<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Olin Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF OLIN]
501 MERRITT 7, NORWALK, CONNECTICUT 06856-4500
March 14, 2000
Dear Olin Shareholder:
You are cordially invited to attend our 2000 Annual Meeting of Shareholders
at 10:30 a.m. on Thursday, April 27th. The meeting will be held at The Westin
Stamford Hotel, One First Stamford Place, Stamford, Connecticut.
You will find information about the meeting in the enclosed Notice and Proxy
Statement.
Ms. Suzanne D. Jaffe, whose term as a Class III Director will expire in
April, has decided not to stand for re-election to the Board of Directors. The
Board thanks her for her past contributions and extends its best wishes in her
future endeavors.
We are pleased to announce that Mr. Mitchell E. Daniels, Jr. and Mr. Stephen
F. Page are nominees for the first time. Mr. Daniels is Senior Vice President,
Corporate Strategy and Policy of Eli Lilly and Company and Mr. Page is
President and Chief Executive Officer of Otis Elevator Company.
Please be advised that we have not planned a communications segment or any
multimedia presentations for the 2000 Annual Meeting. There are four proposals
being presented to the shareholders for approval this year.
Whether or not you plan to attend, please sign and date the enclosed proxy
card, and return the upper half of it in the enclosed envelope as soon as
possible. If you do plan to attend, please so indicate by checking the
appropriate box on the proxy card. Keep the lower half to be used as your
admission card to the meeting.
At last year's Annual Meeting more than 93% of our shares were represented in
person or by proxy. We hope for the same high level of representation at this
year's meeting and we urge you to return your proxy card with your voting
instructions as soon as possible.
Sincerely,
/S/ Donald W. Griffin
Donald W. Griffin
Chairman, President and Chief
Executive Officer
YOUR VOTE IS IMPORTANT
You are urged to sign, date and promptly
return your proxy card in the enclosed envelope.
<PAGE>
OLIN CORPORATION
Notice of Annual Meeting of Shareholders
Norwalk, Connecticut
March 14, 2000
The Annual Meeting of Shareholders of OLIN CORPORATION will be held at The
Westin Stamford Hotel, One First Stamford Place, Stamford, Connecticut, on
Thursday, April 27, 2000, at 10:30 a.m., local time, to consider and act upon
the following:
(1) The election of three Directors.
(2) Re-approval of the Olin Senior Management Incentive Compensation Plan,
as amended.
(3) Approval of the Olin Corporation 2000 Long Term Incentive Plan.
(4) Ratification of the appointment of independent auditors for 2000.
(5) Such other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed March 2, 2000, as the record date for
determining shareholders entitled to notice of and to vote at the meeting.
By Order of the Board of Directors:
/s/ Johnnie M. Jackson, Jr.
Johnnie M. Jackson, Jr.
Secretary
<PAGE>
OLIN CORPORATION
PROXY STATEMENT
----------------
ANNUAL MEETING OF SHAREHOLDERS
To be Held April 27, 2000
This Proxy Statement is furnished to the shareholders of Olin Corporation
("Olin" or the "Company") in connection with the solicitation by the Board of
Directors of Olin of proxies to be voted at the Annual Meeting of Shareholders
to be held on April 27, 2000, and at any adjournment thereof. Shares
represented by duly executed proxies in the accompanying form received by Olin
prior to the meeting will be voted at the meeting. Where a shareholder directs
in the proxy a choice regarding any matter that is to be voted on, that
direction will be followed. If no direction is made, proxies will be voted for
the election of directors as set forth below, and in favor of each of the
other matters listed in the proxy. Any person who has returned a proxy has the
power to revoke it at any time before it is exercised by submitting a
subsequently dated proxy, by giving notice in writing to the Secretary or by
voting in person at the meeting.
As of the date hereof, Olin does not know of any matters other than those
referred to in the accompanying Notice which are to come before the meeting.
If any other matters are properly presented for action, the persons named in
the accompanying form of proxy will vote the proxy in accordance with their
best judgment. The mailing address of Olin's principal executive office is 501
Merritt 7, PO Box 4500, Norwalk, CT 06856-4500. This Proxy Statement and the
related proxy card are first being mailed to shareholders on or about March
14, 2000.
SHARES OUTSTANDING AND ENTITLED TO VOTE
The close of business on March 2, 2000 has been fixed as the record date for
the meeting and any adjournment thereof. As of that date, there were
approximately 45,080,744 shares of Olin common stock, $1 par value ("Common
Stock"), outstanding, each of which is entitled to one vote. Of those shares
of Common Stock outstanding, approximately 8,594,754 shares were held in the
Olin Common Stock Fund of the Olin Corporation Contributing Employee Ownership
Plan ("CEOP"), all of which are held by State Street Bank and Trust Company
("State Street") as the Trustee of the CEOP. Each individual participating in
the CEOP is entitled to instruct the Trustee how to vote all shares of Common
Stock credited to the individual through the individual's contributions and
through matching contributions by Olin. Shares of Common Stock held in the
CEOP for which voting instructions are not received from CEOP participants or
which are not credited to participants' accounts are voted by the Trustee in
the same proportion as shares of Common Stock for which the Trustee has
received instructions.
ChaseMellon Shareholder Services, L.L.C. ("CMSS") is Olin's registrar and
transfer agent. For holders of Common Stock who participate in the Automatic
Dividend Reinvestment Plan offered by CMSS, CMSS will vote any shares of
Common Stock that it holds for the participant's account in accordance with
the proxy returned by the participant covering his or her shares of record. If
a participant does not send in a proxy for shares of record, CMSS will not
vote Dividend Reinvestment shares of such participant.
1
<PAGE>
CERTAIN BENEFICIAL OWNERS
Except as indicated below, Olin knows of no person who was the beneficial
owner of more than five percent of Olin Common Stock as of December 31, 1999.
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Beneficial of
Name and Address of Beneficial Owner Ownership Class
------------------------------------ ----------- -------
<S> <C> <C>
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110 8,743,376(a) 19.4
FMR Corp.
82 Devonshire Street
Boston, MA 02109 5,912,700(b) 13.1
</TABLE>
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(a) Olin has been advised in a Schedule 13G filing as follows with respect to
these shares: As trustee of the CEOP, State Street has sole voting power
over 304,815 shares, shared voting power with respect to 8,435,861 shares,
sole dispositive power with respect to 8,743,276 shares and shared
dispositive power with respect to 100 shares. State Street disclaims
beneficial ownership of these shares.
(b) Olin has been advised in an amended Schedule 13G filing as follows with
respect to these shares: FMR Corp. ("FMR") has sole voting power as to
386,400 of such shares and sole dispositive power as to all such shares.
Fidelity Management & Research Company ("Fidelity") and Fidelity Management
Trust Company ("FMTC") beneficially own 5,287,000 and 625,700 shares,
respectively. Both are subsidiaries of FMR. Edward C. Johnson 3rd
("Johnson"), who is the Chairman of FMR has sole dispositive power with
respect to 5,287,000 shares owned by the Funds. Neither Johnson nor FMR has
sole voting power with respect to the shares owned by the Funds, which power
rests with the Funds' Board of Trustees. Johnson and FMR, through its
control of FMTC, each has sole dispositive power over 625,700 shares, sole
voting power over 386,400 shares and no voting power with respect to 239,300
of the shares.
2
<PAGE>
ITEM 1--ELECTION OF DIRECTORS
The Board of Directors is divided into three classes with the term of office
of each class being three years, ending in different years. Three persons, as
set forth below under "Nominees for Three-Year Terms Expiring in 2003", have
been nominated by the Board for election as Class III Directors to serve until
the 2003 Annual Meeting of Shareholders and until their successors have been
elected. The terms of the other directors will continue after the meeting as
indicated below.
Mr. Higgins is a director at the present time. It is not expected that any
of the nominees will be unable to serve as a director but if any are unable to
accept election, it is intended that shares represented by proxies in the
accompanying form will be voted for the election of substitute nominees
selected by the Board, unless the number of directors is reduced.
The election of each nominee as a director requires the affirmative vote of
a plurality of the votes cast in the election. Abstentions and shares held in
street name ("Broker Shares") that are not voted in the election of directors
will not be included in determining the number of votes cast.
CLASS III
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2003
[PHOTO]
MITCHELL E. DANIELS, JR., 50, is Senior Vice President of
Corporate Strategy and Policy at Eli Lilly and Company. He
previously served as President of North American pharmaceutical
operations from 1993 to 1997. Mr. Daniels received a BA degree
from the Woodrow Wilson School of Public and International
Affairs at Princeton University, a JD degree from Georgetown
University and honorary doctor of law degrees from the
University of Indianapolis and Anderson University. From 1971
through 1982 he served Indianapolis Mayor, and now U.S. Senator,
Richard G. Lugar as Chief of Staff. He was Executive Director of
the National Republican Senatorial Committee in 1983 and 1984.
From 1985 to 1987, he served as President Ronald Reagan's chief
political advisor and as the administration's liaison to the
nation's state and local officials. In 1987, he was named
President and Chief Executive Officer of the Hudson Institute.
Mr. Daniels is a director of Indianapolis Power and Light
Company/IPALCO Enterprises, Inc.
[PHOTO]
WILLIAM W. HIGGINS, 64, is Chairman, and a director of the
Greenwich Emergency Medical Service, Greenwich, CT. Mr. Higgins
retired as a Senior Vice President of The Chase Manhattan Bank,
N.A. and a senior credit executive of its Institutional Bank in
December 1990. He joined the bank in 1959 after receiving a BA
degree from Amherst College and an MBA degree from Harvard
Business School. He was appointed Assistant Treasurer in 1962,
Second Vice President in 1965 and Vice President in 1968. He was
appointed a Senior Vice President and a Credit Policy Executive
in 1983. From 1979 to 1983, he served as Deputy Sector Credit
Executive of the Corporate Industries Sector. Prior to that, he
was Group Credit Officer of the Corporate Banking Department and
before that District Executive of the Petroleum Division of the
same Department. He is past President of the Belle Haven
Landowners Association in Greenwich, a former member of the
Representative Town Meeting in Greenwich, and a former trustee
of the Canterbury School in New Milford, Connecticut. He is a
director of The Greenwich Bank & Trust Company. Olin director
since 1964; Chair of the Audit Committee and member of the
Directors and Corporate Governance Committee and the Executive
Committee.
3
<PAGE>
[PHOTO]
STEPHEN F. PAGE, 60, is President and Chief Executive Officer of
Otis Elevator Company, a subsidiary of United Technologies
Corporation (UTC), a position he has held since April 1997. He
served as Executive Vice President and Chief Financial Officer
of UTC until 1993. Before joining UTC, Mr. Page had a 20-year
career with Black & Decker Corporation, rising to Executive Vice
President and Chief Financial Officer. He joined Black & Decker
following its acquisition of McCulloch Corporation, where he
served as General Counsel. Previously, he was a principal of the
public accounting firm now known as Deloitte & Touche. Mr. Page
earned business and law degrees from Loyola Marymount University
in Los Angeles, California. He is a certified public accountant
and a member of the American Bar Association. Mr. Page is a
regent of Loyola Marymount University, where he is also a member
of the National Graduate Committee. He also serves as a director
of INROADS for Greater Hartford (CT), and is a member of the
National Advisory Board of the Kennedy Krieger Institute for
Handicapped Children. He formerly served as a director for
Loctite Corporation (NYSE) and Augat Inc. (NYSE).
The Board recommends a vote FOR the election of Mr. Daniels and Mr. Page as
Class III Directors, and the reelection of Mr. Higgins as a Class III
Director.
The terms of the following directors will continue after the meeting as
indicated below.
CLASS I
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2001
[PHOTO]
RANDALL W. LARRIMORE, 52, is President and Chief Executive
Officer of United Stationers Inc., a wholesale distributor of
office products, a position he has held since 1997. From 1988
until 1997, he was President and Chief Executive Officer of
MasterBrand Industries, Inc., a subsidiary of Fortune Brands,
Inc. He holds a BA degree from Swarthmore College and an MBA
degree from the Harvard Business School. He is a member of the
Executive Committee of the Office Products Council of the City
of Hope, a member of the Board of Directors of United
Stationers, Evanston Northwestern Healthcare, and of Students In
Free Enterprise (S.I.F.E.). Olin director since 1998; Chair of
the Directors and Corporate Governance Committee and member of
the Compensation Committee and the Executive Committee.
[PHOTO]
ANTHONY W. RUGGIERO, 58, is Executive Vice President and Chief
Financial Officer of Olin, a position he has held since January
1999. He joined Olin in 1995 as Senior Vice President and Chief
Financial Officer. Mr. Ruggiero served as Senior Vice President
and Chief Financial Officer of the Readers Digest Association,
Inc. from 1990 to 1995. He joined Squibb Corporation in 1969 and
served as Senior Vice President and Chief Financial Officer and
a Director from 1983 to 1990. He holds a BS degree from Fordham
University and an MBA degree from the Columbia Business School.
He is a member of the CFO Advisory Council of the Financial
Executives Institute and a Director of Primex Technologies, Inc.
Olin director since 1999.
4
<PAGE>
CLASS II
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2002
[PHOTO]
DONALD W. GRIFFIN, 63, is Chairman, President and Chief
Executive Officer of Olin. He joined Olin in 1961 and from 1963
served in a variety of Brass Division marketing positions,
including director of international business development and
vice president, marketing. In 1983, he was elected a corporate
Vice President and President of the Brass Group. In 1985, he was
named President of the Winchester Group; in 1986, President of
the Defense Systems Group; in 1987, Executive Vice President; in
1993, Vice Chairman-Operations; in 1994, President and Chief
Operating Officer; in January 1996, Chief Executive Officer; and
in April 1996, Chairman. He is a graduate of the University of
Evansville, Evansville, IN and completed the Graduate School for
Sales and Marketing Managers at Syracuse University, Syracuse,
NY. Mr. Griffin is a director of A. C. Nielsen, Inc. and Eastman
Chemical. He is also a director of the Sporting Arms and
Ammunition Manufacturers Institute, the Wildlife Management
Institute and the National Shooting Sports Foundation. He is on
the Board of Trustees of the Buffalo Bill Historical Center and
the University of Evansville. He is a member of the American
Society of Metals, the Association of the U.S. Army and the
American Defense Preparedness Association. He is a life member
of the Navy League of the United States and the Surface Navy
Association. Olin director since 1990; Chair of the Executive
Committee.
[PHOTO]
G. JACKSON RATCLIFFE, JR., 64, is Chairman, President and Chief
Executive Officer of Hubbell Incorporated, a position he has
held since 1987. He holds an AB degree from Duke University and
a JD degree from the University of Virginia. Mr. Ratcliffe is a
member of the Board of Directors of Hubbell, Praxair, Inc. and
Sunoco, Inc.; and a member of the Board of Trustees of the
Manufacturers' Alliance for Productivity and Innovation, Inc.
Olin director since 1990; Chair of the Compensation Committee
and member of the Directors and Corporate Governance Committee
and the Executive Committee.
[PHOTO]
RICHARD M. ROMPALA, 53, is Chairman, President and Chief
Executive Officer of The Valspar Corporation, a manufacturer and
distributor of paints and coatings, a position he has held since
February 1998. He joined Valspar as President in 1994 and also
became Chief Executive Officer in 1995. Prior to that time, Mr.
Rompala served as Group Vice President-Coatings and Resins for
two years and Group Vice President-Chemicals for five years at
PPG Industries, Inc. Mr. Rompala holds a BA degree in Chemistry
and a BS degree in Chemical Engineering from Columbia University
and an MBA degree from Harvard Business School. He is a director
of the Valspar Corporation. Olin director since 1998; member of
the Audit Committee, Directors and Corporate Governance
Committee and the Compensation Committee.
5
<PAGE>
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
Attendance
During 1999, the Board held ten meetings. The average attendance by
directors at meetings of the Board and committees of the Board on which they
served was 99%. Each director attended at least 75% of such meetings.
Committees of the Board
The current standing committees of the Board are an Audit Committee, a
Compensation Committee, a Directors and Corporate Governance Committee and an
Executive Committee.
The Audit Committee advises the Board on internal and external audit matters
affecting Olin, including recommendation of the appointment of independent
auditors of Olin; reviews with such auditors the scope and results of their
examination of the financial statements of Olin and any investigations and
surveys by such auditors; reviews reports of and audits by Olin's Internal
Audit Department; and reviews the presentation of Olin's financial results.
The committee also advises the Board on compliance with Olin's Standards of
Ethical Business Practices, on government and other compliance programs, on
corporate and governmental security matters, and monitors major litigation
with a particular interest in the event there are claims that Olin has acted
unethically or unlawfully. The Committee also has oversight responsibility for
the implementation of the Company's Responsible Care(R) Codes and for
compliance with legal mandates in the environmental, health and safety areas.
During 1999, this committee held four meetings.
The Compensation Committee sets policy, develops and monitors strategies
for, and administers the programs which compensate the Chief Executive Officer
("CEO") and other senior executives. The committee approves the salary plans
for the CEO and other senior executives including total direct compensation
opportunity, and the mix of base salary, annual incentive standard and long-
term incentive guideline award. It approves the measures, goals, objectives,
weighting, payout matrices and actual payouts and certifies performance for
and administers the incentive compensation plans. The committee administers
stock option plans and the Long Term Incentive Plan, issues an annual report
on Executive Compensation that appears in the Proxy Statement, approves
Executive and Change in Control Agreements, approves and adopts new qualified
and non-qualified pension plans, approves terminations of qualified and non-
qualified pension plans, approves the interest rate for deferred compensation
arrangements, administers the Senior Executive Pension Plan, and makes
recommendations to the Board on any other matters pertaining to the pension,
CEOP and other plans which the committee deems appropriate. The committee also
advises the Board on the remuneration for members of the Board. During 1999,
this committee held five meetings.
The Directors and Corporate Governance Committee assists the Board of
Directors in fulfilling its responsibility to the Company's shareholders
relating to the selection and nomination of Directors, makes recommendations
to the Board of Directors regarding the election of the Chief Executive
Officer, reviews the nominees for other offices of the Company, annually
evaluates the performance of the Chief Executive Officer, reviews plans for
management development and succession, periodically reviews corporate
governance trends, issues and best practices and makes recommendations to the
Board regarding the adoption of best practices most appropriate for the
governance of the affairs of the Board of Directors, recommends to the Board
of Directors a slate of nominees to be proposed for election to the Board by
shareholders at annual meetings and at other appropriate times, recommends
individuals to fill any vacancies created on the Board of Directors, makes
recommendations to the Board of Directors regarding the size and composition
of the Board, the particular qualifications and experience that might be
sought in Board nominees, assesses whether the qualifications and experience
of candidates for nomination and renomination to the Board meet the then
current needs of the Board, seeks out possible candidates for nomination and
considers suggestions by
6
<PAGE>
shareholders, management, employees and others for candidates for nomination
and renomination as Directors, reviews and makes recommendations to the Board
of Directors regarding the composition, duties and responsibilities of various
Board committees from time to time as may be appropriate, reviews and advises
the Board on such matters as protection against liability and indemnification,
and assesses and reports annually to the Board on the performance of the Board
itself as a whole. During 1999, this committee held three meetings.
The By-laws require that advance notice of nominations for the election of
directors to be made by a shareholder (as distinguished from a shareholder's
recommendation to the Directors and Corporate Governance Committee) be given
to the Secretary of Olin no later than 90 days before the anniversary of the
immediately preceeding annual meeting of shareholders, together with the name
and address of the shareholder and of the person to be nominated; a
representation that the shareholder is entitled to vote at the meeting and
intends to appear there in person or by proxy to make the nomination; a
description of arrangements or understandings between the shareholder and
others pursuant to which the nomination is to be made; such other information
regarding the nominee as would be required in a proxy statement filed under
the Securities and Exchange Commission ("SEC") proxy rules; and the consent of
the nominee to serve as a director if elected.
The Executive Committee meets as needed in accordance with Article IV,
Section 1 of the Corporation's By-laws. During the intervals between the
meetings of the Board, the Executive Committee may exercise all the power and
authority of the Board (including 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
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. During
1999, this committee held no meetings.
Compensation of Directors
During 1999, each non-employee member of the Board received an annual
retainer of $30,000, at least $25,000 of which was paid or credited in the
form of shares of Common Stock as provided in the amended and restated 1997
Stock Plan for Nonemployee Directors (the "Directors Plan"). Each non-employee
director also received 204 shares of Common Stock, with payment of such shares
deferred until after such director ceases to be a member of the Board. In
addition, each non-employee director who is not eligible for any other pension
benefits from Olin received 500 shares of Common Stock in such director's
deferred stock account. Effective January 1, 2000, non-employee directors will
be credited annually with a number of shares of Common Stock with an aggregate
fair market value equal to $24,000, rounded to the nearest 100 shares,
(prorated based on the date the director joins the Board, for those directors
serving less than a full year) in place of the 204 and 500 share grants. The
Directors Plan also permits each director to elect to receive his or her
meeting fees in the form of shares of Common Stock in lieu of cash and to
elect to defer any stock or cash payments under the Directors Plan. In 1999,
directors also could elect to receive the amount by which the annual retainer
exceeds $25,000 in the form of shares of Common Stock in lieu of cash.
Deferred cash is credited with interest quarterly and deferred shares are
credited with dividend equivalents. Deferred shares are paid out in shares of
Common Stock, or at the director's election in cash. The Directors Plan also
holds, as "phantom" shares, the shares of Common Stock of Arch Chemicals, Inc.
("Arch Chemicals") issued to the directors as dividends on their shares of
Olin Common Stock held in the Directors Plan in connection with the spin-off
of Arch Chemicals. Those phantom Arch Chemicals shares are payable only in
cash, unless a director elects to transfer the phantom shares into his or her
Olin Common Stock account under the Directors Plan. Deferred accounts under
the Directors Plan are also paid out if there is a "Change in Control" as
defined in such plan.
7
<PAGE>
During 1999, directors who were not employees of Olin were paid a fee of
$1,500 for each meeting of the Board and for each meeting of a committee of
the Board attended, together with expenses incurred in the performance of
their duties as directors. Committee chairs also received a $5,000 annual fee.
Directors who are not officers or employees of Olin are also covered under
the Company's matching gift plan whereby the Company will make a 100% match of
gifts totalling up to $5,000 by the director to an eligible institution.
Directors who are not officers or employees of Olin or one of its subsidiaries
are covered while on Company business under Olin's business travel accident
insurance policy which covers employees of the Company generally.
8
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each director and nominee for director, by the
individuals named in the summary compensation table on page 12, and by all
directors and current executive officers of Olin as a group, as reported to
Olin by such persons as of January 15, 2000. Unless otherwise indicated in the
footnotes below, the officers, directors, nominees and individuals had sole
voting and investment power over such shares.
<TABLE>
<CAPTION>
No. of
Shares Percent of
Beneficially Common
Name of Beneficial Owner Owned(a,b) Stock(c)
------------------------ ------------ ----------
<S> <C> <C>
Mitchell E. Daniels, Jr. .......................... 0 --
Donald W. Griffin.................................. 543,494(d) 1.2
William W. Higgins................................. 267,807(e) --
Suzanne D. Jaffe................................... 17,697 --
Randall W. Larrimore............................... 10,135 --
Stephen F. Page.................................... 0 --
G. Jackson Ratcliffe, Jr........................... 20,999 --
Richard M. Rompala................................. 10,156 --
Anthony W. Ruggiero................................ 186,757 --
Peter C. Kosche.................................... 147,224(d) --
Thomas M. Gura..................................... 86,397 --
Joseph D. Rupp..................................... 123,261 --
Directors and executive officers as a group, in-
cluding those named
above (17 persons)................................ 1,691,516(d),(e) 3.7
</TABLE>
- --------
(a) Included in this table with respect to officers are shares credited under
the CEOP. Also included in the case of the incumbent directors (other than
Messrs. Griffin and Ruggiero) are certain shares of Common Stock credited
to a deferred account for such directors pursuant to the arrangements
described above under "Compensation of Directors" in the amounts of 17,275
for Mr. Higgins; 16,451 for Ms. Jaffe; 9,635 for Mr. Larrimore; 18,999 for
Mr. Ratcliffe; and 9,656 for Mr. Rompala. Such shares have no voting
rights.
(b) The amounts shown include shares that may be acquired within 60 days
following January 15, 2000 through the exercise of stock options, as
follows: Mr. Griffin, 444,134; Mr. Ruggiero, 137,641; Mr. Kosche, 100,446;
Mr. Gura, 60,029; Mr. Rupp, 91,755; and all directors and executive
officers as a group, including the named individuals, 1,075,339.
(c) Unless otherwise indicated, beneficial ownership of any named individual
does not exceed 1% of the outstanding shares of Common Stock.
(d) Includes 24,665 shares held by a charitable foundation for which Mr.
Griffin and Mr. Kosche, as individual trustees, share voting and
investment power with Wachovia Bank, N. A. Mr. Griffin and Mr. Kosche
disclaim beneficial ownership of such shares.
(e) Includes 18,600 shares held in three trusts of which Mr. Higgins is a co-
trustee, sharing voting and investment power; 84,220 shares held in two
trusts of which his spouse is beneficiary and co-trustee; and 66,974
shares held in five trusts of which Mr. Higgins is co-trustee and his
children are beneficiaries; does not include 128,010 shares held in three
trusts, in which his spouse has an interest. Mr. Higgins disclaims
beneficial ownership of all such shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Olin's
officers and directors, and persons who own more than ten percent of a
registered class of Olin's equity securities, to file reports of ownership and
changes in ownership with the SEC and the New York Stock Exchange. Officers,
directors and greater than ten-percent shareholders are required by SEC
regulation to furnish Olin with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to Olin, or
written representations that no Forms 5 were required, Olin believes that
during the period January 1, 1999 to December 31, 1999, all Section 16(a)
filing requirements applicable to its officers, directors and greater than
ten-percent beneficial owners were complied with, except Mr. J. Michael
Waddell, a former Vice President, who did not file a Form 3 at the time he
became an officer of the Corporation.
9
<PAGE>
EXECUTIVE COMPENSATION
Report of the Compensation Committee on Executive Compensation
Executive Compensation Program as Administered in 1999
The Compensation Committee has established competitive total compensation
opportunities (and each component thereof) for the CEO and other executive
officers that are targeted to the median of a group of 21 companies (the
"comparator group") that are similar in size, scope of operations and
represent businesses competing in the chemicals, metals and metal products
industries. Independent consultants provide the Committee with an annual
assessment of Olin's relative positions within this comparator group with
respect to performance and total compensation which includes each of the
following components:
. annual base salary
. annual incentive bonus
. long term incentive award
Together, these three components comprise the total targeted compensation
opportunity determined by the competitive analysis cited above. Once the total
targeted compensation opportunity is determined for the CEO and the other
named executive officers, the Compensation Committee, also with the advice of
outside consultants, determines the appropriate mix of these three components,
again using the competitive analysis. With the focus on creating alignment
between the compensation program and shareholders' interests, the emphasis of
Olin's Executive Compensation is on variable compensation. This emphasis is
also consistent with competitive practice.
The objectives of the Company's executive compensation policies and programs
are to:
. attract, motivate and retain the highest quality executives,
. align executive interests with those of the Company's shareholders,
. provide an incentive to executives to achieve quantifiable financial and
other strategic objectives in a manner consistent with the Company's
values, and
. unite management as a team, emphasizing group results.
The Company implemented the Economic Value Added (EVA(R)) business
management system beginning in 1996 and continued to use this measurement
system in 1999, as the primary basis for the annual incentive bonus plan
discussed below. EVA is a method of measuring a company's financial
performance by taking its operating profit after taxes and subtracting a
charge for the capital employed to create the profit. EVA will be positive
when a company's return on capital exceeds its cost of capital.
EVA is a registered trademark of Stern Stewart & Company.
Base Salary
For 1999, the CEO's base salary remained at $700,000, the same level as
1998. Factors considered by the Committee in determining his 1999 salary
included analyses of the comparator group and the scope of his
responsibilities following the Arch Chemicals spin-off. The foregoing factors
were utilized by our outside consultants in making their recommendation to the
Committee. The CEO's base salary was above the median of the comparator group
in 1999.
Similarly, there were no adjustments made to the base salaries of any of the
other named executives in 1999.
10
<PAGE>
Annual Incentive Bonus
Incentive bonuses were based on two elements: (1) EVA performance of the
Company and (2) performance against personal objectives. The total bonus of
the CEO was determined using a weighting of 75% on EVA performance and 25% on
performance against personal objectives.
For 1999, the EVA performance element was determined using the Company's
actual EVA performance versus the predetermined target. EVA performance was
below the goal for 1999. Under the bonus plan, the award for EVA performance
is credited to an individual's "bonus bank" from which only a predetermined
portion of the bank balance is actually paid out as the bonus in a given year.
For 1999, the predetermined payout percent was 33% of the bonus bank for the
executive officers. The remaining balance, if any, is held in the ending bank
and remains at risk. It will be available for payout over subsequent years if
EVA performance is sustained. With performance below target, bank balances may
become negative, in which case, they must be offset and therefore reduce
future awards. This banking feature imparts a longer term component to the
plan, serves to smooth out the payouts through economic cycles and provides a
retention element.
For the discretionary element of the award, the payout is determined by the
Compensation Committee and is not added to the bonus bank, but is paid out in
full for the year earned.
The CEO's 1999 incentive payout was $137,500, made up entirely of the
discretionary award with no payout for EVA performance. This compares to a
total payout in 1998 of $324,923. His ending 1999 EVA performance-related bank
balance is a negative $271,616, compared to a positive $487,384 in 1998.
The actual bonus awards for the Executive Vice President and the Senior Vice
President, Corporate Affairs were determined in a similar fashion, based on
the Company's EVA performance and performance toward their personal objectives
with weightings of 75% and 25% respectively. The other named executives, two
Division Presidents, each had their incentive awards based on a combination of
the Company's EVA and his Division's EVA performance (75% weighting) and their
personal objectives (25% weighting).
Long Term Incentive Award
As explained above, the Compensation Committee determined the long term
incentive award opportunity for each named executive in early 1999. A long
term incentive plan in the form of stock option grants provides the strongest
and simplest linkage to shareholder interests. The CEO and other named
executives received stock option grants in 1999 with an option price set at
the fair market value of Common Stock on the date of the grant. These option
grants vest one-third each year beginning in 2000 and have a ten year term.
Special Performance Bonuses
From time to time, the Committee may award special performance bonuses to
recognize extraordinary performance and business results. In 1999, the
Committee made such a special award payment to the CEO for his leadership in
implementing the spin-off of Arch Chemicals. The CEO received $150,000 as a
special bonus. Two other named executives also received special awards for
their work on the Arch Chemicals spin-off.
January 27, 2000
G. Jackson Ratcliffe, Jr., Chairman
Randall W. Larrimore
Richard M. Rompala
11
<PAGE>
The following table shows for the Chief Executive Officer and the other four
most highly compensated executive officers cash compensation for the fiscal
years 1997-1999.
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
--------------------------- ------------------------
Awards Payouts
----------- -----------
Other All
Name and Principal Annual Securities Other
Position as of Compen- Underlying LTIP Compen-
December 31, 1999 Year Salary Bonus(a) sation(b) Options Payouts(c) sation(d)
------------------ ---- -------- -------- --------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Donald W. Griffin....... 1999 $700,008 $287,500 $27,429 150,000 $248,250 $ 70,801
Chairman, President & 1998 700,009 324,923 26,282 100,000 678,831 51,852
Chief Executive Officer 1997 650,004 625,308 35,172 75,000 310,817 59,910
Anthony W. Ruggiero..... 1999 $400,008 $150,000 $34,665 60,000 $ 0 $326,363
Executive Vice 1998 387,504 132,162 25,605 40,000 252,828 34,458
President and
Chief Financial Officer 1997 375,000 262,404 14,491 30,000 94,296 35,605
Peter C. Kosche......... 1999 $325,008 $118,750 $27,215 40,000 $ 51,505 $ 22,791
Senior Vice President 1998 312,504 103,878 26,064 25,000 163,798 22,400
1997 300,000 200,195 13,356 20,000 67,757 27,639
Thomas M. Gura.......... 1999 $275,004 $193,007 $ 6,424 30,000 $ 77,875 $ 19,154
Vice President 1998 262,506 194,752 6,974 20,000 132,526 22,969
1997 230,298 90,942 7,052 6,000 56,470 23,901
Joseph D. Rupp.......... 1999 $300,000 $103,720 $ 2,226 30,000 $ 77,875 $ 16,814
Vice President 1998 287,502 96,872 3,828 20,000 132,526 15,530
1997 275,004 126,555 7,052 15,000 57,077 19,503
</TABLE>
- --------
(a) Includes special performance bonuses related to work performed in
connection with the spin-off of Arch Chemicals paid in 1999 in the amounts
of $150,000 for the CEO, $100,000 for the CFO and $75,000 for the Senior
Vice President. Bonus payments to Messrs. Griffin, Ruggiero and Kosche for
the EVA Performance of the Company were $0 for 1999.
(b) Includes dividend equivalents on outstanding performance share units paid
at the same rate as dividends paid on Olin Common Stock. Also includes
imputed income on use of Company-provided automobiles, Company-owned
airplane and investment advice.
(c) As required by Securities and Exchange Commission rules, LTIP awards are
reported in the year paid rather than in the year earned, because by their
nature they do not reflect performance in one particular year and often
are not fully determinable until paid. LTIP payouts in 1999 included
retention units for 1989-1992 which had a six-year normal retention period
which accelerated to payout in 1999 prior to the spin-off of Arch
Chemicals.
(d) Amounts reported in this column for 1999 are comprised of the following
items:
<TABLE>
<CAPTION>
Exercise Value of
Restricted of Arch Split-Dollar
Stock Stock CEOP Supplemental Term Life Life Insurance
Payout(1) Options Match CEOP(2) Insurance(3) Premiums(4)
---------- -------- ------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Donald W. Griffin....... $ 0 $14,984 $4,850 $16,300 $1,390 $33,277
Anthony W. Ruggiero..... 298,560 0 4,396 7,767 1,390 14,250
Peter C. Kosche......... 0 1,799 4,875 4,619 1,390 10,108
Thomas M. Gura.......... 0 3,639 4,887 3,513 1,390 5,725
Joseph D. Rupp.......... 0 3,506 4,887 4,262 1,390 2,769
</TABLE>
--------
(1) Reflects vesting of a portion of a restricted stock grant made to Mr.
Ruggiero at the time he joined the Company in August of 1995. Mr.
Ruggiero's remaining restricted stock units vest on August 30, 2000.
The remaining restricted stock units consist of 4,426 shares of Olin
Common Stock and 10,213 shares of Arch Chemicals stock, valued as of
December 31, 1999, at $87,690 and $213,835, respectively, based on
the closing prices of such shares as reported on the consolidated
transaction reporting system relating to New York Stock Exchange
issues. The Arch Chemicals restricted stock units are payable only in
cash.
(2) The Supplemental CEOP permits participants in the CEOP to make
contributions, which Olin matches in amounts permitted by the CEOP
but which would otherwise be in excess of those permitted by certain
Internal Revenue Service limitations.
(3) Under Olin's key executive insurance program, additional life
insurance is provided and monthly payments are made to the spouse
and dependent children of deceased participants.
(4) The amount of the premium shown represents the full dollar amount of
the premium Olin paid in 1999 for the whole life insurance and to
fund the retiree death benefit. Such amounts also include
retroactive premiums which Olin paid to cover a period of time
during which some premiums were suspended due to the financial
instability of the insurance carrier.
12
<PAGE>
Stock Option Plans
Under Olin's Stock Option Plans, options to purchase shares of Common Stock
have been granted to key employees selected by the Compensation Committee. The
option price may not be less than the fair market value of Common Stock on the
date of grant and options may not be exercised later than ten years from such
date. Instead of requiring an optionee to pay cash, the Compensation Committee
may permit the delivery of Common Stock, valued at the fair market value on
the date of exercise, in payment for the exercise price of options. Except for
anti-dilution adjustments, options do not provide for repricing or adjustments
to the exercise price.
The following table sets forth as to the individuals named in the summary
compensation table on page 12, information relating to options granted by Olin
from January 1, 1999 through December 31, 1999.
Option Grants of Common Stock in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants(a)
-------------------------------------------------------------------------------- ---
Number of % of Total
Securities Options Potential Realizable Value at
Underlying Granted Assumed Rates of Stock Price
Options to All Appreciation for Option Term(d)(e)
Granted Employees Exercise Expiration ----------------------------------
Name (a,b) in Fiscal Year Price(c) Date 0% 5% 10%
- ---- ---------- -------------- -------- ---------- ------------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Donald W. Griffin....... 150,000 19.1 $15.85 2/08/09 $ 0 $ 1,495,197 $ 3,789,123
Anthony W. Ruggiero..... 60,000 7.7 15.85 2/08/09 0 598,079 1,515,649
Peter C. Kosche......... 40,000 5.1 15.85 2/08/09 0 398,719 1,010,433
Thomas M. Gura.......... 30,000 3.8 15.85 2/08/09 0 299,039 757,825
Joseph D. Rupp.......... 30,000 3.8 15.85 2/08/09 0 299,039 757,825
All Shareholders........ N/A N/A N/A N/A 0 449,176,071 1,138,300,353
All Optionees........... 784,150 100.0 15.84 (f) 0 7,811,460 19,795,773
</TABLE>
- --------
(a) Options for the five named individuals were awarded on February 9, 1999.
One-third of the grant becomes exercisable annually, beginning on February
9, 2000.
(b) Under the Stock Option Plans, the Compensation Committee, in its
discretion, may grant stock appreciation rights in Olin stock ("SARs") to
optionees. To date, no such SARs have been granted. Each such right will
relate to and have the same terms and conditions, including restrictions,
as a specific option granted, together with such additional terms and
conditions as the Compensation Committee may prescribe.
(c) The exercise price of the options is equal to the fair market value of
Common Stock on the date of grant.
(d) No gain to the optionees is possible without appreciation in the stock
price which will benefit all shareholders commensurately. The dollar
amounts under these columns are the result of calculations at the 5% and
10% assumption rates set by the SEC and therefore are not intended to
forecast possible future appreciation of Olin's stock price or to
establish any present value of the options.
(e) Realizable values are computed based on the number of options which were
granted in 1999 and which were still outstanding at year-end.
(f) The expiration dates of options granted during 1999 are February 8, 2009
and July 28, 2009.
13
<PAGE>
The following table sets forth as to the individuals named in the summary
compensation table on page 12, information regarding options exercised during
1999 and the value of in-the-money outstanding options at the end of 1999.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-end Option
Values
<TABLE>
<CAPTION>
Number of Securities Aggregate Value of
Underlying Unexercised Unexercised, In-the-Money
Shares Options at 12/31/99 Options at 12/31/99(a)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Donald W. Griffin....... 0 $ 0 335,801 241,666 $492,765 $594,375
Anthony W. Ruggiero..... 0 0 94,308 106,891 0 237,750
Peter C. Kosche......... 0 0 72,113 63,332 84,034 158,500
Thomas M. Gura.......... 0 0 41,362 45,333 72,338 118,875
Joseph D. Rupp.......... 0 0 70,088 48,333 101,031 118,875
</TABLE>
- --------
(a) Value was computed as the difference between the exercise price and the
$19.8125 per share closing price of Olin Common Stock on December 31,
1999, as reported on the consolidated transaction reporting system
relating to New York Stock Exchange issues.
14
<PAGE>
Corporate Performance Graph
The Olin Peer Group consists of Georgia Gulf Corporation, Pioneer Company,
Brush Wellman Inc., Chase Industries Inc., Mueller Industries, Inc. and
Wolverine Tube, Inc. The Olin Peer Group has been weighted in accordance with
market capitalization (closing stock price multiplied by the number of shares
outstanding) as of the beginning of each of the five years covered by the
performance graph. The weighted return for each year was calculated by
multiplying (a) the percentage that each corporation's market capitalization
represented of the total market capitalization for all corporations in the
Olin Peer Group for such year by (b) the total shareholder return for that
corporation for such year.
Comparison of Five Year Cumulative Total Return*
Among Olin Corporation, The S&P Midcap 400 Index
and a Peer Group
[LINE GRAPH]
* $100 invested on 12/31/94 in stock or index, including reinvestment of
dividends. The graph reflects distributions received in connection with the
spin-off of Primex Technologies, Inc. and Arch Chemicals, Inc. as a
dividend. Such dividend is assumed to have been reinvested in Olin Common
Stock as of January 7, 1997 and February 9, 1999, respectively.
<TABLE>
<CAPTION>
12/94 12/95 12/96 12/97 12/98 12/99
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OLIN CORPORATION....................... 100 150 157 210 131 155
PEER GROUP............................. 100 106 108 138 86 128
S & P MIDCAP 400....................... 100 131 156 206 236 271
</TABLE>
15
<PAGE>
Executive Agreements
As of December 31, 1999 each of the executive officers named in the table on
page 12 and three other employees had agreements with Olin which provide,
among other things, that in the event of a covered termination of employment
(which could include, among other things, termination of employment other than
for cause and termination in lieu of other Olin severance benefits at the
election of the individual to leave Olin under certain circumstances), the
individual will receive a lump sum severance payment from Olin equal to 12
months' salary plus the greater of (a) the average incentive compensation
award paid from Olin during the three years preceding the termination or (b)
the then standard annual incentive compensation award, less any amounts
payable under existing disability plans of Olin. In the event that a "Change
in Control" of Olin occurs, and there is a covered termination, the individual
will receive three times the severance payment. Pension credit and insurance
coverage would be afforded for the period reflected in the severance payment,
and in certain cases, insurance coverage will be extended beyond such period.
The agreements also provide for certain outplacement services. The agreements
will expire on September 30, 2002, unless prior to that date there is a
"Change in Control" of Olin, in which event they will expire on the later of
September 30, 2002 or three years following the date of the "Change in
Control". A "Change in Control" would occur if Olin ceases to be publicly
owned; 20% or more of its voting stock is acquired by others (other than an
Olin employee benefit plan); the incumbent directors and their designated
successors cease over a two-year period to constitute a majority of the Board;
or all or substantially all of Olin's business is disposed of in a transaction
in which Olin is not the surviving corporation or Olin combines with another
company and is the surviving corporation (unless Olin shareholders following
the transaction own more than 50% of the voting stock or other ownership
interest of the surviving entity or combined company). Each agreement provides
that the individual agrees to remain in Olin's employ for six months after a
"Potential Change in Control" of Olin has occurred or until a Change in
Control occurs and the individual retains substantially the same position as
before the Potential Change in Control, whichever occurs earlier. The
agreements provide that payments made thereunder or under any change in
control provision of an Olin compensation or benefit plan which are subject to
"excess parachute payment" tax will be increased so that the individual will
receive a net payment equal to that which would have been received if such tax
did not apply. Certain of Olin's benefit and compensation plans, including its
EVA annual incentive bonus plan, also contain "change-in-control" provisions.
In addition, three of the named executive officers in the table on page 12
and two other executives have retention agreements that provide them with
decreasing lump-sum payments for salary and bonus as well as continuation of
other benefits through the end of 2001, in the event of a covered termination.
If the covered termination is the result of the executive's resignation for
one of the enumerated reasons, he or she must provide at least 90 days'
notice. The agreements terminate upon a Change in Control as defined above. In
no event may an executive receive (under both agreements) an aggregate sum
more than the maximum benefit under the Change in Control agreements described
above.
Retirement Benefits
The Olin Corporation Employees Pension Plan, together with two supplementary
plans (collectively, the "Pension Plan"), provide for fixed benefits upon
retirement. The normal retirement age is 65, but early retirement is available
after age 55 with at least 10 years of service, at a reduced percentage of the
normal retirement allowance (100% is payable if early retirement is at age
62). Directors who are not also employees of Olin are not eligible to
participate in the Pension Plan. The Olin Corporation Employees Pension Plan
is a tax-qualified plan, and benefits are payable only with respect to current
compensation. Under one of the supplementary plans mentioned above, Olin pays
a supplemental pension, based on the formula described in the next paragraph,
on deferred compensation (including deferred incentive compensation). Under
the other supplementary plan, Olin will pay employees affected by the
limitations imposed by the Internal Revenue Code on qualified plans a
supplemental pension in an annual amount equal to the reduction in pensions
resulting from such limitations.
16
<PAGE>
"Compensation" for purposes of the Pension Plan represents average cash
compensation per year (salary and bonus shown in the summary compensation
table on page 12) received for the highest three years during the ten years up
to and including the year in which an employee retires. The normal retirement
allowance is 1.5% of "Compensation" as so defined multiplied by the number of
years of benefit service, less a percentage of the employee's primary Social
Security benefit based on years of service, not to exceed 50% of such Social
Security benefit.
Under the Senior Executive Pension Plan (the "Senior Plan"), Olin will pay
retirement benefits to certain senior executives upon their retirement after
age 55, with reduced benefits if retirement is prior to age 62. Under the
Senior Plan, the maximum benefit will be 50% of "Compensation" (as defined
above), less payments from the Pension Plan, any other Olin pension, pension
benefits from other employers, and Social Security benefits. Subject to the
above limitations, benefits under the Senior Plan will accrue at the rate of
3% for each year of service in a senior executive position, reduced by
payments under the Pension Plan which accrued during the period the employee
was in the Senior Plan and by 50% of the employee's primary social security
benefit. The Senior Plan will also provide benefits to the executive's
surviving spouse equal to 50% of the executive's benefits. Payment of benefits
under the Senior Plan is subject to satisfaction of its service requirements
and other plan provisions regarding suspension of benefit accruals and
cessation of benefits. The Senior Plan and the other two plans provide that
unless the participant elects installment payments, the participant will
receive benefits under these plans in a lump sum upon retirement if the lump
sum would exceed $100,000. The Compensation Committee may remove a participant
from the Senior Plan for cause as defined in such plan.
The Olin Corporation Employees Pension Plan provides that if, within three
years following a "Change in Control" of Olin, any corporate action is taken
or filing made in contemplation of, among other things, a plan termination or
merger or other transfer of assets or liabilities of the plan, and such
termination, merger or other event thereafter takes place, plan benefits would
automatically be increased for affected participants (and retired
participants) to absorb any plan surplus.
The Senior Plan and the other two plans mentioned above provide that in the
event of a "Change in Control", Olin will pay each participant a lump sum
amount sufficient to purchase an annuity which (together with any monthly
payment provided under trust arrangements or other annuities established or
purchased by Olin to make payments under such plan) will provide the
participant with the same monthly after-tax benefit as the participant would
have received under the plan, based on benefits accrued thereunder to the date
of the "Change in Control". The agreements described under "Executive
Agreements" above provide that an executive officer who is less than age 55 at
the time of a "Change in Control" will, for purposes of calculating the above
lump sum payment under the Senior Plan, be treated as if he had retired at age
55, with the lump sum payment being calculated on the basis of service to the
date of a "Change in Control".
17
<PAGE>
The following table shows the maximum combined amounts payable annually on
normal retirement under the Pension Plan and Senior Plan. Such amounts will be
reduced by Social Security benefits and the other offsets described above.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
--------------------------------------------------------------
Compensation 10 Years 15 years 20 Years 25 Years 30 Years 35 Years 40 Years
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000....... $ 60,000 $ 90,000 $100,000 $100,000 $100,000 $105,000 $120,000
300,000....... 90,000 135,000 150,000 150,000 150,000 157,500 180,000
400,000....... 120,000 180,000 200,000 200,000 200,000 210,000 240,000
500,000....... 150,000 225,000 250,000 250,000 250,000 262,500 300,000
600,000....... 180,000 270,000 300,000 300,000 300,000 315,000 360,000
700,000....... 210,000 315,000 350,000 350,000 350,000 367,500 420,000
800,000....... 240,000 360,000 400,000 400,000 400,000 420,000 480,000
900,000....... 270,000 405,000 450,000 450,000 450,000 472,500 540,000
1,000,000...... 300,000 450,000 500,000 500,000 500,000 525,000 600,000
1,100,000...... 330,000 495,000 550,000 550,000 550,000 577,500 660,000
1,200,000...... 360,000 540,000 600,000 600,000 600,000 630,000 720,000
1,300,000...... 390,000 585,000 650,000 650,000 650,000 682,500 780,000
1,400,000...... 420,000 630,000 700,000 700,000 700,000 735,000 840,000
1,500,000...... 450,000 675,000 750,000 750,000 750,000 787,500 900,000
1,600,000...... 480,000 720,000 800,000 800,000 800,000 840,000 960,000
</TABLE>
Credited years of service for the named executive officers as of December
31, 1999 are as follows: Mr. Griffin, 38.6 years (18.8 years under the Senior
Plan); Mr. Ruggiero, 4.3 years (4.3 years under the Senior Plan); Mr. Kosche,
26.8 years (6.6 years under the Senior Plan); Mr. Gura, 31.5 years (12.4 years
under the Senior Plan); and Mr. Rupp, 26.9 years (13.4 years under the Senior
Plan).
Other
Under Olin's compensation plans and arrangements, all participants,
including directors, may defer payment of salaries, director compensation and
incentive compensation to cash and phantom stock accounts.
In connection with an employment transfer to a new location, the Company
loaned Mr. John L. McIntosh, Vice President and President, Chlor Alkali
Products Division, $200,000 on June 10, 1998 without interest. The loan was
repaid in full on August 23, 1999.
ITEM 2--PROPOSAL TO RE-APPROVE
THE OLIN SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN, AS AMENDED
The Board of Directors proposes that the shareholders re-approve the Olin
Senior Management Incentive Compensation Plan, as amended ("Incentive Plan"),
which provides for the awarding of cash bonuses ("Incentive Awards") to
participants in the Incentive Plan. Provisions of the Incentive Plan are
summarized below. The summary is not intended to be a complete description of
the Incentive Plan, and you should review the entire Incentive Plan, a copy of
which is included in this Proxy Statement as Exhibit A.
On January 27, 1994, the Board adopted the Incentive Plan. The Incentive
Plan was submitted to the shareholders for approval at the 1994 Annual Meeting
and amendments to the Incentive Plan were submitted to shareholders for
approval at the 1995 Annual Meeting.
18
<PAGE>
Section 162(m) of the Internal Revenue Code, as amended, denies the
deduction for certain compensation in excess of $1 million per year paid by a
publicly traded corporation to the chief executive officer and the four other
most highly compensated officers. Certain types of compensation, including
compensation based on performance measures, are excluded from this deduction
limit. In order for compensation to qualify for this exception (i) it must be
paid solely on account of the attainment of one or more performance measures,
(ii) the performance goals must be established by a Compensation Committee
consisting solely of two or more outside directors, (iii) the material terms
under which the compensation is to be paid, including the performance
measures, must be disclosed to and approved by shareholders in a separate vote
prior to payment and (iv) prior to payment, the Compensation Committee must
certify that the performance goals and any other material terms were in fact
satisfied. In addition, satisfaction of the requirements set forth in (iii)
and (iv) above must be made conditions to the right of the executive to
receive the performance-based compensation. The Incentive Plan is intended to
satisfy the exclusion contained in Section 162(m).
The effectiveness of the 1995 shareholder approval of the material terms of
the Incentive Plan expires (for purposes of Section 162(m)), at the 2000
Annual Meeting of the Company's shareholders. On December 9, 1999, subject to
the shareholder approval sought in this Proposal, the Board of Directors
approved several minor amendments to the Incentive Plan. The amendments
include:
. deleting outdated references to actions taken in 1994,
. simplifying the description of the procedures the Compensation Committee
uses to determine the awards,
. revising the dates by which the Compensation Committee must take
specified actions to conform the dates to regulations adopted under
Section 162(m) after 1994, and
. a modification to the cap on compensation to a single individual in any
one year, described in more detail below.
The Board of Directors has determined that it is in Olin's best interests
that awards paid under the Incentive Plan continue to be eligible to qualify
as performance-based compensation under Section 162(m). As a result, the
Company is now seeking shareholder re-approval of the Incentive Plan.
Purpose. The purpose of the Incentive Plan is to compensate certain members
of Olin's senior management on an individual basis for contributions to Olin
and to stimulate the efforts of such members by giving them a direct financial
interest in Olin's performance.
Administration. The Incentive Plan is administered by the Compensation
Committee of the Board or such other committee of the Board as the Board may
from time to time designate. Such committee has sole authority to make rules
and regulations for the administration of the Incentive Plan. Interpretations
and decisions of such committee with regard to the Incentive Plan are final
and conclusive.
Participants. Participants for a fiscal year are those salaried employees
designated as participants by the Compensation Committee on or before March 30
of that fiscal year (or a later date if permitted by tax law). Currently only
Mr. Griffin and Mr. Ruggiero are designated as participants.
Performance Measures. For each fiscal year, the Compensation Committee
selects one or more of the shareholder-approved performance measures and sets
the performance goals for these measures. The performance measures and the
related performance goals are utilized to determine the amount of the
Incentive Award payable for such fiscal year under the Incentive Plan. One or
more of the performance measures are designated by the Compensation Committee
for a fiscal year, provided such designation would not cause the Incentive
Award to become subject to the $1 million limitation contained in Section
162(m). The permissible performance measures are Pre-Tax Profit, Earnings Per
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Share, Cash Flow, Economic Value Added, Return on Capital, Return on Equity
("ROE") and Return on Net Assets ("RONA"), as defined in the Incentive Plan.
For each of 1996, 1997, 1998, 1999 and 2000, the sole performance measure
designated by the Compensation Committee under the Incentive Plan was Economic
Value Added.
Award Determination. On or before March 30 of each fiscal year (or such
later date as permitted by tax law) for the Incentive Awards for such fiscal
year, the Compensation Committee will designate or approve (i) the individuals
who will be participants, (ii) the performance measures, (iii) if there is
more than one performance measure, the weighting of the performance measures
in determining the Incentive Award, (iv) the performance goals and payout
matrix or formula for each performance measure and (v) the incentive standard
award (the cash component of total targeted compensation that is tied to the
performance measures) for each participant. Following the end of a fiscal
year, the Compensation Committee determines the actual Incentive Award for
each participant based upon the payout matrix or formula for each performance
measure designated, and applying the pre-determined weighting for each
performance measure if more than one was designated.
As a condition to the right of a participant to receive an Incentive Award,
the Compensation Committee first certifies, by resolution of the committee,
that the Incentive Award has been determined in accordance with the provisions
of the Incentive Plan. The Compensation Committee in its sole discretion may
reduce any Incentive Award to any participant to any amount, including zero,
prior to the certification of the amount of such Incentive Award.
The cost to Olin of the Incentive Awards and the amounts to be paid to
participants cannot be determined at this time because payout of Incentive
Awards is based on Olin's future financial performance and the number of
participants named by the Compensation Committee. For the same reason, the
benefits or amounts that will be received by or allocated to any of Olin's
Named Executive Officers are not determinable. The Incentive Plan provides,
however, for a maximum amount payable to a single individual in any fiscal
year under the Incentive Plan. That limit is described in the following
subsection, "Maximum Award." For amounts earned under the Incentive Plan by
Named Executive Officers in the fiscal year ended December 31, 1999, see the
"Summary Compensation Table" under "Executive Compensation" above.
Maximum Award. Under the amendment approved by the Board on December 9,
1999, the maximum Incentive Award paid a participant under the Incentive Plan
with respect to a fiscal year may not exceed 200% of such participant's annual
base salary in effect on December 1 of such fiscal year. Prior to such
amendment, the cap was 100% of the base salary in effect on December 31 of the
prior fiscal year.
Payment and Deferral. Incentive Awards are paid within 75 days of the close
of a fiscal year in a single, lump sum. Under certain circumstances, payment
may be deferred as provided in the Incentive Plan.
Nonexclusive. Participation in the Incentive Plan does not exclude
participants from participation in any other benefit or compensation plan or
arrangement of Olin, including other bonus or incentive plans.
Federal Income Tax Information. Awards under the Incentive Plan constitute
ordinary income to the participants for federal income tax purposes.
Generally, Olin is required to withhold from Incentive Awards granted to
employees an amount based on the amount of the award. Subject to the
requirement of reasonableness, the provisions of Section 162(m) and the
satisfaction of a tax reporting obligation, Olin generally will be entitled to
a business expense deduction equal to the taxable ordinary income realized by
the employee.
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The Board of Directors recommends a vote FOR re-approval of the Olin Senior
Management Incentive Compensation Plan, as amended, because the Board believes
it is in the best interest of the Company to continue to qualify performance-
based compensation for deductibility under Section 162(m) in order to maximize
Olin's income tax deductions. The affirmative vote of the holders of a
majority of shares present in person or by proxy and entitled to vote at the
meeting is necessary to re-approve the Incentive Plan. Unless otherwise
instructed, proxies will be voted FOR re-approval of the Incentive Plan.
ITEM 3--PROPOSAL TO APPROVE
OLIN CORPORATION 2000 LONG TERM INCENTIVE PLAN
The Board of Directors proposes that the shareholders approve the Olin
Corporation 2000 Long Term Incentive Plan (the "2000 LTIP"), as adopted by the
Board on January 27, 2000.
As explained above in "Proposal to Re-approve the Senior Management
Incentive Compensation Plan, as amended," Section 162(m) denies the deduction
for certain compensation in excess of $1 million per year paid by a public
company to certain highly compensated officers. Certain types of compensation,
including compensation based on performance measures, are excluded from this
deduction limit. In order for compensation to qualify for this exception,
among other things, (i) the compensation plan must provide for a limit on the
compensation to be paid to each executive and (ii) the performance measures
must be disclosed to and approved by shareholders in a separate vote prior to
payment. As discussed below, the 2000 LTIP provides for limits on the amount
of Awards to be paid to any participant.
In an effort to comply with the provisions of Section 162(m) and to qualify
Awards issuable under 2000 LTIP to certain executives as performance-based
compensation eligible for exclusion from the deduction limit, the 2000 LTIP is
being submitted to the shareholders for approval at the 2000 Annual Meeting.
By approving the 2000 LTIP, the shareholders will among other things be
approving the performance measures to be used under the 2000 LTIP.
The 2000 LTIP provides that Awards designated by the Committee as being
performance-based shall have as performance measures the same performance
measures permitted under the Incentive Plan and described above under
"Proposal to Re-Approve the Olin Senior Management Incentive Compensation
Plan, as amended."
The principal features of the 2000 LTIP are summarized below. The summary is
not intended to be a complete description of the 2000 LTIP, and you should
review the entire 2000 LTIP, a copy of which is included in this Proxy
Statement as Exhibit B.
General Nature and Purpose
The principal purposes of the 2000 LTIP are to (a) attract and keep quality
employees, (b) provide competitive compensation packages to participants, (c)
motivate participants to achieve long-range goals, and (d) further identify
participants' interests with those of Olin's shareholders.
Under the 2000 LTIP, a maximum of 2,250,000 shares of Common Stock is
authorized for issuance upon exercise or granting of options, SARs, restricted
stock, performance shares and other awards (collectively, "Awards"). As of the
end of February 2000, the total number of shares available for stock option
grants to Olin employees was approximately 300,000 (22,079 under the Olin 1991
Long Term Incentive Plan and 269,631 under the 1996 Stock Option Plan for Key
Employees of Olin Corporation and Subsidiaries).
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Administration
A committee of the Board appointed by the Board, each of whom is both a
"non-employee director" for purposes of Rule 16b-3 under the Exchange Act
("Rule 16b-3") and an "outside director" for purposes of Section 162(m) of the
Code, will administer the 2000 LTIP. The full Board may also elect to
administer the 2000 LTIP directly. The committee may delegate partial or full
authority to one or more members of Olin's management under the 2000 LTIP,
with respect to eligible employees who are not "officers" for purposes of
Section 16(b) of the Securities Exchange Act of 1934.
Subject to the terms and conditions of the 2000 LTIP, the committee has the
authority to select the employees to whom Awards are to be made, to determine
the number of shares to be subject thereto and the terms and conditions
thereof, and to make all other determinations and to take other actions
necessary or advisable for the administration of the 2000 LTIP (other than to
reprice outstanding options). The Board or the committee may at any time
suspend or terminate the 2000 LTIP subject to rights under Awards previously
granted, and may amend or modify the 2000 LTIP except that shareholder
approval is generally required to increase the maximum number of shares
subject to Awards or other Award limits, to reduce the minimum option exercise
price or to permit repricing of options.
Eligibility
Awards under the 2000 LTIP may be granted to employees of Olin (or any
current or future subsidiaries) selected by the committee for participation in
the 2000 LTIP.
Awards
The 2000 LTIP provides that the committee may grant or issue stock options,
SARs, restricted stock, performance shares and dividend equivalents, or any
combination thereof to any eligible employee. The committee will specify the
type, terms and conditions of the Award. Each such Award may be set forth in a
separate agreement with the person receiving the Award.
The 2000 LTIP provides that (a) Awards covering not more than 2,250,000
shares may be granted under the 2000 LTIP, (b) no more than 900,000 shares may
be issued for Incentive Stock Options, (c) Awards of stock options and SARs to
any one individual may not exceed 300,000 shares in any calendar year and
Awards of Restricted Stock or Performance Shares to any one individual may not
exceed 100,000 shares in any calendar year for Awards that are performance-
based compensation under Section 162(m), and (d) no more than 450,000 shares
may be subject to Awards for Restricted Stock or Performance Shares.
Non-Qualified Stock Options ("NQSOs") provide for the right to purchase
common stock at a specified price which may not be less than the fair market
value of a share of common stock on the date of grant, (except that the
exercise price for NQSOs granted to a new employee or an employee who has
moved to a new job within Olin may be the fair market value on the date of
hiring or promotion, if the option is granted within 90 days after such
event). The option will become exercisable (at the discretion of the
committee) in one or more installments on or after the grant date, subject to
the participant's continued employment with Olin. NQSOs and ISOs may be
granted for any term specified by the committee up to a maximum term of ten
years.
Incentive Stock Options ("ISOs") will be designed to comply with certain
restrictions contained in the Code. Among such restrictions, ISOs must have an
exercise price of not less than the fair market value of a share of Common
Stock on the date of grant, must expire within a specified period of time
following the optionee's termination of employment, and must be exercised
within ten years after the date of grant. ISOs may be subsequently modified to
disqualify them from treatment as ISOs. In the
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case of an ISO granted to an individual who owns (or is deemed to own) at
least 10% of the total combined voting power of all classes of stock of Olin,
the exercise price must be at least 110% of the fair market value of a share
of Common Stock on the date of grant, and the ISO must expire no later than
the fifth anniversary of the date of its grant.
A restricted stock unit will entitle the holder to receive shares of Common
Stock or cash at the end of a specified deferral period. The committee may
issue up to an aggregate 45,000 shares of restricted stock without any minimum
vesting period. Grants of restricted stock above that level must include a
minimum one-year vesting period for performance-based restricted stock grants
and a minimum three-year vesting period for restricted stock grants without
any performance-based component. Restricted stock may be awarded and made
subject to such other restrictions as may be determined by the committee. Such
restrictions will lapse under such circumstances as the committee may
determine, including upon the achievement of performance criteria referred to
below. In general, restricted stock may not be sold, or otherwise transferred
or hypothecated, until the restrictions (if any) are removed or expire.
Recipients of restricted stock may have voting rights and receive dividends
paid with respect to such stock prior to the time when the restrictions lapse,
or the restricted stock may not be issued until the Award has vested, and, in
that instance, the recipient would have no voting or dividend rights prior to
the time when the vesting conditions are satisfied.
Performance shares will provide for future issuance of shares to the
recipient upon the attainment of corporate performance goals established by
the committee over specified performance periods. Prior to payment of
performance shares the committee will certify that the performance objectives
were satisfied. Performance objectives may vary from individual to individual
and will be based upon such one or more performance criteria as the committee
may deem appropriate, including the criteria described above under "Proposal
to Re-Approve the Olin Senior Management Incentive Compensation Plan, as
amended."
Stock appreciation rights may be granted in connection with stock options or
separately, and are payable in cash. The term of a SAR may not exceed ten
years. A SAR will entitle the holder to receive with respect to each share
subject thereto, an amount equal to the excess of the fair market value of one
share of Common Stock on the date of exercise (or, if the committee so
determines, at any time during a specified period before or after the date of
exercise) over the exercise price of the SAR set by the committee as the date
of grant. Except as required by Section 162(m), there are no restrictions
specified in the 2000 LTIP on the amount of gain realizable from the exercise
of SARs, although restrictions may be imposed by the committee.
Dividend equivalents represent the value of any dividends per share paid by
Olin, calculated with reference to the number of shares covered by the Awards
held by the participant. This value is converted into cash or additional
shares of Common Stock, as determined by the committee. Payment may be made
concurrently with actual dividend payments, or may be deferred, at the
election of the committee.
General
Method of Exercise. To exercise an option, the optionee must deliver to Olin
a notice of exercise and full payment for the shares. The option price may be
paid in cash, or by tendering shares of Common Stock already issued or
issuable upon exercise of the option or by any other form of payment which is
approved by the committee and is consistent with the 2000 LTIP or applicable
law, or by any combination of the above.
Termination of Employment. Awards terminate upon termination of the
participant's employment by Olin for cause or by the employee without Olin's
written consent. Vested options held at the time an optionee's employment
terminates for any other reason may be exercised for three months after
termination, or such longer period as the committee provides. In no event,
however, can an option be extended beyond the expiration date.
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Non-Compete. If a participant renders service to a competitor of Olin, or
discloses confidential information without Olin's consent, or violates other
terms of the 2000 LTIP, the committee may terminate any unvested, unpaid or
deferred Awards held by the participant, or may require the participant to
forfeit benefits received under the 2000 LTIP within the six months prior to
such action.
Non-Transferability. Options may be transferred only by will or by the laws
of descent and distribution, and during a participant's lifetime are
exercisable only by the participant. However, the committee may in its
discretion permit transfers by gift to a member of the holder's family members
or related entities or pursuant to certain domestic relations orders.
Acceleration of Awards. The vesting of Awards will be accelerated in the
event of Change of Control of Olin. A "Change in Control" occurs if:
. Olin ceases to be publicly owned with at least 1,000 shareholders;
. a person or group of persons other than Olin, a majority-owned subsidiary
or an employee benefit plan (or related trust) of Olin or such a
subsidiary becomes the beneficial owner (as that term is defined under
Rule 13d-3 of the Securities Exchange Act of 1934, as amended), of 20% or
more of Olin's then-outstanding voting stock;
. during any period of two consecutive years, persons who, at the beginning
of such period constitute Olin's Board of Directors, together with any new
directors whose election or nomination was approved by a vote of at least
two-thirds of the directors then still in office who either were directors
at the beginning of such period or whose election or nomination was
previously so approved, cease for any reason to constitute a majority of
the directors then in office;
. all or substantially all of Olin's business is disposed of, unless Olin
is the surviving corporation of any such transaction or the shareholders
of Olin immediately after the transaction own more than 50% of the
aggregate voting interests of the surviving entity; or
. Olin's shareholders approve (i) a sale of all or substantially all of
Olin's assets or (ii) a liquidation or dissolution of Olin.
If a participant in the 2000 LTIP is subject to excise tax on any benefits
or payments received under the 2000 LTIP as a result of the "parachute tax"
provisions of the Internal Revenue Code, Olin will make a payment to such
participant to compensate him or her for such excise tax unless a compensating
payment for excise tax on benefits under the 2000 LTIP is made under another
benefit or employment plan or agreement.
Adjustments Upon Change in Capitalization. If the outstanding shares of
Common Stock are changed into or exchanged for a different number or kind of
shares of Olin or other securities of Olin by reason of merger, consolidation,
recapitalization, stock split, stock dividend, combination or exchange of
shares, split-up, split-off, spin-off or other similar change in
capitalization or any distribution to shareholders other than cash dividends,
the committee will make an appropriate and equitable adjustment in the number,
kind and prices of shares as to which all outstanding Awards will be
exercisable, and in the number and kind of shares for shares subject to Awards
which may be awarded, including adjustments of the limitations on the maximum
number and kind of shares subject to the Award Limits.
Benefits Under 2000 LTIP
No Awards have been granted under the 2000 LTIP, so that benefits accruing
pursuant to the 2000 LTIP are not presently determinable.
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Federal Income Tax Consequences
The 2000 LTIP is neither a qualified pension, profit sharing or stock bonus
plan under Section 401(a) of the Code nor an "employee benefit plan" subject
to the provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The following discussion is a general summary of the
material federal income tax consequences that are generally applicable to
participants in the 2000 LTIP. The discussion is based on the Code,
regulations thereunder and rulings and decisions now in effect, all of which
are subject to change. The summary does not discuss all aspects of federal
income taxation that may be relevant to a particular participant in light of
that participant's personal investment circumstances.
Non-Qualified Stock Options. The grant of a NQSO is generally not a taxable
event either for the optionee or for Olin. Upon exercise of a NQSO, the
optionee generally will recognize ordinary income in an amount equal to the
excess of the fair market value of the shares of Common Stock acquired upon
exercise, determined at the date of exercise, over the exercise price of such
option. Subject to Section 162(m), Olin will be entitled to a business expense
deduction equal to such amount in the fiscal year of Olin in which the
optionee exercises the NQSO. The ordinary income recognized by the optionee is
subject to income and employment tax withholding. The optionee's tax basis in
the shares acquired pursuant to the exercise of a NQSO will be equal to the
option price paid plus the amount of ordinary income recognized upon exercise.
Any gain or loss on a disposition of the Common Stock acquired upon the
exercise of a non-qualified stock option will be treated as short-term or
long-term capital gain or loss, subject to income taxation at short-term, mid-
term or long-term capital gains rates depending on the holding period of the
optionee measured from the date of the exercise of such option. There are
generally no federal income tax consequences to Olin by reason of the
disposition by an optionee of Common Stock acquired upon the exercise of a
NQSO. If an optionee elects to defer receipt of shares upon exercise (provided
the committee permits such election), the optionee will recognize ordinary
income and Olin will be entitled to a business expense deduction when the
shares are received, in each case based on the fair market value of the shares
issued, determined at the date the shares are received.
If an optionee delivers previously acquired shares of Common Stock of Olin
to pay the option price upon exercise of a NQSO, the shares of Common Stock so
acquired that are equal in fair market value to the shares surrendered,
measured at the date of exercise, generally will qualify for nonrecognition of
gain. The tax basis of such shares will be equal to the optionee's basis in
the shares surrendered, and the holding period for purposes of determining
capital gain or loss treatment with respect to subsequent appreciation or
depreciation will be measured to include the optionee's holding period with
respect to the surrendered shares. Shares of Common Stock so acquired that
exceed the fair market value of the shares surrendered will be taxable as
ordinary income to the optionee. Olin will be subject to a withholding
obligation for income and employment taxes with respect to the amount of
ordinary income recognized by the optionee and will be entitled to a deduction
equal to the amount of such ordinary income. The optionee's tax basis in such
shares will be equal to the amount of ordinary income so recognized, and the
holding period for subsequent capital gain (or loss) will be measured from the
exercise date.
Incentive Stock Options. Generally, an optionee recognizes no taxable income
upon the grant or exercise of an ISO that meets the requirements of Section
422 of the Code. However, the amount by which the fair market value of the
Common Stock acquired at the time of exercise exceeds the option exercise
price (the "spread") is taken into account in determining the amount, if any,
of the alternative minimum tax due from the optionee in the year in which the
option is exercised. In addition, if the optionee exercises the option by
paying the option price with shares of Common Stock, the transfer of such
Common Stock may result in taxable income to the optionee even though the
transfer itself will not affect the favorable tax treatment of the Common
Stock received as a result of exercising the option.
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If an optionee holds the Common Stock acquired through the exercise of an
incentive stock option for more than two years from the date on which the
option was granted and more than one year from the date on which the option
was exercised, and if the optionee is an employee of Olin at all times from
the date of the grant of the ISO through the date that is three months before
the date of exercise, any gain or loss on the subsequent disposition of such
Common Stock will be taxed to such optionee as long-term capital gain or loss
equal to the difference between the consideration received upon such
disposition and the option exercise price.
Generally, if an optionee disposes of the Common Stock received on exercise
of an ISO less than two years after the date the option was granted or less
than one year after the date the option was exercised, it is considered to be
a "disqualifying disposition." At the time of such disqualifying disposition,
the optionee will recognize ordinary income in an amount equal to the lesser
of (i) the fair market value of the Common Stock on the date of exercise over
the option exercise price, or (ii) the amount received for the Common Stock
over the option exercise price. Any gain in excess of this amount will be
taxed as capital gain.
To the extent that an optionee recognizes ordinary income by reason of a
disqualifying disposition of Common Stock acquired upon the exercise of any
ISO, Olin generally will be entitled to a corresponding business expense
deduction in the fiscal year of Olin in which the disqualifying disposition
occurs, subject to Section 162(m).
Restricted Stock. A holder of restricted stock generally will recognize
ordinary income in an amount equal to the excess of the fair market value of
the Common Stock (determined without regard to any restrictions other than
those that by their terms never lapse) over the amount, if any, paid for the
Common Stock on the earlier of the date on which (i) the Common Stock is no
longer subject to a substantial risk of forfeiture or (ii) is transferable
(without the transferee being subject to a substantial risk of forfeiture).
If, as of such date, the holder cannot sell the Common Stock without incurring
liability under Section 16(b) of the Exchange Act, the holder generally will
not recognize ordinary income with respect to the receipt of the Common Stock
until such time as the holder can sell the Common Stock without incurring
liability under Section 16(b) of the Exchange Act. For purposes of determining
the holder's income resulting from the receipt of the Common Stock, the fair
market value will be determined as of that date.
In the alternative, if the holder files an election with the Internal
Revenue Service pursuant to Section 83(b) of the Code within 30 days of the
receipt of the Common Stock pursuant to an award of restricted stock, the
holder will be taxed in the year the Common Stock is received on the
difference between the fair market value of the Common Stock at the time of
receipt and the amount paid for the Common Stock, if any. This amount will be
taxed as ordinary income. If shares with respect to which a Section 83(b)
election has been made are later forfeited, the holder generally will be
entitled to a capital loss only in an amount equal to the amount, if any, that
the holder had paid for the forfeited shares, not the amount that the holder
had recognized as income as a result of the Section 83(b) election. Subject to
Section 162(m), Olin is entitled to a business expense deduction that
corresponds to the amount of ordinary income recognized by the holder in the
fiscal year of Olin in which such ordinary income is recognized by the holder.
Stock Appreciation Rights. Generally, the holder of a stock appreciation
right recognizes no income upon the grant of a SAR. Upon exercise, the holder
will recognize as ordinary income the excess of the value of the SAR on the
date of exercise over the value as of the date of grant. If the SAR is paid in
cash, the appreciation is taxable under Section 61 of the Code. If the
committee determines to transfer shares of Common Stock to the holder in full
or partial payment of the appreciation, the fair market value of the Common
Stock so received over the amount paid therefor by the holder, if any, is
taxable as ordinary income under Section 83 of the Code as of the date the SAR
is exercised. Subject to Section 162(m), Olin is entitled to a business
expense deduction that corresponds to the amount of ordinary income recognized
by the holder in the fiscal year of Olin in which the SAR is exercised.
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Dividend Equivalents and Deferred Payments of Restricted Stock. In general,
recipients of dividend equivalents, and deferred payments of restricted stock
are taxable under Section 83 of the Code upon the receipt of Common Stock or
under Section 61 of the Code upon the receipt of cash, as applicable. Subject
to Section 162(m), Olin is entitled to a business expense deduction that
corresponds to the amount of ordinary income recognized by the recipient of
the Award.
Payment of Withholding Taxes
Olin may withhold, or require a participant to remit to Olin an amount
sufficient to satisfy any federal, state or local withholding tax requirements
associated with Awards under the 2000 LTIP.
Vote Required for Approval
The affirmative vote of the holders of a majority of the shares represented
in person or by proxy and entitled to vote on this matter is required for this
proposal to be adopted.
The Board of Directors recommends a vote FOR approval of the Olin
Corporation 2000 Long Term Incentive Plan.
ITEM 4--PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of KPMG LLP as independent
auditors of Olin for the year 2000. The appointment of this firm was
recommended to the Board by its Audit Committee.
The submission of this matter to shareholders at the Annual Meeting is not
required by law or by the By-laws. The Board of Directors of Olin is,
nevertheless, submitting it to the shareholders to ascertain their views. If
this appointment is not ratified at the Annual Meeting, the Board of Directors
intends to reconsider its appointment of KPMG LLP as independent auditors.
A representative of KPMG LLP is expected to be present at the Annual Meeting
and will have an opportunity to make a statement if he or she desires to do
so, and to respond to appropriate questions.
The ratification of the appointment of independent auditors for 2000
requires that the votes cast in favor of the ratification exceed the votes
cast opposing such ratification. Abstentions and Broker Shares that are not
voted will not be included in determining the number of votes cast.
The Board of Directors recommends a vote FOR the ratification of the
appointment of KPMG LLP as Olin's independent auditors for 2000.
MISCELLANEOUS
Olin will pay the entire expense of this solicitation of proxies.
Georgeson Shareholder Communications Inc. ("Georgeson"), New York, New York,
will solicit proxies by personal interview, mail, telephone and telegraph, and
will request brokerage houses and other custodians, nominees and fiduciaries
to forward soliciting material to the beneficial owners of the Common Stock
held of record by such persons. Olin will pay Georgeson approximately $12,500
for its services and will reimburse Georgeson for payments made to brokers and
other nominees for their expenses in forwarding soliciting material. In
addition, proxies may be solicited by personal interview, telephone and
telegram by directors, officers and employees of Olin.
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Shareholder Proposals
Proposals of shareholders intended to be presented to Olin's 2001 Annual
Meeting of Shareholders must be received at Olin's principal executive offices
by November 14, 2000 for inclusion in Olin's proxy statement and form of proxy
for that meeting. All such proposals must be in writing and addressed to the
Corporate Secretary, Olin Corporation, 501 Merritt 7, PO Box 4500, Norwalk, CT
06856-4500. In addition, under Olin's By-laws, in order for nominations for
directors or other business proposals to be properly brought before the 2001
Annual Meeting by a shareholder, such shareholder must have delivered (in the
manner specified in the By-laws) a notice in writing to the Corporate
Secretary of Olin no later than January 27, 2001. The notice must contain the
information required by the By-laws.
By Order of the Board of Directors:
/S/ Johnnie M. Jackson, Jr.
Johnnie M. Jackson, Jr.
Secretary
Dated: March 14, 2000
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Exhibit A
OLIN SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
(As Amended through December 9, 1999)
Section 1. Purpose. The purposes of the Olin Senior Management Incentive
Compensation Plan (the "Plan") are (i) to compensate certain members of senior
management of Olin Corporation (the "Company") on an individual basis for
significant contributions to the Company and its subsidiaries and (ii) to
stimulate the efforts of such members by giving them a direct financial
interest in the performance of the Company.
Section 2. Definitions. The following terms utilized in this Plan shall have
the following meanings:
"Cash Flow" shall mean consolidated net income of the Company, before the
after-tax effect of any special charge or gain or cumulative effect of any
change in accounting, plus depreciation and amortization, less capital and
investment spending and plus or minus changes in working capital.
"Committee" shall mean the Compensation Committee of the Board of
Directors of the Company or such other committee of such Board as such
Board may from time to time designate.
"Consolidated Net Assets" shall mean consolidated total assets of the
Company less total non-interest bearing liabilities.
"Earnings Per Share" shall mean for a fiscal year consolidated net income
of the Company before the after-tax effect of any special charge or gain or
cumulative effect of a change in accounting, divided by the weighted
average number of shares of common stock outstanding on a fully diluted
basis.
"Economic Value Added" means the Company's consolidated sales less its
operating costs (including tax) less a capital charge based on the
Company's cost of capital on assets employed in the business.
"Participant" shall mean for a fiscal year each salaried employee who is
designated as a Participant by the Committee on or before March 30 of such
fiscal year (or such later date, if any, as permitted by Section 162(m)).
"Performance Measures" shall mean for a fiscal year one or more of the
following, as designated by the Committee for such fiscal year: Pre-Tax
Profit, Earnings Per Share, Cash Flow, Economic Value Added, ROE, Return on
Capital and RONA, provided such designation would not subject any Incentive
Award to Section 162(m).
"Pre-Tax Profit" shall mean for a fiscal year the consolidated income
before taxes of the Company, before any special charges or gains.
"Return on Capital" shall mean consolidated net income of the Company
plus after-tax interest expense and the after-tax effect of any special
charge or gain and any cumulative effect of a change in accounting, divided
by average Consolidated Net Assets.
"ROE" shall mean consolidated net income of the Company before the after-
tax effect of any special charge or gain and any cumulative effect of any
change in accounting, divided by average shareholders' equity.
"RONA" shall mean Pre-tax Profit before interest expense divided by
average Consolidated Net Assets.
<PAGE>
"Section 162(m)" shall mean Section 162(m) of the Internal Revenue Code
of 1986, and the regulations promulgated thereunder, all as amended from
time to time.
Section 3. Term. The Plan, as amended, shall be effective as of January 1,
2000 (the "Effective Date"), and the amended Plan shall be applicable for all
future fiscal years of the Company unless amended or terminated by the Company
pursuant to Section 7.
Section 4. Incentive Award.
4.1 For each fiscal year of the Company, each Participant may be entitled
to receive an award payable in cash ("Incentive Award") in an amount
determined by the Committee as provided in this Plan. On or before March 30
of such fiscal year (or such later date, if any, as permitted by
Section 162(m)), for the Incentive Awards for such fiscal year, the
Committee will designate or approve (i) the individuals who will be
Participants in the Plan, if any, (ii) the Performance Measures, (iii) if
there is more than one Performance Measure, the weighting of the
Performance Measures in determining the Incentive Award, (iv) the
performance goals and payout matrix or formula for each Performance Measure
and (v) the incentive standard award (the cash component of a Participant's
total targeted compensation tied to the Performance Measures) for each
Participant. Following the end of a fiscal year, the Committee shall
determine the Incentive Award for each Participant based upon the payout
matrix or formula for each Performance Measure designated, applying the
pre-determined weighting for each Performance Measure, if more than one.
Notwithstanding anything contained in this Plan to the contrary, the
Committee in its sole discretion may reduce any Incentive Award to any
Participant to any amount, including zero, prior to the certification by
resolution of the Committee of the amount of such Incentive Award.
As a condition to the right of a Participant to receive an Incentive
Award, the Committee shall first certify, by resolution of the Committee,
that the Incentive Award has been determined in accordance with the
provisions of this Plan.
Incentive Awards for a fiscal year shall be determined as soon as
practicable after such fiscal year and shall be paid no later than 75 days
following such fiscal year unless deferred as provided in Section 4.3
hereof. The maximum Incentive Award paid a Participant under this Plan with
respect to a fiscal year may not exceed 200% of such Participant's annual
base salary in effect on December 1 of such fiscal year.
4.2 A Participant whose employment terminates with cause or without the
Committee's written consent during a fiscal year shall forfeit such
Participant's Incentive Award for such fiscal year.
4.3 Incentive Awards shall be payable in a single, lump sum. However, the
Committee may in its discretion elect to defer payment of any Incentive
Award until such date before or after retirement as a Participant may
request upon such terms and conditions as may be approved or established by
the Committee in its sole judgment; provided that deferrals in the form of
phantom stock shall be paid only in the form of cash and on a fixed date or
dates at least six months after the grant of the Incentive Award or
incident to death, retirement, disability or termination of employment.
Such terms may include the payment of interest or dividend equivalents on
deferred amounts.
4.4 The Company shall withhold from any Incentive Award or payments made
or to be made under this Plan any amount of withholding taxes due in
respect of an Incentive Award, its deferral or payment.
4.5 Participation in this Plan does not exclude Participants from
participation in any other benefit or compensation plans or arrangements of
the Company, including other bonus or incentive plans.
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Section 5. Administration and Interpretation. The Plan shall be administered
by the Committee, which shall have the sole authority to make rules and
regulations for the administration of the Plan. The interpretations and
decisions of the Committee with regard to the Plan shall be final and
conclusive. The Committee may request advice or assistance or employ such
persons (including, without limitation, legal counsel and accountants) as it
deems necessary for the proper administration of the Plan.
Section 6. Administrative Expenses. Any expense incurred in the
administration of the Plan shall be borne by the Company out of its general
funds.
Section 7. Amendment or Termination. The Committee of the Company may from
time to time amend the Plan in any respect or terminate the Plan in whole or
in part, provided that no such action shall increase the amount of any
Incentive Award for which performance goals have been established but which
has not yet been earned or paid; provided further that such action will not
cause an Incentive Award to become subject to the deduction limitations
contained in Section 162(m).
Section 8. No Assignment. The rights hereunder, including without limitation
rights to receive an Incentive Award, shall not be pledged, assigned,
transferred, encumbered or hypothecated by an employee of the Company, and
during the lifetime of any Participant any payment of an Incentive Award shall
be payable only to such Participant. A Participant, however, may designate in
writing at any time and from time to time one or more beneficiaries to receive
the payment of any deferred Incentive Award in the event of the Participant's
death; provided such designation is received by the Company prior to such
death.
Section 9. The Company. For purposes of this Plan, the "Company" shall
include the successors and assigns of the Company, and this Plan shall be
binding on any corporation or other person with which the Company is merged or
consolidated.
Section 10. Stockholder Approval. This Plan, as amended, shall be subject to
approval by a vote of the stockholders of the Company at the 2000 Annual
Meeting, and such stockholder approval shall be a condition to the right of a
Participant to receive any benefits hereunder for any fiscal year beginning on
or after the Effective Date.
Section 11. No Right to Employment. The designation of an employee as a
Participant or grant of an Incentive Award shall not be construed as giving a
Participant the right to be retained in the employ of the Company or any
affiliate or subsidiary.
Section 12. Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be determined in
accordance with the laws of the State of Connecticut and applicable federal
law.
Section 13. No Trust. Neither the Plan nor any Incentive Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Participant. To the extent any
Participant acquires a right to receive payments from the Company in respect
to any Incentive Award, such right shall be no greater than the right of any
unsecured general creditor of the Company.
Section 14. Section 162(m). It is the intention of the Company that all
payments made under the Plan be excluded from the deduction limitations
contained in Section 162(m). Therefore, if any Plan provision is found not to
be in compliance with the "performance-based" compensation exception contained
in Section 162(m), that provision shall be deemed amended so that the Plan
does so comply to the extent permitted by law and deemed advisable by the
Committee, and in all events the Plan shall be construed in favor of its
meeting the "performance-based" compensation exception contained in Section
162(m).
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Exhibit B
OLIN CORPORATION
2000 LONG TERM INCENTIVE PLAN
Section 1. Purpose.
The general purposes of the Olin Corporation 2000 Long Term Incentive Plan
(the "Plan") are to (i) attract and retain persons eligible to participate in
the Plan; (ii) motivate Participants, by means of appropriate incentives, to
achieve long-range goals; (iii) provide incentive compensation opportunities
that are competitive with those of other similar companies; and (iv) further
identify Participants' interests with those of other shareholders of Olin
Corporation (together with any successor, "Olin") through compensation that is
based on Olin's common stock; and thereby promote the long-term financial
interest of Olin and its Affiliates, including growth in the value of Olin's
equity and enhancement of long-term shareholder return.
Section 2. Definitions.
As used in the Plan:
(a) "Affiliate" means any corporation, partnership, joint venture or other
entity during any period in which Olin owns, directly or indirectly, at
least 50% of the total voting or profits interest.
(b) "Award" means any Option, Stock Appreciation Right, Restricted Stock,
Restricted Stock Unit, Performance Share or Dividend Equivalent granted
under the Plan.
(c) "Award Agreement" means any written agreement or other instrument or
document evidencing an Award granted under the Plan. The terms of any
plan or guideline adopted by the Board or the Committee and applicable
to an Award shall be deemed incorporated in and a part of the related
Award Agreement.
(d) "Board" means the Board of Directors of Olin.
(e) "Cash Flow" means consolidated net income of Olin, before the after-tax
effect of any special charge or gain or cumulative effect of any change
in accounting, plus depreciation and amortization, less capital and
investment spending and plus or minus changes in working capital.
(f) "Code" means the Internal Revenue Code of 1986, as amended. A reference
to any provision of the Code shall include reference to any successor
provision of the Code.
(g) "Committee" means a committee of the Board designated by the Board to
administer the Plan, each member of which is an "outside director" for
purposes of Section 162(m) of the Code and a "non-employee director"
for the purpose of Rule 16b-3, and, to the extent the Committee
delegates authority to one or more individuals in accordance with the
Plan, such individual(s).
(h) "Dividend Equivalent" means any right granted under Section 6(c)(ii) of
the Plan.
(i) "Earnings Per Share" means, for a fiscal year, consolidated net income
of Olin before the after-tax effect of any special charge or gain or
cumulative effect of a change in accounting, divided by the weighted
average number of shares of common stock outstanding, on a fully
diluted basis.
(j) "Economic Value Added" means Olin's consolidated sales less its
operating costs (including tax) less a capital charge based on Olin's
cost of capital on assets employed in the business.
(k) "Employee" means any employee of Olin or of an Affiliate.
<PAGE>
(l) "Fair Market Value" means, with respect to shares of Olin common stock,
the mean of the high and low per share sales prices of such common
stock as reported on the consolidated transaction reporting system for
New York Stock Exchange issues as of the relevant date, or the last
preceding trading date, if such Shares were not traded on such date,
and, with respect to any other property (including, without limitation,
securities other than Shares), the fair market value of such property
determined by such methods or procedures as shall be established from
time to time by the Committee.
(m) "Family Member" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-
law or sister-in-law, including adoptive relationship, or any person
sharing the Participant's household, other than a tenant or employee.
(n) "Incentive Stock Option" means an option to purchase Shares granted
under the Plan that is intended to meet the requirements of Section 422
of the Code.
(o) "Non-Qualified Stock Option" means an option to purchase Shares granted
under the Plan that is not intended to be an Incentive Stock Option.
(p) "Option" means an Incentive Stock Option or a Non-Qualified Stock
Option.
(q) "Participant" means an Employee granted an Award under the Plan.
(r) "Performance Share" means any grant of a right to receive Shares which
is contingent on the achievement of performance or other objectives
during a specified period.
(s) "Person" means any individual, corporation, partnership, limited
liability company, association, joint venture, stock company, trust,
unincorporated organization, or government or political subdivision
thereof.
(t) "Pre-Tax Profit" means, for a fiscal year, the consolidated income
before taxes of Olin, before any special charges or gains.
(u) "Released Securities" means securities that were Restricted Securities
with respect to which all applicable restrictions imposed under the
terms of the relevant Award have expired, lapsed or been waived or
satisfied.
(v) "Restricted Securities" means Awards of Restricted Stock or other
Awards under which outstanding Shares are held subject to certain
restrictions.
(w) "Restricted Stock" means any grant of Shares, and "Restricted Stock
Unit" means the grant of a right to receive Shares in the future, with
such Shares or right to future delivery of Shares subject to a risk of
forfeiture or other restrictions that will lapse upon the achievement
of one or more goals relating to completion of service by the
Participant, or achievement of performance or other objectives, as
determined by the Committee.
(x) "Return on Capital" means consolidated net income of Olin plus after-
tax interest expense and the after-tax effect of any special charge or
gain and any cumulative effect of a change in accounting, divided by
average consolidated total assets of Olin less total non-interest-
bearing liabilities.
(y) "ROE" shall mean the consolidated net income of Olin before the after
tax effect of any special charge or gain and any cumulative effect of
any change in accounting, divided by average shareholders equity.
(z) "RONA" means Pre-tax Profit before interest expense divided by average
consolidated total assets of Olin less total non-interest-bearing
liabilities.
(aa) "Rule 16b-3" means Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended, or any successor rule.
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(bb) "Shares" means the common stock of Olin and such other securities or
property as may become the subject of Awards pursuant to an adjustment
made under Section 4(b) of the Plan.
(cc) "Stock Appreciation Right" or "SAR" means any such right granted under
Section 6(b) of the Plan.
Section 3. Administration.
(a) Powers of Committee. The Plan shall be administered by the Committee
which shall have full power and authority to: (i) designate
Participants; (ii) determine the Awards to be granted to Participants;
(iii) determine the number of Shares (or securities convertible into
Shares) to be covered by Awards; (iv) determine the terms and
conditions of any Award; (v) determine whether, to what extent, and
under what circumstances Awards may be settled or exercised in cash,
Shares, other securities, other Awards, or other property, or canceled,
substituted, forfeited or suspended, and the method or methods by which
Awards may be settled, exercised, canceled, substituted, forfeited or
suspended, provided that no such action will result in repricing of
Options prohibited by Section 6(f)(ii); (vi) determine whether, to what
extent, and under what circumstances cash, Shares, other securities,
other Awards, other property and other amounts payable with respect to
an Award under the Plan shall be deferred either automatically or at
the election of the Participant or of the Committee; (vii) interpret
and administer the Plan and any instrument or agreement relating to, or
Award made under, the Plan; (viii) establish, amend, suspend or waive
such rules and guidelines and appoint such agents as it shall deem
appropriate for the administration of the Plan; and (ix) make any other
determination and take any other action that it deems necessary or
desirable for such administration.
(b) Committee Discretion. All designations, determinations, interpretations
and other decisions with respect to the Plan or any Award shall be
within the sole discretion of the Committee and shall be final,
conclusive and binding upon all Persons, including Olin, any Affiliate,
any Participants, any holder or beneficiary of any Award, any
shareholder and any employee of Olin or of any Affiliate. The
Committee's powers include the adoption of modifications, amendments,
procedures, subplans and the like as are necessary to comply with
provisions of the laws of other countries in which Olin or an Affiliate
may operate in order to assure the viability of Awards granted under
the Plan and to enable Participants employed in such other countries to
receive benefits under the Plan and such laws, provided that no such
action results in repricing of Options prohibited by Section 6(f)(ii).
(c) Board Authority. If the Committee does not exist, or for any other
reason determined by the Board, the Board may take any action under the
Plan that would otherwise be the responsibility of the Committee.
(d) Delegation. Notwithstanding any provision of the Plan to the contrary,
except to the extent prohibited by applicable law or the applicable
rules of a stock exchange, the Committee may delegate to one or more
officers or managers of Olin or any Affiliate, or a committee of such
officers or managers, the authority, subject to such terms and
limitations as the Committee shall determine, to grant Awards to, or to
cancel, modify, waive rights or conditions with respect to, alter,
discontinue, suspend, or terminate Awards held by, Employees who are
not officers or directors of Olin for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended, provided that no such
action shall result in repricing of Options prohibited by Section
6(f)(ii).
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Section 4. Shares Available for Awards.
(a) Shares Available. Subject to adjustment as provided in Section 4(b) of
the Plan:
(i) The aggregate number of Shares available for granting Awards under
the Plan shall be 2,250,000. If an Award is denominated in or
relates to a security of Olin convertible into its Common Stock,
the number of shares of Common Stock into which such security shall
be convertible (calculated as of the date of grant of the Award,
subject to adjustment as provided in Section 4(b) hereof or under
the terms of such security) shall be deemed denominated in Shares
and counted against the aggregate number of Shares available for
the granting of Awards under the Plan.
(ii) For purposes of this Section 4(a):
(A) To the extent any Shares covered by an Award are not delivered
to a Participant or beneficiary because the Award is forfeited
or canceled, or the Shares are not delivered because the Award
is settled in cash or used to satisfy the applicable tax
withholding obligation, such Shares shall not be deemed to have
been delivered for purposes of determining the maximum number of
Shares available for delivery under the Plan; and
(B) If the exercise price of any Option granted under the Plan is
satisfied by tendering Shares (by either actual delivery or by
attestation), only the number of Shares issued net of the Shares
tendered shall be deemed delivered for purposes of determining
the maximum number of Shares available for delivery under the
Plan.
(b) Adjustments. In the event of any change in the Shares by reason of
stock dividends, stock splits, recapitalization, mergers,
consolidations, combinations or exchanges of shares, split-ups, split-
offs, spin-offs, liquidations or other similar changes in
capitalization, or any distributions to shareholders other than cash
dividends, (i) the numbers, class and prices of Shares covered by
outstanding Awards under the Plan (provided that no such adjustment
shall result in repricing of Options prohibited by Section 6(f)(ii) of
the Plan), (ii) the aggregate number and class of Shares available
under the Plan, and (iii) the numbers and class of Shares that may be
the subject of Awards pursuant to Section 4(c), shall be adjusted by
the Committee, whose determination shall be conclusive.
(i) Without limiting the foregoing, in the event of any split-up,
split-off, spin-off or other distribution to shareholders of shares
representing a part of Olin's business, properties and assets, the
Committee may modify an outstanding Award so that such Award shall
thereafter relate to Shares of Olin and shares of capital stock of
the corporation owning the business, properties and assets so
split-up, split-off, spun-off or otherwise distributed to
shareholders of Olin in the same ratio in which holders of the
Shares became entitled to receive shares of capital stock of the
corporation owning the business, properties and assets so split-up,
split-off or spun-off or otherwise distributed, provided that no
such action results in repricing of Options prohibited by Section
6(f)(ii).
(ii) With respect to Awards of Incentive Stock Options, no such
adjustment shall be authorized to the extent that such authority
would cause the Plan to violate Section 422 of the Code or any
successor provision thereto, unless the holder of such Award of
Incentive Stock Options agrees to convert such options to Non-
qualified Stock Options.
(iii) Notwithstanding the foregoing, a Participant to whom Dividend
Equivalents or dividend units have been awarded shall not be
entitled to receive a special or extraordinary dividend or
distribution unless the Committee shall have expressly authorized
such receipt.
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(c) Additional Restrictions. Subject to adjustment as provided in Section
4(b), the following additional maximums are imposed under the Plan:
(i) The maximum number of Shares that may be issued for Options
intended to be Incentive Stock Options shall be 900,000 Shares.
(ii) The maximum number of Shares that may be covered by Awards granted
to any one individual shall be 300,000 Shares during any calendar
year.
(iii) No more than 100,000 Shares may be subject to Restricted Stock
Awards, Restricted Stock Unit Awards and Performance Share
Awards, and no more than 300,000 Shares may be subject to Options
and Stock Appreciation Rights, granted to any one individual
during any calendar-year period (regardless of when such Shares
are deliverable) for any Award intended to be "performance-based
compensation" (as that term is used for purposes of Code Section
162(m)).
(iv) No more than 450,000 Shares may be subject to Restricted Stock
Awards, Restricted Stock Unit Awards and Performance Share Awards.
Section 5. Eligibility.
Any Employee, including any officer or employee-director, of Olin or an
Affiliate shall be eligible to be designated a Participant, subject to any
restrictions imposed by applicable law. An Award may be granted to an Employee
prior to the date the Employee first performs services for the Company or the
Affiliate, provided that such Awards shall not become vested prior to the date
the Employee first performs such services.
Section 6. Awards.
(a) Options. The Committee is authorized to grant Options to Participants
with the following terms and conditions and with such additional terms
and conditions, not inconsistent with the provisions of the Plan, as
the Committee shall determine:
(i) Exercise Price. The per Share exercise price shall be determined by
the Committee; provided, however, that such exercise price shall
not be less than the Fair Market Value of a Share on the date of
the Option grant; provided that, if a Non-qualified Option is
granted in connection with the recipient's hiring, promotion or
similar event, the exercise price may be not less than the Fair
Market Value of the Shares on the date on which the recipient is
hired or promoted (or the similar event occurs), if the Option
grant occurs not more than 90 days after the date of such event.
(ii) Option Term. The term of each Option shall be fixed by the
Committee, provided that in no event shall the term of an Option
be more than a period of ten years from the date of its grant.
(iii) Exercise. The Committee shall determine the time or times at
which an Option may be exercised in whole or in part, and the
method or methods by which, and the form or forms in which
payment of the exercise price with respect thereto may be made.
(iv) Incentive Stock Options. The terms of any Incentive Stock Option
granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, or any successor provision
thereto, and any regulations promulgated thereunder. Without
limiting the preceding sentence, the aggregate Fair Market Value
(determined at the time an option is granted) of Shares with
respect to which Incentive Stock Options are exercisable for the
first time by a Participant during any calendar year (under the
Plan and any other plan of the Participant's employer corporation
and its parent and subsidiary corporations providing for Options)
shall not exceed such dollar limitation as shall be
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<PAGE>
applicable to Incentive Stock Options under Section 422 of the Code
or a successor provision.
(v) Termination of Employment. In the event the employment of a
Participant to whom an Option has been granted under the Plan shall
be terminated (other than by reason of the Participant's death or
disability), such Option may, subject to the provisions of the next
to last sentence of Section 6(a)(vi) be exercised (to the extent of
the number of shares that the Participant was entitled to purchase
under such Option at the termination of employment) at any time
within three months after such termination (which three-month period
may be extended by the Committee), but in no event shall such three-
month period or any such extension permit the exercise of an Option
after the expiration date of the Option. Options granted under the
Plan shall not be affected by any change of duties or position so
long as the Participant continues to be an Employee.
(vi) Agreement to Service. Each Participant receiving an Option shall,
by accepting the Option, agree that he or she will, during
employment, devote his or her entire time, energy and skill to the
service of Olin and the promotion of its interests, subject to
vacations, sick leave and other absences in accordance with the
regular policies of, or other reasons satisfactory to, Olin and its
Affiliates. Such employment shall (subject to the terms of any
contract between Olin or any such Affiliate and such Participant)
be at the pleasure of Olin or such Affiliate, and shall be at such
compensation as Olin or such Affiliate shall determine from time to
time. Upon termination of such Participant's employment either (a)
for cause, or (b) voluntarily on the part of the Participant and
without the written consent of Olin, any Awards held by him or her
under the Plan, to the extent not theretofore exercised or vested,
shall forthwith terminate. Retirement pursuant to any retirement
plan of Olin or of an Affiliate shall be deemed to be a termination
of employment with Olin's consent.
(vii) Death. If a Participant to whom an Option has been granted shall
die while an Employee, such Option may be exercised by the
Participant's executors, administrators, personal representatives
or distributees or permitted transferees at any time within a
period of one year after the Participant's death (which period may
be extended by the Committee), regardless of whether or not such
Option had vested at the time of death. If a Participant to whom
an Option has been granted shall die after his or her employment
has terminated but while the Option remains exercisable, the
Option may be exercised by the persons described above at any time
within the longer of (a) the period that the Participant could
have exercised the Option had he or she not died, or (b) one year
after the date of death (which period may be extended by the
Committee), but only to the extent the Option was exercisable at
the time of the Participant's death.
(viii) Disability. If a Participant to whom an Option has been granted
shall become totally and permanently disabled, as that term is
defined in Section 22(e)(3) of the Code (or a successor
provision), and the Participant's employment is terminated as a
result, such option may be exercised by the Participant or
permitted transferee within one year after the date of
termination of employment, to the extent that the Option was
exercisable at the time of termination of employment.
(b) Stock Appreciation Rights. The Committee is authorized to grant Stock
Appreciation Rights to Participants which may but need not relate to a
specific Option granted under the Plan. Subject to the terms of the
Plan and any applicable Award Agreement, each Stock Appreciation Right
granted under the Plan shall confer on the holder thereof a right to
receive, upon exercise thereof, up to the excess of (i) the Fair
Market Value of one Share on the date of exercise over (ii) the
exercise price of the right as specified by the Committee, which shall
not be less than the Fair Market Value of one Share on the date of
grant of the
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Stock Appreciation Right. Subject to the terms of the Plan and any
applicable Award Agreement, the exercise price, term, methods of
exercise, methods of payment or settlement and any other terms and
conditions of any Stock Appreciation Right shall be as determined by
the Committee, but in no event shall the term of a Stock Appreciation
Right exceed a period of ten years from the date of its grant.
(c) Other Stock Awards.
(i) Issuance. The Committee is authorized to grant Awards of Restricted
Stock, Restricted Stock Units and Performance Shares to
Participants.
(ii) Dividends and Dividend Equivalents. An Award (including without
limitation an Option or Stock Appreciation Right) may provide the
Participant with the right to receive dividend payments or dividend
equivalent payments with respect to Shares subject to the Award
(both before and after the Shares subject to the Award are earned,
vested, or acquired), which payments may be either made currently
or credited to an account for the Participant, and may be settled
in cash or Shares as determined by the Committee. Any such
settlements, and any such crediting of dividends or dividend
equivalents or reinvestment in Shares, may be subject to such
conditions, restrictions and contingencies as the Committee shall
establish, including the reinvestment of such credited amounts in
Share equivalents.
(iii) Restrictions. Any such Award shall be subject to such conditions,
restrictions and contingencies as the Committee may impose
(including, without limitation, any limitation on the right to
vote Restricted Stock or the right to receive any dividend or
other right or property), which may lapse separately or in
combination at such time or times, as the Committee may deem
appropriate, provided that in order for a Participant to vest in
Awards of Restricted Stock, the Participant must remain in the
employ of Olin or an Affiliate for a period of not less than one
(1) year after the grant of a performance-based Restricted Stock
Award, and not less than three (3) years after the grant of a
Restricted Stock Award that is not performance-based, in each
case, subject to Section 9 hereof and subject to relief for
specified reasons as may be approved by the Committee.
Notwithstanding the foregoing, the Committee may grant Awards for
Restricted Stock for an aggregate number of Shares not to exceed
45,000 which vest in less than one (1) year after the date of
grant, including immediate vesting.
(iv) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment for any reason during the applicable
restriction period, all Shares of Restricted Stock still subject to
restriction shall be forfeited and reacquired by Olin.
(v) Performance-Based Awards. The Committee may designate whether any
such Awards being granted to a Participant is intended to be
"performance-based compensation" as that term is used in Section
162(m) of the Code. Any Award so designated shall be conditioned on
the achievement of one or more performance measures. Performance
measures that may be used by the Committee for such purpose shall be
based on one or more of the following: Pre-Tax Profit and/or
Earnings Per Share, Cash Flow, Economic Value Added, ROE, Return on
Capital or RONA. For Awards intended to be "performance-based
compensation," the grant of the Awards and the establishment of the
performance measures shall be made during the period required under
Code Section 162(m).
(d) Forms of Payment Under Awards. Subject to the terms of the Plan and of
any applicable Award agreement, payments to be made by Olin or an
Affiliate upon the grant, exercise, or payment of an Award may be made
in such form or forms as the Committee shall determine, including,
without limitation, cash, Shares, other securities, other Awards, or
other property or
7
<PAGE>
any combination thereof, and may be made in a single payment or
transfer, in installments, or on a deferred basis, in each case in
accordance with rules and procedures established by the Committee.
Notwithstanding the foregoing, the payment of the exercise price of an
Option shall be subject to the following:
(i) Subject to the following provisions of this subsection the full
exercise price for Shares purchased upon the exercise of any Option
shall be paid at the time of such exercise (except that, in the case
of an exercise arrangement approved by the Committee and described
below, payment may be made as soon as practicable after the
exercise).
(ii) The exercise price shall be payable in cash or by tendering, by
either actual delivery of Shares or by attestation, Shares
acceptable to the Committee, which Shares were either acquired at
least six months before the exercise date or purchased on the open
market, and valued at Fair Market Value as of the day of exercise,
or in any combination thereof, as determined by the Committee.
(iii) The Committee may permit a Participant to elect to pay the
exercise price upon the exercise of an Option by irrevocably
authorizing a third party to sell Shares (or a sufficient portion
of the Shares) acquired upon exercise of an Option and remit to
Olin a sufficient portion of the sale proceeds to pay the entire
exercise price and any tax withholding resulting from such
exercise.
(e) Limits on Transfer of Awards. No Award (other than Released Securities)
or right thereunder shall be assignable or transferable by a
Participant, other than:
(i) by will or the laws of descent and distribution (or, in the case of
an Award of Restricted Securities, to Olin); or
(ii) in the case of Awards other than Incentive Stock Options, to the
extent permitted under the terms of the Award, by a gift or
domestic relations order to any Family Member, to a trust in which
the Participant and/or his or her Family Members hold more than 50%
of the beneficial interest, to a foundation in which the
Participant and/or Family Members control the management of assets,
and any other entity in which the Participant and/or his or her
Family Members own more than 50% of the voting interests.
For purposes of this provision, a transfer to an entity in exchange for
an interest in that entity shall constitute a gift.
(f) General.
(i) No Cash Consideration for Awards. Participants shall not be required
to make any cash payment for the granting of an Award except for
such minimum consideration as may be required by applicable law.
(ii) Awards May Be Granted Separately or Together. Awards may be granted
either alone or in addition to, in tandem with, or in substitution
for any other Award or any award or benefit granted under any other
plan or arrangement of Olin or any Affiliate, or as payment for or
to assure payment of an award or benefit granted under any such
other such plan or arrangement, provided that the purchase or
exercise price under an Option or other Award encompassing the
right to purchase Shares shall not be reduced by the cancellation
of such Award and the substitution of another Award. Awards so
granted may be granted either at the same time as or at a different
time from the grant of such other Awards or awards or benefits.
8
<PAGE>
(iii) General Restrictions. Delivery of Shares or other amounts under
the Plan shall be subject to the following:
(A) Notwithstanding any other provision of the Plan, Olin shall have
no liability to deliver any Shares under the Plan or make any
other distribution of benefits under the Plan unless such
delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the
Securities Act of 1933), and the applicable requirements of any
securities exchange or similar entity.
(B) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of Shares the issuance may
be effected on a non-certificated basis, to the extent not
prohibited by applicable law or the applicable rules of any
stock exchange.
(iv) Agreement With Olin. An Award under the Plan shall be subject to
such terms and conditions, not inconsistent with the Plan, as the
Committee shall, in its sole discretion, prescribe. The terms and
conditions of any Award to any Participant may be reflected in
such form of written document as is determined by the Committee. A
copy of such document shall be provided to the Participant, and
the Committee may, but need not, require the Participant to sign a
copy of such document, (an "Award Agreement" regardless of whether
any Participant signature is required).
(v) Beneficiary. A Participant may, in the manner established by the
Committee, designate a beneficiary or beneficiaries with respect to
any Award to exercise the rights of the Participant, and to receive
any property distributable, upon the death of the Participant. Each
Award, and each right under any Award, shall be exercisable, during
the Participant's lifetime, only by the Participant or a permitted
transferee, or, if permissible under applicable law by the
Participant's guardian or legal representative.
(vi) No Lien or Security Interest. No Award (other than Released
Securities), and no right under any such Award, may be pledged,
attached or otherwise encumbered other than in favor of Olin, and
any purported pledge, attachment, or encumbrance thereof other
than in favor of Olin shall be void and unenforceable against Olin
or any Affiliate.
(vii) No Rights to Awards. No Employee, Participant or other Person
shall have any claim to be granted an Award, and there is no
obligation for uniformity of treatment of Employees, Participants
or beneficiaries of Awards under the Plan. The terms and
conditions of Awards need not be the same with respect to each
recipient. The prospective recipient of any Award under the Plan
shall not, with respect to such Award, be deemed to have become a
Participant, or to have any rights with respect to such Award,
until and unless such recipient shall have executed an agreement
or other instrument accepting the Award required by the Committee
and delivered a fully executed copy thereof to Olin, and
otherwise complied with the then applicable terms and conditions.
(viii) Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and, except as otherwise
provided by the Committee, the delivery of any Shares or other
benefits under the Plan to a Participant are conditioned on
satisfaction of the applicable withholding requirements. The
Committee, in its discretion, and subject to such requirements
as the Committee may impose prior to the occurrence of such
withholding, may permit such withholding obligations to be
satisfied through cash payment by the Participant, through the
surrender of Shares which the Participant already owns, or
through the surrender of Shares to which the Participant is
otherwise entitled under the Plan.
(ix) Other Compensation Arrangements. Nothing contained in the Plan
shall prevent Olin or any Affiliate from adopting or continuing in
effect other or additional compensation
9
<PAGE>
arrangements, and such arrangements may be either generally
applicable or applicable only in specific cases.
(x) No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of
Olin or any Affiliate. Nothing in the Plan or any Award Agreement
shall limit the right of Olin or an Affiliate at any time to dismiss
a Participant from employment, free from any liability or any claim
under the Plan or the Award Agreement.
(xi) Governing Law. The validity, construction and effect of the Plan
and any rules and regulations relating to the Plan shall be
determined in accordance with the laws of the State of Connecticut,
excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this Plan
or any award Agreement to the substantive law of another
jurisdiction.
(xii) Severability. If any provision of the Plan or any Award is
determined to be invalid, illegal or unenforceable, or as to any
Person or Award, or would disqualify the Plan or any Award, such
provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed
amended without, in the determination of the Committee, materially
altering the intent of the Plan or the Award, such provision shall
be stricken as to such Person or Award, and the remainder of the
Plan and any such Award shall remain in full force and effect.
(xiii) No Trust or Fund Created. Neither the Plan nor any Award shall
create or be construed to create a trust or separate fund of any
kind or a fiduciary relationship between Olin or any Affiliate
and a Participant or any other Person. To the extent that any
Person acquires a right to receive payments from Olin or any
Affiliate pursuant to an Award, such right shall be no greater
than the right of any unsecured general creditor of Olin or any
Affiliate.
(xiv) No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee
shall determine whether cash, other securities or other property
shall be paid or transferred in lieu of any fractional Shares, or
whether such fractional Shares or any rights thereto shall be
canceled, terminated or otherwise eliminated.
(xv) Share Certificates. All certificates for Shares or other securities
delivered under the Plan pursuant to any Award or the exercise
thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or
the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which such Shares or
other securities are then listed, and any applicable Federal or
state securities laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate
reference to such restrictions.
(xvi) Conflict with Plan. In the event of any inconsistency or conflict
between the terms of the Plan and an Award Agreement, the terms of
the Plan shall govern.
Section 7. Amendment and Termination.
(a) Amendments to the Plan. The Board or the Committee may amend, suspend,
discontinue or terminate the Plan, including, without limitation, any
amendment, suspension, discontinuation or termination that would impair
the rights of any Participant, or any other holder or beneficiary of
any Award theretofore granted, without the consent of any shareholder,
Participant, other holder or beneficiary of an Award, or other Person;
provided, however, that, notwithstanding any other provision of the
Plan or any Award Agreement,
10
<PAGE>
without the approval of the shareholders of Olin, no such amendment,
suspension, discontinuation or termination shall be made that would:
(i) increase the total number of Shares available for Awards under the
Plan or the total number of Shares subject to one or more categories
of Awards pursuant to Section 4(c), in either case except as
provided in Section 4(b);
(ii) reduce the minimum Option exercise price, except as provided in
Section 4(b); or
(iii) permit repricing of Options prohibited by Section 6(f)(ii); and
provided further that no amendment, suspension, discontinuation or
termination (i) that would impair the rights of such Participant, holder or
beneficiary shall be made with respect to Section 9 of the Plan after a
Change in Control, as defined therein and (ii) may increase the amount of
payment of any Award to any Participant.
(b) Amendments to Awards. The Committee may waive any conditions or rights
with respect to, or amend, alter, suspend, discontinue, or terminate,
any unexercised Award theretofore granted, prospectively or
retroactively, without the consent of any relevant Participant or
holder or beneficiary of an Award, provided that no amendment,
alteration, suspension, discontinuation or termination of an Award that
would impair the rights of such Participant, holder or beneficiary
shall be made after a Change in Control, as defined in Section 9;
provided further that the Committee may not increase the payment of any
Award granted any Participant.
(c) Adjustments of Awards Upon Certain Acquisitions. In the event Olin or
any Affiliate shall assume outstanding employee awards or the right or
obligation to make future such awards in connection with the
acquisition of another business or another Person, the Committee may
make such adjustments, not inconsistent with the terms of the Plan, in
the terms of Awards as it shall deem appropriate.
(d) Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms
and conditions of Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in Section
4(b) hereof) affecting Olin, any Affiliate, or the financial statements
of Olin or any Affiliate, or of changes in applicable laws,
regulations, or accounting principles, whenever the Committee
determines that statements of Olin or any Affiliate, or of changes in
applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits to be made available
under the Plan.
Section 8. Additional Conditions to Enjoyment of Awards.
(a) The Committee may cancel any unexpired, unpaid or deferred Awards if at
any time the Participant is not in compliance with all applicable
provisions of the Award Agreement, the Plan and the following
conditions:
(i) A Participant shall not render services for any Person or engage,
directly or indirectly, in any business which, in the judgment of
the Committee is or becomes competitive with Olin or any Affiliate,
or which is or becomes otherwise prejudicial to or in conflict with
the interests of Olin or any Affiliate. Such judgment shall be based
on the Participant's positions and responsibilities while employed
by Olin or an Affiliate, the Participant's post employment
responsibilities and position with the other Person or business, the
extent of past, current and potential competition or conflict
between Olin or an Affiliate and the other Person or business, the
effect on customers, suppliers and competitors of the Participant's
assuming the post employment position, the guidelines established in
the
11
<PAGE>
then current edition of Olin's Standards of Ethical Business
Practices, and such other considerations as are deemed relevant given
the applicable facts and circumstances. The Participant shall be
free, however, to purchase as an investment or otherwise, stock or
other securities of such Person or business so long as they are
listed upon a recognized securities exchange or traded over the
counter, and such investment does not represent a substantial
investment to the Participant or a greater than 1% equity interest in
the organization or business.
(ii) Participant shall not, without prior written authorization from
Olin, disclose to anyone outside Olin, or use in other than Olin's
business, any secret or confidential information, knowledge or
data, relating to the business of Olin or an Affiliate in violation
of his or her agreement with Olin or the Affiliate.
(iii) A Participant, pursuant to his or her agreement with Olin or an
Affiliate, shall disclose promptly and assign to Olin or the
Affiliate all right, title and interest in any invention or idea,
patentable or not, made or conceived by the Participant during
employment by Olin or the Affiliate, relating in any manner to the
actual or anticipated business, research or development work of
Olin or the Affiliate and shall do anything reasonably necessary
to enable Olin or the Affiliate to secure a patent where
appropriate in the United States and in foreign countries.
(b) Notwithstanding any other provision of the Plan, the Committee in its
sole discretion may cancel any Award at any time prior to the exercise
thereof, if the employment of the Participant shall be terminated,
other than by reason of death, unless the conditions in this Section 8
are met.
(c) Failure to comply with the conditions of this Section 8 prior to, or
during the six months after, any exercise, payment or delivery pursuant
to an Award shall cause the exercise, payment or delivery to be
rescinded. Olin shall notify the Participant in writing of any such
rescission within two years after such exercise payment or delivery and
within 10 days after receiving such notice, the Participant shall pay
to Olin the amount of any gain realized or payment received as a result
of the exercise, payment or delivery rescinded. Such payment shall be
made either in cash or by returning to Olin the number of Shares that
the Participant received in connection with the rescinded exercise,
payment or delivery.
(d) Upon exercise, payment or delivery pursuant to an Award, the Committee
may require the Participant to acknowledge the terms and conditions of
the Plan and to certify on a form acceptable to the Committee, that he
or she is in compliance with the terms and conditions of the Plan.
(e) Nothing herein shall be interpreted to limit the obligations of a
Participant under his or her employee agreement or any other agreement
with Olin.
Section 9. Change in Control.
(a) Except as the Board or the Committee may expressly provide otherwise
prior to a Change in Control of Olin (as defined below) in the event of
a Change in Control of Olin:
(i) all Options and Stock Appreciation Rights then outstanding shall
become immediately and fully exercisable, notwithstanding any
provision therein for the exercise in installments;
(ii) all restrictions and conditions of all Restricted Stock and
Restricted Stock Units then outstanding shall be deemed satisfied
as of the date of the Change in Control; and
(iii) all Performance Share Awards shall become vested, deemed earned in
full and promptly paid to the Participants, cash units in cash and
phantom stock units in the Shares
12
<PAGE>
represented thereby or such other securities, property or cash as may
be deliverable in respect of Shares as a result of a Change in
Control, without regard to payment schedules and notwithstanding that
the applicable performance cycle or retention cycle shall not have
been completed.
(b) A Change in Control of Olin means:
(i) Olin ceases to be, directly or indirectly, owned by at least 1,000
stockholders;
(ii) A person, partnership, joint venture, corporation or other entity,
or two or more of any of the foregoing acting as a "person" within
the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended (the "Act"), other than Olin, a majority-owned
subsidiary of Olin or an employee benefit plan (or the plan's
related trust) of Olin or such subsidiary, become(s) the
"beneficial owner" (as defined in Rule 13d-3 under such Act) of 20%
or more of the then outstanding voting stock of Olin;
(iii) During any period of two consecutive years, individuals who at the
beginning of such period constitute Olin's Board of Directors
(together with any new Director whose election by Olin's Board of
Directors or whose nomination for election by Olin's stockholders
was approved by a vote of at least two-thirds of the Directors
then still in office who either were directors at the beginning of
such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the directors then in office;
(iv) All or substantially all of the business of Olin is disposed of
pursuant to a merger, consolidation or other transaction in which
Olin is not the surviving corporation or Olin combines with another
company and is the surviving corporation (unless the shareholders
of Olin immediately following such merger, consolidation,
combination, or other transaction beneficially own, directly or
indirectly, more than 50% of the aggregate voting stock or other
ownership interests of (x) the entity or entities, if any, that
succeed to the business of Olin or (y) the combined company) or
(v) Approval by Olin's shareholders of (i) a sale of all or
substantially all the assets of Olin or (ii) a liquidation or
dissolution of Olin.
(c) In the event that a Participant participates or agrees to participate
by loan or equity investment (other than through ownership of less than
1% of publicly traded securities of another company) in a transaction
("acquisition") which would result in an event described in Section
9(b)(i) or (ii), the Participant must promptly disclose such
participation or agreement to Olin. If the Participant so participates
or agrees to participate, no benefits or payments due under the Plan or
by virtue of the Change in Control provisions contained in any
compensation or benefit plan of Olin will be paid to the Participant
until the acquiring group in which the Participant participates or
agrees to participate has completed the acquisition. In the event the
Participant so participates or agrees to participate and fails to
disclose his participation or agreement, the Participant will not be
entitled to any benefits or payments under the Plan or by virtue of
Change in Control provisions in any Olin compensation or benefit plan,
notwithstanding any of the terms hereof or thereof.
(d) Anything in the Plan to the contrary notwithstanding, in the event that
it shall be determined that any benefit, payment or distribution by
Olin to or for the benefit of the Participant (whether paid or payable
or distributed or distributable) pursuant to the terms of the Plan but
determined without regard to any additional payments required under
this Section 9(d), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended, the
Participant shall be entitled to receive an additional payment (the
"Gross-Up Payment") in an amount equal to (i) the amount of the excise
tax imposed on the Participant in respect of the benefits or payments
received pursuant to the Plan (the "Excise Tax") plus
13
<PAGE>
(ii) all federal, state and local income, employment and excise taxes
(including any interest or penalties imposed with respect to such taxes)
imposed on the Participant in respect of the Gross-Up Payment, such that
after payments of all such taxes (including any applicable interest or
penalties) on the Gross-Up Payment, the Participant retains a portion of
the Gross-Up Payment equal to the Excise Tax, provided that, if the
Participant receives a Gross-Up Payment with respect to benefits or
payments received under the Plan pursuant to another benefit or
compensation plan or agreement, the Gross-Up Payment under this Section
9(d) shall be reduced by the amount of such other Gross-Up Payments paid
in respect to the Excise Tax due as the result of the benefits or
payments received under the Plan.
Section 10. Effective Date and Term.
Subject to the approval of Olin's shareholders at the 2000 annual
shareholders meeting the Plan shall be effective as of January 27, 2000 (the
"Effective Date"); provided, however, that to the extent that Awards are
granted under the Plan prior to its approval by shareholders, the Awards shall
be contingent on approval of the Plan by the shareholders of Olin at such
annual meeting. The Plan shall be unlimited in duration and, in the event of
Plan termination, shall remain in effect as long as any Awards under it are
outstanding; provided; however, that, to the extent required by the Code, no
Incentive Stock Option may be granted under the Plan on a date that is more
than ten years from the date the Plan is adopted.
14
<PAGE>
[RECYLING LOGO] PRINTED ON RECYCLED PAPER
<PAGE>
OLIN CORPORATION PROXY
501 Merritt 7, Norwalk, CT 06856
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
WILLIAM W. HIGGINS, DONALD W. GRIFFIN, and G. JACKSON RATCLIFFE, JR., or
any of them, with full power of substitution, are hereby appointed proxies to
vote all Common Stock of the undersigned in Olin Corporation which the
undersigned would be entitled to vote on all matters which may come before the
Annual Meeting of Shareholders to be held at Stamford, Connecticut, on April 27,
2000, at 10:30 a.m. and at any adjournment.
This Proxy will be voted as directed by the shareholder on the items listed
on the reverse side. If no contrary direction is specified, this Proxy will be
voted FOR Items 1, 2, 3 and 4. Should any nominee be unable to serve, this Proxy
may be voted for a substitute selected by the Board of Directors.
This card also provides confidential voting instructions for shares held in
the Olin Corporation Contributing Employee Ownership Plan ("CEOP"). If you are a
participant and have shares of Olin Common Stock allocated to your account in
the CEOP, please read the following instruction regarding voting of those
shares.
Trustee's Authorization: As a named fiduciary, you may direct State Street
Bank & Trust Company, as Trustee of the CEOP, how to vote the shares of Olin
Common Stock allocated to your CEOP account by completing and returning this
Voting Instruction Form. The Trustee will vote all shares for which no
instructions are received in the same proportion as shares for which it has
received instructions. State Street Bank and Trust Company will vote the shares
represented by this Voting Instruction Form if it is properly completed, signed
and received by ChaseMellon Shareholder Services before 5:00 p.m. EDT on April
24, 2000.
Comments/Address Change: Please mark box on reverse side
PLEASE COMPLETE AND SIGN THIS PROXY ON THE REVERSE SIDE, WHERE IT IS CONTINUED,
THEN RETURN IT IN THE ENCLOSED ENVELOPE.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
- --------------------------------------------------------------------------------
Directions to the Westin Stamford Hotel
One First Stamford Place, Stamford CT. 06902
- --------------------------------------------------------------------------------
FROM NORTHERN CONNECTICUT ON NEW ENGLAND THRUWAY:
Follow I-95 S. to Stamford Exit 6 (West Avenue). At the end of the ramp, turn
Lt. at the light. Go under the I-95 overpass. Go to the next light and turn Lt.
onto the entrance ramp of I-95 N. Go to the next exit which is Exit 7 (Greenwich
Ave.). At the end of the ramp turn Rt. and then make another quick Rt. turn into
First Stamford Place. Hotel is at the end of the road.
FROM NORTHERN OR SOUTHERN CONNECTICUT ON THE MERRITT PKWY:
Follow Merritt Pkwy to Exit 34 (Long Ridge Road, Rte. 104). At the end of the
exit ramp take Rte. 104 S. for 2 miles. At a very large merging intersection
turn Rt. onto Rte. 137 (Cold Spring Road). Bear Rt. onto Washington Blvd.
Continue on Rte. 137 straight to Tresser Blvd. intersection. Turn Rt. onto
Tresser Blvd. (Rte. 1). Then take second Lt. onto Greenwich Ave. Go straight,
under I-95 overpass. Turn Rt. at second set of lights into First Stamford Place.
Hotel is at the end of the road.
FROM MANHATTAN, SOUTHERN CONNECTICUT AND WESTCHESTER:
Follow New England Thruway (I-95) N. to Exit 7 (Greenwich Ave.). At end of ramp
turn Rt., then make a sharp Rt. into First Stamford Place. Hotel is at the end
of road. Traveling time from Manhattan: 45 min. (approximately).
<PAGE>
Please mark your votes as indicated in this example [x]
The Board of Directors recommends FOR ALL WITHHOLD
a vote FOR Items 1, 2, 3 and 4. (except as FOR ALL
noted below)
Item 1-ELECTION OF DIRECTORS
Nominees: [ ] [ ]
Mitchell E. Daniels, Jr.
William W. Higgins
Stephen F. Page
WITHHOLD FOR: (Write that nominee's name in the space provided below):
_________________________________________________
Item 2-RE-APPROVAL OF OLIN SENIOR MANAGEMENT FOR AGAINST ABSTAIN
INCENTIVE COMPENSATION PLAN, AS AMENDED [ ] [ ] [ ]
Item 3-APPROVAL OF THE OLIN CORPORATION 2000 LONG FOR AGAINST ABSTAIN
TERM INCENTIVE PLAN [ ] [ ] [ ]
Item 4-RATIFICATION OF APPOINTMENT OF INDEPENDENT FOR AGAINST ABSTAIN
AUDITORS [ ] [ ] [ ]
WILL ATTEND MEETING YES NO
[ ] [ ]
COMMENTS/ADDRESS CHANGE YES NO
(use space on reverse side) [ ] [ ]
Signature(s) ______________________________________________ Date __________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
OLIN CORPORATION
501 Merritt 7, Norwalk, Connecticut 06856
Dear Shareholder:
You are invited to attend our 2000 Annual Meeting of Shareholders at 10:30 a.m.
Eastern Daylight time on Thursday, April 27th at the Westin Stamford Hotel, One
First Stamford Place, Stamford, CT 06902.
This is your admission card. If you plan to attend, please mark the box on your
proxy. Be sure to bring the card with you to the Meeting. On the back are
directions showing how to reach the Westin Stamford Hotel by automobile.
Sincerely,
Johnnie M. Jackson, Jr.
Secretary
