-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GEhg5Pft+oqX4XBCRe2uywfRLifIG4s+HciK0XAvz8mWdzsSTTuOe+VlbQPqMf/s fSvLrAh3fBpTByXogGZIfg== 0000950130-99-003076.txt : 19990518 0000950130-99-003076.hdr.sgml : 19990518 ACCESSION NUMBER: 0000950130-99-003076 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OLIN CORP CENTRAL INDEX KEY: 0000074303 STANDARD INDUSTRIAL CLASSIFICATION: CHEMICALS & ALLIED PRODUCTS [2800] IRS NUMBER: 131872319 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01070 FILM NUMBER: 99625990 BUSINESS ADDRESS: STREET 1: 501 MERRITT 7 STREET 2: P O BOX 4500 CITY: NORWALK STATE: CT ZIP: 06856 BUSINESS PHONE: 2037503000 MAIL ADDRESS: STREET 1: OLIN CORP STREET 2: 501 MERRITT 7 PO BOX 4500 CITY: NORWALK STATE: CT ZIP: 06851 FORMER COMPANY: FORMER CONFORMED NAME: OLIN MATHIESON CHEMICAL CORP DATE OF NAME CHANGE: 19691008 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 ----------------------------------------- OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------------------------------- Commission file number 1-1070 -------------------------------------------------- Olin Corporation - -------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Virginia 13-1872319 - -------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 501 Merritt 7, Norwalk, CT 06851 - -------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (203) 750-3000 - -------------------------------------------------------------------------- (Registrant's telephone number, including area code) - -------------------------------------------------------------------------- (Former name, former address, and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- As of April 30, 1999, there were outstanding 45,517,235 shares of the registrant's common stock. Part I - Financial Information Item 1. Financial Statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Balance Sheets (In millions)
Unaudited March 31, December 31, 1999 1998 --------- ------------ ASSETS - ------ Cash and cash equivalents $ 67.0 $ 50.2 Short-term investments 40.3 25.5 Accounts receivable, net 198.5 192.0 Inventories 206.9 198.8 Income taxes receivable 3.2 33.2 Other current assets 17.1 18.1 -------- -------- Total current assets 533.0 517.8 Investments and advances - affiliated companies at equity 7.0 11.9 Property, plant and equipment (less accumulated depreciation of $1,110.2 and $1,074.7) 465.2 475.0 Other assets 64.4 67.8 Net assets of discontinued operations - 504.5 -------- -------- Total assets $1,069.6 $1,577.0 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Short-term borrowings and current installments of long-term debt $ 1.0 $ 1.0 Accounts payable 90.1 118.1 Income taxes payable 10.7 5.1 Accrued liabilities 150.6 168.1 -------- -------- Total current liabilities 252.4 292.3 Long-term debt 229.8 230.2 Other liabilities 242.6 264.3 Commitments and contingencies Shareholders' equity: Common stock, par value $1 per share: Authorized 120.0 shares Issued 45.7 shares (45.9 in 1998) 45.7 45.9 Additional paid-in capital 240.8 242.8 Accumulated other comprehensive loss (10.2) (24.8) Retained earnings 68.5 526.3 -------- -------- Total shareholders' equity 344.8 790.2 -------- -------- Total liabilities and shareholders' equity $1,069.6 $1,577.0 ======== ========
- ----------------------------------- The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statements of Income (Unaudited) (In millions, except per share amounts)
Three Months Ended March 31, ---------------------- 1999 1998 ------- ------- Sales $ 304.8 $ 359.1 Cost of goods sold 262.9 287.4 Selling and administration 30.9 33.9 Research and development 2.0 1.6 Earnings(loss) of non-consolidated affiliates (2.5) 2.0 Interest expense 3.8 4.8 Interest income 0.7 1.2 Other income 0.1 0.3 -------- -------- Income from continuing operations before taxes 3.5 34.9 Income taxes 1.4 12.1 -------- -------- Income from continuing operations 2.1 22.8 Income from discontinued operations, net of taxes 4.4 16.3 -------- -------- Net income $ 6.5 $ 39.1 ======== ======== Net income per common share: Basic: Continuing operations $ 0.05 $ 0.47 Discontinued operations 0.09 0.34 -------- -------- Total net income $ 0.14 $ 0.81 ======== ======== Diluted: Continuing operations $ 0.05 $ 0.46 Discontinued operations 0.09 0.34 -------- -------- Total net income $ 0.14 $ 0.80 ======== ======== Dividends per common share $ 0.30 $ 0.30 Average common shares outstanding: Basic 45.9 48.6 Diluted 45.9 49.0
- ----------------------------------- The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Condensed Statements of Cash Flows (Unaudited) (In millions)
Three Months Ended March 31, ------------------------- 1999 1998 ------- -------- Operating activities - -------------------- Net income $ 2.1 $ 22.8 Adjustments to reconcile income from continuing operations to net cash and cash equivalents provided by operating activities Loss(earnings) of non-consolidated affiliates 2.5 (2.0) Depreciation and amortization 18.6 19.2 Deferred taxes (4.2) (1.6) Change in: Receivables (6.5) (2.7) Inventories (8.1) (10.6) Other current assets (0.3) 0.8 Accounts payable and accrued liabilities (45.5) (32.8) Income taxes payable 22.5 13.5 Noncurrent liabilities (3.1) 0.9 Other operating activities 3.7 (2.7) ------- ------- Net cash and cash equivalents provided (used) by operating activities from continuing operations (18.3) 4.8 Discontinued operations: Net income 4.4 16.3 Change in net assets (7.3) (67.6) ------- ------- Net operating activities (21.2) (46.5) ------- ------- Investing activities - -------------------- Capital expenditures (8.3) (7.9) Purchases of short-term investments (25.2) (9.4) Proceeds from sale of short-term investments 10.4 16.5 Investments and advances-affiliated companies at equity 2.4 (4.7) Other investing activities 1.1 (1.7) ------- ------- Net investing activities (19.6) (7.2) ------- ------- Financing activities - -------------------- Long-term debt repayments (0.4) - Short-term debt repayments - (0.8) Purchases of Olin common stock (3.2) (38.8) Borrowings under line of credit assumed by Arch Chemicals, Inc. 75.0 - Stock options exercised - 2.0 Dividends paid (13.8) (14.7) Other financing activities - (0.5) ------- ------- Net financing activities 57.6 (52.8) ------- ------- Net increase(decrease) in cash and cash equivalents 16.8 (106.5) Cash and cash equivalents, beginning of period 50.2 156.8 ------- ------- Cash and cash equivalents, end of period $ 67.0 $ 50.3 ======= =======
- ----------------------------------- The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements. OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS 1. The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission and, in the opinion of the Company, reflect all adjustments (consisting only of normal accruals) which are necessary to present fairly the results for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed financial statements be read in conjunction with the financial statements, accounting policies and the notes thereto and management's discussion and analysis of financial condition and results of operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998. 2. Inventory consists of the following:
March 31, December 31, 1999 1998 --------- ------------ Raw materials and supplies $120.6 $113.1 Work in process 87.6 102.4 Finished goods 58.9 46.5 ------ ------ 267.1 262.0 LIFO reserve (60.2) (63.2) ------ ------ Inventory, net $206.9 $198.8 ====== ======
Inventories are valued principally by the dollar value last-in, first-out (LIFO) method of inventory accounting; in aggregate, such valuations are not in excess of market. Costs of other inventories have been determined principally by the average cost and first-in, first-out (FIFO) methods. Elements of costs in inventories include raw material, direct labor and manufacturing overhead. Inventories under the LIFO method are based on annual estimates of quantities and costs as of the year-end; therefore, the condensed financial statements at March 31, 1999, reflect certain estimates relating to inventory quantities and costs at December 31, 1999. 3. Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share reflect the dilutive effect of stock options.
Three Months Ended March 31, ----------------- Basic Earnings Per Share 1999 1998 - ------------------------ ---- ----- Basic earnings: Income from continuing operations $ 2.1 $22.8 Net income $ 6.5 $39.1 Basic shares 45.9 48.6 Basic earnings per share: Continuing operations $0.05 $ 0.47 Net income $0.14 $ 0.81
Three Months Ended March 31, ---------------- 1999 1998 ---- ---- Diluted Earnings Per Share - -------------------------- Diluted earnings: Income from continuing operations $ 2.1 $22.8 Net income $ 6.5 $39.1 Diluted shares: Basic shares 45.9 48.6 Stock options - .4 ------ ------ Diluted shares 45.9 49.0 ====== ====== Diluted earnings per share: Continuing operations $ 0.05 $ 0.46 Net Income $ 0.14 $ 0.80
4. The Company is party to various governmental and private environmental actions associated with waste disposal sites and manufacturing facilities. Environmental provisions charged to income amounted to $4 million for the three months ended March 31, 1999 and 1998. Charges to income for investigatory and remedial efforts were material to operating results in 1998 and may be material to operating results in 1999. The consolidated balance sheets include reserves for future environmental expenditures to investigate and remediate known sites amounting to $129 million at March 31, 1999 and December 31, 1998, of which $99 million was classified as other noncurrent liabilities. Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other potentially responsible parties and the Company's ability to obtain contributions from other parties and the length of time over which site remediation occurs. It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably against the Company. 5. In April 1998, the Board of Directors authorized an additional share repurchase program of up to 5 million shares of Olin common stock, from time to time, as conditions warrant. Since January 1997 the Company has repurchased 7,223,200 shares, of which 2,223,200 were under the April 1998 program. 6. Segment operating income is defined as earnings before interest, other income and income taxes and includes earnings (losses) of non-consolidated affiliates. Segment operating results include an allocation of corporate operating expenses. Intersegment sales are not material. Three Months Ended March 31, --------------- 1999 1998 ---- ---- Sales: Chlor Alkali Products $ 66.9 $ 96.1 Metals 182.3 211.3 Winchester 55.6 51.7 ------ ------ Total sales $304.8 $359.1 ====== ====== Operating income(loss): Chlor Alkali Products $(12.8) $ 21.7 Metals 18.0 18.2 Winchester 1.3 (1.7) ------ ------ Total operating income $ 6.5 $ 38.2 ====== ====== Operating income $ 6.5 $ 38.2 Interest expense 3.8 4.8 Interest income 0.7 1.2 Other income 0.1 0.3 ------ ------ Income from continuing operations before taxes $ 3.5 $ 34.9 ====== ====== 7. As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income," which established standards for the reporting and display of comprehensive income and its components in the financial statements. The Company does not provide for U.S. income taxes on foreign currency translation adjustments since it does not provide for such taxes on undistributed earnings of foreign subsidiaries. The components of comprehensive income for the three-month periods ended March 31, 1999 and 1998 are as follows:
Three Months Ended March 31, ------------------- 1999 1998 ----- ----- Net income $ 6.5 $39.1 Other comprehensive income (loss): Cumulative translation adjustment 1.1 (2.7) ----- ----- Comprehensive income $ 7.6 $36.4 ===== =====
8. On February 8, 1999, the Company completed the Spin-Off of its specialty chemicals businesses as Arch Chemicals, Inc. ("Arch Chemicals"). Under the terms of the Spin-Off, the Company distributed to its holders of common stock of record at the close of business on February 1, 1999, one Arch Chemicals common share for every two shares of Olin common stock. The results of operations have been restated to reflect Arch Chemicals as discontinued operations for all periods presented. The 1999 first quarter net income from discontinued operations includes one month of operating results while the comparable quarter in 1998 includes three months of operating results. Item 2. Management's Discussion and Analysis of Financial Condition ----------------------------------------------------------- and Results of Operations ------------------------- CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended March 31, ---------------- ($ in millions, except per share data) 1999 1998 - ------------------------------------------------------------------ Sales $304.8 $359.1 Gross Margin 41.9 71.7 Selling and Administration 30.9 33.9 Interest Expense, net 3.1 3.6 Income from Continuing Operations 2.1 22.8 Net Income Per Common Share: 6.5 39.1 Basic Income from Continuing Operations $ 0.05 $ 0.47 Net Income $ 0.14 $ 0.81 Diluted Income from Continuing Operations $ 0.05 $ 0.46 Net Income $ 0.14 $ 0.80 - ------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO 1998 Sales decreased 15% due to lower selling prices and metal values. The decrease in selling prices was primarily related to lower Electrochemical Unit ("ECU") prices in the Chlor Alkali Products segment. Also, sales were lower due to the shut down of the rod, wire and tube business at Indianapolis, IN in the fourth quarter of 1998 and the sale of the microelectronics packaging operation in Manteca, CA. Gross margin percentage decreased from 20% in 1998 to 14% in 1999 primarily due to lower ECU prices. Selling and Administration as a percentage of sales was 10% in 1999 up from 9% in 1998 due to the lower sales base in 1999 as a result of lower ECU prices. Selling and Administration was $3 million lower than in 1998 due to lower administrative expenses, primarily pension and management compensation expenses. Interest expense, net of interest income, decreased from 1998 due to lower interest expense as a result of the repayment in May of 1998 of $38 million of 7.97% notes offset in part by lower interest income in 1999 due to lower average cash, cash equivalent and short-term investment balances. The decrease in operating results from the non-consolidated affiliates was due primarily to the operating loss from the Sunbelt joint venture, which was negatively impacted by the lower ECU pricing. The effective tax rate increased to 40.0% from 34.7% due to higher non- deductible expenses related to company-owned life insurance programs. SEGMENT OPERATING RESULTS Segment operating results are defined as earnings (losses) before interest, other income and income taxes and include earnings (losses) of non-consolidated affiliates. Segment operating results include an allocation of corporate operating expenses.
CHLOR ALKALI PRODUCTS Three Months Ended March 31, ----------------- ($ in millions) 1999 1998 - ------------------------------------------------- Sales $ 66.9 $96.1 Operating (Loss) Income (12.8) 21.7
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO 1998 Sales and operating results were lower than 1998 primarily due to lower pricing. Average ECU prices in the first quarter of 1999 were approximately $230, compared to $370 in the first quarter of 1998. Lingering effects of the Asian situation and new chlor-alkali industry capacity additions have caused an oversupply of chlorine and caustic, thereby exerting downward pressure on pricing. The Company expects these influences to continue for several more quarters.
METALS Three Months Ended March 31, ----------------- ($ in millions) 1999 1998 - ------------------------------------------------ Sales $182.3 $211.3 Operating Income 18.0 18.2
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO 1998 Sales decreased 14% due primarily to lower metal values. Lower sales due to the shut down of the rod, wire and tube business at Indianapolis, IN in the fourth quarter of 1998 and the sale of the Company's microelectronic packaging operation at Manteca, CA, also contributed to the sales decline. Lower demand from the distribution market adversely impacted the sales performance at A.J. Oster Company and was the primary reason for the slight decline in segment operating income. The year-over-year comparisons are expected to improve over the balance of the year primarily due to the benefits of the shut down of the unprofitable rod, wire and tube business.
WINCHESTER Three Months Ended March 31, ----------------- ($ in millions) 1999 1998 - ----------------------------------------------- Sales $55.6 $51.7 Operating Income (Loss) 1.3 (1.7)
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO 1998 Sales in 1999 were 8% higher than 1998 due to higher volumes in the commercial markets, particularly in the retail and mass merchant channels offset in part by lower selling prices in some product lines. Higher demand for centerfire rifle and pistol products was driven by new product introductions and competitive pricing. Operating income improved significantly from 1998 due to higher sales and lower manufacturing and commodity costs. In Australia, profits were higher due in part to lower operating expenses. Winchester is the operator of the U.S. Army's Lake City small caliber ammunition plant in Independence, MO. The current five-year contract expires at the end of this year. The Company is one of several bidders for a new ten-year, fixed price contract, which the government expects to award during the third quarter of 1999. 1999 OUTLOOK Lingering effects of the Asian situation and new Chlor-Alkali industry capacity additions have significantly impacted the Company's Chlor-Alkali Products business. The Company expects these influences to continue for several more quarters, resulting in quarterly earnings per share in the 5 to 10 cent range, if the Company's ECU prices continue at current levels. DISCONTINUED OPERATIONS On February 8, 1999, the Company completed the Spin-Off of its specialty chemicals businesses as Arch Chemicals, Inc. ("Arch Chemicals") (the "Spin- Off"). Under the terms of the Spin-Off, the Company distributed to its holders of common stock of record at the close of business on February 1, 1999, one Arch Chemicals common share for every two shares of Olin common stock. The 1999 first quarter net income includes one month of operating results of the specialty chemicals businesses while the comparable quarter in 1998 includes three months of operating results. ENVIRONMENTAL MATTERS In the three months ended March 31, 1999 and 1998, the Company spent approximately $4 million for investigatory and remediation activities associated with former waste sites and past operations. Spending for environmental investigatory and remedial efforts for the full year 1999 is estimated to be $30 million. Cash outlays for remedial and investigatory activities associated with former waste sites and past operations were not charged to income but instead were charged to reserves established for such costs identified and expensed to income in prior periods. Associated costs of investigatory and remedial activities are provided for in accordance with generally accepted accounting principles governing probability and the ability to reasonably estimate future costs. Charges to income for investigatory and remedial activities were $4 million for the three months ended March 31, 1999 and 1998. Charges to income for investigatory and remedial efforts were material to operating results in 1998 and may be material to net income in 1999 and future years. The Company's consolidated balance sheets included liabilities for future environmental expenditures to investigate and remediate known sites amounting to $129 million at March 31, 1999 and December 31, 1998, of which $99 million was classified as other noncurrent liabilities. Those amounts did not take into account any discounting of future expenditures or any consideration of insurance recoveries or advances in technology. Those liabilities are reassessed periodically to determine if environmental circumstances have changed and/or remediation efforts and their costs can be better estimated. As a result of these reassessments, future charges to income may be made for additional liabilities. Annual environmental-related cash outlays for site investigation and remediation, capital projects, and normal plant operations are expected to range between $50 to $60 million over the next several years. While the Company does not anticipate a material increase in the projected annual level of its environmental-related costs, there is always the possibility that such increases may occur in the future in view of the uncertainties associated with environmental exposures. Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, advances in technology, changes in environmental laws and regulations and their application, the scarcity of reliable data pertaining to identified sites, the difficulty in assessing the involvement and financial capability of other potentially responsible parties and the Company's ability to obtain contributions from other parties and the lengthy time periods over which site remediation occurs. It is possible that some of these matters (the outcomes of which are subject to various uncertainties) may be resolved unfavorably against the Company. LIQUIDITY, INVESTMENT ACTIVITY AND OTHER FINANCIAL DATA
CASH FLOW DATA Three Months Ended March 31, ----------------- Provided By (Used For)($ in millions) 1999 1998 - -------------------------------------------------------------------- Net Cash and Cash Equivalents Provided by (Used for) Operating Activities from Continuing Operations $(18.3) $ 4.8 Net Operating Activities (21.2) (46.5) Capital Expenditures (8.3) (7.9) Net Investing Activities (19.6) (7.2) Purchases of Olin Common Stock (3.2) (38.8) Net Financing Activities 57.6 (52.8)
In 1999, income from continuing operations exclusive of non-cash charges, borrowings under a line of credit assumed by Arch Chemicals and cash and cash equivalents on hand were used to finance the Company's working capital requirements, capital and investment projects, dividends and the purchase of the Company's common stock. OPERATING ACTIVITIES In 1999, the decrease in cash flow from operating activities of continuing operations was primarily attributable to lower operating income and a higher investment in working capital. In the first quarter of 1999 the Company made certain cash expenditures which were accrued at December 31, 1998, related to the Spin-Off of Arch Chemicals, primarily legal and investment banking fees. CAPITAL EXPENDITURES Capital spending of $8.3 million in 1999 was $.4 million higher than 1998. For the total year, capital spending is expected to be in the $80 million range and should approximate annual depreciation expense. FINANCING ACTIVITIES At March 31, 1999, the Company has available a $165 million line of credit under an unsecured revolving credit agreement with a group of banks. As a result of the Spin-Off in February of 1999, the Company amended its revolving credit agreement reducing the aggregate commitments from $250 million to $165 million. The Company may select various floating rate borrowing options. The Company believes that the credit facility is adequate to satisfy its liquidity needs for the foreseeable future. The credit facility includes various customary restrictive covenants including restrictions related to the ratio of debt to earnings before interest, taxes, depreciation and amortization and the ratio of earnings before interest, taxes, depreciation and amortization to interest. During 1999, the Company used $3.2 million to repurchase 300,000 shares of the Company's common stock, bringing the cumulative total shares repurchased to 7,223,200 since January 1997. Prior to the Spin-Off in February, 1999, the Company borrowed $75 million under a credit facility which liability was assumed by Arch Chemicals. The Company has used a portion of and intends to use the balance of these funds for general corporate purposes, which may include share repurchases and future acquisitions. The percent of total debt to total capitalization increased to 40% at March 31, 1999, from 29% at year-end 1998 and 24% at March 31, 1998. Contributing to the increase in 1999 was the reduction to equity resulting from the Spin-Off. The Company paid a first quarter 1999 dividend of $0.30 per share on March 10, 1999 to shareholders of record on January 19, 1999. As announced previously, following the Spin-Off, the Company's annual dividend is expected to be $0.80 per share. In April 1999, the Company's Board of Directors declared a quarterly dividend of $.20 per share on its common stock, and the Board of Directors of Arch Chemicals, Inc. declared a dividend of $.10 per equivalent Olin share ($.20 per Arch Chemicals, Inc. share). Accordingly, those stockholders who retained their Olin and Arch Chemicals stock, will receive, in the aggregate, the same total quarterly dividend of $.30 as before the Spin-Off. The Board of Directors of either company, however, could change the dividend rate on the shares of their respective companies at any time in the future. NEW ACCOUNTING STANDARDS In 1998, the Financial Accounting Standards Board issued Statement No. 133 ("Statement 133") "Accounting for Derivative Instruments and Hedging Activities." It requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. This statement is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. The Company is currently evaluating the effect this statement will have on its financial position and results of operations in the period of adoption. Effective January 1, 1999, the Company adopted Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" and Statement of Position 98-5, "Reporting on the Costs of Start- up Activities." Adoption of these statements did not have a material effect on the Company's results of operations or financial position. EURO CONVERSION On January 1, 1999, eleven of the fifteen member countries of the European Union adopted the Euro as their common legal currency and established fixed conversion rates between their existing sovereign currencies and the Euro. The Company does not expect the conversion to the Euro to have a material impact on its business, operations, or financial position. YEAR 2000 COMPUTER SYSTEMS The Company views the impact of the Year 2000 as a critical business issue. It manages the process by having each business segment identify its own Year 2000 issues and develop appropriate corrective action steps, while instituting a series of management processes that coordinate and manage the process across business segment boundaries and the corporate center. The process includes corporate oversight and provides for consistent attention to progress made against planned activities and a forum for issue resolution at the business segment and corporate levels with periodic assessments made by independent parties which are reported to the Board. As a result of the Spin-Off of Arch Chemicals, the Company entered into an Information Technology Services Agreement with Arch Chemicals stipulating that Arch Chemicals will provide various information technology related services including maintenance of the centralized computer center and the wide area network as well as provide services in support of the Company's Year 2000 initiative. The Company recognizes that the Year 2000 issue is not limited to computer programs normally associated with the processing of business information, but can also be found in certain equipment and processes used in manufacturing and operation of facilities. It also recognizes that the potential exists for Year 2000 issues within the supply chain. The Company's approach was to subdivide the program into four distinct segments: 1) Business Systems; 2) Manufacturing; 3) Supply Chain; and 4) Infrastructure. In the business systems area, the Company has positioned itself very favorably with respect to software and equipment that is Year 2000 compliant. In 1994, the Company began implementing a Year 2000 compliant client-server system, Peoplesoft, to address payroll and human resource needs and it presently uses such system in all businesses. In 1993, the Company began implementing for all domestic businesses, except the Metals segment, a client-server system, SAP, for core business requirements as a vehicle to obtain certain improvements in the business processes. With the exception of the Metals segment, SAP is currently utilized in a majority of its domestic businesses. Since SAP was also a certified Year 2000 compliant solution, migration plans were adjusted to take advantage of the business benefit while eliminating the cost of remediating old legacy system code. Deployment has been aggressive with all domestic functions and locations (except Metals) transferred to SAP. In the few instances where SAP is not utilized, replacement systems are scheduled for June 1999. Offshore processing systems will continue using existing systems. All systems have been examined with Year 2000 upgrades targeted for completion by the second quarter of 1999. The Metals segment is addressing the Year 2000 issue by converting existing programs to be compliant. It has completed code converting its entire software portfolio, and is currently heavily engaged in the testing phase of its plan. Completion of all systems is targeted for June 1999. In the manufacturing area, plant level employees and independent assessments were used to identify places where embedded systems exist and categorize them by the potential impact to the business. Six items, which have the potential for causing process shut downs or unsafe conditions, remain to be remediated or replaced. The plan, which takes maximum advantage of "planned outages" in order to minimize the impact on operations, targets completion by June 1999. The supply chain area has seen much activity in terms of assessing vendor Year 2000 preparedness, identifying alternate sources, as well as insertion of certain Year 2000 compliance language in all purchase orders issued. The Company has completed a review of single source and critical suppliers. During 1999, the Company will continue to re-evaluate its suppliers on a periodic basis. Personal computers, networks, and PBX's represent the majority of items in the Company's infrastructure segment. The Company has deployed new Pentium Year 2000 compliant equipment in large numbers to support its SAP deployment program and for internal standards compliance. In addition, the Company is currently utilizing software tools to test the entire PC inventory for Year 2000 compliance and this is expected to be completed by the first quarter of 1999. The Company's wide area network is already Year 2000 compliant as is most of its PBX and voice mail systems. The non-compliant equipment is planned to be replaced with compliant versions as leases expire, but no later than June 1999. The Company believes its Year 2000 initiative is on track to address all significant Year 2000 issues by the middle of 1999, and is supported by the findings of an independent assessment completed in December 1998. Plans include additional assessments throughout 1999. Plans for a worst case scenario in the unlikely event of a major failure due to a Year 2000 problem which causes significant disruptions to business operations have been formulated. In the area of business systems, management believes that the Company, with most of its operating units already migrated to Year 2000 compliant solutions, has already significantly reduced its potential risk. As added protection, software migration plans to new releases of SAP and Peoplesoft, which are planned in 1999, include Year 2000 testing scenarios. The Company will continue to monitor progress in the system testing of the converted legacy systems and will redirect existing resources and/or utilize outside assistance in the event of slippage against plans. The Company continues to focus attention on the manufacturing area. It has deployed several independent initiatives to identify embedded systems, develop comprehensive equipment lists, and obtain vendor certifications of Year 2000 compliance. It has developed plans for further testing with respect to key manufacturing equipment and systems, during periods of scheduled outages. The Company will continue to monitor progress against plans in the business systems, manufacturing, infrastructure, and supply chain areas, and take corrective action should slippage occur. The use of vendor-supplied Year 2000 compliant solutions, coupled with substantive pre-testing of key systems and a strong management commitment and oversight are the cornerstone of the Company's Year 2000 program. Nonetheless, in the unlikely occurrence of some unforeseen event, emergency teams skilled in each of the disciplines will be formed during the last half of 1999. They will be deployed to assist local personnel in the event of a Year 2000 issue at the turn of the millennium. The Company does not expect Year 2000 initiative costs to exceed $5 million inclusive of the cost for deploying SAP and Peoplesoft and related infrastructure during 1999. The dates on which the Company believes the Year 2000 Project will be completed and the SAP computer systems will be implemented are based on management's best estimates, which are derived utilizing numerous assumptions of future events, including the continued availability of certain resources, third-party modification plans and other factors. However, there can be no guarantee that these estimates will be achieved, or that there will not be a delay in, or increased costs associated with, the implementation of the Year 2000 Project. Specific factors that might cause differences between the estimates and actual results include, but are not limited to, the availability and cost of personnel trained in these areas, the ability to locate and correct all relevant computer codes, timely responses to and corrections by third-parties and suppliers, the ability to implement interfaces between the new systems and the systems not being replaced, and similar uncertainties. Due to the general uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the Year 2000 readiness of third parties and the interconnection of global businesses, the Company cannot ensure its ability to timely and cost-effectively resolve the problems associated with the Year 2000 issue that may affect its operations and business, or expose it to third-party liability. CAUTIONARY STATEMENT UNDER FEDERAL SECURITIES LAWS: The information contained in the 1999 Outlook section (and subsections thereof), the Environmental Matters section, the Liquidity, Investment Activity and Other Financial Data section, and the Environmental and Commitments and Contingencies notes to the Consolidated Financial Statements contains forward-looking statements that are based on management's beliefs, certain assumptions made by management and current expectations, estimates and projections about the markets and economy in which the Company and its respective divisions operate. Words such as "anticipates," "expects," "believes," "should," "plans," "will," "forecasts," "estimates," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions ("Future Factors") which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expected or forecasted in such forward-looking statements. The Company does not undertake any obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise. Future Factors which could cause actual results to differ materially from those discussed in these sections and notes include but are not limited to: general economic and business and market conditions; lack of moderate growth in the U.S. economy or even a slight recession in 1999; worsening business conditions as a result of the Asian and Latin American financial turmoil; competitive pricing pressures; declines in Chlor Alkali's ECU prices below current levels; Chlor Alkali operating rates below the current levels; higher-than-expected raw material costs; a downturn in many of the markets the Company serves such as electronics, automotive, ammunition and housing; the supply/demand balance for the Company's products, including the impact of excess industry capacity; efficacy of new technologies; changes in U.S. laws and regulations; failure to achieve targeted cost reduction programs; capital expenditures, such as cost overruns, in excess of those scheduled; environmental costs in excess of those projected; and the occurrence of unexpected manufacturing interruptions/outages. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk in the normal course of its business operations due to its operations in different foreign currencies, its purchases of certain commodities and its ongoing investing and financing activities. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. The Company has established policies and procedures governing its management of market risks and the uses of financial instruments to manage exposure to such risks. The primary purpose of the Company's foreign currency hedging activities is to manage currency risks resulting from purchase and sale commitments in foreign currencies (principally Australian dollar and Canadian dollar) and relating to particular anticipated purchases and sales expected to be denominated in those same foreign currencies. Foreign currency hedging activity is not material to the Company's consolidated financial position, results of operations or cash flow. Certain materials, namely copper, lead and zinc, used primarily in the Company's Metals and Winchester segments' products are subject to price volatility. Depending on market conditions, the Company may enter into futures contracts and put and call option contracts in order to reduce the impact of metal price fluctuations. As of March 31, 1999, the Company maintained open positions on futures contracts totalling $45 million. Assuming a hypothetical 10% increase in commodity prices which are currently hedged, the Company would experience a $4.5 million increase in its cost of inventory purchased, which would be offset by a corresponding increase in the value of related hedging instruments. The Company is exposed to changes in interest rates primarily as a result of its investing and financing activities. Investing activity is not material to the Company's consolidated financial position, results of operations or cash flow. The financing activities of the Company are comprised primarily of long-term fixed-rate debt utilized to fund business operations and to maintain liquidity. As of March 31, 1999, the Company had long-term borrowings of $231 million outstanding at varying fixed rates. The Company has interest rate swaps to hedge underlying debt obligations. Interest rate swap activity is not material to the Company's consolidated financial position, results of operations or cash flow. If the actual change in interest rates or commodities pricing is substantially different than expected, the net impact of interest rate risk or commodity risk on the Company's cash flow may be materially different than that disclosed above. The Company does not enter into any derivative financial instruments for trading purposes. Part II - Other Information Item 1. Legal Proceedings. ----------------- Not Applicable. Item 2. Changes in Securities and Use of Proceeds. ----------------------------------------- Not Applicable. Item 3. Defaults Upon Senior Securities. ------------------------------- Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders. --------------------------------------------------- Not Applicable. Item 5. Defaults Upon Senior Securities. ------------------------------- Not Applicable. Item 6. Exhibits and Reports on Form 8-K. -------------------------------- (a) Exhibits -------- 3(b) Bylaws of Olin as amended effective April 29, 1999. 10(d) Olin Senior Executive Pension Plan, as Restated as of February 8, 1999. 10(e) Olin Supplemental Contributing Employee Ownership Plan, effective January 1, 1990 as Amended and Restated as of February 8, 1999. 10(s) Olin Supplementary and Deferral Benefit Pension Plan, as Restated as of February 8, 1999. 12. Computation of Ratio of Earnings to Fixed Charges (Unaudited). 27. Financial Data Schedule. (b) Reports on Form 8-K ------------------- Form 8-K filed February 23, 1999 with respect to a disposition of assets (the spin-off of its specialty chemicals business to existing shareholders). SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. OLIN CORPORATION (Registrant) By: /s/ A. W. Ruggiero ------------------------------------ Executive Vice President and Chief Financial Officer (Authorized Officer) Date: May 17, 1999 EXHIBIT INDEX Exhibit No. Description - ------- ----------- 3(b) Bylaws of Olin as amended effective April 29, 1999. 10(d) Olin Senior Executive Pension Plan, as Restated as of February 8, 1999. 10(e) Olin Supplemental Contributing Employee Ownership Plan, effective January 1, 1990 as Amended and Restated as of February 8, 1999. 10(s) Olin Supplementary and Deferral Benefit Pension Plan, as Restated as of February 8, 1999. 12. Computation of Ratio of Earnings to Fixed Charges (Unaudited). 27. Financial Data Schedule. EX-3.B 2 BYLAWS OF OLIN EXHIBIT 3(b) ================================================================================ BYLAWS OF OLIN CORPORATION As Amended Effective April 29, 1999 ================================================================================ BY-LAWS of OLIN CORPORATION -------------------------- ARTICLE I. MEETINGS OF SHAREHOLDERS. SECTION 1. Place of Meetings. All meetings of the shareholders of Olin ------------------ Corporation (hereinafter called the "Corporation") shall be held at such place, either within or without the Commonwealth of Virginia, as may from time to time be fixed by the Board of Directors of the Corporation (hereinafter called the "Board"). SECTION 2. Annual Meetings. The annual meeting of the shareholders of the ---------------- Corporation for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held on the last Thursday in April in each year (or, if that day shall be a legal holiday, then on the next succeeding business day), or on such other day and/or in such other month as may be fixed by the Board, at such hour as may be specified in the notice thereof. SECTION 3. Special Meetings. A special meeting of the shareholders for any ----------------- purpose or purposes, unless otherwise provided by law or in the Articles of Incorporation of the Corporation as from time to time amended (hereinafter called the "Articles"), may be held at any time upon the call of the Board, the Chairman of the Board, the President or the holders of a majority of the shares of the issued and outstanding stock of the Corporation entitled to vote at the meeting. SECTION 4. Notice of Meetings. Except as otherwise provided by law or the ------------------- Articles, not less than ten nor more than sixty days' notice in writing of the place, day, hour and purpose or purposes of each meeting of the shareholders, whether annual or special, shall be given to each shareholder of record of the Corporation entitled to vote at such meeting, either by the delivery thereof to such shareholder personally or by the mailing thereof to such shareholder in a postage prepaid envelope addressed to such shareholder at his address as it appears on the stock transfer books of the Corporation; provided, however, that in the case of a special meeting of shareholders called by the shareholders, such notice shall be given at least fifty days before the date of the meeting. Notice of any meeting of shareholders shall not be required to be given to any shareholder who shall attend the meeting in person or by proxy, unless attendance is for the express purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened, or who shall waive notice thereof in writing signed by the shareholder before, at or after such meeting. Notice of any adjourned meeting need not be given, except when expressly required by law. SECTION 5. Quorum. Shares representing a majority of the votes entitled to ------- be cast on a matter by all classes or series which are entitled to vote thereon and be counted -2- together collectively, represented in person or by proxy at any meeting of the shareholders, shall constitute a quorum for the transaction of business thereat with respect to such matter, unless otherwise provided by law or the Articles. In the absence of a quorum at any such meeting or any adjournment or adjournments thereof, shares representing a majority of the votes cast on the matter of adjournment, either in person or by proxy, may adjourn such meeting from time to time until a quorum is obtained. At any such adjourned meeting at which a quorum has been obtained, any business may be transacted which might have been transacted at the meeting as originally called. SECTION 6. Voting. Unless otherwise provided by law or the Articles, at ------- each meeting of the shareholders each shareholder entitled to vote at such meeting shall be entitled to one vote for each share of stock standing in his name on the books of the Corporation upon any date fixed as hereinafter provided, and may vote either in person or by proxy in writing. Unless demanded by a shareholder present in person or represented by proxy at any meeting of the shareholders and entitled to vote thereon or so directed by the chairman of the meeting, the vote on any matter need not be by ballot. On a vote by ballot, each ballot shall be signed by the shareholder voting or his proxy, and it shall show the number of shares voted. SECTION 7. Judges. One or more judges or inspectors of election for any ------- meeting of shareholders may be appointed by the chairman of such meeting, for the purpose of receiving and taking charge of proxies and ballots and deciding all questions as to the qualification of voters, the validity of proxies and ballots and the number of votes properly cast. SECTION 8. Conduct of Meeting. The chairman of the meeting at each meeting ------------------- of shareholders shall have all the powers and authority vested in presiding officers by law or practice, without restriction, as well as the authority to conduct an orderly meeting and to impose reasonable limits on the amount of time taken up in remarks by any one shareholder. SECTION 9. Business Proposed by a Shareholder. To be properly brought ----------------------------------- before a meeting of shareholders, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors or (iii) in the case of an annual meeting of shareholders or a special meeting called at the request of shareholders in accordance with these By-laws, properly brought before the meeting by a shareholder. In addition to any other applicable requirements, for business to be properly brought before a meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be given, either by personal delivery or by United States registered or certified mail, postage prepaid, to the Secretary of the Corporation in the case of an annual meeting, not later than 90 days before the anniversary of the immediately preceding annual meeting and in the case of a special meeting called at the request of shareholders, in accordance with the procedures set forth in Section 10 of Article I of these By-laws. A shareholder's notice to the Secretary shall set forth as to -3- each matter the shareholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting, including the complete text of any resolutions to be presented at the meeting with respect to such business, and the reasons for conducting such business at the meeting, (ii) the name and address of record of the shareholder proposing such business, (iii) the class and number of shares of the Corporation that are beneficially owned by the shareholder and any other person on whose behalf the proposal is made, and (iv) any material interest of the shareholder and any other person on whose behalf the proposal is made, in such business. In the event that a shareholder attempts to bring business before a meeting without complying with the foregoing procedure, the chairman of the meeting may declare to the meeting that the business was not properly brought before the meeting and, if he shall so declare, such business shall not be transacted. SECTION 10. Special Meeting at Request of Shareholders. ------------------------------------------- (a) Any holder or holders of record of a majority of the outstanding shares of Common Stock requesting the Corporation to call a special meeting of shareholders pursuant to Section 2 of Article Eighth of the Restated Articles of Incorporation (collectively, the "Initiating Shareholder") shall give written notice of such request to the Secretary of the Corporation at its principal executive offices (the "Notice"). The Notice shall be sent in the manner and contain all the information that would be required in a notice to the Secretary given pursuant to Section 9 of this Article I. (b) If the Initiating Shareholder owns of record a majority of the outstanding Common Stock as determined by the Secretary of the Corporation, the Corporation shall be required to call the special meeting of shareholders requested by the Initiating Shareholder. (c) The record date for determining the shareholders of record entitled to vote at a special meeting called pursuant to this Section 10 shall be fixed by the Board of Directors which record date will be within 60 days of the date the Secretary of the Corporation determines the Corporation is required to call such special meeting. Written notice of the meeting shall be mailed by the Corporation to shareholders of record on such record date within 10 days after the record date (or such longer period as may be necessary for the Corporation to file its proxy materials with, and receive and respond to the comments of, the Securities and Exchange Commission), and the meeting will be held within 50 days after the date of mailing of the notice, as determined by the Board of Directors. (d) The business to be conducted at a special meeting called pursuant to this Section 10 shall be limited to the business set forth in the Notice and such other business or proposals as the Board of Directors shall determine and shall be set forth in the notice of meeting. The Board of Directors or the Chairman of the Board of Directors may determine other rules and procedures for the conduct of the meeting. -4- ARTICLE II. BOARD OF DIRECTORS. SECTION 1. Number, Classification, Term, Election. The property, business --------------------------------------- and affairs of the Corporation shall be managed under the direction of the Board as from time to time constituted. The Board shall consist of seven directors, but the number of directors may be increased to any number, not more than eighteen directors, or decreased to any number, not less than three directors, by amendment of these Bylaws. No director need be a shareholder. The Board shall be divided into three classes, Class I, Class II and Class III, as nearly equal in number as possible, with the members of each class to serve for the respective terms of office provided in the Articles, and until their respective successors shall have been duly elected or until death or resignation or until removal in the manner hereinafter provided. In case the number of directors shall be increased, the additional directors to fill the vacancies caused by such increase shall be elected in accordance with the provisions of Section 4 of Article VI of these By-laws. Any increase or decrease in the number of directors shall be so apportioned among the classes by the Board as to make all classes as nearly equal in number as possible. Subject to the rights of holders of any Preferred Stock outstanding, nominations for the election of directors may be made by the Board or a committee appointed by the Board or by any shareholder entitled to vote in the election of directors generally. However, any shareholder entitled to vote in the election of directors generally may nominate one or more persons for election as directors at a meeting only if it is an annual meeting and written notice of such shareholder's intent to make such nomination or nominations has been given, either by personal delivery or by United States registered or certified mail, postage prepaid, to the Secretary of the Corporation not later than 90 days before the anniversary of the immediately preceding annual meeting. Each such notice shall set forth: (a) the name and address of the shareholder who intends to make the nomination and of the person or persons to be nominated; (b) a representation that the shareholder is a holder of record of shares of the Corporation entitled to vote at such meeting (stating the class and number thereof) and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (c) a description of all arrangements or understandings between the shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the shareholder; and (d) such other information regarding each nominee proposed by such shareholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated or intended to be nominated by the Board of Directors, and shall include a consent signed by each such nominee to serve as a director of the Corporation if so elected. The chairman of the meeting may refuse to acknowledge the nomination by a shareholder of any person that is not made in compliance with the foregoing procedure. SECTION 2. Compensation. Each director, in consideration of his serving as ------------- such, shall be entitled to receive from the Corporation such amount per annum or such fees for -5- attendance at Board and Committee meetings, or both, in cash or other property, including securities of the Corporation, as the Board shall from time to time determine, together with reimbursements for the reasonable expenses incurred by him in connection with the performance of his duties. Nothing contained herein shall preclude any director from serving the Corporation, or any subsidiary or affiliated corporation, in any other capacity and receiving proper compensation therefor. If the Board adopts a resolution to that effect, any director may elect to defer all or any part of the annual and other fees hereinabove referred to for such period and on such terms and conditions as shall be permitted by such resolution. SECTION 3. Place of Meetings. The Board may hold its meetings at such ------------------ place or places within or without the Commonwealth of Virginia as it may from time to time by resolution determine or as shall be specified or fixed in the respective notices or waivers of notice thereof. SECTION 4. Organization Meeting. After each annual election of directors, --------------------- as soon as conveniently may be, the newly constituted Board shall meet for the purposes of organization. At such organization meeting, the newly constituted Board shall elect officers of the Corporation and transact such other business as shall come before the meeting. Notice of organization meetings of the Board need not be given. Any organization meeting may be held at any other time or place which shall be specified in a notice given as hereinafter provided for special meetings of the Board, or in a waiver of notice thereof signed by all the directors. SECTION 5. Regular Meetings. Regular meetings of the Board may be held at ----------------- such time and place as may from time to time be specified in a resolution adopted by the Board then in effect; and, unless otherwise required by such resolution, or by law, notice of any such regular meeting need not be given. SECTION 6. Special Meetings. Special meetings of the Board shall be held ----------------- whenever called by the Chief Executive Officer, or by the Secretary at the request of any three directors. Notice of a special meeting shall be mailed to each director, addressed to him at his residence or usual place of business, not later than the second day before the day on which such meeting is to be held, or shall be sent addressed to him at such place by telegraph, cable or wireless, or be delivered personally or by telephone, not later than the day before the day on which such meeting is to be held. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice of such meeting, unless required by the Articles. SECTION 7. Quorum. At each meeting of the Board the presence of a majority ------- of the number of directors fixed by these By-laws shall be necessary to constitute a quorum. The act of a majority of the directors present at a meeting at which a quorum shall be present shall be the act of the Board, except as may be otherwise provided by law or by these By-laws. Any meeting of the Board may be adjourned by a majority vote of the directors present at such meeting. Notice of any adjourned meeting need not be given. -6- SECTION 8. Waivers of Notice of Meetings. Anything in these By-laws or in ------------------------------ any resolution adopted by the Board to the contrary notwithstanding, notice of any meeting of the Board need not be given to any director if such notice shall be waived in writing signed by such director before, at or after the meeting, or if such director shall be present at the meeting. Any meeting of the Board shall be a legal meeting without any notice having been given or regardless of the giving of any notice or the adoption of any resolution in reference thereto, if every member of the Board shall be present thereat. Except as otherwise provided by law or these By-laws, waivers of notice of any meeting of the Board need not contain any statement of the purpose of the meeting. SECTION 9. Telephone Meetings. Members of the Board or any committee may ------------------- participate in a meeting of the Board or such committee by means of a conference telephone or other means of communications whereby all directors participating may simultaneously hear each other during the meeting, and participation by such means shall constitute presence in person at such meeting. SECTION 10. Actions Without Meetings. Any action that may be taken at a ------------------------- meeting of the Board or of a committee may be taken without a meeting if a consent in writing, setting forth the action, shall be signed, either before or after such action, by all of the directors or all of the members of the committee, as the case may be. Such consent shall have the same force and effect as a unanimous vote. ARTICLE III. INDEMNIFICATION AND LIMIT ON LIABILITY. (a) Every person who is or was a director, officer or employee of the Corporation, or who, at the request of the Corporation, serves or has served in any such capacity with another corporation, partnership, joint venture, trust, employee benefit plan, or other enterprise shall be indemnified by the Corporation against any and all liability and reasonable expense that may be incurred by him in connection with or resulting from any claim, action or proceeding (whether brought in the right of the Corporation or any such other corporation, entity, plan or otherwise), civil or criminal, in which he may become involved, as a party or otherwise, by reason of his being or having been a director, officer or employee of the Corporation, or such other corporation, entity or plan while serving at the request of the Corporation, whether or not he continues to be such at the time such liability or expense shall have been incurred, unless such person engaged in willful misconduct or a knowing violation of the criminal law. As used in this Article III: (i) the terms "liability" and "expense" shall include, but shall not be limited to, counsel fees and disbursements and amounts of judgments, fines or penalties against, and amounts paid in settlement by, a director, officer or employee; (ii) the terms "director," "officer" and "employee," unless the context otherwise requires, -7- include the estate or personal representative of any such person; (iii) a person is considered to be serving an employee benefit plan as a director, officer or employee of the plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or, in connection with the plan, to participants in or beneficiaries of the plan; (iv) the term "occurrence" means any act or failure to act, actual or alleged, giving rise to a claim, action or proceeding; and (v) service as a trustee or as a member of a management or similar committee of a partnership or joint venture shall be considered service as a director, officer or employee of the trust, partnership or joint venture. The termination of any claim, action or proceeding, civil or criminal, by judgment, settlement, conviction or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that a director, officer or employee did not meet the standards of conduct set forth in this paragraph (a). The burden of proof shall be on the Corporation to establish, by a preponderance of the evidence, that the relevant standards of conduct set forth in this paragraph (a) have not been met. (b) Any indemnification under paragraph (a) of this Article shall be made unless (i) the Board, acting by a majority vote of those directors who were directors at the time of the occurrence giving rise to the claim, action or proceeding involved and who are not at the time parties to such claim, action or proceeding (provided there are at least five such directors), finds that the director, officer or employee has not met the relevant standards of conduct set forth in such paragraph (a), or (ii) if there are not at least five such directors, the Corporation's principal Virginia legal counsel, as last designated by the Board as such prior to the time of the occurrence giving rise to the claim, action or proceeding involved, or in the event for any reason such Virginia counsel is unwilling to so serve, then Virginia legal counsel mutually acceptable to the Corporation and the person seeking indemnification, deliver to the Corporation their written advice that, in their opinion, such standards have not been met. (c) Expenses incurred with respect to any claim, action or proceeding of the character described in paragraph (a) shall, except as otherwise set forth in this paragraph (c), be advanced by the Corporation prior to the final disposition thereof upon receipt of an undertaking by or on behalf of the recipient to repay such amount if it is ultimately determined that he is not entitled to indemnification under this Article III. No security shall be required for such undertaking and such undertaking shall be accepted without reference to the recipient's financial ability to make repayment. Notwithstanding the foregoing, the Corporation may refrain from, or suspend, payment of expenses in advance if at any time before delivery of the final finding described in paragraph (b), the Board or Virginia legal counsel, as the case may be, acting in accordance with the procedures set forth in paragraph (b), find by a preponderance of the evidence then available that the officer, director or employee has not met the relevant standards of conduct set forth in paragraph (a). (d) No amendment or repeal of this Article III shall adversely affect or deny to any director, officer or employee the rights of indemnification provided in this Article III with -8- respect to any liability or expense arising out of a claim, action or proceeding based in whole or substantial part on an occurrence the inception of which takes place before or while this Article III, as adopted by the shareholders of the Corporation at the 1986 Annual Meeting of the Corporation, is in effect. The provisions of this paragraph (d) shall apply to any such claim, action or proceeding whenever commenced, including any such claim, action or proceeding commenced after any amendment or repeal to this Article III. (e) The rights of indemnification provided in this Article III shall be in addition to any rights to which any such director, officer or employee may otherwise be entitled by contraction or as a matter of law. (f) In any proceeding brought by or in the right of the Corporation or brought by or on behalf of shareholders of the Corporation, no director or officer of the Corporation shall be liable to the Corporation or its shareholders for monetary damages with respect to any transaction, occurrence or course of conduct, whether prior or subsequent to the effective date of this Article lll, except for liability resulting from such person's having engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities law. (g) An amendment to this Article III shall be approved only by a majority of the votes entitled to be cast by each voting group entitled to vote thereon. ARTICLE IV. COMMITTEES. SECTION 1. Executive Committee. The Board may, by resolution or -------------------- resolutions adopted by a majority of the number of directors fixed by these By- laws, appoint two or more directors to constitute an Executive Committee, each member of which shall serve as such during the pleasure of the Board, and may designate for such Committee a Chairman, who shall continue as such during the pleasure of the Board. All completed action by the Executive Committee shall be reported to the Board at its meeting next succeeding such action or at its meeting held in the month following the taking of such action, and shall be subject to revision or alteration by the Board; provided, that no acts or rights of third parties shall be affected by any such revision or alteration. The Executive Committee shall fix its own rules of procedure and shall meet where and as provided by such rules or by resolution of the Board. At all meetings of the Executive Committee, a majority of the full number of members of such Committee shall constitute a quorum, and in every case the affirmative vote of a majority of members present at any meeting of the Executive Committee at which a quorum is present shall be necessary for the adoption of any resolution. -9- During the intervals between the meetings of the Board, the Executive Committee shall possess and may exercise all the power and authority of the Board (including, without limitation, all the power and authority of the Board in the management, control and direction of the financial affairs of the Corporation) except with respect to those matters reserved to the Board by Virginia law, in such manner as the Executive Committee shall deem best for the interests of the Corporation, in all cases in which specific directions shall not have been given by the Board. SECTION 2. Other Committees. To the extent permitted by law, the Board may ----------------- from time to time by resolution adopted by a majority of the number of directors fixed by these By-laws create such other committees of directors, officers, employees or other persons designated by it as the Board shall deem advisable and with such limited authority, functions and duties as the Board shall by resolution prescribe. The Board shall have the power to change the members of any such committee at any time, to fill vacancies, and to discharge any such committee, either with or without cause, at any time. ARTICLE V. OFFICERS. SECTION 1. Number, Term, Election. The officers of the Corporation shall ----------------------- be a Chief Executive Officer, a Chairman of the Board, a President, one or more Vice Presidents, a Treasurer, a Controller and a Secretary. The Board may appoint such other officers and such assistant officers and agents with such powers and duties as the Board may find necessary or convenient to carry on the business of the Corporation. Such officers and assistant officers shall serve until their successors shall be chosen, or as otherwise provided in these By- laws. Any two or more offices may be held by the same person. SECTION 2. Chief Executive Officer. The Chief Executive Officer shall, ------------------------ subject to the control of the Board and any Executive Committee, have full authority and responsibility for directing the conduct of the business, affairs and operations of the Corporation. In addition to acting as Chief Executive Officer of the Corporation, he shall perform such other duties and exercise such other powers as may from time to time be prescribed by the Board and shall see that all orders and resolutions of the Board and any Executive Committee are carried into effect. In the event of the inability of the Chief Executive Officer to act, the Board will designate an officer of the Corporation to perform the duties of that office. SECTION 3. Chairman of the Board. The Chairman of the Board shall preside ---------------------- at all meetings of the Board and of the shareholders and, in the absence of the Chairman of the Executive Committee, at all meetings of the Executive Committee. He shall perform such other duties and exercise such other powers as may from time to time be prescribed by the Board or, if he shall not be the Chief Executive Officer, by the Chief Executive Officer. -10- SECTION 4. President. The President shall have such powers and perform ---------- such duties as may from time to time be prescribed by the Board or, if he shall not be the Chief Executive Officer, by the Chief Executive Officer. SECTION 5. Vice Presidents. Each Vice President shall have such powers and ---------------- perform such duties as may from time to time be prescribed by the Board, the Chief Executive Officer or any officer to whom the Chief Executive Officer may have delegated such authority. SECTION 6. Treasurer. The Treasurer shall have the general care and ---------- custody of the funds and securities of the Corporation. He shall perform such other duties and exercise such other powers as may from time to time be prescribed by the Board, the Chief Executive Officer or any officer to whom the Chief Executive Officer may have delegated such authority. If the Board shall so determine, he shall give a bond for the faithful performance of his duties, in such sum as the Board may determine to be proper, the expense of which shall be borne by the Corporation. To such extent as the Board shall deem proper, the duties of the Treasurer may be performed by one or more assistants, to be appointed by the Board. SECTION 7. Controller. The Controller shall be the accounting officer of ----------- the Corporation. He shall keep full and accurate accounts of all assets, liabilities, receipts and disbursements and other transactions of the Corporation and cause regular audits of the books and records of the Corporation to be made. He shall also perform such other duties and exercise such other powers as may from time to time be prescribed by the Board, the Chief Executive Officer or any officer to whom the Chief Executive Officer may have delegated such authority. If the Board shall so determine, he shall give a bond for the faithful performance of his duties, in such sum as the Board may determine to be proper, the expense of which shall be borne by the Corporation. To such extent as the Board shall deem proper, the duties of the Controller may be performed by one or more assistants, to be appointed by the Board. SECTION 8. Secretary. The Secretary shall keep the minutes of meetings of ---------- shareholders, of the Board, and, when requested, of Committees of the Board; and he shall attend to the giving and serving of notices of all meetings thereof. He shall keep or cause to be kept such stock and other books, showing the names of the shareholders of the Corporation, and all other particulars regarding them, as may be required by law. He shall also perform such other duties and exercise such other powers as may from time to time be prescribed by the Board, the Chief Executive Officer or any officer to whom the Chief Executive Officer may have delegated such authority. To such extent as the Board shall deem proper, the duties of the Secretary may be performed by one or more assistants, to be appointed by the Board. -11- ARTICLE VI. REMOVALS, RESIGNATIONS AND VACANCIES. SECTION 1. Removal of Directors. Any director may be removed at any time --------------------- but only with cause, by the affirmative vote of the holders of record of a majority of the shares of the Corporation entitled to vote on the election of directors, taken at an annual meeting of the shareholders. SECTION 2. Removal of Officers. Any officer, assistant officer or agent of -------------------- the Corporation may be removed at any time, either with or without cause, by the Board in its absolute discretion. Any such removal shall be without prejudice to the recovery of damages for breach of the contract rights, if any, of the officer, assistant officer or agent removed. Election or appointment of an officer, assistant officer or agent shall not of itself create contract rights. SECTION 3. Resignation. Any director, officer or assistant officer of the ------------ Corporation may resign as such at any time by giving written notice of his resignation to the Board, the Chief Executive Officer or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein or, if no time is specified therein, at the time of delivery thereof, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. SECTION 4. Vacancies. Any vacancy in the Board caused by death, ---------- resignation, disqualification, removal, an increase in the number of directors, or any other cause, may be filled (a) by the holders of shares of the Corporation entitled to vote on the election of directors, but only at an annual meeting of shareholders, or (b) by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board at any regular or special meeting thereof. Each director so elected by the Board shall hold office until the next annual election of directors, and each director so elected by the shareholders shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which he has been elected expires, and, in each case, until his successor shall be elected, or until his death, or until he shall resign, or until he shall have been removed in the manner hereinabove provided. Any vacancy in the office of any officer or assistant officer caused by death, resignation, removal or any other cause, may be filled by the Board for the unexpired portion of the term. -12- ARTICLE VII. CONTRACTS, LOANS, CHECKS, DRAFTS, DEPOSITS, ETC. SECTION 1. Execution of Contracts. Except as otherwise provided by law or ----------------------- by these By-laws, the Board (i) may authorize any officer, employee or agent of the Corporation to execute and deliver any contract, agreement or other instrument in writing in the name and on behalf of the Corporation, and (ii) may authorize any officer, employee or agent of the Corporation so authorized by the Board to delegate such authority by written instrument to other officers, employees or agents of the Corporation. Any such authorization by the Board may be general or specific and shall be subject to such limitations and restrictions as may be imposed by the Board. Any such delegation of authority by an officer, employee or agent may be general or specific, may authorize re-delegation, and shall be subject to such limitations and restrictions as may be imposed in the written instrument of delegation by the person making such delegation. SECTION 2. Loans. No loans shall be contracted on behalf of the ------ Corporation and no negotiable paper shall be issued in its name unless authorized by the Board. When authorized by the Board, any officer, employee or agent of the Corporation may effect loans and advances at any time for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds or other certificates or evidences of indebtedness of the Corporation and when so authorized may pledge, hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances. Such authority may be general or confined to specific instances. SECTION 3. Checks, Drafts, etc. All checks, drafts and other orders for -------------------- the payment of money out of the funds of the Corporation and all notes or other evidences of indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by the Board. SECTION 4. Deposits. All funds of the Corporation not otherwise employed --------- shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select or as may be selected by the Treasurer or any other officer, employee or agent of the Corporation to whom such power may from time to time be delegated by the Board. SECTION 5. Voting of Securities. Unless otherwise provided by the Board, --------------------- the Chief Executive Officer may from time to time appoint an attorney or attorneys, or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation, any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation, and may instruct the person or persons so appointed as -13- to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or otherwise, all such written proxies or other instruments as such officer may deem necessary or proper in the premises. ARTICLE VIII. CAPITAL STOCK. SECTION 1. Certificates. Every shareholder shall be entitled to a ------------- certificate, or certificates, in such form as shall be approved by the Board, signed by the Chairman of the Board, the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer or any other officer authorized by these By-laws or a resolution of the Board, certifying the number of shares owned by him in the Corporation. Any such certificate may, but need not, bear the seal of the Corporation or a facsimile thereof. If any such certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation or an employee of the Corporation, the signatures of any of the officers above specified upon such certificate may be facsimiles. In case any such officer who shall have signed or whose facsimile signature shall have been placed upon such certificate shall have ceased to be such before such certificate is issued, it may be issued by the Corporation with the same effect as if such officer had not ceased to be such at the date of its issue. SECTION 2. Transfers. Shares of stock of the Corporation shall be ---------- transferable on the stock books of the Corporation by the holder in person or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary or the transfer agent, but, except as hereinafter provided in the case of loss, destruction or mutilation of certificates, no transfer of stock shall be entered until the previous certificate, if any, given for the same shall have been surrendered and canceled. Except as otherwise provided by law, no transfer of shares shall be valid as against the Corporation, its shareholders or creditors, for any purpose, until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred. The Board may also make such additional rules and regulations as it may deem expedient concerning the issue and transfer of certificates representing shares of the capital stock of the Corporation. SECTION 3. Record Date. For the purpose of determining shareholders ------------ entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof unless the Board fixes a new record -14- date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting. SECTION 4. Lost, Destroyed or Mutilated Certificates. In case of loss, ------------------------------------------ destruction or mutilation of any certificate of stock, another may be issued in its place upon proof of such loss, destruction or mutilation and upon the giving of a bond of indemnity to the Corporation in such form and in such sum as the Board may direct; provided that a new certificate may be issued without requiring any bond when, in the judgment of the Board, it is proper so to do. SECTION 5. Control Share Acquisitions. Article 14.1 of Chapter 9 of Title --------------------------- 13.1 of the Code of Virginia shall not apply to acquisitions of shares of the Corporation. ARTICLE IX. INSPECTION OF RECORDS. The Board from time to time shall determine whether, to what extent, at what times and places, and under what conditions and regulations the accounts and books and papers of the Corporation, or any of them, shall be open for the inspection of the shareholders, and no shareholder shall have any right to inspect any account or book or paper of the Corporation except as expressly conferred by statute or by these By-laws or authorized by the Board. ARTICLE X. AUDITOR. The Board shall annually appoint an independent accountant who shall carefully examine the books of the Corporation. One such examination shall be made immediately after the close of the fiscal year and be ready for presentation at the annual meeting of shareholders of the Corporation, and such other examinations shall be made as the Board may direct. ARTICLE XI. SEAL. The seal of the Corporation shall be circular in form and shall bear the name of the Corporation and the year "1892." -15- ARTICLE XII. FISCAL YEAR. The fiscal year of the Corporation shall end on the 31st day of December in each year. ARTICLE XIII. AMENDMENTS. The By-laws of the Corporation may be altered, amended or repealed and new By-laws may be adopted by the Board (except as Section 1 of Article II may otherwise require), or by the holders of the outstanding shares of the Corporation entitled to vote generally at any annual or special meeting of the shareholders when notice thereof shall have been given in the notice of the meeting of shareholders. EMERGENCY BY-LAWS. SECTION 1. Definitions. As used in these Emergency By-laws, ------------ (a) the term "period of emergency" shall mean any period during which a quorum of the Board cannot readily be assembled because of some catastrophic event. (b) the term "incapacitated" shall mean that the individual to whom such term is applied shall not have been determined to be dead but shall be missing or unable to discharge the responsibilities of his office; and (c) the term "senior officer" shall mean the Chairman of the Board, the President, any corporate Vice President, the Treasurer, the Controller and the Secretary, and any other person who may have been so designated by the Board before the emergency. SECTION 2. Applicability. These Emergency By-laws, as from time to time -------------- amended, shall be operative only during any period of emergency. To the extent not inconsistent with these Emergency By-laws, all provisions of the regular By- laws of the Corporation shall remain in effect during any period of emergency. No officer, director or employee shall be liable for actions taken in good faith in accordance with these Emergency By-laws. SECTION 3. Board of Directors. (a) A meeting of the Board may be called by ------------------- any director or senior officer of the Corporation. Notice of any meeting of the Board need be given only to such of the directors as it may be feasible to reach at the time and by such -16- means as may be feasible at the time, including publication or radio, and at a time less than twenty-four hours before the meeting if deemed necessary by the person giving notice. (b) At any meeting of the Board, three directors in attendance shall constitute a quorum. Any act of a majority of the directors present at a meeting at which a quorum shall be present shall be the act of the Board. If less than three directors should be present at a meeting of the Board, any senior officer of the Corporation in attendance at such meeting shall serve as a director for such meeting, selected in order of rank and within the same rank in order of seniority. (c) In addition to the Board's powers under the regular By-laws of the Corporation to fill vacancies on the Board, the Board may elect any individual as a director to replace any director who may be incapacitated and to serve until the latter ceases to be incapacitated or until the termination of the period of emergency, whichever first occurs. In considering officers of the Corporation for election to the Board, the rank and seniority of individual officers shall not be pertinent. (d) The Board, during as well as before any such emergency, may change the principal office or designate several alternative offices or authorize the officers to do so. SECTION 4. Appointment of Officers. In addition to the Board's powers under ------------------------ the regular By-laws of the Corporation with respect to the election of officers, the Board may elect any individual as an officer to replace any officer who may be incapacitated and to serve until the latter ceases to be incapacitated. SECTION 5. Amendments. These Emergency By-laws shall be subject to repeal ----------- or change by further action of the Board of Directors or by action of the shareholders, except that no such repeal or change shall modify the provisions of the second paragraph of Section 2 with regard to action or inaction prior to the time of such repeal or change. Any such amendment of these Emergency By- laws may make any further or different provision that may be practical and necessary for the circumstances of the emergency. -17- EX-10.D 3 OLIN SENIOR EXECUTIVE PENSION PLAN EXHIBIT 10(d) OLIN SENIOR EXECUTIVE PENSION PLAN (Restated as of February 8, 1999) Article I. The Plan -------------------- 1.1 Establishment of Plan. Olin Corporation (the "Company" or ---------------------- "Olin") hereby restates its Olin Senior Executive Pension Plan, originally adopted by the Board of Directors on September 27, 1984. The Effective Date of this restatement is February 8, 1999. 1.2 Purpose. The purpose of this Plan is to attract and retain a -------- management group capable of assuring Olin's future success by providing them with supplemental retirement income under this Plan. This Plan is intended to be an unfunded, nonqualified deferred compensation plan for select management employees. Article II. Eligibility ------------------------ 2.1 Participation. Any employee of the Company or its subsidiaries -------------- (collectively referred to as "Employing Companies") whose job is rated at 2,000 Hay Points (or the equivalent) or more, and who is selected by the Compensation Committee (referred to in this Plan as the "Selection Committee"), shall participate in the Plan. As provided hereinafter, the Selection Committee shall also have the power to remove any Participant from the Plan, whether or not he or she has begun to receive benefits hereunder. 2.2. Transfer of Arch Employees and Reserves. As of February 8, ---------------------------------------- 1998, the effective date of the spin-off of Arch Chemicals, Inc. ("Arch") from the Company (the "Arch Spin-off Date"), the employment of certain Company employees, who were defined as "Arch Employees" within the meaning of the Employee Benefits Allocation Agreement as of the same date, was transferred to Arch or its affiliated companies. Those Arch Employees who had been participating in this Plan immediately commenced participation in the Arch Senior Executive Pension Plan (the "Arch Plan"), and Olin transferred to Arch the reserves reflecting the value of the accrued liabilities of such employees under this Plan. From and after the Arch Spin-off Date, neither Olin nor this Plan shall have any liability with respect to the former participation by such Arch Employees in this Plan. -1- Article III. Benefits --------------------- 3.1 Benefit Formula. --------------- Upon retirement, as hereinafter provided, a Participant shall be entitled to receive an annual "Retirement Allowance" equal to the lesser of ------------- (a) and (b) below: (a) three percent (3%) of the Participant's Average Compensation, multiplied by his Years of Benefit Service credited while the employee was a Participant in this Plan, plus one and one-half percent (1%) of the Participant's Average Compensation multiplied by his Years of Benefit Service credited under all qualified plans of Olin Corporation or its affiliates while the employee was not a Participant in this Plan, provided that the resulting percentage of Average Compensation shall be reduced by one-third of one percent (1/3%) for each month by which the Participant's benefits begin prior to his sixty-second (62nd) birthday; reduced by the sum of (i) the Participant's annual retirement allowance payable from all Olin qualified and nonqualified defined benefit pension plans of the Company and all Employing Companies, including, without limitation, the Olin Corporation Employees Pension Plan which was previously known as the Nonbargaining Employees' Pension Plan of Olin Corporation and prior to that as the Olin Salaried Pension Plan (all such plans being collectively referred to in this Plan as the "Olin Employees Pension Plan"), and the equivalent actuarial value of any other arrangement with the Company or an Employing Company which the Plan Administrator, in its sole discretion, determines to be a pension supplement (collectively referred to hereinafter as the "Other Olin Plans"); and (ii) fifty percent (50%) of the Participant's Primary Social Security Benefit. (b) fifty percent (50%) of the Participant's Average Compensation, reduced by the sum of (i) the amount of annual retirement benefits from the Olin Employees Pension Plan and all Other Olin Plans (as previously defined) and all qualified and non-qualified deferred compensation plans of the Participant's previous and subsequent employers; and (ii) fifty percent (50%) of the Participant's Primary Social Security Benefit. (c) For purposes of this benefit formula, "Average Compensation", "Years of Benefit Service", "Retirement Allowance" and "Primary Social Security Benefit" shall have the -2- same definition as that contained in the Olin Employees Pension Plan; provided, however, that (i) "Average Compensation" under this Plan shall include deferred amounts of regular salary and deferrals under management incentive plans (other than the Performance Unit Plan, the EVA Bonus Bank and other long-term incentive and long-term bonus plans); (ii) Average Compensation of Participants whose employment is being transferred directly to Primex Technologies, Inc. or its affiliates ("Primex") (or who transfer directly within five (5) years following the spin-off of Primex) shall be determined taking into account reasonable compensation paid by Primex (as determined by the Plan Administrator of this Plan); (iii) in calculating Average Compensation, executive severance which is payable to certain Participants under employment agreements shall be treated as if paid over the number of months used to calculate the amount of such severance, even if such severance is received in a lump sum; (iv) Average Compensation shall be calculated without regard to the dollar limitations imposed by Section 401(a)(17) of the Internal Revenue Code; and (v) "Years of Benefit Service" shall include service imputed as a result of treating executive severance as having been received over the number of months used to calculate such severance. (d) The annual retirement allowances payable under the Olin Employees Pension Plan, Other Olin Plans and from pension plans of the Participant's previous employers, which are to be used to reduce the benefit payable under (a) or (b) above, shall be determined assuming (i) that the Participant selected a 50% joint and survivor annuity under such plans, (ii) began receiving benefits thereunder at their actual commencement date (rather than the commencement date for benefits under this Plan), and (iii) using the actuarial equivalent factors specified in the plans which are the subject of the offset or, if such factors are not reasonably available, such factors as may, from time to time, be elected by the Plan Administrator. 3.2 Early Retirement. ---------------- (a) Except as otherwise provided in Section 4.2(a), a Participant may retire from active service with all Employing Companies and commence benefits under this Plan at any time after reaching his fifty-fifth (55th) birthday, provided, however, that Accelerated Benefits (as provided for in Section 4.2(b) of the Plan) may not commence until at least twelve (12) full months following the Participant's actual retirement. In the case of Participants who transfer directly to Arco Chemical Company ("Arco") or Primex (or who, in the case of Primex only, transfer directly to Primex within five (5) years of the spin-off of Primex), and in the case of Arch only, who transfer directly to Arch after the Arch Spin-off Date and on or before February 8, 2000, (i) "actual retirement" shall be construed to mean retirement or termination of service from Arco, Primex or Arch and their affiliates, as the case may be, and (ii) service with Primex, Arco, or Arch (and their affiliates) shall be credited in enabling the Participant to attain his early retirement age (but not in determining Years of Benefit Service) under this Plan. -3- (b) For purposes of (i) determining whether a Participant has reached his fifty-fifth (55th) birthday and, thus, is eligible to commence benefits under this Section 3.2 instead of on a deferred vested basis, and (ii) calculating the annual retirement allowance from the Olin Employees Pension Plan which is to be used as an offset, any Participant who has completed at least seven (7) Years of Creditable Service (as defined in the Olin Employees Pension Plan) and who is at least age fifty-two (52) and less than age fifty-five (55) on the date his service is terminated (without taking into account any severance period) other than (i) for cause or (ii) as a result of a voluntary termination, shall be treated as continuing as an active Employee until age fifty-five (55). In the case of Participants who transfer directly to Arco, or to Primex within five (5) years of the spin-off of Primex, and in the case of Arch only, who transfer directly to Arch after the Arch Spin-off Date and on or before February 8, 2000, service with Arco, Primex and Arch, respectively, shall be credited in determining whether the Participant has reached age 55 under this paragraph (b). Such service shall be imputed for the sole purposes of determining whether the Participant qualifies for subsidized early retirement benefits, and shall not be treated as "Benefit Service" for the purpose of calculating the amount of the Participant's Retirement Allowance. A Participant may not commence benefits hereunder until he actually reaches age fifty-five (55). 3.3 Deferred Vested Employees. Any Participant who terminates active ------------------------- service with all Employing Companies prior to having reached age fifty-five (55) may commence benefits under this Plan only after having reached age sixty-five (65); provided however that, in the case of Participants who transfer directly to Primex, Arco, or Arch within the timeframes specified above, service with those respective companies and their affiliates shall be counted in enabling such Participants to retire on or after attaining age fifty-five (55) and actually retiring from Primex, Arco, or Arch as the case may be, in accordance with Section 3.2 above. In the case of a deferred vested Participant, benefits paid from this Plan will assume that the Participant did not commence benefits under the Olin Employees Pension Plan until he or she reached age sixty-five (65), even though the Participant may actually commence benefits under the Olin Employees Pension Plan prior to that date. In the event that an Olin Employee transfers to and becomes an Employee of Arch on or prior to February 8, 2000, no separation from service shall be deemed to occur permitting a distribution to such individual of benefits under this, or any other, provision of this Plan. 3.4 Calculation of Benefit if Participant is Disabled. In the event that ------------------------------------------------- a Participant becomes Totally Disabled as that term is defined in the Olin Employees Pension Plan, the Participant shall continue to receive the same service credit under this Plan as would be applicable to Totally Disabled nonbargaining employees covered by the Olin Employees Pension Plan. The disabled Participant's benefit under this Plan shall be calculated in accordance with 3.1(a) and (b), and shall be payable as of the date that the Participant is no longer Totally Disabled (if such date occurs after age fifty-five (55)) or at age sixty-five (65), if the Employee is still then Disabled. If a Participant is no longer Disabled prior to reaching age fifty-five (55), then his entitlement to benefits shall be determined under Section 3.3, if he terminates service prior to reaching age 55, or under the other -4- applicable provisions of this Plan, if he returns to active service. No Participant shall qualify for Disability Benefits hereunder once he or she is no longer actively employed by Olin Corporation or its affiliates. 3.5 Transfers between Olin and Arch. It is contemplated that Plan -------------------------------- Participants may transfer their employment after the Arch Spin-off Date and on ----- or before February 8, 2000 from Olin to Arch and vice versa and commence, or ---- ----- resume participation in the Senior Executive Pension Plan of their then new employer. (a) Transfer to Arch from Olin. In the event that a Plan Participant --------------------------- transfers employment to Arch after the Arch Spin-off Date and on or prior to February 8, 2000, his or her benefit accrual under this Plan shall cease and Olin shall remain liable for payment of any benefits accrued under this Plan to the date of such transfer. As provided in Section 3.3, no separation from service shall be deemed to occur under this Plan permitting a distribution under any provision of this Plan, and benefits hereunder shall not commence until the Participant has terminated his employment with Arch and its affiliates and has otherwise qualified for benefits hereunder. When commenced, benefits payable hereunder shall be based upon the Participant's service with Olin to the date of transfer; provided, however that Olin shall continue to recognize a Participant's service with Arch and its affiliates subsequent to his transfer to Arch solely for purposes of determining the Participant's vesting and attainment of retirement dates under this Plan. (b) Transfer to Olin from Arch. In the event that an Arch Employee --------------------------- transfers employment to Olin from Arch after the Arch Spin-off Date and on or prior to February 8, 2000, benefit accrual under the Arch Plan shall cease and Arch shall remain liable for payment of any benefits accrued under the Arch Plan to the employees date of transfer to Olin. Benefits shall not commence under the Arch Plan until the former Arch employee terminates service with Olin and its affiliates and has otherwise qualified for benefits under the Arch Plan. In computing benefit under this Plan and determining attainment of retirement ages under this Plan, Olin shall recognize the compensation received, and service rendered by such Participant while employed by Arch and its affiliates up to the Participant's date of transfer to Olin. When benefits commence under this Plan, they shall be offset by the benefit that would be payable to the Participant from the Arch Plan, as of the date benefits commence hereunder, regardless of when such benefit under the Arch Plan actually commences. Article IV. Payment of Benefits -------------------------------- 4.1 Payment Provisions for Current and Future Retirees. In the event --------------------------------------------------- that the Participant (i) does not elect to establish an employee-grantor trust in accordance with Section 4.2(a), (ii) does not elect to receive Accelerated Benefits in accordance with Section 4.2(a), and (iii) elects to commence his benefits under this Plan at the same time that he commences his Qualified Plan Benefit, then the Retirement Allowance payable hereunder shall be paid commencing at the same -5- time and in the same form as that in which the Qualified Plan Benefit is payable to the Participant. If the Participant elects an actuarially equivalent form of benefit payment with respect to his Qualified Plan Benefits, that same form of payment shall apply to payment of his Retirement Allowance hereunder. Any election to receive regular monthly benefits under this Section 4.3 must be made at least one full year prior to the Participant's Accelerated Benefit Commencement Date. 4.2 Payment Provisions for Active Employees. ---------------------------------------- (a) As of October 31 of the calendar year following the year in which an actively employed Participant meets the Minimum Benefit Accumulation threshold provided for in Section 4.4, the Actuarial Present Value (determined as hereinafter provided) of the after-tax amount of an actively employed Participant's Retirement Allowance shall be deposited in an employee-grantor trust established by the Participant unless, at least one full year prior to the funding of such employee-grantor trust, the Participant shall instead have elected to receive "Accelerated Benefits" as hereinafter provided. If a Participant elects to receive Accelerated Benefits, then the Actuarial Present Value of such Benefits shall be paid, at the election of the Chairman of the Board of Directors of the Company, either in a single sum or in up to three (3) annual installments (such single sum or annual installments being referred to in this Plan as "Accelerated Benefits"). The Participant's Accelerated Benefits shall commence on his Accelerated Benefit Commencement Date, which shall be twelve full months following a Participant's actual retirement at age fifty-five (55) or later (the Participant's "Accelerated Benefit Commencement Date"). In the case of Participants who transfer directly to Primex or Arco (or who, in the case of Primex only, transfer directly to Primex within five (5) years of the spin-off of Primex), and in the case of Arch only, who transfer directly to Arch after the Arch Spin-off Date and on or before February 8, 2000, "actual retirement" shall be construed to mean retirement or termination of service from the transferee employer. Service with Primex, Arco or Arch (and their affiliates) shall be credited in enabling the Participant to attain his early retirement age (but not in determining his Years of Benefit Service) under this Plan. (b) In the event that an actively employed Participant elects not to establish an employee-grantor trust, but instead to receive Accelerated Benefits, regular monthly benefits shall commence to be paid upon such Participant's actual retirement in accordance with Section 4.3 until such Participant reaches his Accelerated Benefit Commencement Date, at which time "Accelerated Benefits" shall be paid in the form and manner determined by the Chairman of the Board of Directors of the Company, and in the case of the Chairman, the Selection Committee, either in a single sum, in up to three (3) annual installments, or in a combination of annuity payments and either a single sum or annual installments, provided, however, that no monthly benefits shall be paid to Participants who transfer to Primex, Arco or Arch until they separate from service with Primex, Arco, or Arch, respectively. -6- (c) Alternatively, the actively employed Participant may elect, at least one full year prior to such Accelerated Benefit Commencement Date, to receive his entire benefit in the form of an annuity in accordance with Section 4.3 of this Plan. 4.3 Payment of Regular Monthly Benefits. ------------------------------------ (a) Participants retiring from active service from all Employing Companies may elect to receive regular monthly benefits in lieu of receiving Accelerated Benefits or establishing an employee-grantor trust. Such monthly benefits shall be calculated and payable in the form of a joint and 50% survivor annuity with the Participant's Spouse as the joint annuitant, without actuarial reduction for the death benefit protection. (b) Any Participant who terminates service with all Employing Companies before reaching age 55 may not commence benefits under this Plan prior to reaching age 65 unless (i) he is eligible for "lay-off credit" pursuant to Section 3.2(b) and, thus, is deemed to qualify for early retirement benefits or (ii) he receives service credit for purposes of enabling him to retire on or after age 55 as provided in the next sentence. In the case of Participants who transfer directly to Primex, Arco, or Arch within the timeframes previously specified in this Plan, service with those respective companies and their affiliates shall be counted in enabling such Participants to retire on or after attaining age fifty-five (55). Any benefits payable under this Plan with respect to a Participant who terminates service prior to reaching age 55, and who is not eligible for any imputed service under the foregoing provisions of Section 4.3(b), will be calculated assuming that the Participant did not commence benefits under the Olin Employees' Pension Plan until reaching age 65, even though his actual commencement date under the Olin Employees Pension Plan may have been earlier. 4.4 Assumptions used for Determining Amount to be contributed to Employee- --------------------------------------------------------------------- grantor Trust; Threshold for Accelerated Benefits. -------------------------------------------------- (a) Actuarial Assumptions for Employee-Grantor Trust. In determining the ------------------------------------------------ Actuarial Present Value of the Participant's Plan benefit to be used for purposes funding an employee-grantor trust, the benefit shall be determined: (i) as of the close of the Plan Year (i.e., December 31) prior to the year in which the employee grantor trust is being funded; (ii) using an annuity purchase rate based upon a discount rate equal to the rate for a zero coupon Treasury strip (determined approximately at the time of the deposit to the employee-grantor trust) with a maturity that approximates the Participant's life expectancy determined as of the date the payment to the trust is scheduled to be made; and -7- (iii) assuming that the benefit commences under this Plan (a) on the Participant's 65th birthday, if the Participant terminates service (or is treated as terminating service) prior to age 55; (b) on the Participant's 62nd birthday, if the Participant terminates service on or after reaching age 55 and before reaching age 62; and (c) on the Participant's 65th birthday, if the Participant terminates service on or after reaching age 62. (b) Actuarial Assumptions for Determining Accelerated Benefits. In ---------------------------------------------------------- determining the Actuarial Present Value of the Participant's Accelerated Benefit, the benefit shall be determined: (i) as of the close of the Participant's retirement or termination of service; (ii) using an annuity purchase rate based upon a discount rate equal to the rate for a zero coupon Treasury strip (determined approximately at the time the Accelerated Benefit is scheduled to commence) with a maturity that approximates the Participant's life expectancy determined as of the date the payment is scheduled to be made; and (iii) assuming that the benefit commences under this Plan (a) on the Participant's 65th birthday, if the Participant terminates service (or is treated as terminating service) prior to age 55; (b) on the Participant's 62nd birthday, if the Participant terminates service on or after reaching age 55 and before reaching age 62; and (c) on the Participant's 65th birthday, if the Participant terminates service on or after reaching age 62. (c) Minimum Benefit Accumulation Threshold. No Accelerated Benefits shall --------------------------------------- commence to be paid, and no Participant shall be given the opportunity to fund an employee-grantor trust, until the Participant has accumulated benefits under this Plan, the Olin Supplementary Pension Plan and the Olin Deferral Benefit Pension Plan which, in the aggregate, have an actuarial present value of at least One Hundred Thousand Dollars ($100,000.00). 4.5 Surviving Spouse Benefit. ------------------------- (a) The Surviving Spouse of a Participant who dies after commencing regular ----- monthly benefits shall receive a survivor benefit for his or her lifetime equal to 50% of the -8- monthly payments that were being paid to the Participant under the Plan as of his death. The Surviving Spouse of a Participant who dies after having elected to receive Accelerated Benefits, but who as of the date of his death has not received the entire value of his Accelerated Benefits, shall receive the remainder of any Accelerated Benefits not yet paid in the form in effect with respect to the Participant. (b) The Surviving Spouse of any Participant who dies prior to benefit ----- commencement shall be entitled to receive a benefit equal to 50% of the benefit that the Participant would have been entitled to had he survived to the earliest date on which he could commence benefits hereunder, retired and commenced monthly regular benefits under the Plan, and then died the next day. (c) Notwithstanding (a) or (b) above, if the Surviving Spouse is more than four years younger than the Participant, then the "joint and survivor" benefit payable to the Participant (and the Surviving Spouses's portion of such Benefit) shall be calculated by using the Participant's actual age, and the Spouses's actual age increased by four (4) years. (d) For purposes of this Plan, the term "Spouse" shall mean the person to whom a Participant is validly married at the date of his death, as evidenced by a marriage certificate issued in accordance with state law; provided however, that (i) if a Participant's Spouse at his or her death was not the Participant's Spouse at least 12 months prior to the Participant's death, no Surviving Spouse's retirement allowance shall be paid, and (ii) common law marriages shall not be recognized hereunder. 4.6 Benefit Upon a Change of Control. -------------------------------- (a) Lump Sum Payment Upon a Change of Control. ----------------------------------------- The spin-off of Primex and Arch from Olin shall not be deemed to be a change of control entitling any Participant herein to benefits under this Plan. Notwithstanding any other provision of the Plan, upon a Change in Control, each Participant covered by the Plan shall automatically be paid a lump sum amount in cash by the Company sufficient to purchase an annuity which, together with the monthly payment, if any, under a Rabbi or other trust arrangement established by the Company to make payments hereunder in the event of a Change in Control and/or pursuant to any other annuity purchased by the Company for the Participant to make payments hereunder, shall provide the Participant with the same monthly after-tax benefit as he would have received under the Plan based on the benefits accrued to the Participant hereunder as of the date of the Change in Control. Payment under this Section shall not in and of itself terminate the Plan, but such payment shall be taken into account in calculating benefits under the Plan which may otherwise become due the Participant thereafter. (b) No Divestment Upon a Change of Control. If a Participant is removed -------------------------------------- from participation in the Plan after a Change of Control has occurred, in no event shall his -9- years of Benefit Service accrued prior to such removal, and the benefit accrued prior thereto, be adversely affected. (c) Change of Control Defined. ------------------------- For purposes of the Plan, a "Change in Control" shall be deemed to have occurred if (i) the Company ceases to be, directly or indirectly, owned of record by at least 1,000 stockholders;or (ii) a person, partnership, joint venture, corporation or other entity, or two or more of any of the foregoing acting as "person" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act"), other than the Company, a majority- owned subsidiary of the Company or an employee benefit plan of the Company or such subsidiary (or such plan's related trust), become(s) the "beneficial owner" (as defined in Rule 13d-3 of the Act) of 20% or more of the then outstanding voting stock of the Company; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Company's Board of Directors (together with any new Director whose election by the Company's Board or whose nomination for election by the Company's stockholders, was approved by a vote of at least two-thirds of the Directors of the Company then still in office who either were Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Directors then in office; or (iv) all or substantially all of the business of the Company is disposed of pursuant to a merger, consolidation or other transaction in which the Company is not the surviving corporation or the Company combines with another company and is the surviving corporation (unless the shareholders of the Company immediately following such merger, consolidation, combination, or other transaction beneficially own, directly or indirectly, more than 50% of the aggregate voting stock or other ownership interests of (x) the entities, if any, that succeed to the business of the Company or (y) the combined company); or (v) the shareholders of the Company approve a sale of all or substantially all of the assets of the Company or a liquidation or dissolution of the Company. (d) Arbitration. Any dispute or controversy arising under or in ----------- connection with the Plan subsequent to a Change in Control shall be settled exclusively by arbitration in Connecticut, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. -10- 4.7 Removal from the Plan; Non-Payment of Benefits. ----------------------------------------------- (a) Any Participant may be removed from the Plan by the Selection Committee at any time "for cause", as determined by the Selection Committee in its sole discretion, whether or not the Participant has begun to receive payments under the Plan, and whether or not the Participant's employment has been terminated. "Cause" shall include, without limitation, rendering services in any capacity to a competitor of the Company or Employing Company without the consent of the Selection Committee. Neither the Participant nor his or her Spouse shall be entitled to receive any payments from the Plan from and after the date of the removal of the Participant nor have any cause of action as a result of such removal. The Participant or Spouse shall not be required to return any payments made prior to removal of the Participant from the Plan. (b) The Selection Committee may notify a Participant that he or she is being suspended from the Plan as a result of job performance which the Selection Committee in its sole discretion deems unsatisfactory. From and after the date of such notification and notwithstanding the Participant's actual Hay Points, he or she will not be deemed to have 2,000 or more Hay Points for purposes of calculating the Participant's Retirement Allowance. Any prior Years of Benefit Service shall not be affected by such suspension. ARTICLE V. Funding 5.1 Unfunded Plan. This Plan shall be unfunded. All payments under ------------- this Plan shall be made from the general assets of the Employing Company of the Participant. 5.2 Liability for Payment. Each Employing Company shall pay the --------------------- benefits provided under this Plan with respect to Participants who are employed, or were formerly employed by it during their participation in the Plan. In the case of a Participant who was employed by more than one Employing Company, the Committee shall allocate the cost of such benefits among such Employing Companies in such manner as it deems equitable. The obligations of the Employing Company shall not be funded in any manner. The rights of any person to receive benefits under this Plan are limited to those of a general creditor of the Employing Company liable for payment hereunder. 5.3 Anti-alienation. No Participant or beneficiary shall have the --------------- right to assign, transfer, encumber or otherwise subject to any lien any payment or any other interest under this Plan, nor shall such payment or interest be subject to attachment, execution or levy of any kind. Article VI. Plan Administration ------------------------------- 6.1 Plan Administrator. The Company hereby appoints the Benefit Plan ------------------- Review Committee as the Plan Administrator (the "Plan Administrator" or "Committee"). -11- Any person, including, but not limited to, the directors, shareholders, officers and employees of the Company, shall be eligible to serve on the Committee. Any person so appointed shall signify his acceptance by undertaking the duties assigned. Any member of the Committee may resign by delivering written resignation to the Company. The Company may also remove any member of the Committee by delivery of a written notice of removal, which shall take effect upon delivery or on a date specified. Upon resignation or removal of a Committee member, the Company shall promptly designate in writing such other person or persons as a successor. 6.2 Allocation and Delegation. The Committee members may allocate ------------------------- the responsibilities among themselves, and shall notify the Company in writing of such action and the responsibilities allocated to each member. 6.3 Powers, Duties and Responsibilities. Except for those powers ----------------------------------- expressly reserved to the Selection Committee, the Plan Administrator shall have all power to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, in accordance with the terms of the Plan. The Plan Administrator shall have the absolute discretion and power to determine all questions arising in connection with the administration, interpretation and application of the Plan. Any such determination by the Plan Administrator shall be conclusive and binding upon all persons. The Plan Administrator may correct any defect or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan; provided, however, that such interpretation or construction shall be done in a non-discriminatory manner and shall be consistent with the intent of the Plan. The Plan Administrator shall: (a) compute the amount and kind of benefits to which any Participant shall be entitled hereunder; (b) maintain all necessary records for the administration of the Plan; (c) interpret the provisions of the Plan and make and publish such rules for regulation of the Plan as are consistent with the terms hereof; (d) assist any Participant regarding his rights, benefits or elections available under the Plan; and (e) communicate to Participants and their Beneficiaries concerning the provisions of the Plan. -12- 6.4 Records and Reports. The Plan Administrator shall keep a record -------------------- of all actions taken and shall keep such other books of account, records and other information that may be necessary for proper administration of the Plan. The Plan Administrator shall file and distribute all reports that may be required by the Internal Revenue Service, Department of Labor or others, as required by law. 6.5 Appointment of Advisors. The Plan Administrator may appoint ------------------------- accountants, actuaries, counsel, advisors and other persons that it deems necessary or desirable in connection with the administration of the Plan. 6.6 Majority Actions. The Committee shall act by a majority of their ---------------- numbers, but may authorize one or more of them to sign all papers on their behalf. 6.7 Indemnification of Members. The Company shall indemnify and hold --------------------------- harmless any member of the Committee from any liability incurred in his or her capacity as such for acts which he or she undertakes in good faith as a member of such Committee. Article VII. Termination and Amendment -------------------------------------- 7.1 Amendment or Termination. The Company may amend or terminate the ------------------------ Plan at any time, in whole or in part, by action of its Board of Directors or any duly authorized committee or officer. Any Employing Company may withdraw from participation in the Plan at any time. No amendment or termination of the Plan or withdrawal therefrom by an Employing Company shall adversely affect the vested benefits payable hereunder to any Participant for service rendered prior to the effective date of such amendment, termination or withdrawal. Article VIII. Miscellaneous ---------------------------- 8.1 Gender and Number. Whenever any words are used herein in the ------------------- masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where such would apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in another form in all cases where they would so apply. 8.2 Action by the Company. Whenever the Company under the terms of --------------------- this Plan is permitted or required to do or perform any act or thing, it shall be done and performed by an officer or committee duly authorized by the Board of Directors of the Company. 8.3 Headings. The headings and subheadings of this Plan have been --------- inserted for convenience of reference only and shall not be used in the construction of any of the provisions hereof. -13- 8.4 Uniformity and Non Discrimination. All provisions of this Plan ---------------------------------- shall be interpreted and applied in a uniform nondiscriminatory manner. 8.5 Governing Law. To the extent that state law has not been -------------- preempted by the provisions of ERISA or any other laws of the United States heretofore or hereafter enacted, this Plan shall be construed under the laws of the State of Connecticut. 8.6 Employment Rights. Nothing in this Plan shall confer any right ------------------ upon any Employee to be retained in the service of the Company or any of its affiliates. 8.7 Incompetency. In the event that the Plan Administrator ------------- determines that a Participant is unable to care for his affairs because of illness or accident or any other reason, any amounts payable under this Plan may, unless claim shall have been made therefor by a duly appointed guardian, conservator, committee or other legal representative, be paid by the Plan Administrator to the spouse, child, parent or other blood relative or to any other person deemed by the Plan Administrator to have incurred expenses for such Participant, and such payment so made shall be a complete discharge of the liabilities of the Plan therefor. OLIN CORPORATION By:___________________________ Its -14- EX-10.E 4 SUPPLEMENTAL CONTRIBUTING EMPLOYEE OWNERSHIP PLAN EXHIBIT 10(e) OLIN SUPPLEMENTAL CONTRIBUTING EMPLOYEE OWNERSHIP PLAN EFFECTIVE JANUARY 1, 1990 AS AMENDED AND RESTATED AS OF FEBRUARY 8, 1999 Olin Corporation ("Olin") hereby restates the Olin Supplemental Contributing Employee Ownership Plan (the "Plan" or "SCEOP"), effective February 8, 1999. The Plan was originally effective as of January 1, 1990 and was amended from time to time prior to its restatement herein. The Plan is intended to be an unfunded, nonqualified deferred compensation plan for certain management and highly compensated employees, as described in Section 201(2) and 301(a)(3) of the Employee Retirement Income Security Act ("ERISA"). The purpose of this Plan is to provide certain eligible executive employees, whose contributions to the Olin Corporation Contributing Employee Ownership Plan (as from time to time amended, the "CEOP") are limited under Sections 401(a)(17) of the Internal Revenue Code of 1986 and the regulations promulgated thereunder (the "Code"), with certain supplemental benefits to make up for such Code-imposed limitations. ARTICLE I DEFINITIONS AND GENERAL PROVISIONS 1.1 Except as otherwise provided herein, the terms defined in the CEOP are used herein with the meanings ascribed to them in the CEOP. In addition, when used herein, the following definitions shall apply: (a) "Arch Phantom Units" means phantom units of the CEOP's Arch Common Stock Fund credited on and after February 8, 1999, under the SCEOP, such units deemed to consist of both the Common Stock of Arch Chemicals, Inc. ("Arch") and cash. (b) "CEOP Percentage" means with respect to a SCEOP Participant the annual percentage by which such Participant reduces his Maximum Eligible Compensation on either a before-tax or after-tax basis in calculating Contributions made to the CEOP; provided, however, that, if a Participant's CEOP percentage exceeds six percent (6%), the Participant may elect, for purposes of this Plan, to limit the CEOP percentage used under this Plan to six percent (6%). (c) "Company" means Olin Corporation. (d) "Compensation" shall have the same meaning as under the CEOP, except that it shall not be subject to the maximum dollar limitation on compensation taken into account for purposes of the CEOP under Section 401(a)(17) of the Code. (e) "Distribution Date" has the same meaning as that specified in the Distribution Agreement by and between Olin Corporation and Arch Chemicals, Inc. (f) "Dividend Equivalents" means (i) with respect to Olin Phantom Units held in a SCEOP Account, the dollar amount of regular or special dividends actually paid in cash from time to time on the actual number of shares of Olin Common Stock reflected in such Olin Phantom Units; (ii) effective as of December 31, 1996, with respect to Primex Phantom Units held in a SCEOP Account, the dollar amount of regular or special dividends actually paid in cash from time to time on the actual number of shares of Primex Technologies, Inc. common stock ("Primex Stock") reflected in such Primex Phantom Units; and (iii) effective as of February 8, 1999, with respect to the Arch Phantom Units held in a SCEOP Account, the dollar amount of regular or special dividends actually paid in cash from time to time on the actual number of shares of Arch Common Stock reflected in such Arch Phantom Units. Any Dividend Equivalents issued with respect to Primex Phantom Units and Arch Phantom Units shall be deemed reinvested in Olin Phantom Units. (g) "Excess Company Matching Contribution" means, with respect to a SCEOP Participant for a Plan Year, an amount derived by multiplying (i) the percentage used in calculating the Company Matching Contribution in excess of $25 per under the CEOP (as of the date hereof, 50%), by (ii) the annual Supplemental Plan Contribution for that Participant; provided that, if the participant's CEOP Percentage exceeds six percent (6%), the Supplemental Plan Contribution will be calculated using six percent (6%) for the CEOP Percentage when calculating the Excess Company Matching Contribution. (h) "Excess Performance Contribution" means with respect to a SCEOP Participant for a Plan Year, the amount derived by multiplying (i) the percentage used in calculating the Performance Matching Contribution under the CEOP for that year, if any, by (ii) the Supplemental Plan Contribution of that Participant for such year; provided that if such Participant's CEOP Percentage exceeds six percent (6%), the Supplemental Plan Contribution will be calculated using six percent (6%) for the CEOP Percentage when calculating the Excess Performance Contribution. (i) "Maximum Eligible Compensation" means the maximum amount of Compensation under Section 401(a)(17) of the Code from which a Participant is permitted to make Contributions to the CEOP, as such maximum amount is adjusted from time to time under the Code. (j) "Olin Phantom Units" means phantom units of the CEOP's Olin Common Stock Fund held in the SCEOP, such units consisting of both Olin Stock and cash. (k) "Plan Year" shall mean a twelve-month period ending on December 31. (l) "Primex Phantom Units" means, effective on and after December 31, 1996, phantom units of the CEOP's Primex Common Stock Fund held in the SCEOP, such units consisting of both Primex Stock and cash. 2 (m) "SCEOP Participant" shall mean a Participant whose contributions to the CEOP are limited as a result of the imposition of the limitations set forth in the Sections 401(a)(17) of the Code and who has filed an election to participate in the SCEOP with the Committee. (n) "SCEOP Account" for a SCEOP Participant shall mean the Account established under the SCEOP for such Participant holding Olin, Primex and/or Arch Phantom Units and any other phantom securities or units created herein. (o) "Supplemental Plan Contribution" with respect to a SCEOP Participant shall mean the annual amount by which the SCEOP Participant has elected to reduce his Compensation under this Plan, such amount being equal to the CEOP Percentage multiplied by the difference between (i) such Participant's Compensation and (ii) his Maximum Eligible Compensation. ARTICLE II ELIGIBILITY AND PARTICIPATION 2.1 Any Employee of the Company who (a) is a management employee; (b) is a "highly compensated employee" within the meaning of Code Section 414(q); (c) is participating in the CEOP; and (d) whose Compensation or rate of pay is in excess of the limitation contained in Section 401(a)(17) of the Code shall be eligible to participate in this Plan. 2.2 Each Eligible Employee wishing to participate in this Plan must execute and file a salary reduction agreement in a form acceptable to the Plan Administrator. Such agreement to reduce Compensation shall be made by December 1 of the calendar year prior to the beginning of the Plan Year for which it will be effective and prior to the calendar year in which such Compensation would otherwise be earned, and shall remain in effect for subsequent Plan Years unless revoked by the Participant in writing in a form acceptable to the Plan Administrator. Notwithstanding the foregoing, for the Plan Year in which a Participant first becomes eligible to participate in the Plan, a Participant may make such election within 30 days after he becomes eligible. 2.3 Any election to reduce salary shall be irrevocable for the Plan Year to which it relates, provided, however, that during a Plan Year a Participant may elect to cease all salary 3 reductions for the remainder of the Plan Year, in which case, no subsequent election shall be effective until the beginning of the next Plan Year. 2.4 No salary reduction election shall be given effect under this Plan until the Participant has contributed to the CEOP the maximum amount permitted by the CEOP and by applicable law for the Plan Year to which such salary reduction election relates. ARTICLE III CONTRIBUTIONS AND ACCOUNTS 3.1 Each SCEOP Participant who so elects for a Plan Year shall defer the Supplemental Plan Contribution on a pre-tax basis. For each SCEOP Participant, a SCEOP Account will be established. The Account will contain sub-accounts for each type of contribution credited to the SCEOP Account. For each Plan Year during which a person is a SCEOP Participant and making deferrals, the Participating Employer will credit to the SCEOP Account of each SCEOP Participant the number of Olin Phantom Units equal in value to the sum of (1) the Supplemental Plan Contribution, plus (2) the Excess Company Matching Contribution, plus (3) the Excess Performance Contribution, if any. Such crediting shall occur periodically in accordance with the timing of contributions to the CEOP, in the case of the Supplemental Plan Contributions and Excess Company Matching Contributions, and as soon as administratively feasible following the making of a Performance Matching Contribution under the CEOP, in the case of an Excess Performance Contribution. 3.2 As a result of the spin-off of Primex, Participants' SCEOP Account Balances deemed invested in Olin Phantom Units were credited with a dividend deemed invested in Primex Phantom Units. For each ten (10) Olin Phantom Units credited to a Participant's SCEOP Account as of December 31, 1996, the Participant's SCEOP Account was credited with one Primex Phantom Unit. The value of the total SCEOP dividend was determined by multiplying the percentage of the market value of the Olin Common Stock Fund in the CEOP that was held in shares of Primex stock and related cash immediately following the Primex spin- off by the total market value of the Olin Phantom Units in the SCEOP. This amount was then allocated to SCEOP Participants based on their number of Primex Phantom Units divided by the total number of Primex Phantom Units. No new investment shall be permitted in Primex Phantom Units. 3.3 As a result of the spin-off of Arch, Participants' SCEOP Account Balances deemed invested in Olin Phantom Units were credited with a dividend deemed invested in Arch Phantom Units. The value of the total SCEOP dividend was determined by multiplying the percentage of the market value of the Olin Common Stock Fund in the CEOP that was held in shares of Arch Common Stock and related cash immediately following the Arch spin-off by the total market value of the Olin Phantom Units in the SCEOP. The number of Arch Phantom Units credited to SCEOP Participants' Arch Phantom Unit Accounts was determined by dividing the amount of the total SCEOP dividend deemed invested in Arch Phantom Units by $10.00. No new investment shall be permitted in Arch Phantom Units. 4 3.4 A Participant's SCEOP Account will also be credited with Dividend Equivalents from time to time, solely in the form of additional Olin Phantom Units when dividends are paid (i) on the actual number of shares of Olin Common Stock reflected in the Olin Phantom Units held in such Account, (ii) on the actual number of shares of Primex Stock reflected in Primex Phantom Units held in such Account, and (iii) on the actual number of shares of Arch Stock reflected in Arch Phantom Units held in such Account. 3.5 For purposes of calculating the number of Olin Phantom Units to be credited to a Participant's SCEOP Account as a result of crediting contributions or Dividend Equivalents, the SCEOP shall use the Current Market Value for valuing units in the Olin Common Stock Fund as defined under the CEOP. Phantom Units will be credited in fractional amounts up to three decimal places. For purposes of valuing Primex Phantom Units and Arch Phantom Units under this Plan, the SCEOP shall use the Current Market Value for valuing units in the Primex Common Stock Fund and Arch Common Stock Fund, respectively, as defined in the CEOP. 3.6 SCEOP Participants may either (i) retain their Primex Phantom Units and/or Arch Phantom Units or (ii) may have their entire Primex Phantom Unit Account Balance and/or Arch Phantom Unit Account Balance deemed transferred at the then Current Market Value and reinvested in Olin Phantom Units at the then Current Market Value. Once Primex Phantom Units and/or Arch Phantom Units are deemed transferred and reinvested, a Participant may not re-direct investment back into Primex Phantom Units or Arch Phantom Units, respectively. No new investment, whether in the form of Company or Participant contributions or Dividend Equivalents, shall be permitted in Primex Phantom Units or Arch Phantom Units. 3.7 A Participant shall be fully vested in his Supplemental Plan Contribution Account Balance, and shall vest in his Excess Company Matching and Excess Performance Contribution Account Balances in accordance with the vesting schedule contained in the CEOP. Nevertheless, each Participant shall be deemed vested in his SCEOP Account Balance to the same extent that he is actually vested in his CEOP Account Balance. A Participant shall be fully vested in his SCEOP Account Balance upon his death, upon his termination of service from the Company and all affiliates after reaching a retirement date under the CEOP, or upon his termination of service due to his Permanent Disability as defined in the CEOP. 3.8 In the event that the Compensation Committee of the Board ("the Committee") determines that any dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Olin Common Stock, Primex Stock, Arch Common Stock or any other securities of Olin , Primex or Arch, issuance of warrants or other rights to purchase Olin Common Stock, Arch Common Stock or Primex Common Stock or other securities or Olin, Primex or Arch, or other similar corporate transaction or event affects Olin, Primex or Arch Common Stock such that the Committee determines that an adjustment in Phantom Units under the Plan is appropriate in order to prevent dilution or enlargement of the benefits intended to be made available under this Plan, then the Committee shall, in such manner as it deems equitable, adjust Participants' 5 SCEOP Accounts. In the case of a spin-off, split-up, issuance of an extraordinary stock dividend, or similar transaction, such adjustment, in the Committee's discretion, may result in creation of phantom shares in a separate phantom stock fund, reinvestment of such phantom shares in Olin Phantom Units, and the like. Notwithstanding the foregoing, a Participant to whom Dividend Equivalents have been allocated shall not be entitled to receive a non-cash special or extraordinary dividend or distribution unless the Committee expressly authorizes such receipt. 3.9 Spin-off of Arch Employees; Transfers between Arch and Olin. It is ------------------------------------------------------------- contemplated that Plan Participants may transfer their employment after the Distribution Date and before February 8, 2000 to Olin from Arch and vice versa ---- ----- and commence, or resume, participation in the SCEOP of the new employer. (a) Initial Transfers to Arch From Olin. The SCEOP Account Balances of all ------------------------------------ Eligible Employees who (i) were enrolled in the Olin SCEOP as of the Distribution Date, and (ii) as of February 8, 1999 (the "Arch Spin-off Date") transferred to, and became employed by Arch or its affiliated Companies ("Arch Employees"), were transferred to Arch and Arch assumed the liabilities of Olin for the provision of benefits under the Olin SCEOP, provided that such Employees first released Olin, its affiliates, and this Plan from any liability or claims for benefits hereunder. In consideration for the assumption of liability and release, Olin transferred to Arch as of the same date (or to a rabbi trust established by Arch) reserves equal to the value of the SCEOP Accounts held by Arch Employees as of the Arch Spin-off Date. (b) Subsequent Transfers from Olin to Arch. In the event that an Olin --------------------------------------- employee transfers employment to Arch from Olin after the Arch Spin-off Date and by February 8, 2000, benefit accrual under the Olin SCEOP shall cease and Olin shall remain liable for payment of any benefits accrued under that Plan to the employee's date of transfer to Arch. Benefits shall not commence under the Olin SCEOP until the former Olin employee terminates service with Arch and its affiliates and has otherwise qualified for benefits under the Olin SCEOP. Following such transfer, Olin shall continue to credit such employee's service with Arch and its affiliates subsequent to his transfer to Arch solely for purposes of determining his vesting under the Olin SCEOP. (c) Subsequent Transfers to Olin From Arch. In the event that an Arch --------------------------------------- Employee who is a Participant in the Arch SCEOP transfers employment to Olin on or prior to February 8, 2000, benefit accrual under the Arch SCEOP shall cease and Arch shall remain liable for payment of any benefits accrued under the Arch SCEOP to the date of transfer. Olin shall enroll the transferred Employee in the Olin SCEOP to the extent that he or she is then eligible, and shall recognize the transferred Employee's service with Arch for purposes of determining his vesting under the Olin SCEOP. No separation from service shall be deemed to occur under the Arch SCEOP permitting a distribution under that Plan until the Participant has terminated his employment with Olin and its affiliates and has otherwise qualified for benefits hereunder. Arch shall continue to recognize a Participant's service with Olin and its affiliates subsequent to his 6 transfer to Olin solely for purposes of determining the Participant's vesting under the Arch SCEOP. ARTICLE IV DISTRIBUTIONS 4.1 No amounts credited to a Participant's SCEOP Account under this Plan may be withdrawn or distributed prior to the Participant's termination of employment with the Company and all affiliates thereof, including, but not limited to, Olin Corporation and any other corporation in the same controlled group with Olin Corporation (within the meaning of Section 414(b), (c) and (m) of the Code). Amounts credited to a Participant's Account under this Plan may not be loaned to such Participant. Subject to the provisions of Section 4.2, a Participant's SCEOP Account will be distributed in the form elected under Section 4.3 upon the earliest to occur of the Participant's death, termination of service due to Permanent Disability, retirement or termination of active service from the Company and all affiliates. 4.2 Each Participant whose employment is transferred from the Company to Primex, in connection with the spin-off of Primex, shall be fully vested in his or her SCEOP Account Balance. Such Balance shall continue to be credited with Dividend Equivalents until it is distributed; however, no such Balance may be distributed until such Participant terminates active service with Primex and its subsidiaries. In the event that an Olin Employee transfers to Arch on or prior to February 8, 2000 and participates in the Arch SCEOP, and Olin has retained liability for such individual's benefits hereunder, no separation from service shall be deemed to occur permitting a distribution of benefits from this Plan until the Employee subsequently terminates service from Arch and its affiliates. 4.3 Upon becoming a SCEOP Participant, such SCEOP Participant shall elect to receive the value of his SCEOP Account Balance either (i) in a lump sum, or (ii) in annual installments for a period not to exceed fifteen (15) years, commencing on the earliest to occur of the Participant's death, retirement, termination of service due to Permanent Disability or termination of active employment. A SCEOP Participant may change such election upon written notice to the Plan Administrator, provided no such change shall be given effect if the SCEOP Participant becomes eligible for a distribution from this Plan within twelve (12) months of such change. 4.4 Installment payments shall commence to be paid as soon as administratively feasible and generally effective as of the first day of the month following a Participant's termination of active service. The Company may delay the payment of any benefit owed hereunder in order to complete the orderly processing of such benefit. 4.5 Distributions to a SCEOP Participant of his SCEOP Account Balance shall be made only in the form of cash. Except as provided in Section 7.3, the value of the amount of any distribution shall be based on the Current Market Value of units in the Olin Common Stock Fund and, if applicable, Primex Common Stock Fund and Arch Common Stock Fund, as calculated in 7 accordance with the CEOP at the close of business on the last business day immediately preceding the date on which the distribution is to be effective. 4.6 Any benefit payable under this Plan on account of the death of a Participant shall be paid to the Participant's beneficiary as designated or determined under the terms of the CEOP. ARTICLE V LIABILITY FOR PAYMENT 5.1 Each Participating Employer shall pay the benefits provided hereunder with respect to SCEOP Participants who are employed or were formerly employed by it during their participation in the Plan. In the case of a SCEOP Participant who was employed by more than one Participating Employer, the Committee shall allocate the cost of such benefits among such Participating Employers in such manner as it deems equitable. The obligations of the Participating Employer hereunder shall not be funded in any manner. The rights of any person to receive benefits under this Plan are limited to those of a general creditor of the Participating Employer liable for such benefits hereunder. ARTICLE VI ADMINISTRATION OF THE PLAN 6.1 The Benefit Plan Review Committee shall be the named Plan Administrator of this Plan. The Plan Administrator shall administer the Plan for the exclusive benefit of the Participants (and their Beneficiaries), in accordance with the terms of the Plan. The Plan Administrator shall have the absolute discretion and power to determine all questions arising in connection with the administration, interpretation and application of the Plan. Any such determination by the Plan Administrator shall be conclusive and binding upon all persons. The Plan Administrator may correct any defect or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan; provided, however, that such interpretation or construction shall be done in a non-discriminatory manner and shall be consistent with the intent of the Plan, the Code and ERISA. The Plan Administrator shall: (a) determine all questions relating to eligibility of Employees to participate or continue participation in the Plan; (b) maintain all necessary records for the administration of the Plan; (c) interpret the provisions of the Plan and make and publish such rules for regulation of the Plan as are consistent with the terms hereof; 8 (d) assist any Participant regarding his rights, benefits or elections available under the Plan; and (e) communicate to Employees, Participants and their Beneficiaries concerning the provisions of the Plan. The Plan Administrator shall keep a record of all actions taken and shall keep such other books of account, records and other information that may be necessary for proper administration of the Plan. The Plan Administrator shall file and distribute all reports that may be required by the Internal Revenue Service, Department of Labor or others, as required by law. The Plan Administrator may appoint accountants, actuaries, counsel, advisors and other persons that it deems necessary or desirable in connection with the administration of the Plan. 6.2 Except as otherwise provided herein, all provisions set forth in the CEOP with respect to the administration of the Plan shall also be applicable with respect to this Plan. For purposes of this Plan, the Company shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company or by Olin Corporation with respect to the CEOP. ARTICLE VII AMENDMENT, TERMINATION AND CHANGE OF CONTROL 7.1 The Company reserves the right to amend or terminate this Plan at any time, by action of the Company's Board of Directors, the Compensation Committee of the Board, or such other committee from time to time designated by the Board, and without the consent of any employee or other person. 7.2 Notwithstanding Section 7.1 above, no amendment or termination of the Plan shall directly or indirectly reduce the balance to the credit of any Participant hereunder as of the effective date of such amendment or termination. Upon termination of the Plan, no additional amounts shall be credited under the terms of the Plan. Notwithstanding the termination of this Plan, amounts credited hereunder shall not be distributed to Participants except as provided in Article IV, above. 7.3 Upon a Change of Control (as defined below), the Plan shall terminate and the Account Balance of a SCEOP Participant shall be paid in cash to such Participant as promptly as practicable, but in no event later than 30 days following the Change in Control. For purposes of this paragraph, "Change in Control" shall mean that any of the following events shall have occurred: (i) the Company ceases to be, directly or indirectly, owned of record by at least 1,000 stockholders; or 9 (ii) a person, partnership, joint venture, corporation or other entity, or two or more of any of the foregoing acting as "person" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act"), other than the Company, a majority- owned subsidiary of the Company or an employee benefit plan of the Company or such subsidiary (or such plan's related trust), become(s) the "beneficial owner" (as defined in Rule 13d-3 of the Act) of 20% or more of the then outstanding voting stock of the Company; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Company's Board of Directors (together with any new Director whose election by the Company's Board or whose nomination for election by the Company's stockholders, was approved by a vote of at least two-thirds of the Directors of the Company then still in office who either were Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Directors then in office; or (iv) all or substantially all of the business of the Company is disposed of pursuant to a merger, consolidation or other transaction in which the Company is not the surviving corporation or the Company combines with another company and is the surviving corporation (unless the shareholders of the Company immediately following such merger, consolidation, combination, or other transaction beneficially own, directly or indirectly, more than 50% of the aggregate voting stock or other ownership interests of (x) the entities, if any, that succeed to the business of the Company or (y) the combined company);or (v) the shareholders of the Company approve a sale of all or substantially all of the assets of the Company or a liquidation or dissolution of the Company. For purposes of computing the payout under this Section 7.3, the cash value of the SCEOP Account of a Participant shall be determined by: (i) multiplying the actual number of shares of Olin Common Stock reflected in a Participant's Olin Phantom Units by the greater of (a) the highest Current Market Value of the Common Stock (as defined in the CEOP Plan) on any date within the period commencing thirty (30) days prior to such Change in Control and ending on the date of the Change in Control, or (b) if the Change in Control occurs as a result of a tender or exchange offer or consummation of a corporate transaction, then the highest price paid per share of Common Stock pursuant thereto; (ii) adding any cash portion attributable to a Participant's Olin Phantom Units held in his SCEOP Account; then 10 (iii) adding the then Current Market Value of that portion of a Participant's SCEOP Account which is deemed invested in Primex Phantom Units and Arch Phantom Units (and any other phantom units or stock fund established in the SCEOP). ARTICLE VIII GENERAL PROVISIONS 8.1 The Plan at all times shall be entirely unfunded and no provision shall at any time be made with respect to segregating any assets of the Company for payment of any distribution hereunder. The right of a Participant or his designated Beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor a designated Beneficiary shall have any rights in or against any specific assets of the Company. All amounts credited to the SCEOP Accounts of Participants shall constitute general assets of the Company and may be disposed of by the Company at such time and for such purposes as it may deem appropriate. 8.2 Nothing contained in the Plan shall constitute a guaranty by the Company or any other person or entity that the assets of the Company will be sufficient to pay any benefit hereunder. 8.3 No Participant shall have any right to receive a distribution of contributions made under the Plan except in accordance with the terms of the Plan. Establishment of the Plan shall not be construed to give any Participant the right to be retained in the service of the Company. 8.4 No interest of any person or entity in, or right to receive a distribution under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment or other alienation or encumbrance of any kind; nor may such interest or right to receive a distribution be taken, either voluntarily or involuntarily for the satisfaction of the debts of, or other obligations or claims against, such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings. 8.5 The Plan shall be construed and administered under the laws of the State of Connecticut, to the extent not preempted by federal law. 8.6 If any person entitled to a distribution under the Plan is deemed by the Company to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until claim therefor shall have been made by a duly appointed guardian or other legal representative of such person, the Company may provide for such payment or any part thereof to be made to any other person or institution then contributing toward or providing for the care and maintenance of such person. Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan therefor. 8.7 The Plan shall not be automatically terminated by a transfer or sale of all or substantially all of the assets of the Company or by the merger or consolidation of the Company 11 into or with any other corporation or other entity, but the Plan shall be continued after such sale, merger or consolidation only if and to the extent that the transferee, purchaser or successor entity agrees to continue the Plan. In the event that the Plan is not continued by the transferee, purchaser or successor entity, then the Plan shall terminate, subject to the provisions of Section 7.2. 8.8 Each Participant shall keep the Company informed of his current address and the current address of his designated Beneficiary. The Company shall not be obligated to search for the whereabouts of any person. If the location of a Participant is not made known to the Company within three (3) years after the date on which payment of any or all of the Participant's Accounts may first be made, payment may be made as though the Participant had died at the end of the three-year period. If, within one additional year after such three-year period has elapsed, or, within three years after the actual death of a Participant, the Company is unable to locate any designated Beneficiary of the Participant, then the Company shall have no further obligation to pay any benefit hereunder to such Participant or designated Beneficiary and such benefit shall be irrevocably forfeited. 8.9 This Plan shall constitute the entire agreement between the Company and its executives concerning the provision of supplemental CEOP benefits. 8.10 Notwithstanding any of the preceding provisions of the Plan, neither the Company nor any individual acting as employee or agent of the Company shall be liable to any Participant, former Participant or other person for any claim, loss, liability or expense incurred in connection with the Plan. IN WITNESS WHEREOF, Olin Corporation has caused this Plan to be executed by its duly authorized officer as of February 8, 1999. OLIN CORPORATION By:_______________________________________ Its 12 EX-10.S 5 SUPPLEMENTARY AND DEFERRAL BENEFIT PENSION PLAN EXHIBIT 10(s) OLIN SUPPLEMENTARY AND DEFERRAL BENEFIT PENSION PLAN (Restated as of February 8, 1999) Article I. The Plan -------------------- 1.1 Establishment of Plan. Olin Corporation (the "Company") hereby ---------------------- restates the Supplementary Pension Plan and Deferral Benefit Pension Plan for the benefit of salaried employees of Olin Corporation and other Employing Companies who may be eligible to participate in the Plan. The restated Plan is effective as of February 8, 1999 and is known as the "Olin Supplementary and Deferral Benefit Pension Plan." For purposes of this Plan, an "Employing Company" means any company which has adopted this Plan and is included within the definition of an Employing Company under the terms of the qualified defined benefit plans maintained by the Company or other Employing Companies (the "Qualified Plans"). 1.2 Purpose of Plan. The purpose of this Plan is to provide benefits to ---------------- certain current and former salaried employees of the Company and other Employing Companies whose benefits under the Qualified Plans ("Qualified Plan Benefits") are limited (i) by Section 415 of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) by the limitations on compensation that can be taken into account in calculating qualified plan benefits (i) under Section 401(a)(17) of the Code, and (iii) by the inability to include in compensation for Qualified Plan Benefits any salary and awards of management incentive compensation that have been deferred by Eligible Employees into non-qualified plans or arrangements. These limitations are collectively referred to herein as "Benefit Limitations". This Plan is intended to provide such employees and their Beneficiaries with benefits ("Supplemental Pension Benefits") equal to the difference between what their Qualified Plan Benefits would be absent the Benefit Limitations, and what their Qualified Plan Benefits would be with the imposition of the Benefit Limitations. 1.3 Nature of Plan. This Plan is divisible into two components: that --------------- portion which provides for benefits in excess of the Code Section 415 limits and, therefore, is intended to qualify for the exemption from the Employee Retirement Income Security Act ("ERISA") as an "excess benefit plan", and that portion which provides for benefits in excess of applicable compensation limits, and is intended to be a supplemental executive retirement plan for management and highly compensated employees. Article II. Eligibility. ------------------------- 2.1 Participation. Any Employee who is eligible to receive a Qualified -------------- Plan Benefit from the Company or an Employing Company, the amount of which is reduced by reason of the application of a Benefit Limitation (as previously defined) shall be eligible to receive a Supplemental Pension Benefit as provided in this Plan. 2.2. Transfer of Arch Employees and Reserves. As of February 8, 1999, the ---------------------------------------- effective date of the spin-off of Arch Chemicals, Inc. ("Arch") from the Company (the "Arch Spin-off Date"), the employment of certain Company employees, who were defined as "Arch Employees" within the meaning of the Employee Benefits Allocation Agreement as of the same date, was transferred to Arch or its affiliated companies. Those Arch Employees who had been participating in this Plan immediately commenced participation in the Arch Supplementary and Deferral Benefit Pension Plan (the "Arch Plan"), and Olin transferred to Arch the reserves reflecting the value of the accrued liabilities of such employees under this Plan; provided however that no transfer occurred with respect to an Arch Employee until such Employee released Olin and its affiliates, and the Plan, from any liability or claim for benefits with respect to such Employee's participation in this Plan. From and after the Arch Spin-off Date, neither Olin nor this Plan shall have any liability with respect to the former participation by such Arch Employees in this Plan. Article III. Calculation of Benefits. ------------------------------------- 3.1 Amount of Benefit. The Supplemental Pension Benefit payable to a ------------------ Participant retiring on or after his Normal Retirement Date shall be calculated in the form of a single life annuity, commencing at the Participant's Normal Retirement Date (or, if later, his actual retirement date) and shall be a monthly amount equal to the difference between (a) and (b) below: (a) the monthly amount of the Qualified Plan Benefit to which the Participant would have been entitled had such benefit been calculated (i) including non-qualified deferred payments of regular salary and deferred awards under the management incentive plan, and (ii) without regard to the Benefit Limitations imposed by Sections 415 and 401(a)(17) of the Code; and (b) the monthly amount of the Qualified Retirement Plan Benefit actually payable to the Participant. The amounts described in (a) shall be calculated as of the date that the Participant terminates service with the Company and all other Employing Companies, in the form of a single life annuity payable over the lifetime of the Participant commencing at his Normal Retirement Date (or, if later, his actual retirement date). 3.2 Transfers between Olin and Arch. It is contemplated that Plan -------------------------------- Participants may transfer their employment after the Arch Spin-off Date and on ----- or before February 8, 2000 from Olin to Arch and vice versa and commence, or ---- ----- resume, participation in the Supplementary and Deferral Benefit Pension Plan of their then new employer. (a) Transfer to Arch from Olin. In the event that a Plan Participant --------------------------- transfers employment to Arch after the Arch Spin-off Date and on or prior to February 8, 2000, his or her benefit accrual under this Plan shall cease and Olin shall remain liable for 2 payment of any benefits accrued under this Plan to the date of such transfer. No separation from service shall be deemed to occur under this Plan permitting a distribution under any provision of this Plan, and benefits hereunder shall not commence, until the Participant has terminated his employment with Arch and its affiliates and has otherwise qualified for benefits hereunder. When commenced, benefits payable hereunder shall be based upon the Participant's service with Olin to the date of transfer; provided, however that Olin shall continue to recognize a Participant's service with Arch and its affiliates subsequent to his transfer to Arch solely for purposes of determining the Participant's vesting and attainment of retirement dates under this Plan. (b) Transfer to Olin from Arch. In the event that an Arch Employee --------------------------- transfers employment to Olin from Arch after the Arch Spin-off Date and on or prior to February 8, 2000, benefit accrual under the Arch Plan shall cease and Arch shall remain liable for payment of any benefits accrued under the Arch Plan to the employees date of transfer to Olin. Benefits shall not commence under the Arch Plan until the former Arch employee terminates service with Olin and its affiliates and has otherwise qualified for benefits under the Arch Plan. In computing benefits under this Plan and determining attainment of retirement ages under this Plan, Olin shall recognize the compensation received, and service rendered by such Participant while employed by Arch and its affiliates up to the Participant's date of transfer to Olin. When benefits commence under this Plan, they shall be offset by the benefit that would be payable to the Participant from the Arch Plan, as of the date benefits commence hereunder, regardless of when such benefit under the Arch Plan actually commences. Article IV. Payment of Benefits. --------------------------------- 4.1. Benefits commencing on or after Reaching Early Retirement Date. --------------------------------------------------------------- (a) A Participant may retire from active service with all Employing Companies and commence benefits under this Plan at any time after reaching his fifty-fifth (55th) birthday (his "Early Retirement Date"), provided, however, that Accelerated Benefits (as defined in Section 4.4) may not commence until at least twelve (12) full months following the Participant's actual retirement. A Participant may commence benefits under this Plan regardless of the date on which he actually commences benefits under the Olin Corporation Employees' Pension Plan. In the case of Participants who transfer directly to Primex or Arco Chemical Company ("Arco") (or who, in the case of Primex only, transfer directly to Primex within five (5) years of the spin-off of Primex), and in the case of Arch only, who transfer directly to Arch after the Arch Spin-off Date and on or before February 8, 2000, "actual retirement" shall be construed to mean retirement or termination of service from the transferee employer. Service with Primex, Arco or Arch (and their affiliates) shall be credited in enabling the Participant to attain his early retirement age under this Plan. 3 (b) For purposes of determining whether a Participant has reached his fifty-fifth (55th) birthday and, thus, is eligible to commence benefits under this Section 4.1(a) instead of on a deferred vested basis, any Participant who has completed at least seven (7) Years of Creditable Service (as defined in the Olin Corporation Employees' Pension Plan) and who is at least age fifty-two (52) and less than age fifty-five (55) on the date his service is terminated (without taking into account any severance period) other than (i) for cause or (ii) as a result of a voluntary termination, shall be treated as continuing as an active Employee until age fifty-five (55). A Participant may not commence benefits hereunder until he actually reaches age fifty-five (55). In the case of Participants who transfer directly to Arco, or to Primex within five (5) years of the spin-off of Primex, and in the case of Arch only, who transfer directly to Arch after the Arch Spin-off Date and on or before February 8, 2000, service with Arco, Primex and Arch, respectively, shall be credited in determining whether the Participant has reached age 55 under this paragraph (b). Such service shall be imputed for the sole purposes of determining whether the Participant qualifies for subsidized early retirement benefits, and shall not be treated as "Benefit Service" for the purpose of calculating the amount of the benefit under this Plan. (c) With respect to a Participant retiring from active service on or after reaching his Early Retirement Date, the Plan Administrator will calculate the Participant's retirement benefit then payable from all Olin non-qualified and qualified pension plans using, in the case of the qualified pension plan benefit, the Benefit Limitations then in effect, and using the early retirement reductions specified in the Qualified Plan based upon the benefit commencement date elected by the Participant for commencement of his qualified and non- qualified plan benefits. In the case of a Participant who elects to defer commencement of his qualified plan benefits, the Olin Non-qualified pension plans, including this Plan, shall provide for the payment of the Participant's estimated qualified plan benefit until such time as the Participant actually commences his qualified plan benefit, at which time the amount of the Participant's non-qualified plan benefit, including the benefits payable from this Plan, shall be reduced dollar for dollar, but not below $0, by the amount of the qualified pension plan benefit ultimately payable to the Participant, based upon the Benefit Limitations in effect when the Participant actually commences receipt of such qualified plan benefit. 4.2 Deferred Vested Employees. Any Participant who terminates active ------------------------- service with all Employing Companies prior to having reached age fifty-five (55), may commence benefits under this Plan at any time after having reached age fifty-five (55); provided, however, that his benefit hereunder shall subject to the actuarial reductions that would be applicable under the Olin Qualified Plan, and further provided that, in the case of Participants who transfer directly to Primex, Arco or Arch within the timeframes specified above, service with those respective companies and their affiliates shall be counted in enabling such Participants to retire on or after attaining age fifty-five (55) and actually retiring from Primex, Arco, or Arch as the case may be, in accordance with Section 4.1 above. In the event that a Olin Employee transfers to and becomes employed by Arch on or prior to February 8, 2000 but after the Arch Spin-off Date, no separation from service shall be deemed to occur permitting a distribution of benefits under this, or any other provision of the Plan. 4 4.3 Payment of Regular Monthly Benefits along with Qualified Plan Benefits. ---------------------------------------------------------------------- (a) In the event that the Participant (i) does not elect to establish an employee-grantor trust in accordance with Section 4.4(a), (ii) does not elect to receive Accelerated Benefits in accordance with Section 4.4(a), and (iii) elects to commence his benefits under this Plan at the same time that he commences his Qualified Plan Benefit, then the Supplemental Pension Benefit payable hereunder shall be paid commencing at the same time and in the same form as that in which the Qualified Plan Benefit is payable to the Participant. If the Participant elects an actuarially equivalent form of benefit payment with respect to his Qualified Plan Benefits (with, if applicable, the consent of his surviving Spouse), that same form of payment shall apply to payment of his Supplementary Pension Benefit. Any election to receive regular monthly benefits under this Section 4.3 must be made at least one full year prior to the Participant's Accelerated Benefit Commencement Date. (b) An election by the Participant with respect to the timing and form of this Supplemental Pension Benefit shall be effective only if consented to by the Plan Administrator. If not so approved, then the timing and form of the Supplementary Pension Benefit shall be selected by the Plan Administrator in its sole discretion. (c) A Supplemental Pension Benefit that is payable in any form other than a single life annuity, or which commences at any time prior to the Participant's Normal Retirement Date shall be calculated using the same conversion factors and actuarial adjustments as those specified in the Qualified Plan as of the date that such benefit is being determined. 4.4 Choice of Employee-grantor Trust or Payment of Accelerated Benefits. -------------------------------------------------------------------- (a) As of October 31 of the calendar year following the year in which a Participant meets the Minimum Benefit Accumulation threshold provided for in Section 4.5, the Actuarial Present Value (determined as hereinafter provided) of the after-tax amount of a Participant's Supplemental Pension Benefit shall be deposited in an employee-grantor trust established by the Participant unless, at least one full year prior to the funding of such employee-grantor trust, the Participant shall instead have elected to receive "Accelerated Benefits" as hereinafter provided. If a Participant elects to receive Accelerated Benefits, then the Actuarial Present Value of such Benefits shall be paid, at the election of the Chairman of the Board of Directors of the Company, either in a single sum or in up to three (3) annual installments (such single sum or annual installments being referred to in this Plan as "Accelerated Benefits"). The Participant's Accelerated Benefits shall commence on his Accelerated Benefit Commencement Date, which shall be twelve full months following a Participant's actual retirement date at age fifty-five (55) or later (the Participant's "Accelerated Benefit Commencement Date"). For purposes of determining whether a Participant has reached his fifty-fifth (55th) birthday and, thus, is eligible to commence benefits under Section 4.1(a) instead of on a deferred vested basis under Section 4.2, Section 4.1(b) shall apply. In the case of Participants who transfer directly to Primex or Arco (or who, in the case of Primex only, transfer directly to Primex within five (5) years of the spin-off of Primex), and in the case of Arch only, who transfer directly to Arch after the Arch 5 Spin-off Date and on or before February 8, 2000, "actual retirement" shall be construed to mean retirement or termination of service from the transferee employer. Service with Primex, Arco or Arch (and their affiliates) shall be credited in enabling the Participant to attain his early retirement age (but not in determining his Years of Benefit Service) under this Plan. (b) In the event that an actively employed Participant elects not to establish an employee-grantor trust, but instead to receive Accelerated Benefits, regular monthly benefits shall commence to be paid upon such Participant's actual retirement in accordance with Section 4.1 until such Participant reaches his Accelerated Benefit Commencement Date, at which time Accelerated Benefits shall be paid in the form and manner determined by the Chairman of the Board of Directors of the Company, and in the case of the Chairman, the Selection Committee, either in a single sum, in up to three (3) annual installments, or in a combination of annuity payments and either a single sum or annual installments, provided, however, that no monthly benefits shall be paid to Participants who transfer to Primex, Arco or Arch until they separate from Primex, Arco or Arch, respectively. (c) In lieu of funding an employee-grantor trust or receiving Accelerated Benefits, the Participant may elect, at least one full year prior to such Accelerated Benefit Commencement Date, to receive benefit payments in an annuity for life in accordance with Section 4.1 of this Plan. 4.5 Assumptions used for Determining Amount to be contributed to Employee- --------------------------------------------------------------------- grantor Trust; Threshold for Accelerated Benefits. -------------------------------------------------- (a) Actuarial Assumptions for Employee-Grantor Trust. In determining the ------------------------------------------------ Actuarial Present Value of the Participant's Plan benefit to be used for purposes of funding an employee-grantor trust, the benefit shall be determined (i) as of the close of the Plan Year (i.e., December 31) prior to the year in which the employee grantor trust is being funded; (ii) using the Code Section 415 limits and 401(a)(17) limits then currently in effect as of the date on which the actuarial present value is being determined or may, in the discretion of the Plan Administrator, be projected, using reasonable assumptions concerning cost-of-living indices; (iii) using an annuity purchase rate based upon a discount rate equal to the rate for a zero coupon Treasury strip (determined approximately at the time of the deposit to the employee-grantor trust) with a maturity that approximates the Participant's life expectancy determined as of the date the payment to the trust is scheduled to be made; and (iv) assuming that the benefit commences under this Plan 6 (a) on the Participant's 65th birthday, if the Participant terminates service (or is treated as terminating service) prior to age 55; (b) on the Participant's 62nd birthday, if the Participant terminates service on or after reaching age 55 and before reaching age 62; and (c) on the Participant's 65th birthday, if the Participant terminates service on or after reaching age 62. (b) Actuarial Assumptions for Determining Accelerated Benefits. In ---------------------------------------------------------- determining the Actuarial Present Value of the Participant's Accelerated Benefit, the benefit shall be determined (i) as of the close of the Participant's retirement or termination of service; and (ii) using an annuity purchase rate based upon a discount rate equal to the rate for a zero coupon Treasury strip (determined approximately at the time that Accelerated Benefits are scheduled to commence) with a maturity that approximates the Participant's life expectancy determined as of the date the payment is scheduled to be made. (c) Minimum Benefit Accumulation Threshold. No Accelerated Benefits --------------------------------------- shall commence to be paid, and no Participant shall be given the opportunity to fund an employee-grantor trust, until the Participant has accumulated benefits under this Plan, and the Olin Senior Executive Pension Plan which, in the aggregate, have an actuarial present value of at least One Hundred Thousand Dollars ($100,000.00). 4.6 Death Benefits. --------------- (a) The Beneficiary of a Participant who dies after commencing regular ----- monthly benefits under Section 4.1 of this Plan shall receive a death benefit under this Plan only if the form selected by, or in force with respect to, the Participant under the Qualified Plan provides for a death benefit. For purposes of this Plan, a Participant's Beneficiary shall be the Beneficiary designated to receive death benefits under the Qualified Plan. (b) The Beneficiary of a Participant who dies after having elected to receive Accelerated Benefits, but who as of the date of his death has not received the entire value of his Accelerated Benefits, shall receive the remainder of any Accelerated Benefits not yet paid in the form in effect with respect to the Participant. (c) If a Participant dies prior to commencement of his Qualified Plan Benefits under circumstances in which a pre-retirement survivor annuity is payable under the Qualified Plan, then a supplemental surviving Spouse benefit shall be payable under this Plan in a monthly amount that shall be equal to the difference between 7 (i) the monthly amount of the Qualified pre-retirement survivor benefit to which the surviving Spouse would have been entitled under the Qualified Plan had such benefit been calculated (i) including non- qualified deferred payments of regular salary and deferred awards under the management incentive plan, and (ii) without regard to the Benefit Limitations imposed by Sections 415 and 401(a)(17) of the Code; and (ii) the monthly amount of the Qualified pre-retirement survivor benefit that is actually payable to the surviving Spouse. (d) For purposes of this Plan, the term "Spouse" shall mean the person to whom a Participant is validly married at the date of his death, as evidenced by a marriage certificate issued in accordance with state law; provided however, that (i) if a Participant's Spouse at his or her death was not the Participant's Spouse at least 12 months prior to the Participant's death, no Surviving Spouse's retirement allowance shall be paid, and (ii) common law marriages shall not be recognized hereunder. 4.7 Benefit Upon a Change of Control. -------------------------------- (a) Lump Sum Payment Upon a Change of Control. ----------------------------------------- The spin-off of Primex and Arch from Olin shall not be deemed to be a change of control entitling any Participant herein to benefits under this Plan. Notwithstanding any other provision of the Plan, upon a Change in Control, each Participant covered by the Plan shall automatically be paid a lump sum amount in cash by the Company sufficient to purchase an annuity which, together with the monthly payment, if any, under a Rabbi or other trust arrangement established by the Company to make payments hereunder in the event of a Change in Control and/or pursuant to any other annuity purchased by the Company for the Participant to make payments hereunder, shall provide the Participant with the same monthly after-tax benefit as he would have received under the Plan based on the benefits accrued to the Participant hereunder as of the date of the Change in Control. Payment under this Section shall not in and of itself terminate the Plan, but such payment shall be taken into account in calculating benefits under the Plan which may otherwise become due the Participant thereafter. (b) No Divestment Upon a Change of Control. If a Participant is removed -------------------------------------- from participation in the Plan after a Change of Control has occurred, in no event shall his years of Benefit Service accrued prior to such removal, and the benefit accrued prior thereto, be adversely affected. (c) Change of Control Defined. ------------------------- For purposes of the Plan, a "Change in Control" shall be deemed to have occurred if 8 (i) the Company ceases to be, directly or indirectly, owned of record by at least 1,000 stockholders; (ii) a person, partnership, joint venture, corporation or other entity, or two or more of any of the foregoing acting as "person" within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act"), other than the Company, a majority- owned subsidiary of the Company or an employee benefit plan of the Company or such subsidiary (or such plan's related trust), become(s) the "beneficial owner" (as defined in Rule 13d-3 of the Act) of 20% or more of the then outstanding voting stock of the Company; or (iii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Company's Board of Directors (together with any new Director whose election by the Company's Board or whose nomination for election by the Company's stockholders, was approved by a vote of at least two-thirds of the Directors of the Company then still in office who either were Directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Directors then in office; or (iv) all or substantially all of the business of the Company is disposed of pursuant to a merger, consolidation or other transaction in which the Company is not the surviving corporation or the Company combines with another company and is the surviving corporation (unless the shareholders of the Company immediately following such merger, consolidation, combination, or other transaction beneficially own, directly or indirectly, more than 50% of the aggregate voting stock or other ownership interests of (x) the entities, if any, that succeed to the business of the Company or (y) the combined company); or (v) the shareholders of the Company approve a sale of all or substantially all of the assets of the Company or a liquidation or dissolution of the Company. (d) Arbitration. Any dispute or controversy arising under or in ----------- connection with the Plan subsequent to a Change in Control shall be settled exclusively by arbitration in Connecticut, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction. ARTICLE V. Funding 5.1 Unfunded Plan. This Plan shall be unfunded. All payments under this ------------- Plan shall be made from the general assets of the Employing Company of the Participant. No provision shall at any time be made with respect to segregating any assets of an Employing Company for payment of benefits hereunder. No Participant, surviving Spouse or any other Beneficiary shall have any interest in any particular assets of an Employing Company by reason of the right to 9 receive a benefit under this Plan and shall have the rights only of a general unsecured creditor of Employing Company with respect to any rights under the Plan. 5.2 Liability for Payment. Each Employing Company shall pay the benefits --------------------- provided under this Plan with respect to Participants who are employed, or were formerly employed by it during their participation in the Plan. In the case of a Participant who was employed by more than one Employing Company, the Committee shall allocate the cost of such benefits among such Employing Companies in such manner as it deems equitable. The obligations of the Employing Company shall not be funded in any manner. 5.3 Anti-alienation. No Participant or Beneficiary shall have the right --------------- to assign, transfer, encumber or otherwise subject to any lien any payment or any other interest under this Plan, nor shall such payment or interest be subject to attachment, execution or levy of any kind. Article VI. Plan Administration ------------------------------- 6.1 Plan Administrator. The Company hereby appoints the Benefit Plan ------------------- Review Committee as the Plan Administrator (the "Plan Administrator" or "Committee"). Any person, including, but not limited to, the directors, shareholders, officers and employees of the Company, shall be eligible to serve on the Committee. Any person so appointed shall signify his acceptance by undertaking the duties assigned. Any member of the Committee may resign by delivering written resignation to the Company. The Company may also remove any member of the Committee by delivery of a written notice of removal, which shall take effect upon delivery or on a date specified. Upon resignation or removal of a Committee member, the Company shall promptly designate in writing such other person or persons as a successor. 6.2 Allocation and Delegation. The Committee members may allocate the ------------------------- responsibilities among themselves, and shall notify the Company in writing of such action and the responsibilities allocated to each member. 6.3 Powers, Duties and Responsibilities. Except for those powers ----------------------------------- expressly reserved to the Selection Committee, the Plan Administrator shall have all power to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, in accordance with the terms of the Plan. The Plan Administrator shall have the absolute discretion and power to determine all questions arising in connection with the administration, interpretation and application of the Plan. Any such determination by the Plan Administrator shall be conclusive and binding upon all persons. The Plan Administrator may correct any defect or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purposes of the Plan; provided, however, that such interpretation or construction shall be done in a non-discriminatory manner and shall be consistent with the intent of the Plan. The Plan Administrator shall: 10 (a) compute the amount and kind of benefits to which any Participant shall be entitled hereunder; (b) maintain all necessary records for the administration of the Plan; (c) interpret the provisions of the Plan and make and publish such rules for regulation of the Plan as are consistent with the terms hereof; (d) assist any Participant regarding his rights, benefits or elections available under the Plan; and (e) communicate to Participants and their Beneficiaries concerning the provisions of the Plan. 6.4 Records and Reports. The Plan Administrator shall keep a record of -------------------- all actions taken and shall keep such other books of account, records and other information that may be necessary for proper administration of the Plan. The Plan Administrator shall file and distribute all reports that may be required by the Internal Revenue Service, Department of Labor or others, as required by law. 6.5 Appointment of Advisors. The Plan Administrator may appoint ------------------------- accountants, actuaries, counsel, advisors and other persons that it deems necessary or desirable in connection with the administration of the Plan. 6.6 Majority Actions. The Committee shall act by a majority of their ---------------- numbers, but may authorize one or more of them to sign all papers on their behalf. 6.7 Indemnification of Members. The Company shall indemnify and hold --------------------------- harmless any member of the Committee from any liability incurred in his or her capacity as such for acts which he or she undertakes in good faith as a member of such Committee. 6.8 Construction of Plan Terms. Except as otherwise expressly provided in --------------------------- this Plan, all terms and conditions of the Qualified Plan shall be applicable to a Supplemental and Deferral Pension Benefit payable hereunder. Article VII. Termination and Amendment -------------------------------------- 7.1 Amendment or Termination. The Company may amend or terminate the Plan ------------------------ at any time, in whole or in part, by action of its Board of Directors or any duly authorized committee or officer. Any Employing Company may withdraw from participation in the Plan at any time. No amendment or termination of the Plan or withdrawal therefrom by an Employing Company shall adversely affect the vested benefits payable hereunder to any Participant for service rendered prior to the effective date of such amendment, termination or withdrawal. 11 Article VIII. Miscellaneous ---------------------------- 8.1 Gender and Number. Whenever any words are used herein in the ----------------- masculine, feminine or neuter gender, they shall be construed as though they were also used in another gender in all cases where such would apply, and whenever any words are used herein in the singular or plural form, they shall be construed as though they were also used in another form in all cases where they would so apply. 8.2 Action by the Company. Whenever the Company under the terms of this --------------------- Plan is permitted or required to do or perform any act or thing, it shall be done and performed by an officer or committee duly authorized by the Board of Directors of the Company. 8.3 Headings. The headings and subheadings of this Plan have been --------- inserted for convenience of reference only and shall not be used in the construction of any of the provisions hereof. 8.4 Uniformity and Non Discrimination. All provisions of this Plan shall ---------------------------------- be interpreted and applied in a uniform nondiscriminatory manner. 8.5 Governing Law. To the extent that state law has not been preempted by -------------- the provisions of ERISA or any other laws of the United States heretofore or hereafter enacted, this Plan shall be construed under the laws of the State of Connecticut. 8.6 Employment Rights. Nothing in this Plan shall confer any right upon ------------------ any Employee to be retained in the service of the Company or any of its affiliates. 8.7 Incompetency. In the event that the Plan Administrator determines ------------- that a Participant is unable to care for his affairs because of illness or accident or any other reason, any amounts payable under this Plan may, unless claim shall have been made therefor by a duly appointed guardian, conservator, committee or other legal representative, be paid by the Plan Administrator to the spouse, child, parent or other blood relative or to any other person deemed by the Plan Administrator to have incurred expenses for such Participant, and such payment so made shall be a complete discharge of the liabilities of the Plan therefor. Dated: February 8, 1999 OLIN CORPORATION By_________________________________ Its 12 EX-12 6 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12 OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES Computation of Ratio of Earnings to Fixed Charges (Unaudited) (In millions)
Three Months Ended March 31, --------------------- 1999 1998(a) ------ ------- Earnings: Income from continuing operations before taxes $ 3.5 $ 34.9 Add (deduct): Equity in (loss) income of non-consolidated affiliates (2.5) 2.0 Interest capitalized, net of amortization (0.1) (0.1) Fixed charges as described below 6.3 8.0 ------ ------ Total $ 7.2 $ 44.8 ====== ====== Fixed Charges: Interest expense $ 3.8 $ 4.8 Estimated interest factor in rent expense 2.5 3.2 ------ ------ Total $ 6.3 $ 8.0 ====== ====== Ratio of earnings to fixed charges 1.1 5.5 === ===
- ---------------------------------------------------------- (a) Computation of ratio of earnings to fixed charges has been restated to reflect the spin-off of Arch Chemicals, Inc. EX-27 7 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Financial Statements contained in Item 1 of Form 10-Q for the period ended March 31, 1999 and is qualified in its entirety by reference to such financial statements. Figures are rounded to the nearest 100,000 (except EPS). 1,000 3-MOS DEC-31-1999 MAR-31-1999 67,000 40,300 198,500 0 206,900 533,000 1,575,400 (1,110,200) 1,069,600 252,400 229,800 0 0 45,700 299,100 1,069,600 304,800 304,800 262,900 262,900 0 0 3,800 3,500 1,400 2,100 4,400 0 0 6,500 0.14 0.14
-----END PRIVACY-ENHANCED MESSAGE-----