8-K: Olin Corporation Amends Supplemental Retirement Savings Plan

Olin Corporation has amended and restated its Supplemental Retirement Savings Plan, renaming it the Olin Corporation Supplemental Retirement Savings Plan, effective October 1, 2024, and making several discretionary changes.

Summary

• Olin Corporation has amended and restated its Supplemental Contributing Employee Ownership Plan, renaming it the Olin Corporation Supplemental Retirement Savings Plan, effective October 1, 2024.
• The changes, generally effective January 1, 2024, include aligning investment options with the Olin Corporation Retirement Savings Plan, allowing the corporation to establish a rabbi trust for funding, and clarifying the plan's operation.
• The plan is designed as an unfunded, nonqualified deferred compensation plan for a select group of management and highly compensated employees.
• It aims to provide supplemental benefits to executives whose contributions to the Olin Corporation Retirement Savings Plan are limited by the Internal Revenue Code.
• The plan allows eligible employees to make pre-tax contributions, with the company also making excess matching and retirement contributions.
• Participants' accounts are credited with Olin Phantom Units and other phantom investment options, with dividend equivalents also being credited.
• Distributions are made in cash upon termination of employment, death, or disability, with options for lump sum or installment payments.
• The plan incorporates a clawback policy adopted by the board on December 7, 2023, which may affect the benefits accrued under the plan.
• The plan is administered by the Benefit Plan Review Committee, which has the authority to interpret the plan and resolve claims.

Sentiment

Score: 7

Explanation: The document outlines routine changes to an existing employee benefit plan. While the changes are positive for the employees, they are not unexpected and do not indicate any significant change in the company's financial health or strategy. The sentiment is therefore moderately positive.

Positives

• The plan amendment aligns investment options with the company's main retirement plan, potentially simplifying investment decisions for participants.
• The establishment of a rabbi trust may provide additional security for the plan's funding.
• The plan provides supplemental benefits to highly compensated employees, which can be a valuable incentive.
• The plan offers flexibility in payment options, allowing participants to choose between lump sum or installment payments.
• The plan is designed to comply with Code Section 409A, which helps to ensure tax compliance.

Negatives

• The plan is unfunded, meaning that participants' benefits are subject to the general credit risk of the company.
• The plan incorporates a clawback policy, which could reduce benefits in certain circumstances.
• Distributions are only made upon termination of employment, death, or disability, which may limit access to funds for participants.
• The plan is complex and may be difficult for some participants to understand.

Risks

• The plan is unfunded, meaning that participants' benefits are subject to the general credit risk of the company.
• The clawback policy could reduce benefits in certain circumstances.
• Changes in tax laws could affect the plan's benefits.
• The plan's investment options are subject to market risk.
• The plan's complexity may lead to misunderstandings or errors.

Future Outlook

The plan will continue to operate as an unfunded, nonqualified deferred compensation plan for eligible employees, with the possibility of future amendments or termination by the company.

Management Comments

• The amendment and restatement of the Supplemental Plan renames the Supplemental Plan, effective October 1, 2024, as the Olin Corporation Supplemental Retirement Savings Plan and reflects certain discretionary changes.
• The above description is intended to be a summary of the material updated terms of the amended and restated Supplemental Plan and is subject to and qualified in its entirety by reference to the full text of the Supplemental Plan.

Industry Context

This type of supplemental retirement plan is common among large corporations to provide additional benefits to highly compensated employees and executives, especially when their contributions to tax-qualified plans are limited by law. It is a competitive tool for attracting and retaining top talent.

Comparison to Industry Standards

• Many large corporations offer supplemental retirement plans similar to Olin's to provide benefits beyond the limits of qualified plans like 401(k)s.
• Companies like Dow Chemical, which had a similar spin-off transaction with Olin, also have supplemental plans for their executives.
• The use of phantom stock units is a common practice in these plans, allowing participants to benefit from the company's stock performance without owning actual shares.
• The inclusion of a clawback policy is also becoming more common, reflecting a trend towards greater accountability for executive compensation.
• The plan's structure and terms are generally consistent with industry standards for nonqualified deferred compensation plans.

Corporate Governance

Stakeholder Impact

• Eligible employees will benefit from the updated plan, which provides supplemental retirement benefits.
• Shareholders may be indirectly affected by the plan's impact on employee retention and motivation.
• The company will incur costs associated with administering the plan.

Next Steps

• The Plan Administrator will implement the changes to the plan.
• Eligible employees will need to make investment elections.
• The company may establish a rabbi trust for funding the plan.

Key Dates

Keywords

Supplemental Retirement Savings Plan, Deferred Compensation, Executive Compensation, Rabbi Trust, Olin Corporation, Phantom Units, Clawback Policy, Retirement Plan, 409A, Investment Options