81 / Schnitzer Steel Industries, Inc. Form 10-K 2021 One of the multiemployer plans that the Company contributes to is the Steelworkers Western Independent Shops Pension Plan (“WISPP,” EIN 90-0169564, Plan No. 001) benefiting the union employees of the Company’s steel manufacturing operations, which are covered by a collective bargaining agreement that will expire on March 31, 2022. As of October 1, 2020, the WISPP was certified by the plan’s actuaries as being in the Green Zone, as defined by the Pension Protection Act of 2006. The Company contributed $4 million to the WISPP for the year ended August 31, 2021, and $3 million for each of the years ended August 31, 2020 and 2019. These contributions represented more than 5% of total contributions to the WISPP for each year. In 2004, the Internal Revenue Service (“IRS”) approved a seven-year extension of the period over which the WISPP may amortize unfunded liabilities, conditioned upon maintenance of certain minimum funding levels. In 2014, the WISPP obtained relief from the specified funding requirements from the IRS, which requires that the WISPP meet a minimum funded percentage on each valuation date and achieve a funded percentage of 100% as of October 1, 2029. Based on the most recent actuarial valuation for the WISPP, the funded percentage using the valuation method prescribed by the IRS satisfied the minimum funded percentage requirement. Company contributions to all of the multiemployer plans were $6 million for each of the years ended August 31, 2021, 2020, and 2019. Defined Contribution Plans The Company has several defined contribution plans covering certain employees. Company contributions to the defined contribution plans totaled $4 million for each of the years ended August 31, 2021, 2020, and 2019. Deferred Compensation Plan In fiscal 2021, the Company established a non-qualified deferred compensation plan (the “DCP”) which permits eligible employees to elect to defer receipt of compensation including salary, bonuses, and certain equity awards made under the Company’s long-term incentive plan. The DCP also allows the Company to make discretionary contributions to participant accounts that may be subject to one or more vesting schedules. Participant contributions, excluding equity awards subject to vesting conditions, are fully vested at all times. The deferred compensation liability as of August 31, 2021 was less than $1 million, consisted entirely of deferred salary, and was classified within other long-term liabilities in the Consolidated Balance Sheets. The Company maintains a rabbi trust to fund obligations under the DCP. The carrying value of assets held in the rabbi trust, which comprise company-owned life insurance policies, substantially equaled the deferred compensation liability as of August 31, 2021. The rabbi trust asset is classified within other assets in the Consolidated Balance Sheets. Note 13 - Share-Based Compensation The Company’s 1993 Stock Incentive Plan, as amended (the “SIP”), was established to provide for the grant of stock-based compensation awards to its employees, consultants, and directors. The SIP authorizes the grant of restricted shares, restricted stock units, performance-based awards including performance share awards, stock options, and stock appreciation rights, and other stock-based awards. The SIP is administered by the Compensation Committee of the Company’s Board of Directors (“Compensation Committee”). There are 12.2 million shares of Class A common stock reserved for issuance under the SIP, of which 2.2 million were available for future grants as of August 31, 2021. Share-based compensation expense recognized in cost of goods sold or selling, general, and administrative expense, as applicable, was $18 million, $10 million, and $17 million for the years ended August 31, 2021, 2020, and 2019, respectively. The Company capitalized less than $1 million of share-based compensation cost to the cost of qualifying long-lived assets in each of fiscal 2021 and 2020. Restricted Stock Units (“RSUs”) During the years ended August 31, 2021, 2020, and 2019, the Compensation Committee granted 317,760, 470,917, and 261,642 RSUs, respectively, to the Company’s key employees under the SIP. RSUs generally vest 20% per year over five years commencing October 31 of the year after grant. Each RSU entitles the recipient to receive one share of Class A common stock upon vesting.
RkJQdWJsaXNoZXIy NTIzOTM0