<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
---------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
---------------------------------------------
COMMISSION FILE NUMBER 1-1070
---------------------------------------------------
OLIN CORPORATION
- ---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 13-1872319
- ---------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
501 Merritt 7, Norwalk, CT 06851
- ---------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(203) 750-3000
- ---------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- ---------------------------------------------------------------------------
(Former name, former address, and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X NO
----- ------
As of April 30, 1998, there were outstanding 47,992,229 shares of the
registrant's common stock.
<PAGE>
Part I - Financial Information
Item 1. Financial Statements.
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Balance Sheets
(In millions)
Unaudited
March 31, December 31,
1998 1997
---- ----
ASSETS
- ------
Cash and cash equivalents $ 53.5 $ 165.8
Short-term investments 21.0 28.1
Accounts receivable, net 388.4 350.1
Inventories 361.3 347.3
Other current assets 43.3 44.7
--------- ---------
Total current assets 867.5 936.0
Investments and advances 38.3 30.9
Property, plant and equipment
(less accumulated depreciation
of $1,553.5 and $1,528.2) 785.1 795.0
Other assets 182.1 183.5
--------- ---------
Total assets $1,873.0 $1,945.4
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Short-term borrowings and current
installments of long-term debt $ 7.5 $ 9.2
Accounts payable 204.0 255.9
Income taxes payable 18.9 5.4
Accrued liabilities 231.7 241.7
--------- ---------
Total current liabilities 462.1 512.2
Long-term debt 268.0 268.0
Other liabilities 278.3 286.9
Commitments and contingencies
Shareholders' equity:
Common stock, par value $1 per share:
Authorized 120.0 shares.
Issued 48.1 shares (48.8 in 1997) 48.1 48.8
Additional paid-in capital 313.0 347.7
Cumulative translation adjustment (26.4) (23.7)
Retained earnings 529.9 505.5
--------- ---------
Total shareholders' equity 864.6 878.3
--------- ---------
Total liabilities and
shareholders' equity $1,873.0 $1,945.4
========= =========
___________________________________
The accompanying Notes to Condensed Financial Statements are an integral part of
the condensed financial statements.
<PAGE>
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statements of Income (Unaudited)
(In millions, except per share amounts)
Three Months
Ended March 31,
-----------------------------
1998 1997
---- ----
Sales $573.1 $591.2
Operating expenses:
Cost of goods sold 431.9 449.9
Selling and administration 76.6 72.4
Research and development 6.8 7.4
---------------- -----------------
Operating income 57.8 61.5
Interest expense 5.0 7.5
Interest income 1.5 6.0
Other income 5.3 3.8
---------------- -----------------
Income before taxes 59.6 63.8
Income taxes 20.5 22.0
---------------- -----------------
Net income $ 39.1 $ 41.8
================ =================
Net income per common share:
Basic $0.81 $0.81
Diluted $0.80 $0.80
Dividends per common share $0.30 $0.30
Average common shares outstanding:
Basic 48.6 51.9
Diluted 49.0 52.2
___________________________________
The accompanying Notes to Condensed Financial Statements are an integral part of
the condensed financial statements.
<PAGE>
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
Condensed Statements of Cash Flows (Unaudited)
(In millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------
1998 1997
---- ----
<S> <C> <C>
Operating activities
- --------------------
Net income $39.1 $41.8
Adjustments to reconcile net income to net cash and
cash equivalents provided by operating activities
Earnings of non-consolidated affiliates (2.8) (2.2)
Depreciation and amortization 30.5 26.7
Deferred taxes 3.9 1.8
Change in assets and liabilities net of
purchases and sales of businesses:
Receivables (38.3) (94.2)
Inventories (14.0) (12.3)
Other current assets 1.4 (1.6)
Accounts payable and accrued liabilities (61.9) (39.7)
Income taxes payable 13.5 (99.5)
Noncurrent liabilities (6.6) (14.1)
Other operating activities (5.6) (0.7)
------- -------
Net operating activities (40.8) (194.0)
------- -------
Investing activities
- ---------------------
Capital expenditures (19.3) (13.9)
Business acquired in purchase transaction - (2.0)
Purchase of short-term investments (9.4) (21.3)
Proceeds from sale of short-term investments 16.5 20.7
Investments and advances-affiliated companies at equity (4.6) (8.6)
Other investing activities (1.0) 0.1
------- -------
Net investing activities (17.8) (25.0)
------- -------
Financing activities
- --------------------
Long-term debt repayments (1.7) (5.0)
Short-term borrowings - 1.2
Purchase of Olin common stock (38.8) (41.4)
Repayment from ESOP - 5.0
Stock options exercised 2.0 1.2
Dividends paid (14.7) (15.7)
Other financing activities (0.5) -
------- -------
Net financing activities (53.7) (54.7)
------- -------
Net decrease in cash and cash equivalents (112.3) (273.7)
Cash and cash equivalents, beginning of period 165.8 523.5
------- -------
Cash and cash equivalents, end of period $53.5 $249.8
======= =======
</TABLE>
___________________________________
The accompanying Notes to Condensed Financial Statements are an integral part of
the condensed financial statements.
<PAGE>
OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. The condensed financial statements included herein have been prepared by the
company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission and, in the opinion of the company,
reflect all adjustments (consisting only of normal accruals) which are
necessary to present fairly the results for interim periods. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations; however, the company believes that the disclosures are adequate
to make the information presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements, accounting policies and the notes thereto and management's
discussion and analysis of financial condition and results of operations
included in the company's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. Inventory consists of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
---------- -------------
<S> <C> <C>
Raw materials and supplies $ 153.1 $ 158.1
Work in process 128.8 128.7
Finished goods 211.3 197.7
------- -------
493.2 484.5
LIFO reserve (131.9) (137.2)
------- -------
Inventory, net $ 361.3 $ 347.3
======= =======
</TABLE>
Inventories are valued principally by the dollar value last-in, first-out
(LIFO) method of inventory accounting; in aggregate, such valuations are not
in excess of market. Elements of costs in inventories include raw material,
direct labor and manufacturing overhead. Inventories under the LIFO method
are based on annual determination of quantities and costs as of the year-end;
therefore, the condensed financial statements at March 31, 1998, reflect
certain estimates relating to inventory quantities and costs at December 31,
1998.
3. Basic earnings per share are computed by dividing net income by the weighted
average number of common shares outstanding. Diluted earnings per share
reflect the dilutive effect of stock options.
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------
1998 1997
------- ------
<S> <C> <C>
Basic Earnings Per Share
------------------------
Basic earnings:
Net income $39.1 $41.8
Basic shares 48.6 51.9
Basic earnings per share $0.81 $0.81
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Diluted Earnings Per Share
- --------------------------
Diluted earnings:
<S> <C> <C>
Net income $39.1 $41.8
Diluted shares:
Basic shares 48.6 51.9
Stock options and remuneration agreements 0.4 0.3
----- -----
Diluted shares 49.0 52.2
===== =====
Diluted earnings per share $0.80 $0.80
</TABLE>
4. The company is party to various governmental and private environmental
actions associated with waste disposal sites and manufacturing facilities.
Environmental provisions charged to income amounted to $4 million for the
three months ended March 31, 1998 and 1997. Charges to income for
investigatory and remedial efforts were material to operating results in 1997
and may be material to operating results in 1998. The consolidated balance
sheets include reserves for future environmental expenditures to investigate
and remediate known sites amounting to $136 million at March 31, 1998 and
December 31, 1997, of which $106 million was classified as other noncurrent
liabilities.
Environmental exposures are difficult to assess for numerous reasons,
including the identification of new sites, developments at sites resulting
from investigatory studies, advances in technology, changes in environmental
laws and regulations and their application, the scarcity of reliable data
pertaining to identified sites, the difficulty in assessing the involvement
and financial capability of other potentially responsible parties and the
company's ability to obtain contributions from other parties and the length
of time over which site remediation occurs. It is possible that some of these
matters (the outcomes of which are subject to various uncertainties) may be
resolved unfavorably against the company.
5. In April 1998, the Board of Directors authorized an additional share
repurchase program of up to 5 million shares of Olin common stock, from time
to time, as conditions warrant.
6. The company enters into forward sales and purchase contracts and currency
options to manage currency risk resulting from purchase and sale commitments
denominated in foreign currencies (principally Belgian franc, Canadian
dollar, Irish punt and Japanese yen) and relating to particular anticipated
but not yet committed purchases and sales expected to be denominated in those
currencies. All of the currency derivatives expire within one year and are
for United States dollar equivalents. The counterparties to the options and
contracts are major financial institutions. The risk of loss to the company
in the event of nonperformance by a counterparty is not significant. In
accordance with Statement of Financial Accounting Standards No. 52, Foreign
Currency Translation (SFAS 52), a transaction is classified as a hedge when
the foreign currency transaction is designated as, and is effective as, a
hedge of a foreign currency commitment and the foreign currency commitment is
firm. If a transaction does not meet the criteria to qualify as a hedge, it
is considered to be speculative. For foreign currency commitments that are
classified as a hedge, any gain or loss on the commitment is deferred
<PAGE>
until it matures. Any unrealized gains or losses associated with foreign
currency commitments that are classified as speculative are recognized in the
current period. Foreign currency gains and losses realized are included in
the income statement in Selling and Administration. If a foreign currency
transaction previously considered as a hedge is terminated or matures before
the transaction date of the related commitment, any deferred gain or loss
shall continue to be deferred until the transaction date of the commitment.
During 1992, the company swapped interest payments on $50 million
principal amount of its 8% notes due 2002 to a floating rate (6.0625% at
March 31, 1998). In June 1995, the company offset this transaction by
swapping interest payments to a fixed rate of 6.485%. Counterparties to the
interest rate swap contracts are major financial institutions. The risk of
loss to the company in the event of nonperformance by a counterparty is not
significant. The company records the net difference between the interest
spreads as Interest Expense in the income statement.
Depending on market conditions, the company may enter into futures
contracts and put and call options in order to reduce the impact of metal
price fluctuations, principally in copper, lead and zinc. In accordance with
SFAS No. 80, "Accounting for Futures Contracts," futures contracts are
classified as a hedge when the item to be hedged exposes the company to price
risk and the futures contract reduces that risk exposure. Futures contracts
that relate to transactions that are expected to occur are accounted for as a
hedge when the significant characteristics and expected terms of the
anticipated transaction are identified and it is probable that the
anticipated transaction will occur. If a transaction does not meet the
criteria to qualify as a hedge, it is considered to be speculative. Any gains
or losses associated with futures contracts which are classified as
speculative are recognized in the current period. If a futures contract that
has been accounted for as a hedge is closed or matures before the date of the
anticipated transaction, the accumulated change in value of the contract is
carried forward and included in the measurement of the related transaction.
Option contracts are accounted for in the same manner that futures contracts
are accounted for.
7. As of January 1, 1998, the company adopted SFAS No. 130, "Reporting
Comprehensive Income," which established standards for the reporting and
display of comprehensive income and its components in the financial
statements. The company does not provide for U.S. income taxes on foreign
currency translation adjustments since it does not provide for such taxes on
undistributed earnings on foreign subsidiaries. The components of
comprehensive income for the three-month periods ended March 31, 1998 and
1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Net income $39.1 $41.8
Other comprehensive income:
Cumulative translation adjustments (2.7) (5.7)
----- -----
Comprehensive income $36.4 $36.1
===== =====
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
---------------------------------------------------------------
Results of Operations.
----------------------
RESULTS OF OPERATIONS
(in millions, except per share data)
Three Months
Ended March 31,
--------------
CONSOLIDATED 1998 1997
------ ------
Sales $573.1 $591.2
Gross Margin 141.2 141.3
Selling and Administration 76.6 72.4
Operating Income 57.8 61.5
Interest Income 1.5 6.0
Other Income 5.3 3.8
Net Income 39.1 41.8
Net Income per Common Share:
Basic 0.81 0.81
Diluted 0.80 0.80
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO 1997
Sales decreased 3% due primarily to a decrease in metal values.
Selling and administration expenses as a percentage of sales were 13% in 1998
and 12% in 1997. Selling and administrative expenses increased in amount due to
higher administration expenses for information technology systems and business
planning and development activities.
The decrease in interest income is due to the amount of income earned on the
lower average levels of cash, cash equivalents and short-term investments.
The increase in other income is due primarily to the favorable performance of
the non-consolidated affiliates.
The effective tax rate approximated 34.5% in 1998 and 1997.
CHEMICALS
Three Months
Ended March 31,
---------------
1998 1997
------- ------
Sales $319.3 $327.2
Operating Income 42.1 49.4
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO 1997
Sales decreased 2% as a 3% decrease in volumes was partially offset by a 1%
increase in prices. Operating income decreased 15%. In Chlor-Alkali sales and
operating income decreased as lower volumes (primarily caustic soda) were
partially offset by higher pricing for chlorine and caustic soda. Sales volumes
were lower due to a variety of factors including railroad transportation
problems, reduced customer demand caused by rainy weather and reduced Asian
demand for some of our customers' products. Pool Products' operating income
decreased significantly due to lower volumes and pricing. Exports of calcium
hypochlorite from Chinese producers have disrupted the supply/demand balance and
affected prices on a worldwide basis. Higher manufacturing costs, including
depreciation expense, also have negatively impacted Pool Products' performance.
For the total year, estimated lower volumes and pricing in Pool Products along
with higher manufacturing costs, including depreciation expense, are expected to
decrease its operating income. Excluding the impact of its divested businesses,
Performance Urethanes & Organics' operating performance improved due to the
restructuring of this business along with lower raw materials costs. Despite a
slower-than-expected recovery period for the semiconductor industry, increased
volumes along with the inclusion of Aegis Inc.'s operating results contributed
to Microelectronic Materials' improved performance. Higher
<PAGE>
volumes and pricing were the primary contributors to the improved
performance in the Hydrazine and the Sulfuric Acid businesses.
METALS and AMMUNITION
Three Months
Ended March 31,
---------------
1998 1997
------- ------
Sales $253.8 $264.0
Operating Income 15.7 12.1
THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO 1997
Sales decreased 4% as a 7% decrease in metal values was partially offset by a 3%
increase in volumes. Operating income increased 30%. Brass' sales decreased as
lower metal values more than offset the higher volumes resulting from the strong
demand from the automotive and housing markets and improved demand from the
ammunition market. These additional volumes along with higher earnings at A.J.
Oster resulting from higher shipments contributed to Brass' improved operating
income. In Winchester, increased domestic commercial ammunition sales were more
than offset by lower sales in Australia. The Australian market is suffering
from lower demand and dealer inventory build-ups as several major distributors
are liquidating stocks in response to the restrictive gun legislation. The
profit impact from the domestic sales along with improved plant operating
performance and lower costs contributed to Winchester's improved operating
results.
ENVIRONMENTAL
In the first three months of 1998, the company spent approximately $4 million
for investigatory and remediation activities associated with former waste sites
and past operations. Spending for environmental investigatory and remedial
efforts for the full year 1998 is estimated to be $30 million. Cash outlays for
remedial and investigatory activities associated with former waste sites and
past operations were not charged to income but instead were charged to reserves
established for such costs identified and expensed to income in prior periods.
Associated costs of investigatory and remedial activities are provided for in
accordance with generally accepted accounting principles governing probability
and the ability to reasonably estimate future costs. Charges to income for
investigatory and remedial activities were $4 million for the three months ended
March 31, 1998. Charges to income for investigatory and remedial efforts were
material to operating results in 1997 and may be material to net income in 1998
and future years.
The company's consolidated balance sheets included liabilities for future
environmental expenditures to investigate and remediate known sites amounting to
$136 million at March 31, 1998 and December 31, 1997, of which $106 million was
classified as other noncurrent liabilities. Those amounts did not take into
account any discounting of future expenditures or any consideration of insurance
recoveries or advances in technology. Those liabilities are reassessed
periodically to determine if environmental circumstances have changed and/or
remediation efforts and their costs can be better estimated. As a result of
these reassessments, future charges to income may be made for additional
liabilities.
Annual environmental-related cash outlays for site investigation and
remediation, capital projects and normal plant operations are expected to range
between $65-$90 million over the next several years. While the company does not
anticipate a material increase in the projected annual level of its
environmental-related costs, there is always the possibility that such increases
may occur in the future in view of the
<PAGE>
uncertainties associated with environmental exposures. Environmental exposures
are difficult to assess for numerous reasons, including the identification of
new sites, developments at sites resulting from investigatory studies, advances
in technology, changes in environmental laws and regulations and their
application, the scarcity of reliable data pertaining to identified sites, the
difficulty in assessing the involvement and the financial capability of other
potentially responsible parties and the company's ability to obtain
contributions from other parties and the lengthy time periods over which site
remediation occurs. It is possible that some of these matters (the outcomes of
which are subject to various uncertainties) may be resolved unfavorably against
the company.
LIQUIDITY, INVESTMENT ACTIVITY AND OTHER FINANCIAL DATA
Cash Flow Data Three Months
Used for (in millions) Ended March 31,
-----------------------
1998 1997
------------- --------
Net Operating Activities $(40.8) $(194.0)
Capital Expenditures (19.3) (13.9)
Net Investing Activities (17.8) (25.0)
Purchases of Olin Common Stock (38.8) (41.4)
Net Financing Activities (53.7) (54.7)
Operating income and cash and cash equivalents on hand were used to finance the
company's seasonal working capital requirements, capital and investment
projects, dividends and the repurchase of Olin common stock.
OPERATING ACTIVITIES
Cash used for operating activities in 1998 was for an increase in working
capital and lower operating income. Lower accounts payable and accrued
liability levels along with higher accounts receivables due to the seasonal Pool
Products business, were the main contributors to the increase in working
capital. Cash used for operating activities in 1997 was for an increase in
working capital resulting from higher receivable levels associated with the
Niachlor acquisition, tax payments on the sale of the isocyanates business and
lower operating income.
INVESTING ACTIVITIES
Capital spending of $19.3 million in 1998 was 39% higher than 1997. Capital
spending for 1998 is estimated to increase approximately 15-30% from 1997 in
order to provide additional capacity for certain Chemicals product lines,
particularly in Microelectronic Materials and Biocides. Microelectronic
Materials' high-purity chemical plant in Belgium was completed in April 1998.
FINANCING ACTIVITIES
At March 31, 1998, the company maintained committed credit facilities with banks
of $254 million, all of, which was available. The company believes that these
credit facilities are adequate to satisfy its liquidity needs for the near
future.
During the first quarter of 1998, the company used $39 million to repurchase
833,500 shares of its common stock, bringing the cumulative total shares
repurchased to 4,660,600 under a program approved by the board of directors in
late 1996. It is expected that this program will be completed during the second
quarter of 1998. In April 1998, the board of directors authorized an additional
share repurchase program of up to 5 million shares of common stock.
At March 31, 1998, the percent of total debt to total capitalization was 24.2%,
up from 24.0% at year-end 1997 and down from 30.6% at March 31, 1997. The
decrease from March 31, 1997 was due to the repayment of the 9.5% subordinated
notes ($125 million in June 1997).
<PAGE>
On May 1, 1998, the company prepaid its 7.97% notes for approximately $39
million representing primarily principal and accrued interest. The early
retirement of these notes did not have a material impact on the results of
operations.
NEW ACCOUNTING STANDARD
In June 1997, the Financial Accounting Standards Board issued SFAS No.131,
"Disclosure about Segments of an Enterprise and Related Information," which
establishes standards for the way that segment information is to be disclosed in
the financial statements along with additional information on products and
services, geographic areas and major customers. The company is still assessing
the disclosure requirements of this standard, which is effective for the periods
beginning after December 15, 1997.
YEAR 2000 COMPUTER SYSTEMS
The company is in the process of upgrading its information technology systems
and implementing SAP. As a result it is reviewing all internal processes and
hardware and software issues. In addition, it is analyzing the issues relating
to the Year 2000 and is also discussing with its vendors and customers the
possibility of any interface difficulties, which may affect the company. With
respect to the Year 2000, no significant concerns have been identified to date.
While management expects the costs associated with information technology
systems will increase over the next few years and will be higher than those in
previous years, the additional costs are not expected to be material.
CAUTIONARY STATEMENT UNDER FEDERAL SECURITIES LAWS
The information in the Results of Operations section, Environmental Matters
section and the Liquidity, Investment Activity and Other Financial Data sections
(and subsections thereof) contains forward-looking statements that are based on
management's beliefs, certain assumptions made by management and current
expectations, estimates and projections about the markets and economy in which
the company and its various divisions operate. Words such as "expects,"
"believes," "should," "plans," "will," "estimates," and variations of such words
and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions ("Future Factors") which
are difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expected or forecasted in such forward-looking
statements. The company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of future events, new
information or otherwise. Information on Future Factors which could cause
actual results to differ materially from those discussed in these sections
appears within such sections and in the last sentence of the section "1998
Outlook -- Cautionary Statement under Federal Securities Laws" contained in Item
7 -- Management's Discussion and Analysis of Financial Condition and Results of
Operations of the company's 1997 Form 10-K (page 20 of the 1997 Annual Report to
Shareholders), such last sentence being incorporated by reference herein.
Part 3. Quantitative and Qualitative Disclosures about Market Risk.
Not Applicable.
<PAGE>
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
--------
3. By-laws as amended effective April 30, 1998.
12. Computation of Ratio of Earnings to Fixed Charges (Unaudited).
27. Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended March
31, 1998.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OLIN CORPORATION
(Registrant)
By: A.W. Ruggiero
---------------------------
A.W. Ruggiero
Senior Vice President and
Chief Financial Officer
(Authorized Officer)
Date: May 13, 1998
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
--------- -----------
3. By-laws as amended effective April 30, 1998.
12. Computation of Ratio of Earnings to Fixed Charges (Unaudited).
27. Financial Data Schedule.
<PAGE>
EXHIBIT 3
===================================================================
BY-LAWS
OF
OLIN CORPORATION
AS AMENDED
EFFECTIVE
April 30, 1998
===================================================================
<PAGE>
BY-LAWS
OF
OLIN CORPORATION
____________________________
ARTICLE I.
MEETINGS OF SHAREHOLDERS.
SECTION 1. PLACE OF MEETINGS. All meetings of the shareholders of Olin
------------------
Corporation (hereinafter called the "Corporation") shall be held at such place,
either within or without the Commonwealth of Virginia, as may from time to time
be fixed by the Board of Directors of the Corporation (hereinafter called the
"Board").
SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders of the
----------------
Corporation for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held on the last
Thursday in April in each year (or, if that day shall be a legal holiday, then
on the next succeeding business day), or on such other day and/or in such other
month as may be fixed by the Board, at such hour as may be specified in the
notice thereof.
SECTION 3. SPECIAL MEETINGS. A special meeting of the shareholders for any
-----------------
purpose or purposes, unless otherwise provided by law or in the Articles of
Incorporation of the Corporation as from time to time amended (hereinafter
called the "Articles"), may be held at any time upon the call of the Board, the
Chairman of the Board, the President or the holders of a majority of the shares
of the issued and outstanding stock of the Corporation entitled to vote at the
meeting.
SECTION 4. NOTICE OF MEETINGS. Except as otherwise provided by law or the
-------------------
Articles, not less than ten nor more than sixty days' notice in writing of the
place, day, hour and purpose or purposes of each meeting of the shareholders,
whether annual or special, shall be given to each shareholder of record of the
Corporation entitled to vote at such meeting, either by the delivery thereof to
such shareholder personally or by the mailing thereof to such shareholder in a
postage prepaid envelope addressed to such shareholder at his address as it
appears on the stock transfer books of the Corporation; provided, however, that
in the case of a special meeting of shareholders called by the shareholders,
such notice shall be given at least fifty days before the date of the meeting.
Notice of any meeting of shareholders shall not be required to be given to any
shareholder who shall attend the meeting in person or by proxy, unless
attendance is for the express purpose of objecting to the transaction of any
business because the meeting was not lawfully called or convened, or who shall
waive notice thereof in writing signed by the shareholder before, at or after
such meeting. Notice of any adjourned meeting need not be given, except when
expressly required by law.
<PAGE>
SECTION 5. QUORUM. Shares representing a majority of the votes entitled to
-------
be cast on a matter by all classes or series which are entitled to vote thereon
and be counted together collectively, represented in person or by proxy at any
meeting of the shareholders, shall constitute a quorum for the transaction of
business thereat with respect to such matter, unless otherwise provided by law
or the Articles. In the absence of a quorum at any such meeting or any
adjournment or adjournments thereof, shares representing a majority of the votes
cast on the matter of adjournment, either in person or by proxy, may adjourn
such meeting from time to time until a quorum is obtained. At any such
adjourned meeting at which a quorum has been obtained, any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 6. VOTING. Unless otherwise provided by law or the Articles, at
-------
each meeting of the shareholders each shareholder entitled to vote at such
meeting shall be entitled to one vote for each share of stock standing in his
name on the books of the Corporation upon any date fixed as hereinafter
provided, and may vote either in person or by proxy in writing. Unless demanded
by a shareholder present in person or represented by proxy at any meeting of the
shareholders and entitled to vote thereon or so directed by the chairman of the
meeting, the vote on any matter need not be by ballot. On a vote by ballot,
each ballot shall be signed by the shareholder voting or his proxy, and it shall
show the number of shares voted.
SECTION 7. JUDGES. One or more judges or inspectors of election for any
-------
meeting of shareholders may be appointed by the chairman of such meeting, for
the purpose of receiving and taking charge of proxies and ballots and deciding
all questions as to the qualification of voters, the validity of proxies and
ballots and the number of votes properly cast.
SECTION 8. CONDUCT OF MEETING. The chairman of the meeting at each meeting
-------------------
of shareholders shall have all the powers and authority vested in presiding
officers by law or practice, without restriction, as well as the authority to
conduct an orderly meeting and to impose reasonable limits on the amount of time
taken up in remarks by any one shareholder.
SECTION 9. BUSINESS PROPOSED BY A SHAREHOLDER. To be properly brought
-----------------------------------
before a meeting of shareholders, business must be (i) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the Board
of Directors, (ii) otherwise properly brought before the meeting by or at the
direction of the Board of Directors or (iii) in the case of an annual meeting of
shareholders or a special meeting called at the request of shareholders in
accordance with these By-laws, properly brought before the meeting by a
shareholder. In addition to any other applicable requirements, for business to
be properly brought before a meeting by a shareholder, the shareholder must have
given timely notice thereof in writing to the Secretary of the Corporation. To
be timely, a shareholder's notice must be given, either by personal delivery or
by United States registered or certified mail, postage prepaid, to the Secretary
of the Corporation in the case of an annual meeting, not later than 90 days
before the anniversary of the
-2-
<PAGE>
immediately preceding annual meeting and in the case of a special meeting called
at the request of shareholders, in accordance with the procedures set forth in
Section 10 of Article I of these By-laws. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes to bring
before the meeting (i) a brief description of the business desired to be brought
before the meeting, including the complete text of any resolutions to be
presented at the meeting with respect to such business, and the reasons for
conducting such business at the meeting, (ii) the name and address of record of
the shareholder proposing such business, (iii) the class and number of shares of
the Corporation that are beneficially owned by the shareholder and any other
person on whose behalf the proposal is made, and (iv) any material interest of
the shareholder and any other person on whose behalf the proposal is made, in
such business. In the event that a shareholder attempts to bring business before
a meeting without complying with the foregoing procedure, the chairman of the
meeting may declare to the meeting that the business was not properly brought
before the meeting and, if he shall so declare, such business shall not be
transacted.
SECTION 10. SPECIAL MEETING AT REQUEST OF SHAREHOLDERS.
-------------------------------------------
(a) Any holder or holders of record of a majority of the outstanding shares
of Common Stock requesting the Corporation to call a special meeting of
shareholders pursuant to Section 2 of Article Eighth of the Restated Articles of
Incorporation (collectively, the "Initiating Shareholder") shall give written
notice of such request to the Secretary of the Corporation at its principal
executive offices (the "Notice"). The Notice shall be sent in the manner and
contain all the information that would be required in a notice to the Secretary
given pursuant to Section 9 of this Article I.
(b) If the Initiating Shareholder owns of record a majority of the
outstanding Common Stock as determined by the Secretary of the Corporation, the
Corporation shall be required to call the special meeting of shareholders
requested by the Initiating Shareholder.
(c) The record date for determining the shareholders of record entitled to
vote at a special meeting called pursuant to this Section 10 shall be fixed by
the Board of Directors which record date will be within 60 days of the date the
Secretary of the Corporation determines the Corporation is required to call such
special meeting. Written notice of the meeting shall be mailed by the
Corporation to shareholders of record on such record date within 10 days after
the record date (or such longer period as may be necessary for the Corporation
to file its proxy materials with, and receive and respond to the comments of,
the Securities and Exchange Commission), and the meeting will be held within 50
days after the date of mailing of the notice, as determined by the Board of
Directors.
(d) The business to be conducted at a special meeting called pursuant to
this Section 10 shall be limited to the business set forth in the Notice and
such other business or proposals as the Board of Directors shall determine and
shall be set forth in the notice of meeting. The Board of Directors or the
Chairman of the Board of Directors may determine other rules and procedures for
the conduct of the meeting.
-3-
<PAGE>
ARTICLE II.
BOARD OF DIRECTORS.
SECTION 1. NUMBER, CLASSIFICATION, TERM, ELECTION. The property, business
---------------------------------------
and affairs of the Corporation shall be managed under the direction of the Board
as from time to time constituted. The Board shall consist of twelve directors,
but the number of directors may be increased to any number, not more than
eighteen directors, or decreased to any number, not less than three directors,
by amendment of these By-laws, provided that any increase or decrease by more
than thirty percent of the number of directors of all classes immediately
following the most recent election of directors by the shareholders may only be
effected by the shareholders. No director need be a shareholder. The Board
shall be divided into three classes, Class I, Class II and Class III, as nearly
equal in number as possible, with the members of each class to serve for the
respective terms of office provided in the Articles, and until their respective
successors shall have been duly elected or until death or resignation or until
removal in the manner hereinafter provided. In case the number of directors
shall be increased, the additional directors to fill the vacancies caused by
such increase shall be elected in accordance with the provisions of Section 4 of
Article VI of these By-laws. Any increase or decrease in the number of
directors shall be so apportioned among the classes by the Board as to make all
classes as nearly equal in number as possible.
Subject to the rights of holders of any Preferred Stock outstanding,
nominations for the election of directors may be made by the Board or a
committee appointed by the Board or by any shareholder entitled to vote in the
election of directors generally. However, any shareholder entitled to vote in
the election of directors generally may nominate one or more persons for
election as directors at a meeting only if it is an annual meeting and written
notice of such shareholder's intent to make such nomination or nominations has
been given, either by personal delivery or by United States registered or
certified mail, postage prepaid, to the Secretary of the Corporation not later
than 90 days before the anniversary of the immediately preceding annual
meeting. Each such notice shall set forth: (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record of
shares of the Corporation entitled to vote at such meeting (stating the class
and number thereof) and intends to appear in person or by proxy at the meeting
to nominate the person or persons specified in the notice; (c) a description of
all arrangements or understandings between the shareholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the shareholder; and (d) such
other information regarding each nominee proposed by such shareholder as would
be required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had the nominee been nominated
or intended to be nominated by the Board of Directors, and shall include a
consent signed by each such nominee to serve as a director of the Corporation if
so elected. The chairman of the
-4-
<PAGE>
meeting may refuse to acknowledge the nomination by a shareholder of any person
that is not made in compliance with the foregoing procedure.
SECTION 2. COMPENSATION. Each director, in consideration of his serving as
-------------
such, shall be entitled to receive from the Corporation such amount per annum or
such fees for attendance at Board and Committee meetings, or both, in cash or
other property, including securities of the Corporation, as the Board shall from
time to time determine, together with reimbursements for the reasonable expenses
incurred by him in connection with the performance of his duties. Nothing
contained herein shall preclude any director from serving the Corporation, or
any subsidiary or affiliated corporation, in any other capacity and receiving
proper compensation therefor. If the Board adopts a resolution to that effect,
any director may elect to defer all or any part of the annual and other fees
hereinabove referred to for such period and on such terms and conditions as
shall be permitted by such resolution.
SECTION 3. PLACE OF MEETINGS. The Board may hold its meetings at such
------------------
place or places within or without the Commonwealth of Virginia as it may from
time to time by resolution determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
SECTION 4. ORGANIZATION MEETING. After each annual election of directors,
---------------------
as soon as conveniently may be, the newly constituted Board shall meet for the
purposes of organization. At such organization meeting, the newly constituted
Board shall elect officers of the Corporation and transact such other business
as shall come before the meeting. Notice of organization meetings of the Board
need not be given. Any organization meeting may be held at any other time or
place which shall be specified in a notice given as hereinafter provided for
special meetings of the Board, or in a waiver of notice thereof signed by all
the directors.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Board may be held at
-----------------
such time and place as may from time to time be specified in a resolution
adopted by the Board then in effect; and, unless otherwise required by such
resolution, or by law, notice of any such regular meeting need not be given.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board shall be held
-----------------
whenever called by the Chief Executive Officer, or by the Secretary at the
request of any three directors. Notice of a special meeting shall be mailed to
each director, addressed to him at his residence or usual place of business, not
later than the second day before the day on which such meeting is to be held, or
shall be sent addressed to him at such place by telegraph, cable or wireless, or
be delivered personally or by telephone, not later than the day before the day
on which such meeting is to be held. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the Board need be
specified in the notice of such meeting, unless required by the Articles.
SECTION 7. QUORUM. At each meeting of the Board the presence of a majority
-------
of the number of directors fixed by these By-laws shall be necessary to
constitute a quorum.
-5-
<PAGE>
The act of a majority of the directors present at a meeting at which a quorum
shall be present shall be the act of the Board, except as may be otherwise
provided by law or by these By-laws. Any meeting of the Board may be adjourned
by a majority vote of the directors present at such meeting. Notice of any
adjourned meeting need not be given.
SECTION 8. WAIVERS OF NOTICE OF MEETINGS. Anything in these By-laws or in
------------------------------
any resolution adopted by the Board to the contrary notwithstanding, notice of
any meeting of the Board need not be given to any director if such notice shall
be waived in writing signed by such director before, at or after the meeting, or
if such director shall be present at the meeting. Any meeting of the Board shall
be a legal meeting without any notice having been given or regardless of the
giving of any notice or the adoption of any resolution in reference thereto, if
every member of the Board shall be present thereat. Except as otherwise
provided by law or these By-laws, waivers of notice of any meeting of the Board
need not contain any statement of the purpose of the meeting.
SECTION 9. TELEPHONE MEETINGS. Members of the Board or any committee may
-------------------
participate in a meeting of the Board or such committee by means of a conference
telephone or other means of communications whereby all directors participating
may simultaneously hear each other during the meeting, and participation by such
means shall constitute presence in person at such meeting.
SECTION 10. ACTIONS WITHOUT MEETINGS. Any action that may be taken at a
-------------------------
meeting of the Board or of a committee may be taken without a meeting if a
consent in writing, setting forth the action, shall be signed, either before or
after such action, by all of the directors or all of the members of the
committee, as the case may be. Such consent shall have the same force and
effect as a unanimous vote.
ARTICLE III.*
INDEMNIFICATION AND LIMIT ON LIABILITY.
(a) Every person who is or was a director, officer or employee of the
Corporation, or who, at the request of the Corporation, serves or has served in
any such capacity with another corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise shall be indemnified by the
Corporation against any and all liability and reasonable expense that may be
incurred by him in connection with or resulting from any claim, action or
proceeding (whether brought in the right of the Corporation or any such other
corporation, entity, plan or otherwise), civil or criminal, in which he may
become involved, as a party or otherwise, by reason of his being or having been
a director, officer or employee of the Corporation, or such other corporation,
entity or plan while serving at the request of the Corporation, whether or not
he continues to be such at the time such liability or expense shall have been
incurred, unless such person engaged in willful misconduct or a knowing
violation of the criminal law.
* [Compiler's Note: This Article III was adopted by the shareholders at the
Annual Meeting of Shareholders, April 28, 1994.]
-6-
<PAGE>
As used in this Article III: (i) the terms "liability" and "expense" shall
include, but shall not be limited to, counsel fees and disbursements and amounts
of judgments, fines or penalties against, and amounts paid in settlement by, a
director, officer or employee; (ii) the terms "director," "officer" and
"employee," unless the context otherwise requires, include the estate or
personal representative of any such person; (iii) a person is considered to be
serving an employee benefit plan as a director, officer or employee of the plan
at the Corporation's request if his duties to the Corporation also impose duties
on, or otherwise involve services by, him to the plan or, in connection with the
plan, to participants in or beneficiaries of the plan; (iv) the term
"occurrence" means any act or failure to act, actual or alleged, giving rise to
a claim, action or proceeding; and (v) service as a trustee or as a member of a
management or similar committee of a partnership or joint venture shall be
considered service as a director, officer or employee of the trust, partnership
or joint venture.
The termination of any claim, action or proceeding, civil or criminal, by
judgment, settlement, conviction or upon a plea of nolo contendere, or its
equivalent, shall not create a presumption that a director, officer or employee
did not meet the standards of conduct set forth in this paragraph (a). The
burden of proof shall be on the Corporation to establish, by a preponderance of
the evidence, that the relevant standards of conduct set forth in this paragraph
(a) have not been met.
(b) Any indemnification under paragraph (a) of this Article shall be made
unless (i) the Board, acting by a majority vote of those directors who were
directors at the time of the occurrence giving rise to the claim, action or
proceeding involved and who are not at the time parties to such claim, action or
proceeding (provided there are at least five such directors), finds that the
director, officer or employee has not met the relevant standards of conduct set
forth in such paragraph (a), or (ii) if there are not at least five such
directors, the Corporation's principal Virginia legal counsel, as last
designated by the Board as such prior to the time of the occurrence giving rise
to the claim, action or proceeding involved, or in the event for any reason such
Virginia counsel is unwilling to so serve, then Virginia legal counsel mutually
acceptable to the Corporation and the person seeking indemnification, deliver to
the Corporation their written advice that, in their opinion, such standards have
not been met.
(c) Expenses incurred with respect to any claim, action or proceeding of the
character described in paragraph (a) shall, except as otherwise set forth in
this paragraph (c), be advanced by the Corporation prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Article III. No security shall be
required for such undertaking and such undertaking shall be accepted without
reference to the recipient's financial ability to make repayment.
Notwithstanding the
-7-
<PAGE>
foregoing, the Corporation may refrain from, or suspend, payment of expenses in
advance if at any time before delivery of the final finding described in
paragraph (b), the Board or Virginia legal counsel, as the case may be, acting
in accordance with the procedures set forth in paragraph (b), find by a
preponderance of the evidence then available that the officer, director or
employee has not met the relevant standards of conduct set forth in paragraph
(a).
(d) No amendment or repeal of this Article III shall adversely affect or
deny to any director, officer or employee the rights of indemnification provided
in this Article III with respect to any liability or expense arising out of a
claim, action or proceeding based in whole or substantial part on an occurrence
the inception of which takes place before or while this Article III, as adopted
by the shareholders of the Corporation at the 1986 Annual Meeting of the
Corporation, is in effect. The provisions of this paragraph (d) shall apply to
any such claim, action or proceeding whenever commenced, including any such
claim, action or proceeding commenced after any amendment or repeal to this
Article III.
(e) The rights of indemnification provided in this Article III shall be in
addition to any rights to which any such director, officer or employee may
otherwise be entitled by contraction or as a matter of law.
(f) In any proceeding brought by or in the right of the Corporation or
brought by or on behalf of shareholders of the Corporation, no director or
officer of the Corporation shall be liable to the Corporation or its
shareholders for monetary damages with respect to any transaction, occurrence or
course of conduct, whether prior or subsequent to the effective date of this
Article III, except for liability resulting from such person's having engaged in
willful misconduct or a knowing violation of the criminal law or any federal or
state securities law.
(g) An amendment to this Article III shall be approved only by a majority of
the votes entitled to be cast by each voting group entitled to vote thereon.
ARTICLE IV.
COMMITTEES.
SECTION 1. EXECUTIVE AND FINANCE COMMITTEE. The Board may, by resolution
--------------------------------
or resolutions adopted by a majority of the number of directors fixed by these
By-laws, appoint two or more directors to constitute an Executive and Finance
Committee, each member of which shall serve as such during the pleasure of the
Board, and may designate for such Committee a Chairman, who shall continue as
such during the pleasure of the Board.
All completed action by the Executive and Finance Committee shall be
reported to the Board at its meeting next succeeding such action or at its
meeting held in the month
-8-
<PAGE>
following the taking of such action, and shall be subject to revision or
alteration by the Board; provided, that no acts or rights of third parties shall
be affected by any such revision or alteration.
The Executive and Finance Committee shall fix its own rules of procedure and
shall meet where and as provided by such rules or by resolution of the Board. At
all meetings of the Executive and Finance Committee, a majority of the full
number of members of such Committee shall constitute a quorum, and in every case
the affirmative vote of a majority of members present at any meeting of the
Executive and Finance Committee at which a quorum is present shall be necessary
for the adoption of any resolution.
During the intervals between the meetings of the Board, the Executive and
Finance Committee shall possess and may exercise all the power and authority of
the Board (including, without limitation, all the power and authority of the
Board in the management, control and direction of the financial affairs of the
Corporation) except with respect to those matters reserved to the Board by
Virginia law, in such manner as the Executive and Finance Committee shall deem
best for the interests of the Corporation, in all cases in which specific
directions shall not have been given by the Board.
SECTION 2. OTHER COMMITTEES. To the extent permitted by law, the Board may
-----------------
from time to time by resolution adopted by a majority of the number of directors
fixed by these By-laws create such other committees of directors, officers,
employees or other persons designated by it as the Board shall deem advisable
and with such limited authority, functions and duties as the Board shall by
resolution prescribe. The Board shall have the power to change the members of
any such committee at any time, to fill vacancies, and to discharge any such
committee, either with or without cause, at any time.
ARTICLE V.
OFFICERS.
SECTION 1. NUMBER, TERM, ELECTION. The officers of the Corporation shall
-----------------------
be a Chief Executive Officer, a Chairman of the Board, a President, one or more
Vice Presidents, a Treasurer, a Controller and a Secretary. The Board may
appoint such other officers and such assistant officers and agents with such
powers and duties as the Board may find necessary or convenient to carry on the
business of the Corporation. Such officers and assistant officers shall serve
until their successors shall be chosen, or as otherwise provided in these By-
laws. Any two or more offices may be held by the same person.
SECTION 2. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall,
------------------------
subject to the control of the Board and the Executive and Finance Committee,
have full authority and responsibility for directing the conduct of the
business, affairs and operations of the Corporation. In addition to acting as
Chief Executive Officer of the Corporation, he shall perform such other duties
and exercise such other powers as may from time to time be
-9-
<PAGE>
prescribed by the Board and shall see that all orders and resolutions of the
Board and the Executive and Finance Committee are carried into effect. In the
event of the inability of the Chief Executive Officer to act, the Board will
designate an officer of the Corporation to perform the duties of that office.
SECTION 3. CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
----------------------
at all meetings of the Board and of the shareholders and, in the absence of the
Chairman of the Executive and Finance Committee, at all meetings of the
Executive and Finance Committee. He shall perform such other duties and
exercise such other powers as may from time to time be prescribed by the Board
or, if he shall not be the Chief Executive Officer, by the Chief Executive
Officer.
SECTION 4. PRESIDENT. The President shall have such powers and perform
----------
such duties as may from time to time be prescribed by the Board or, if he shall
not be the Chief Executive Officer, by the Chief Executive Officer.
SECTION 5. VICE PRESIDENTS. Each Vice President shall have such powers and
----------------
perform such duties as may from time to time be prescribed by the Board, the
Chief Executive Officer or any officer to whom the Chief Executive Officer may
have delegated such authority.
SECTION 6. TREASURER. The Treasurer shall have the general care and
----------
custody of the funds and securities of the Corporation. He shall perform such
other duties and exercise such other powers as may from time to time be
prescribed by the Board, the Chief Executive Officer or any officer to whom the
Chief Executive Officer may have delegated such authority. If the Board shall
so determine, he shall give a bond for the faithful performance of his duties,
in such sum as the Board may determine to be proper, the expense of which shall
be borne by the Corporation. To such extent as the Board shall deem proper, the
duties of the Treasurer may be performed by one or more assistants, to be
appointed by the Board.
SECTION 7. CONTROLLER. The Controller shall be the accounting officer of
-----------
the Corporation. He shall keep full and accurate accounts of all assets,
liabilities, receipts and disbursements and other transactions of the
Corporation and cause regular audits of the books and records of the Corporation
to be made. He shall also perform such other duties and exercise such other
powers as may from time to time be prescribed by the Board, the Chief Executive
Officer or any officer to whom the Chief Executive Officer may have delegated
such authority. If the Board shall so determine, he shall give a bond for the
faithful performance of his duties, in such sum as the Board may determine to be
proper, the expense of which shall be borne by the Corporation. To such extent
as the Board shall deem proper, the duties of the Controller may be performed by
one or more assistants, to be appointed by the Board.
SECTION 8. SECRETARY. The Secretary shall keep the minutes of meetings of
----------
shareholders, of the Board, and, when requested, of Committees of the Board; and
he shall attend to the giving and serving of notices of all meetings thereof.
He shall keep or
-10-
<PAGE>
cause to be kept such stock and other books, showing the names of the
shareholders of the Corporation, and all other particulars regarding them, as
may be required by law. He shall also perform such other duties and exercise
such other powers as may from time to time be prescribed by the Board, the Chief
Executive Officer or any officer to whom the Chief Executive Officer may have
delegated such authority. To such extent as the Board shall deem proper, the
duties of the Secretary may be performed by one or more assistants, to be
appointed by the Board.
ARTICLE VI.
REMOVALS, RESIGNATIONS AND VACANCIES.
SECTION 1. REMOVAL OF DIRECTORS. Any director may be removed at any time
---------------------
but only with cause, by the affirmative vote of the holders of record of a
majority of the shares of the Corporation entitled to vote on the election of
directors, taken at an annual meeting of the shareholders.
SECTION 2. REMOVAL OF OFFICERS. Any officer, assistant officer or agent of
--------------------
the Corporation may be removed at any time, either with or without cause, by the
Board in its absolute discretion. Any such removal shall be without prejudice to
the recovery of damages for breach of the contract rights, if any, of the
officer, assistant officer or agent removed. Election or appointment of an
officer, assistant officer or agent shall not of itself create contract rights.
SECTION 3. RESIGNATION. Any director, officer or assistant officer of the
------------
Corporation may resign as such at any time by giving written notice of his
resignation to the Board, the Chief Executive Officer or the Secretary of the
Corporation. Such resignation shall take effect at the time specified therein
or, if no time is specified therein, at the time of delivery thereof, and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
SECTION 4. VACANCIES. Any vacancy in the Board caused by death,
----------
resignation, disqualification, removal, an increase in the number of directors,
or any other cause, may be filled (a) by the holders of shares of the
Corporation entitled to vote on the election of directors, but only at an annual
meeting of shareholders, or (b) by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board at any regular or
special meeting thereof. Each director so elected by the Board shall hold
office until the next annual election of directors, and each director so elected
by the shareholders shall hold office for a term expiring at the annual meeting
of shareholders at which the term of the class to which he has been elected
expires, and, in each case, until his successor shall be elected, or until his
death, or until he shall resign, or until he shall have been removed in the
manner hereinabove provided. Any vacancy in the office of any officer or
assistant officer caused by death, resignation, removal or any other cause, may
be filled by the Board for the unexpired portion of the term.
ARTICLE VII.
-11-
<PAGE>
CONTRACTS, LOANS, CHECKS, DRAFTS, DEPOSITS, ETC.
SECTION 1. EXECUTION OF CONTRACTS. Except as otherwise provided by law or
-----------------------
by these By-laws, the Board (i) may authorize any officer, employee or agent of
the Corporation to execute and deliver any contract, agreement or other
instrument in writing in the name and on behalf of the Corporation, and (ii) may
authorize any officer, employee or agent of the Corporation so authorized by the
Board to delegate such authority by written instrument to other officers,
employees or agents of the Corporation. Any such authorization by the Board may
be general or specific and shall be subject to such limitations and restrictions
as may be imposed by the Board. Any such delegation of authority by an officer,
employee or agent may be general or specific, may authorize re-delegation, and
shall be subject to such limitations and restrictions as may be imposed in the
written instrument of delegation by the person making such delegation.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
------
Corporation and no negotiable paper shall be issued in its name unless
authorized by the Board. When authorized by the Board, any officer, employee or
agent of the Corporation may effect loans and advances at any time for the
Corporation from any bank, trust company or other institution, or from any firm,
corporation or individual, and for such loans and advances may make, execute and
deliver promissory notes, bonds or other certificates or evidences of
indebtedness of the Corporation and when so authorized may pledge, hypothecate
or transfer any securities or other property of the Corporation as security for
any such loans or advances. Such authority may be general or confined to
specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts and other orders for
--------------------
the payment of money out of the funds of the Corporation and all notes or other
evidences of indebtedness of the Corporation shall be signed on behalf of the
Corporation in such manner as shall from time to time be determined by the
Board.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed
---------
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board may select or as may
be selected by the Treasurer or any other officer, employee or agent of the
Corporation to whom such power may from time to time be delegated by the Board.
SECTION 5. VOTING OF SECURITIES. Unless otherwise provided by the Board,
---------------------
the Chief Executive Officer may from time to time appoint an attorney or
attorneys, or agent or agents of the Corporation, in the name and on behalf of
the Corporation, to cast the votes which the Corporation may be entitled to cast
as the holder of stock or other securities in any other corporation, any of
whose stock or other securities may be held by the Corporation, at meetings of
the holders of the stock or other securities of such other corporation, or to
consent in writing, in the name of the Corporation as such holder, to any action
by such other corporation, and may instruct the person or persons so appointed
as to the manner of casting such votes or giving such consent, and may execute
or cause to be executed in the name and on behalf of the Corporation and under
its corporate seal, or
-12-
<PAGE>
otherwise, all such written proxies or other instruments as such officer may
deem necessary or proper in the premises.
ARTICLE VIII.
CAPITAL STOCK.
SECTION 1. CERTIFICATES. Every shareholder shall be entitled to a
-------------
certificate, or certificates, in such form as shall be approved by the Board,
signed by the Chairman of the Board, the President or a Vice President and the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer
or any other officer authorized by these By-laws or a resolution of the Board,
certifying the number of shares owned by him in the Corporation. Any such
certificate may, but need not, bear the seal of the Corporation or a facsimile
thereof. If any such certificate is countersigned by a transfer agent or
registered by a registrar other than the Corporation or an employee of the
Corporation, the signatures of any of the officers above specified upon such
certificate may be facsimiles. In case any such officer who shall have signed
or whose facsimile signature shall have been placed upon such certificate shall
have ceased to be such before such certificate is issued, it may be issued by
the Corporation with the same effect as if such officer had not ceased to be
such at the date of its issue.
SECTION 2. TRANSFERS. Shares of stock of the Corporation shall be
----------
transferable on the stock books of the Corporation by the holder in person or by
his attorney thereunto authorized by power of attorney duly executed and filed
with the Secretary or the transfer agent, but, except as hereinafter provided in
the case of loss, destruction or mutilation of certificates, no transfer of
stock shall be entered until the previous certificate, if any, given for the
same shall have been surrendered and canceled. Except as otherwise provided by
law, no transfer of shares shall be valid as against the Corporation, its
shareholders or creditors, for any purpose, until it shall have been entered in
the stock records of the Corporation by an entry showing from and to whom
transferred. The Board may also make such additional rules and regulations as
it may deem expedient concerning the issue and transfer of certificates
representing shares of the capital stock of the Corporation.
SECTION 3. RECORD DATE. For the purpose of determining shareholders
------------
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in order
to make a determination of shareholders for any other proper purpose, the Board
may fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than seventy days prior to
the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment thereof unless the Board fixes
a new record date, which it shall do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
-13-
<PAGE>
SECTION 4. LOST, DESTROYED OR MUTILATED CERTIFICATES. In case of loss,
------------------------------------------
destruction or mutilation of any certificate of stock, another may be issued in
its place upon proof of such loss, destruction or mutilation and upon the giving
of a bond of indemnity to the Corporation in such form and in such sum as the
Board may direct; provided that a new certificate may be issued without
requiring any bond when, in the judgment of the Board, it is proper so to do.
SECTION 5. CONTROL SHARE ACQUISITIONS. Article 14.1 of Chapter 9 of Title
---------------------------
13.1 of the Code of Virginia shall not apply to acquisitions of shares of the
Corporation.
ARTICLE IX.
INSPECTION OF RECORDS.
The Board from time to time shall determine whether, to what extent, at what
times and places, and under what conditions and regulations the accounts and
books and papers of the Corporation, or any of them, shall be open for the
inspection of the shareholders, and no shareholder shall have any right to
inspect any account or book or paper of the Corporation except as expressly
conferred by statute or by these By-laws or authorized by the Board.
ARTICLE X.
AUDITOR.
The Board shall annually appoint an independent accountant who shall
carefully examine the books of the Corporation. One such examination shall be
made immediately after the close of the fiscal year and be ready for
presentation at the annual meeting of shareholders of the Corporation, and such
other examinations shall be made as the Board may direct.
ARTICLE XI.
SEAL.
The seal of the Corporation shall be circular in form and shall bear the name
of the Corporation and the year "1892."
ARTICLE XII.
FISCAL YEAR.
-14-
<PAGE>
The fiscal year of the Corporation shall end on the 31st day of December in
each year.
ARTICLE XIII.
AMENDMENTS.
The By-laws of the Corporation may be altered, amended or repealed and new
By-laws may be adopted by the Board (except as Section 1 of Article II may
otherwise require), or by the holders of the outstanding shares of the
Corporation entitled to vote generally at any annual or special meeting of the
shareholders when notice thereof shall have been given in the notice of the
meeting of shareholders.
EMERGENCY BY-LAWS.
SECTION 1. DEFINITIONS. As used in these Emergency By-laws,
------------
(a) the term "period of emergency" shall mean any period during which a
quorum of the Board cannot readily be assembled because of some catastrophic
event.
(b) the term "incapacitated" shall mean that the individual to whom such term
is applied shall not have been determined to be dead but shall be missing or
unable to discharge the responsibilities of his office; and
(c) the term "senior officer" shall mean the Chairman of the Board, the
President, any corporate Vice President, the Treasurer, the Controller and the
Secretary, and any other person who may have been so designated by the Board
before the emergency.
SECTION 2. APPLICABILITY. These Emergency By-laws, as from time to time
--------------
amended, shall be operative only during any period of emergency. To the extent
not inconsistent with these Emergency By-laws, all provisions of the regular By-
laws of the Corporation shall remain in effect during any period of emergency.
No officer, director or employee shall be liable for actions taken in good
faith in accordance with these Emergency By-laws.
SECTION 3. BOARD OF DIRECTORS. (a) A meeting of the Board may be called by
-------------------
any director or senior officer of the Corporation. Notice of any meeting of the
Board need be given only to such of the directors as it may be feasible to reach
at the time and by such means as may be feasible at the time, including
publication or radio, and at a time less
-15-
<PAGE>
than twenty-four hours before the meeting if deemed necessary by the person
giving notice.
(b) At any meeting of the Board, three directors in attendance shall
constitute a quorum. Any act of a majority of the directors present at a
meeting at which a quorum shall be present shall be the act of the Board. If
less than three directors should be present at a meeting of the Board, any
senior officer of the Corporation in attendance at such meeting shall serve as a
director for such meeting, selected in order of rank and within the same rank in
order of seniority.
(c) In addition to the Board's powers under the regular By-laws of the
Corporation to fill vacancies on the Board, the Board may elect any individual
as a director to replace any director who may be incapacitated and to serve
until the latter ceases to be incapacitated or until the termination of the
period of emergency, whichever first occurs. In considering officers of the
Corporation for election to the Board, the rank and seniority of individual
officers shall not be pertinent.
(d) The Board, during as well as before any such emergency, may change the
principal office or designate several alternative offices or authorize the
officers to do so.
SECTION 4. APPOINTMENT OF OFFICERS. In addition to the Board's powers under
------------------------
the regular By-laws of the Corporation with respect to the election of officers,
the Board may elect any individual as an officer to replace any officer who may
be incapacitated and to serve until the latter ceases to be incapacitated.
SECTION 5. AMENDMENTS. These Emergency By-laws shall be subject to repeal
-----------
or change by further action of the Board of Directors or by action of the
shareholders, except that no such repeal or change shall modify the provisions
of the second paragraph of Section 2 with regard to action or inaction prior to
the time of such repeal or change. Any such amendment of these Emergency By-
laws may make any further or different provision that may be practical and
necessary for the circumstances of the emergency.
-16-
<PAGE>
EXHIBIT 12
OLIN INCORPORATED AND CONSOLIDATED SUBSIDIARIES
Computation of Ratio of Earnings to Fixed Charges (Unaudited)
(In millions)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
--------------------------
1998 1997
---- ----
<S> <C> <C>
Earnings:
Income before taxes $59.6 $63.8
Add (deduct):
Income taxes of 50% owned affiliates 0.5 0.7
Equity in income of less than 50%
owned affiliates (2.2) (0.8)
Interest capitalized, net of amortization 0.2 (0.5)
Fixed charges as described below 9.4 12.0
--------- ---------
Total $67.5 $75.2
========= =========
Fixed Charges:
Interest expense $ 4.8 $ 8.1
Estimated interest factor in rent expense 4.6 3.9
--------- ---------
Total $ 9.4 $12.0
========= =========
Ratio of earnings to fixed charges 7.2 6.3
========= =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements contained in Item 1 of Form 10-Q for the period ended March
31, 1998 and is qualified in its entirety by reference to such financial
statements. Figures are rounded to the nearest 100,000 (except EPS).
</LEGEND>
<PERIOD-TYPE> 3-Mos
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-START> Jan-01-1998
<PERIOD-END> Mar-31-1998
<CASH> 53,500
<SECURITIES> 21,000
<RECEIVABLES> 388,400
<ALLOWANCES> 0
<INVENTORY> 361,300
<CURRENT-ASSETS> 867,500
<PP&E> 2,338,600
<DEPRECIATION> (1,553,500)
<TOTAL-ASSETS> 1,873,000
<CURRENT-LIABILITIES> 462,100
<BONDS> 268,000
0
0
<COMMON> 48,100
<OTHER-SE> 816,500
<TOTAL-LIABILITY-AND-EQUITY> 1,873,000
<SALES> 573,100
<TOTAL-REVENUES> 573,100
<CGS> 431,900
<TOTAL-COSTS> 431,900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,000
<INCOME-PRETAX> 59,600
<INCOME-TAX> 20,500
<INCOME-CONTINUING> 39,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,100
<EPS-PRIMARY> 0.81
<EPS-DILUTED> 0.80
</TABLE>
