MONRO, INC.
401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
Participants become 100% vested in the Companys Profit Sharing Contributions at the end of five years
of service with 25%, 50% and 75% vesting in years two, three and four, respectively.
Forfeited balances of terminated participants nonvested
accounts are used to reduce future Company contributions and to pay administrative expenses of the Plan. Forfeited accounts used to reduce Company contributions and to pay administrative expenses amounted to approximately $759,000 for the year ended
December 31, 2022. At December 31, 2022 and 2021, remaining forfeitures available to offset future contributions were approximately $17,000 and $516,000, respectively.
Notes Receivable from Participants
Participants may
borrow from their 401(k) account in various amounts as specified by the Plan. Notes receivable must be a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balances. The terms for notes receivable range
from one to five years, or up to ten years for the purchase of a primary residence. The notes receivable are secured by the balance in the participants account and bear interest at a rate commensurate with local prevailing rates as determined
by the Benefits Committee. Principal and interest are paid ratably through payroll deductions. Notes receivable of approximately $1,116,000 and $614,000 were granted during the year ended December 31, 2022 and the nine months ended
December 31, 2021, respectively. Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Related fees are recorded as administrative expenses and are charged directly to the
participants accounts when they are incurred. No allowance for credit losses has been recorded as of December 31, 2022 or 2021. Delinquent notes receivable are reclassified as distributions based upon the terms of the Plan document.
Payment of Benefits
Upon retirement, termination of
employment, death or disability, participants or their beneficiaries may elect to receive their account balances in a single sum or in equal annual, or more frequent installments over a period not to exceed the life expectancy of the participant or
the joint life expectancy of the participant and his beneficiary. In-service distributions are also permitted when a participant attains age 59.5 or demonstrates financial hardship.
Administrative Expenses
Plan expenses are primarily paid
by the Plan. Expenses related to the administration of notes receivable from participants are charged directly to the participants account and are included in administrative expenses. Investment related expenses are included in net
depreciation in fair value of investments. During the year ended December 31, 2022, the Plan wrote off approximately $380,000 in accrued administrative expenses that will not be repaid to the Plan Sponsor. These amounts are recorded as Other
Income on the accompanying statement of changes in net assets.
Administration
The Monro, Inc. Benefits Committee is solely responsible for the general administration of the Plan and carrying out the Plan provisions. The Benefits
Committee determines the appropriateness of the Plans investment offerings, monitors investment performance and reports to the Companys Board of Directors. The Company reserves the right, by action of the Board of Directors, to
discontinue contributions and terminate the Plan at any time, subject to the provisions of ERISA. In the event of a termination of the Plan, each participant shall immediately become fully vested.
Since December 2014, the administrator, custodian and trustee of the Plan was Wells Fargo Bank, N.A. (Wells Fargo). The Company changed benefit
plan administrators, custodian and trustee for the Plan from Wells Fargo to Prudential Financial, Inc. (Prudential), effective for the plan year beginning on April 1, 2021. As of April 4, 2022, Empower Retirement, LLC
(Empower) completed the acquisition of Prudentials full-service retirement business and became the benefit plan administrator, custodian and trustee of the Plan. Empower continues to operate under the Prudential name and these will
be used interchangeably throughout these financial statements.
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