising, store layout and computer-generated pricing and inventory control
services offered by larger entities. The Company has benefitted from this
consolidating trend by recruiting experienced territory managers from
competitors who have been acquired, gone out of business or reduced market area,
thereby increasing the Company's customer base and sales.
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PRODUCTS
The Company closely monitors its items in stock, maintaining a full range of
products while concentrating its efforts on carrying quantities of stock
designed to achieve high inventory turns. The following table indicates the
percentage of net sales by class of merchandise sold by the Company in the past
three years:
<TABLE>
<CAPTION>
PERCENTAGE OF NET SALES
---------------------------------
CLASS OF MERCHANDISE 1994 1993 1992
- - ---------------------------------------------------------------------------- ----- ----- -----
<S> <C> <C> <C>
Electrical and plumbing supplies............................................ 23.5% 22.4% 23.3%
Home center products (including lawn and garden equipment, paint and
accessories, sporting goods and appliances)............................... 18.9 19.9 20.6
Building supplies (including aluminum windows and doors, roofing products
and lumber)............................................................... 25.7 25.1 24.7
General and shelf hardware (including power and hand tools, lock sets and
wire products)............................................................ 31.9 32.6 31.4
----- ----- -----
100.0% 100.0% 100.0%
===== ===== =====
</TABLE>
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3
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MARKETING PROGRAMS AND CUSTOMER SERVICES
Sales Force. The Company's marketing program is implemented primarily by its
sales force of territory managers, each of whom is responsible for specific
customers within a particular geographic area. Territory managers generally call
on customers weekly to check inventories, take orders and perform various
in-store services. In addition, the territory managers act as a liaison between
the customer and the Company to promote the Company's support services.
As a result of the liquidation of a large competitor during the first half of
1991, the Company increased the number of territory managers to 127 at June 30,
1991 (See Management's Discussion and Analysis). During the last half of 1991
and through 1993 a number of less productive territory managers were terminated.
In the second quarter of 1994 the Company began a program of hiring sales
assistants to work with certain of the more senior territory managers and at
December 31, 1994 there were 82 territory managers and assistants employed by
the Company. As a result of the temporary increase in number of territory
managers in the field during 1991 the average sales per territory manager
declined about 5% for the year 1991. For 1993 and 1994 average sales per
territory manager increased 25% and 9%, respectively. The following table shows
the weighted average number of territory managers from 1990 through 1994 and the
average sales per territory manager in each year.
<TABLE>
<CAPTION>
AVERAGE SALES
AVERAGE NUMBER PER
OF TERRITORY
TERRITORY MANAGER
YEAR MANAGERS (IN THOUSANDS)
----- --------------- ---------------
<S> <C> <C>
1990 100 1,123
1991 116 1,066
1992 99 1,273
1993 81 1,597
1994 78 1,747
</TABLE>
At December 31, 1994, the Company also employed two district managers, each
responsible for supervising and monitoring the activities of territory managers
located in his assigned area. To supplement its primary sales force, the Company
maintains a telemarketing group which solicits and accepts orders from customers
between regular visits by territory managers.
Customer Services. An important component of the Company's marketing strategy
is the range of support services it offers to its customers. These services,
which the Company believes not only strengthen its relationships with existing
customers but also attract new customers, are designed to enable customers to
improve their marketing efforts and compete more effectively, thereby increasing
the Company's sales.
The Company's support services include advertising and promotional services,
store installation and design services, and computer-generated systems for
control of inventory, pricing and gross margin. The Company also provides a
store identification program, as well as additional promotional services, to
selected customers under the name "Hardware House", a registered trade name
owned and developed by the Company, and similar programs under the national
trade name of "Pro".
Operations. The Company's ability to fill and deliver small quantity orders
for many different items enables customers to place orders on an as-needed
basis, and in turn, to reduce inventory investment, storage and control costs.
The Company's "fill-rate" -- the percentage of items shipped within 48 hours of
receipt of an order -- is a measure of the efficiency of its order processing,
inventory control and warehouse operations. In 1994 the Company's fill-rate
generally exceeded 95%.
Deliveries are made on a regular basis primarily by the Company's fleet of
approximately 46 owned and leased trucks and vans. The Company's sales personnel
generally call on customers weekly, and deliveries of merchandise are normally
made within two or three business days after placement of an order.
Direct Shipment Program. As an additional service to its customers, the
Company maintains a direct shipment program under which customers order and
receive shipments of some products directly from suppliers but are invoiced
through the Company. These programs enable the Company to distribute products
that would be inconvenient or expensive to stock at its warehouse, such as
commodity building materials, and allow customers to receive discounts that
otherwise might not be available to them. In 1994, approximately 28% of the
Company's net sales were attributable to purchases under the direct shipment
program.
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CUSTOMERS
The Company currently services approximately 1,200 customers, including retail
home centers, hardware stores, building materials dealers, combination stores
and a limited number of mass merchandisers. No customer or affiliated group of
customers accounted for more than 3% of the Company's 1994 net sales.
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4
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The Company's current customers are located primarily in Alabama, Florida,
Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina,
Tennessee and Virginia. In the latter part of 1987 the Company began a
systematic review of customer account profitability. On the basis of this
review, which is ongoing, the Company has reduced the number of accounts it
services by eliminating many accounts which are not profitable or only
marginally profitable.
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PURCHASING, SUPPLIERS AND INVENTORY MANAGEMENT
The Company distributes approximately 38,000 items purchased from
approximately 1,400 manufacturers. The Company's ten largest vendors in 1994
accounted for approximately 23% of total Company purchases, but no single
manufacturer accounted for more than 5% of the Company's total purchases during
the year. The Company has no long-term supply or distribution agreements with
its vendors. Substantially all products of the type distributed by the Company
are available from a number of manufacturers. From time to time the Company
receives extended terms from its suppliers which it passes on to its customers.
Because inventory constitutes a substantial portion of the Company's total
assets, efficient control of inventory is an important management priority. The
Company's inventory turns (determined by dividing monthly cost of stocked goods
sold by average monthly inventory) were 5.0 in 1994 as compared to 5.2 in 1993.
The decline was caused by an increase of approximately 5,000 new items in
inventory.
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COMPETITION
The Company's markets and those of its customers are highly competitive. The
Company competes directly with other national and regional wholesalers
(including co-ops), with direct-selling manufacturers and with specialty
distributors on the basis of fill-rate, delivery time, price, breadth of product
lines, marketing programs and support services. A number of these competitors
are larger and have greater financial resources than the Company. The Company's
business depends on its ability to distribute a large volume and variety of
products efficiently and to provide high quality support services.
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EMPLOYEES
As of December 31, 1994, the Company employed 407 persons, of whom
approximately 207 are subject to a collective bargaining agreement expiring in
December 1995. The Company has not experienced any strikes or work stoppages and
considers its relationship with employees to be good.
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PROPERTIES
The Company's distribution facility and executive offices are located in a
single 430,000 square foot facility on a 30-acre site in Pelham, Alabama. The
Company leases the Pelham facility pursuant to leases entered into in connection
with the issuance of three series of industrial development bonds. The Company
has guaranteed payment of the principal and interest on such bonds, and in 1994
paid an aggregate of $884,000 pursuant to such lease agreements. The Company has
options to purchase the property for a nominal cost at the expiration of the
leases. The Company believes that its Pelham facility is adequate for its
presently foreseeable needs. The Company also leases 20,000 square foot
warehouse redistribution facilities in Winston-Salem, North Carolina and in
Ocala, Florida for monthly rental of approximately $4,700 and $5,300,
respectively, and office space in Atlanta, Georgia and New York, New York for
which lease payments are approximately $51,000 and $77,000 per annum,
respectively.
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5
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EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company as of March 1, 1995, their ages and
their present positions with the Company and their principal occupations since
1989 are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- - ------------------------------------------ --- ----------------------------------------------------------
<S> <C> <C>
William Riley............................. 63 Chairman of the Board
Pierce E. Marks, Jr....................... 66 President and Chief Executive Officer
John L. Sawyer............................ 57 Executive Vice President and General Manager
J. Franklin West.......................... 44 Senior Vice President -- Marketing & Sales
Andrew W. Reid............................ 47 Vice President -- Marketing
L. Ward Edwards........................... 58 Vice President -- Finance, Treasurer, Secretary and
Director
</TABLE>
Officers are elected annually and serve at the discretion of the Board of
Directors.
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COMMON STOCK INFORMATION
The Company's common stock is traded in the over-the-counter market and quoted
on the NASDAQ National Market System, symbol MHCO. The following table shows the
high and low sales prices by quarter in 1994 and 1993.
<TABLE>
<CAPTION>
1994 1993
---------------- ----------------
QUARTER ENDED HIGH LOW HIGH LOW
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<S> <C> <C> <C> <C>
March 31,........................................................ 4 1/4 3 6 4 3/4
June 30,......................................................... 5 1/2 3 1/4 5 1/2 4 1/2
September 30,.................................................... 5 1/2 4 1/2 5 1/4 4 1/2
December 31,..................................................... 5 1/4 4 1/4 4 1/2 3 1/2
</TABLE>
At March 3, 1995 there were 77 holders of record of the Company's common
stock. Since a large number of these holders are nominees, the Company believes
beneficial holders represent a substantially larger number.
The Company has not paid cash dividends on its common stock. It has been the
policy of the Board of Directors to retain all available earnings to support the
growth and expansion of its business. The payment of dividends on common stock
in the future and the rate of such dividends, if any, will be determined by the
Board of Directors based on the Company's earnings, financial condition and
capital requirements.
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6
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SELECTED FINANCIAL DATA
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<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales................................. $ 136,236 $ 129,355 $ 126,003 $ 123,627 $ 112,347
Cost of sales............................. 120,945 114,684 110,304 108,993 97,889
--------- --------- --------- --------- ---------
Gross profit.............................. 15,291 14,671 15,699 14,634 14,458
Selling and administrative expenses....... 12,360 12,861 13,101 15,331 12,857
--------- --------- --------- --------- ---------
Operating income (loss)................... 2,931 1,810 2,598 (697) 1,601
Interest expense, net..................... 595 539 567 756 710
--------- --------- --------- --------- ---------
Income (loss) before income tax
(benefit)............................... 2,336 1,271 2,031 (1,453) 891
Income tax (benefit)...................... 880 465 690 (477) 358
--------- --------- --------- --------- ---------
Net income (loss)......................... $ 1,456 $ 806 $ 1,341 $ (976) $ 533
========= ========= ========= ========= =========
Per share data:
Net income (loss).................... $ .65 $ .36 $ .59 $ (.43) $ .24
========= ========= ========= ========= =========
Weighted average common shares
outstanding............................. 2,249,000 2,265,000 2,275,000 2,257,000 2,265,000
========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance Sheet Data:
Current assets............................ $ 42,747 $ 35,921 $ 36,148 $ 35,288 $ 29,301
Property and equipment -- net............. 7,216 7,420 7,283 7,356 7,540
Other assets.............................. 785 776 807 424 523
--------- --------- --------- --------- ---------
Total assets......................... $ 50,748 $ 44,117 $ 44,238 $ 43,068 $ 37,364
========= ========= ========= ========= =========
Current liabilities....................... $ 29,318 $ 23,531 $ 24,128 $ 24,681 $ 17,095
Long-term debt............................ 4,699 5,198 5,516 6,014 6,478
Deferred income taxes..................... 988 968 880 -- 442
Stockholders' equity...................... 15,743 14,420 13,714 12,373 13,349
--------- --------- --------- --------- ---------
Total liabilities and stockholders'
equity............................. $ 50,748 $ 44,117 $ 44,238 $ 43,068 $ 37,364
========= ========= ========= ========= =========
</TABLE>
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7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Beginning in late 1991 the Company reduced operating expenses by consolidating
sales territories and delivery routes and eliminating a number of small,
unprofitable accounts. In order to keep its customers competitive in their
markets, the Company introduced a new dealer buying plan in 1993 which features
lower prices for volume purchases. Increased sales to larger accounts has more
than offset the sales lost from the elimination of smaller accounts and a
reduction in the number of salesmen; however, more competitive pricing has
reduced the gross margin percentage.
NET SALES
As the Company's customer base has changed towards larger customers, sales
shipped direct from the factory to the customer have increased. Gross margins on
direct shipments are lower than gross margins on warehouse shipments; however,
expenses related to direct shipments are also substantially lower, and the
Company believes that direct shipments are an important part of its business as
a full-service wholesale distributor.
The following table sets forth the major elements of net sales in the past
three years.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------
1994 1993 1992
----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
Net Sales:
Warehouse shipments.............................. $ 98,154 72.0% $ 92,779 71.7% $ 92,893 73.7%
Factory direct shipments......................... 38,082 28.0 36,576 28.3 33,110 26.3
-------- ----- -------- ----- -------- -----
Net Sales................................... $136,236 100.0% $129,355 100.0% $126,003 100.0%
======== ===== ======== ===== ======== =====
</TABLE>
From 1992 to 1993 warehouse shipments were flat as increases in sales to
larger customers were offset by sales lost due to the elimination of small
unprofitable customers. There was no significant reduction in the number of
customers in 1994 and warehouse sales increased 6% and total sales increased 5%.
OPERATIONS
The following table sets forth certain financial data as a percentage of net
sales for the years indicated:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------
1994 1993 1992
----- ----- -----
<S> <C> <C> <C>
Net sales................................................................... 100.0% 100.0% 100.0%
===== ===== =====
Gross margin................................................................ 17.0% 17.2% 18.5%
Warehouse and delivery expense.............................................. 5.8 5.9 6.0
----- ----- -----
Gross profit................................................................ 11.2 11.3 12.5
Selling and administrative expense.......................................... 9.1 9.9 10.4
----- ----- -----
Operating income............................................................ 2.1 1.4 2.1
Interest expense, net....................................................... .4 .4 .5
----- ----- -----
Income before income tax.................................................... 1.7% 1.0% 1.6%
===== ===== =====
</TABLE>
GROSS MARGIN
Gross margin percentage has decreased due to the elimination of a number of
smaller accounts which did not qualify for more competitive prices available to
the Company's larger customers and the introduction of the more competitively
priced dealer buying plan noted above. In 1994 gross margin dollars increased as
volume increases
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8
<PAGE> 12
more than offset the lower gross margin percentage. The following table sets
forth gross margin and gross margin percentages and year-to-year changes for
1992, 1993 and 1994.
<TABLE>
<CAPTION>
INCREASE (DECREASE)
VS. SAME QUARTER
GROSS MARGIN IN PREVIOUS YEAR
------------------------------- -------------------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
QUARTER (IN THOUSANDS) OF SALES (IN THOUSANDS) POINTS
------------------------------------- -------------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1992 -- 1st.................................. $5,809 18.9% $ 804 .5%
2nd.................................. 6,161 18.5 (212) (.4)
3rd.................................. 6,028 18.2 (272) (.4)
4th.................................. 5,270 18.2 (228) (.8)
1993 -- 1st.................................. 5,475 17.0 (334) (1.9)
2nd.................................. 5,852 17.7 (309) (.8)
3rd.................................. 5,802 16.6 (226) (1.6)
4th.................................. 5,157 17.6 (113) (.6)
1994 -- 1st.................................. 5,815 17.1 340 .1
2nd.................................. 5,912 17.5 60 (.2)
3rd.................................. 5,936 16.2 134 (.4)
4th.................................. 5,546 17.4 389 (.2)
</TABLE>
WAREHOUSE AND DELIVERY EXPENSES
Warehouse and delivery expenses increased slightly from 1992 to 1993 as
increased labor rates and additional warehouse labor to handle additional
products in inventory more than offset the savings realized from ongoing
consolidation of delivery routes. The additional inventory items were added to
broaden the existing lines and fill the needs of new customers in the Florida
market. In 1994 these expenses increased in part due to steps taken to improve
order filling accuracy and customer satisfaction. However, as a percent of
warehouse shipments they decreased slightly to 8.1%.
The following table shows the trend of warehouse and delivery expense by
quarter for 1992, 1993 and 1994.
<TABLE>
<CAPTION>
INCREASE (DECREASE)
WAREHOUSE & DELIVERY EXPENSE VS. SAME QUARTER
--------------------------------- IN PREVIOUS YEAR
PERCENTAGE -------------------------------
AMOUNT OF WAREHOUSE AMOUNT PERCENTAGE
QUARTER (IN THOUSANDS) SHIPMENTS (IN THOUSANDS) POINTS
----------------------------------- -------------- ------------ -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1992 -- 1st................................ $1,820 7.9% $ 64 (.7)%
2nd................................ 1,879 8.0 (432) (.9)
3rd................................ 1,941 8.0 (384) (1.4)
4th................................ 1,929 8.7 (221) (1.1)
1993 -- 1st................................ 1,816 7.8 (4) (.1)
2nd................................ 1,925 8.1 46 .1
3rd................................ 1,959 8.3 18 .3
4th................................ 1,915 8.6 (14) (.1)
1994 -- 1st................................ 1,920 7.9 104 .1
2nd................................ 1,991 8.1 66 .0
3rd................................ 1,994 7.9 35 (.4)
4th................................ 2,013 8.4 98 (.2)
</TABLE>
SELLING AND ADMINISTRATIVE EXPENSES
Throughout the period from 1992 through 1994, selling expense has been reduced
by consolidation of sales territories and reducing the number of territory
managers. Selling and administrative expense as a percent of sales decreased
from 10.4% of sales in 1992 to 9.9% of sales in 1993. Late in 1993 the number of
administrative employees
- - --------------------------------------------------------------------------------
9
<PAGE> 13
was reduced and selling and administrative expense as a percent of sales
decreased to 9.1% in 1994. The following table shows the quarterly trend of
selling and administrative expenses in 1992, 1993 and 1994.
<TABLE>
<CAPTION>
INCREASE (DECREASE)
SALES & ADMINISTRATIVE VS. SAME QUARTER
EXPENSE IN PREVIOUS YEAR
------------------------------- -------------------------------
AMOUNT PERCENTAGE AMOUNT PERCENTAGE
QUARTER (IN THOUSANDS) OF SALES (IN THOUSANDS) POINTS
- - -------------------------------------------- -------------- ---------- -------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1992 -- 1st.............................. $3,274 10.7% $ (83) (1.6)%
2nd.............................. 3,321 10.0 (824) (2.3)
3rd.............................. 3,328 10.1 (753) (1.9)
4th.............................. 3,178 11.0 (570) (2.0)
1993 -- 1st.............................. 3,298 10.2 24 (.5)
2nd.............................. 3,189 9.7 (132) (.3)
3rd.............................. 3,260 9.4 (68) (.7)
4th.............................. 3,114 10.6 (64) (.4)
1994 -- 1st.............................. 3,030 8.9 (268) (1.3)
2nd.............................. 3,104 9.2 (85) (.5)
3rd.............................. 3,298 9.0 38 (.4)
4th.............................. 2,928 9.2 (186) (1.4)
</TABLE>
INTEREST EXPENSE
Interest expense in 1993 decreased slightly compared to 1992 as a result of
lower interest rates and a reduction in the principal of long-term debt
outstanding, partially offset by increased average borrowings on the Company's
line of credit. Interest expense increased in 1994 compared to 1993 due to
higher average interest rates.
TAX
As a result of the loss incurred in 1991, the Company had net operating loss
carryforwards of $142,000 for financial reporting purposes which reduced tax
expense for 1992 by $53,000.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital requirements are met with funds provided by
operations and bank lines of credit providing for maximum borrowings of up to
$9,000,000. Actual borrowings under these lines of credit and the average
interest rate were as follows during the past three years:
<TABLE>
<CAPTION>
WEIGHTED
AVERAGE YEAR-END
AVERAGE YEAR-END MAXIMUM INTEREST INTEREST
BORROWINGS(1) BORROWINGS BORROWINGS RATE(2) RATE
------------- ---------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C>
1992................................................. $ 4,309,000 $6,000,000 $7,003,000 6.25% 6.00%
1993................................................. 4,825,000 7,450,000 7,655,000 6.00 6.00
1994................................................. 5,117,000 8,500,000 8,500,000 7.10 8.50
</TABLE>
(1) The average amount outstanding during the period was computed by dividing
the total month-end outstanding principal balances by twelve.
(2) The weighted average interest rate during the period was computed by
dividing the actual interest expense by the average borrowings.
The increase in average borrowings in 1993 and 1994 resulted from higher
levels of average trade receivables and merchandise inventories, reflecting the
higher level of sales and reduced inventory turns. Trade receivables at December
31, 1993 were down $381,000 from December 31, 1992 because of reduced past due
accounts and up $2,277,000 at December 31, 1994 because of an increase in sales
with extended payment terms in the fourth quarter.
- - --------------------------------------------------------------------------------
10
<PAGE> 14
The following are the number of inventory items carried and average inventory
turns for 1992, 1993 and 1994.
<TABLE>
<CAPTION>
NUMBER OF AVERAGE
ITEMS INVENTORY
CARRIED TURNS
--------- ---------
<S> <C> <C>
1992................................................................................... 33,700 5.4
1993................................................................................... 38,000 5.2
1994................................................................................... 38,000 5.0
</TABLE>
In 1993 approximately 4,300 additional inventory items were added. This
increased the average inventory on hand and reduced the number of turns. At
December 31, 1994 inventories were up $3,971,000 compared to the prior year. In
order to improve the "fill rate" (the percentage of items shipped within 48
hours of the receipt of an order) on customer orders, inventories were increased
during 1994, and as a result the "fill rate" increased from approximately 93% to
approximately 95%. In addition, in December inventories were increased in order
to take advantage of volume rebates available from certain suppliers. Accounts
payable at December 31, 1994 were up $4,624,000 from December 31, 1993 as a
result of the increase in inventories late in the year.
Capital expenditures during the current year totaled $762,000 and have been
financed by operations. Depreciation and amortization for 1994 was $972,000.
- - --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- - --------------------------------------------------------------------------------
Board of Directors
Moore-Handley, Inc.
We have audited the accompanying balance sheets of Moore-Handley, Inc. as of
December 31, 1994 and 1993, and the related statements of income, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1994. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Moore-Handley, Inc. at December
31, 1994 and 1993, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles.
Ernst & Young, LLP
Birmingham, Alabama
February 16, 1995
- - --------------------------------------------------------------------------------
11
<PAGE> 15
MOORE-HANDLEY, INC.
STATEMENTS OF INCOME
- - --------------------------------------------------------------------------------
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------
Net sales.................................... $136,236,000 $129,355,000 $126,003,000
Cost of merchandise sold..................... 113,027,000 107,069,000 102,735,000
Warehouse and delivery expense............... 7,918,000 7,615,000 7,569,000
------------ ------------ ------------
Cost of sales................................ 120,945,000 114,684,000 110,304,000
------------ ------------ ------------
Gross profit................................. 15,291,000 14,671,000 15,699,000
Selling and administrative expense........... 12,360,000 12,861,000 13,101,000
------------ ------------ ------------
Operating income............................. 2,931,000 1,810,000 2,598,000
Interest expense, net........................ 595,000 539,000 567,000
------------ ------------ ------------
Income before provision for income tax....... 2,336,000 1,271,000 2,031,000
Income tax................................... 880,000 465,000 690,000
------------ ------------ ------------
Net income................................... $ 1,456,000 $ 806,000 $ 1,341,000
============ ============ ============
Per share data:
Net income per common share............ $ .65 $ .36 $ .59
============ ============ ============
Weighted average common shares
outstanding......................... 2,249,000 2,265,000 2,275,000
============ ============ ============
</TABLE>
See accompanying notes.
- - --------------------------------------------------------------------------------
12
<PAGE> 16
MOORE-HANDLEY, INC.
BALANCE SHEETS
- - --------------------------------------------------------------------------------
December 31, 1994 and 1993
<TABLE>
<CAPTION>
ASSETS 1994 1993
<S> <C> <C>
- - -------------------------------------------------------------------------------------------
Current assets:
Cash and cash equivalents............................... $ 781,000 $ 587,000
Trade receivables, net of allowance for doubtful
accounts
of $1,100,000 and $1,000,000 in 1994 and 1993........ 20,349,000 18,072,000
Other receivables....................................... 1,947,000 1,592,000
Merchandise inventory................................... 18,713,000 14,742,000
Prepaid expenses........................................ 243,000 296,000
Deferred income taxes................................... 714,000 632,000
----------- -----------
Total current assets.............................. 42,747,000 35,921,000
Prepaid pension cost.......................................... 704,000 675,000
Loan to officer, less amount due within one year.............. 31,000 43,000
Property and equipment:
Land.................................................... 718,000 718,000
Buildings............................................... 6,937,000 6,930,000
Equipment............................................... 7,615,000 7,385,000
----------- -----------
15,270,000 15,033,000
Less accumulated depreciation........................... (8,054,000) (7,613,000)
----------- -----------
Net property and equipment.............................. 7,216,000 7,420,000
Deferred charges, net of accumulated amortization of $57,000
and $49,000 in 1994 and 1993............................... 50,000 58,000
----------- -----------
Total Assets.................................................. $50,748,000 $44,117,000
============ ============
</TABLE>
See accompanying notes.
- - --------------------------------------------------------------------------------
13
<PAGE> 17
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1993
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Bank loans.............................................. $ 8,500,000 $ 7,450,000
Accounts payable........................................ 17,902,000 13,278,000
Accrued payroll......................................... 407,000 412,000
Other accrued liabilities............................... 1,542,000 1,680,000
Long-term debt due within one year...................... 843,000 649,000
Accrued income tax...................................... 124,000 62,000
----------- -----------
Total current liabilities......................... 29,318,000 23,531,000
Long-term debt, less amount due within one year............... 4,699,000 5,198,000
Deferred income taxes......................................... 988,000 968,000
Stockholders' equity:
Common stock, $.10 par value; 10,000,000 shares
authorized, 2,510,040 shares issued.................... 251,000 251,000
Capital in excess of par value.......................... 12,883,000 12,883,000
Retained earnings....................................... 4,345,000 2,889,000
Less:
Treasury stock at cost, 300,497 shares and 272,597 in
1994 and 1993...................................... (1,587,000) (1,454,000)
Loans to officers.................................... (149,000) (149,000)
----------- -----------
Total stockholders' equity........................ 15,743,000 14,420,000
----------- -----------
Total Liabilities and Stockholders Equity..................... $50,748,000 $44,117,000
============ ============
</TABLE>
See accompanying notes.
- - --------------------------------------------------------------------------------
14
<PAGE> 18
MOORE-HANDLEY, INC.
STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
- - --------------------------------------------------------------------------------
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
COMMON STOCK
--------------------------
SHARES AMOUNT
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Balance at December 31, 1991..................................................... 2,510,040 $251,000
Net income....................................................................... -- --
--------- --------
Balance at December 31, 1992..................................................... 2,510,040 251,000
Purchase of shares for treasury.................................................. -- --
Net income....................................................................... -- --
--------- --------
Balance at December 31, 1993..................................................... 2,510,040 251,000
Purchase of shares for treasury.................................................. -- --
Net income....................................................................... -- --
--------- --------
Balance at December 31, 1994..................................................... 2,510,040 $251,000
========= ========
</TABLE>
See accompanying notes.
- - --------------------------------------------------------------------------------
15
<PAGE> 19
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TREASURY STOCK
CAPITAL IN ----------------------- TOTAL
EXCESS OF RETAINED LOANS TO STOCKHOLDERS'
PAR VALUE EARNINGS SHARES AMOUNT OFFICERS EQUITY
- - ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$12,883,000 $ 742,000 252,597 $(1,354,000) $(149,000) $12,373,000
-- 1,341,000 -- -- -- 1,341,000
----------- ---------- ------- ----------- --------- -------------
12,883,000 2,083,000 252,597 (1,354,000) (149,000) 13,714,000
-- -- 20,000 (100,000) -- (100,000)
-- 806,000 -- -- -- 806,000
----------- ---------- ------- ----------- --------- -------------
12,883,000 2,889,000 272,597 (1,454,000) (149,000) 14,420,000
-- -- 27,900 (133,000) -- (133,000)
-- 1,456,000 -- -- -- 1,456,000
----------- ---------- ------- ----------- --------- -------------
$12,883,000 $4,345,000 300,497 $(1,587,000) $(149,000) $15,743,000
=========== ========== ======= =========== ========= =============
</TABLE>
See accompanying notes.
- - --------------------------------------------------------------------------------
16
<PAGE> 20
MOORE-HANDLEY, INC.
STATEMENTS OF CASH FLOW
- - --------------------------------------------------------------------------------
For the Years Ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
- - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................................... $ 1,456,000 $ 806,000 $ 1,341,000
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization........................... 972,000 947,000 894,000
Provision for doubtful accounts......................... 369,000 331,000 360,000
Gain on sale of equipment............................... (92,000) (35,000) (21,000)
Change in assets and liabilities:
Trade and other receivables........................ (3,001,000) 26,000 (1,494,000)
Merchandise inventory.............................. (3,971,000) (595,000) 950,000
Prepaid expenses................................... 53,000 33,000 (57,000)
Prepaid pension cost............................... (29,000) 12,000 (335,000)
Loan to officer.................................... 12,000 12,000 (55,000)
Accounts payable and accrued expenses.............. 4,481,000 (2,260,000) (1,087,000)
Accrued income taxes............................... 62,000 62,000 147,000
Deferred income taxes.............................. (62,000) 46,000 290,000
----------- ----------- -----------
Total adjustments.................................. (1,206,000) (1,421,000) (408,000)
----------- ----------- -----------
Net cash provided by (used in) operating
activities...................................... 250,000 (615,000) 933,000
Cash flows from investing activities:
Capital expenditures......................................... (762,000) (1,119,000) (828,000)
Proceeds from sale of equipment.............................. 94,000 77,000 35,000
----------- ----------- -----------
Net cash used in investing activities.............. (668,000) (1,042,000) (793,000)
Cash flows from financing activities:
Net borrowings under bank loans.............................. 1,050,000 1,450,000 500,000
Principal payments under long-term debt...................... (754,000) (527,000) (464,000)
Additional long-term borrowings.............................. 449,000 360,000 --
Purchase of treasury stock................................... (133,000) (100,000) --
----------- ----------- -----------
Net cash provided by financing activities.......... 612,000 1,183,000 36,000
----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents..................................... 194,000 (474,000) 176,000
Cash and cash equivalents at beginning of year.................... 587,000 1,061,000 885,000
----------- ----------- -----------
Cash and cash equivalents at end of year.......................... $ 781,000 $ 587,000 $ 1,061,000
=========== =========== ===========
</TABLE>
Supplemental Disclosures of Cash Flow Information
<TABLE>
<CAPTION>
1994 1993 1992
----------- ----------- -----------
<S> <C> <C> <C>
Cash paid during the year for:
Interest..................................................... $ 662,000 $ 593,000 $ 658,000
Income taxes................................................. 818,000 280,000 525,000
</TABLE>
See accompanying notes.
- - --------------------------------------------------------------------------------
17
<PAGE> 21
- - --------------------------------------------------------------------------------
MOORE-HANDLEY, INC.
NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------
1. Significant Accounting Policies
Cash and Cash Equivalents
The Company considers all highly liquid securities with original maturities of
three months or less to be cash equivalents.
Concentration of Credit Risk
The Company is a wholesaler of hardware and building material products and as
such grants credit to its customers, most of whom are independent retailers
located in the Southeast. The Company performs periodic credit evaluations of
its customers' financial condition and obtains personal guarantees and/or
security interests where it deems necessary.
Inventory
Inventory is stated at the lower of weighted average cost or market.
Property and Equipment
Property and equipment is stated at cost and depreciation is computed using
the straight line method over estimated useful lives as follows:
Buildings...................................................... 25-31.5 years
Equipment...................................................... 3-10 years
Income Taxes
Deferred income taxes are provided for temporary differences between financial
and income tax reporting, primarily related to depreciation, inventory valuation
and certain accrued costs.
The adoption in 1992 of Financial Accounting Standards Board Statement No.
109, "Accounting for Income Taxes," had no material effect on the Company's
financial statements.
Deferred Charges
Deferred charges consist of financing costs and are amortized over the term of
the indebtedness.
Income per Common Share
Income per common share is computed based on the weighted average number of
common and common equivalent shares outstanding during the year. Common
equivalent shares include dilutive employees' stock options.
2. Loans to Officers
In 1989 two officers of the Company, Mr. Sawyer and Mr. West, purchased an
aggregate of 35,000 shares of treasury stock, at market value, for notes of
$149,000 collateralized by the shares and bearing interest at 10%. No payments
have been made on these notes receivable ($106,000 from Mr. Sawyer and $43,000
from Mr. West) which are reflected as a reduction of stockholders' equity in the
balance sheet.
In 1990 the Company also loaned Mr. Sawyer $60,000 in connection with the
purchase of a home. No payments of principal have been made on this note which
is due on demand and bears interest at the prime rate.
The Company also loaned Mr. West $50,000 in 1990 and $72,000 in 1992. He has
made principal payments on these loans of $16,000, $12,000, and $12,000 in 1992,
1993, and 1994 respectively. The balance at December 31, 1994 of $43,000
($55,000 at December 31, 1993) bears interest at 7% and is payable $1,000 per
month plus the net amount of any bonus paid to him.
3. Bank Loans
The Company has lines of credit, renewable annually, with two banks which
allow unsecured borrowings in the aggregate of up to $9,000,000 at the banks'
prime interest rates. The Company is charged a commitment fee of 3/8 of 1% on
the unused portion of one of the lines of credit.
4. Long-Term Debt
Long-term debt at December 31, 1994 and 1993 includes industrial development
bonds with interest payable at rates from 85% to 93% of prime and obligations
under capital leases financing transportation equipment. The Company is a party
to lease agreements with an industrial development board which are being
accounted for as asset purchases. Under the agreements, industrial development
bonds were issued and the proceeds used to purchase land of $534,000 and
building and equipment of $8,881,000. The Company has an unconditional
obligation to pay the principal and interest on the bonds.
In 1993 the Company entered into a 36 month lease to finance the purchase of
$360,000 of transportation equipment. The lease, which includes interest at
7.08%, is being accounted for as a capital lease. Purchases of
- - --------------------------------------------------------------------------------
18
<PAGE> 22
- - --------------------------------------------------------------------------------
additional transportation equipment in 1994 of $449,000 were financed under
leases with an average interest rate of 7.88%. Annual installments of principal
on all capital leases increase from approximately $843,000 in 1994 to $883,000
in 2001.
Maturities of long-term debt during the next five years are as follows:
<TABLE>
<S> <C>
1995............................ $ 843,000
1996............................ 875,000
1997............................ 703,000
1998............................ 715,000
1999............................ 769,000
Thereafter...................... 1,637,000
----------
$5,542,000
==========
</TABLE>
Interest expense on long-term debt and bank loans for the years ended December
31, 1994, 1993 and 1992 was $677,000, $603,000, and $626,000 respectively.
5. Commitments
Total future rental payments under non-cancelable operating leases which
expire in 1997 are $469,000. Annual rentals for the remainder of the lease terms
are as follows:
<TABLE>
<S> <C>
1995......................... $290,000
1996......................... 168,000
1997......................... 11,000
</TABLE>
Rental expense was $408,000, $409,000, and $487,000 in 1994, 1993 and 1992,
respectively.
6. Income Tax
The provision (benefit) for income tax consists of the following:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal......................... $839,000 $372,000 $368,000
State........................... 103,000 47,000 32,000
Deferred............................ (62,000) 46,000 290,000
-------- -------- --------
$880,000 $465,000 $690,000
======== ======== ========
</TABLE>
The provision for income taxes in 1992 includes a benefit of $53,000 resulting
from net operating loss carryforwards.
Deferred income tax expense (benefit) is related to the following items:
<TABLE>
<CAPTION>
1994 1993 1992
-------- -------- ---------
<S> <C> <C> <C>
Depreciation....................... $ 36,000 $ 59,000 $ 634,000
Provision for pension expenses..... (16,000) 29,000 246,000
Accrued health insurance and
vacation costs................... (26,000) -- (81,000)
Allowance for doubtful accounts.... (36,000) -- (373,000)
Inventory costs capitalized for tax
purposes......................... (5,000) (27,000) (102,000)
Provision for writedown of excess
inventory........................ (15,000) (15,000) (34,000)
-------- -------- ---------
$(62,000) $ 46,000 $ 290,000
======== ======== =========
</TABLE>
The deferred income tax liabilities (assets) are reflected in the balance
sheet as follows:
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Current Assets:
Accrued health insurance and vacation
costs................................... $(107,000) $ (81,000)
Allowance for doubtful accounts........... (409,000) (373,000)
Inventory costs capitalized for tax
purposes................................ (134,000) (129,000)
Provision for write down of excess
inventory............................... (64,000) (49,000)
--------- ---------
(714,000) (632,000)
Non-current liabilities
Depreciation.............................. 729,000 693,000
Provision for pension expenses............ 259,000 275,000
--------- ---------
988,000 968,000
--------- ---------
Net liability........................... $ 274,000 $ 336,000
========= =========
</TABLE>
The provision for income taxes differs from the statutory federal income tax
rate as a result of the following:
<TABLE>
<CAPTION>
PERCENT OF PRE-TAX INCOME
--------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Statutory U. S. income tax rate........ 34% 34% 34%
Increase in rates resulting from:
State income taxes -- net of
federal benefit.................. 3 2 3
Non-deductible and other items..... 1 1 --
Use of net operating loss
carryforward of prior year....... -- -- (3)
---- ---- ----
Effective income tax rate.............. 38% 37% 34%
===== ===== =====
</TABLE>
7. Pension Plans
The Company has two trusteed, noncontributory, qualified defined benefit
pension plans ("Pension Plans") covering substantially all employees of the
Company. Retirement benefits are provided based on employees' years of service
and earnings. Contributions to the Pension Plans are based on the amount
necessary to fund the net periodic pension cost. Contributions are limited to
the amount that can be currently deducted for federal income tax purposes and
are based on the amount necessary to fund the minimum level required by the
Employee Retirement Income Security Act of 1974.
- - --------------------------------------------------------------------------------
19
<PAGE> 23
- - --------------------------------------------------------------------------------
The Company's net periodic pension cost for 1994, 1993 and 1992 included the
following components:
<TABLE>
<CAPTION>
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Service cost --
benefits earned
during the
period............ $ 215,000 $ 254,000 $ 203,000
Interest cost on
projected benefit
obligation........ 289,000 268,000 242,000
Actual return on
assets............ 88,000 (255,000) (167,000)
Net amortization and
deferral.......... (305,000) 70,000 (59,000)
--------- --------- ---------
Net periodic pension
cost.............. $ 287,000 $ 337,000 $ 219,000
========= ========= =========
</TABLE>
The following table sets forth the assets and liabilities of the plans and the
amount of the net prepaid pension cost recognized in the Company's balance
sheets as of December 31, 1994 and 1993.
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit
obligations............ $3,743,000 $3,398,000
Nonvested benefit
obligations............ 98,000 106,000
---------- ----------
Accumulated benefit
obligations............ 3,841,000 3,504,000
Effect of projected
future salary
increases.............. 802,000 859,000
---------- ----------
Projected benefit
obligations............ 4,643,000 4,363,000
Plan assets at fair
value(a).................... 4,394,000 4,277,000
---------- ----------
Plan assets in excess of (less
than) projected benefit
obligations................. (249,000) (86,000)
Unrecognized obligations at
transition.................. 609,000 691,000
Unrecognized net loss/
(gain)...................... 203,000 (85,000)
Unrecognized prior service
cost........................ 141,000 155,000
---------- ----------
Net prepaid pension cost
recognized in the balance
sheet....................... $ 704,000 $ 675,000
========== ==========
</TABLE>
- - ------------
(a) Plan assets consist of debt securities and comingled funds.
The assumed rates used to measure the projected benefit obligations and the
expected earnings on plan assets at December 31, 1994, 1993 and 1992 were:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Weighted average discount rate.... 7% 7% 8%
Long-term rate of return on
assets.......................... 7% 7% 8%
Increase in future compensation
levels.......................... 4% 4% 5%
</TABLE>
The Company has 401(k) savings plans covering substantially all employees.
Contributions by the Company are discretionary and no contributions were made in
1994, 1993 or 1992.
8. Incentive Compensation Plan
On May 23, 1991 the stockholders approved the 1991 Incentive Compensation Plan
pursuant to which a maximum aggregate of 250,000 shares of common stock may be
issued to employees and directors until April 12, 2001.
As of December 31, 1994 the following options have been granted under this
plan:
A. Options to officers for 80,000 shares at $3.75 per share (market value
at date of grant) exercisable through April 2001 in four equal annual
installments beginning April 12, 1992.
B. Options to Independent Directors for 12,000 shares at approximately
$5.00 per share and 4,000 shares at approximately $4.75 per share (market
value at date of grant) exercisable through May 2004.
C. Options to Officer-Directors for 110,000 shares at $5.36 per share
(approximately 143% of market value at date of grant) exercisable, if at all,
through April 2001 upon the first to occur of (i) the Company earning $.85 or
more per share in any fiscal year during the term of the option; (ii) three
months before the tenth anniversary of the date of grant of the option if the
holder is still an employee; or (iii) the date of retirement of the holder if
he is age 70 or older.
- - --------------------------------------------------------------------------------
20
<PAGE> 24
- - --------------------------------------------------------------------------------
QUARTERLY FINANCIAL DATA -- UNAUDITED
QUARTERLY FINANCIAL DATA -- UNAUDITED
(IN THOUSANDS)
<TABLE>
<CAPTION>
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------------- ----------------- ----------------- -----------------
1994 1993 1994 1993 1994 1993 1994 1993
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales........................... $33,984 $32,219 $33,825 $33,035 $36,607 $34,861 $31,820 $29,240
Gross profit........................ 3,895 3,659 3,921 3,927 3,942 3,843 3,533 3,242
Net income.......................... 442 120 431 379 312 292 271 15
======= ======= ======= ======= ======= ======= ======= =======
Net income per share................ $ .20 $ .05 $ .19 $ .17 $ .14 $ .13 $ .12 $ .01
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
21
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Moore-Handley, Inc.
By: /s/ L. WARD EDWARDS
---------------------------------------
L. Ward Edwards
Vice President, Treasurer, Secretary
and Director
(Principal Accounting and Financial
Officer)
March 8, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- - ------------------------------------- ------------------------------------------------------- ---------------
<C> <S> <C>
/s/ WILLIAM RILEY Chairman of the Board and Director March 8, 1995
- - -------------------------------------
William Riley
/s/ PIERCE E. MARKS, JR. President and Director (Principal Executive Officer) March 8, 1995
- - -------------------------------------
Pierce E. Marks, Jr.
/s/ L. WARD EDWARDS Vice President, Treasurer, Secretary and Director March 8, 1995
- - ------------------------------------- (Principal Accounting and Financial Officer)
L. Ward Edwards
/s/ MICHAEL B. STUBBS Director March 8, 1995
- - -------------------------------------
Michael B. Stubbs
/s/ RONALD J. JUVONEN Director March 8, 1995
- - -------------------------------------
Ronald J. Juvonen
</TABLE>
- - --------------------------------------------------------------------------------
22
<PAGE> 26
MOORE-HANDLEY, INC.
Index of Exhibits
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- - ----------- ------------------------------------------------------------------------------------------------
<C> <S>
3(a) Restated Certificate of Incorporation of Company, filed as Exhibit 3(a) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference.
(a)-1 Amendment to Restated Certificate of Incorporation dated May 7, 1987, filed as Exhibit 3(a)-1 to
the Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated
herein by reference.
(b) By-laws of the Company, filed as Exhibit 3(d) to the Company's Registration Statement on Form
S-1 (Reg. No. 33-3032) and incorporated herein by reference.
(b)-1 Article VII of By-laws of the Company, as amended May 7, 1987, filed as Exhibit 3(b)-1 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated
herein by reference.
4(a) Lease Agreement, dated as of December 1, 1981, as amended, between the Company and the
Industrial Development Board of the Town of Pelham (the "Board"), filed as Exhibit 10(a) to
the Company's Registration Statement on Form S-1 (Reg. No. 33-3032) and incorporated herein by
reference.
(b) Guarantee Agreement, dated as of December 1, 1981, between the Company and the First Alabama
Bank of Birmingham, as Trustee ("Trustee"), filed as Exhibit 10(b) to the Company's
Registration Statement on Form S-1 (Reg. No. 33-3032) and incorporated herein by reference.
(c) Mortgage and Trust Indenture, dated as of December 1, 1981, between the Trustee and the Board,
filed as Exhibit 10(c) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032)
and incorporated herein by reference.
(d) Lease Agreement, dated as of December 1, 1982, between the Company and the Board, filed as
Exhibit 10(d) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032) and
incorporated herein by reference.
(e) Guarantee Agreement, dated as of December 1, 1982, between the Company and the Trustee, filed as
Exhibit 10(e) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032) and
incorporated herein by reference.
(f) Mortgage and Trust Indenture, dated as of December 1, 1982, between the Trustee and the Board,
filed as Exhibit 10(f) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032)
and incorporated herein by reference.
(g) Guarantee Agreement, dated as of December 30, 1986, between the Company and the First Alabama
Bank of Birmingham, as Trustee ("Trustee"), filed as Exhibit 10(dd) to the Company's Annual
Report on Form 10-K for the year ended December 31, 1987 and incorporated herein by reference.
(h) Mortgage and Trust Indenture, dated as of December 30, 1986, between the Trustee and the Board,
filed as Exhibit 10(ee) to the Company's Annual Report on Form 10-K for the year ended
December 31, 1987 and incorporated herein by reference.
(i) Master Lease Agreement, dated as of September 30, 1993, between the Company and The CIT
Group/Equipment Financing, related to the lease of 10 Navistar Tractors for the term of 36
months and incorporated herein by reference.
*10(n)-3 Amended and Restated Moore-Handley, Inc. Salaried Pension Plan, dated February 10, 1992 but
effective January 1, 1989, filed as Exhibit 10(n)-3 to the Company's Annual Report on Form
10-K for the year ended December 31, 1991 and incorporated herein by reference.
*(n)-4 Amendment No. 6 to The Moore-Handley Incorporated Salaried Pension Plan, dated February 10,
1992, filed as Exhibit 10(n)-4 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1991 and incorporated herein by reference.
(n)-5 Amendment No. 2 to The Moore-Handley Incorporated Salaried Pension Plan, dated December 29,
1994, filed as Exhibit 10(n)-5 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
(o)-3 Amended and Restated Moore-Handley, Inc. Hourly Employees' Retirement Plan dated February 10,
1992 but effective January 1, 1989, filed as Exhibit 10(o)-3 to the Company's Annual Report on
Form 10-K for the year ended December 31, 1991 and incorporated herein by reference.
(o)-4 Amendment No. 2 to the Moore-Handley, Inc. Hourly Employees' Retirement Plan, dated December 29,
1994, filed as Exhibit 10(0)-4 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
*(p)-1 Amended and restated The Moore-Handley Salaried Employees' Savings Plan and Trust dated February
4, 1994 but effective January 1, 1989, filed as Exhibit 10(p)-1 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1994.
</TABLE>
- - --------------------------------------------------------------------------------
23
<PAGE> 27
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- - ----------- ------------------------------------------------------------------------------------------------
<C> <S>
(q)-3 Collective Bargaining Agreement between the Company and United Wholesale and Warehouse
Employees' Union, effective December 23, 1992 through December 23, 1995, filed as Exhibit
10(q)-3 to the Company's Annual Report on Form 10-K for the year ended December 31, 1992 and
incorporated herein by reference.
*(r) The Moore-Handley Return-on-Investment Bonus Program, dated February 23, 1983, filed as Exhibit
10(r) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032) and incorporated
herein by reference.
*(aa) Form of Stock Subscription Agreement, dated as of January 29, 1986, between the Company and
certain managers of the Company, filed as Exhibit 10(aa) to the Company's Registration
Statement on Form S-1 (Reg. No. 33-3032) and incorporated herein by reference.
(bb) Form of Amendatory Agreements, dated as of March 3, 1986 between the Company, the Trustee and
the Board, relating to the Lease Agreements listed as items 10(c) and 10(d), respectively,
filed as Exhibit 10(bb) to the Company's Registration Statement on Form S-1 (Reg. No. 33-3032)
and incorporated herein by reference.
(cc) Lease Agreement, dated as of December 30, 1986, between the Company and the Industrial
Development Board of the Town of Pelham (the "Board"), filed as Exhibit 10(cc) to the
Company's Annual Report on Form 10-K for the year ended December 31, 1987 and incorporated
herein by reference.
*(dd) Agreement dated August 15, 1989 between the Company and John L. Sawyer related to the purchase
of common stock, filed as Exhibit 19.1 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1989 and incorporated herein by reference.
*(ee) Agreement dated August 15, 1989 between the Company and J. Franklin West related to the purchase
of common stock, filed as Exhibit 19.2 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1989 and incorporated herein by reference.
*(ff) 1991 Incentive Compensation Plan, filed as Exhibit A to the Company's Proxy Statement dated
April 30, 1991 and incorporated herein by reference.
*(gg) The Moore-Handley, Inc. Employees' 401(k) Profit Sharing Prototype Non-Standardized Adoption
Agreement effective July 1, 1993 and incorporated herein by reference.
27 Financial Data Schedule (for SEC purposes only)
</TABLE>
- - ---------------
* Management contract or management compensation plan or arrangement..
- - --------------------------------------------------------------------------------
24
<PAGE> 28
MOORE-HANDLEY, INC.
P.O. BOX 2607, BIRMINGHAM, ALABAMA 35202
TEL (205) 663-8011
<PAGE> 1
Exhibit 10(n)-5
AMENDMENT NO. 2
to the
MOORE-HANDLEY, INC. SALARIED PENSION PLAN
THIS AMENDMENT, made and entered into this 29th day of
December 1994, by MOORE-HANDLEY, INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company maintains the Moore-Handley, Inc.
Salaried Pension Plan for the benefit of certain of the Company's employees, as
heretofore amended (the "Plan");
WHEREAS, Section (1) of Article XIII of the Plan reserves to
the Company the right to amend the Plan; and
WHEREAS, the Company desires to amend the Plan as hereinafter
provided;
NOW, THEREFORE, pursuant to Section (1) of Article XIII of the
Plan, the Plan is hereby amended, as follows:
FIRST: Section (1) of Article I of the Plan is hereby amended
by adding thereto, at the end thereof, the following:
Notwithstanding any other provision in the plan, each
section 401(a)(17) employee's accrued benefit under this plan will be the sum
of:
1
<PAGE> 2
(a) the employee's accrued benefit as of the last day of
the last plan year beginning before January 1, 1994, frozen in
accordance with section 1.401(a)(4)-13 of the regulations, and
(b) the employee's accrued benefit determined under the
benefit formula applicable for the plan year beginning on or after
January 1, 1994, as applied to the employee's years of service
credited to the employee for plan years beginning on or after January
1, 1994, for purposes of benefit accruals.
A section 401(a)(17) employee means an employee whose current
accrued benefit as of a date on or after the first day of the first
plan year beginning on or after January 1, 1994, is based on
compensation for a year beginning prior to the first day of the first
plan year beginning on or after January 1, 1994, that exceeded
$150,000.
SECOND: Sections (15) and (21) of Article I of the Plan are
hereby amended by adding thereto, at the end thereof, the following:
In addition to other applicable limitations set forth
in the plan, and notwithstanding any other provision of the plan to
the contrary, for plan years beginning on or after January 1, 1994,
the annual compensation of each employee taken into account under the
plan shall not exceed the OBRA '93 annual compensation limit. The OBRA
'93 annual compensation limit is $150,000, as adjusted by the
Commissioner for increases in the cost of living in accordance with
section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth
in this provision.
If compensation for any prior determination period is
taken into account in determining an employee's benefits accruing in
the current plan year, the compensation for that prior determination
period is subject to the OBRA '93 annual compensation limit in effect
for that prior determination period. For this
2
<PAGE> 3
purpose, for determination periods beginning before the first day of
the first plan year beginning on or after January 1, 1994, the OBRA
'93 annual compensation limit is $150,000.
THIRD: The Plan is hereby amended by adding thereto, at the
end thereof, the following new ARTICLE XVII:
ARTICLE XVII
Section 1. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to the
contrary that would otherwise limit a distributee's election under
this Article, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
Section 2. Definitions.
Section 2.1. Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except than an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
Section 2.2. Eligible retirement plan: An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or
a qualified trust described in section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse,
an eligible retirement plan is an individual retirement account or
individual retirement annuity.
3
<PAGE> 4
Section 2.3. Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former spouse
who is the alternate payee under a qualified domestic relations order,
as defined in section 414(p) of the Code, are distributees with regard
to the interest of the spouse or former spouse.
Section 2.4. Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
FOURTH: The amendments made by paragraphs FIRST and SECOND
hereof shall be effective January 1, 1994; and the amendments made by paragraph
THIRD hereof shall be effective as of January 1, 1993.
FIFTH: The amendments made hereby shall not eliminate or
reduce any early retirement benefit or retirement type subsidy (as defined in
regulations promulgated by the Secretary of the Treasury) or eliminate an
optional form of benefit with respect to benefits attributable to service
before the date hereof.
SIXTH: The Plan, as hereby amended, shall continue in full
force and effect.
4
<PAGE> 5
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed and its seal to be hereunto affixed and attested, all by its
officers thereunto duly authorized, all on this 29th day of December, 1994.
MOORE-HANDLEY, INC.
By: L. Ward Edwards
--------------------------------------
Its: Vice President, Treasurer
--------------------------------------
ATTEST:
Pierce E. Marks, Jr.
- - --------------------------------------
Its: President
---------------------------------
[CORPORATE SEAL]
5
<PAGE> 1
Exhibit 10(o)-4
AMENDMENT NO. 2
to the
MOORE-HANDLEY, INC. HOURLY EMPLOYEES' RETIREMENT PLAN
THIS AMENDMENT, made and entered into this 29th day of
December 1994, by MOORE-HANDLEY, INC., a Delaware corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company maintains the Moore-Handley, Inc. Hourly
Employees' Retirement Plan for the benefit of certain of the Company's
employees, as heretofore amended (the "Plan");
WHEREAS, Section (1) of Article XIII of the Plan reserves to
the Company the right to amend the Plan; and
WHEREAS, the Company desires to amend the Plan as hereinafter
provided;
NOW, THEREFORE, pursuant to Section (1) of Article XIII of the
Plan, the Plan is hereby amended, as follows:
1
<PAGE> 2
FIRST: Sections (15) and (19) of Article I of the Plan are
hereby amended by adding thereto, at the end thereof, the following:
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to the
contrary, for plan years beginning on or after January 1, 1994, the
annual compensation of each employee taken into account under the plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
for increases in the cost of living in accordance with section
401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not
exceeding 12 months, over which compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93
annual compensation limit will be multiplied by a fraction, the
numerator of which is the number of months in the determination
period, and the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth
in this provision.
If compensation for any prior determination period is taken
into account in determining an employee's benefits accruing in the
current plan year, the compensation for that prior determination
period is subject to the OBRA '93 annual compensation limit in effect
for that prior determination period. For this purpose, for
determination periods beginning before the first day of the first plan
year beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
SECOND: The Plan is hereby amended by adding thereto, at the
end thereof, the following new ARTICLE XVII:
ARTICLE XVII
Section 1. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to the
contrary that would otherwise limit a distributee's election under
this Article, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any
2
<PAGE> 3
portion of an eligible rollover distribution paid directly to an
eligible retirement plan specified by the distributee in a direct
rollover.
Section 2. Definitions.
Section 2.1. Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributee, except than an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code; and
the portion of any distribution that is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
Section 2.2. Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of
the Code, an annuity plan described in section 403(a) of the Code, or
a qualified trust described in section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving spouse,
an eligible retirement plan is an individual retirement account or
individual retirement annuity.
Section 2.3. Distributee: A distributee includes an employee or
former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or
former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
Section 2.4. Direct rollover: A direct rollover is a payment by the
plan to the eligible retirement plan specified by the distributee.
3
<PAGE> 4
THIRD: The amendments made by paragraph FIRST hereof shall be
effective January 1, 1994; and the amendments made by paragraph SECOND hereof
shall be effective as of January 1, 1993.
FOURTH: The amendment made hereby shall not eliminate or
reduce any early retirement benefit or retirement type subsidy (as defined in
regulations promulgated by the Secretary of the Treasury) or eliminate an
optional form of benefit with respect to benefits attributable to service
before the date hereof.
FIFTH: The Plan, as hereby amended, shall continue in full
force and effect.
IN WITNESS WHEREOF, the Company has caused this instrument to
be executed and its seal to be hereunto affixed and attested, all by its
officers thereunto duly authorized, all on this 29th day of December, 1994.
MOORE-HANDLEY, INC.
By: L. Ward Edwards
----------------------------------
Its: Vice President, Treasurer
----------------------------------
ATTEST:
Pierce E. Marks, Jr.
- - ----------------------------------
Its: President
-----------------------------
[CORPORATE SEAL]
4
<PAGE> 1
Exhibit 10*(p)-1
AMENDMENT FOR TRA 86 PROVISIONS
EFFECTIVE PRIOR TO 1989 FOR THE
MOORE HANDLEY SALARIED EMPLOYEES' SAVINGS PLAN AND TRUST
SECTION I: PURPOSE AND EFFECTIVE DATE
1.1 Purpose. It is the intention of the Employer to amend the plan to
comply with those provisions of the Tax Reform Act of 1986 that
are effective prior to the first Plan Year beginning after
December 31, 1988. Nothing contained in this amendment shall
permit or require Elective Deferrals, Matching Employer
Contributions, or Employee Contributions under the plan unless
such Elective Deferrals, Matching Employer Contributions, or
Employee Contributions have been authorized by the Employer under
other provisions of the plan or under other amendments thereto.
1.2 Effective Date. Except as otherwise provided, this amendment
shall be effective as of the first day of the first Plan Year
beginning after December 31, 1986.
SECTION II: DEFINITIONS
For purposes of this amendment only, the following definitions shall apply.
2.1 "Adjustment Factor" shall mean the cost of living adjustment
factor prescribed by the Secretary of the Treasury under Section
415(d) of the Code for years beginning after December 31, 1987,
as applied to such items and in such manner as the Secretary
shall provide.
2.2 "Affiliated Employer" shall mean the Employer and any corporation
which is a member of a controlled group of corporations (as
defined in Section 414(b) of the Code) which includes the
Employer; any trade or business (whether or not incorporated)
which is under common control (as defined in Section 414(c) of
the Code) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group
(as defined in Section 414(m) of the Code) which includes the
Employer; and any other entity required to be aggregated with the
Employer pursuant to regulations under Section 414(o) of the
Code.
2.3 "Code" shall mean the Internal Revenue Code of 1986 and
amendments thereto.
2.4 "Compensation" shall mean compensation paid by the Employer to
the Participant during the taxable year ending with or within the
Plan Year which is required to be reported as wages on the
Participant's Form W-2 and, if the provisions of the plan other
than this amendment so provide, shall also include compensation
which is not currently includible in the participant's gross
income by reason of the application of sections 125, 402(a) (8),
402(h) (1) (B) or 403(b) of the Code.
2.5 "Elective Deferrals" shall mean contributions made to the plan
during the Plan Year by the Employer, at the election of the
Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.
2.6 "Employee" shall mean employees of the Employer and shall include
leased employees within the meaning of Section 414(n)(2) of the
Code. Notwithstanding the foregoing, if such leased employees
constitute less than twenty percent of the Employer's nonhighly
compensated work force within the meaning of Section
414(n)(1)(C)(ii) of the Code, the term "Employee" shall not
include those leased employees covered by a plan described in
Section 414(n)(5) of the Code unless otherwise provided by the
terms of this plan other than this amendment.
2.7 "Employee Contributions" shall mean contributions to the plan
made by a Participant during the Plan Year.
2.8 "Employer" shall mean the entity that establishes or maintains
the plan; any other organization which has adopted the plan with
the consent of such establishing employer; and any successor of
such employer.
<PAGE> 2
2.9 "Family Member" shall mean an individual described in Section
414(q)(6)(B) of the Code.
2.10 "Highly Compensated Employee" shall mean an individual described
in Section 414(q) of the Code.
2.11 "Inactive Participant" shall mean any Employee or former Employee
who has ceased to be a Participant and on whose behalf an account
is maintained under the plan.
2.12 "Matching Contribution" shall mean any contribution to the Plan
made by the Employer for the Plan Year and allocated to a
Participant's account by reason of the Participant's Employee
Contributions or Elective Deferrals.
2.13 "Non-Highly Compensated Employee" shall mean an Employee of the
Employer who is neither a Highly Compensated Employee nor a
Family Member.
2.14 "Participant" shall mean any Employee of the Employer who has met
the eligibility and participation requirements of the plan.
2.15 "Qualified Nonelective Contributions" shall mean contributions
(other than Matching Contributions) made by the Employer and
allocated to Participants' accounts that the Participant may not
elect to receive in cash until distributed from the plan; that
are 100 percent vested and nonforfeitable when made; and that are
not distributable under the terms of the plan to Participants or
their beneficiaries earlier than the earlier of:
i) separation from service, death, or disability of the
Participant;
ii) attainment of the age 59 1 /2 by the Participant;
iii) termination of the plan without establishment of a
successor plan;
iv) the events specified in those of Sections XIII, XIV
or XV of this amendment adopted by the Employer; or
(v) for Plan Years beginning before January 1, 1989, upon
hardship of the Participant.
2.16 "Plan Year" shall mean the plan year otherwise specified in the
plan.
SECTION III: PROVISIONS RELATING TO LEASED EMPLOYEES
3.1 Safe-Harbor. Notwithstanding any other provisions of the Plan,
for purposes of determining the number or identity of Highly
Compensated Employees or for purposes of the pension requirements
of Section 414(n)(3) of the Code, the employees of the Employer
shall include individuals defined as Employees in Section 2.6 of
this amendment.
3.2 Participation and Accrual. A leased employee within the meaning
of Section 414(n)(2) of the Code shall become a Participant in,
and accrue benefits under, the plan based on service as a leased
employee only as provided in provisions of the plan other than
this Section III.
3.3 Effective Date. This Section III shall be effective for services
performed after December 31, 1986.
SECTION IV: LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
4.1 Revised Contribution Limitations under Defined Contribution
Plan.
4.1(a) Definition of Annual Additions. For purposes of the plan,
"Annual Addition" shall mean the amount allocated to a
Participant's account during the Limitation Year that
constitutes:
(i) Employer contributions,
<PAGE> 3
(ii) Employee contributions,
(iii) Forfeitures, and
(iv) Amounts described in Sections 415(1)(1) and
419(A)(d)(2) of the Code.
4.1(b) Maximum Annual Addition. The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the
Plan for any Limitation Year shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation, or
(ii) 25 percent of the Participant's compensation, within
the meaning of Section 415(c)(3) of the Code for the
Limitation Year.
4.1(c) Special Rules. The compensation limitation referred to in
Section 4.1 (b) (ii) shall not apply to:
(i) Any contribution for medical benefits (within the
meaning of Section 419A(f)(2) of the Code) after
separation from service which is otherwise treated as
an Annual Addition, or
(ii) Any amount otherwise treated as an Annual Addition
under Section 415(1)(1) of the Code.
4.1(d) Definitions. For purposes of Section 4.1, "Defined Contribution
Dollar Limitation shall mean $30,000 or, if greater, one-fourth
of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the Limitation Year.
4.2 Special Rules for Plans Subject to Overall Limitations Under
Code Section 415(e).
4.2(a) Recomputation Not Required. The Annual Addition for any
Limitation Year beginning before January 1, 1987 shall not be
recomputed to treat all Employee Contributions as an Annual
Addition.
4.2(b) Adjustment of Defined Contribution Plan Fraction. If the plan
satisfied the applicable requirements of Section 415 of the Code
as in effect for all Limitation Years beginning before January
1, 1987, an amount shall be subtracted from the numerator of the
defined contribution plan fraction (not exceeding such
numerator) as prescribed by the Secretary of the Treasury so
that the sum of the defined benefit plan fraction and defined
contribution plan fraction computed under Section 415(e)(1) of
the Code (as revised by this Section IV) does not exceed 1.0 for
such Limitation Year.
4.3 Limitation Year. For purposes of this Section IV, Limitation
Year" shall mean the limitation year specified in the plan, or
if none is specified, the calendar year.
4.4 Effective Date of Section IV Provision. The provisions of this
Section IV shall be effective for Limitation Years beginning
after December 31, 1986.
SECTION V: ELECTIVE DEFERRALS
5.1 Maximum Amount of Elective Deferrals. Effective as of January 1,
1987, no Employee shall be permitted to have Elective Deferrals
made under this plan during any calendar year in excess of $7000
multiplied by the Adjustment Factor as provided by the Secretary
of the Treasury. The foregoing limit shall not apply to Elective
Deferrals of amounts attributable to service performed in 1986
and described in Section 1105(c) (5) of the Tax Reform Act of
1986.
5.2 Average Actual Deferral Percentage.
(a) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Actual
Deferral Percentage for Eligible Participants who are
Nonhighly Compensated Employees for the Plan Year
multiplied by 1.25; or
<PAGE> 4
(b) The Average Actual Deferral Percentage for Eligible
Participants who are Highly Compensated Employees for
the Plan Year shall not exceed the Average Actual
Deferral Percentage for Eligible Participants who are
Nonhighly Compensated Employees for the Plan Year
multiplied by 2, provided that the Average Actual
Deferral Percentage for Eligible Participants who are
Highly Compensated Employees does not exceed the
Average Actual Deferral Percentage for Eligible
Participants who are Nonhighly Compensated Employees
by more than two (2) percentage points or such lesser
amount as the Secretary of the Treasury shall
prescribe to prevent the multiple use of this
alternative limitation with respect to any Highly
Compensated Employee.
5.3 Definitions. For purposes of this section V and for purposes of
Sections X and XI of this Amendment, the following definitions
shall be used:
5.3(a) "Actual Deferral Percentage" shall mean the ratio (expressed as
a percentage), of Elective Deferrals and Qualified Employer
Deferral Contributions on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's Compensation for the
Plan Year.
5.3(b) "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages
of the Eligible Participants in a group.
5.3(c) "Qualified Employer Deferral Contributions" shall mean Qualified
Nonelective Contributions taken into account under the terms of
the plan without regard to this amendment in determining the
Actual Deferral Percentage.
5.3(d) "Eligible Participant" shall mean any Employee of the Employer
who is otherwise authorized under the terms of the Plan to have
Elective Deferrals or Qualified Employer Deferral Contributions
allocated to his account for the Plan Year.
5.4 Special Rules.
5.4(a) For purposes of this Section V, the Actual Deferral Percentage
for any Eligible Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective
Deferrals or Qualified Employer Deferral Contributions allocated
to his account under two or more plans or arrangements described
in Section 401 (k) of the Code that are maintained by the
Employer or an Affiliated Employer shall be determined as if all
such Elective Deferrals and Qualified Employer Deferral
Contributions were made under a single arrangement.
5.4(b) For purposes of determining the Actual Deferral Percentage of a
Participant who is a Highly Compensated Employee, the Elective
Deferrals, Qualified Employer Deferral Contributions and
Compensation of such Participant shall include the Elective
Deferrals, Qualified Employer Deferral Contributions and
Compensation of Family Members, and such Family Members shall be
disregarded in determining the Actual Deferral Percentage for
Participants who are Nonhighly Compensated Employees.
5.4(c) The determination and treatment of the Elective Deferrals,
Qualified Nonelective Contributions and Actual Deferral
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
SECTION VI. LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING EMPLOYER
CONTRIBUTIONS
6.1 Contribution Percentage.
6.1(a) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees for the
Plan Year multiplied by 1.25; or
6.1(b) The Average Contribution Percentage for Eligible Participants
who are Highly Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for Eligible
<PAGE> 5
Participants who are Nonhighly Compensated Employees the Plan
Year multiplied by 2, provided that the Average Contribution
Percentage for Eligible Participants who are Highly Compensated
Employees does not exceed the Average Contribution Percentage
for Eligible Participants who are Nonhighly Compensated
Employees by more than two (2) percentage points or such lesser
amount as the Secretary of the Treasury shall prescribe to
prevent the multiple use of this alternative limitation with
respect to any Highly Compensated Employee.
6.2 Definitions. For purposes of this Section VI, and for purposes
of Section XII of this amendment, the following definitions
shall apply.
6.2(a) "Average Contribution Percentage" shall mean the average
(expressed as percentage) of the Contribution Percentages of the
Eligible Participants in a group.
6.2(b) "Contribution Percentage" shall mean the ratio (expressed as a
percentage), of the sum of the Employee Contributions and
Matching Contributions under the plan on behalf of the Eligible
Participant for the Plan Year to the Eligible Participant's
Compensation for the Plan Year.
6.2(c) "Eligible Participant" shall mean any employee of the Employer
who is otherwise authorized under the terms of the plan to have
Employee Contributions or Matching Contributions allocated to
his account for the Plan Year.
6.3 Special Rules.
6.3(a) For purposes of this section VI, the Contribution Percentage for
any Eligible Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to make Employee
Contributions, or to receive Matching Contributions, Qualified
Nonelective Contributions or Elective Deferrals allocated to his
account under two or more plans described in Section 401 (a) of
the Code or arrangements described in Section 401 (k) of the
Code that are maintained by the Employer or an Affiliated
Employer shall be determined as if all such contributions and
Elective Deferrals were made under a single plan.
6.3(b) In the event that this plan satisfies the requirements of
Section 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the
requirements of Section 410(b) of the Code only if aggregated
with this plan, then this Section VI shall be applied by
determining the Contribution Percentages of Eligible
Participants as if all such plans were a single plan.
6.3(c) For purposes of determining the Contribution Percentage of an
Eligible Participant who is a Highly Compensated Employee, the
Employee Contributions, Matching Employer Contributions and
Compensation of such Participant shall include the Employee
Contributions, Matching Employer Contributions and Compensation
of Family Members, and such Family Members shall be disregarded
in determining the Contribution Percentage for Eligible
Participants who are Nonhighly Compensated Employees.
6.3(d) The determination and treatment of the Contribution Percentage
of any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
SECTION VII: QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS NOT PERMITTED
The plan shall accept no Employee Contributions designated by the Participant
as deductible employee contributions (within the meaning of Section 72(o)(5)(A)
of the Code) for a taxable year of the Participant beginning after December 31,
1986.
SECTION IX: DETERMINATION OF TOP-HEAVY STATUS
Solely for the purpose of determining if the plan, or any other plan included in
a required aggregation group of which this plan is a pan, is top-heavy (within
the meaning of Section 416(9) of the Code) the accrued benefit of an Employee
other than a key employee (within the meaning of Section 416(i)(1) of the
<PAGE> 6
Code) shall be determined under (a) the method, if any, that uniformly applies
for accrual purposes under all plans maintained by the Affiliated Employers, or
(b) if there is no such method, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Code.
SECTION X: DISTRIBUTION OF EXCESS DEFERRALS
10.1 In General. Notwithstanding any other provision of the plan,
Excess Deferral Amounts and income allocable thereto shall be
distributed no later than April 15, 1988, and each April 15
thereafter to Participants who claim such Allocable Excess
Deferral Amounts for the preceding calendar year.
10.2 Definitions. For purposes of this amendment, "Excess Deferral
Amount" shall mean the amount of Elective Deferrals for a
calendar year that the Participant allocates to this plan
pursuant to the claim procedure set forth in Section 10.3.
10.3 Claims. The Participant's claim shall be in writing, shall be
submitted to the plan administrator no later than March 1; shall
specify the Participant's Excess Deferral Amount for the
preceding calendar year; and shall be accompanied by the
Participant's written statement that if such amounts are not
distributed, such Excess Deferral Amount, when added to amounts
deferred under other plans or arrangements described in Sections
401 (k), 408(k) or 403(b) of the Code, exceeds the limit imposed
on the Participant by Section 402(9) of the Code for the year in
which the deferral occurred.
10.4 Determination of Income or Loss. The Excess Elective Deferral
shall be adjusted for income or loss. The income or loss
allocable to Excess Elective Deferrals shall be determined by
multiplying the income or loss allocable to the Participant's
Elective Deferrals for the Calendar Year by a fraction, the
numerator of which is the Excess Elective Deferral on behalf of
the Participant for the preceding Calendar Year and the
denominator of which is the Participant's account balance
attributable to Elective Deferrals on the last day of the
preceding Calendar Year.
SECTION XI: DISTRIBUTION OF EXCESS CONTRIBUTIONS
11.1 In General. Notwithstanding any other provision of the plan,
Excess Contributions and income allocable thereto shall be
distributed no later than the last day of each plan year
beginning after December 31, 1987, to Participants on whose
behalf such Excess Contributions were made for the preceding
Plan Year.
11.2 Excess Contributions. For purposes of this amendment, "Excess
Contributions" shall mean the amount described in Section 401
(k)(8)(B) of the Code.
11.3 Determination of Income or Loss. The Excess Contributions shall
be adjusted for income or loss. The income or loss allocable to
Excess Contributions shall be determined by multiplying the
income or loss allocable to the Participant's Elective Deferrals
and Qualified Employer Deferral Contributions for the Plan Year
by a fraction, the numerator of which is the Excess Contribution
on behalf of the Participant for the preceding Plan Year and the
denominator of which is the sum of the Participant's account
balances attributable to Elective Deferrals and Qualified
Employer Deferral Contributions on the last day of the preceding
Plan Year.
11.4 Reduction for Excess Deferrals Distributed. The Excess
Contributions which would otherwise be distributed to the
Participant shall be reduced, in accordance with regulations, by
the amount of Excess Deferrals distributed to the Participant.
11.5 Accounting for Excess Contributions. Amounts distributed under
this Section XI shall first be treated as distributions from the
Participant's Elective Deferral account and shall be treated as
distributed from the Participant's Qualified Employer Deferral
Contribution account only to the extent such Excess
Contributions exceed the balance in the Participant's Elective
Deferral account.
<PAGE> 7
SECTION XII: DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
12.1 In General. Excess Aggregate Contributions and income allocable
thereto shall be forfeited, if otherwise forfeitable under the
terms of this Plan, or if not forfeitable, distributed no later
than the last day of each Plan Year beginning after December 31,
1987, to Participants to whose accounts Employee Contributions
or Matching Contributions were allocated for the preceding Plan
Year.
12.2 Excess Aggregate Contributions. For purposes of this amendment,
"Excess Aggregate Contributions" shall mean the amount described
in Section 401 (m)(6)(B) of the Code.
12.3 Determination of Income or Loss. The Excess Aggregate
Contributions shall be adjusted for income or loss. The income
or loss allocable to Excess Aggregate Contributions shall be
determined by multiplying the income or loss allocable to the
Participant's Employee Contributions and Matching Contributions
for the Plan Year by a fraction, the numerator of which is the
Excess Aggregate Contributions on behalf of the Participant for
the preceding Plan Year and the denominator of which is the sum
of the Participant's account balance attributable to Employee
Contributions and Matching Contributions on the last day of the
preceding Plan Year.
12.4 Accounting for Excess Aggregate Contributions. Excess Aggregate
Contributions shall be distributed from the Participant's
Employee Contribution account, and forfeited if otherwise
forfeitable under the terms of the plan (or, if not forfeitable,
distributed) from the Participant's Matching Contribution
account in proportion to the Participant's Employee
Contributions and Matching Contributions for the Plan Year.
12.5 Allocation of Forfeitures.
12.5(a) Amounts forfeited by Highly Compensated Employees under this
Section XII shall be:
i) Treated as Annual Additions under Section 4.1 (a) of
this amendment and either;
ii) Applied to reduce employer contributions if
forfeitures of Matching Contributions under the Plan
are applied to reduce employer contributions; or
iii) Allocated, after all other forfeitures under the
plan, and subject to Section 12.6(b) of this
amendment, to the same Participants and in the same
manner as such other forfeitures of Matching
Contributions, are allocated to other Participants
under the Plan.
12.5(b) Notwithstanding the foregoing, no forfeitures arising under this
Section XII shall be allocated to the account of any Highly
Compensated Employee.
SECTION XIII: DISTRIBUTIONS UPON PLAN TERMINATION
Effective as of January 1, 1985 or such later date as the employer shall
specify upon adoption of this Section XIII, Elective Deferrals, Qualified
Employer Deferral Contributions, and income attributable thereto, shall be
distributed to Participants or their beneficiaries as soon as administratively
feasible after the termination of the plan, provided that neither the Employer
nor an Affiliated Employer maintains a successor plan.
SECTION XIV: DISTRIBUTIONS UPON SALE OF ASSETS
Effective as of January 1, 1985, or such later date as the Employer shall
specify upon adoption of this Section XIV, all Elective Deferrals, Qualified
Employer Deferral Contributions, and income attributable thereto, shall be
distributed to Participants as soon as administratively feasible after the
sale, to an entity that is not an Affiliated Employer, of substantially all of
the assets used by the Employer in the trade or business in which the
Participant is employed.
<PAGE> 8
SECTION XV: DISTRIBUTIONS UPON SALE OF SUBSIDIARY
Effective as of January 1, 1985, or such later date as the Employer specifies
upon adoption of this Section XV, all Elective Deferrals, Qualified Employer
Deferral Contributions, and income attributable thereto, shall be distributed,
as soon as administratively feasible after the sale, to an entity that is not
an Affiliated Employer, of an incorporated Affiliated Employer's interest in an
subsidiary to Participants employed by such subsidiary.
This Amendment is signed this 14th day of March, 1994.
----------- ----- --
MOORE HANDLEY, INC.
By: L. Ward Edwards
---------------------------
(authorized signature)
<PAGE> 9
=====================================================================
401 (k)/PROFIT SHARING
PROTOTYPE
NON-STANDARDIZED
ADOPTION AGREEMENT #03-001
<PAGE> 10
THE NEW ENGLAND 401(K)/Profit SHARING PROTOTYPE PLAN
NON-STANDARDIZED ADOPTION AGREEMENT #001
The Employer named below hereby establishes a profit-sharing plan and trust by
adopting the 401 (k)/Profit Sharing Prototype Plan #03 which the Employer
accepts and incorporates by reference herein, with the specifications set forth
below with respect to the terms and provisions of the Plan. This Adoption
Agreement, together with the Basic Plan Document when registered in accordance
with the Sponsoring Organization's requirements, shall be a Prototype Plan and
constitutes a Plan and Trust for the exclusive benefit of participating
Employees. Prototype Plan status depends upon initial registration and
continued registration in accordance with the requirements of the Sponsoring
Organization.
THIS ADOPTION AGREEMENT constitutes (select one):
[ ] the establishment of a new Plan and Trust, effective
(the "Effective Date").
-----------------------
[X] the amendment and restatement of an existing Plan and Trust of
the Employer which is qualified under Section 401 (a) of the
Internal Revenue Code and which was effective January 1, 1982
---------------
(the "Effective Date"). The name of the existing Plan that is
being amended and restated is:
Moore Handley Salaried Employees' Salaried Plan and Trust
-------------------------------------------------------------
-------------------------------------------------------------.
The effective date of this amendment is: January 1, 1989
--------------------.
THE EMPLOYER (If more than one employer is included in the Plan, list all
Employers and indicate which Employer is the Principal Employer. Use
attachment H necessary. Note: An Employer who is not aggregated with
the Principal Employer under Section 414(b), (c), (m) or (o) of the
Code shall not be permitted to adopt the Plan.)
Name Moore Handley, Inc. (Sponsoring Employer)
* See Attachment for additional Employer
--------------------------------------------------------------
Address P.O. Box 2607
--------------------------------------------------------------
Birmingham, AL Zip Code 35202
-------------------------------------------------- ---------
Employer Identification Number 63-819773 Plan Number 001
------------------- -------
Type of Entity:
[X] Corporation [ ] Partnership [ ] Sole Proprietorship
[ ] Other
Employer Fiscal Year for Income Tax Purposes:
[X] Calendar Year [ ] Year beginning the day of
--------- ---------
Date incorporated (or date business commenced, if not a corporation):
--------------------------------------
THE TRUSTEE (Enter the name and address of the person(s) or corporation
appointed by the Employer as Trustee under this Plan and Trust.)
Name(s) L. Ward Edwards And Gary Mercer
--------------------------------------------------------------
Address P.O. Box 2607
--------------------------------------------------------------
Birmingham, AL Zip Code 35202
------------------------------------------ ---------
Copyright (C) 1993, New England Mutual Life Insurance Company.
All rights reserved
1
<PAGE> 11
PLAN NAME
The name of the Plan shall be: Moore Handley Salaried Employees' Savings
-------------------------------------------------
Plan and Trust
- - -------------------------------------------------------------------------------
ARTICLE 11- General Definitions
2.07 "COMPENSATION," shall mean the Participant's wages within the meaning
of Section 3401 (a) of the Code for income tax withholding at the
source, subject; however, to Section 2.07 of the Basic Plan Document
and the following provisions (complete A, B, C and D):
A. Except as provided in D Below, "Compensation" shall be
determined over the following applicable period (select one):
[X] the Plan Year
[ ] the Limitation Year ending with or within the Plan
Year
[ ] the Employer's fiscal year ending with or within the
Plan Year
[ ] the calendar year ending with or within the Plan Year
B. "COMPENSATION" for purposes of determining profit sharing and
matching contributions shall exclude the following (select one
or more as appropriate):
[X] not applicable
[ ] overtime pay
[ ] commissions
[ ] bonuses
[ ] other special pay (specify).
----------------
[ ] Compensation in excess of $ .
---------------
C. "COMPENSATION" for purposes of determining profit sharing and
matching contributions (select one):
[X] shall include
[ ] shall not include
the following types of elective contributions and deferred
compensation: (1) any Employer contributions made pursuant to
a salary reduction agreement which are not includible in the
gross income of the Employee under a "cafeteria plan"
described in Section 125 of the Code, a "cash or deferred
arrangement" described in Section 401 (k) of the Code, a
"simplified employee pension plan" described in Section 402(h)
of the Code or a "tax deferred annuity" program as provided in
Section 403(b) of the Code, (2) any compensation defined under
an "eligible deferred compensation plan" described in Section
457 of the Code, or (3) any Employee contributions which are
"picked up" under a government plan as described in Section
414(h)(2) of the Code
D. "COMPENSATION" for purposes of the Actual Deferral Percentage
Test under Article XXV and the Actual Contribution Percentage
Test under Article XXVI shall mean the Participant's
Compensation, as defined above, paid to him during the
applicable period, as specified below, but including any
amounts described in B and C above. The applicable period
shall be as follows (select one):
[X] the entire Plan Year
[ ] the part of the Plan year during which the
Participant is a member of the Plan
2
<PAGE> 12
2.08 "EARLY RETIREMENT DATE" for a Participant shall mean (select and
complete one):
[X] not applicable.
[ ] the date he attains age .
---------------
[ ] the date he attains age and completes
---------------
Years of Service.
---------------
NOTE: Early retirement under the Prototype Plan operates only to
accelerate vesting and, if Section 13.03(a)B is selected below, to
defer the distribution of Employer derived benefits. No early
retirement date should be selected H neither of these reasons apply.
2.15 "ENTRY DATE" shall mean (select one):
[ ] the day of each . (Must be either
-------------- ---------------
first or last day of Plan Year. Unless the "elapsed time"
method is selected under Section 3.01 D below, an additional
Entry Date exactly 6 months from the date specified above may
apply to some Employees as required by law. See Section 2.27
of the Basic Plan Document.)
[ ] the first day of each month.
[X] the first day of the first and seventh month of each Plan Year.
[ ] the first day of the first, fourth, seventh and tenth month of
each Plan Year.
If the adoption of this Prototype Plan establishes a new Plan, the
Effective Date shall also be an Entry Date H such date is not included
above.
2.24 "LIMITATION YEAR" shall mean (select one):
[ ] the Plan Year.
[X] the calendar year.
[ ] other 12-month period ending on .
--------------------
2.29 "NORMAL RETIREMENT AGE" for a Participant shall mean (select and
complete one):
[X] the date he attains age 65 (not to exceed 65).
----
[ ] the date he attains age 65 or the fifth anniversary of the
first day of the Plan Year in which he first became a
Participant, whichever is later.
2.35 "PLAN ADMINISTRATOR" (complete only if other than Employer)
The Employer designates as
-----------------------------------------
the Plan Administrator and his successor shall be that person who
shall from time to time hold the office of (select one):
[ ] President [ ] Treasurer [ ] Other (specify)
or other person designated in writing by the President or Board of
Directors.
2.36 "PLAN YEAR" shall mean (select one):
[ ] the 12-consecutive month period corresponding to the
Employer's fiscal year for income tax purposes as specified on
the Adoption Agreement. (Must be selected if Employer is a
Partnership or Sole Proprietorship.)
[ ] the 12-consecutive month period commencing on each
. (insert month and day)
------------------------------
[X] the calendar year.
[ ] a short Plan Year commencing on
-----------------------------
(insert month/day/year) and ending on
-------------------------
(insert month/day/year) and immediately thereafter the
12-consecutive month period commencing on each
(insert month/day).
-----------------------------
3
<PAGE> 13
2.57 "VALUATION DATE" Plan assets shall be valued (select one):
[ ] annually; the last day of each Plan Year.
[ ] semi-annually; the last day of the sixth and twelfth month of
each Plan Year.
[ ] quarterly; the last day of the third, sixth, ninth and twelfth
month of each Plan Year.
[X] monthly; the last day of each month.
2.59 "YEARS OF SERVICE" for purposes of early retirement and vesting shall
be based on (select one):
[X] HOURLY METHOD. 12-consecutive month computation periods of
1,000 Hours of Service based on (select one):
[ ] the Employee's employment year, beginning on the date
the Employee first completes an Hour of Service (or on
his reemployment date, if applicable) and on each
anniversary thereof.
[X] the Plan Year.
[ ] ELAPSED TIME METHOD. Years and fractions of years of
employment, based on days.
PREDECESSOR EMPLOYER SERVICE. (select one):
[X] Not applicable. There is no predecessor employer.
[ ] The Employer maintains the plan of a predecessor employer. In
such case, the Plan provides that service with the predecessor
employer shall be treated as Years of Service and Months of
Service with the Employer. (Insert name of the predecessor
employer and the effective date of the predecessor employer
plan in the space provided below.)
[ ] There is a predecessor employer but the Employer does not
maintain a plan of the predecessor employer. Service with
such predecessor employer (select one):
[ ] shall be treated as Years of Service and Months of
Service with the Employer. (Insert name of predecessor
employer in the space provided below.)
[ ] shall not be treated as service with the Employer.
------------------------------------------------------
(predecessor employer) (effective date of
predecessor plan)
ARTICLE III - ELIGIBILITY AND PARTICIPATION
3.01 Each Employee shall be eligible to participate in the Plan if he is
employed in the job classification described below, after he has
satisfied the following requirements (complete A, B, C and D)
A. The Plan's age requirement shall be as follows (select one):
[X] No age requirement.
[ ] Attained age (maximum age 21).
-------------
B. The Plan's service requirement shall be as follows (select
one):
[ ] No service requirement.
[X] Completion of 12 Month(s) of Service.
----
This requirement shall apply (select one):
[X] to all contributions, including salary
reduction, thrift, matching and profit
sharing contributions.
[ ] only to salary reductions and thrift
contributions. The service requirement for
matching and profit sharing contributions
shall be Month(s) of Service.
[ ] only to salary reduction, thrift and matching
contributions. The service requirement for
profit sharing contributions shall be
------
Month(s) of Service.
C. The service requirement(s) under B above shall apply (select
one):
[ ] Not applicable. There is no service requirement.
[X] to present and future Employees.
4
<PAGE> 14
[ ] only to persons who are Employees on the Effective
Date of the Plan. The service requirement(s) for
persons who become Employees after the Effective Date
of the Plan shall be as follows: (select one):
[ ] For all contributions, including salary
reduction, thrift, matching and profit
sharing contributions:____________Month(s) of
Service.
[ ] For salary reduction and thrift
contributions:____________Month(s) of
Service. For matching and profit sharing
contributions:____________Month(s) of Service.
[ ] For salary reduction, thrift and matching
contributions:____________Month(s) of
Service. For profit sharing contributions:
______________Month(s) of Service.
NOTE: If the first option under Section 2.15 above is
selected, any age requirement under A above must not exceed
age 20-1/2 and any service requirement under B or C above must
not exceed 6 months, unless full and immediate vesting is
selected in Section 11.03 below in which case up to 18 months
may be used for thrift, matching and profit sharing
contributions. If the first option under Section 2.15 above is
not selected, (1) the service requirement for salary reduction
contributions must not exceed 12 months, and (2) the service
requirement for thrift, matching and profit sharing
contributions must also not exceed 12 months unless full and
immediate vesting under Section 11.03 below is selected in
which case up to 24 months may be used.
D. The Months of Service requirement(s) under B and C above shall
be based on (select one)
[ ] NOT APPLICABLE. There is no service requirement.
[X] HOURLY METHOD. Computation periods based on
consecutive months during which the Employee
completes a number of Hours of Service equal to at
least 83-1 /3 times the number of Months of Service
specified in B or C above.
If the hourly method is selected above and the Months
of Service requirement is exactly 12 months, complete
the following:
The second and succeeding eligibility computation
periods shall be based on (select one):
[ ] the Employee's employment year, beginning on
the date the Employee first completes an Hour
of Service (or on his reemployment date, if
applicable) and on each anniversary thereof.
[X] the Plan Year, commencing with the first Plan
Year which begins after the date the Employee
first completes an Hour of Service (or after
his reemployment date, if applicable) .
[ ] ELAPSED TIME METHOD. A period of employment of 30
days multiplied by the number of Months of Service
specified in B or C above during which the Employee
does not have to complete a specific number of Hours
of Service.
JOB CLASSIFICATION (select as appropriate)
[ ] All job classifications.
[X] All job classifications except:
[X] Hourly Paid.
[ ] Commission Paid.
[ ] Salaried Paid.
[X] Employees under a comparable Employer plan.
[X] Employees covered by a collective bargaining agreement
(if retirement benefits have been the subject of good
faith negotiations).
[ ] Individuals who perform services for the Employer
pursuant to an agreement between the Employer and a
leasing organization.
[ ] Other________________________________________ (specify)
5
<PAGE> 15
RELATED EMPLOYER COVERAGE (select as appropriate)
[ ] Not Applicable. There are no Related Employers.
[X] Employees of any employer required to be aggregated with the
Employer under Section 414(b), (c) or (m) of the Code (select
one):
[X] shall
[ ] shall not
be covered by the Plan.
ARTICLE V - EMPLOYER CONTRIBUTIONS
5.01 SOURCE OF CONTRIBUTIONS. Employer contributions to the Plan for any
Plan Year shall be made (select one):
[X] without regard to current or accumulated Profits.
[ ] subject to Section 5.01 of the Basic Plan Document, only out
of current or accumulated Profits for the fiscal year ending
with or within the Plan Year.
5.04 MATCHING CONTRIBUTIONS. The Employer shall make matching contributions
for each eligible Participant (as specified in Section 8.03 below)
each Plan Year as follows (select one):
[X] NOT APPLICABLE. No matching contributions shall be made by the
Employer under the Plan.
[ ] FIXED MATCH. The Employer shall contribute an amount equal to
the percentage of the Participant's salary reduction
contributions and/or thrift contributions for the Plan Year as
specified in A and B below.
[ ] FLEXIBLE MATCH. If no resolution is made by the Board of
Directors, the Employer shall contribute an amount for each
Participant equal to the percentage of his salary reduction
contributions and/or thrift contributions for the Plan Year as
specified in A and B below.
A. MATCHING PERCENTAGE. (select as appropriate)
[ ] 25% [ ] 50% [ ] 75%
[ ] ________% (insert single percentage)
B. LIMITS ON MATCHING CONTRIBUTIONS. The amount of
matching contributions shall be limited as follows
(select as appropriate):
[ ] The matching contribution on behalf of each
Participant each Plan Year shall not exceed
$__________ (insert dollar amount).
[ ] Only __________ (insert percentage or dollar
amount) of the Participant's Compensation
while a Participant each Plan Year shall be
matched.
[ ] OPTIONAL MATCH. The Employer shall contribute an amount (if
any) equal to a percentage of each Participant's salary
reduction contributions and/or thrift contributions for the
Plan Year as specified by resolution of the Board of Directors
each Plan Year. The amount of matching contributions may be
subject to a maximum as specified by the Board of Directors.
The matching percentage and any maximum shall be applied
uniformly to all Participants.
5.05 QUALIFIED MATCHING CONTRIBUTIONS (select one)
[X] Not applicable. There are no matching contributions under the
Plan.
[ ] The matching contributions under Section 5.04 (select one):
[ ] shall
[ ] shall not
be designated as Qualified Matching Contributions to be
included in the Actual Deferral Percentage Test.
NOTE: If such designation is made, matching contributions must be fully vested
when made and may not be distributed until age 59-1/2, death, disability or
termination of employment.
6
<PAGE> 16
5.06 PROFIT SHARING CONTRIBUTIONS. The Employer shall make profit sharing
contributions to the Plan for each Plan Year as follows (select one):
[X] NOT APPLICABLE. No profit sharing contributions shall be made
by the Employer.
[ ] DISCRETIONARY FORMULA. An amount as determined each year by
resolution of the Board of Directors.
[ ] FIXED FORMULA. An amount equal to ________% of the total
Compensation paid to eligible Participants during the fiscal
year which ends with or within the Plan Year.
[ ] COMBINATION FIXED/DISCRETIONARY FORMULA. An amount equal to
________% of the total Compensation paid to eligible
Participants during the fiscal year which ends with or within
the Plan Year, but not in excess of $__________, plus an
amount as determined each year by resolution of the Board of
Directors.
[ ] PER CAPITA FORMULA. The Employer shall contribute $___________
for each eligible Participant, or such other amount as
determined each year by the Board of Directors.
ARTICLE VI - PARTICIPANT CONTRIBUTIONS, ROLLOVERS AND TRANSFERS
6.01 SALARY REDUCTION AND THRIFT CONTRIBUTIONS (select A, B, C or D):
and
6.02 [ ] A. NOT APPLICABLE. No salary reduction or thrift
contributions shall be permitted or required under
the Plan.
[X] B. SALARY REDUCTION ONLY. Each Participant may contribute a
percentage of his Compensation on a pre-tax basis by
salary reduction pursuant to Section 7.04 below.
[ ] C. THRIFT ONLY. Each Participant may contribute a percentage
of his Compensation on an after-tax basis by payroll
deduction pursuant to Section 7.04 below. (Available only
by matching contributions are specified in Section 5.04
above.)
[ ] D. COMBINATION SALARY REDUCTION/THRIFT. Each Participant may
contribute a percentage of his Compensation on either a
pre-tax basis by salary reduction or an after-tax basis
by payroll deduction pursuant to Section 7.04 below.
Participants (select one)
[ ] shall
[ ] shall not
be permitted to make both salary reduction and thrift
contributions in the same Plan Year.
6.03 VOLUNTARY EMPLOYEE CONTRIBUTIONS UNDER THE PLAN (select one):
[X] shall be permitted.
[ ] shall not be permitted.
6.04 ROLLOVERS AND TRANSFERS TO THE PLAN (select one):
and
6.05 [X] shall be permitted.
[ ] shall not be permitted.
ARTICLE VII - PAYROLL AGREEMENTS
7.04 AMOUNT OF SALARY REDUCTION OR THRIFT CONTRIBUTION. (select one):
[ ] Not Applicable. No salary reduction or thrift contributions
are permitted under the Plan.
[X] Salary reduction and/or thrift contributions are specified
under Article VI above. The following limits shall apply
(complete A and B):
A. The maximum salary reduction or thrift contribution
shall be (select one):
[ ] Not applicable. No maximum shall apply.
7
<PAGE> 17
[X] 20% (whole percent) of Compensation for the
[X] Plan Year. [ ] payroll period.
[ ] $___________ per [ ] Plan Year. [ ] payroll
period.
B. The minimum salary reduction or thrift contributions
shall be (select one):
[ ] Not applicable. No minimum shall apply.
[X] 2% (whole percent) of Compensation for the
[X] Plan Year. [ ] payroll period.
[ ] $___________ per [ ] Plan Year. [ ] payroll
period.
NOTE: If both salary reduction and thrift contributions are
permitted in the same Plan Year, any limits specified above
shall apply on an aggregate basis.
7.05 A Participant who terminates his Payroll Agreement may enter into a
new Payroll Agreement as of any subsequent Entry Date after a waiting
period of (select one):
[ ] Not applicable. There shall be no waiting period.
[X] 3 months (not to exceed 6 months).
NOTE: No waiting period is permitted if the first option is selected
under Section 2.15 above.
ARTICLE VIII - ALLOCATION AND VALUATION
8.02 Any Profit sharing contributions made by the Employer shall be
allocated to Participants who satisfy all of the following
requirements (select one or more as appropriate):
[X] A. Not Applicable. No profit sharing contributions shall
be made by the Employer.
[ ] B. Completion of at least one Hour of Service during the
Plan Year. (Available only if no other selection is
made below.)
[ ] C. Completion of at least 501 Hours of Service during
the Plan Year.
[ ] D. Completion of at least 1,000 Hours of Service during
the Plan Year.
[ ] E. Employment with the Employer on the last day of the
Plan Year.
Participants who are not eligible for an allocation as specified above
but die, retire or become disabled during the Plan Year (select one):
[ ] not applicable. Option B has been selected above. All
Participants who complete at least one Hour of Service during
the Plan Year shall receive an allocation.
[ ] shall receive an allocation.
[ ] shall not receive an allocation.
ALLOCATION FORMULA. Subject to the top-heavy minimum contribution
requirements in Article XXVII of the Basic Plan Document, profit
sharing contributions for any Plan Year shall be allocated to eligible
Participants (as determined in Section 8.02 above) as follows (select
one):
[ ] NON-INTEGRATED FORMULA. (select one):
[ ] COMPENSATION FORMULA. The allocation shall be in the
ratio that each eligible Participant's Compensation
bears to the total Compensation of all eligible
Participants.
[ ] PER CAPITA FORMULA. Each eligible Participant shall
receive the dollar amount specified in Section 5.06
above, or such other dollar amount as determined each
year by resolution of the Board of Directors. (This
option must be selected if the per capita formula is
selected in Section 5.06 above.)
[ ] INTEGRATED FORMULA. In accordance with the allocation formula
set forth in Section 8.02(b) of the Basic Plan Document. For
purposes of such allocation formula, the following factors
shall apply (complete A and B):
8
<PAGE> 18
A. INTEGRATION LEVEL. The Integration Level shall be
(select one:)
[ ] the Taxable Wage Base.
[ ] $__________________ (insert dollar amount not
to exceed the Taxable Wage Base).
[ ] ____________% (insert percentage not to
exceed 100% of the Taxable Wage Base).
B. Maximum Disparity Rate. The Maximum Disparity Rate
shall be ________% (insert percentage not to exceed
5.7%). If the Integration Level is below the Taxable
Wage Base, the 5.7% factor shall be reduced in
accordance with the table below.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
IF THE INTEGRATION LEVEL IS THE 5.7% FACTOR IS REDUCED TO
--------------------------------------------------------------------------------
<S> <C>
Not greater than the greater of $10,000 or
20% of the Taxable Wage Base. No Reduction
--------------------------------------------------------------------------------
Greater than the amount in the box above but 4.3%
not greater than 80% of the Taxable Wage Base.
--------------------------------------------------------------------------------
Greater than 80% of the Taxable Wage Base. 5.4%
--------------------------------------------------------------------------------
</TABLE>
8.03 Any Matching contributions shall be allocated to Participants as
follows (select one):
[X] Not applicable. No matching contributions shall be made by the
Employer.
[ ] Matching contributions shall be allocated during the Plan Year
on a monthly, quarterly or semi-annual basis to all
Participants who have salary reduction or thrift contributions
during the period for which the matching contributions are
being made.
[ ] Matching contributions shall be allocated as of the last day
of the Plan Year to Participants who have salary reduction or
thrift contributions during the Plan Year and satisfy all of
the following requirements (select one or more as
appropriate):
[ ] A. Completion of at least one Hour of Service during the
Plan Year. (Available only if no other selection is
made below.)
[ ] B. Completion of at least 501 Hours of Service during
the Plan Year.
[ ] C. Completion of at least 1,000 Hours of Service during
the Plan Year.
[ ] D. Employment with the Employer on the last day of the
Plan Year.
Participants who are not eligible for an allocation as
specified above but die, retire or become disabled during the
Plan Year (select one):
[ ] Not applicable. Option A has been selected above. All
Participants who have salary reduction or thrift
contributions during the Plan Year and complete at
least one Hour of Service during the Plan Year shall
receive an allocation.
[ ] shall receive an allocation.
[ ] shall not receive an allocation.
8.05 FORFEITURES. Amounts forfeited by Participants shall be applied as
follows (select one):
[X] Not applicable. There are no forfeitures under the Plan. All
accounts are fully vested.
[ ] All forfeitures shall be reallocated to eligible Participants
(as determined in Section 8.02 above) in the same manner as
profit sharing contributions. If profit sharing contributions
are not selected in Section 5.06 above, or if the Per Capita
allocation formula is selected in Section 8.02 above,
forfeitures shall be reallocated to eligible Participants on
the basis of their Compensation.
9
<PAGE> 19
[ ] Any forfeitures derived from profit sharing contributions
shall be reallocated to eligible Participants (as determined
in Section 8.02 above) in the same manner as profit sharing
contributions. If the Per Capita allocation formula is
selected under Section 8.02 above, the reallocation shall be
on the basis of each eligible Participant's Compensation. Any
forfeitures derived from matching contributions shall be used
to reduce Employer matching contributions otherwise payable
for the Plan Year in which such forfeitures arise, and for
each succeeding Plan Year if necessary, until such forfeitures
have been exhausted.
[ ] All forfeitures shall be used to reduce Employer contributions
otherwise payable for the Plan Year in which such forfeitures
arise, and for each succeeding Plan Year if necessary, until
such forfeitures have been exhausted.
ARTICLE IX - PARTICIPANT DIRECTION OF INVESTMENTS
9.01 Contributions to the Plan shall be invested as follows (select one):
[ ] The Trustee shall make all investment selections.
[X] The Participant shall make all investment selections.
[ ] The Participant shall designate how the following
contributions shall be invested. All other contributions shall
be invested in accordance with instructions of the Trustee
(select as appropriate):
[ ] Salary reduction contributions.
[ ] Matching contributions.
[ ] Thrift contributions.
[ ] Profit sharing contributions.
[ ] Voluntary contributions.
[ ] Rollover contributions, including trust-to-trust
transfers.
[ ] Contributions made prior to ________________________
(insert date).
[ ] Contributions made after _________________________
(insert date).
ARTICLE XI - TERMINATION OF EMPLOYMENT AND VESTING
11.03 The interest of a Participant in any matching contributions under
Section 5.04 and any profit sharing contributions under Section 5.06
shall vest and become nonforfeitable in accordance with the following
vesting schedule (select one and complete as appropriate):
[X] NOT APPLICABLE. No profit sharing or matching contributions
shall be made by the Employer.
[ ] SINGLE VESTING SCHEDULE. The vesting schedule to be applied
for both matching and profit sharing contributions shall be
Schedule _____. (Select and insert one of the vesting schedules
described below.)
[ ] DUAL VESTING SCHEDULE. The vesting schedule to be applied for
matching contributions shall be Schedule ______ and for profit
sharing contributions shall be Schedule ______. (Select and
insert in each blank one of the vesting schedules described
below - one of the schedules must be Schedule A.)
VESTING SCHEDULES.
A. Full and immediate vesting.
B. Graduated vesting (insert percentages in blanks)
________% after 1 Year of Service
________% after 2 Years of Service
________% (not less than 20) after 3 Years of Service
________% (not less than 40) after 4 Years of Service
________% (not less than 60) after 5 Years of Service
________% (not less than 80) after 6 Years of Service
100% after 7 Years of Service.
C. Cliff vesting - 100% after ________ (not to exceed 5) Years
of Service.
10
<PAGE> 20
D. Other (Explain - the schedule must provide a
vested percentage which at all times is at
least as great as the percentage required
under vesting schedule B. or C.)
_____________________________________________
11.04 Exclusion of Years of Service for vesting purposes, including
the Top-Heavy vesting schedule in Section 27.04.
In computing a Participant's nonforfeitable interest in his
Employer Contribution Account, the following Years of Service
shall be excluded (select as appropriate):
[X] Not applicable. All Years of Service shall be
counted.
[ ] Years of Service before the Employer maintained this
Plan or a predecessor plan.
[ ] Years of Service prior to attainment of age _____
(not to exceed age 18).
ARTICLE XIII - DISTRIBUTION AND FORM OF BENEFITS
13.03(a) If a Participant terminates employment for any reason other
than death or Total and Permanent Disability prior to his
Early Retirement Date, if applicable, or Normal Retirement
Age, and the value of his Vested Account Balance exceeds
$3,500, the vested portion of his Employer Contribution
Account shall be distributed (select one):
[X] A. as soon as administratively possible
following his termination (provided the
Participant and his spouse, if applicable,
agree to such distribution pursuant to
Article XIII of the Basic Plan Document).
[ ] B. no earlier than his Early Retirement Date,
if applicable, or his Normal Retirement Age.
13.03(c) PARTICIPANT ELECTION TO DEFER COMMENCEMENT OF BENEFITS. The
Plan permits a terminated Participant whose Vested Account
Balance exceeds $3,500 to defer the commencement of benefits
until the later of his Normal Retirement Age and age 62. In
addition, such a Participant (select one):
[X] shall
[ ] shall not
be permitted to further defer the commencement of his
benefits until his Required Beginning Date as defined in
Section 15.06 of the Basic Plan Document.
ARTICLE XIV - JOINT AND SURVIVOR REQUIREMENTS
14.06 The full qualified joint and survivor annuity and
preretirement survivor annuity requirements of Section 401
(a)(11) and Section 417 of the Code (select one):
[ ] A. shall apply to all Participants at all times.
[X] B. shall not apply to a Participant until (and
unless) the Participant elects to receive
his benefits under the Plan in the form of an
annuity.
NOTE: If the Plan is (or becomes) a direct or indirect
transferee of a defined benefit plan, money purchase plan,
target benefit plan, stock bonus plan, or a profit sharing
plan which is subject to the full survivor annuity
requirements of Section 401 (a)(11) and Section 417 of the
Code, then such requirements shall apply to all Participants
at all times and the selection of B. above shall be voided.
11
<PAGE> 21
ARTICLE XVI - WITHDRAWALS FROM ACCOUNTS
The Plan allows Participants to make in-service withdrawals
from Voluntary Contribution Accounts, if voluntary
contributions are permitted. In addition, Participants shall
be permitted to make in-service withdrawals from other
accounts, as follows (select as appropriate):
[ ] Not Applicable. Additional withdrawals are not
permitted.
[ ] Withdrawals from all other accounts at age
59-1/2 are permitted.
[ ] Withdrawals from all other accounts at Normal
Retirement Age are permitted.
[X] Hardship withdrawals from Profit Sharing
Contribution Accounts and Matching Contribution
Accounts are permitted.
[X] Hardship withdrawals from Salary Reduction Accounts
(excluding any income accrued after 1988), are
permitted.
[ ] Withdrawals from Profit Sharing Contribution Accounts
and Matching Contribution Accounts under the IRS
2-year rule (described in Section 16.05 of the Basic
Plan Document) are permitted.
[X] Withdrawals from Thrift Contribution Accounts and
Rollover Contribution Accounts are permitted.
16.01 The minimum amount of any withdrawal shall be (select one):
[X] not applicable.
[ ] the lesser of $________(insert dollar amount, not to
exceed $1,000) or the Participant's total vested
account balance under the Plan, excluding any income
accrued after 1988 under his Salary Reduction
Account.
ARTICLE XVII - LOANS
17.01 (Select one)
[X] No loans to Participants shall be permitted under the
Plan.
[ ] Loans to Participants shall be permitted under
the Plan in an amount not to exceed the lesser
of (a) one-half of the Participant's non-forfeitable
interest under the Plan, or (b) $50,000.
17.02 A Participant shall be eligible for loans after he completes
the following number of years of participation (select one):
[ ] Not applicable.
[ ] years (insert number, not to exceed 5).
17.03 The minimum amount of any loan shall be (select one):
[ ] Not applicable.
[ ] $___________(insert dollar amount, not to exceed
$1,000)
ARTICLE XXIV - LIMITATIONS ON ALLOCATIONS
LIMITATIONS-ADDITIONAL EMPLOYER PLANS. If the Employer
maintains, or ever maintained, another qualified plan in which
any Participant in this Plan is (or was) a participant or
could possibly become a participant, the Employer must
complete Sections 24.03 and 24.04 below. The Employer must
also complete these Sections H it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an
individual medical account, as defined in Section 415(1)(2) of
the Code, under which amounts are treated as Annual Additions
with respect to any Participant in this Plan. If you maintain
such a plan or plans, failure to complete these Sections may
adversely affect the qualification of the plans you maintain.
24.03 CODE SECTION 415 LIMITATIONS - MULTIPLE DEFINED CONTRIBUTION
PLANS (select one)
[X] Not applicable. Employer does not maintain another
qualified defined contribution plan which covers
Participants of this Plan.
12
<PAGE> 22
[ ] Not applicable. Employer does maintain another
qualified defined contribution plan which covers
Participants of this Plan, but such other plan is a
Master or Prototype plan.
[ ] Employer does maintain another qualified defined
contribution plan, other than a Master or Prototype
Plan, which covers Participants of this Plan. If a
Participant is covered by such other plan, (select
one):
[ ] The provisions of Section 24.02 shall
apply as if the other plan were a Master or
Prototype Plan.
[ ] (Provide the method under which such other
plan will limit the total Annual Additions to
the Maximum Permissible Amount, and will
properly reduce any Excess Amounts, in a
manner that precludes Employer discretion.)
_____________________________________________
_____________________________________________
24.04 CODE SECTION 415 LIMITATIONS - COMBINED PLANS (select one)
[ ] Not applicable. Employer has never maintained a
qualified defined benefit plan which covers or
covered Participants of this Plan.
[X] Employer either maintains or has maintained a
qualified defined benefit plan which covers
Participants of this Plan. (In the space below,
provide language which will satisfy the 1.0
limitation of Section 415(e) of the Code.)
______________________________________________________
______________________________________________________
ARTICLE XXVI - LIMITATIONS ON EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS
26.04 FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS SHALL BE (select
one):
[X] not applicable. No matching contributions shall be
made under the Plan.
[ ] not applicable. There are no forfeitures under the
Plan. All accounts are fully vested.
[ ] applied to reduce Employer contributions for the Plan
Year in which such Excess Aggregate Contributions
arise, but allocated in accordance with the next
option below to the extent such Excess Aggregate
Contributions exceed Employer contributions
for such Plan Year or if the Employer has already
contributed for such Plan Year.
[ ] allocated, after all other forfeitures under the
Plan, to all Participants who are Non-Highly
Compensated Employees in the ratio that each such
Employee's Compensation bears to the total
Compensation of all such Employees.
ARTICLE XXVII - TOP HEAVY PROVISIONS
27.02 PRESENT VALUE UNDER DEFINED BENEFIT PLANS (SELECT ONE):
[X] Not applicable. Employer does not maintain a
qualified defined benefit plan which covers
Participants of this Plan.
[ ] Employer maintains a qualified defined benefit plan
which covers Participants of this Plan. For purposes
of establishing Present Value to compute the
Top-Heavy Ratio, any benefit shall be discounted only
for mortality and interest based on the following
(complete both):
Interest rate:______________%
Mortality table:____________________________________
13
<PAGE> 23
27.03 MINIMUM ALLOCATION - MULTIPLE PLANS (SELECT ONE):
[X] Not applicable. Employer does not maintain another
qualified plan which covers Participants of this
Plan.
[ ] Employer maintains another qualified plan which
covers Participants of this Plan. The minimum
Top-Heavy allocation requirement applicable to this
Plan (select one):
[ ] shall be met by this Plan.
[ ] shall be met by another plan or plans of the
Employer. (Indicate the name(s) of such
other plan(s) in the space provided below.)
______________________________________________
27.04 VESTING SCHEDULE IN TOP-HEAVY STATUS. If the Plan becomes
Top-Heavy, the Plan's minimum vesting schedule shall be 20%
after 2 Years of Service, increasing by 20% for each Year of
Service thereafter, but not to exceed 100% after 6 Years of
Service.
If the Plan becomes Top-Heavy, the above minimum Top-Heavy
vesting schedule (select one):
[ ] shall apply only for Plan Years in which the Plan is
in Top-Heavy status.
[X] shall continue to apply for succeeding Plan Years,
irrespective of whether the Plan is actually in
Top-Heavy status for such Plan Years.
14
<PAGE> 24
It is understood and agreed that the Sponsoring Organization shall not be
responsible for the tax and legal aspects of the Plan and Trust, full
responsibility for which is assumed by the undersigned Employer, who hereby
acknowledges that he has consulted legal and tax counsel to the extent
considered necessary.
The Employer may not rely on an opinion letter issued by the National Office of
the Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Internal Revenue Code. In order to obtain reliance with
respect to Plan qualification, the Employer must apply to the appropriate Key
District Office of the Internal Revenue Service for a determination letter.
This Adoption Agreement may be used only in conjunction with the 401(k)/Profit
Sharing Prototype Plan Basic Plan Document #03.
This Plan and Trust is signed this 14th day of March, 1994
---- ----- --
MOORE HANDLEY. INC.
---------------------------------------
(name of Employer)
By: L. Ward Edwards
---------------------------------------
(authorized signature)
MOORE HANDLEY MACHINE TOOL-INDUSTRIAL, INC.
-------------------------------------------
(name of additional Employer)
By: L. Ward Edwards
---------------------------------------
(authorized signature)
Appointment as Trustee is accepted
L. Ward Edwards
- - ----------------------------------
Gary Mercer
- - ---------------------------------- Appointment as Plan Administrator is accepted
- - ---------------------------------- --------------------------------------------
(as Trustee(s)) (to be signed by Plan Administrator if other
than Employer)
Failure to properly fill out this Adoption Agreement may result in the
disqualification of the Plan.
The Sponsoring Organization will inform the adopting Employer of any amendments
made to the Prototype Plan or of the discontinuance or abandonment of the
Prototype Plan, provided the Employer complies with the initial and continuing
registration requirements of the Sponsoring Organization. The adopting Employer
should keep the initial registration form and all registration renewal forms
with its copy of the Plan.
The Sponsoring Organization is: New England Mutual Life Insurance Company
500 Boylston Street
Boston, MA 02117
Tel. No. (617) 578-6158
This prototype plan is an important legal document. You should consult with
your attorney regarding the legal and tax implications of adopting this plan.
Although the overall form of the plan has been approved by the Internal Revenue
Service, neither The New England nor its agents can act as your attorney in
qualifying your plan with the IRS, or assure that it automatically is suited to
your needs.
15
<PAGE> 25
ATTACHMENT TO THE
MOORE HANDLEY SALARIED EMPLOYEES' SAVINGS PLAN AND TRUST
Name: Moore Handley Machine Tool - Industrial, Inc.
Address: __________________________________________________________________
__________________________________________________________________
Employer
I.D. Number: __________________________________________________________________
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 781
<SECURITIES> 0
<RECEIVABLES> 20,349
<ALLOWANCES> 0
<INVENTORY> 18,713
<CURRENT-ASSETS> 42,747
<PP&E> 15,270
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<COMMON> 251
0
0
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<EPS-DILUTED> .65
</TABLE>
