<PAGE>
As filed with the Securities and Exchange Commission on March 2, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_____________________
MICRO WAREHOUSE, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 06-1192793
(State of Incorporation) (I.R.S. Employer
Identification No.)
535 Connecticut Avenue
Norwalk, Connecticut 06854
(203) 899-4000
(Address and Telephone Number of Principal Executive Offices)
_____________________
MICRO WAREHOUSE, INC. DEFERRED COMPENSATION PLAN
(Full Title of the Plan)
______________________
Bruce L. Lev, Esq.
Executive Vice President, Secretary and General Counsel
535 Connecticut Avenue
Norwalk, Connecticut 06854
(203) 899-4000
(Name, Address, Including Zip Code and Telephone Number, Including Area Code,
of Agent For Service)
______________________
<TABLE>
<CAPTION>
=========================================================================================================
CALCULATION OF REGISTRATION FEE
=========================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount To Be Offering Price Per Aggregate Offering Amount of
to be Registered (1) Registered Obligation Price(2) Registration Fee
<S> <C> <C> <C> <C>
Deferred $5,000,000 100% $5,000,000 $1,475
Compensation
Obligations
=========================================================================================================
</TABLE>
(1) The Deferred Compensation Obligations are unsecured obligations of Micro
Warehouse, Inc. (the "Company") to pay deferred compensation in the future
in accordance with the terms of the Micro Warehouse, Inc. Deferred
Compensation Plan (the "Plan").
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933.
<PAGE>
PART I
A prospectus setting forth the information required by Part I of
the Form S-8 will be sent or given to Plan participants as specified by Rule
428(b)(1)(i) of the Securities Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 and the Company's Quarterly Report on Form 10-Q for each
of the Quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 as
filed by the Company with the Securities and Exchange Commission (the
"Commission") are hereby incorporated by reference in this Registration
Statement. All other reports filed by the Company with the Commission pursuant
to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), since the end of the fiscal year ended December 31, 1996
are also hereby incorporated by reference.
All documents and reports filed by the Company pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities being offered
have been sold or which deregisters all such securities then remaining unsold
are deemed to be incorporated by reference in this Registration Statement and to
be a part hereof from the respective dates of filing of such documents or
reports; provided, however, that the documents enumerated above or subsequently
filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act in each year during which the offering made by this Registration
Statement is in effect prior to the filing with the Commission of the Company's
Annual Report on Form 10-K covering such year shall not be incorporated by
reference in this Registration Statement or be a part hereof from and after the
filing of such Annual Report on Form 10-K.
Any statement contained in a document incorporated or deemed to
be incorporated by reference herein is deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded will not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
The securities being registered under this Registration Statement
consist of obligations (the "Obligations") of the Company to pay compensation
deferred by eligible employees under the terms of the Plan. Subject to the
provisions of the Plan, an eligible employee may enter into an agreement with
the Company providing for the deferral of the payment of a specified portion or
amount of compensation payable by the Company to the eligible employee. The
amount ultimately payable to the eligible employee in respect of such a deferral
election will be adjusted to reflect the investment experience of one or more of
the benchmarks designated under the Plan and selected by the eligible employee.
Such amounts are payable to the employee commencing, at the election of the
employee, on either (i) the date designated by the employee which date shall be
no earlier than the beginning of the fourth year following the year of deferral
in accordance with the terms of the Plan, or (ii) upon retirement in a single
lump sum or in substantially equal annual installments over 5, 10 or 15 years;
provided, however, that payment of employees' deferred amounts will be
accelerated and paid in a single lump sum on certain events, such as the
termination of employment of the employee, and may also be accelerated upon a
termination of the Plan, and, provided, further, that the Plan administrators
may elect to pay a participant's deferred amounts in a single lump sum upon
certain events, such as death of the employee. Neither an eligible employee nor
any other person shall have any right to commute, sell, assign, transfer,
pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate,
alienate or convey in advance of actual receipt, the amounts, if any, payable
under the Plan, or any part thereof, which are, and all rights to which are
expressly declared to be, unassignable and non-transferrable.
The Obligations are unsecured general obligations of the Company
which rank pari passu with other unsecured and unsubordinated indebtedness of
the Company that may be outstanding from time to time. No sinking fund has or
will be established with respect to the Obligations. The Obligations are not
subject to redemption, in whole or in part, prior to the payment dates
applicable under the Plan and the Obligations are not convertible into
<PAGE>
another security of the Company. The Company reserves the right to amend or
terminate the Plan at any time, except that no such amendment or termination
shall adversely affect the rights of employees with respect to amounts deferred
prior to such amendment or termination. In the event the Plan is terminated,
the Company may decide, in its sole discretion, either to pay the Obligations as
they come due in accordance with the employees' initial elections or to pay the
Obligations immediately upon the termination of the Plan.
Except as stated above, the Obligations do not enjoy the benefit
of any affirmative or negative pledges or covenants by the Company. Although
the Company has established a grantor trust to fund the payment of the
Obligations (the "Trust"), the Company retains discretion to determine the
amount and timing of its contributions to the Trust and the assets of the Trust
are subject to the claims of the Company's creditors. The trustee of the Trust
is required to administer the Trust in accordance with its terms, but the
trustee's obligations and authority are limited to the amounts which may be held
in the Trust from time to time and the trustee is subject to the direction of
the Company with respect to the payment of the Obligations. Accordingly, the
trustee of the Trust does not have any independent obligation or authority to
act on behalf of any employee and each employee will be responsible for acting
on his or her own behalf with respect to, among other things, the giving of
notices, responding to requests for consents, waivers or amendments, enforcing
covenants and taking action upon default.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The legality of the Obligations being registered has been passed
upon for the Company by Bruce L. Lev, Esq., Executive Vice President, Secretary
and General Counsel of the Company. As of March 2, 1998, Mr. Lev is not a
participant in the Plan. However, Mr. Lev will be eligible to be a participant
in the Plan.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's certificate of incorporation and by-laws provide
for the indemnification of the directors, officers, employees, and agents of the
Company and its subsidiaries to the fullest extent that may be permitted by
Delaware law from time to time. Under Delaware law, the Company may indemnify
directors, officers, employees, and other individuals against expenses
(including attorneys' fees), judgments, fines, and amounts paid in settlement in
connection with specified actions, suits, or proceedings, whether civil,
criminal, administrative, or investigative (other than an action by or in the
right of the Company (a "derivative action")) if the person acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his/her conduct was unlawful. A
similar standard of care is applicable in the case of a derivative action,
except that indemnification only extends to expenses (including attorneys' fees)
incurred in connection with the defense or settlement of such an action and
Delaware law requires court approval before there can be any indemnification of
expenses where the person seeking indemnification has been found liable to the
Company.
The Company's certificate of incorporation provides, among other
things, that the Company will, to the fullest extent permitted by Section 145 of
the General Corporation Law of Delaware, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under such section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by such section, and the
indemnification provided for therein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in their official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. The certificate also includes a
provision eliminating directors' exposure to liability for monetary damages for
breaches of their fiduciary duty of care as directors. The provision does not
eliminate the directors' (i) liability for monetary damages for breach of the
duty of loyalty to the Company or its stockholders, (ii) liability for acts or
omissions not in good faith or involving intentional misconduct or a knowing
violation of law, (iii) liability for the improper purchase or redemption of
stock or the payment of improper dividends, and (iv) liability for any
transaction from which a director received an improper personal benefit. In
addition, the provision does not apply to claims made against directors by third
parties or to persons who are officers as well as directors when acting in their
capacities as officers.
The Company is a party to indemnification agreements (the
"Indemnification Agreements") with each of its officers and directors (each an
"Indemnitee"). Under these Indemnification Agreements, the Company must
indemnify an Indemnitee to the fullest extent permitted by Delaware law for
losses and expenses incurred in connection with actions in which the Indemnitee
is involved by reason of having been a director or employee of the Company. The
Company is also obligated to advance expenses an Indemnitee may incur in
connection with such
<PAGE>
actions before any resolution of the action, and the Indemnitee may sue to
enforce his or her right to indemnification or advancement of expenses.
The Company also maintains an insurance policy insuring its
directors and officers against liability for certain acts and omissions while
acting in their official capacities.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
Exhibit
Number Document
------- -------------------------------------------------------
4.1 Micro Warehouse, Inc. Deferred Compensation Plan.
5.1 Opinion of Counsel as to legality of securities being
registered.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney (included on signature page).
The Company undertakes to submit or has submitted the Plan and
any amendment thereto to the Internal Revenue Service ("IRS") in a timely manner
and has made or will make all changes required by the IRS in order to qualify
the Plan.
Item 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration Statement to
include any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change to
such information in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Norwalk, State of Connecticut, on this 3rd day of
March, 1998.
MICRO WAREHOUSE, INC.
By: /s/ Peter Godfrey
--------------------------------
Peter Godfrey
CHAIRMAN OF THE BOARD, CHIEF
EXECUTIVE OFFICER AND DIRECTOR
(PRINCIPAL EXECUTIVE OFFICER)
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Peter Godfrey and Bruce L. Lev, and each of them, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement (or any other registration statement for the same offering that is to
be effective upon filing pursuant to Rule 462 under the Securities Act) and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, and to take such actions in, and file with the
appropriate authorities in, whatever states said attorneys-in-fact and agents,
and each of them, shall determine, such applications, statements, consents and
other documents as may be necessary or expedient to register securities of the
Company for sale, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof and the
registration hereby confers like authority on its behalf.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated:
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Peter Godfrey
- ---------------------------- Chairman of the Board, Chief March 2, 1998
Peter Godfrey Executive Officer and Director
(Principal Executive Officer)
/s/ Felix Dennis
- ---------------------------- Director March 2, 1998
Felix Dennis
/s/ Frederick H. Fruitman
- ---------------------------- Director March 2, 1998
Frederick H. Fruitman
/s/ Joseph M. Walsh
- ---------------------------- Director March 2, 1998
Joseph M. Walsh
/s/ Wayne P. Garten
- ---------------------------- Executive Vice President and March 2, 1998
Wayne P. Garten Chief Financial Officer
(Principal Financial Officer
and Principal Accounting
Officer)
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Number Document
-------------- --------
4.1 Micro Warehouse, Inc. Deferred Compensation Plan.
5.1 Opinion of Counsel as to enforceability of securities being
registered.
23.1 Consent of Counsel (contained in Exhibit 5.1).
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney (included on signature page).
<PAGE>
EXHIBIT 4.1
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
EFFECTIVE MAY 1, 1998
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
Copyright -C- 1997
By Compensation Resource Group, Inc.
All Rights Reserved
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY . . . . . . . . . . . . . . . .6
2.1 SELECTION BY COMMITTEE . . . . . . . . . . . . . . . . . . . . . .6
2.2 ENROLLMENT REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . .6
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION . . . . . . . . . . . .6
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. . . . . . . . . . .6
ARTICLE 3 DEFERRAL COMMITMENTS/CREDITING TAXES . . . . . . . . . . . . . . .7
3.1 MINIMUM DEFERRALS. . . . . . . . . . . . . . . . . . . . . . . . .7
3.2 MAXIMUM DEFERRAL . . . . . . . . . . . . . . . . . . . . . . . . .7
3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM . . . . . . . . . . . .8
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS . . . . . . . . . . . . . .8
3.5 INVESTMENT OF TRUST ASSETS . . . . . . . . . . . . . . . . . . . .8
3.6 VESTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3.7 CREDITING/DEBITING OF ACCOUNT BALANCES . . . . . . . . . . . . . .9
3.8 FICA AND OTHER TAXES . . . . . . . . . . . . . . . . . . . . . . 11
3.9 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4 SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES;
WITHDRAWAL ELECTION. . . . . . . . . . . . . . . . . . . . . . . 11
4.1 SHORT-TERM PAYOUT. . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM . . . . . . . . . 12
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL
EMERGENCIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.4 WITHDRAWAL ELECTION. . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 5 RETIREMENT BENEFIT . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 RETIREMENT BENEFIT . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 PAYMENT OF RETIREMENT BENEFIT. . . . . . . . . . . . . . . . . . 13
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. . . . . . . . . 13
-i-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ARTICLE 6 PRE-RETIREMENT SURVIVOR BENEFIT. . . . . . . . . . . . . . . . . 13
6.1 PRE-RETIREMENT SURVIVOR BENEFIT. . . . . . . . . . . . . . . . . 14
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT . . . . . . . . . . . 14
ARTICLE 7 TERMINATION BENEFIT. . . . . . . . . . . . . . . . . . . . . . . 14
7.1 TERMINATION BENEFIT. . . . . . . . . . . . . . . . . . . . . . . 14
7.2 PAYMENT OF TERMINATION BENEFIT . . . . . . . . . . . . . . . . . 14
ARTICLE 8 DISABILITY WAIVER AND BENEFIT. . . . . . . . . . . . . . . . . . 14
8.1 DISABILITY WAIVER. . . . . . . . . . . . . . . . . . . . . . . . 14
8.2 CONTINUED ELIGIBILITY; DISABILITY BENEFIT. . . . . . . . . . . . 15
ARTICLE 9 BENEFICIARY DESIGNATION. . . . . . . . . . . . . . . . . . . . . 16
9.1 BENEFICIARY. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT . . . . . . . . 16
9.3 ACKNOWLEDGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 16
9.4 NO BENEFICIARY DESIGNATION . . . . . . . . . . . . . . . . . . . 16
9.5 DOUBT AS TO BENEFICIARY. . . . . . . . . . . . . . . . . . . . . 16
9.6 DISCHARGE OF OBLIGATIONS . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 10 LEAVE OF ABSENCE . . . . . . . . . . . . . . . . . . . . . . . . 17
10.1 PAID LEAVE OF ABSENCE. . . . . . . . . . . . . . . . . . . . . . 17
10.2 UNPAID LEAVE OF ABSENCE. . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 11 TERMINATION, AMENDMENT OR MODIFICATION . . . . . . . . . . . . . 17
11.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.2 AMENDMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
11.3 PLAN AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.4 EFFECT OF PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 12 ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.1 COMMITTEE DUTIES . . . . . . . . . . . . . . . . . . . . . . . . 18
12.2 ADMINISTRATION UPON CHANGE IN CONTROL. . . . . . . . . . . . . . 19
12.3 AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.4 BINDING EFFECT OF DECISIONS. . . . . . . . . . . . . . . . . . . 20
12.5 INDEMNITY OF COMMITTEE . . . . . . . . . . . . . . . . . . . . . 20
12.6 EMPLOYER INFORMATION . . . . . . . . . . . . . . . . . . . . . . 20
-ii-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
ARTICLE 13 OTHER BENEFITS AND AGREEMENTS. . . . . . . . . . . . . . . . . . 21
13.1 COORDINATION WITH OTHER BENEFITS . . . . . . . . . . . . . . . . 21
ARTICLE 14 CLAIMS PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . . 21
14.1 PRESENTATION OF CLAIM. . . . . . . . . . . . . . . . . . . . . . 21
14.2 NOTIFICATION OF DECISION . . . . . . . . . . . . . . . . . . . . 21
14.3 REVIEW OF A DENIED CLAIM . . . . . . . . . . . . . . . . . . . . 22
14.4 DECISION ON REVIEW . . . . . . . . . . . . . . . . . . . . . . . 22
14.5 LEGAL ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 15 TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
15.1 ESTABLISHMENT OF THE TRUST . . . . . . . . . . . . . . . . . . . 22
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. . . . . . . . . . . 23
15.3 DISTRIBUTIONS FROM THE TRUST . . . . . . . . . . . . . . . . . . 23
ARTICLE 16 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 23
16.1 STATUS OF PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 23
16.2 UNSECURED GENERAL CREDITOR . . . . . . . . . . . . . . . . . . . 23
16.3 EMPLOYER'S LIABILITY . . . . . . . . . . . . . . . . . . . . . . 23
16.4 NONASSIGNABILITY . . . . . . . . . . . . . . . . . . . . . . . . 23
16.5 NOT A CONTRACT OF EMPLOYMENT . . . . . . . . . . . . . . . . . . 23
16.6 FURNISHING INFORMATION . . . . . . . . . . . . . . . . . . . . . 24
16.7 TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.8 CAPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.9 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.10 NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.11 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.12 SPOUSE'S INTEREST. . . . . . . . . . . . . . . . . . . . . . . . 25
16.13 VALIDITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.14 INCOMPETENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.15 COURT ORDER. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.16 DISTRIBUTION IN THE EVENT OF TAXATION. . . . . . . . . . . . . . 26
16.17 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.18 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL . . . . . . 26
-iii-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MICRO WAREHOUSE, INC.
DEFERRED COMPENSATION PLAN
Effective May 1, 1998
PURPOSE
THE PURPOSE OF THIS PLAN IS TO PROVIDE SPECIFIED BENEFITS TO A
SELECT GROUP OF MANAGEMENT AND HIGHLY COMPENSATED EMPLOYEES WHO CONTRIBUTE
MATERIALLY TO THE CONTINUED GROWTH, DEVELOPMENT AND FUTURE BUSINESS SUCCESS
OF MICRO WAREHOUSE, INC., A DELAWARE CORPORATION, AND ITS SUBSIDIARIES, IF
ANY, THAT SPONSOR THIS PLAN. THIS PLAN SHALL BE UNFUNDED FOR TAX PURPOSES
AND FOR PURPOSES OF TITLE I OF ERISA.
ARTICLE 1
DEFINITIONS
For purposes of this Plan, unless otherwise clearly apparent
from the context, the following phrases or terms shall have the following
indicated meanings:
1.1 "Account Balance" shall mean, with respect to a Participant, a credit on
the records of the Employer equal to the Deferral Account balance. The
Account Balance, and each other specified account balance, shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a
Participant, or his or her designated Beneficiary, pursuant to this
Plan.
1.2 "Annual Bonus" shall mean any compensation in addition to Base Annual
Salary relating to services performed during any calendar year, whether
or not paid in such calendar year or included on the Federal Income Tax
Form W-2 for such calendar year, payable to a Participant as an Employee
under any Employer's annual bonus and cash incentive plans, excluding
commissions and stock options.
1.3 "Annual Deferral Amount" shall mean that portion of a Participant's Base
Annual Salary, Annual Bonus and Commissions that a Participant elects to
have, and is deferred, in accordance with Article 3, for any one Plan
Year. In the event of a Participant's Retirement, Disability (if
deferrals cease in accordance with Section 8.1), death or a Termination
of Employment prior to the end of a Plan Year, such year's Annual
Deferral Amount shall be the actual amount withheld prior to such event.
1.4 "Annual Installment Method" shall be an annual installment payment over
the number of years selected by the Participant in accordance with this
Plan, calculated as follows: The
-1-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Account Balance of the Participant shall be calculated as of the close
of business on the last business day of the year. The annual
installment shall be calculated by multiplying this balance by a
fraction, the numerator of which is one, and the denominator of which is
the remaining number of annual payments due the Participant. By way of
example, if the Participant elects a 10 year Annual Installment Method,
the first payment shall be 1/10 of the Account Balance, calculated as
described in this definition. The following year, the payment shall be
1/9 of the Account Balance, calculated as described in this definition.
Each annual installment shall be paid on or as soon as practicable after
the last business day of the applicable year.
1.5 "Base Annual Salary" shall mean the annual cash compensation relating to
services performed during any calendar year, whether or not paid in such
calendar year or included on the Federal Income Tax Form W-2 for such
calendar year, excluding bonuses, commissions, overtime, fringe
benefits, stock options, relocation expenses, incentive payments,
non-monetary awards, directors fees and other fees, automobile and other
allowances, paid to a Participant for employment services rendered
(whether or not such allowances are included in the Employee's gross
income). Base Annual Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or non-qualified plans of any Employer and
shall be calculated to include amounts not otherwise included in the
Participant's gross income under Code Sections 125, 402(e)(3), 402(h),
or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in compensation only to
the extent that, had there been no such plan, the amount would have been
payable in cash to the Employee.
1.6 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are entitled to
receive benefits under this Plan upon the death of a Participant.
1.7 "Beneficiary Designation Form" shall mean the form established from time
to time by the Committee that a Participant completes signs and returns
to the Committee to designate one or more Beneficiaries.
1.8 "Board" shall mean the board of directors of the Company.
1.9 "Change in Control" shall mean the merger or consolidation of the
Company with, or the sale of all or substantially all of the assets of
the Company to, any person or entity not affiliated with the Company as
of the date of this Plan, provided the Company is not the surviving
entity after any such merger or consolidation.
-2-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1.10 "Claimant" shall have the meaning set forth in Section 14.1.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.
1.12 "Commissions" shall mean any compensation, in addition to Base Annual
Salary and Annual Bonus, relating to sales performance during any
calendar year, whether or not paid in such calendar year or included in
the federal income tax form W-2 for such calendar year, payable by an
Employer to a Participant as an Employee in the form of commissions.
1.13 "Committee" shall mean the committee described in Article 12.
1.14 "Company" shall mean Micro Warehouse, Inc., a Delaware corporation, and
any successor to all or substantially all of the Company's assets or
business.
1.15 "Deduction Limitation" shall mean the following described limitation on
a benefit that may otherwise be distributable pursuant to the provisions
of this Plan. Except as otherwise provided, this limitation shall be
applied to all distributions that are "subject to the Deduction
Limitation" under this Plan. If an Employer determines in good faith
prior to a Change in Control that there is a reasonable likelihood that
any compensation paid to a Participant for a taxable year of the
Employer would not be deductible by the Employer solely by reason of the
limitation under Code Section 162(m), then to the extent deemed
necessary by the Employer to ensure that the entire amount of any
distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible, the Employer may defer all or any
portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall continue to be credited/debited with
additional amounts in accordance with Section 3.7 below, even if such
amount is being paid out in installments. The amounts so deferred and
amounts credited thereon shall be distributed to the Participant or his
or her Beneficiary (in the event of the Participant's death) at the
earliest possible date, as determined by the Employer in good faith, on
which the deductibility of compensation paid or payable to the
Participant for the taxable year of the Employer during which the
distribution is made will not be limited by Section 162(m), or if
earlier, the effective date of a Change in Control. Notwithstanding
anything to the contrary in this Plan, the Deduction Limitation shall
not apply to any distributions made after a Change in Control.
1.16 "Deferral Account" shall mean (i) the sum of all of a Participant's
Annual Deferral Amounts, plus (ii) amounts credited and/or debited in
accordance with all the applicable crediting/debiting provisions of this
Plan that relate to the Participant's Deferral Account,
-3-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
less (iii) all distributions made to the Participant or his or her
Beneficiary pursuant to this Plan that relate to his or her Deferral
Account.
1.17 "Disability" shall mean a period of disability during which a
Participant qualifies for permanent disability benefits under the
Participant's Employer's long-term disability plan, or, if a Participant
does not participate in such a plan, a period of disability during which
the Participant would have qualified for permanent disability benefits
under such a plan had the Participant been a participant in such a plan,
as determined in the sole discretion of the Committee. If the
Participant's Employer does not sponsor such a plan, or discontinues to
sponsor such a plan, Disability shall be determined by the Committee in
its sole discretion.
1.18 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.19 "Election Form" shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
1.20 "Employee" shall mean a person who is an employee of any Employer.
1.21 "Employer(s)" shall mean the Company and/or any of its subsidiaries (now
in existence or hereafter formed or acquired) that have been selected by
the Board to participate in the Plan and have adopted the Plan as a
sponsor.
1.22 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
1.23 "First Plan Year" shall mean the period beginning May 1, 1998 and ending
December 31, 1998.
1.24 "Participant" shall mean any Employee (i) who is selected to participate
in the Plan, (ii) who elects to participate in the Plan, (iii) who signs
a Plan Agreement, an Election Form and a Beneficiary Designation Form,
(iv) whose signed Plan Agreement, Election Form and Beneficiary
Designation Form are accepted by the Committee, (v) who commences
participation in the Plan, and (vi) whose Plan Agreement has not
terminated. A spouse or former spouse of a Participant shall not be
treated as a Participant in the Plan or have an account balance under
the Plan, even if he or she has an interest in the Participant's
benefits under the Plan as a result of applicable law or property
settlements resulting from legal separation or divorce.
-4-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1.25 "Plan" shall mean the Company's Deferred Compensation Plan, which shall
be evidenced by this instrument and by each Plan Agreement, as they may
be amended from time to time.
1.26 "Plan Agreement" shall mean a written agreement, as may be amended from
time to time, which is entered into by and between an Employer and a
Participant. Each Plan Agreement executed by a Participant and the
Participant's Employer shall provide for the entire benefit to which
such Participant is entitled under the Plan; should there be more than
one Plan Agreement, the Plan Agreement bearing the latest date of
acceptance by the Employer shall supersede all previous Plan Agreements
in their entirety and shall govern such entitlement. The terms of any
Plan Agreement may be different for any Participant, and any Plan
Agreement may provide additional benefits not set forth in the Plan or
limit the benefits otherwise provided under the Plan; provided, however,
that any such additional benefits or benefit limitations must be agreed
to by both the Employer and the Participant.
1.27 "Plan Year" shall, except for the First Plan Year, mean a period
beginning on January 1 of each calendar year and continuing through
December 31 of such calendar year.
1.28 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.29 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability on or after the
earlier of the attainment of (a) age sixty-five (65) or (b) age fifty-
five (55) with ten (10) Years of Service.
1.30 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.31 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.32 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.33 "Termination of Employment" shall mean the severing of employment with
all Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death or an authorized leave of absence.
1.34 "Trust" shall mean one or more trusts established pursuant to that
certain Master Trust Agreement for Micro Warehouse, Inc. Deferred
Compensation Plan, dated as of ________ 1, 199_ between the Company and
the trustee named therein, as amended from time to time.
1.35 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the
Participant that would result in severe
-5-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
financial hardship to the Participant resulting from (i) a sudden and
unexpected illness or accident of the Participant or a dependent of the
Participant, (ii) a loss of the Participant's property due to casualty,
or (iii) such other extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant, all
as determined in the sole discretion of the Committee.
1.36 "Years of Plan Participation" shall mean the total number of full Plan
Years a Participant has been a Participant in the Plan prior to his or
her Termination of Employment (determined without regard to whether
deferral elections have been made by the Participant for any Plan Year).
Any partial year shall not be counted. Notwithstanding the previous
sentence, a Participant's first Plan Year of participation shall be
treated as a full Plan Year for purposes of this definition, even if it
is only a partial Plan Year of participation.
1.37 "Years of Service" shall mean the total number of full years in which a
Participant has been employed by one or more Employers. For purposes of
this definition, a year of employment shall be a 365 day period (or 366
day period in the case of a leap year) that, for the first year of
employment, commences on the Employee's date of hiring and that, for any
subsequent year, commences on an anniversary of that hiring date. Any
partial year of employment shall not be counted.
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to a
select group of management and highly compensated Employees of the
Employers who are designated, from time to time, by the Committee in its
sole discretion.
2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each selected
Employee shall complete, execute and return to the Committee a Plan
Agreement, an Election Form and a Beneficiary Designation Form, all
within 30 days after he or she is selected to participate in the Plan.
In addition, the Committee shall establish from time to time such other
enrollment requirements as it determines in its sole discretion are
necessary.
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee
selected to participate in the Plan has met all enrollment requirements
set forth in this Plan and required by the Committee, including
returning all required documents to the Committee within the specified
time period, that Employee shall commence participation in the Plan on
the first day of the month following the month in which the Employee
completes all enrollment requirements. If an Employee fails to meet all
such requirements within the period required, in accordance with Section
2.2, that Employee shall not be eligible to
-6-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
participate in the Plan until the first day of the Plan Year following
the delivery to and acceptance by the Committee of the required
documents.
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated employees,
as membership in such group is determined in accordance with
Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall
have the right, in its sole discretion, to (i) terminate any deferral
election the Participant has made for the remainder of the Plan Year in
which the Participant's membership status changes, (ii) prevent the
Participant from making future deferral elections and/or
(iii) immediately distribute the Participant's then Account Balance as a
Termination Benefit and terminate the Participant's participation in the
Plan.
ARTICLE 3
DEFERRAL COMMITMENTS/CREDITING/TAXES
3.1 MINIMUM DEFERRALS.
(a) BASE ANNUAL SALARY, ANNUAL BONUS AND COMMISSIONS. For each Plan
Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Base Annual Salary, Annual Bonus and/or
Commissions in the following minimum amounts for each deferral
elected:
DEFERRAL MINIMUM AMOUNT
Base Annual Salary $2,000*
Annual Bonus $2,000*
Commissions $2,000*
* In each case, less deferrals under the other two categories.
If an election is made for less than stated minimum amounts, or
if no election is made, the amount deferred shall be zero.
(b) SHORT PLAN YEAR. Notwithstanding the foregoing, if a Participant
first becomes a Participant after the first day of a Plan Year,
or in the case of the first Plan Year of the Plan itself, the
minimum Base Annual Salary deferral shall be an amount equal to
the minimum set forth above, multiplied by a fraction, the
numerator of which is the number of complete months remaining in
the Plan Year and the denominator of which is 12.
3.2 MAXIMUM DEFERRAL.
-7-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(a) BASE ANNUAL SALARY, ANNUAL BONUS AND COMMISSIONS. For each Plan
Year, a Participant may elect to defer, as his or her Annual
Deferral Amount, Base Annual Salary, Annual Bonus and/or
Commissions up to the following maximum percentages for each
deferral elected:
DEFERRAL MAXIMUM AMOUNT
Base Annual Salary 50%
Annual Bonus 100%
Commissions 50%
Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, or in the case of
the first Plan Year of the Plan itself, the maximum Annual
Deferral Amount, with respect to Base Annual Salary, Annual Bonus
and Commissions shall be limited to the amount of compensation
not yet earned by the Participant as of the date the Participant
submits a Plan Agreement and Election Form to the Committee for
acceptance.
3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM.
(a) FIRST PLAN YEAR. In connection with a Participant's commencement
of participation in the Plan, the Participant shall make an
irrevocable deferral election for the Plan Year in which the
Participant commences participation in the Plan, along with such
other elections as the Committee deems necessary or desirable
under the Plan. For these elections to be valid, the Election
Form must be completed and signed by the Participant, timely
delivered to the Committee (in accordance with Section 2.2 above)
and accepted by the Committee.
(b) SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an
irrevocable deferral election for that Plan Year, and such other
elections as the Committee deems necessary or desirable under the
Plan, shall be made by timely delivering to the Committee, in
accordance with its rules and procedures, before the end of the
Plan Year preceding the Plan Year for which the election is made,
a new Election Form. If no such Election Form is timely delivered
for a Plan Year, the Annual Deferral Amount shall be zero for
that Plan Year.
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base
Annual Salary portion of the Annual Deferral Amount shall be withheld
from each regularly scheduled Base Annual Salary payroll in equal
amounts, as adjusted from time to time for increases and decreases in
Base Annual Salary. The Annual Bonus and/or Commissions portion of the
Annual Deferral Amount shall be withheld at the time the Annual Bonus or
-8-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Commissions are or otherwise would be paid to the Participant, whether
or not this occurs during the Plan Year itself.
3.5 INVESTMENT OF TRUST ASSETS. The Trustee of the Trust shall be
authorized, upon written instructions received from the Committee or
investment manager appointed by the Committee, to invest and reinvest
the assets of the Trust in accordance with the applicable Trust
Agreement, including the disposition of stock and reinvestment of the
proceeds in one or more investment vehicles designated by the Committee.
3.6 VESTING. A Participant shall at all times be 100% vested in his or her
Deferral Account.
3.7 CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and subject
to, the rules and procedures that are established from time to time by
the Committee, in its sole discretion, amounts shall be credited or
debited to a Participant's Account Balance in accordance with the
following rules:
(a) ELECTION OF MEASUREMENT FUNDS. A Participant, in connection with
his or her initial deferral election in accordance with Section
3.3(a) above, shall elect, on the Election Form, one or more
Measurement Fund(s) (as described in Section 3.7(c) below) to be
used to determine the additional amounts to be credited to his or
her Account Balance for the first calendar quarter or portion
thereof in which the Participant commences participation in the
Plan and continuing thereafter for each subsequent calendar
quarter in which the Participant participates in the Plan, unless
changed in accordance with the next sentence. Commencing with
the first calendar quarter that follows the Participant's
commencement of participation in the Plan and continuing
thereafter for each subsequent calendar quarter in which the
Participant participates in the Plan, no later than the next to
last business day of the calendar quarter, the Participant may
(but is not required to) elect, by submitting an Election Form to
the Committee that is accepted by the Committee, to add or delete
one or more Measurement Fund(s) to be used to determine the
additional amounts to be credited to his or her Account Balance,
or to change the portion of his or her Account Balance allocated
to each previously or newly elected Measurement Fund. If an
election is made in accordance with the previous sentence, it
shall apply to the next calendar quarter and continue thereafter
for each subsequent calendar quarter in which the Participant
participates in the Plan, unless changed in accordance with the
previous sentence.
(b) PROPORTIONATE ALLOCATION. In making any election described in
Section 3.7a) above, the Participant shall specify on the
Election Form, in increments of five
-9-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
percentage points (5%), the percentage of his or her Account
Balance to be allocated to a Measurement Fund (as if the
Participant was making an investment in that Measurement Fund
with that portion of his or her Account Balance).
(c) MEASUREMENT FUNDS. The Participant may elect one or more of the
following measurement funds, based on certain mutual funds (the
"Measurement Funds"), for the purpose of crediting additional
amounts to his or her Account Balance:
(1) Nationwide Money Market Fund;
(2) Oppenheimer Bond Fund;
(3) Fidelity VIP Equity-Income Portfolio;
(4) Fidelity VIP III Growth Opportunities Fund;
(5) Fidelity VIP II Contrafund Portfolio
(6) Oppenheimer Global Securities Fund; and
(7) Warburg Pincus Small Company Growth Portfolio.
The Committee may, in its sole discretion, discontinue,
substitute or add a Measurement Fund. Each such action will take
effect as of the first day of the calendar quarter that follows
by thirty (30) days the day on which the Committee gives
Participants advance written notice of such change.
(d) CREDITING OR DEBITING METHOD. The performance of each elected
Measurement Fund (either positive or negative) will be determined
by the Committee, in its reasonable discretion, based on the
performance of the Measurement Funds themselves. A Participant's
Account Balance shall be credited or debited on a daily basis
based on the performance of each Measurement Fund selected by the
Participant, AS DETERMINED BY THE COMMITTEE IN ITS SOLE
DISCRETION, as though (i) a Participant's Account Balance were
invested in the Measurement Fund(s) selected by the Participant,
in the percentages applicable to such calendar quarter, as of the
close of business on the first business day of such calendar
quarter, at the closing price on such date; (ii) the portion of
the Annual Deferral Amount that was actually deferred during any
calendar quarter were invested in the Measurement Fund(s)
selected by the Participant, in the percentages applicable to
such calendar quarter, no later than the close of business on the
third business day after the day on which such amounts are
actually deferred from the Participant's Base Annual Salary,
Annual Bonus and/or Commissions through reductions in his or her
payroll, at the
-10-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
closing price on such date; and (iii) any distribution made to a
Participant that decreases such Participant's Account Balance
ceased being invested in the Measurement Fund(s), in the
percentages applicable to such calendar quarter, no earlier than
three business days prior to the distribution, at the closing
price on such date.
(e) NO ACTUAL INVESTMENT. Notwithstanding any other provision of
this Plan that may be interpreted to the contrary, the
Measurement Funds are to be used for measurement purposes only,
and a Participant's election of any such Measurement Fund, the
allocation to his or her Account Balance thereto, the calculation
of additional amounts and the crediting or debiting of such
amounts to a Participant's Account Balance SHALL NOT be
considered or construed in any manner as an actual investment of
his or her Account Balance in any such Measurement Fund. In the
event that the Company or the Trustee (as that term is defined in
the Trust), in its own discretion, decides to invest funds in any
or all of the Measurement Funds, no Participant shall have any
rights in or to such investments themselves. Without limiting
the foregoing, a Participant's Account Balance shall at all times
be a bookkeeping entry only and shall not represent any
investment made on his or her behalf by the Company or the Trust;
the Participant shall at all times remain an unsecured creditor
of the Company.
3.8 FICA AND OTHER TAXES. For each Plan Year in which an Annual Deferral
Amount is being withheld from a Participant, the Participant's
Employer(s) shall withhold from that portion of the Participant's Base
Annual Salary, Annual Bonus and/or Commissions that is not being
deferred, in a manner determined by the Employer(s), the Participant's
share of FICA and other employment taxes on such Annual Deferral Amount.
If necessary, the Committee may reduce the Annual Deferral Amount in
order to comply with this Section 3.8.
3.9 DISTRIBUTIONS. The Participant's Employer(s), or the trustee of the
Trust, shall withhold from any payments made to a Participant under this
Plan all federal, state and local income, employment and other taxes
required to be withheld by the Employer(s), or the trustee of the Trust,
in connection with such payments, in amounts and in a manner to be
determined in the sole discretion of the Employer(s) and the trustee of
the Trust.
ARTICLE 4
SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION
41 SHORT-TERM PAYOUT. In connection with each election to defer an Annual
Deferral Amount, a Participant may irrevocably elect to receive a future
"Short-Term Payout" from the Plan with respect to such Annual Deferral
Amount. Subject to the Deduction
-11-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Limitation, the Short-Term Payout shall be a lump sum payment in an
amount that is equal to the Annual Deferral Amount plus amounts credited
or debited in the manner provided in Section 3.7 above on that amount,
determined at the time that the Short-Term Payout becomes payable
(rather than the date of a Termination of Employment). Subject to the
Deduction Limitation and the other terms and conditions of this Plan,
each Short-Term Payout elected shall be paid out during a 60 day period
commencing immediately after the last day of any Plan Year designated by
the Participant that is at least three Plan Years after the Plan Year in
which the Annual Deferral Amount is actually deferred. By way of
example, if a three year Short-Term Payout is elected for Annual
Deferral Amounts that are deferred in the Plan Year commencing May 1,
1998, the three year Short-Term Payout would become payable during a 60
day period commencing January 1, 2002.
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur
that triggers a benefit under Article 5, 6, 7 or 8, any Annual Deferral
Amount, plus amounts credited or debited thereon, that is subject to a
Short-Term Payout election under Section 4.1 shall not be paid in
accordance with Section 4.1 but shall be paid in accordance with the
other applicable Article.
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES.
If the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee to (i) suspend any deferrals
required to be made by a Participant and/or (ii) receive a partial or
full payout from the Plan. The payout shall not exceed the lesser of
the Participant's Account Balance, calculated as if such Participant
were receiving a Termination Benefit, or the amount reasonably needed to
satisfy the Unforeseeable Financial Emergency. If, subject to the sole
discretion of the Committee, the petition for a suspension and/or payout
is approved, suspension shall take effect upon the date of approval and
any payout shall be made within 60 days of the date of approval. The
payment of any amount under this Section 4.3 shall not be subject to the
Deduction Limitation.
4.4 WITHDRAWAL ELECTION. A Participant (or, after a Participant's death,
his or her Beneficiary) may elect, at any time, to withdraw all of his
or her Account Balance, calculated as if there had occurred a
Termination of Employment as of the day of the election, less a
withdrawal penalty equal to 10% of such amount (the net amount shall be
referred to as the "Withdrawal Amount"). This election can be made at
any time, before or after Retirement, Disability, death or Termination
of Employment, and whether or not the Participant (or Beneficiary) is in
the process of being paid pursuant to an installment payment schedule.
If made before Retirement, Disability or death, a Participant's
Withdrawal Amount shall be his or her Account Balance calculated as if
there had occurred a Termination of Employment as of the day of the
election. No partial withdrawals of the Withdrawal
-12-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Amount shall be allowed. The Participant (or his or her Beneficiary)
shall make this election by giving the Committee advance written notice
of the election in a form determined from time to time by the Committee.
The Participant (or his or her Beneficiary) shall be paid the Withdrawal
Amount within 60 days of his or her election. Once the Withdrawal
Amount is paid, the Participant's participation in the Plan shall
terminate and the Participant shall not be eligible to participate in
the Plan during the remainder of the Plan Year and the next Plan Year.
The payment of this Withdrawal Amount shall not be subject to the
Deduction Limitation.
ARTICLE 5
RETIREMENT BENEFIT
5.1 RETIREMENT BENEFIT. Subject to the Deduction Limitation, a Participant
who Retires shall receive, as a Retirement Benefit, his or her Account
Balance.
5.2 PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his or
her commencement of participation in the Plan, shall elect on an
Election Form to receive the Retirement Benefit in a lump sum or
pursuant to an Annual Installment Method of 5, 10 or 15 years. The
Participant may annually change his or her election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, provided that any such Election Form is submitted at least 1
year prior to the Participant's Retirement and is accepted by the
Committee in its sole discretion. The Election Form most recently
accepted by the Committee shall govern the payout of the Retirement
Benefit. If a Participant does not make any election with respect to
the payment of the Retirement Benefit, then such benefit shall be
payable in a lump sum. The lump sum payment shall be made, or
installment payments shall commence, no later than 60 days after the
last day of the Plan Year in which the Participant Retires. Any payment
made shall be subject to the Deduction Limitation.
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies
after Retirement but before the Retirement Benefit is paid in full, the
Participant's unpaid Retirement Benefit payments shall continue and
shall be paid to the Participant's Beneficiary (a) over the remaining
number of years and in the same amounts as that benefit would have been
paid to the Participant had the Participant survived, or (b) in a lump
sum, if requested by the Beneficiary and allowed in the sole discretion
of the Committee, that is equal to the Participant's unpaid remaining
Account Balance.
ARTICLE 6
PRE-RETIREMENT SURVIVOR BENEFIT
-13-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
6.1 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation,
the Participant's Beneficiary shall receive a Pre-Retirement Survivor
Benefit equal to the Participant's Account Balance if the Participant
dies before he or she Retires, experiences a Termination of Employment
or suffers a Disability.
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form whether the Pre-Retirement Survivor
Benefit shall be received by his or her Beneficiary in a lump sum or
pursuant to an Annual Installment Method of 5, 10 or 15 years. The
Participant may annually change this election to an allowable
alternative payout period by submitting a new Election Form to the
Committee, which form must be accepted by the Committee in its sole
discretion. The Election Form most recently accepted by the Committee
prior to the Participant's death shall govern the payout of the
Participant's Pre-Retirement Survivor Benefit. If a Participant does
not make any election with respect to the payment of the Pre-Retirement
Survivor Benefit, then such benefit shall be paid in a lump sum.
Despite the foregoing, if the Participant's Account Balance at the time
of his or her death is less than $25,000, payment of the Pre-Retirement
Survivor Benefit may be made, in the sole discretion of the Committee,
in a lump sum or pursuant to an Annual Installment Method of not more
than 5 years. The lump sum payment shall be made, or installment
payments shall commence, no later than 60 days after the last day of the
Plan Year in which the Committee is provided with proof that is
satisfactory to the Committee of the Participant's death. Any payment
made shall be subject to the Deduction Limitation.
ARTICLE 7
TERMINATION BENEFIT
7.1 TERMINATION BENEFIT. Subject to the Deduction Limitation, the
Participant shall receive a Termination Benefit, which shall be equal to
the Participant's Account Balance if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability.
7.2 PAYMENT OF TERMINATION BENEFIT. The Participant's Termination Benefit
shall be paid in a lump sum. The lump sum payment shall be made no
later than 60 days after the last day of the Plan Year in which the
Participant experiences the Termination of Employment. Any payment made
shall be subject to the Deduction Limitation.
ARTICLE 8
DISABILITY WAIVER AND BENEFIT
8.1 DISABILITY WAIVER.
-14-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(a) WAIVER OF DEFERRAL. A Participant who is determined by the
Committee to be suffering from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount commitment
that would otherwise have been withheld from a Participant's Base
Annual Salary, Annual Bonus and/or Commissions for the Plan Year
during which the Participant first suffers a Disability. During
the period of Disability, the Participant shall not be allowed to
make any additional deferral elections, but will continue to be
considered a Participant for all other purposes of this Plan.
(b) RETURN TO WORK. If a Participant returns to employment with an
Employer, after a Disability ceases, the Participant may elect to
defer an Annual Deferral Amount for the Plan Year following his
or her return to employment or service and for every Plan Year
thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed and an Election Form is
delivered to and accepted by the Committee for each such election
in accordance with Section 3.3 above.
8.2 CONTINUED ELIGIBILITY; DISABILITY BENEFIT. A Participant suffering a
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits
provided for in Articles 4, 5, 6 or 7 in accordance with the provisions
of those Articles. Notwithstanding the above, the Committee shall have
the right to, in its sole and absolute discretion and for purposes of
this Plan only, and must in the case of a Participant who is otherwise
eligible to Retire, deem the Participant to have experienced a
Termination of Employment, or in the case of a Participant who is
eligible to Retire, to have Retired, at any time (or in the case of a
Participant who is eligible to Retire, as soon as practicable) after
such Participant is determined to be suffering a Disability, in which
case the Participant shall receive a Disability Benefit equal to his or
her Account Balance at the time of the Committee's determination;
provided, however, that should the Participant otherwise have been
eligible to Retire, he or she shall be paid in accordance with Article
5. The Disability Benefit shall be paid in a lump sum within 60 days of
the Committee's exercise of such right. Any payment made shall be
subject to the Deduction Limitation.
-15-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ARTICLE 9
BENEFICIARY DESIGNATION
9.1 BENEFICIARY. Each Participant shall have the right, at any time, to
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary designated
under this Plan may be the same as or different from the Beneficiary
designation under any other plan of an Employer in which the Participant
participates.
9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall
designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules and
procedures, as in effect from time to time. If the Participant names
someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by that
Participant's spouse and returned to the Committee. Upon the acceptance
by the Committee of a new Beneficiary Designation Form, all Beneficiary
designations previously filed shall be canceled. The Committee shall be
entitled to rely on the last Beneficiary Designation Form filed by the
Participant and accepted by the Committee prior to his or her death.
9.3 ACKNOWLEDGMENT. No designation or change in designation of a
Beneficiary shall be effective until received and acknowledged in
writing by the Committee or its designated agent.
9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the Participant's
estate.
9.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to cause
the Participant's Employer to withhold such payments until this matter
is resolved to the Committee's satisfaction.
9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further
-16-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
obligations under this Plan with respect to the Participant, and that
Participant's Plan Agreement shall terminate upon such full payment of
benefits.
ARTICLE 10
LEAVE OF ABSENCE
10.1 PAID LEAVE OF ABSENCE. If a Participant is authorized by the
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Annual Deferral Amount
shall continue to be withheld during such paid leave of absence in
accordance with Section 3.3.
10.2 UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
Participant's Employer for any reason to take an unpaid leave of absence
from the employment of the Employer, the Participant shall continue to
be considered employed by the Employer and the Participant shall be
excused from making deferrals until the earlier of the date the leave of
absence expires or the Participant returns to a paid employment status.
Upon such expiration or return, deferrals shall resume for the remaining
portion of the Plan Year in which the expiration or return occurs, based
on the deferral election, if any, made for that Plan Year. If no
election was made for that Plan Year, no deferral shall be withheld.
ARTICLE 11
TERMINATION, AMENDMENT OR MODIFICATION
11.1 TERMINATION. Each Employer reserves the right to discontinue its
sponsorship of the Plan and/or to terminate the Plan at any time with
respect to any or all of its participating Employees by action of its
board of directors. Upon the termination of the Plan with respect to
any Employer, the Plan Agreements of the affected Participants who are
employed by that Employer shall terminate and their Account Balances,
determined as if they had experienced a Termination of Employment on the
date of Plan termination or, if Plan termination occurs after the date
upon which a Participant was eligible to Retire, then with respect to
that Participant as if he or she had Retired on the date of Plan
termination, shall be paid to the Participants as follows: Prior to a
Change in Control, if the Plan is terminated with respect to all of its
Participants, an Employer shall have the right, in its sole discretion,
and notwithstanding any elections made by the Participant, to pay such
benefits in a lump sum or pursuant to an Annual Installment Method of up
to 15 years, with amounts credited and debited during the installment
period as provided herein. If the Plan is terminated with respect to
less than all of its Participants, an Employer shall be required to pay
such benefits in a lump sum. After a Change in Control, the Employer
shall be required to pay such benefits in a lump sum. The termination
of the Plan shall not adversely affect any Participant or Beneficiary
who has become entitled to the payment of
-17-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
any benefits under the Plan as of the date of termination; provided
however, that the Employer shall have the right to accelerate
installment payments without a premium or prepayment penalty by paying
the Account Balance in a lump sum or pursuant to an Annual Installment
Method using fewer years (provided that the present value of all
payments that will have been received by a Participant at any given
point of time under the different payment schedule shall equal or exceed
the present value of all payments that would have been received at that
point in time under the original payment schedule).
11.2 AMENDMENT. The Company may, at any time, amend or modify the Plan in
whole or in part with respect to that Employer by the action of the
Board; provided, however, that: (i) no amendment or modification shall
be effective to decrease or restrict the value of a Participant's
Account Balance in existence at the time the amendment or modification
is made, calculated as if the Participant had experienced a Termination
of Employment as of the effective date of the amendment or modification
or, if the amendment or modification occurs after the date upon which
the Participant was eligible to Retire, the Participant had Retired as
of the effective date of the amendment or modification, and (ii) no
amendment or modification of this Section 11.2 or Section 12.2 of the
Plan shall be effective. The amendment or modification of the Plan
shall not affect any Participant or Beneficiary who has become entitled
to the payment of benefits under the Plan as of the date of the
amendment or modification; provided, however, that the Employer shall
have the right to accelerate installment payments by paying the Account
Balance in a lump sum or pursuant to an Annual Installment Method using
fewer years (provided that the present value of all payments that will
have been received by a Participant at any given point of time under the
different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time under
the original payment schedule).
11.3 PLAN AGREEMENT. Despite the provisions of Sections 11.1 and 11.2 above,
if a Participant's Plan Agreement contains benefits or limitations that
are not in this Plan document, the Employer may only amend or terminate
such provisions with the consent of the Participant.
11.4 EFFECT OF PAYMENT. The full payment of the applicable benefit under
Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all
obligations to a Participant and his or her designated Beneficiaries
under this Plan and the Participant's Plan Agreement shall terminate.
ARTICLE 12
ADMINISTRATION
12.1 COMMITTEE DUTIES. Except as otherwise provided in this Article 12, this
Plan shall be administered by a Committee which shall consist of the
Board, or such committee as the
-18-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Board shall appoint. Members of the Committee may be Participants under
this Plan. The Committee shall also have the discretion and authority
to (i) make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan, (ii) interpret where
necessary all provisions of this Plan (including, without limitation, by
supplying ommission from, correcting deficiencies in, or resolving
inconsistencies in, the language of this Plan), and (iii) determine all
factual matters, as may arise in connection with the Plan. Any
individual serving on the Committee who is a Participant shall not vote
or act on any matter relating solely to himself or herself. When making
a determination or calculation, the Committee shall be entitled to rely
on information furnished by a Participant or the Company.
12.2 ADMINISTRATION UPON CHANGE IN CONTROL. Notwithstanding Section 12.1,
upon and after the occurrence of a Change in Control, this Plan shall be
administered by an independent third party (the "Administrator")
selected by the Trustee and approved by the individual who, immediately
prior to such event, was the Company's Chief Executive Officer or, if
not so identified, the Company's highest ranking officer (the "Ex-CEO").
The Administrator shall have each of the discretionary powers set forth
in Section 12.1 and the discretionary power to determine all questions
arising in connection with the administration of the Plan and the
interpretation of the Plan and Trust including, but not limited to
benefit entitlement determinations; provided, however, upon and after
the occurrence of a Change in Control, the Administrator shall have no
power to direct the investment of Plan or Trust assets or select any
investment manager or custodial firm for the Plan or Trust. Upon and
after the occurrence of a Change in Control, the Company must: (1) pay
all reasonable administrative expenses and fees of the Administrator;
(2) indemnify the Administrator against any costs, expenses and
liabilities including, without limitation, attorney's fees and expenses
arising in connection with the performance of the Administrator
hereunder, except with respect to matters resulting from the gross
negligence or willful misconduct of the Administrator or its employees
or agents; and (3) supply full and timely information to the
Administrator or all matters relating to the Plan, the Trust, the
Participants and their Beneficiaries, the Account Balances of the
Participants, the date of circumstances of the Retirement, Disability,
death or Termination of Employment of the Participants, and such other
pertinent information as the Administrator may reasonably require. Upon
and after a Change in Control, the Administrator may be terminated (and
a replacement appointed) by the Trustee only with the approval of the
Ex-CEO. Upon and after a Change in Control, the Administrator may not
be terminated by the Company.
12.3 AGENTS. In the administration of this Plan, the Committee and the
Administrator may, from time to time, employ agents and delegate to them
such administrative duties as it sees fit (including acting through a
duly appointed representative) and may from time to time consult with
counsel who may be counsel to any Employer.
-19-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
12.4 BINDING EFFECT OF DECISIONS. The decision or action of the Committee or
the Administrator with respect to any question arising out of or in
connection with the administration, interpretation and application of
the Plan and the rules and regulations promulgated hereunder shall be
final and conclusive and binding upon all persons having any interest in
the Plan.
12.5 INDEMNITY OF COMMITTEE AND ADMINISTRATOR. All Employers shall indemnify
and hold harmless the members of the Committee,any Employee to whom the
duties of the Committee may be delegated, and the Administrator against
any and all claims, losses, damages, expenses or liabilities arising
from any action or failure to act with respect to this Plan, except in
the case of willful misconduct by the Committee, any of its members, any
such Employee or the Administrator.
12.6 EMPLOYER INFORMATION. To enable the Committee and/or Administrator to
perform its functions, the Company and each Employer shall supply full
and timely information to the Committee and/or Administrator, as the
case may be, on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement, Disability,
death or Termination of Employment of its Participants, and such other
pertinent information as the Committee or Administrator may reasonably
require.
-20-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ARTICLE 13
OTHER BENEFITS AND AGREEMENTS
13.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a
Participant and Participant's Beneficiary under the Plan are in addition
to any other benefits available to such Participant under any other plan
or program for employees of the Participant's Employer. The Plan shall
supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided.
ARTICLE 14
CLAIMS PROCEDURES
14.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as
a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such Claimant
from the Plan. If such a claim relates to the contents of a notice
received by the Claimant, the claim must be made within 60 days after
such notice was received by the Claimant. All other claims must be made
within 180 days of the date on which the event that caused the claim to
arise occurred. The claim must state with particularity the
determination desired by the Claimant.
14.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or
in part, to the Claimant's requested determination, and such
notice must set forth in a manner calculated to be understood by
the Claimant:
(i) the specific reason(s) for the denial of the claim, or
any part of it;
(ii) specific reference(s) to pertinent provisions of the Plan
upon which such denial was based;
(iii) a description of any additional material or information
necessary for the Claimant to perfect the claim, and an
explanation of why such material or information is
necessary; and
(iv) an explanation of the claim review procedure set forth in
Section 14.3 below.
-21-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
14.3 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from
the Committee that a claim has been denied, in whole or in part, a
Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 30 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
14.4 DECISION ON REVIEW. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood by
the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of
this Article 14 is a mandatory prerequisite to a Claimant's right to
commence any legal action with respect to any claim for benefits under
this Plan.
ARTICLE 15
TRUST
15.1 ESTABLISHMENT OF THE TRUST. The Company shall establish the Trust, and
each Employer shall at least annually transfer over to the Trust such
assets as the Employer determines, in its sole discretion, are necessary
to provide, on a present value basis, for its respective future
liabilities created with respect to the Annual Deferral Amounts for such
Employer's Participants for all periods prior to the transfer, as well
as any debits and credits to the Participants' Account Balances for all
periods prior to the transfer, taking into consideration the value of
the assets in the trust at the time of the transfer.
-22-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan
and the Plan Agreement shall govern the rights of a Participant to
receive distributions pursuant to the Plan. The provisions of the Trust
shall govern the rights of the Employers, Participants and the creditors
of the Employers to the assets transferred to the Trust. Each Employer
shall at all times remain liable to carry out its obligations under the
Plan.
15.3 DISTRIBUTIONS FROM THE TRUST. Each Employer's obligations under the
Plan may be satisfied with Trust assets distributed pursuant to the
terms of the Trust, and any such distribution shall reduce the
Employer's obligations under this Plan.
ARTICLE 16
MISCELLANEOUS
16.1 STATUS OF PLAN. The Plan is intended to be a plan that is not qualified
within the meaning of Code Section 401(a) and that "is unfunded and is
maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employee" within the meaning of ERISA Sections 201(2),
301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted
to the extent possible in a manner consistent with that intent.
16.2 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer. For
purposes of the payment of benefits under this Plan, any and all of an
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under the
Plan shall be merely that of an unfunded and unsecured promise to pay
money in the future.
16.3 EMPLOYER'S LIABILITY. An Employer's liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer shall
have no obligation to a Participant under the Plan except as expressly
provided in the Plan and his or her Plan Agreement.
16.4 NONASSIGNABILITY. Neither a Participant nor any other person shall have
any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or
convey in advance of actual receipt, the amounts, if any, payable
hereunder, or any part thereof, which are, and all rights to which are
expressly declared to be, unassignable and non-transferable. No part of
the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of any
debts, judgments, alimony or separate maintenance owed by a Participant
or any other person, be transferable by operation of law in the event of
a
-23-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Participant's or any other person's bankruptcy or insolvency or be
transferable to a spouse as a result of a property settlement or
otherwise.
16.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged to
be an "at will" employment relationship that can be terminated at any
time for any reason, or no reason, with or without cause, and with or
without notice, unless expressly provided in a written employment
agreement. Nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of any Employer as an Employee
or to interfere with the right of any Employer to discipline or
discharge the Participant at any time.
16.6 FURNISHING INFORMATION. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and the
payments of benefits hereunder, including but not limited to taking such
physical examinations as the Committee may deem necessary.
16.7 TERMS. Whenever any words are used herein in the masculine, they shall
be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular
or in the plural, they shall be construed as though they were used in
the plural or the singular, as the case may be, in all cases where they
would so apply.
16.8 CAPTIONS. The captions of the articles, sections and paragraphs of this
Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
16.9 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the internal laws of the State of
Connecticut without regard to its conflicts of laws principles.
16.10 NOTICE. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and
hand-delivered, or sent by registered or certified mail, to the address
below:
------------------
------------------
------------------
------------------
-24-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant
under this Plan shall be sufficient if in writing and hand-delivered, or
sent by mail, to the last known address of the Participant.
16.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the
benefit of the Participant's Employer and its successors and assigns and
the Participant and the Participant's designated Beneficiaries.
16.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in
any manner, including but not limited to such spouse's will, nor shall
such interest pass under the laws of intestate succession.
16.13 VALIDITY. In case any provision of this Plan shall be illegal or
invalid for any reason, said illegality or invalidity shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted
herein.
16.14 INCOMPETENT. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of that
person's property, the Committee may direct payment of such benefit to
the guardian, legal representative or person having the care and custody
of such minor, incompetent or incapable person. The Committee may
require proof of minority, incompetence, incapacity or guardianship, as
it may deem appropriate prior to distribution of the benefit. Any
payment of a benefit shall be a payment for the account of the
Participant and the Participant's Beneficiary, as the case may be, and
shall be a complete discharge of any liability under the Plan for such
payment amount.
16.15 COURT ORDER. The Committee is authorized to make any payments directed
by court order in any action in which the Plan or the Committee has been
named as a party. In addition, if a court determines that a spouse or
former spouse of a Participant has an interest in the Participant's
benefits under the Plan in connection with a property settlement or
otherwise, the Committee, in its sole discretion, shall have the right,
notwithstanding any election made by a Participant, to immediately
distribute the spouse's or former spouse's interest in the Participant's
benefits under the Plan to that spouse or former spouse.
-25-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
16.16 DISTRIBUTION IN THE EVENT OF TAXATION.
(a) IN GENERAL. If, for any reason, all or any portion of a
Participant's benefits under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the Trust
after a Change in Control, for a distribution of that portion of
his or her benefit that has become taxable. Upon the grant of
such a petition, which grant shall not be unreasonably withheld
(and, after a Change in Control, shall be granted), a
Participant's Employer shall distribute to the Participant
immediately available funds in an amount equal to the taxable
portion of his or her benefit (which amount shall not exceed a
Participant's unpaid Account Balance under the Plan). If the
petition is granted, the tax liability distribution shall be made
within 90 days of the date when the Participant's petition is
granted. Such a distribution shall affect and reduce the
benefits to be paid under this Plan.
(b) TRUST. If the Trust terminates in accordance with Section 3.6(e)
of the Trust and benefits are distributed from the Trust to a
Participant in accordance with that Section, the Participant's
benefits under this Plan shall be reduced to the extent of such
distributions.
16.17 INSURANCE. The Employers, on their own behalf or on behalf of the
trustee of the Trust, and, in their sole discretion, may apply for and
procure insurance on the life of the Participant, in such amounts and in
such forms as the Trust may choose. The Employers or the trustee of the
Trust, as the case may be, shall be the sole owner and beneficiary of
any such insurance. The Participant shall have no interest whatsoever
in any such policy or policies, and at the request of the Employers
shall submit to medical examinations and supply such information and
execute such documents as may be required by the insurance company or
companies to whom the Employers have applied for insurance.
16.18 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company and
each Employer is aware that upon the occurrence of a Change in Control,
the Board or the board of directors of a Participant's Employer (which
might then be composed of new members) or a shareholder of the Company
or the Participant's Employer, or of any successor corporation might
then cause or attempt to cause the Company, the Participant's Employer
or such successor to refuse to comply with its obligations under the
Plan and might cause or attempt to cause the Company or the
Participant's Employer to institute, or may institute, litigation
seeking to deny Participants the benefits intended under the Plan. In
these circumstances, the purpose of the Plan could be frustrated.
Accordingly, if, following a Change in Control, it should appear to any
Participant that the Company, the Participant's Employer or any
successor corporation has failed to comply with any of its
-26-
<PAGE>
Micro Warehouse, Inc.
Deferred Compensation Plan
Master Plan Document
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
obligations under the Plan or any agreement thereunder or, if the
Company, such Employer or any other person takes any action to declare
the Plan void or unenforceable or institutes any litigation or other
legal action designed to deny, diminish or to recover from any
Participant the benefits intended to be provided, then the Company and
the Participant's Employer irrevocably authorize such Participant to
retain counsel of his or her choice at the expense of the Company and
the Participant's Employer (who shall be jointly and severally liable)
to represent such Participant in connection with the initiation or
defense of any litigation or other legal action, whether by or against
the Company, the Participant's Employer or any director, officer,
shareholder or other person affiliated with the Company, the
Participant's Employer or any successor thereto in any jurisdiction.
IN WITNESS WHEREOF, the Company has signed this Plan document as of
__________, 199_.
"Company"
Micro Warehouse, Inc., a Delaware
corporation
By: ______________________________
Title: _________________________
-27-
<PAGE>
EXHIBIT 5.1
March 2, 1998
Micro Warehouse, Inc.
535 Connecticut Avenue
Norwalk, Connecticut 06854
Ladies and Gentlemen:
I have acted as counsel to Micro Warehouse, Inc., a Delaware corporation
(the "Company"), in connection with the Registration Statement on Form S-8 (the
"Registration Statement") of the Company filed in connection with the
registration under the Securities Act of 1933, as amended, of $5,000,000 of
Deferred Compensation Obligations (the "Obligations"). The Obligations are
being registered for issuance by the Company in connection with the
establishment of the Micro Warehouse, Inc. Deferred Compensation Plan (the
"Plan").
For purposes of this opinion, I have examined such matters of law and
originals, or copies certified or otherwise identified to my satisfaction, of
such documents, corporate records and other instruments as I have deemed
necessary. In my examination, I have assumed the genuineness of all signatures,
the authenticity of all documents submitted to me as certified, photostatic or
conformed copies, and the authenticity of originals of all such latter
documents. I have also assumed the due execution and delivery of all documents
where due execution and delivery are prerequisites to the effectiveness thereof.
I have relied upon certificates of public officials and certificates of officers
of the Company for the accuracy of material factual matters contained therein
which were not independently established.
Based on the foregoing, it is my opinion that, subject to effectiveness
with the Securities and Exchange Commission, the Obligations, when issued in
accordance with the provisions of the Plan, will be valid and binding
obligations of the Company, enforceable in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency and other laws
of general applicability related to or affecting enforcement of creditor's
rights or by general equity principals.
I hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement.
Very truly yours,
/s/ Bruce L. Lev, Esq.
-----------------------------------
Bruce L. Lev, Esq.
Executive Vice President, Secretary
and General Counsel
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
The Board of Directors
Micro Warehouse, Inc.
We consent to the use of our audit reports dated February 10, 1997, on the
consolidated financial statements and schedule of Micro Warehouse, Inc. and
subsidiaries as of December 31, 1996 and 1995 and for each of the years in the
three-year period ended December 31, 1996 incorporated herein by reference in
the Registration Statement on Form S-8 of Micro Warehouse, Inc. pertaining to
the Micro Warehouse, Inc. Deferred Compensation Plan.
/s/ KPMG Pert Marwick LLP
Stamford, Connecticut
February 25, 1998
