Exhibit 10.11
ARCH SUPPLEMENTARY AND DEFERRAL
BENEFIT PENSION PLAN
Originally Effective
February 8, 1999
Amended and Restated on December 30,
2008
Effective as of January 1, 2005
Article I. The
Plan
1.1 Establishment of Plan .
Effective as of February 8, 1999 (the “Original
Effective Date”) Arch Chemicals, Inc. (the
“Company” or “Arch”) established a
non-qualified deferred compensation plan known as the Arch
Supplementary and Deferral Benefit Pension Plan (the
“Plan”) for the benefit of certain salaried employees
of Arch and other Employing Companies who may be eligible to
participate in the Plan.
1.2 Purpose of Plan . The
purpose of this Plan is to provide benefits to certain current and
former salaried employees of Arch and other Employing Companies
whose benefits under the terms of The Pension Plan of Arch
Chemicals and any other qualified defined benefit plans maintained
by Arch and the qualified defined benefit plans of Arch’s
predecessor in interest, Olin Corporation, (collectively, the
“Qualified Pension Plans” and the “Qualified Plan
Pension Benefits”) are limited (i) by §415 of the
Internal Revenue Code of 1986, as amended (the “Code”),
(ii) by the limitations on compensation that can be taken into
account in calculating qualified plan benefits under Code
§401(a)(17), and (iii) by the inability to include in
compensation for Qualified Plan Pension Benefits any salary and
awards of management incentive compensation that have been deferred
by eligible employees into non-qualified plans or arrangements.
These limitations are collectively referred to herein as
“Benefit Limitations.” This Plan is intended to provide
employees affected by Benefit Limitations (and their beneficiaries)
with benefits (“Supplemental Pension Benefits”) equal
to the difference in value between what such employees’
Qualified Plan Pension Benefits would be absent the Benefit
Limitations, and what their Qualified Plan Pension Benefits are
taking into account the Benefit Limitations.
1.3 Eligibility and
Participation . Any salaried Arch employee who is eligible to
receive a Qualified Plan Pension Benefit from the Company or an
Employing Company, the amount of which is reduced by reason of the
application of a Benefit Limitation (as previously defined) shall
be a Participant in this Plan and be eligible to receive a
Supplemental Pension Benefit as provided in this Plan.
Notwithstanding the foregoing, any Arch employee who on
December 1, 2005 was a participant in the Arch Senior
Executive Pension Plan shall not be eligible for benefits under
this Plan.
1.4 Nature of Plan . This
Plan is divisible into two components: that portion which qualifies
for the exemption from the Employee Retirement Income Security Act
(“ERISA”) as an unfunded “excess benefit
plan,” and that portion which provides for benefits in excess
of applicable compensation limits, and is intended to be an
unfunded supplemental executive retirement plan for a select group
of management and highly compensated employees. The Plan is also
intended to be a non-qualified deferred compensation plan which
meets the requirements of Code §409A(a)(2), (3) and
(4).
1.5 Plan Document . This Plan
document describes the terms of the Plan as of January 1, 2005
and as amended through December 30, 2008. Prior Plan documents
govern Plan administration for periods prior to January 1,
2005 and for all purposes for Participants or former Participants
who commenced benefits under the Plan prior to January 1,
2005.
Article II.
Definitions
2.1 A “Change in Control
” with respect to a Participating Employer that is
organized as a corporation occurs on the date on which any of the
following events occur (i) a change in the ownership of the
Participating Employer; (ii) a change in the effective control
of the Participating Employer; (iii) a change in the ownership
of a substantial portion of the assets of the Participating
Employer.
(a) A change in the ownership of the
Participating Employer occurs on the date on which any one person,
or more than one person acting as a group, acquires ownership of
stock of the Participating Employer that, together with stock held
by such person or group constitutes more than 50% of the total fair
market value or total voting power of the stock of the
Participating Employer. A change in the effective control of the
Participating Employer occurs on the date on which either
(i) a person, or more than one person acting as a group,
acquires ownership of stock of the Participating Employer
possessing 30% or more of the total voting power of the stock of
the Participating Employer, taking into account all such stock
acquired during the 12-month period ending on the date of the most
recent acquisition, or (ii) a majority of the members of the
Participating Employer’s Board of Directors is replaced
during any 12-month period by directors whose appointment or
election is not endorsed by a majority of the members of such Board
of Directors prior to the date of the appointment or election, but
only if no other corporation is a majority shareholder of the
Participating Employer. A change in the ownership of a substantial
portion of assets occurs on the date on which any one person, or
more than one person acting as a group, other than a person or
group of persons that is related to the Participating Employer,
acquires assets from the Participating Employer that have a total
gross fair market value equal to or more than 80% of the total
gross fair market value of all of the assets of the Participating
Employer immediately prior to such acquisition or acquisitions,
taking into account all such assets acquired during the 12-month
period ending on the date of the most recent
acquisition.
(b) An event constitutes a Change in
Control with respect to a Participant only if the Participant
performs services for the Participating Employer that has
experienced the Change in Control, or the Participant’s
relationship to the affected Participating Employer otherwise
satisfies the requirements of Treasury Regulation
Section 1.409A-3(2)(i)(5)(ii).
(c) The determination as to the
occurrence of a Change in Control shall be based on objective facts
and in accordance with the requirements of Code
Section 409A.
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2.2 “Code” means the
Internal Revenue Code of 1986, as amended from time to
time.
2.3 “Company” means Arch
Chemicals, Inc., a Virginia corporation.
2.4 “Employing Company”
means any company which has adopted this Plan and is included
within the definition of an Employing Company under the terms of
The Pension Plan of Arch Chemicals.
2.5 “Married” means the
Participant has a Spouse, as defined below.
2.6 “Olin” means Olin
Corporation, a predecessor in interest to Arch Chemicals. In
conjunction with establishing this Plan, Arch assumed the
liabilities of Olin for the provision of benefits to Participants
who, immediately prior to February 8, 1999 (the
“Distribution Date”) were participants in the Olin
Supplementary Pension Plan or the Olin Deferral Benefit Pension
Plan (collectively, the “Olin Supplementary and Deferral
Benefit Plan”) as in effect on the Distribution Date and who,
as of the Original Effective Date of this Plan transferred to, and
became employed by, Arch or an affiliated company.
2.7 “Olin Supplementary and
Deferral Benefit Plan” means the Olin Supplementary Pension
Plan and the Olin Deferral Benefit Pension Plan, which were certain
non-qualified deferred compensation plans of Olin. As of the
Distribution Date, each Eligible Employee who, immediately prior to
the Distribution Date, was a participant in the Olin Supplementary
Pension Plan and/or the Olin Deferral Benefit Pension Plan was
credited in this Plan with an accrued benefit equal to that
credited to such individual under the respective Olin Plans as of
the Distribution Date (based upon the Eligible Employee’s
Average Compensation and service with Olin).
2.8 “Plan Administrator”
shall mean the Pension Administration and Review Committee of Arch
Chemicals, Inc.
2.9 “Plan Year” shall
mean each calendar year.
2.10 “Qualified Pension
Plans” means The Pension Plan of Arch Chemicals and any other
qualified defined benefit plans maintained by Arch, provided that
no amendment to a Qualified Pension Plan shall be given effect for
purposes of this Plan to the extent such amendment may or will
result in a direct or indirect change to the time or form of any
payment hereunder, except as permitted under Code §409A and
related regulations.
2.11 “Retires” or
“Retirement” means the Participant has had a Normal
Retirement Date, Early Retirement Date or Deferred Vested
Retirement Date, as further described in Article III,
below.
2.12 “Separation from
Service” means a termination of employment with the Company,
as defined for purposes of Code §409A.
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(a) Except as noted below with
respect to asset sales, the Plan Administrator will determine, in
accordance with Code Section 409A, whether a Separation from
Service has occurred. Except in the case of a Participant on a bona
fide leave of absence as provided below, a Participant is deemed to
have incurred a Separation from Service if the Company and the
Participant reasonably anticipated that the level of services to be
performed by the Participant after a date certain would be reduced
to 20% or less of the average services rendered by the Participant
during the immediately preceding 36-month period (or the total
period of employment, if less than 36 months), disregarding periods
during which the Participant was on a bona fide leave of
absence.
(b) An Employee who is absent from
work due to military leave, sick leave, or other bona fide leave of
absence shall incur a Separation from Service on the first date
immediately following the later of (i) the six-month
anniversary of the commencement of the leave, or (ii) the
expiration of the Employee’s right, if any, to reemployment
under statute or contract. Notwithstanding the preceding, however,
with respect to an Employee who is absent from work due to a
physical or mental impairment that is expected to result in death
or last for a continuous period of at least six months and that
prevents the Employee from performing the duties of his or her
position of employment or a similar position, the twenty-nine-month
anniversary of the commencement of leave shall be substituted for
the six-month anniversary in (i) in the preceding
sentence.
(c) For purposes of determining
whether a Separation from Service has occurred, the Company means
the Company and any Affiliate, except that for purposes of
determining whether another organization is an Affiliate of the
Company, common ownership of at least 50% shall be determinative.
Affiliate means a corporation, trade or business that, together
with the Company, is treated as a single employer under Code
§414(b) or (c).
(d) The Company specifically
reserves the right to determine whether a sale or other disposition
of substantial assets to an unrelated party constitutes a
Separation from Service with respect to a Participant providing
services to the seller immediately prior to the transaction and
providing services to the buyer after the transaction. Such
determination shall be made in accordance with the requirements of
Code §409A.
2.13 “Specified
Employee” means an employee who, as of the date of his or her
Separation from Service, is a “key employee” of the
Company or any Affiliate, any stock of which is actively traded on
an established securities market or otherwise. An employee is a key
employee if he or she meets the requirements of Code
§416(i)(1)(A)(i), (ii), or (iii) (applied in accordance
with applicable regulations thereunder and without regard to Code
§416(i)(5)) at any time during the 12-month period ending on
the Specified Employee Identification Date. Such Employee shall be
treated as a key employee for the entire 12-month period beginning
on the Specified Employee Effective Date.
For purposes of determining whether
an Employee is a Specified Employee, the compensation of the
Employee shall be determined in accordance with the definition of
compensation provided under Treas. Reg.
Section 1.415(c)-2(d)(3) (wages within the meaning of Code
section 3401(a) for purposes of income tax withholding at the
source, plus amounts excludible from gross income
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under section 125(a), 132(f)(4), 402(e)(3),
402(h)(1)(B), 402(k) or 457(b), without regard to rules that limit
the remuneration included in wages based on the nature or location
of the employment or the services performed); provided, however,
that, with respect to a nonresident alien who is not a Participant
in the Plan, compensation shall not include compensation that is
not includible in the gross income of the Employee under Code
Sections 872, 893, 894, 911, 931 and 933, provided such
compensation is not effectively connected with the conduct of a
trade or business within the United States.
Notwithstanding anything in this
paragraph to the contrary, (i) if a different definition of
compensation has been designated by the Company with respect to
another nonqualified deferred compensation plan in which a key
employee participates, the definition of compensation shall be the
definition provided in Treas. Reg. §1.409A-1(i)(2), and
(ii) the Company may through action that is legally binding
with respect to all nonqualified deferred compensation plans
maintained by the Company, elect to use a different definition of
compensation. In the event of corporate transactions described in
Treas. Reg. Section 1.409A-1(i)(6), the identification of
Specified Employees shall be determined in accordance with the
default rules described therein, unless the Employer elects to
utilize the available alternative methodology through designations
made within the timeframes specified therein. Specified Employee
Effective Date means the first day of the fourth month following
the Specified Employee Identification Date, or such earlier date as
is selected by the Plan Administrator. Specified Employee
Identification Date means December 31, unless the Employer has
elected a different date through action that is legally binding
with respect to all nonqualified deferred compensation plans
maintained by the Employer.
2.14 “Spouse” shall mean
the person to whom a Participant is validly married at the date of
the Participant’s death, as evidenced by a marriage
certificate issued in accordance with state law and as recognized
under federal law; provided, however, that if a Participant’s
Spouse at his or her death was not the Participant’s Spouse
for at least 12 months immediately prior to the Participant’s
death, no surviving Spouse’s pre-retirement benefit shall be
paid. Common law marriages shall not be recognized
hereunder.
Article III. Calculation of
Benefits
3.1 Benefits; In General .
Supplemental Pension Benefits are payable hereunder upon the first
to occur of the following:
(a) a Participant’s Normal
Retirement Date, as provided in Section 3.3;
(b) a Participant’s Early
Retirement Date, as provided in Section 3.4; or
(c) a Participant’s Deferred
Vested Retirement Date, as provided in Section 3.5.
A Participant’s Supplemental
Pension Benefit may also become payable in the event of a Change of
Control, as provided in Section 3.7, and pre-retirement
survivor benefits may be payable in the event a Married Participant
dies prior to qualifying for Supplemental Pension Benefits under
subsections (a) – (c), above, as provided in
Section 3.6(b).
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3.2 Benefit Formula . The
Supplemental Pension Benefit payable to a Participant shall be
calculated in the form of a single life annuity payable over the
lifetime of the Participant commencing at the Participant’s
sixty-fifth (65th) birthday or, if later, his or her actual
Separation from Service date, and shall be a monthly amount equal
to the difference between (a) and (b) below:
(a) the monthly amount of the
Qualified Plan Pension Benefit to which the Participant would have
been entitled had such benefit been calculated (i) including
non-qualified deferrals of regular salary and awards under any
applicable management incentive plan, and (ii) without regard
to the Benefit Limitations; and
(b) the monthly amount of the
Qualified Plan Pension Benefit payable to the
Participant.
The amounts described in
(a) and (b), above, shall be calculated based on the
Participant’s service and compensation as of the date of the
Participant’s Separation from Service, and shall reflect the
effect of any applicable vesting schedule on the
Participant’s Qualified Plan Pension Benefits. For purposes
of determining the amount and entitlement to the benefits described
in (a) and (b) above, a Participant shall credited with
the service, compensation, and accrued benefit that the Participant
was credited with under the Olin Supplementary and Deferral Benefit
Plan, and any Olin qualified defined benefit pension
plan(s).
3.3 Normal Retirement
Benefits . Supplemental Pension Benefits are payable upon a
Participant’s Normal Retirement Date, which is the date of a
Participant’s Separation fro
