SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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
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(Name of Registrant as Specified In Its Certificate)
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(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)(4) 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.: PRELIMINARY PROXY
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3) Filing Party: LAM RESEARCH CORPORATION
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4) Date Filed: APRIL , 2001
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
[LOGO] Olin
501 MERRITT 7, NORWALK, CONNECTICUT 06856-4500
March 14, 2002
Dear Olin Shareholder:
We cordially invite you to attend our 2002 annual meeting of
shareholders.
This booklet includes the notice and proxy statement, which
describes the business we will conduct at the meeting and provides
information about Olin that you should consider when you vote your
shares. We have not planned a communications segment or any multimedia
presentations for the 2002 annual meeting.
This year, we have prepared the proxy statement in a format that we
hope is easier to understand. The Securities and Exchange Commission
encourages companies to write documents for investors in plain
English, and we support this effort. We hope you like the new format,
and we welcome your comments.
Whether or not you plan to attend, it is important that your shares
are represented and voted at the annual meeting. If you do not plan to
attend the annual meeting, you may vote your shares on the Internet,
by telephone or by completing and returning the proxy card in the
enclosed envelope. If you plan to attend the annual meeting, please
bring the lower half of your proxy card to use as your admission
ticket for the meeting.
At last year's annual meeting more than 91% 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 vote as soon
as possible.
Sincerely,
/s/ DONALD GRIFFIN
Donald W. Griffin
Chairman of the Board
YOUR VOTE IS IMPORTANT
We urge you to promptly vote your shares on the Internet, by telephone or by
completing, signing, dating and returning your proxy card in the enclosed
envelope.
OLIN CORPORATION
Notice of Annual Meeting of Shareholders
Time: 8:30 a.m. (Eastern Daylight time)
Date: Thursday, April 25, 2002
Place: Riverview Cafeteria 301 Merritt 7 Norwalk, Connecticut
Purpose: To consider and act upon the following:
(1) The election of three Directors to serve for three-year
terms expiring in 2005, and one Director to serve until
2003.
(2) Ratification of the appointment of independent auditors
for 2002.
(3) Such other business that is properly presented at the
meeting.
Who May Vote: You may vote if you were the record owner of Olin common stock
at the close of business on February 28, 2002.
By Order of the Board of Directors:
/s/ Stuart N. Roth
Stuart N. Roth
Assistant Secretary
Norwalk, Connecticut
March 14, 2002
OLIN CORPORATION
PROXY STATEMENT
-----------------
ANNUAL MEETING OF SHAREHOLDERS
To be Held April 25, 2002
GENERAL QUESTIONS
-----------------------
Why did I receive this proxy statement?
You received this proxy statement because you owned shares of Olin common
stock at the close of business on February 28, 2002. Olin's Board of Directors
is asking you to vote at the 2002 annual meeting in favor of the matters listed
in the notice of the annual meeting of shareholders. This proxy statement
describes the matters on which we would like you to vote and provides
information so that you can make an informed decision.
When was this proxy material mailed to shareholders?
We began to mail the proxy statement and form of proxy to shareholders on or
about March 14, 2002.
What if I have questions?
If you have questions, please write them down and send them to the Secretary
at Olin's principal executive office at 501 Merritt 7, PO Box 4500, Norwalk, CT
06856-4500.
What will I be voting on?
You will be voting on:
(1) the election of four Directors,
(2) the ratification of KPMG LLP as Olin's independent auditors for 2002,
and
(3) any other business if properly presented at the annual meeting.
Could other matters be voted on at the annual meeting?
As of March 14, 2002, the election of four Directors and the ratification of
KPMG LLP as Olin's independent auditors for 2002 are the only matters being
presented for consideration. We know of no other matters to be considered at
the annual 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 and opinion as to what is in the best
interests of Olin.
How does the Board recommend I vote on the proposals?
The Board recommends a vote for each of the Director nominees and for the
appointment of KPMG LLP as Olin's independent auditors for 2002.
VOTING
Who can vote?
All shareholders of record at the close of business on February 28, 2002 are
entitled to vote at the annual meeting.
How many votes can be cast by all shareholders?
At the close of business on February 28, 2002, the record date for voting,
we had outstanding 43,479,806 shares of Olin common stock, par value $1 per
share. Each shareholder on the record date may cast one vote for each full
share owned.
How do I vote?
You may vote either in person at the annual meeting or by proxy. To vote by
proxy, you must select one of the following options:
.. Complete the enclosed proxy card:
. Complete all of the required information on the proxy card.
. Date and sign the proxy card.
. Return the proxy card in the enclosed postage-paid envelope. We must
receive the proxy card not later than the day before the annual meeting
for your proxy to be valid and for your vote to count.
. If you are not the shareholder of record and hold shares through a
custodian, broker or other agent, such agent may have special voting
instructions that you should follow.
.. Vote by telephone (telephone voting instructions are printed on the proxy
card):
. Call the toll-free voting telephone number: 1-800-435-6710.
. Enter your voter control number located at the bottom of your proxy card.
. Follow and comply with the recorded instructions before the indicated
deadline on April 24, 2002.
. If you are not the shareholder of record and hold shares through a
custodian, broker or other agent, such agent may have special voting
instructions that you should follow.
.. Vote on the Internet (Internet voting instructions are printed on the proxy
card):
. Access http://www.eproxy.com/oln
. Follow the instructions provided on the site and log on using your voter
control number located at the bottom of your proxy card.
. Submit the electronic proxy before the indicated deadline on April 24,
2002.
. If you are not the shareholder of record but hold shares through a
custodian, broker or other agent, such agent may have special voting
instructions that you should follow.
Telephone and Internet voting ends at 4:00 p.m., Eastern Daylight time, on
April 24, 2002. If you vote in a timely manner by the Internet or telephone,
you do not have to return your proxy card for your vote to count. Please be
aware that if you vote on the Internet, you may incur costs such as normal
telephone and Internet access charges for which you will be responsible.
The Internet and telephone voting procedures use a control number. Your
control number appears on the bottom of the enclosed proxy card. The control
number also lets you log on to change your vote or to confirm that your vote
has been properly recorded.
2
If you want to vote in person at the annual meeting, and you own your Olin
shares through a custodian, broker or other agent, you must obtain a proxy from
that party in their capacity as owner of record for your shares and bring the
proxy to the annual meeting.
How are votes counted?
If you specifically mark your proxy card (or vote by telephone or Internet)
and indicate how you want your vote to be cast regarding any matter, your
directions will be followed. If you submit your proxy card but do not
specifically mark it with your instructions as to how you want to vote, your
proxy will be voted for the election of the Directors, and in favor of the
ratification of KPMG LLP as independent auditors for 2002.
If you submit a proxy card marked "abstain" or "withhold" on any item, your
shares will not be voted on the item so marked and your vote will not be
included in determining the number of votes cast for that matter.
Can I change my vote?
Yes. Even if you submit a proxy card with your voting instructions, you may
revoke or change it in person at the meeting any time before it is exercised or
in a timely manner before the expiration of the voting deadlines by:
. submitting another written proxy with a later date,
. casting a new vote on the Internet or by telephone,
. sending a written notice of the change in your voting instructions to the
Secretary if received before the annual meeting, or
. revoking the grant of a previously submitted proxy and voting in person
at the annual meeting.
When are the votes due?
Shares represented by proxies on the enclosed proxy card will be counted in
the vote at the annual meeting if we receive your proxy card by April 24, 2002.
Proxies submitted by the Internet or by telephone will be counted in the vote
only if they are received by 4:00 p.m., Eastern Daylight time on April 24, 2002.
How do I vote my shares held in the Olin Contributing Employee Ownership Plan
or the Arch Chemicals, Inc. Contributing Employee Ownership Plan?
On February 28, 2002, approximately 7,346,634 shares were held in the Olin
common stock fund of the Olin Corporation Contributing Employee Ownership Plan
and 888,468 shares were held in the Olin common stock fund of the Arch
Chemicals, Inc. Contributing Employee Ownership Plan. We sometimes refer to one
or both of these plans as the CEOP. JPMorgan Chase Bank, as the Trustee of the
CEOP, holds all of those shares. If you are a participant in the CEOP, you may
instruct JPMorgan Chase Bank how to vote shares of common stock credited to you
by indicating your instructions on your proxy card and returning it to us or by
voting on the Internet or telephone. JPMorgan Chase Bank will vote shares of
common stock held in the CEOP for which it does not receive voting
instructions, or which are not credited to participants' accounts, in the same
manner proportionately as it votes the shares of common stock for which they do
receive instructions.
How do I vote my shares held in the Automatic Dividend Reinvestment Plan?
Mellon Investor Services is our registrar and transfer agent and administers
the Automatic Dividend Reinvestment Plan. If you participate in our Automatic
Dividend Reinvestment Plan, Mellon will vote any shares of common stock that it
holds for you in accordance with your instructions indicated on the proxy card
you return or the vote you make by Internet or telephone. If you do not submit
a proxy card for your shares of record or vote by Internet or telephone, Mellon
Investor Services will not vote your dividend reinvestment shares.
3
MISCELLANEOUS
Who pays for this proxy solicitation?
Olin will pay the entire expense of this proxy solicitation.
Who solicits the proxies and what is the cost of this proxy solicitation?
We have hired Georgeson Shareholder Communications Inc., a proxy
solicitation firm, to assist us with the distribution of proxy materials and
vote solicitation. We 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 proxy solicitation materials.
How will the proxies be solicited?
Georgeson will solicit proxies by personal interview, mail, and telephone,
and will request brokerage houses and other custodians, brokers and other
agents to forward proxy solicitation materials to the beneficial owners of Olin
common stock for whom they hold shares. Our Directors, officers and employees
may also solicit proxies by personal interview and telephone.
How can I submit a shareholder proposal at the 2003 annual meeting?
If you want to present a proposal to be considered for inclusion in the 2003
proxy statement for the 2003 annual meeting, you must deliver the proposal in
writing to the Secretary at Olin Corporation, 501 Merritt 7, PO Box 4500,
Norwalk, CT 06856-4500 no later than November 15, 2002. You must then present
your proposal in person at the 2003 annual meeting.
If you want to present a proposal for consideration at the 2003 annual
meeting without including your proposal in the proxy statement, you must
deliver a written notice (containing the information required by Olin's
By-Laws) to the Secretary at Olin Corporation, 501 Merritt 7, PO Box 4500,
Norwalk, CT 06856-4500 no later than January 24, 2003. You must also present
your proposal in person at the 2003 annual meeting.
How can I nominate a Director for election to the Board?
According to Olin's By-Laws, you may nominate an individual for election to
the Board if you deliver a written notice of the nomination to Olin's Secretary
no later than January 24, 2003. Your notice must include:
. your name and address;
. the name and address of the person you are nominating;
. a statement that you are entitled to vote at the annual meeting and
intend to appear at the annual meeting in person, or by proxy, to make
the nomination;
. a description of arrangements or understandings between you and
others, if any, pursuant to which you are making the nomination;
. such other information about the nominee as would be required in a
proxy statement filed under the Securities and Exchange Commission
proxy rules; and
. the written consent of the nominee to actually serve as a Director, if
elected.
CERTAIN BENEFICIAL OWNERS
Does any single shareholder own or control 5% or more of Olin's common stock?
We know of no person who beneficially owned more than five percent of our
common stock as of December 31, 2001.
4
ITEM 1--PROPOSAL FOR THE ELECTION OF DIRECTORS
Who are the individuals nominated by the Board to serve as Directors?
The Board of Directors is divided into three classes. Each class has a term
of office for three years, and the term of each class ends in a different year.
The Board has nominated three persons, each of whom is listed under "Nominees
for Three-Year Terms Expiring in 2005", for election as Class II Directors to
serve until the 2005 annual meeting of shareholders and until their successors
have been elected. Two of those directors, G. Jackson Ratcliffe, Jr. and
Richard M. Rompala, are currently serving as Class II Directors. The third,
Joseph D. Rupp, was elected by the Board of Directors pursuant to Olin's
By-Laws as a new Class III director on January 1, 2002. Olin's By-Laws require
that any director elected by the Board of Directors shall serve only until the
next election of Directors by the shareholders. The Board has nominated Mr.
Rupp for election by the shareholders as a Class II Director. The Board has
also nominated Donald W. Griffin for election as a Class III Director with a
term expiring in 2003. The terms of the other Directors will continue after the
annual meeting as indicated below.
The Board expects that all of the nominees will be able to serve as
Directors. If any nominee is unable to accept election, a proxy voting in favor
of such nominee will be voted for the election of a substitute nominee selected
by the Board, unless the Board reduces the number of Directors.
CLASS II
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 2005
[PHOTO OF GJ
Ratcliffe] G. JACKSON RATCLIFFE, JR., 66, is Chairman of Hubbell
Incorporated, an international manufacturer of electrical and
electronic products, a position he has held since 1987. From
1987 to 2001, he also served as President and Chief Executive
Officer of Hubbell. 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.,
Sunoco, Inc. and Barnes Group 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, 55, is Chairman and Chief Executive Officer
of The Valspar Corporation, a manufacturer and distributor of
paints and coatings. Mr. Rompala has held the position of
Chairman of Valspar since 1998 and Chief Executive Officer of
Valspar since 1995. From 1994-2001, he also served as President
of Valspar. Prior to 1994, 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.
[PHOTO OF
Joseph D.
Rupp] JOSEPH D. RUPP, 51, is President and Chief Executive Officer of
Olin, a position he has held since January 2002. Prior to that
and since March 2001, he was Executive Vice President,
Operations, and was responsible for all Olin business operations
including Brass, Winchester and Chlor Alkali Products. He joined
Olin's Brass Division in 1972 and held a number of positions of
increasing responsibility in the Brass manufacturing and
engineering organization. In 1985, he was appointed Vice
President, Manufacturing and Engineering. He was appointed
President of Olin Brass and a Corporate Vice President in 1996.
He holds a BS degree in Metallurgy from the University of
Missouri, Rolla. Olin Director since 2002.
5
CLASS III
NOMINEE FOR TERM EXPIRING IN 2003
[PHOTO OF DW
Griffin] DONALD W. GRIFFIN, 65, is Chairman of Olin, a position he has
held since 1996. Until January 1, 2002 he also served as Olin's
President and Chief Executive Officer. 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 and Barnes Group Inc. 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.
The Board recommends that you vote FOR the election of Mr. Ratcliffe, Mr.
Rompala and Mr. Rupp as Class II Directors, and for the election of Mr. Griffin
as a Class III Director.
How many votes are required to elect a Director?
A nominee will be elected as a Director if a plurality of the votes cast in
the election are in favor of the nominee. Abstentions and shares held in street
name that are not voted in the election of Directors will not be included in
determining the number of votes cast.
6
Who are the other remaining Directors and when are their terms scheduled to
expire?
The terms of the following Directors will continue after the 2002 annual
meeting, as indicated below.
CLASS III
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2003
[PHOTO OF WW
Higgins] WILLIAM W. HIGGINS, 66, 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, 62, 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 is a Director of Liberty Mutual Holding
Company Inc. and 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.
7
CLASS I
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2004
[PHOTO OF RW
Larrimore] RANDALL W. LARRIMORE, 54, 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 and a member of the Board of Directors of United
Stationers and Evanston Northwestern Healthcare. He is also a
Director of Students In Free Enterprise (S.I.F.E.) and a trustee
of Lake Forest Academy. 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, 60, 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, a Director of Carlisle Companies
Incorporated and a former Director and Audit Committee Chair of
Primex Technologies, Inc. Olin Director since 1999.
8
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
How many meetings did Board members attend?
During 2001, the Board held six meetings. Each of the current Directors
attended 100% of the meetings of the Board and committees of the Board on which
they served.
What are the committees of the Board?
The Audit Committee, which held five meetings during 2001, advises the Board
on internal and external audit matters affecting us. The audit committee:
. recommends the appointment of our independent auditors, reviews with
such auditors the scope and results of their examination of our
financial statements and any investigations and surveys by such
auditors;
. reviews its charter annually and publishes the charter in the annual
meeting proxy statement in accordance with SEC regulations;
. reviews our annual audited financial statements before filing or
distribution;
. reviews with management and our independent auditors, the interim
financial results and related press releases before issuance to the
public;
. reviews audit plans, activities and reports of our internal and
regulatory audit departments;
. reviews the presentations by management and our independent auditors
regarding our financial results;
. monitors our litigation process including major litigation and other
legal matters that impact our financial statements or compliance with
the law;
. monitors our insurance and risk management process; and
. oversees our ethics and business conduct programs and procedures.
The Compensation Committee, which held four meetings during 2001, sets
policy, develops and monitors strategies for, and administers the programs that
are used to compensate the chief executive officer and other senior executives.
The compensation committee:
. approves the salary plans for senior executives including their total
direct compensation opportunity, comprised of base salary, annual
incentive standard and long-term incentive guideline award;
. approves the measures, goals, objectives, weighting, payout matrices,
performance certification and actual payouts for the incentive
compensation plans;
. administers the incentive compensation plans, stock option plans and
long-term incentive plans;
. issues an annual report on executive compensation that appears in this
proxy statement;
. approves executive and change-in-control agreements;
. approves and adopts new tax-qualified and non-qualified pension plans,
approves terminations of tax-qualified and non-qualified pension
plans, administers deferred compensation arrangements, administers the
Senior Executive Pension Plan and makes recommendations to the Board
on any other matters pertaining to the pension, 401(k) and other plans
which the compensation committee deems appropriate; and
. advises the Board on the compensation of directors.
9
The Directors and Corporate Governance Committee, which held four meetings
during 2001, assists the Board in fulfilling its responsibility to our
shareholders relating to the selection and nomination of officers and
Directors. The directors and corporate governance committee:
. makes recommendations to the Board regarding the election of the chief
executive officer;
. reviews the nominees for our other officers;
. annually evaluates the performance of the chief executive officer;
. makes recommendations to the Board regarding the size and composition
of the Board and the qualifications and experience that might be sought
in Board nominees;
. seeks out and recommends possible candidates for nomination and
considers recommendations by shareholders, management, employees and
others for candidates for nomination and renomination as Directors;
. assesses whether the qualifications and experience of Board nominees
meet the current needs of the Board;
. 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;
. reviews and makes recommendations to the Board regarding the
composition, duties and responsibilities of various Board committees;
. reviews and advises the Board on such matters as protection against
liability and indemnification; and
. reports periodically to the Board on the performance of the Board itself
as a whole.
The Executive Committee meets as needed in accordance with our By-laws.
Between meetings of the Board, the executive committee may exercise all the
power and authority of the Board (including authority and power over our
financial affairs) except for matters reserved to the full Board by Virginia
law and matters for which the Board gives specific directions. During 2001,
this committee held no meetings.
How are the Directors compensated?
During 2001, we compensated each non-employee Director on the Board with:
. an annual retainer of $30,000, of which $25,000 was paid or credited in
the form of shares of common stock.
. shares of common stock with an aggregate fair market value equal to
$24,000, rounded to the nearest 100 shares.
. a fee of $1,500 for each meeting of the Board and for each meeting of a
committee of the Board attended by a committee member.
. a $5,000 annual fee for committee chairs.
. reimbursement for expenses incurred in the performance of their duties
as Directors.
. a 100% matching contribution to an eligible institution for gifts made
by a Director (50% for gifts made after November 1, 2001) to such
institution, but the matching gift plan is limited to $5,000 per
Director per year.
. insurance coverage while on Company business under our business travel
accident insurance policy.
. a special one-time fee of $6,000, for significant succession planning
work outside the normal director duties during 2001.
10
Directors may elect to receive common stock instead of cash for any portion
of their cash compensation and to defer any stock or cash payments. 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. If there is a "Change in Control" as
defined in the 1997 Stock Plan for Non-Employee Directors, (what we refer to as
the Directors Plan) the balance of any deferred account is paid to the
Directors.
The Directors' Plan also holds, as ''phantom'' shares, the shares of common
stock of Arch Chemicals, Inc. issued to any Director as a dividend distribution
on their shares of Olin common stock held in their Directors' Plan accounts at
the time of the spin-off of Arch Chemicals, Inc. Those Arch Chemicals, Inc.
phantom shares are payable only in cash, unless a Director elects to transfer
the Arch Chemicals, Inc. phantom shares into their Olin common stock accounts.
Directors who are also employees of Olin do not receive any extra
compensation for their services as Directors.
11
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
How much stock is beneficially owned by each Director and nominee for Director
and by the individuals named in the Summary Compensation Table?
This table shows how many shares of our common stock certain persons
beneficially owned on January 15, 2002. Those persons include each Director and
Director nominee, each individual named in the Summary Compensation Table on
page 17, and all current Directors and executive officers as a group. A person
has "beneficial ownership" of shares if the person has voting or investment
power over the shares or the right to acquire such power within 60 days.
"Investment power" means the power to direct the sale or other disposition of
the shares. Each person has sole voting and investment power over the number of
shares listed, except as noted in the following table.
No. of Shares Percent of
Beneficially Common
Name of Beneficial Owner Owned(a) Stock(b)
------------------------ ------------- ----------
Donald W. Griffin(c).................................................... 789,201 1.8
William W. Higgins(d)................................................... 228,686 --
Randall W. Larrimore.................................................... 17,106 --
Stephen F. Page......................................................... 8,853 --
G. Jackson Ratcliffe, Jr................................................ 25,316 --
Richard M. Rompala...................................................... 17,217 --
Joseph D. Rupp.......................................................... 185,737 --
Anthony W. Ruggiero..................................................... 318,074 --
Thomas M. Gura.......................................................... 143,322 --
Peter C. Kosche(c, e)................................................... 222,223 --
Directors and executive officers as a group, including those named above
(15 persons)(c, d, e).................................................. 2,425,415 5.4
--------
(a)Includes shares credited under the CEOP on January 15, 2002, shares of
common stock credited to deferred accounts under the Directors Plan, and
shares that may be acquired within 60 days (by March 15, 2002) through the
exercise of stock options as follows:
Number of Shares Number of Shares
Held in Director Subject to Options
Name Deferred Accounts* Exercisable in 60 days
---- ------------------ ----------------------
Mr. Griffin.......................... -- 678,550
Mr. Higgins.......................... 21,428 --
Mr. Larrimore........................ 16,606 --
Mr. Page............................. 6,853 --
Mr. Ratcliffe........................ 23,316 --
Mr. Rompala.......................... 16,717 --
Mr. Rupp............................. -- 143,413
Mr. Ruggiero......................... -- 263,793
Mr. Gura............................. -- 110,937
Mr. Kosche........................... -- 172,415
Directors and executive officers as a
group, including those named above,
(15 persons)....................... 84,920 1,793,718
--------
* Such shares have no voting rights.
(b)Unless otherwise indicated, beneficial ownership does not exceed 1% of the
outstanding shares of common stock.
(c)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.
12
(d)Includes 84,220 shares held in two trusts of which his spouse is beneficiary
and co-trustee; and 42,300 shares held in three 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.
(e)Includes 838 shares held by Mr. Kosche's daughter.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and Directors, and persons who own more than ten percent of our common stock,
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission, and these persons must furnish us with copies of the forms
they file. Based solely on our review of the copies of these forms furnished to
us and on written representations, we believe that our officers, Directors and
ten-percent beneficial owners complied with all Section 16(a) filing
requirements.
13
EXECUTIVE COMPENSATION
Report of the Compensation Committee on Executive Compensation for 2001
Compensation Philosophy
Olin designs its executive compensation policies and program based on
specific objectives:
. 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.
To accomplish these objectives, the Company emphasizes variable compensation,
an emphasis consistent with competitive practice.
Executive Compensation Program as Administered in 2001
The compensation committee establishes total compensation opportunities (and
the three individual components) for the CEO and other named executive officers
targeted to the median of a group of more than 600 companies that represent
general U.S. industry, referred to as the "comparator group."
Independent executive compensation consultants provide the committee with an
annual assessment of the Company's relative position within this comparator
group. The total target compensation opportunity for each executive includes
the following components:
. annual base salary
. annual incentive award opportunity
. long term incentive award
Once the committee determines the total targeted compensation opportunity for
the CEO and the other named executive officers, the committee determines the
appropriate mix of these three components, again with the advice of outside
executive compensation consultants, using the competitive analysis.
The Company implemented the Economic Value Added (EVA/(R)/) business
management system beginning in 1996 and continued to use this measurement
system in 2001, as the primary basis for the annual incentive plan discussed
below./(1)/ 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.
Base Salary
Effective January 1, 2001, the CEO's base salary was increased to $760,000,
3.4% over the 2000 level. Factors utilized by the committee in determining the
CEO's 2001 salary included analyses of the comparator group and the scope of
his responsibilities. The CEO's base salary was above the median of the
comparator group in 2001.
The compensation committee used the same methodology to determine base
salary adjustments for the other four named executive officers.
--------
/(1)/ EVA is a registered trademark of Stern Stewart & Company.
14
Annual Incentive Award
Olin makes incentive awards based on two elements: (1) Olin's EVA
performance and (2) performance against personal and team objectives. The CEO's
total award was determined using a weighting of 75% on EVA performance and 25%
on performance against personal and team objectives. For 2001, the EVA
performance element compares Olin's actual EVA performance against a
predetermined target. EVA performance was below the target for 2001.
The Company maintains a "bonus bank" account for each individual
participating in the award plan. We pay a predetermined portion of the annual
EVA performance award, if any, (plus a predetermined portion of the bonus bank
balance, if the bank balance is positive) in a given year. For 2001, the
predetermined payout percent was 33% for the executive officers. 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.
With performance below target, bank balances may become negative, in which
case, they must be offset and therefore will reduce future awards. If bonus
bank balances carried over from the prior year are negative, an executive
receives the predetermined payout percent of the declared EVA 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.
The discretionary portion 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 2001 incentive payout was $150,000, which represents his targeted
discretionary award for performance against personal and team objectives. He
received no payout for EVA performance. This compares to a total annual
incentive payout in 2000 of $437,842, made up of a $292,842 payout for EVA
performance and an award of $145,000 for performance against personal and team
objectives. His ending 2001 EVA performance-related bank balance is a negative
$284,558, compared to a positive balance of $322,942 in 2000.
The actual awards for the Executive Vice President, Operations, the
Executive Vice President & Chief Financial Officer and the Senior Vice
President, Corporate Affairs, were determined in a similar fashion, with 75%
based on the Company's EVA performance and 25% based on performance toward
their personal and team objectives. The award for the other named executive
officer, a Division President, was based on a combination of the Company's EVA
and his Divisions' EVA performance (75% weighting) and his personal and team
objectives (25% weighting).
Long Term Incentive Award
The compensation committee determined the long term incentive award
opportunity for each named executive officer in early 2001, based on the
competitive analysis described above. Under the 2001 long term incentive plan,
stock options represent one-half of the aggregate value of the long term
incentive award opportunity, and performance share awards make up the other
half.
In 2001, Olin made changes in the method used to determine the grant size
for stock options. The sum of all of the option grants determines the aggregate
pool of options. This pool increases or decreases depending on Olin's trailing
three-year total shareholder return. Total shareholder return, or TSR,
represents the increase in the fair market value of Olin common stock over the
relevant period,
15
including reinvestment of dividends, as calculated for the Performance Graph on
page 21. The option grant pool increases by 25% when Olin's TSR falls within
the top third relative to the TSR for companies in the S&P MidCap 400. The
option grant pool shrinks by 25% when Olin's TSR falls within the bottom third
relative to the TSR for companies in the S&P MidCap 400. Olin reduced its 2001
stock option grant pool by 25%, because Olin's trailing three-year TSR fell in
the bottom third of the companies in the S&P MidCap 400.
The CEO and other named executive officers received stock option grants in
2001. The option price was set at the fair market value of common stock on the
date of the grant, and the options have a ten-year term. The CEO's options vest
on April 1, 2002, and the remaining option grants vest one-third each year
beginning in 2002. We also accelerated the vesting of Mr. Griffin's stock
options for 66,640 shares from the originally scheduled vesting date of January
27, 2003 to April 30, 2002. This modification did not result in any charge to
our earnings, as the exercise price for the options of $18.97 per share is
above the market price for our common stock.
Individual standard option grant sizes are fixed by competitive analyses.
Actual grants made to individuals may be increased or decreased by up to 25% by
this committee (or the CEO for non-officers). The total of all adjusted grants
may not exceed the aggregate pool of available options for the year.
The other half of the individual long term incentive requirement takes the
form of performance shares, with the number of performance shares based on the
competitive analysis and the price of Olin common stock at the time of the
grant. At the end of a three-year performance cycle, participants receive a
performance share award denominated in shares of Olin common stock, paid half
in shares of Olin common stock and half in cash, based on Olin's average annual
return on capital in relation to the average annual return on capital among the
S&P MidCap 400 companies. Return on capital, or ROC, means Olin's consolidated
net income, 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 Olin's average consolidated total assets less total non-interest
bearing liabilities. The award may increase by as much as 50% if Olin's average
annual ROC falls in the top 20% of the S&P MidCap 400 performance and may fall
to 25% if Olin's performance drops to the bottom 20% of the S&P MidCap 400
performance. The CEO and other named executive officers received grants of
performance shares in 2001. The terms of Mr. Griffin's 2001 performance share
grant were modified to provide him with the benefits of all such performance
shares (rather than a pro rata portion) at such time as shares are issued to
other executive officers in accordance with the terms of the 2001 Performance
Share Program.
Section 162(m) of the Internal Revenue Code denies Olin a deduction for
compensation paid to a named executive officer in a taxable year, to the extent
his compensation that does not meet the definition of "performance-based
compensation" exceeds $1,000,000. Olin structures the stock options, and
significant portions of the remaining long term incentive and of the annual
incentive, to meet the criteria for performance-based compensation. It is
possible, however, that the portions of these awards that do not qualify as
"performance-based compensation," when combined with salary and other forms of
compensation Olin pays to a named executive officer, may exceed this limitation
in any particular year.
January 31, 2002
G. Jackson Ratcliffe, Jr., Chairman
Randall W. Larrimore
Richard M. Rompala
16
This table shows information about compensation for the Chief Executive
Officer and the other four most highly compensated executive officers in 1999,
2000 and 2001.
Summary Compensation Table
Long-Term
Annual Compensation Compensation
------------------------------ ---------------------
Awards Payouts
---------- ----------
Other All
Name and Principal Annual Securities Long-Term Other
Position as of Compen- Underlying Incentive Compen-
December 31, 2001 Year Salary Bonus(b) sation Options Payouts(d) sation(e)
----------------- ---- -------- -------- ------- ---------- ---------- ---------
Donald W. Griffin.................... 2001 $760,008 $150,000 (c) 72,750 $ 0 $ 99,328
Chairman of the Board, President & 2000 735,000 437,842 (c) 400,000 0 62,583
Chief Executive Officer (a) 1999 700,008 287,500 (c) 150,000 248,250 70,801
Joseph D. Rupp....................... 2001 $390,008 $ 63,837 (c) 15,750 $ 0 $ 28,124
Executive Vice President, 2000 325,008 157,892 (c) 80,000 0 20,252
Operations (a) 1999 300,000 103,720 (c) 30,000 77,875 16,814
Anthony W. Ruggiero.................. 2001 $425,004 $ 55,000 (c) 27,750 $ 0 $ 31,130
Executive Vice President and 2000 415,008 158,529 (c) 160,000 0 293,168
Chief Financial Officer 1999 400,008 150,000 (c) 60,000 0 326,363
Thomas M. Gura....................... 2001 $333,340 $ 42,500 (c) 13,500 $ 0 $ 42,908
Vice President and President, 2000 300,000 180,682 (c) 80,000 0 21,790
Brass & Winchester Divisions 1999 275,004 193,007 (c) 30,000 77,875 19,154
Peter C. Kosche...................... 2001 $352,008 $ 47,500 (c) 21,000 $ 0 $ 27,753
Senior Vice President, 2000 340,008 135,882 (c) 100,000 0 26,312
Corporate Affairs 1999 325,008 118,750 (c) 40,000 51,505 22,791
--------
(a)Effective January 1, 2002, Mr. Rupp became President and Chief Executive
Officer. Mr. Griffin remains as Chairman of the Board.
(b)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.
We did not make any bonus payments to Messrs. Griffin, Ruggiero or Kosche
for the Company's EVA Performance for 1999 and 2001.
(c)We did not pay "Other annual compensation" 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.
(d)As required by Securities and Exchange Commission rules, we report LTIP
awards 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.
(e)Amounts reported in this column for 2001 are comprised of the following
items:
Value of Split-
Exercise of Dollar
Arch Stock CEOP Supplemental Term Life Life Insurance
Options (1) Match CEOP (2) Insurance (3) Premiums (4)
----------- ------ ------------ ------------- ---------------
Donald W. Griffin.. $40,980 $5,138 $17,813 $1,390 $34,007
Joseph D. Rupp..... 8,055 5,175 6,675 1,390 6,829
Anthony W. Ruggiero 0 4,575 8,325 1,390 16,840
Thomas M. Gura..... 21,845 5,188 4,963 1,390 9,522
Peter C. Kosche.... 4,478 5,175 5,535 1,390 11,175
--------
(1)Olin employees may exercise their options for shares of Arch
Chemicals, Inc. common stock (issued in the 1999 spin-off of Arch
Chemicals) for either a cash payment or for Arch Chemicals common
stock. Olin pays the difference between the option exercise price
and the fair market value of Arch Chemicals common stock at the time
of exercise to the employee if he or she elects to take cash, or to
Arch, which then issues the appropriate number of shares to the
employee, if the employee elects to take stock.
(2)Under the Supplemental CEOP, CEOP participants whose contributions
are limited under certain IRS regulations, may make tax deferred
contributions as would otherwise be permitted in the CEOP. We match
Supplemental CEOP contributions, as we would under the CEOP. The
amounts of our matching contributions made on behalf of the
executives are shown.
(3)The key executive life insurance program offers executives the
choice between additional life insurance or monthly income benefits
for their spouse and children, if they die while working for Olin.
We fund these benefits through life insurance and the premiums we
paid are shown.
(4)Represents the total amount of the premiums we paid in 2001 for life
insurance and to fund the retiree death benefits.
17
Stock Option Plans
We grant to key employees, selected by the compensation committee, options
to purchase shares of common stock. The option price must be at least the fair
market value of the common stock on the date of the grant and the 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 an optionee to pay
the exercise price of the options with common stock, valued at the market price
on the date of exercise. Except for anti-dilution adjustments, options do not
provide for repricing or other adjustments to the exercise price.
This table provides information about stock options we granted in 2001 to
the individuals named in the Summary Compensation Table on page 17.
Option Grants of Common Stock in 2001
Individual Grants
-----------------------------------------------------------------------
Potential Realizable Value at
Assumed Rates of
Stock Price Appreciation
for Option Term(c,d)
-----------------------------
% of Total
Number of Options
Securities Granted
Underlying to All
Options Employees Exercise Expiration
Name Granted(a) in 2001 Price(b) Date 5% 10%
---- ---------- ---------- -------- ---------- ------------ --------------
Donald W. Griffin.. 72,750 16.1 $18.63 2/7/11 $ 852,361 $ 2,160,051
Joseph D. Rupp..... 15,750 3.5 18.63 2/7/11 184,532 467,640
Anthony W. Ruggiero 27,750 6.1 18.63 2/7/11 325,128 823,937
Thomas M. Gura..... 13,500 3.0 18.63 2/7/11 158,170 400,834
Peter C. Kosche.... 21,000 4.7 18.63 2/7/11 246,042 623,520
All Shareholders... N/A N/A N/A N/A 508,958,984 1,289,796,906
All Optionees...... 451,300 100.0 18.59 (e) 5,276,216 13,370,969
--------
(a)We awarded stock options to the five named individuals effective February 8,
2001. The options granted to Mr. Griffin become exercisable on April 1,
2002. The remaining options become exercisable in three equal annual
increments, beginning on February 8, 2002.
(b)The per share exercise price of the options is equal to the fair market
value of common stock on the grant dates (calculated on a weighted average
basis).
(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 our stock price or to establish any present value of
the options.
(d)Realizable values are computed based on the number of options granted in
2001 and still outstanding at year-end.
(e)The expiration dates of options granted during 2001 are February 7, 2011,
March 1, 2011, and August 8, 2011.
18
This table describes options exercised during 2001 and the outstanding
options at the end of 2001 for the individuals named in the Summary
Compensation Table on page 17.
Aggregated Option Exercises in 2001 and Year-end 2001 Stock Option Values
Number of Securities Aggregate Value of
Underlying Unexercised Unexercised, In-the-Money
Options at 12/31/01 Options at 12/31/01(a)
------------------------- -------------------------
Shares
Acquired
On Value
Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name (#) ($) (#) (#) ($) ($)
---- -------- -------- ----------- ------------- ----------- -------------
Donald W. Griffin.. 18,796 115,407 561,870 456,070 84,141 14,500
Joseph D. Rupp..... 3,882 32,434 114,830 92,416 18,605 2,900
Anthony W. Ruggiero 0 0 207,871 181,078 11,600 5,800
Thomas M. Gura..... 3,882 22,323 83,104 90,166 6,193 2,900
Peter C. Kosche.... 1,879 13,472 135,412 117,663 20,390 3,867
--------
(a)Value was computed as the difference between the exercise price and the
$16.14 per share closing price of our common stock on December 31, 2001, as
reported on the consolidated transaction reporting system relating to New
York Stock Exchange issues.
The following table describes performance share awards we made in 2001 to
the individuals named in the Summary Compensation Table on page 17.
Long-Term Incentive Plan--Awards in Last Fiscal Year
Estimated Future Payouts under
Non-Stock Price-Based Plans(a)
------------------------------
Number Performance or Other
of Period Until Threshold Target Maximum
Name Shares Maturation or Payout (#) (#) (#)
---- ------ -------------------- --------- ------ -------
Donald W. Griffin.. 47,000 December 31, 2003 11,750 47,000 70,500
Joseph D. Rupp..... 10,000 December 31, 2003 2,500 10,000 15,000
Anthony W. Ruggiero 18,000 December 31, 2003 4,500 18,000 27,000
Thomas M. Gura..... 9,000 December 31, 2003 2,250 9,000 13,500
Peter C. Kosche.... 13,000 December 31, 2003 3,250 13,000 19,500
--------
(a)Actual number of shares paid (payable one-half in stock and one-half in
cash) ranges between 25% and 150% of target number, based upon our average
annual return on capital compared to the average annual return on capital of
the Standard & Poor's MidCap 400 companies over the performance period.
19
This table summarizes share and exercise price information about our equity
compensation plans as of December 31, 2001. While we are not required to
provide this disclosure to shareholders until 2003, we are including it this
year to enhance shareholder understanding of our equity compensation plans.
Equity Compensation Plan Information
(a) (b) (c)
----------------------- ----------------- ----------------------------
Number of securities
Number of securities to Weighted-average remaining available for
be issued upon exercise price of future issuance under
exercise of outstanding outstanding equity compensation
options, warrants options, warrants plans (excluding securities
Plan Category and rights(1)(2) and rights reflected in column (a) (2))
------------- ----------------------- ----------------- ----------------------------
Equity compensation plans approved
by security holders............. 5,636,272(3) $20.68 2,112,610
Equity compensation plans not
approved by security holders.... None N/A N/A
--------
(1)Does not include (i) an aggregate of 76,200 shares of restricted stock
payable over the years 2002, 2003 and 2004, (ii) a maximum of 130,212 of
performance shares payable in 2004, or (iii) 93,299 shares granted and
deferred under the Directors Plan.
(2)Number of shares is subject to adjustment for changes in capitalization for
stock splits and stock dividends and similar events.
(3)Includes options for 924,000 shares with an exercise price of $18.97 per
share, that are exercisable only upon the earlier of December 27, 2009 (one
month before the options expire) 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. The weighted average
remaining exercise period for the outstanding options listed in the table
above was 6.25 years at December 31, 2001.
20
Performance Graph
This graph compares the total shareholder return on our common stock with
the total return on the S&P Midcap 400 and our peer group for the five-year
period from December 31, 1996 through December 31, 2001. The cumulative return
includes reinvestment of dividends.
Our peer group consists of Georgia Gulf Corporation, Brush Engineered
Materials Inc., Chase Industries Inc., Mueller Industries, Inc. and Wolverine
Tube, Inc. Our Peer Group is 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. We
calculated the weighted return for each year by multiplying (a) the percentage
that each corporation's market capitalization represented of the total market
capitalization for all corporations in our Peer Group for such year by (b) the
total shareholder return for that corporation for such year. Our Peer Group no
longer includes Pioneer Companies, Inc., as Pioneer's previously outstanding
common stock was cancelled in 2001 as part of Pioneer's Chapter 11 bankruptcy
proceedings in the United States (and parallel proceedings in Canada).
[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
---------------- ---------- --------------
12/96 $100 $100 $100
12/97 134 125 132
12/98 83 80 158
12/99 99 118 181
12/00 116 89 212
12/01 89 96 196
* $100 invested on 12/31/96 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 our common
stock as of January 7, 1997 and February 9, 1999, respectively.
12/96 12/97 12/98 12/99 12/00 12/01
----------------------------------------------------
OLIN CORPORATION 100 134 83 99 116 89
PEER GROUP...... 100 125 80 118 89 96
S & P MIDCAP 400 100 132 158 181 212 196
21
EXECUTIVE AGREEMENTS
As of December 31, 2001, Olin had compensation agreements with the executive
officers named in the table on page 17 and five other officers. These
agreements provide, among other things, that the officer will receive a payment
from Olin if the individual's employment is terminated (other than for cause),
or the employee elects to leave Olin under certain circumstances. The payment
includes a lump sum severance payment equal to 12 months' salary plus the
greater of:
. the average incentive compensation award paid by Olin during the three
years before the termination, or
. the standard annual incentive compensation award, less any amounts
payable under existing disability plans of Olin, instead of other Olin
severance benefits.
Olin provides pension credit and insurance coverage for twelve months, and in
certain cases, beyond such period. The agreements also provide for outplacement
services.
If a "Change in Control" of Olin occurs, the agreements provide that the
officer will receive a lump sum severance payment equal to three times the
severance payment described above. A "Change in Control" occurs 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 current Directors and their designated successors become a
minority of the Board over a two-year period;
. substantially all of our business is disposed of in a transaction in
which Olin is not the surviving corporation; or
. Olin merges with another company and is the surviving corporation
(unless Olin shareholders own more than 50% of the voting stock or
other ownership interest of the combined company).
In the event of a "Change in Control" of Olin, these executive agreements
require qualified individuals to continue to work for a period of six months
after an announcement or a contract providing for a potential "Change of
Control," provided that the individual retains substantially the same position
as before the potential "Change in Control." These executive agreements expire
on September 30, 2002, (or, if a "Change in Control" occurs before that date,
three years following the "Change in Control"). These executive agreements
also provide that any payments made under any "Change in Control" provision in
any compensation or benefit plan of Olin subject to the "excess parachute
payment" tax will be increased so that the executive will receive the same net
payment as 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.
22
RETIREMENT BENEFITS
Qualified Pension Plan for Employees
We provide fixed retirement benefits through a tax qualified pension plan
and two non-qualified plans described below. The normal retirement age is 65,
but early retirement is available after age 55 with at least 10 years of
service. (If early retirement is before age 62, the employee receives reduced
benefits.) The pension benefits are calculated based on the average cash
compensation per year (salary and bonus shown in the Summary Compensation Table
on page 17) for the highest three years during the ten years before and
including the year in which an employee retires. The normal retirement
allowance is 1.5% of the employee's average compensation multiplied by the
number of years of 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).
When the employee qualifies and elects to retire, the benefits of the
qualified plan will be paid in monthly installments, unless the present value
of the benefit is less than $5,000. The qualified pension plan, called 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 increase for affected participants (and retired participants) to
absorb any surplus plan assets.
Non-Qualified Supplemental Employee Pension Plan
Under this non-qualified supplemental pension plan, we pay a supplemental
pension based on the formula described above on deferred compensation,
including deferred incentive compensation.
The non-qualified supplemental pension plan also provides additional pension
benefits to highly compensated employees, whose benefits from qualified plans
are limited by the Internal Revenue Code. This plan provides for the payment of
supplemental pension benefits equal to the reduction in the qualified plan
benefit resulting from the IRS limitations.
The non-qualified supplemental pension plan provides that unless the
executive elects installment payments, the executive will receive benefits
under the plan in a lump sum, provided the lump sum exceeds $100,000.
In the event of a "Change in Control", we will pay each eligible employee a
lump sum amount sufficient to purchase an annuity which will provide the same
monthly after tax benefit as the employee would have received under the plan
based on benefits accrued as of the date of the Change in Control. The lump sum
payment will be reduced to take into consideration monthly payments provided
under trust arrangements or other annuities we establish or purchase to make
payments under this plan.
Senior Executive Pension Plan
Our Senior Executive Pension Plan provides additional pension benefits for
senior executives. Under this plan, we pay pension benefits to certain senior
executives when they retire after age 55 (with reduced benefits if they retire
before age 62). The benefits are based on the average cash compensation per
year (salary and bonus shown in the Summary Compensation Table on page 17) for
the highest three years during the ten years including the year in which an
executive retires. The benefits equal 3% of the executive's average
compensation multiplied by the number of years of service in a senior executive
position, reduced by pension benefits that accrued under our qualified and
non-qualified plans for the period of time credited under the Senior Executive
Pension Plan, and
23
further reduced by 50% of employee's primary Social Security benefit. The
maximum benefit payable is 50% of the employee's average compensation reduced
by amounts payable from our qualified and non-qualified plans and certain
adjustments set forth in the plan documents, if applicable. The Senior
Executive Pension Plan also provides benefits to an executive's surviving
spouse equal to 50% of the executive's benefits.
To receive benefits under the Senior Executive Pension Plan, an executive
must meet the service requirements and other plan provisions regarding
suspension of benefit accruals and cessation of benefits. Even if the benefits
have accrued, the compensation committee may remove a participant from the
Senior Executive Pension Plan for cause.
The Senior Executive Pension Plan provides that unless the executive elects
installment payments, the executive will receive benefits under the plan in a
lump sum payment upon retirement as long as the lump sum would exceed $100,000.
However, in the event of a "Change in Control," the plan will pay qualified
executives a lump sum amount sufficient to purchase an annuity which will
provide the same after-tax benefit. In addition, the agreements described above
under "Executive Agreements" provide that an executive officer who is less
than age 55 at the time of a "Change in Control," will be treated as if he or
she had retired at age 55, and the lump sum payment will be calculated based on
the years of service at the date of a "Change in Control."
The following table shows the maximum amount of retirement benefits annually
payable under the qualified pension plan, the non-qualified supplemental
pension plan and the senior executive pension plan. These amounts will be
reduced by Social Security benefits and 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, 2001 are as follows: Mr. Griffin, 40.6 years (20.8 years under the Senior
Plan); Mr. Rupp, 28.9 years (15.4 years under the Senior Plan); Mr. Ruggiero,
6.3 years (6.3 years under the Senior Plan); Mr. Gura, 33.5 years (14.4 years
under the Senior Plan); and Mr. Kosche, 28.8 years (8.6 years under the Senior
Plan).
24
Other
Under our 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 five meetings during 2001. The meetings were
designed to facilitate and encourage private communication between the audit
committee and the internal auditors and our independent public accountants,
KPMG LLP.
The audit committee consists of three Directors, all of whom meet the audit
committee member requirements under NYSE listing standards. The audit committee
acts under a written Charter adopted by the Board of Directors in 1997, which
is reviewed annually and was last updated in 2000.
The audit committee reviewed and discussed the audited financial statements
for fiscal year 2001 with management and the independent auditors.
Specifically, the audit 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 include, among other things:
. methods Olin used to account for significant and unusual transactions;
. the effect of important accounting policies in controversial or
emerging areas for which there is no authoritative guidance;
. the process management used to formulate sensitive accounting
estimates and the auditor's conclusions regarding the reasonableness
of those accounting estimates; and
. disagreements, if any, 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 audit committee received the written disclosures and a
letter from our independent accountants, KPMG LLP, required by Independence
Standards Board Standard No. 1, INDEPENDENCE DISCUSSIONS WITH AUDIT COMMITTEES.
The audit committee discussed with KPMG the issue of its independence from
Olin. The audit committee also reviewed the fees paid to KPMG during 2001 to
ensure that all of the work performed was compatible with maintaining KPMG's
independence.
Based on the audit committee's discussion with management and the
independent accountants and the audit committee's review of management and the
report of the independent accountants, the audit committee recommended that the
Board of Directors include the audited consolidated financial statements in
Olin's Annual Report on Form 10-K for the year ended December 31, 2001 filed
with the Securities and Exchange Commission.
February 28, 2002
William W. Higgins, Chairman
Stephen F. Page
Richard M. Rompala
25
ITEM 2--PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
KPMG LLP was our independent auditor for 2001. A summary of the fees we paid
to KPMG during 2001 follows:
Nature of Service Fees (in thousands)
----------------- -------------------
Audit Fees (including quarterly financial reviews)........ $ 675
Financial Information Systems Design and Implementation... --
All Other Fees:
. Assistance to internal audit........................ 217
. Benefit plan audits................................. 154
. Environmental expense accounting/litigation support. 124
. Tax advice and services............................. 63
. Debt offering comfort letters....................... 50
. Acquisition due diligence........................... 43
. All other........................................... 7
------
Total Fees......................................... $1,333
======
Who has the Board appointed as independent auditors for 2002?
The Board has appointed the firm of KPMG LLP as our independent auditors for
the year 2002. The audit committee recommended the appointment of KPMG.
Is a shareholder vote required to approve Olin's independent auditors?
The law and our By-laws do not require us to submit this matter to the
shareholders at the annual meeting. The Board chose to submit it to the
shareholders to ascertain their views. If shareholders do not ratify their
appointment at the annual meeting, the Board of Directors intends to reconsider
its appointment of KPMG LLP as independent auditors.
Will I have an opportunity to hear from KPMG LLP and ask them questions?
We expect representatives of KPMG LLP to be present at the annual meeting.
They will have an opportunity to make a statement and to respond to appropriate
questions if they desire to do so.
How many votes are required to approve the appointment of KPMG LLP as
independent auditors for 2002?
To approve the appointment of KPMG LLP as independent auditors for 2002, the
votes cast in favor of KPMG LLP must exceed the votes cast in opposition to
KPMG LLP. Abstentions and shares held in street name that are not voted will
not be included in determining the number of votes cast.
How does the Board recommend you vote?
The Board recommends that you vote FOR the ratification of the appointment
of KPMG LLP as our independent auditors for 2002.
By Order of the Board of Directors:
/s/ Stuart N. Roth
Stuart N. Roth
Assistant Secretary
Dated: March 14, 2002
26
[LOGO] PRINTED ON RECYCLED PAPER
Please mark [X]
your votes as
indicated in
this example
The Board of Directors recommends a vote FOR Items 1 and 2.
Item 1--ELECTION OF DIRECTORS Item 2--RATIFICATION OF APPOINTMENT
Nominees: FOR WITHHELD OF INDEPENDENT AUDITORS
01 Donald W. Griffin (except as FOR ALL
02 G. Jackson Ratcliffe, Jr. noted below) FOR AGAINST ABSTAIN
03 Richard M. Rompala
04 Joseph D. Rupp [_] [_] [_] [_] [_]
YES NO
WITHHOLD FOR: (Write that nominee's name in the space WILL ATTEND MEETING [_] [_]
provided below).
YES NO
-------------------------------------------------------------
COMMENTS/ADDRESS CHANGE [_] [_]
(use space on reverse side)
Signature Signature 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 /\
Vote by Internet or Telephone or Mail
24 Hours a Day, 7 Days a Week
Internet and telephone voting is available through 4PM Eastern Daylight Time
the business day prior to annual meeting day.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
------------------------------------- -------------------------------------- --------------------------
Internet Telephone Mail
http://www.eproxy.com/oln 1-800-435-6710
Mark, sign and date
Use the Internet to vote your Use any touch-tone telephone to your proxy card
proxy. Have your proxy card in OR vote your proxy. Have your proxy OR and
hand when you access the web card in hand when you call. You will return it in the
site. You will be prompted to enter be prompted to enter your control enclosed postage-paid
your control number, located in number, located in the box below, envelope.
the box below, to create and and then follow the directions given.
submit an electronic ballot.
------------------------------------- -------------------------------------- --------------------------
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
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 25,
2002, 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 or Arch Chemicals,
Inc. Contributing Employee Ownership Plan. (We refer to both of these plans as
the "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 JPMorgan
Chase Bank, 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 or sending your voting instructions via telephone or Internet.
The Trustee will vote all shares for which no instructions are received in the
same proportion as shares for which it has received instructions. JPMorgan Chase
Bank will vote the shares represented by this Voting Instruction Form if proper
instructions are completed, signed and received by Mellon Investor Services
before 4:00 p.m. EDT on April 24, 2002.
--------------------------------------------------------------------------------
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 /\
OLIN CORPORATION
501 Merritt 7, Norwalk, Connecticut 06856
Dear Shareholder:
You are invited to attend our 2002 Annual Meeting of Shareholders at 8:30 a.m.
Eastern Daylight Time on Thursday, April 25th 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.
Sincerely,
/s/ Stuart N. Roth
Stuart N. Roth
Assistant Secretary