The Nebraska Furniture Mart, Inc. Profit Sharing Plan
Notes to Financial Statements
December 31, 2019 and 2018
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Description of Plan continued
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E.
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Notes Receivable from Participants
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Participants may borrow from their accounts a minimum of $1,000 up to a maximum of 50% of their vested account balance relating to
participants contributions and rollovers under the Plan, or a maximum of $50,000. The notes are secured by the participants account balance in the participants account and bear interest rates, which are equal to the Prime Rate plus
1%. Principal and interest are paid ratably through biweekly payroll deductions over a period not to exceed five years. Effective September 1, 2016, the Plan only allows general purpose loans that do not exceed a five-year term. As of
December 31, 2019, interest rates ranged from 4.25% to 6.50%. As of December 31, 2018, interest rates ranged from 4.25% to 9.25%. As of December 31, 2019, and 2018, notes receivable from participants mature between January 2020 and
August 2026, and January 2019 and August 2026, respectively.
If the participants vested account balance exceeds $1,000 and he or she is terminated due to death, disability or retirement, a
participant may elect to receive either a lump sum amount equal to the value of the participants vested interest in his or her account or monthly or other periodical installments by Vanguard Fiduciary Trust Company (the Trustee) in
approximate equal amounts over the life expectancy of the participant or of the participant and his or her designated beneficiary. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or
her account as a lump-sum distribution. If the participants account balance is less than $1,000, the Plan can automatically cash out the account at the participants termination in the form of a lump-sum distribution.
Certain in-service withdrawals
are allowed. A participant may also elect to withdrawal all or a portion of their vested account balance while employed after reaching age 59 1⁄2. A participant may
receive a hardship distribution from pre-tax and Roth deferrals if the distribution is: (1) on account of unreimbursed medical expenses incurred by the participant, their spouse, or dependents;
(2) to purchase (excluding mortgage payments) a principal residence of the participant; (3) for the payment of post-secondary tuition expenses; (4) payments to prevent eviction from principal residence; (5) funeral expenses for
the participants parent, spouse, children or dependents; or, (6) related to expenses for the repair of damage to the participants principal residence caused by fire, storm, or other casualty.
Participants leaving employment with the Company before becoming fully vested forfeit their
non-vested interest in the Matching Contributions and Profit Sharing Contributions. These forfeitures are used to pay expenses and to reduce the Companys current or future contributions under the Plan.
At December 31, 2019 and 2018, forfeited non-vested accounts totaled approximately $462,000, and $321,000, respectively. During the years ended December 31, 2019 and 2018, the Company used
approximately $286,000 and $256,000, of forfeitures to pay Plan expenses, respectively.
Each participant is entitled to exercise voting rights attributable to the shares of Berkshires Class B common stock fund
allocated to the participants account.
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