UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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[ ] 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 (S) 240.14a-11(c) or (S) 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.
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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paid previously. Identify the previous filing by registration statement
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Notes:
Reg. (S) 240.14a-101
SEC 1913 (3-99)
[LOGO] Olin
501 MERRITT 7, NORWALK, CONNECTICUT 06856-4500
March 13, 2001
Dear Olin Shareholder:
You are cordially invited to attend our 2001 Annual Meeting of Shareholders
at 8:30 a.m. on Thursday, April 26th. The meeting will be held at the Riverview
Cafeteria, 301 Merritt 7, Norwalk, Connecticut.
You will find information about the meeting in the enclosed Notice and Proxy
Statement. Please be advised that we have not planned a communications segment
or any multimedia presentations for the 2001 Annual Meeting.
Mr. Mitchell E. Daniels, Jr. resigned from the Board of Directors on January
19, 2001 because of his appointment as Director of the Office of Management and
Budget in the Bush Administration. We will miss his wise counsel and sound
judgment.
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 92% 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.
OLIN CORPORATION
Notice of Annual Meeting of Shareholders
Norwalk, Connecticut
March 13, 2001
The Annual Meeting of Shareholders of OLIN CORPORATION will be held at the
Riverview Cafeteria, 301 Merritt 7, Norwalk, Connecticut, on Thursday, April
26, 2001, at 8:30 a.m., local time, to consider and act upon the following:
(1) The election of two Directors.
(2) Ratification of the appointment of independent auditors for 2001.
(3) Such other business as may properly come before the meeting or any
adjournment thereof.
The Board of Directors has fixed March 1, 2001, 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
OLIN CORPORATION
PROXY STATEMENT
-----------------
ANNUAL MEETING OF SHAREHOLDERS
To be Held April 26, 2001
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 26, 2001, 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 13,
2001.
SHARES OUTSTANDING AND ENTITLED TO VOTE
The close of business on March 1, 2001 has been fixed as the record date for
the meeting and any adjournment thereof. As of that date, there were
approximately 43,821,410 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 8,180,931 shares were held in the
Olin Common Stock Fund of the Olin Corporation Contributing Employee Ownership
Plan (''CEOP''), all of which are held by The Chase Manhattan Bank, NA 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.
Mellon Investor Services ("MIS") is Olin's registrar and transfer agent. For
holders of Common Stock who participate in the Automatic Dividend Reinvestment
Plan offered by MIS, MIS 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, MIS will not vote Dividend Reinvestment
shares of such participant.
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, 2000.
Amount and
Nature of Percent
Beneficial of
Name and Address of Beneficial Owner Ownership Class
------------------------------------ --------- -------
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110 8,837,061(a) 20
FMR Corp.
82 Devonshire Street
Boston, MA 02109 3,640,550(b) 8
--------
(a) Olin has been advised in a Schedule 13G filing dated as of February 8, 2001
as follows with respect to these shares: As trustee of the CEOP at December
31, 2000, State Street had sole voting power over 451,327 shares, shared
voting power with respect to 8,358,434 shares, sole dispositive power with
respect to 8,836,813 shares and shared dispositive power with respect to
248 shares. State Street disclaims beneficial ownership of these shares.
Please note that as of March 1, 2001, the Trustee of Olin's CEOP changed
from State Street to The Chase Manhattan Bank, NA, 4 New York Plaza--2nd
Floor, New York, NY 10004.
(b) Olin has been advised in an amended Schedule 13G filing dated as of
February 14, 2001 as follows with respect to these shares: FMR Corp.
("FMR") has sole voting power as to 125,650 of such shares and sole
dispositive power as to 3,640,550 shares. Fidelity Management & Research
Company and Fidelity Management Trust Company beneficially own 3,514,900
and 118,650 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 3,514,900 shares and sole power to vote or to direct
the voting of 118,650 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.
2
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. Two persons, as set
forth below under ''Nominees for Three-Year Terms Expiring in 2004'', have been
nominated by the Board for election as Class I Directors to serve until the
2004 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.
Each of the nominees 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 I
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2004
[PHOTO OF RW Larrimore]
RANDALL W. LARRIMORE, 53, 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 Chairman 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 OF AW Ruggiero]
ANTHONY W. RUGGIERO, 59, 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 former Director and Audit Committee
Chair of Primex Technologies, Inc. Olin director since 1999.
The Board recommends a vote FOR the reelection of Mr. Larrimore and Mr.
Ruggiero as Class I Directors.
3
The terms of the following directors will continue after the meeting as
indicated below.
CLASS II
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2002
[PHOTO OF DW Griffin]
DONALD W. GRIFFIN, 64, 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 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 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 OF GJ Ratcliffe]
G. JACKSON RATCLIFFE, JR., 65, is Chairman, President and Chief
Executive Officer of Hubbell Incorporated, an international
manufacturer of electrical and electronic products, 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 OF RM Rompala]
RICHARD M. ROMPALA, 54, 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.
4
CLASS III
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2003
[PHOTO OF WW Higgins]
WILLIAM W. HIGGINS, 65, 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 a
director and former Chairman of the Greenwich Emergency Medical
Service, Greenwich, CT. 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.
[PHOTO OF SF Page]
STEPHEN F. PAGE, 61, is Executive Vice President of United
Technologies Corporation (UTC) and President and Chief Executive
Officer of Otis Elevator Company, a subsidiary of UTC. He has
held these positions since 1993 and 1997 respectively. He served
as Chief Financial Officer of UTC from 1993 until 1997. 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 chairman of the board 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). Olin director
since 2000; member of the Audit Committee and the Directors and
Corporate Governance Committee.
5
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
Attendance
During 2000, the Board held eight meetings. The average attendance by
current directors at meetings of the Board and committees of the Board on which
they served was 90%. Each such 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 and
Regulatory Audit Departments; and reviews the presentation of Olin's financial
results. The Committee also monitors the Corporation's litigation and insurance
and risk management process, oversees the Company's ethics and business conduct
programs and procedures, and major litigation and other legal matters that
impact the Company's financial statements or compliance with the law. During
2000, 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 their 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 plans, 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 2000, this committee held four 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 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
6
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 2000, 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 preceding 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 2000,
this committee held no meetings.
Compensation of Directors
During 2000, 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 Non-employee Directors (the ''Directors Plan''). Each non-employee
director also was credited 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). 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. 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.
During 2000, 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 totaling 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.
7
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 11, and by all
directors and current executive officers of Olin as a group, as reported to
Olin by such persons as of January 15, 2001. Unless otherwise indicated in the
footnotes below, the officers, directors, nominees and individuals had sole
voting and investment power over such shares.
No. of Shares Percent of
Beneficially Common
Name of Beneficial Owner Owned(a,b) Stock(c)
------------------------ --------- ----------
Donald W. Griffin................................................. 682,918(d) 1.5
William W. Higgins................................................ 256,941(e) --
Randall W. Larrimore.............................................. 14,741 --
Stephen F. Page................................................... 7,044 --
G. Jackson Ratcliffe, Jr.......................................... 24,317 --
Richard M. Rompala................................................ 14,705 --
Anthony W. Ruggiero............................................... 261,119 --
Joseph D. Rupp.................................................... 155,212 --
Thomas M. Gura.................................................... 117,831 --
Peter C. Kosche................................................... 185,241(d) --
Directors and executive officers as a group, including those named
above (15 persons).............................................. 2,094,880(d),(e) 4.6
--------
(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
20,509 for Mr. Higgins; 14,241 for Mr. Larrimore; 5,044 for Mr. Page;
22,317 for Mr. Ratcliffe; and 14,205 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, 2001 through the exercise of stock options, as
follows: Mr. Griffin, 580,666; Mr. Ruggiero, 207,871; Mr. Rupp, 118,712;
Mr. Gura, 86,986; Mr. Kosche, 137,291; and all directors and executive
officers as a group, including the named individuals, 1,465,165.
(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 52,874 shares
held in four 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 and
written representations, Olin believes that during the period January 1, 2000
to December 31, 2000, all Section 16(a) filing requirements applicable to its
officers, directors and greater than ten-percent beneficial owners were
complied with.
8
EXECUTIVE COMPENSATION
Report of the Compensation Committee on Executive Compensation
Executive Compensation Program as Administered in 2000
The Compensation Committee has established competitive total compensation
opportunities (and each component thereof) for the CEO and other named
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 the Company'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 the
Company'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 2000, 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
Effective January 1, 2000, the CEO's base salary was increased to $735,000,
a change of five percent over the 1998 level which was not changed in 1999.
Factors considered by the Committee in determining his 2000 salary included
analyses of the comparator group and the scope of his responsibilities. 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 2000.
Also effective January 1, 2000, base salary adjustments were made for all
other named executives. Salaries for these executives had last been adjusted in
July, 1998. All base salary adjustments utilized the same methodology cited
above.
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.
9
For 2000, the EVA performance element was determined using the Company's
actual EVA performance versus the predetermined target. EVA performance
exceeded the goal for 2000. The Company maintains a "bonus bank" for each
individual participating in the bonus plan. Only a predetermined portion of the
EVA performance award (plus a predetermined portion of the bonus bank balance,
if the bank balance is positive) is actually paid in a given year. For 2000,
the predetermined payout percent was 33% for the executive officers. If bonus
bank balances carried over from the prior year are negative, an executive
receives the predetermined payout percent of the declared award for the year in
question. The portion of the declared award not paid to the executive is
credited against the existing negative or positive bank balance to determine
the new ending bank balance. This positive or negative balance is held in the
bank. If the balance is positive, it will be available for payout over
subsequent years if EVA performance is sustained but it remains at risk, until
it is paid out. With performance below target, bank balances may become
negative, in which case, they must be offset and therefore will 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. The bank balance, if any, is paid upon retirement, death or
disability and may be paid upon termination of employment in certain other
events.
The amount of the discretionary element of the award 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 2000 incentive payout was $437,842, made up of $292,842 for EVA
performance and $145,000 for performance against personal objectives. This
compares to a total annual incentive payout in 1999 of $137,500, made up
entirely of the discretionary award with no payout for EVA performance. His
ending 2000 EVA performance-related bank balance is $322,942, compared to a
negative $271,616 in 1999.
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 2000. A long term
incentive plan in the form of stock option grants provides a direct linkage to
shareholder value. The CEO and other named executives received stock option
grants in 2000 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 2001 and have a ten year term.
Also in 2000, the CEO and other named executives received a special,
one-time grant of Performance Accelerated Vesting Stock Options. These options
have an exercise price equal to the common stock price on the day of the grant,
$18.97 per share. The objective of this special grant was to provide additional
incentive for the senior management team to improve the performance of the
business and accelerate a significant increase in shareholder value. These
options have a term of 120 months and vest in 119 months. They can vest early,
but only if the stock price increases to $28 per share or more for ten days in
any 30 calendar day period - an increase of almost fifty percent over the price
on the day of the grant.
January 25, 2001
G. Jackson Ratcliffe, Jr., Chairman
Randall W. Larrimore
Richard M. Rompala
10
The following table shows for the Chief Executive Officer and the other four
most highly compensated executive officers cash compensation for the fiscal
years 1998-2000.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------------- ---------------------
Awards Payouts
---------- ----------
Other All
Name and Principal Annual Securities Other
Position as of Compen- Underlying LTIP Compen-
December 31, 2000 Year Salary Bonus(a) sation Options Payouts(c) sation(d)
----------------- ---- -------- -------- ------ ---------- ---------- ---------
Donald W. Griffin............... 2000 $735,000 $437,842 (b) 400,000 $ 0 $ 62,583
Chairman, President & 1999 700,008 287,500 (b) 150,000 248,250 70,801
Chief Executive Officer 1998 700,009 324,923 (b) 100,000 678,831 51,852
Anthony W. Ruggiero............. 2000 $415,008 $158,529 (b) 160,000 $ 0 $293,168
Executive Vice President and 1999 400,008 150,000 (b) 60,000 0 326,363
Chief Financial Officer 1998 387,504 132,162 (b) 40,000 252,828 34,458
Joseph D. Rupp.................. 2000 $325,008 $157,892 (b) 80,000 $ 0 $ 20,252
Vice President and President, 1999 300,000 103,720 (b) 30,000 77,875 16,814
Brass Division(e) 1998 287,502 96,872 (b) 20,000 132,526 15,530
Thomas M. Gura.................. 2000 $300,000 $180,682 (b) 80,000 $ 0 $ 21,790
Vice President and President, 1999 275,004 193,007 (b) 30,000 77,875 19,154
Winchester Division 1998 262,506 194,752 (b) 20,000 132,526 22,969
Peter C. Kosche................. 2000 $340,008 $135,882 (b) 100,000 $ 0 $ 26,312
Senior Vice President, 1999 325,008 118,750 (b) 40,000 51,505 22,791
Corporate Affairs 1998 312,504 103,878 (b) 25,000 163,798 22,400
--------
(a) 1999 numbers include special performance bonuses related to work performed
in connection with the spin-off of Arch Chemicals 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) No amounts of "Other annual compensation" were paid to any named executive
officer except for perquisites and other personal benefits, which for each
executive officer did not exceed the lesser of $50,000 or 10% of such
individual's salary plus bonus.
(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 2000 are comprised of the following
items:
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)
---------- -------- ------ ------------ ------------ --------------
Donald W. Griffin.. $ 0 $ 0 $6,454 $24,506 $1,390 $30,233
Anthony W. Ruggiero 260,029 0 7,286 10,213 1,390 14,250
Joseph D. Rupp..... 0 1,766 7,192 6,548 1,390 3,356
Thomas M. Gura..... 0 1,963 6,562 6,128 1,390 5,747
Peter C. Kosche.... 0 1,447 7,185 7,185 1,390 9,105
--------
(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.
(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 2000 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.
(e) Effective March 1, 2001, Joseph D. Rupp was elected Executive Vice
President, Operations.
11
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 11, information relating to options granted by Olin
from January 1, 2000 through December 31, 2000.
Option/SAR Grants of Common Stock in Last Fiscal Year
Individual Grants(a)
---------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to All Potential Realizable Value at
Options/SARs Employees Exercise Expiration Assumed Rates of Stock Price
Name Granted(a) in Fiscal Year Price(b) Date Appreciation for Option Term(c,d)
---- ------------ -------------- -------- ---------- ---------------------------------
0% 5% 10%
-- ------------ --------------
Donald W. Griffin.. 400,000 20.6 $18.97 1/26/10 $0 $ 4,772,052 $ 12,093,318
Anthony W. Ruggiero 160,000 8.2 18.97 1/26/10 0 1,908,821 4,837,327
Joseph D. Rupp..... 80,000 4.1 18.97 1/26/10 0 954,410 2,418,664
Thomas M. Gura..... 80,000 4.1 18.97 1/26/10 0 954,410 2,418,664
Peter C. Kosche.... 100,000 5.1 18.97 1/26/10 0 1,193,013 3,023,329
All Shareholders... N/A N/A N/A N/A 0 524,692,403 1,329,673,624
All Optionees...... 1,943,800 100.0 18.97 1/26/10 0 23,189,788 58,767,478
--------
(a) Options for the five named individuals were awarded on January 27, 2000.
Half of the grant consists of stock options which become exercisable in
three equal annual increments, beginning on January 27, 2001. The other
half of the grant consists of performance-accelerated vesting options which
become exercisable on the earlier of December 27, 2009 or the tenth day (in
any 30 calendar day period) upon which the average of the high and low per
share sales prices of the common stock as reported on the consolidated
transaction system for New York Stock Exchange issues is at or above
$28.00.
(b) The exercise price of the options is equal to the fair market value of
Common Stock on the date of grant.
(c) 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.
(d) Realizable values are computed based on the number of options which were
granted in 2000 and which were still outstanding at year-end.
12
The following table sets forth as to the individuals named in the summary
compensation table on page 11, information regarding options exercised during
2000 and the value of in-the-money outstanding options at the end of 2000.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-end Option
Values
Number of Securities Aggregate Value of
Underlying Unexercised Unexercised, In-the-Money
Shares Options at 12/31/00 Options at 12/31/00(a)
Acquired Value ------------------------- -------------------------
Name on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------- ----------- ------------- ----------- -------------
Donald W. Griffin.. 13,481 $2,696 430,653 533,333 $1,029,835 $1,892,000
Anthony W. Ruggiero 0 0 147,866 213,333 147,379 756,800
Joseph D. Rupp..... 3,043 2,982 88,712 106,666 199,057 378,400
Thomas M. Gura..... 3,043 1,369 56,986 106,666 160,091 378,400
Peter C. Kosche.... 1,491 298 98,955 134,999 205,242 483,462
--------
(a) Value was computed as the difference between the exercise price and the
$22.13 per share closing price of Olin Common Stock on December 31, 2000,
as reported on the consolidated transaction reporting system relating to
New York Stock Exchange issues.
13
Corporate Performance Graph
The Olin Peer Group consists of Georgia Gulf Corporation, Pioneer Company,
Brush Engineered Materials 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.
[CHART]
Comparison of Five Year Cumulative Total Return*
Among Olin Corporation, The S & P Midcap 400 Index
And A Peer Group
OLIN CORPORATION PEER GROUP S&P MIDCAP 400
12/95 100 100 100
12/96 104.26 102.23 119.2
12/97 139.48 130.32 157.65
12/98 86.97 81.47 180.4
12/99 103.33 121.32 206.96
12/2000 120.82 89.17 243.18
* $100 invested on 12/31/95 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.
12/95 12/96 12/97 12/98 12/99 12/00
OLIN CORPORATION 100 104 139 87 103 121
PEER GROUP...... 100 102 130 81 121 89
S & P MIDCAP 400 100 119 158 180 207 243
14
Executive Agreements
As of December 31, 2000 each of the executive officers named in the table on
page 11 and five 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 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 lieu of other Olin severance benefits. 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, provided that 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 11
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
15
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.
''Compensation'' for purposes of the Pension Plan represents average cash
compensation per year (salary and bonus shown in the summary compensation table
on page 11) 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 or she 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.''
16
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
Years of Service
--------------------------------------------------------------
Compensation 10 Years 15 years 20 Years 25 Years 30 Years 35 Years 40 Years
------------ -------- -------- -------- -------- -------- -------- --------
$ 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
Credited years of service for the named executive officers as of December
31, 2000 are as follows: Mr. Griffin, 39.6 years (19.8 years under the Senior
Plan); Mr. Ruggiero, 5.3 years (5.3 years under the Senior Plan); Mr. Rupp,
27.9 years (14.4 years under the Senior Plan); Mr. Gura, 32.5 years (13.4 years
under the Senior Plan); and Mr. Kosche, 27.8 years (7.6 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.
Report of the Audit Committee
The Audit Committee held four meetings during 2000. The meetings were
designed to facilitate and encourage private communication between the
Committee and the internal auditors and the Company's independent public
accountants, KPMG LLP.
The Committee consists of three directors, all of whom are independent
directors under NYSE listing standards.The Committee acts under a written
Charter first adopted by the Board of Directors in 1997. A copy of the current
Audit Committee Charter, which was updated in 2000, is reproduced in Appendix A
to this proxy statement.
The Committee has reviewed and discussed the audited financial statements
for fiscal year 2000 with Management and with the independent auditors.
Specifically, the Committee has discussed with the independent auditors the
matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU Section 380), which includes, among other things:
. methods used to account for significant unusual transactions;
. the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
17
. the process used by Management in formulating particularly sensitive
accounting estimates and the basis for the auditor's conclusions
regarding the reasonableness of those estimates; and
. disagreements with Management over the application of accounting
principles, the basis for Management's accounting estimates, and the
disclosures in the financial statements.
In addition, the Committee has received the written disclosures and the
letter from the Company's independent accountants, KPMG LLP, required by
Independence Standards Board Standard No. 1, INDEPENDENCE DISCUSSIONS WITH
AUDIT COMMITTEES and discussed with KPMG the issue of its independence from
Olin. The Committee also reviewed the fees paid to KPMG during 2000 to ensure
that none of the work performed was incompatible with maintaining KPMG's
independence.
Based on the Committee's discussion with Management and the independent
accountants and the Committee's review of the representation of Management and
the report of the independent accountants to the Committee, the Committee
recommended that the Board of Directors include the audited consolidated
financial statements in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 2000 filed with the Securities and Exchange Commission.
February 22, 2001
William W. Higgins, Chairman
Stephen F. Page
Richard M. Rompala
ITEM 2--PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP was the Company's independent auditor for 2000. A summary of the
fees paid to KPMG during 2000 follows:
Nature of Service Fees (000 thousands)
----------------- --------------------
Audit Fees (including quarterly financial reviews)........ $ 666
Financial Information Systems Design and Implementation... --
Other Fees:
-- Environmental expense accounting/litigation support. 464
-- Acquisitions/ventures due diligence................. 308
-- Assistance to internal audit........................ 236
-- Benefit plan audits................................. 134
-- Tax advice and services............................. 71
-- All other........................................... 14
--------------------
Total Fees......................................... $1,893
--------------------
The Board of Directors has appointed the firm of KPMG LLP as independent
auditors of Olin for the year 2001. 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.
18
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 2001
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 2001.
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, and telephone, 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 $11,500 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 and telephone by
directors, officers and employees of Olin.
Shareholder Proposals
Proposals of shareholders intended to be presented to Olin's 2002 Annual
Meeting of Shareholders must be received at Olin's principal executive offices
by November 15, 2001 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 2002
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, 2002. 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 13, 2001
19
Appendix A
OLIN CORPORATION
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
Purpose
The Audit Committee (the "Committee") is appointed by the Board of Directors
to assist the Board in fulfilling its oversight responsibilities. The charge of
the Committee is to:
. Monitor the integrity of the Corporation's financial reporting process and
systems of internal control covering the areas of finance, accounting,
information technology, and environmental, health, safety and transportation
(EHS&T) and legal compliance.
. Monitor the independence and performance of the Corporation's independent
auditors and internal audit and EHS&T audit functions.
. Provide an avenue for communication between the Board of Directors and
Management, the independent auditors and the internal audit and EHS&T audit
functions.
The Committee has direct access to the independent auditors as well as
anyone else in the organization. In addition, the Committee may use both
internal and external resources and advisors, as it deems appropriate in
carrying out its duties. The Chairman of the Board shall provide the Committee
with all of the resources, both internal and external, which the Committee
deems necessary or advisable to meet its duties and responsibilities and carry
out its function.
Membership and Meetings
The Committee will consist of no less than three Directors, all of whom are
independent outside Directors, free from any relationship with the Corporation
that would interfere with their independent judgement. In all cases membership
on the Committee will comply with the rules of the New York Stock Exchange
(NYSE).
All members of the Committee shall have a basic understanding of finance and
accounting and be able to read and understand financial statements. In
addition, at least one member shall have accounting or related financial
management expertise as defined by the NYSE rules.
Audit Committee members shall be appointed by the Board. The Chair will be
rotated among Committee members periodically at the discretion of the Board of
Directors. When feasible, the immediate past Chair will continue serving as a
member of the Committee for at least one year to ensure an orderly transition.
The Committee shall meet no less than four times per year, or more
frequently as circumstances dictate. Regular meetings of the Committee will be
at times during the year as approved by the Committee. The Audit Committee
Chair shall prepare and/or approve an agenda in advance of each such meeting.
At least once per year, the Committee will meet privately in executive
session with members of Management; the Vice President, Auditing and Business
Ethics and Integrity; the Vice President, Regulatory Audit and Deputy General
Counsel; and with representatives of the independent auditors. Special meetings
of the Committee may also be called and held as may be appropriate, subject to
the Corporation's By-laws.
The Chair of the Committee will regularly report the Committee's findings,
conclusions and recommendations to the Board of Directors at the next meeting.
A-1
Duties and Responsibilities
Review Procedures
. Review and reassess the adequacy of the Audit Committee Charter annually and
submit it for formal approval to the Directors and Corporate Governance
Committee and Board of Directors. In addition, beginning in 2001 and at
least once every three years thereafter, publish the Charter in the annual
meeting proxy statement in accordance with SEC regulations.
. Review the Corporation's annual audited financial statements prior to filing
or distribution. This review is to include discussions with Management and
the independent auditor about the existence and disposition of significant
issues involving accounting principles, practices and judgements, and a
recommendation to the Board of Directors regarding inclusion of such
financial statements in the Corporation's annual report on Form 10-K.
. Review with Management and the independent auditor, Management's proposals
regarding new accounting pronouncements or major changes of choice regarding
accounting principles and practices to be followed when preparing the
financial statements of the Corporation.
. In connection with Management, the independent auditors, the internal
auditors, and the EHS&T auditors evaluate the adequacy of the Corporation's
financial reporting systems and business process controls and discuss
significant exposures and the action Management has taken to monitor and
control such exposures. In addition, review significant findings noted by
the independent auditor, the internal auditors and the EHS&T auditors
including Management responses.
. Review with Management and the independent auditor, the interim financial
results and press release before issuance to the public.
Independent Auditors
. The independent auditors are accountable to the Committee and the Board of
Directors. The Committee shall review the independence and performance of
the auditors and recommend their appointment. In addition, the Committee
will review the terms and conditions of their engagement including fees and
other significant compensation for non-audit services to ensure that the
work is compatible with maintaining the auditors' independence. The
Committee is also charged with the responsibility of approving the auditors'
discharge if circumstances warrant.
. The Committee will review the independent auditors' annual audit plan, which
should cover among other matters: scope of the examination, staffing,
locations, areas of reliance (i.e. Management representations, internal
audit and EHS&T audit coverage), and their general audit approach.
. In connection with discussions related to the annual audit results, the
Committee should consider the independent auditors' judgements about the
quality and appropriateness of the Corporation's accounting principles as
applied in its financial reporting.
. On an annual basis, the Committee shall also review and discuss with the
independent auditors all significant relationships they have with the
Corporation for the purposes of determining if any such relationships could
impair the auditors' independence.
Internal Audit and EHS&T Audit
. Annually, review the Corporation's Internal Audit and EHS&T Audit plans
including organizational structure, staff qualifications, and the process of
audit planning and business risk assessment.
. Review activity and special reports of the Corporation's Internal Audit and
EHS&T Audit functions including Management responses and corrective action
plans for significant findings.
A-2
. Review with Management the appointment and/or replacement of the Vice
President, Auditing and Business Ethics and Integrity or the Vice President,
Regulatory Audit and Deputy General Counsel.
Ethical and Legal Compliance
. Review the Corporation's litigation management process including the
insurance and risk management process.
. Oversee the activities and programs administered by the Vice President,
Auditing and Business Ethics and Integrity.
. Monitor major litigation and significant internal or external special
investigations and review with the General Counsel, at least annually, any
other legal matters that could have a material impact on the Corporation's
financial statements or compliance with law.
Other Committee Responsibilities
. For the year 2000 and annually thereafter, prepare a report to the
shareholders as required by the Securities and Exchange Commission which
states that the Committee has reviewed and discussed the audited financial
statements with Management and has discussed with the independent auditor
matters involving their independence and significant audit findings.
. Review the internal audit of the expenses of the Corporation's Senior
Executives and members of the Board of Directors.
A-3
[GRAPHIC OF PRINTED ON RECYCLED PAPER]
PROXY
OLIN CORPORATION
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 Norwalk, Connecticut, on April 26, 2001,
at 8:30 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 and 2. 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 The
Chase Manhattan Bank, NA, 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.
The Chase Manhattan Bank, NA will vote the shares represented by
this Voting Instruction Form if it is properly completed, signed
and received by Mellon Investor Services before 5:00 p.m. EDT on
April 23, 2001.
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 301 Merritt 7
Norwalk, CT. 06880
--------------------------------------------------------------------------------
301 Merritt 7 is located on Route 7 just off Exit 40B of the Merritt Parkway
Route 7 connects with the Merritt Parkway and I-95 to the south
and I-84 to the North (in Danbury). Other local highways are
Route 1, Route 53, and Route 123.
From I-95 (North or South) From Merritt Parkway (North or South)
Take Exit 15, (Route 7 connector). Follow the connector Take Exit 40B, Route 7 north. At the end of the ramp, turn
to the end, approximately 3 miles. Turn right at the traffic right (north) onto Route 7. The Merritt 7 complex will be
light. At bottom of the hill ("T" intersection), turn right visible on the left, and at the second traffic light turn left
(south) onto Route 7. Make a right turn at the light into into complex.
301 Merritt 7.
Please mark your votes this way [X]
The Board of Directors recommends FOR WITHHOLD
a vote FOR Items 1 and 2. ALL FOR ALL
(except as noted below)
[ ] [ ]
Item 1--ELECTION OF DIRECTORS
Nominees:
Randall W. Larrimore
Anthony W. Ruggiero
WITHHOLD FOR: (Write that nominee's name in the space provided below).
_______________________________________________________________________
Item 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
YES NO
WILL ATTEND MEETING [ ] [ ]
COMMENTS/ADDRESS CHANGE [ ] [ ]
(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 2001 Annual Meeting of Shareholders at 8:30 a.m.
Eastern Daylight Time on Thursday, April 26th at the Riverview Cafeteria at 301
Merritt 7, Norwalk, CT 06880.
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 301 Merritt 7 by automobile.
Sincerely,
/s/ Johnnie M. Jackson, Jr.
Johnnie M. Jackson, Jr.
Secretary