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 June 30, 2003
OR
o	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 incorporation or organization)	(I.R.S. Employer Identification No.)
501 Merritt 7, Norwalk, CT	06856
(Address of principal executive offices)	(Zip Code)
(203) 750-3000
(Registrant’s telephone number, including area code)
(Former name, 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 o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes x No o

As of July 31, 2003, there were outstanding 58,383,121 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, except per share data)

	Unaudited June 30, 2003			December 31, 2002
ASSETS
Cash and cash equivalents	$	94.5		$	110.5
Short-term investments		—			25.0
Accounts receivable, net		208.7			168.1
Inventories, net		270.2			255.0
Income taxes receivable		16.5			9.4
Other current assets		55.5			70.1
Total current assets		645.4			638.1
Property, plant and equipment (less accumulated depreciation of $1,279.7 and $1,308.4)		508.0			551.5
Prepaid pension costs		106.4			106.4
Other assets		70.7			45.9
Goodwill		79.5			81.9
Total assets	$	1,410.0		$	1,423.8
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term borrowings and current installments of long-term debt	$	27.2		$	1.6
Accounts payable		98.7			109.8
Accrued liabilities		156.3			145.8
Total current liabilities		282.2			257.2
Long-term debt		301.3			327.6
Accrued pension liability		443.4			445.3
Other liabilities		189.3			162.4
Total liabilities		1,216.2			1,192.5
Commitments and contingencies
Shareholders’ equity:
Common stock, par value $1 per share:
Authorized 120.0 shares
Issued 58.3 shares (57.6 in 2002)		58.3			57.6
Additional paid-in capital		453.1			441.9
Accumulated other comprehensive loss		(234.6	)		(238.8	)
Accumulated deficit		(83.0	)		(29.4	)
Total shareholders’ equity		193.8			231.3
Total liabilities and shareholders’ equity	$	1,410.0		$	1,423.8

The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Income (Unaudited)

(In millions, except per share amounts)

	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003			2002
Sales	$	396.4	$	314.3		$	786.6		$	609.3
Operating Expenses:
Cost of goods sold		348.4		284.7			694.3			554.8
Selling and administration		31.6		28.1			61.9			57.3
Research and development		1.1		1.1			2.3			2.3
Restructuring charge		—		—			29.0			—
Earnings (loss) of non-consolidated affiliates		3.1		(3.9	)		4.6			(7.8	)
Operating income (loss)		18.4		(3.5	)		3.7			(12.9	)
Interest expense		5.1		7.0			10.3			14.6
Interest income		0.3		1.0			0.5			1.8
Other income		1.8		0.3			1.8			1.6
Income (loss) before taxes and cumulative effect of accounting change		15.4		(9.2	)		(4.3	)		(24.1	)
Income tax provision (benefit)		6.9		(2.2	)		0.8			(5.8	)
Net income (loss) before cumulative effect of accounting change		8.5		(7.0	)		(5.1	)		(18.3	)
Cumulative effect of accounting change, net		—		—			(25.4	)		—
Net income (loss)	$	8.5	$	(7.0	)	$	(30.5	)	$	(18.3	)
Basic and diluted net income (loss) per common share:
Income (loss) before cumulative effect of accounting change	$	0.15	$	(0.15	)	$	(0.09	)	$	(0.40	)
Cumulative effect of accounting change, net		—		—			(0.44	)		—
Net income (loss)	$	0.15	$	(0.15	)	$	(0.53	)	$	(0.40	)
Dividends per common share	$	0.20	$	0.20		$	0.40		$	0.40
Average common shares outstanding:
Basic		58.1		46.9			58.0			45.4
Diluted		58.4		46.9			58.0			45.4

The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Condensed Statements of Cash Flows (Unaudited)

(In millions)

	Six Months Ended June 30,
	2003			2002
Operating activities
Net loss	$	(30.5	)	$	(18.3	)
Adjustments to reconcile net loss to net cash and cash equivalents used for operating activities:
(Earnings) loss of non-consolidated affiliates		(4.6	)		7.8
Depreciation and amortization		44.1			42.6
Deferred income taxes		(9.1	)		2.2
Non-cash portion of restructuring charge		22.8			—
Qualified pension plan (income)		—			(4.3	)
Common stock issued under employee benefit plans		1.4			2.8
Change in:
Receivables		(40.6	)		(31.5	)
Inventories		(18.2	)		(3.5	)
Other current assets		(3.6	)		(7.2	)
Accounts payable and accrued liabilities		(1.7	)		(3.7	)
Income taxes payable		(6.0	)		(7.7	)
Other assets		2.2			3.1
Noncurrent liabilities		25.7			(5.8	)
Other operating activities		0.9			3.7
Net operating activities		(17.2	)		(19.8	)
Investing activities
Capital expenditures		(21.1	)		(7.2	)
Proceeds from sale of short-term investments		25.0			11.0
Investments and advances-affiliated companies at equity		4.8			(1.9	)
Disposition of property, plant and equipment		3.7			0.8
Other investing activities		2.8			1.3
Net investing activities		15.2			4.0
Financing activities
Long-term debt:
Borrowings		—			34.7
Repayments		(0.7	)		(135.4	)
Issuance of common stock		7.4			59.5
Purchases of Olin common stock		—			(2.5	)
Stock options exercised		2.8			2.6
Dividends paid		(23.1	)		(18.1	)
Other financing activities		(0.4	)		(0.5	)
Net financing activities		(14.0	)		(59.7	)
Net decrease in cash and cash equivalents		(16.0	)		(75.5	)
Cash and cash equivalents, beginning of period		110.5			164.8
Cash and cash equivalents, end of period	$	94.5		$	89.3

The accompanying Notes to Condensed Financial Statements are an integral part of the condensed financial statements.

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OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Tabular amounts in millions, except per share data)

1.

We have prepared the condensed financial statements included herein, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  In our opinion, these financial statements 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, we believe that the disclosures are adequate to make the information presented not misleading.  Certain reclassifications were made to prior year amounts to conform to the 2003 presentation.  We recommend that you read these condensed financial statements 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 our Annual Report on Form 10-K for the year ended December 31, 2002.

2.

Inventory consists of the following:

	June 30, 2003			December 31, 2002
Raw materials and supplies	$	120.5		$	120.7
Work in process		116.5			114.9
Finished goods		96.0			73.7
		333.0			309.3
LIFO reserve		(62.8	)		(54.3	)
Inventory, net	$	270.2		$	255.0

Inventories are valued principally by the dollar value last-in, first-out (LIFO) method of inventory accounting; such valuations are not in excess of market. Cost for other inventories has been determined principally by the average cost and first-in, first-out (FIFO) methods.  Elements of costs in inventories include raw materials, direct labor and manufacturing overhead.  Inventories under the LIFO method are based on annual estimates of quantities and costs as of year-end; therefore, the condensed financial statements at June 30, 2003, reflect certain estimates relating to inventory quantities and costs at December 31, 2003.

3.

Basic and diluted earnings (loss) per share are computed by dividing net income (loss) by the weighted average number of common shares outstanding.  Diluted earnings per share for the three months ended June 30, 2003, reflect the dilutive effect of stock options.  The effect of stock options of 0.3 million shares for the three months ended June 30, 2002, has not been included in the 2002 diluted loss per share as its effect would have been anti-dilutive.  The effect of stock options of 0.2 million shares for the six months ended June 30, 2003 and 2002, has not been included in the 2003 and the 2002 diluted loss per share as their effect would have been anti-dilutive.

	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003			2002
Basic Earnings (Loss) Per Share
Net income (loss)	$	8.5	$	(7.0	)	$	(30.5	)	$	(18.3	)
Basic shares		58.1		46.9			58.0			45.4
Basic net income (loss) per share	$	0.15	$	(0.15	)	$	(0.53	)	$	(0.40	)

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	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003			2002
Diluted Earnings (Loss) Per Share
Net income (loss)	$	8.5	$	(7.0	)	$	(30.5	)	$	(18.3	)
Diluted shares:
Basic shares		58.1		46.9			58.0			45.4
Stock options		0.3		—			—			—
Diluted shares		58.4		46.9			58.0			45.4
Diluted net income (loss) per share	$	0.15	$	(0.15	)	$	(0.53	)	$	(0.40	)

4. We define segment operating income (loss) as earnings (loss) before interest expense, interest income, other income, restructuring charge and income taxes.  Segment operating results include an allocation of corporate operating expenses.  Intersegment sales are eliminated.

	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003		2002
Sales:
Chlor Alkali Products	$	107.4	$	75.2		$	204.7	$	147.6
Metals		218.3		174.5			440.5		334.9
Winchester		70.7		64.6			141.4		126.8
Total sales	$	396.4	$	314.3		$	786.6	$	609.3
Segment operating income (loss) before restructuring charge:
Chlor Alkali Products	$	14.2	$	(15.2	)	$	23.2	$	(30.3	)
Metals		1.1		8.9			1.4		11.2
Winchester		3.1		2.8			8.1		6.2
Total segment operating income (loss) before restructuring charge		18.4		(3.5	)		32.7		(12.9	)
Restructuring charge		—		—			29.0		—
Operating income (loss)	$	18.4	$	(3.5	)	$	3.7	$	(12.9	)

5.

In the 2002 second quarter and year-to-date periods, Cost of Goods Sold included a pretax gain of $4.5 million on an insurance settlement.

6.

On September 27, 2002, we completed our acquisition of Chase with the issuance of approximately 9.8 million shares of our common stock for 100% of the outstanding stock of Chase.  Our 2002 second quarter and year-to-date operating results do not include any sales and profits from Chase which was acquired by Olin at the end of the third quarter of 2002.  For segment reporting purposes, Chase is included in our Metals segment.  The following unaudited pro forma condensed results of operations for the three and six month periods ended June 30, 2002, reflect the acquisition as if it had occurred on January 1, 2002, the beginning of the fiscal period presented.

	Three Months Ended June 30, 2002			Six Months Ended June 30, 2002
Sales	$	375.9		$	731.8
Net loss		(4.1	)		(12.4	)
Basic and diluted net loss per common share	$	(0.07	)	$	(0.22	)

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7.	The Board of Directors in April, 1998, authorized a share repurchase program of up to 5 million shares of our common stock.  We have repurchased 4,845,924 shares under the April 1998 program.  There were no share repurchases during the first six months of 2003.  During the first six months of 2002, we repurchased 144,157 shares of our common stock.  At June 30, 2003, approximately 154,000 shares remain to be purchased.
	In March 2002, we issued and sold 3,302,914 shares of common stock at a public offering price of $17.50.  Net proceeds from the sale, which were to be used for general corporate purposes, were approximately $56 million.  In addition, we issued approximately 9.8 million shares of our common stock for the acquisition of Chase Industries Inc. (Chase) in September 2002.
	During the first six months of 2003, we issued approximately 0.2 million (2002 - 0.2 million) shares with a total value of $2.8 million (2002 - $2.6 million), representing stock options exercised.  In addition, we issued approximately 0.6 million and 0.4 million shares with a total value of $9.5 million and $6.8 million, respectively, in connection with our Contributing Employee Ownership Plan and our deferred compensation programs.
8.	In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 143, “Accounting for Asset Retirement Obligations.”  SFAS No. 143 requires that the fair value of a liability for an asset retirement be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.  This statement is effective for fiscal years beginning after June 15, 2002.  Effective January 1, 2003, we adopted SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses financial accounting requirements for retirement obligations associated with tangible long-lived assets.  On January 1, 2003 we recorded an asset and a liability of $41.5 million (of which $7.0 million and $34.5 million were in current liabilities and noncurrent liabilities, respectively) to reflect the cost of retirement obligations related to our former operating facilities ($22.1 million, pretax), certain hazardous waste units at operating plant sites ($14.4 million, pretax), and our Indianapolis facility ($5.0 million, pretax).  Since these sites do not generate revenue, we recorded an impairment charge on these same assets, which resulted in an after-tax charge of $25.4 million ($0.44 per share).  The after-tax charge was recorded as the cumulative effect of an accounting change.  Certain other asset retirement obligations associated with production technology and building materials have not been recorded because these retirement obligations have an indeterminate life, and accordingly, the retirement obligation cannot be reasonably estimated.  The ongoing annual incremental expense resulting from the adoption of SFAS No. 143 is not expected to be significant.  At June 30, 2003, the change in the fair value of the liability for asset retirements compared to the original value of the liability recorded at the date of adoption of SFAS No. 143 was immaterial.
9.	In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.”  SFAS No. 146 addresses the accounting and reporting for costs associated with restructuring activities.  This new standard changes the timing of the recognition of restructuring charges.  Liabilities for restructuring costs will be required to be recognized when the liability is incurred rather than when we commit to the plan.  SFAS No. 146 is effective for restructuring activity initiated after December 31, 2002.  We adopted the provisions of SFAS No. 146 on January 1, 2003.  In the first quarter of 2003, we made a decision to close our manufacturing plant in Indianapolis, Indiana.  The Indianapolis facility ceased operations on February 14, 2003.  The plant manufactured copper and copper alloy sheet and strip products and employed approximately 200 people.  Production at the Indianapolis strip mill has been consolidated within our East Alton, Illinois facility.  While the Indianapolis strip mill has been an important part of the Metals segment since its acquisition in 1988, reduced domestic consumption of strip products combined with the capacity additions at East Alton have lessened the need to maintain the Indianapolis production base.  As a result of this closure and certain other actions, we recorded in the first quarter of 2003 a pretax restructuring charge of $29.0 million.
	The major portion of the charge was a non-cash charge ($22.8 million) related to the loss on disposal or write-off of equipment and facilities and goodwill.  The balance of the restructuring charge related to severance and job-related benefit costs.  At the Indianapolis facility, approximately 190 employees were terminated, while nine employees were transferred to the East Alton facility.  In addition to the closing of the Indianapolis

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facility, the Metals segment had determined that further cost reductions were necessary due to continuing depressed economic conditions.  Approximately 55 employees were terminated in order to reduce headcount through a combination of a reduction-in-force program in Metals and the relocation of the segment’s New Haven, Connecticut metals research laboratory activities to two existing manufacturing locations.

The following table summarizes the major components of the 2003 restructuring charge and the remaining balances as of June 30, 2003:

	Original Charge		Amounts Utilized			Accrued Restructuring Costs
Write-off of assets (including $2.4 of goodwill)	$	22.8	$	(22.8	)	$	—
Employee severance and job-related benefits		6.2		(2.1	)		4.1
	$	29.0	$	(24.9	)	$	4.1

10.

In 1996, we adopted SFAS No. 123, “Accounting for Stock-Based Compensation,” and as permitted by SFAS No. 123, we continue to account for the costs of stock compensation in accordance with Accounting Principles Board Opinion (APBO) No. 25.  In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation.”  This statement provides alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation.  It also amends the disclosure about the effects on reported net income of an entity’s accounting policy decisions with respect to stock-based employee compensation.  We adopted the disclosure provisions of SFAS No. 148 on January 1, 2003.

Under SFAS No. 148, pro forma net income (loss) and earnings (loss) per share were calculated based on the following assumptions as if we had recorded compensation expense for the stock options granted during the year.  We had no compensation expense for stock options granted during the three and six month periods ended June 30, 2003 and June 30, 2002.  The fair value of each option granted during 2003 and 2002 was estimated on the date of grant, using the Black-Scholes option-pricing model with the following weighted-average assumptions used: dividend yield of 5.21% in 2003 and 4.97% in 2002, risk-free interest rate of 3.05% in 2003 and 4.27% in 2002, expected volatility of 40% in 2003 and 31% in 2002 and an expected life of 6 years.  The fair value of options granted during 2003 and 2002 was $3.82 and $5.16, respectively.  The following table shows the difference between reported and pro forma net income (loss) and earnings (loss) per share as if we had recorded compensation expense for the stock options granted during the year.

	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003			2002
Net income (loss)
As reported	$	8.5	$	(7.0	)	$	(30.5	)	$	(18.3	)
Pro forma		8.0		(7.7	)		(31.5	)		(19.7	)
Per Share Data:
Basic
As reported		0.15		(0.15	)		(0.53	)		(0.40	)
Pro forma		0.14		(0.16	)		(0.54	)		(0.43	)
Diluted
As reported		0.15		(0.15	)		(0.53	)		(0.40	)
Pro forma		0.14		(0.16	)		(0.54	)		(0.43	)

11.	We guarantee debt and other obligations under agreements with our affiliated companies and warrant certain products.
	The following guarantee applies to our Sunbelt joint venture.  We and our partner, PolyOne Corporation (PolyOne) own equally the Sunbelt Chlor Alkali Partnership (Sunbelt joint venture).  The construction of this

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	plant and equipment was financed by the issuance of $195.0 million of Guaranteed Senior Secured Notes due 2017.  The Sunbelt joint venture sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G.  We refer to these notes as the Sunbelt Notes.  We have guaranteed Series O of the Sunbelt Notes, and PolyOne has guaranteed Series G of the Sunbelt Notes, in both cases pursuant to customary guaranty agreements.  Our guarantee and PolyOne’s guarantee are several, rather than joint.  Therefore, we are not required to make any payments to satisfy the indebtedness of PolyOne.  An insolvency or bankruptcy of PolyOne will not automatically trigger acceleration of the Sunbelt Notes or cause us to be required to make payments under our guarantee, even if PolyOne is required to make payments under its guarantee.  However, if the Sunbelt joint venture does not make timely payments on the Sunbelt Notes, whether as a result of a failure to pay on a guarantee or otherwise, the holders of the Sunbelt Notes may proceed against the assets of the Sunbelt joint venture for repayment.  If we were to make debt service payments under our guarantee, we would have a right to recover such payments.  Beginning on December 22, 2002 and each year through 2017, our Sunbelt joint venture is required to repay approximately $12.2 million of the Sunbelt Notes, of which approximately $6.1 million is attributable to the Series O Notes.  After the payment of approximately $6.1 million on the Series O Notes in December 2002, our guarantee of the notes was approximately $91.4 million at June 30, 2003.  In the event our Sunbelt joint venture cannot make any of these payments, we would be required to fund our half of such payment.  In certain other circumstances, we may also be required to repay the Sunbelt Notes prior to their maturity.  We and PolyOne have agreed that, if we or PolyOne intend to transfer our respective interests in the Sunbelt joint venture and the transferring party is unable to obtain consent from holders of 80% of the aggregate principal amount of the indebtedness related to the guarantee being transferred after good faith negotiations, then we and PolyOne will be required to repay our respective portions of the Sunbelt Notes.  In such event, any make whole or similar penalties or costs will be paid by the transferring party.
	In the normal course of business, we guarantee the principal and interest under a line of credit, utilized for working capital purposes, of one of our majority-owned foreign affiliates.  At June 30, 2003, our majority-owned foreign affiliate had no short-term debt outstanding under this line of credit.
12.	We are party to various governmental and private environmental actions associated with waste disposal sites and manufacturing facilities.  Environmental provisions charged to income amounted to $3.7 million in each of the three-month periods ended June 30, 2003 and 2002 and $7.4 million in each of the six-month periods ended June 30, 2003 and 2002.  Charges to income for investigatory and remedial efforts were material to operating results in 2002 and are expected to be material to operating results in 2003.  The consolidated balance sheets include reserves for future environmental expenditures to investigate and remediate known sites amounting to $91.7 million at June 30, 2003 and $97.8 million at December 31, 2002, of which $63.7 million and $69.8 million were classified as other noncurrent liabilities, respectively.
	Environmental exposures are difficult to assess for numerous reasons, including the identification of new sites, developments at sites resulting from investigatory studies, the possibility of claims for damages to natural resources, 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 our 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 us, which could have a material adverse effect on our operating results and financial condition.
13.	We and our subsidiaries are defendants in various legal actions (including proceedings based on alleged exposures to asbestos, perchlorate and vinyl chloride) incidental to our past and current business activities. We believe that none of these legal actions will materially adversely affect our financial position. In light of the inherent uncertainties of the litigation concerning alleged exposures, we cannot at this time determine the financial impact, if any, on our results of operations.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Recent Developments

In the first quarter of 2003, we made a decision to close our manufacturing plant in Indianapolis, Indiana. The Indianapolis facility ceased operations on February 14, 2003.  The plant manufactured copper and copper alloy sheet and strip products and employed approximately 200 people.  Production at the Indianapolis strip mill has been consolidated within our East Alton, Illinois facility.  While the Indianapolis strip mill had been an important part of the Metals segment since its acquisition in 1988, reduced domestic consumption of strip products combined with the capacity additions at East Alton have lessened the need to maintain the Indianapolis production base.  As a result of this closure and certain other actions, we recorded in the first quarter of 2003 a pretax restructuring charge of $29.0 million.

The major portion of the charge was a non-cash charge ($22.8 million) related to the loss on disposal or write-off of equipment and facilities and goodwill.  The balance of the restructuring charge related to severance and job-related benefit costs. At the Indianapolis facility, approximately 190 employees were terminated, while nine employees were transferred to the East Alton facility.  In addition to the closing of the Indianapolis facility, the Metals segment had determined that further cost reductions were necessary due to continuing depressed economic conditions.  Approximately 55 employees were terminated in order to reduce headcount through a combination of a reduction-in-force program in Metals and the relocation of the segment’s New Haven, Connecticut metals research laboratory activities to two existing manufacturing locations.  We continue to estimate that the pretax savings from the Indianapolis shutdown will more than offset the cash costs and that the savings will be higher in 2004 when the full-year effect of this shutdown will be realized.

In the first quarter of 2003, we recorded an after-tax charge of $25.4 million in connection with the adoption of SFAS No. 143, “Accounting for Asset Retirement Obligations.”  We adopted this standard on January 1, 2003 and it relates to estimated closure costs related to our former operating facilities ($22.1 million, pretax), certain hazardous waste units at our operating plant sites ($14.4 million, pretax), and our Indianapolis facility ($5.0 million, pretax) which was shut down in the first quarter of 2003, as described above.  The after-tax charge was recorded as the cumulative effect of an accounting change.

In the first quarter of 2003, we were accepted to participate in the Internal Revenue Service’s (IRS) settlement initiative pertaining to the tax issues relating to our benefits liability management company.  Assuming a settlement is reached pursuant to the initiative, we expect to eventually pay approximately $13 million (which had been recorded as a liability in prior years), representing the final settlement, net of tax benefits on the operating results of our benefits liability management company.

In addition, we reached a settlement with the IRS relative to our company-owned life insurance (COLI) program.  The settlement with the IRS contemplates a tax payment of approximately $18

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million in the latter part of 2003 with the remainder of approximately $25 million to be paid in future years.  These payments had been recorded as a liability in prior years.

Consolidated Results of Operations

	Three Months Ended June 30,					Six Months Ended June 30,
($ in millions, except per share data)	2003		2002			2003			2002
Sales	$	396.4	$	314.3		$	786.6		$	609.3
Gross Margin		48.0		29.6			92.3			54.5
Selling and Administration		31.6		28.1			61.9			57.3
Restructuring Charge		—		—			29.0			—
Interest Expense, net		4.8		6.0			9.8			12.8
Income (Loss) before Cumulative Effect of Accounting Change		8.5		(7.0	)		(5.1	)		(18.3	)
Net Income (Loss)		8.5		(7.0	)		(30.5	)		(18.3	)
Basic and Diluted Net Income (Loss) Per Common Share:
Income (Loss) before Cumulative Effect of Accounting Change	$	0.15	$	(0.15	)	$	(0.09	)	$	(0.40	)
Net Income (Loss)	$	0.15	$	(0.15	)	$	(0.53	)	$	(0.40	)

Three Months Ended June 30, 2003 Compared to the Three Months Ended June 30, 2002

Sales increased 26% primarily due to the sales of Chase, which we acquired in September 2002 (16%) and an increase in selling prices (10%).  The price increases were primarily related to higher Electrochemical Unit (ECU) prices in the Chlor Alkali Products segment because of the turnaround in the chlor alkali market.

Gross margin percentage increased from 9% in 2002 to 12% in 2003 primarily due to higher ECU selling prices for chlor alkali products.

Selling and administration expenses as a percentage of sales were 8% in 2003 and 9% in 2002.  Selling and administration expenses in 2003 were $3.5 million higher than in 2002 primarily due to higher incentive compensation costs ($2.2 million), the inclusion of Chase’s administration expenses ($0.8 million) and higher pension costs.

The earnings of non-consolidated affiliates were $3.1 million for the second quarter of 2003, up $7.0 million from 2002, due to higher ECU pricing at the Sunbelt Chlor Alkali Partnership (Sunbelt joint venture), which we own equally with our partner, PolyOne Corporation (PolyOne).

Interest expense for the second quarter of 2003 decreased from 2002 due to lower average debt levels in 2003 and lower interest rates on our debt portfolio.  In June 2002, we repaid the $100 million 8% notes.

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Our effective tax rate was 45% in the second quarter of 2003 compared to 24% in the second quarter of 2002.  The tax provision recorded on the profits in 2003 was more than the statutory rate while the tax benefits recorded on the losses in 2002 were less than the statutory rate because we are accruing interest on taxes which may become payable in the future.

Six Months Ended June 30, 2003 Compared to the Six Months Ended June 30, 2002

Sales increased 29% primarily due to the sales of Chase (18%), an increase in selling prices (8%), higher volumes (2%) and metal sales (1%).  The price increases were primarily related to higher ECU prices in the Chlor Alkali Products segment because of the turnaround in the chlor alkali market.  The increase in sales volumes was primarily related to the Winchester  and Chlor Alkali operations and more than offset the decrease in Metals volumes due to the continuing soft demand for our strip and rod products.

Gross margin percentage increased from 9% in 2002 to 12% in 2003 primarily due to higher ECU selling prices for chlor alkali products.

Selling and administration expenses as a percentage of sales were 8% in 2003 and 9% in 2002.  Selling and administration expenses in 2003 were $4.6 million higher than in 2002 primarily due to higher incentive compensation costs ($1.9 million), the inclusion of Chase’s administration expenses ($1.6 million) and higher pension expenses.

The earnings of non-consolidated affiliates were $4.6 million for the first six months of 2003, up $12.4 million from 2002, due to higher ECU pricing at the Sunbelt joint venture.

Interest expense for the first six months of 2003 decreased from 2002 due to lower average debt levels in 2003 and lower interest rates on our debt portfolio.  In June 2002, we repaid the $100 million 8% notes.

In the first six months of 2003, we recorded a tax provision of $0.8 million on a pretax loss of $4.3 million compared to an effective tax rate of 24% in 2002.  The tax benefits recorded on the losses in 2003 and 2002 were less than the statutory rate because we are accruing interest on taxes which may become payable in the future.  In addition, the 2003 restructuring charge included the write-off of goodwill, which is not deductible for tax purposes.

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Segment Operating Results

We define our segment operating results as earnings (loss) before interest expense, interest income, other income, restructuring charge, and income taxes.  Segment operating results include an allocation of corporate operating expenses.  Intersegment sales are eliminated.

($ in millions)	Three Months Ended June 30,					Six Months Ended June 30,
	2003		2002			2003		2002
Sales:
Chlor Alkali Products	$	107.4	$	75.2		$	204.7	$	147.6
Metals		218.3		174.5			440.5		334.9
Winchester		70.7		64.6			141.4		126.8
Total sales	$	396.4	$	314.3		$	786.6	$	609.3
Segment operating income (loss) before restructuring charge:
Chlor Alkali Products	$	14.2	$	(15.2	)	$	23.2	$	(30.3	)
Metals		1.1		8.9			1.4		11.2
Winchester		3.1		2.8			8.1		6.2
Total segment operating income (loss) before restructuring charge		18.4		(3.5	)		32.7		(12.9	)
Restructuring charge		—		—			29.0		—
Operating income (loss)	$	18.4	$	(3.5	)	$	3.7	$	(12.9	)

Chlor Alkali Products

Three Months Ended June 30, 2003 Compared to the Three Months Ended June 30, 2002

Sales increased 43% from 2002 primarily due to higher selling prices.  Our ECU netbacks (gross selling price less freight and discounts), excluding our Sunbelt joint venture, were approximately $330 in the second quarter of 2003, compared with approximately $200 in the second quarter of 2002, reflecting the impact of improved pricing.  ECU netbacks in the second quarter of 2003 were approximately $15 higher than the first quarter ECU average.  A large portion of the announced price increases for the second quarter was not implemented as weakness in the vinyl’s industry impacted chlorine demand and industry-wide caustic inventory did not support the announced price increases.  Continuing high natural gas prices also limited customer demand impacting industry operating rates.  Our operating rate in the second quarter was in line with industry operating rates.  Our operating results were higher in the second quarter of 2003 compared to 2002 primarily due to higher prices ($30.7 million) and higher operating results from our Sunbelt joint venture which were $6.7 million higher.  The profit impact from the higher volumes more than offset higher manufacturing costs, which were negatively impacted by higher steam and electricity costs.  The overall chlor alkali industry has seen improved pricing

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reflecting capacity rationalization and a pass through of high manufacturing cost caused by natural gas pricing.  The operating results from the Sunbelt joint venture, which is a non-consolidated affiliate accounted for under the equity method of accounting, include interest expense of $2 million in 2003 and 2002, on the Sunbelt Notes.  See “Liquidity and Other Financing Arrangements” for a description of the Sunbelt joint venture and the Sunbelt Notes.  Also, in the second quarter of 2003, the Sunbelt joint venture completed a debottlenecking project.  The impact of this project, in terms of capacity, is 40,000 ECUs on an annualized basis.  This works out to a 20,000 ECU increase for each partner.

Six Months Ended June 30, 2003 Compared to the Six Months Ended June 30, 2002

Sales increased 39% from 2002 due to higher selling prices (34%), and higher volumes (5%).  Our ECU netbacks, excluding our Sunbelt joint venture, were approximately $325 in the first six months of 2003, compared with approximately $215 in the first six months of 2002, reflecting the impact of improved pricing.  This pricing improvement is due to improving economic conditions, industry capacity rationalization and a pass through of high manufacturing cost caused by natural gas pricing.  Our operating results were higher in the first six months of 2003 compared to 2002 primarily due to higher prices ($49.4 million), improved operating results from the Sunbelt joint venture which were $12.1 million higher and higher sales volumes ($4.0 million).  These three factors more than offset higher manufacturing costs.  The operating results from the Sunbelt joint venture included interest expense of $4 million in 2003 and 2002, on the Sunbelt Notes. 

Metals

Three Months Ended June 30, 2003 Compared to the Three Months Ended June 30, 2002

Sales for the second quarter of 2003 were $218.3 million and include sales of $52.9 million from Chase.  Sales in the second quarter of 2002 were $174.5 million.  Shipment volumes (excluding Chase) were down 10% from 2002 mainly due to softer demand in the automotive and coinage segments with other segments being flat to slightly weaker except for ammunition, which was stronger.  However, reported sales (excluding Chase) were only off 5% because of higher copper prices and a product mix containing a higher metal component.

Shipments to the automotive segment decreased in 2003 by 23% as automotive production has softened from the second quarter of 2002.  Coinage shipments were down 44% from last year resulting from reduced demand from the U.S. Mint primarily related to decreased demand for the state quarter program and the continued general softness in the overall economy.  Shipments to the ammunition segment in 2003 increased from 2002 by 61% due to strong demand from the military.

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The Metals segment operating income of $1.1 million includes $1.8 million of Chase profits in 2003.  In the second quarter of 2003, the Metals segment (excluding Chase) recorded an operating loss of $0.7 million in comparison to a profit of $8.9 million in 2002.  The  lower operating results in the second quarter of 2003 were primarily the result of softer volumes and margin pressures.  Higher natural gas costs, higher wages and fringe benefit costs, and the adverse impact of reducing inventories also affected operating results.  Chase sales and profits for the second quarter of 2003 were lower than the comparable period last year as a result of lower demand and lower selling prices.

Six Months Ended June 30, 2003 Compared to the Six Months Ended June 30, 2002

Sales for the first six months of 2003 were $440.5 million and include sales of $111.1 million from Chase.  Sales for the first six months of 2002 were $334.9 million.  Shipment volumes (excluding Chase) were down 6% from 2002, mainly due to softer demand in the automotive and coinage segments with other segments being flat to slightly weaker, except for ammunition, which was stronger.  However, reported sales (excluding Chase) were only off 2% because of higher copper prices and a product mix containing a higher metal component.

Shipments to the automotive segment decreased in 2003 by 14% as automotive production has softened from the first half of 2002.  Coinage shipments were down 30% from last year.  Coinage shipments are down due to reduced demand from the U.S. Mint primarily related to decreased demand for the state quarter program and the continued general softness in the overall economy.  Shipments to the ammunition segment in 2003 increased from 2002 by 32% due to strong demand from the military.

Metals operating income was $1.4 million (which included $4.8 million of Chase profits) in 2003 and $11.2 million in 2002.  The Metals segment operating results in the first six months of 2003 (excluding Chase) were down $14.6 million and were adversely impacted by a 6% decline in shipments, reduced product margins, higher natural gas costs totaling $2.2 million, and cost escalations in wages and fringe benefit costs approximating $4.5 million.  The shutdown of the Indianapolis facility in the first quarter of 2003 increased profits by $3.3 million compared to the first half of 2002. 

Winchester

Three Months Ended June 30, 2003 Compared to the Three Months Ended June 30, 2002

Sales for the second quarter of 2003 were up 9% compared to the second quarter of 2002, primarily due to higher volumes.  The increase in sales was primarily driven by higher domestic military demand and slightly higher commercial ammunition sales.  Operating income in the second quarter of 2003 was $3.1 million, compared with $2.8 million in 2002 primarily due to higher domestic military and commercial sales, which were offset in part by higher wages and fringe benefit costs.

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Six Months Ended June 30, 2003 Compared to the Six Months Ended June 30, 2002

Sales for the first six months of 2003 were up 12% compared to the first six months of 2002, primarily due to higher volumes.  The increase in sales was primarily driven by higher domestic military demand.  Operating income in the first six months of 2003 increased to $8.1 million, from $6.2 million in 2002.  This increase was primarily due to the higher sales resulting from increased domestic military demand, which more than offset both increased manufacturing costs and operating expenses resulting from higher natural gas costs and higher wages and fringe benefit costs.

2003 Outlook

In the third quarter of 2003, we expect net income to be in the $0.10 per share range as compared to $0.15 in the second quarter of 2003, primarily because the seasonal improvement in Winchester will be more than offset by the continuing soft demand in the Metals segment.  In the third quarter, Chlor Alkali’s operating income is expected to approximate the second quarter, as lower sales volumes will likely offset the impact of higher expected ECU prices.

In the Chlor Alkali segment, we are expecting our ECU prices to increase slightly from the second quarter of 2003 to the third quarter of 2003 as our contracts reflect the impact of previously-announced price increases on a delayed basis.  However, softer volumes will likely offset the benefit we expect from these higher prices in the third quarter.

We continue to forecast that Chlor Alkali will be the largest factor contributing to our earnings in 2003 and 2004 because of higher chlor alkali prices.

As we look forward to the third quarter for the Metals segment, we forecast that overall demand for our strip and rod products is expected to decline from the second quarter, consistent with historic trends.   Our financial results for the third quarter will also be affected by our and our customers’ regularly scheduled summer plant shutdowns and our decision to reduce our inventories further, thus reducing our working capital consistent with market demand. 

Earnings in our Metals segment were adversely impacted by a number of factors, the most significant being continuing soft demand for our strip and rod products.  The weakness in the manufacturing sector in the U.S. has adversely impacted our brass strip and rod businesses and it now appears that the softness in our Metals business may be more prolonged than previously anticipated.  Key domestic end-use segments such as automotive, coinage, commercial construction, computer and telecommunications show continued signs of weakness.  Domestic demand for our products has been impacted not only by the weak economy but also by the

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transfer of production of end-use products and components parts to offshore locations.  Over the last five years, we believe about 5 percent of domestic demand migrated from the United States to low-cost foreign locations.

We see few signs of improvement and in fact see some signs of further softening of demand in the near term, consistent with historic trends. In addition, U.S. automotive build schedules are expected to decline by 17% at Ford and 12% at GM from the second quarter to the third quarter.  This will result in Ford’s automotive builds being 15% below the third quarter of 2002 and GM’s builds being 6% below the third quarter of 2002.

While some economists are expecting significant improvement in the overall economy in the second half, at this point, we have not seen signs of this in either our strip or rod business.  We believe the recent increase in the price of copper is more a reflection of the expectation of improvement in the economy than actual improvement in the end-use demand of our sheet and rod customers.  In light of this situation, we will implement a series of cost reduction and operational improvement initiatives in order to achieve significant cost reductions and efficiency enhancements.  In addition, our focus on international growth will intensify.  As we monitor the direction of this economy and evaluate its influence on the brass industry, we still believe that our leadership position in sales, technical support, manufacturing and technology will be an important competitive advantage in achieving our goals through these difficult times.

We are anticipating that Winchester will have a good third quarter as customers stock their shelves in advance of the hunting season.

We expect to increase capital spending from $41 million in 2002 to the $55 million range in 2003.  Capital spending in 2002 and 2003 includes about $5 million for Chase.  Our depreciation and amortization in 2003 will be in the $85 million range.

In 2003, we expect to continue to accrue interest on taxes that may become payable in the future and we estimate our tax rate for the balance of 2003 will remain in the 45% range.

We continue to project that we will remain in compliance with our debt covenants.  Both our consolidated leverage ratio and consolidated interest coverage covenants are 3.5 times at September 30^th, and remain at that level thereafter in our credit agreement.

Environmental Matters

In the six-month periods ended June 30, 2003 and 2002, we spent approximately $13.5 million and $12.2 million, respectively, for environmental investigatory and remediation activities associated with former waste sites and past operations.  Spending for investigatory and remedial efforts for the full year 2003 is estimated to be between $25 and $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

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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 $7.4 million in each of the six-month periods ended June 30, 2003 and 2002.  We expect that the charges to income for investigatory and remedial efforts could increase in the second half of 2003 compared to the first half of 2003 by approximately $4 million.  Charges to income for investigatory and remedial efforts were material to operating results in 2002, are expected to be material to operating results in 2003 and may be material to operating results in future years.

Our consolidated balance sheets included liabilities for future expenditures to investigate and remediate known sites amounting to $91.7 million at June 30, 2003 and $97.8 million at December 31, 2002, of which $63.7 million and $69.8 million was classified as other noncurrent liabilities, respectively.  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 our estimate of related costs have changed.  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 approximately $40 million to $50 million over the next several years, $25 million to $30 million of which is expected to be charged against reserves recorded on our balance sheet.  While we do not anticipate a material increase in the projected annual level of our 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, the possibility of claims for damages to natural resources, 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 our 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 us, which could have a material adverse effect on our operating results and financial condition.

Legal Matters

We and our subsidiaries are defendants in various legal actions (including proceedings based on alleged exposures to asbestos, perchlorate and vinyl chloride) incidental to our past and current business activities. We believe that none of these legal actions will materially adversely affect our financial position. In light of the inherent uncertainties of the litigation concerning alleged exposures, we cannot at this time determine the financial impact, if any, on our results of operations.

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Liquidity, Investment Activity and Other Financial Data

Cash Flow Data

	Six Months Ended June 30,
Provided By (Used For) ($ in millions)	2003			2002
Net Operating Activities	$	(17.2	)	$	(19.8	)
Capital Expenditures		(21.1	)		(7.2	)
Net Investing Activities		15.2			4.0
Net Financing Activities		(14.0	)		(59.7	)

In the first six months of 2003, income from operations (exclusive of non-cash charges), cash equivalents on hand and proceeds from short-term investments were used to finance our working capital requirements, capital projects and dividends.

Operating Activities

The decrease in cash used by operating activities was primarily attributable to higher profits from operations, offset in part by a higher investment in working capital, particularly in accounts receivables and inventories.  The investment in accounts receivable is higher in 2003 due to higher sales in Chlor Alkali and Winchester.  Our investment in inventories in 2003 is higher than the first six months of 2002 primarily because we are selling more copper-based alloys on a metal-price-pass-through basis rather than on a toll basis and therefore have to inventory more raw materials.

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Investing Activities

Capital spending of $21.1 million in the first six months of 2003 was $13.9 million higher than in the corresponding period in 2002.  The capital spending increase was primarily due to a more normalized level of spending in 2003 compared to 2002 where capital spending was curtailed significantly in response to weak operating results.  For the total year, we plan to manage our capital spending at a level of approximately 65% of depreciation, or about $55 million, compared to 47% of depreciation or $41 million in 2002.

Proceeds from the sale of short-term investments of $25 million represented the equity value of the company-owned life insurance (COLI) program which was discontinued in the first quarter of 2003.  We surrendered the life insurance policies that were purchased by us under this program, and received these proceeds in March 2003.  The surrender of these policies resulted in additional taxable income.  The taxes associated with this taxable income were recorded in the fourth quarter of 2002.

In January 2002, we received $11 million from the sale of the stock of Prudential Insurance Company.  We were awarded these shares of stock in 2001 as a result of Prudential’s conversion from a mutual company to a stock company.

Financing Activities

At June 30, 2003, we had $107 million available under our $140 million senior revolving credit facility with a group of banks.  We issued $33 million of letters of credit under a subfacility for the purpose of supporting certain long-term debt, self-insurance obligations and plant closure and post-closure obligations.  The senior credit facility will expire on January 3, 2005.  Under the senior credit facility, we may select various floating rate borrowing options.  It includes various customary restrictive covenants, including restrictions related to the ratio of debt to earnings before interest expense, taxes, depreciation and amortization (leverage ratio) and the ratio of earnings before interest expense, taxes, depreciation and amortization to interest expense (coverage ratio).  In the event that the leverage ratio equals or exceeds 3.75, we are required to grant a security interest in all of our U.S. inventory and accounts receivables.  No assets of our subsidiaries will secure our obligation under our senior credit facility.

In March 2002, we issued and sold 3,302,914 shares of common stock at a public offering price of $17.50.  Net proceeds from this sale were approximately $56 million and provide liquidity and financial flexibility, and strengthen our financial position.  The net proceeds were to be used for general corporate purposes.

In March 2002, we also refinanced $35 million of tax-exempt debt to create additional capacity under our revolving credit facility by eliminating the need for an equivalent amount of letters of credit.

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During the first six months of 2002, we used $2.5 million to repurchase 144,157 shares of our common stock.  There were no share repurchases during the first six months of 2003.  Approximately 154,000 shares remain to be repurchased as of June 30, 2003, under our previously approved stock repurchase programs.

The percent of total debt to total capitalization increased to 63% at June 30, 2003, from 59% at year-end 2002.  The increase from year-end 2002 was due primarily to the lower shareholders’ equity resulting from the restructuring charge and the accounting change under SFAS No. 143.

In 2003, we paid quarterly dividends of $0.20 per share.  In July 2003, our board of directors declared a quarterly dividend of $0.20 per share on our common stock, which is payable on September 10, 2003, to shareholders of record on August 11, 2003.

The payment of cash dividends is subject to the discretion of our board of directors and will be determined in light of then-current conditions, including our earnings, our operations, our financial condition, our capital requirements and other factors deemed relevant by our board of directors.  In the future, our board of directors may change our dividend policy, including the frequency or amount of any dividend, in light of then-existing conditions.

Liquidity and Other Financing Arrangements

Our principal sources of liquidity are from cash and cash equivalents, cash flow from operations and short-term borrowings under our senior revolving credit facility.  We also have access to the debt and equity markets.

Cash flow from operations is subject to change as a result of the cyclical nature of our operating results, which have been affected recently by the economic cycles and resulting downturn in many of the industries we serve, such as automotive, electronics and the telecommunications sectors.  In addition, cash flow from operations is affected by considerable changes in ECU prices caused by the changes in the supply/demand balance of chlorine and caustic, resulting in the chlor alkali business having tremendous leverage on our earnings.  A $10 per ECU price change equates to an approximate $11 million annual pretax profit change when we are operating at full capacity.

Our current debt structure is used to fund our business operations, and commitments from banks under our revolving credit facility are a source of liquidity.  As of June 30, 2003, we had long-term borrowings, including the current installment, of $328.5 million of which $0.4 million was issued at variable rates.  We have entered into interest rate swaps on approximately $140 million of our underlying debt obligations, whereby we agree to pay variable rates to a counterparty who, in turn, pays us fixed rates.  Annual maturities of long-term debt at December 31, 2002, were $2 million in 2003; $27 million in 2004; $52 million in 2005; $1 million in 2006; $2 million in 2007 and $246 million thereafter.

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We use operating leases for certain purposes, such as railroad cars, distribution, warehousing and office space, data processing and office equipment.  Leases covering these properties may contain escalation clauses (except for railroad cars) based on increased costs of the lessor, primarily property taxes, maintenance and insurance, and have renewal or purchase options.  Future minimum rent payments under operating leases having initial or remaining non-cancelable lease terms in excess of one year at December 31, 2002 are as follows: $22 million in 2003; $21 million in 2004; $19 million in 2005; $17 million in 2006; $15 million in 2007 and a total of $70 million thereafter.  Assets under capital leases are not significant.

On December 31, 1997, we entered into a long-term, sulfur dioxide supply agreement with Alliance Specialty Chemicals, Inc. (Alliance), formerly known as RFC S0₂, Inc.  Alliance has the obligation to deliver annually 36,000 tons of sulfur dioxide.  Alliance owns the sulfur dioxide plant, which is located at our Charleston, TN facility and is operated by us.  The price for the sulfur dioxide is fixed over the life of the contract, and under the terms of the contract, we are obligated to make a monthly payment of approximately $0.2 million regardless of the amount of sulfur dioxide purchased.  Commitments related to this agreement are approximately $2 million per year for 2003 through 2006 and a total of $12 million thereafter.

In December 2002, we registered $400 million of securities with the Securities and Exchange Commission whereby from time to time, we may issue debt securities, preferred stock and/or common stock and associated warrants.  At June 30, 2003, the entire $400 million was available for issuance.

We and our partner, PolyOne own equally the Sunbelt joint venture.  We market all of the caustic soda production for the venture, while 250 thousand tons of the chlorine production is required to be purchased by Oxy Vinyls (a joint venture between OxyChem and PolyOne) based on a formula related to the market price of chlorine.  The construction of this plant and equipment was financed by the issuance of $195.0 million of Guaranteed Senior Secured Notes due 2017.  The Sunbelt joint venture sold $97.5 million of Guaranteed Senior Secured Notes due 2017, Series O, and $97.5 million of Guaranteed Senior Secured Notes due 2017, Series G.  We refer to these notes as the Sunbelt Notes.  The Sunbelt Notes bear interest at a rate of 7.23% per annum payable semiannually in arrears on each June 22 and December 22.

We have guaranteed Series O of the Sunbelt Notes, and PolyOne has guaranteed Series G of the Sunbelt Notes, in both cases pursuant to customary guaranty agreements.  Our guarantee and PolyOne’s guarantee are several, rather than joint.  Therefore, we are not required to make any payments to satisfy the indebtedness of PolyOne.  An insolvency or bankruptcy of PolyOne will not automatically trigger acceleration of the Sunbelt Notes or cause us to be required to make payments under our guarantee, even if PolyOne is required to make payments under its guarantee.  However, if the Sunbelt joint venture does not make timely payments on the Sunbelt Notes, whether as a result of a failure to pay on a guarantee or otherwise, the holders of the Sunbelt Notes may proceed against the assets of the Sunbelt joint venture for repayment.

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Beginning on December 22, 2002 and each year through 2017, our Sunbelt joint venture is required to repay approximately $12.2 million of the Sunbelt Notes, of which approximately $6.1 million is attributable to the Series O Notes.  After the payment of approximately $6.1 million on the Series O Notes in December 2002, our guarantee of the notes was approximately $91.4 million at June 30, 2003.  In the event our Sunbelt joint venture cannot make any of these payments, we would be required to fund our half of such payment.  In certain other circumstances, we may also be required to repay the Sunbelt Notes prior to their maturity.  We and PolyOne have agreed that, if we or PolyOne intend to transfer our respective interests in the Sunbelt joint venture and the transferring party is unable to obtain consent from holders of 80% of the aggregate principal amount of the indebtedness related to the guarantee being transferred after good faith negotiations, then we and PolyOne will be required to repay our respective portions of the Sunbelt Notes.  In such event, any make whole or similar penalties or costs will be paid by the transferring party.

New Accounting Standards

In June 2001, the FASB issued SFAS No. 142, “Goodwill and Other Intangible Assets,” which became effective and was adopted by us on January 1, 2002.  SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of this statement.  SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, “Accounting for Impairment or Disposal of

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Long-Lived Assets.”  Accordingly, we ceased amortizing goodwill totaling $42 million as of January 1, 2002.  We completed an initial impairment review of our goodwill balance during the second quarter of 2002 and determined an impairment charge was not required. 

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.”  SFAS No. 143 requires that the fair value of a liability for an asset retirement be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.  The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset.  This statement is effective for fiscal years beginning after June 15, 2002.  Effective January 1, 2003, we adopted SFAS No. 143, “Accounting for Asset Retirement Obligations,” which addresses financial accounting requirements for retirement obligations associated with tangible long-lived assets.  On January 1, 2003 we recorded an after-tax charge of $25.4 million ($0.44 cents per share) for estimated closure costs related to our former operating facilities ($22.1 million, pretax), certain hazardous waste units at operating plant sites ($14.4 million, pretax), and our Indianapolis facility ($5.0 million, pretax) which was shutdown in the first quarter of 2003.  The after-tax charge was recorded as the cumulative effect of an accounting change.  Certain other asset retirement obligations associated with production technology and building materials have not been recorded because these retirement obligations have an indeterminate life, and accordingly, the retirement obligation cannot be reasonably estimated.  The ongoing annual incremental expense resulting from the adoption of SFAS No. 143 is not expected to be significant.  At June 30, 2003, the change in fair value of the liability for asset retirements compared to the original value of the liability recorded at the date of adoption of SFAS No. 143 was immaterial.

In August 2001, the FASB issued SFAS No. 144, “Accounting for Impairment or Disposal of Long-lived Assets.”  SFAS No. 144 addresses the financial accounting and reporting for the impairment or disposal of long-lived assets.  This statement requires that one accounting model be used for long-lived assets to be disposed of by sale whether previously held and used or newly acquired.  In addition, it broadened the presentation of discontinued operations to include more disposal transactions.  This statement is effective for fiscal years beginning after December 15, 2001, and interim periods within those fiscal years.  At the time of adoption on January 1, 2002, this statement did not have a material impact on our financial statements.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.”  SFAS No. 146 addresses the accounting and reporting for costs associated with restructuring activities.  This new standard changes the timing of the recognition of restructuring charges.  Liabilities for restructuring costs will be required to be recognized when the liability is incurred rather than when we commit to the plan.  SFAS No. 146 is effective for restructuring activity initiated after December 31, 2002.  We adopted the provisions of SFAS No. 146 on January 1, 2003.  See the description of our 2003 Restructuring Charge under the caption “Recent Developments.”

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation.”  This statement provides alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation.  It also amends the disclosure about the effects on reported net income of an

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entity’s accounting policy decisions with respect to stock-based employee compensation.  We will continue to account for the cost of stock compensation in accordance with APBO No. 25, “Accounting for Stock Issued to Employees.”  We adopted the disclosure provisions of SFAS No. 148 on January 1, 2003.

In April 2003, the FASB issued SFAS No. 149, “Amendment of Statement 133 on Derivative Instruments and Hedging Activities.”  SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.”  This statement is effective for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003.  We do not expect this statement to have a material impact on our financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity.”  SFAS No. 150 establishes standards for how an issuer classifies and measures financial instruments with characteristics of both liabilities and equity.  It requires that an issuer classify a financial instrument that is within its scope as a liability.  Many of those instruments were previously classified as equity.  The statement revises the definition of a liability to encompass certain obligations that a reporting entity can or must settle by issuing its own equity shares, depending on the nature of the relationship established between the holder and the issuer. This statement is effective for financial instruments entered into or modified after May 31, 2003 and will be effective for financial reporting in the third quarter of 2003.  We are evaluating this statement to determine the impact of its adoption on our financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the normal course of our business operations due to our operations that use different foreign currencies, our purchases of certain commodities and our 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.  We have established policies and procedures governing our management of market risks and the uses of financial instruments to manage exposure to such risks.

Certain raw materials and energy costs, namely copper, lead, zinc and natural gas used primarily in our Metals and Winchester segments, are subject to price volatility.  Depending on market conditions, we may enter into futures contracts and put and call option contracts in order to reduce the impact of metal price fluctuations.  As of June 30, 2003, we maintained open positions on futures contracts totaling $36.3 million ($42.1 million at June 30, 2002).  Assuming a hypothetical 10% increase in commodity prices which are currently hedged, we would experience a $3.6 million ($4.2 million at June 30, 2002) increase in our cost of related inventory purchased, which would be offset by a corresponding increase in the value of related hedging instruments.

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We are exposed to changes in interest rates primarily as a result of our investing and financing activities.  Investing activity is not material to our consolidated financial position, results of operations or cash flow.  Our current debt structure is used to fund our business operations, and commitments from banks under our revolving credit facility are a source of liquidity.  As of June 30, 2003, we had long-term borrowings of $328.5 million ($330.0 million at June 30, 2002) of which $0.4 million ($0.7 million at June 30, 2002) was issued at variable rates.  As a result of our recent fixed-rate financings, we entered into floating interest rate swaps in order to manage interest expense and floating interest rate exposure to optimal levels.  We have entered into approximately $140 million of such swaps, whereby we agree to pay variable rates to a counterparty who, in turn, pays us fixed rates.  In all cases the underlying index for the variable rates is six-month London InterBank Offered Rate (LIBOR).  Accordingly, payments are settled every six months and the term of the swap is the same as the underlying debt instrument. Assuming no changes in the $140 million debt levels from year-end 2002, we estimate that a hypothetical change of 100 basis points in the LIBOR interest rates from year-end 2002 would impact interest expense by $1.4 million on an annualized pretax basis.

In December 2001, we swapped interest payments on $50 million principal amount of our 9.125% Senior Notes to a floating rate (4.525% at June 30, 2003).  In February and March 2002, we swapped interest payments on $30 million and $25 million principal amount, respectively, of our 9.125% Senior Notes to floating rates. Terms of these swaps set the floating rate at the end of each six-month reset period.  Therefore, the interest rates for the current period will be set on December 12, 2003.  We estimate that the rates will be between 4% and 5%.

In March 2002, we refinanced four variable-rate tax-exempt debt issues totaling $35 million.  The purpose of the refinancings was to eliminate the need for letter of credit support that used our liquidity.  In order to manage interest expense and floating interest rate exposure to optimal levels, we swapped the fixed-rate debt of the newly refinanced bonds back to variable-rate debt through interest rate swaps.  At June 30, 2003, the interest rates on the swaps of $21 million and $6 million were 1.52% and 1.66%, respectively.  The interest rate on the remaining $8 million swap is set at the end of the six-month reset period, or October 30, 2003, and is expected to be between 0.50% and 1.50%.

These interest rate swaps reduced interest expense, resulting in a decrease in pretax loss of $3.2 million and $2.2 million for the six months ended June 30, 2003 and 2002, respectively.

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 our cash flow may be materially different than that disclosed above.

We do not enter into any derivative financial instruments for speculative purposes.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

Our chief executive officer and chief financial officer have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules

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13a-14(c) and 15d-14(c)) as of June 30, 2003.  Based on this review, they have concluded that, as of that date, our disclosure controls and procedures were effective to ensure that material information relating to Olin Corporation and its consolidated subsidiaries would be disclosed on a timely basis in this report.

(b) Changes in internal controls.

We maintain a system of internal accounting controls that are designed to provide reasonable assurance that our books and records accurately reflect our transactions and that our established policies and procedures are followed.  For the three months ended June 30, 2003, there were no significant changes to our internal controls or in other factors that could significantly affect our internal controls.

Cautionary Statement Regarding Forward-Looking Statements

This quarterly report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to analyses and other information that are based on management’s beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about the markets and economy in which we and our various segments operate.  The statements contained in this quarterly report on Form 10-Q that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words  “anticipate,” “intend,” “may,” “expect,” “believe,” “should,” “plan,” “will,” “estimate,” and variations of such words and similar expressions in this quarterly report to identify such forward-looking statements.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control.  Therefore, actual outcomes and results may differ materially from those matters expressed or implied in such forward looking-statements.  We undertake no obligation to update publicly any forward-looking statements, whether as a result of future events, new information or otherwise.

The risks, uncertainties and assumptions that are involved in our forward-looking statements include but are not limited to:

• sensitivity to economic, business and market conditions in the United States and overseas, including economic instability or a downturn in the sectors served by us, such as automotive, electronics, coinage, telecommunications, ammunition, housing, vinyls and pulp and paper;

• extraordinary events, such as additional terrorist attacks or war with one or more countries;

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•	continued or additional economic and industry downturns that result in diminished product demand and excess manufacturing capacity in any of our segments and that, in many cases, result in lower selling prices and profits;
•	the cyclical nature of our operating results, particularly declines in average selling prices in the chlor alkali industry and the supply/demand balance for our products, including the impact of excess industry capacity or an imbalance in demand for our chlor alkali products;
•	an increase in our indebtedness or higher-than-expected interest rates, affecting our ability to generate sufficient cash flow for debt service;
•	unforeseen effects of competition, including the migration by United States customers to low-cost foreign locations;
•	costs and other expenditures in excess of those projected for environmental investigation and remediation or other legal proceedings;
•	unexpected litigation outcomes;
•	higher-than-expected raw material and utility or transportation and/or logistics costs;
•	the occurrence of unexpected manufacturing interruptions and outages, including those occurring as a result of production hazards;
•	unexpected additional taxes and related interest as the result of pending income tax audits; and
•	the effects of a continued depressed stock market on the asset values and declining long-term interest rates on the liabilities in our pension plan.
All of our forward-looking statements should be considered in light of these factors.  In addition, other risks and uncertainties not presently known to us or that we consider immaterial could affect the accuracy of our forward-looking statements.

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Part II - Other Information

Item 1. Legal Proceedings.

                     Regarding our former mercury cell Chlor Alkali Products plant in Saltville, Virginia, the Trustees for natural resources in the North Fork of the Holston River, the Main Stem Holston River, and associated floodplains, located in Smyth and Washington Counties in Virginia, and in Sullivan and Hawkins Counties in Tennessee recently notified us of, and invited our participation in, an assessment of alleged injuries to natural resources resulting from the release of mercury. The Trustees also notified us that they have made a preliminary determination that we are potentially liable for natural resource damages in said rivers and floodplains. In light of the early stage, and inherent uncertainties, of the assessment, we cannot at this time determine whether the financial impact, if any, of this matter will be materially adverse to our financial condition, liquidity or results of operations.

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.

                     The Company held its Annual Meeting of Shareholders on April 24, 2003.  Of the 57,789,087 shares of Common Stock entitled to vote at such meeting, at least 54,038,022 shares were present for purposes of a quorum.  At the meeting, shareholders elected to the Board of Directors James G. Hascall and William W. Higgins as Class III directors with terms expiring in 2006 and Donald W. Griffin as a Class I director with a term expiring in 2004.  Votes cast for and votes withheld in the election of Directors were as follows:

	Votes For	Votes Withheld
James G. Hascall	51,665,025	2,372,997
William W. Higgins	52,050,008	1,988,014
Donald W. Griffin	51,438,177	2,599,845

                     There were no abstentions or broker nonvotes.

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                     The shareholders approved the Olin Corporation 2003 Long Term Incentive Plan.  Voting for the resolution approving the Olin Corporation 2003 Long Term Incentive Plan were 46,078,877 shares.  Voting against were 7,323,821 shares.  Abstaining were 635,324 shares.  There were no broker nonvotes.

                     The shareholders approved the Amended and Restated 1997 Stock Plan for Non-employee Directors.  Voting for the resolution approving the Amended and Restated 1997 Stock Plan for Non-employee Directors were 47,024,038 shares.  Voting against were 6,353,797 shares.  Abstaining were 660,187 shares.  There were no broker nonvotes.

                     The shareholders also ratified the appointment of KPMG LLP as independent auditors for the Corporation for 2003.  Voting for the resolution ratifying the appointment were 52,258,539 shares.  Voting against were 1,503,919 shares.  Abstaining were 275,564 shares.  There were no broker nonvotes.

Item 5. Other Information.

                     Not Applicable.

Item 6.	Exhibits and Reports on Form 8-K.
	(a)	Exhibits
		3(a)	Olin’s Restated Articles of Incorporation as amended through May 8, 1997
		3(b)	Olin’s By-laws as amended effective July 30, 2003
		12	Computation of Ratio of Earnings to Fixed Charges (Unaudited).
		31.1	Section 302 Certification Statement of Chief Executive Officer
		31.2	Section 302 Certification Statement of Chief Financial Officer
		32	Section 906 Certification Statement of Chief Executive Officer and Chief Financial Officer
	(b)	Reports on Form 8-K
		Form 8-K filed April 24, 2003, furnishing Olin’s first quarter 2003 earnings press release.
		Form 8-K filed May 5, 2003, furnishing a press release announcing Olin would make a presentation at investor meetings sponsored by Morgan Stanley on May 7 and 8, 2003.
		Form 8-K filed May 7, 2003, furnishing slides that would be presented at the investor meetings sponsored by Morgan Stanley on May 7 and 8, 2003.

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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:  August 14, 2003

EXHIBIT INDEX

Exhibit No.	Description
3(a)	Olin’s Restated Articles of Incorporation as amended through May 8, 1997
3(b)	Olin’s By-laws as amended effective July 30, 2003
12	Computation of Ratio of Earnings to Fixed Charges (Unaudited).
31.1	Section 302 Certification Statement of Chief Executive Officer
31.2	Section 302 Certification Statement of Chief Financial Officer
32	Section 906 Certification Statement of Chief Executive Officer and Chief Financial Officer

EX-3.(A)

EXHIBIT 3(a)

RESTATED

ARTICLES OF INCORPORATION

OF

OLIN CORPORATION

AS AMENDED THROUGH MAY 8, 1997

FIRST:   The name of the Corporation shall be Olin Corporation.

SECOND:    The principal office of the Corporation in the Commonwealth of Virginia shall be at Abingdon, Virginia 24210.

THIRD:  The purposes for which the Corporation is formed are as follows:  If, when and to the extent lawful for a corporation organized under the laws of the Commonwealth of Virginia (provided that none of the following powers and purposes shall be construed so as to constitute the Corporation a railroad company, a telegraph company, a telephone company, a canal company, a turnpike company, or other company designated by law as a public service corporation or which shall need to possess the right of eminent domain for the purpose of taking and condemning lands within the Commonwealth of Virginia within the meaning of the statutes thereof):

          (1)          to produce, manufacture, process, refine, treat, extract, store, purchase or otherwise acquire, sell, deal in, transport, distribute, market, handle and otherwise turn to account or dispose of, either in their natural form or any altered, converted or manufactured form, chemicals and chemical compositions of any state, form, nature, mixture or description, including, without limiting the generality of the foregoing, salt, soda ash, caustic soda, chlorine, ammonia, bicarbonate of soda, sulphuric acid, superphosphate, mixed fertilizer, ammonium phosphate, ammonium sulphate, phosphoric acid, sulphur, ethylene glycol, ethylene oxide, polyethylene and other organic chemicals, and all mixtures, derivatives, products or by-products of such chemicals;

          (2)          to produce, manufacture, process, refine, treat, store, purchase or otherwise acquire, sell, deal in, transport, distribute, market, handle and otherwise turn to account or dispose of ammunition, firearms, explosives, munitions and stores of war, and components thereof;

          (3)          to produce, manufacture, process, refine, treat, extract, store, purchase or otherwise acquire, sell, deal in, transport, distribute, market, handle and otherwise turn to account or dispose of, either in their natural form or in any altered, converted or manufactured form, drugs of every kind and description and the constituent parts and elements thereof

including, without limiting the generality of the foregoing, all kinds of antibiotic, pharmaceutical, medicinal-chemical, biological, veterinary, dental, hygienic, medicinal-dietetic, household medicinal and toilet substances, products, processes, compounds and compositions, and apparatus and medicinal, hospital and druggists; supplies of every kind and description;

          (4)          to produce, manufacture, process, refine, treat, extract, store, purchase or otherwise acquire, sell, deal in, transport, distribute, market, handle and otherwise turn to account or dispose of, either in their natural form or in any altered, converted or manufactured form, oil, gas and other hydrocarbons, and compositions thereof, of any state, form, nature, mixture or description, including, without limiting the generality of the foregoing, methane, ethane, propane, butane, gasoline and kerosene, and all mixtures, derivatives, products or by-products or such hydrocarbons;

          (5)          to produce, manufacture, process, refine, treat, extract, store, purchase or otherwise acquire, sell, deal in, transport, distribute, market, handle and otherwise turn to account or dispose of iron, steel, copper, brass, nickel, silver, aluminum and other metals and metal products, plastics and plastic products, wood and wooden products, and paper and paper products;

          (6)          to acquire by lease, purchase, contract, concession or otherwise, and to own, explore, exploit, develop, improve, operate, lease, enjoy, control, manage or otherwise turn to account, and to mortgage, grant, sell, exchange, convey or otherwise dispose of, any and all kinds of real estate, lands, options, concessions, grants, land patents, timber lands, oil rights, gas rights, and any other mineral rights, oil royalties, gas royalties, and any other mineral royalties, and any other franchises, claims, rights, privileges, easements, tenements, estates, hereditaments and interests in properties, real or personal, tangible or intangible, of every description and nature whatsoever, useful in the conduct of the business of the Corporation;

          (7)          to construct, build, purchase, lease or otherwise acquire, equip, hold, own, improve, develop, manage, maintain, control, operate, lease, mortgage, create liens upon, sell, convey or otherwise dispose of, or turn to account, any and all factories, plants, refineries, laboratories, oil wells, gas wells, mines, lumberyards, sawmills, installations, equipment, machinery, storage tanks, tank cards, tank wagons, locomotives, railroad cars, tractors, trucks, cars, airplanes, boats, barges, and other vehicles and vessels, pipe lines, pumps, pumping stations, filling stations, railways, roadways, canals, water courses, wharves, piers, docks, basins, and other structures, machines and apparatus of every kind and description, and any and all rights and privileges therein, useful in the conduct of the business of the Corporation;

          (8)          to apply for, register, obtain, purchase, lease, take licenses in respect of or otherwise acquire, and to hold, own, use, operate, develop, enjoy, turn to account, grant licenses and immunities in respect of, manufacture under and to introduce, sell, assign, mortgage, pledge or otherwise dispose of, and, in any manner deal with and contract with reference to:

(a)          inventions, devices, formulae, processes and any improvements and modifications thereof, and

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(b)          letters patent, patent rights, patented processes, copyrights, designs and similar rights, trade-marks, trade symbols and other indications of origin and ownership granted by or recognized under the laws of the United States of America or of any state or subdivision thereof, or of any foreign country or subdivision thereof, and all rights connected therewith or appertaining thereunto;

          (9)          to conduct and carry on any experimental and research work;

          (10)          to manufacture, process, purchase, sell and generally to trade and deal in and with goods, wares and merchandise of every kind, nature and description, and to engage and participate in any mercantile, industrial or trading business of any kind or character whatsoever;

          (11)          to acquire by purchase, exchange, lease or otherwise and to own, hold, use, develop, operate, sell, assign, lease, transfer, convey, exchange, mortgage, pledge or otherwise dispose of or deal in and with, real and personal property of every class or description and rights and privileges therein wheresoever situate;

          (12)          to subscribe to, purchase or otherwise acquire, and to hold, mortgage, pledge, sell, exchange or otherwise dispose of, securities (which term, for the purpose of this Article THIRD, includes, without limitation of the generality thereof, any shares of stock, bonds, debentures, notes, mortgages or other obligations, and any certificates, receipts or other instruments representing rights to receive, purchase or subscribe for the same, or representing any other rights or interests therein or in any property or assets) created or issued by any persons, firms, associations, corporations, or governments or subdivisions thereof; to make payment therefor in any lawful manner, and to exercise as owner or holder of any securities, any and all rights, powers and privileges in respect thereof;

          (13)          to make, enter into, perform and carry out contracts of every kind and description with any person, firm, association, corporation or government or subdivision thereof;

          (14)          to acquire by purchase, exchange or otherwise, all, or any part of, or any interest in, the properties, assets, business and good will of any one or more persons, firms, associations or corporations heretofore or hereafter engaged in any business for which a corporation may now or hereafter be organized under the laws of the Commonwealth of Virginia; to pay for the same in cash, property or its own or other securities; to hold, operate, reorganize, liquidate, sell or in any manner dispose of the whole or any part thereof; and in connection therewith, to assume or guarantee performance of any liabilities, obligations or contracts of such persons, firms, associations or corporations, and to conduct the whole or any part of any business thus acquired;

          (15)          to lend its uninvested funds from time to time to such extent, to such persons, firms, associations, corporations, governments or subdivisions thereof, and on such terms and on such security, if any, as the Board of Directors of the Corporation may determine;

          (16)          to guarantee or become surety in respect to the payment of principal, interest or dividends upon, and the performance of sinking fund or other obligations of, any securities, and to guarantee in any way permitted by law the performance of any of the contracts or other

3

undertakings in which the Corporation may otherwise be or become interested, of any person, firm, association, corporation, government or subdivision thereof, or of any other combination, organization or entity whatsoever;

          (17)          to borrow money for any of the purposes of the Corporation, from time to time, and without limit as to amount; from time to time to issue and sell its own securities in such amounts, on such terms and conditions, for such purposes and for such prices, now or hereafter permitted by the laws of the Commonwealth of Virginia and by these Articles of Incorporation, as the Board of Directors of the Corporation may determine; and to secure such securities by mortgage upon, or the pledge of, or the conveyance or assignment in trust of, the whole or any part of the properties, assets, business and good will of the Corporation, then owned or thereafter acquired;

          (18)          to purchase, hold, cancel, reissue, sell, exchange, transfer or otherwise deal in its own securities from time to time to such extent and in such manner and upon such terms as the Board of Directors of the Corporation shall determine; provided that the Corporation shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital, except to the extent permitted by law; and provided further that shares of its own capital stock belonging to the Corporation shall not be voted upon directly or indirectly;

          (19)          to organize or cause to be organized under the laws of the Commonwealth of Virginia, or of any other State of the United States of America, or of the District of Columbia, or of any territory, dependency, colony or possession of the United States of America, or of any foreign country, a corporation or corporations for the purpose of transacting, promoting or carrying on any or all of the objects or purposes for which the Corporation is organized, and to dissolve, wind up, liquidate, merge or consolidate any such corporation or corporations or to cause the same to be dissolved, wound up, liquidated, merged or consolidated;

          (20)          to conduct its business in any and all of its branches and maintain offices both within and without the Commonwealth of Virginia, in any and all States of the United States of America, in the District of Columbia, in any or all territories, dependencies, colonies or possessions of the United States of America, and in foreign countries;

          (21)           to such extent as a corporation organized under the laws of the Commonwealth of Virginia may now or hereafter lawfully do, to do, either as principal or agent and either alone or in connection with, or in partnership with, other persons, firms, associations, corporations and other legal entities, whether organized under the laws of the Commonwealth of Virginia or otherwise, governments or subdivisions thereof, or individuals, all and everything necessary, suitable, convenient or proper for, or in connection with, or incident to, the accomplishment of any of the purposes or the attainment of any one or more of the objects herein enumerated, or designed directly or indirectly to promote the interests of the Corporation or to enhance the value of its properties; and in general to do any and all things and exercise any and all powers, rights and privileges which a corporation may now or hereafter be organized to do or to exercise under the laws of the Commonwealth of Virginia or under any act amendatory thereof, supplemental thereto or substituted therefor.

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          The foregoing clauses shall be construed both as objects and powers, and each as an independent right and power, and it is hereby expressly provided that the enumeration herein of specific objects and powers shall not be held to limit or restrict in any manner the general powers of this Corporation, and all the powers and purposes hereinbefore enumerated shall be exercised, carried out and enjoyed by this Corporation within the Commonwealth of Virginia and outside of the Commonwealth of Virginia to such extent and in such manner as a corporation of this character organized under the laws of the Commonwealth of Virginia may properly and legally exercise, carry out and enjoy, but nothing herein contained shall be deemed to authorize or permit this Corporation to carry on any business or exercise any power or do any act which a corporation of this character, formed under the laws of the Commonwealth of Virginia, may not at the time lawfully carry on or do.

FOURTH:  The aggregate number of shares that the Corporation shall have authority to issue shall be 10,000,000 shares of Preferred Stock, par value $1 per share (hereinafter called Preferred Stock), and 120,000,000 shares of Common Stock, par value $1 per share (hereinafter called Common Stock).

The following is a description of each of said different classes of stock, and a statement of the preferences, limitations, voting rights and relative rights in respect of the shares of each such class:

          1.          The Board of Directors shall have authority, by resolution or resolutions, at any time and from time to time to divide and establish any or all of the unissued shares of Preferred Stock not then allocated to any series of Preferred Stock into one or more series, and, without limiting the generality of the foregoing, to fix and determine the designation of each such series, the number of shares which shall constitute such series and the following relative rights and preferences of the shares of each series so established:

            (a)          The annual dividend rate payable on shares of such series, the time of payment thereof, whether such dividends shall be cumulative or non- cumulative, and the date or dates from which any cumulative dividends shall commence to accrue;

            (b)          the price or prices at which and the terms and conditions, if any, on which shares of such series may be redeemed;

           (c)          the amounts payable upon shares of such series in the event of the voluntary or involuntary dissolution, liquidation or winding-up of the affairs of the Corporation;

           (d)          the sinking fund provisions, if any, for the redemption or purchase of shares of such series;

           (e)          the extent of the voting powers, if any, of the shares of such series;

5

           (f)          the terms and conditions, if any, on which shares of such series may be converted into shares of stock of the Corporation of any other class or classes or into shares of any other series of the same or any other class or classes;

           (g)          whether, and if so the extent to which, shares of such series may participate with the Common Stock in any dividends in excess of the preferential dividend fixed for shares of such series or in any distribution of the assets of the Corporation, upon a liquidation, dissolution or winding-up thereof, in excess of the preferential amount fixed for shares of such series; and

           (h)          any other preferences and relative, optional or other special rights, and qualifications, limitations or restrictions of such preferences or rights, of shares of such series not fixed and determined by law or in this Article FOURTH.

          2.          Each series of Preferred Stock shall be so designated as to distinguish the shares thereof from the shares of all other series. Different series of Preferred Stock shall not be considered to constitute different classes of shares for the purpose of voting by classes except as otherwise fixed by the Board of Directors with respect to any series at the time of the creation thereof.

          3.          So long as any shares of Preferred Stock are outstanding, the Corporation shall not declare and pay or set apart for payment any dividends (other than dividends payable in Common Stock or other stock of the Corporation ranking junior to the Preferred Stock as to dividends) or make any other distribution on such junior stock, if at the time of making such declaration, payment or distribution the Corporation shall be in default with respect to any dividend payable on, or any obligation to retire, shares of Preferred Stock.

          4.          Shares of any series of Preferred Stock which have been redeemed or otherwise reacquired by the Corporation (whether through the operation of a sinking fund, upon conversion or otherwise) shall, upon cancellation in accordance with law, have the status of authorized and unissued shares of Preferred Stock and may be redesignated and reissued as a part of such series or of any other series of Preferred Stock. Shares of Common Stock which have been reacquired by the Corporation shall, upon cancellation in accordance with law, have the status of authorized and unissued shares of Common Stock and may be reissued.

          5.          Subject to the provisions of any applicable law or of the By-laws of the Corporation as from time to time amended with respect to the closing of the transfer books or the fixing of a record date for the determination of stockholders entitled to vote, and except as otherwise provided by law or in resolutions of the Board of Directors establishing any series of Preferred Stock pursuant to the provisions of paragraph 1 of this Article FOURTH, the holders of outstanding shares of Common Stock of the Corporation shall exclusively possess voting power for the election of directors and for all other purposes, each holder of record of shares of Common Stock of the Corporation being entitled to one vote for each share of such stock standing in his name on the books of the Corporation.

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          6.          No holder of shares of stock of any class of the Corporation shall, as such holder, have any right to subscribe for or purchase (a) any shares of stock of any class of the Corporation, or any warrants, options or other instruments that shall confer upon the holder thereof the right to subscribe for or purchase or receive from the Corporation any shares of stock of any class, whether or not such shares shall be unissued shares, now or hereafter authorized, or shares acquired by the Corporation after the issue thereof, and whether or not such shares of stock, warrants, options or other instruments are issued for cash or services or property or by way of dividend or otherwise, or (b) any other security of the Corporation which shall be convertible into, or exchangeable for, any shares of stock of the Corporation of any class or classes, or to which shall be attached or appurtenant any warrant, option or other instrument that shall confer upon the holder of such security the right to subscribe for or purchase or receive from the Corporation any shares of its stock of any class or classes, whether or not such shares shall be unissued shares, now or hereafter authorized, or shares acquired by the Corporation after the issue thereof, and whether or not such securities are issued for cash or services or property or by way of dividend or otherwise, other than such right, if any, as the Board of Directors, in its sole discretion, may from time to time determine.  If the Board of Directors shall offer to the holders of shares of stock of any class of the Corporation, or any of them, any such shares of stock, options, warrants, instruments or other securities of the Corporation, such offer shall not, in any way, constitute a waiver or release of the right of the Board of Directors subsequently to dispose of other securities of the Corporation without offering the same to said holders.

          7.          Anything herein to the contrary notwithstanding, dividends upon shares of any class of stock of the Corporation shall be payable only out of assets legally available for the payment of such dividends, and the rights of the holders of shares of stock of the Corporation in respect of dividends shall at all times be subject to the power of the Board of Directors to determine what dividends, if any, shall be declared and paid to the stockholders.

          8.          Subject to the provisions hereof and except as otherwise provided by law, shares of stock of any class of the Corporation may be issued for such consideration and for such corporate purposes as the Board of Directors may from time to time determine.

          9.          (Reserved)

          10.          Series A Participating Cumulative Preferred Stock.  There is hereby established a series of the Corporation’s authorized Preferred Stock, to be designated as the “Series A Participating Cumulative Preferred Stock, par value $1 per share.”  The designation and number, and relative rights, preferences and limitations of the Series A Participating Cumulative Preferred Stock, insofar as not already fixed by any other provision of these Articles of Incorporation, shall be as follows:

          SECTION 1.     Designation and Number of Shares.

          The shares of such series shall be designated as “Series A Participating Cumulative Preferred Stock” (the “Series A Preferred Stock”), par value $1 per share.  The number of shares initially constituting the Series A Preferred Stock shall be 250,000; provided, however, that, if more than a total of 250,000 shares of Series A Preferred Stock shall be issuable upon the

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exercise of Rights (the “Rights”) issued pursuant to the Rights Agreement dated as of February 27, 1996, between the Corporation and Chemical Mellon Shareholder Services, L.L.C., as Rights Agent (the “Rights Agreement”), the Board of Directors of the Corporation, pursuant to Section 13.1-639 of the Virginia Stock Corporation Act, shall direct by resolution or resolutions that articles of amendment of the Articles of Incorporation of the Corporation be properly executed and filed with the State Corporation Commission of Virginia providing for the total number of shares of Series A Preferred Stock authorized to be issued to be increased (to the extent that the Articles of Incorporation then permit) to the largest number of whole shares (rounded up to the nearest whole number) issuable upon exercise of such Rights.

          SECTION 2.     Dividends or Distributions.

                    (a)          Subject to the prior and superior rights of the holders of shares of any other series of Preferred Stock or other class of capital stock of the Corporation ranking prior and superior to the shares of Series A Preferred Stock with respect to dividends, the holders of shares of the Series A Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of the assets of the Corporation legally available therefor, (i) quarterly dividends payable in cash on the last day of each fiscal quarter in each year, or such other dates as the Board of Directors of the Corporation shall approve (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or a fraction of a share of Series A Preferred Stock, in the amount of $.01 per whole share (rounded to the nearest cent), less the amount of all cash dividends declared on the Series A Preferred Stock pursuant to the following clause (ii) since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock (the total of which shall not, in any event, be less than zero) and (ii) dividends payable in cash on the payment date for each cash dividend declared on the Common Stock in an amount per whole share (rounded to the nearest cent) equal to the Formula Number (as hereinafter defined) then in effect times the cash dividends then to be paid on each share of Common Stock. In addition, if the Corporation shall pay any dividend or make any distribution on the Common Stock payable in assets, securities or other forms of non-cash consideration (other than dividends or distributions solely in shares of Common Stock), then, in each such case, the Corporation shall simultaneously pay or make on each outstanding whole share of Series A Preferred Stock a dividend or distribution in like kind equal to the Formula Number then in effect times such dividend or distribution on each share of the Common Stock. As used herein, the “Formula Number” shall be 1,000; provided, however, that, if at any time after February 27, 1996, the Corporation shall (x) declare or pay any dividend on the Common Stock payable in shares of Common Stock or make any distribution on the Common Stock in shares of Common Stock, (y) subdivide (by a stock split or otherwise) the outstanding shares of Common Stock into a larger number of shares of Common Stock or (z) combine (by a reverse stock split or otherwise) the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, in each such event, the Formula Number shall be adjusted to a number determined by multiplying the Formula Number in effect immediately prior to such event by a fraction, the numerator of which is the number of shares of Common Stock that are outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that are outstanding immediately prior to such event (and rounding the result to the nearest

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whole number); and provided further, that, if at any time after February 27, 1996, the Corporation shall issue any shares of its capital stock in a merger, reclassification, or change of the outstanding shares of Common Stock, then, in each such event, the Formula Number shall be appropriately adjusted to reflect such merger, reclassification or change so that each share of Preferred Stock continues to be the economic equivalent of a Formula Number of shares of Common Stock prior to such merger, reclassification or change.

                    (b)          The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in Section 2(a) immediately prior to or at the same time it declares a dividend or distribution on the Common Stock (other than a dividend or distribution solely in shares of Common Stock); provided, however, that, in the event no dividend or distribution (other than a dividend or distribution in shares of Common Stock) shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $.01 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.  The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a dividend or distribution declared thereon, which record date shall be the same as the record date for any corresponding dividend or distribution on the Common Stock.

                    (c)          Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from and after the Quarterly Dividend Payment Date next preceding the date of original issue of such shares of Series A Preferred Stock; provided, however, that dividends on such shares that are originally issued after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and on or prior to the next succeeding Quarterly Dividend Payment Date shall begin to accrue and be cumulative from and after such Quarterly Dividend Payment Date.  Notwithstanding the foregoing, dividends on shares of Series A Preferred Stock that are originally issued prior to the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend on the first Quarterly Dividend Payment Date shall be calculated as if cumulative from and after the last day of the fiscal quarter next preceding the date of original issuance of such shares. Accrued but unpaid dividends shall not bear interest.  Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.

                    (d)          So long as any shares of the Series A Preferred Stock are outstanding, no dividends or other distributions shall be declared, paid or distributed, or set aside for payment or distribution, on the Common Stock, unless, in each case, the dividend required by this Section 2 to be declared on the Series A Preferred Stock shall have been declared.

                    (e)          The holders of the shares of Series A Preferred Stock shall not be entitled to receive any dividends or other distributions, except as provided herein.

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          SECTION 3.     Voting Rights. 

          The holders of shares of Series A Preferred Stock shall have the following voting rights:

                    (a)          Each holder of Series A Preferred Stock shall be entitled to a number of votes equal to the Formula Number then in effect, for each share of Series A Preferred Stock held of record on each matter on which holders of the Common Stock or shareholders generally are entitled to vote, multiplied by the maximum number of votes per share which any holder of the Common Stock or shareholders generally then have with respect to such matter (assuming any holding period or other requirement to vote a greater number of shares is satisfied).

                    (b)          Except as otherwise provided herein or by applicable law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock shall vote together as one class for the election of directors of the Corporation and on all other matters submitted to a vote of shareholders of the Corporation.

                    (c)          If, at the time of any annual meeting of shareholders for the election of directors, the equivalent of six quarterly dividends (whether or not consecutive) payable on any share or shares of Series A Preferred Stock are in default, the number of directors constituting the Board of Directors of the Corporation shall be increased by two.  In addition to voting together with the holders of Common Stock for the election of other directors of the Corporation, the holders of record of the Series A Preferred Stock, voting separately as a class to the exclusion of the holders of Common Stock, shall be entitled at said meeting of shareholders (and at each subsequent annual meeting of shareholders), unless all dividends in arrears have been paid or declared and set apart for payment prior thereto, to vote for the election of two directors of the Corporation, the holders of any Series A Preferred Stock being entitled to cast a number of votes per share of Series A Preferred Stock equal to the Formula Number.  Until the default in payments of all dividends that permitted the election of said directors shall cease to exist, any director who shall have been so elected pursuant to the next preceding sentence may be removed at any time, either with or without cause, only by the affirmative vote of the holders of the shares of Series A Preferred Stock at the time entitled to cast a majority of the votes entitled to be cast for the election of any such director at a special meeting of such holders called for that purpose, and any vacancy thereby created may be filled by the vote of such holders.  If and when such default shall cease to exist, the holders of the Series A Preferred Stock shall be divested of the foregoing special voting rights, subject to revesting in the event of each and every subsequent like default in payments of dividends.  Upon the termination of the foregoing special voting rights, the terms of office of all persons who may have been elected directors pursuant to said special voting rights shall forthwith terminate, and the number of directors constituting the Board of Directors shall be reduced by two.  The voting rights granted by this Section 3(c) shall be in addition to any other voting rights granted to the holders of the Series A Preferred Stock in this Section 3.

                    (d)          Except as provided herein, in Section 11 or by applicable law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for authorizing or taking any corporate action.

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          SECTION 4.     Certain Restrictions.

                    (a)          Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not

                         (i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock;

                         (ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

                         (iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock; provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or

                         (iv) purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

                    (b)          The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

          SECTION 5.     Liquidation Rights. 

          Upon the liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, no distribution shall be made (a) to the holders of shares of stock ranking junior

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(either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received an amount equal to the accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, plus an amount equal to the greater of (i) $.01 per whole share or (ii) an aggregate amount per share equal to the Formula Number then in effect times the aggregate amount to be distributed per share to holders of Common Stock or (b) to the holders of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all other such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up.

          SECTION 6.     Consolidation, Merger, etc. 

          In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other property, then, in any such case, the then outstanding shares of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share equal to the Formula Number then in effect times the aggregate amount of stock, securities, cash or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is exchanged or changed. In the event both this Section 6 and Section 2 appear to apply to a transaction, this Section 6 will control.

          SECTION 7.     No Redemption; No Sinking Fund.

                    (a)          The shares of Series A Preferred Stock shall not be subject to redemption by the Corporation or at the option of any holder of Series A Preferred Stock; provided, however, that the Corporation may purchase or otherwise acquire outstanding shares of Series A Preferred Stock in the open market or by offer to any holder or holders of shares of Series A Preferred Stock.

                    (b)          The shares of Series A Preferred Stock shall not be subject to or entitled to the operation of a retirement or sinking fund.

          SECTION 8.     Ranking.

          The Series A Preferred Stock shall rank junior to all other series of Preferred Stock of the Corporation, unless the Board of Directors shall specifically determine otherwise in fixing the powers, preferences and relative, participating, optional and other special rights of the shares of such series and the qualifications, limitations and restrictions thereof.

          SECTION 9.     Fractional Shares.

          The Series A Preferred Stock shall be issuable upon exercise of the Rights issued pursuant to the Rights Agreement in whole shares or in any fraction of a share that is one-thousandth (1/1,000) of a share or any integral multiple of such fraction which shall entitle the holder, in proportion to such holder’s fractional shares, to receive dividends, exercise voting

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rights, participate in distributions and have the benefit of all other rights of holders of Series A Preferred Stock. In lieu of fractional shares, the Corporation, prior to the first issuance of a share or a fraction of a share of Series A Preferred Stock, may elect

                    (a)          to make a cash payment as provided in the Rights Agreement for fractions of a share other than one-thousandth (1/1,000) of a share or any integral multiple thereof or

                    (b)          to issue depository receipts evidencing such authorized fraction of a share of Series A Preferred Stock pursuant to an appropriate agreement between the Corporation and a depository selected by the Corporation; provided that such agreement shall provide that the holders of such depository receipts shall have all the rights, privileges and preferences to which they are entitled as holders of the Series A Preferred Stock.

          SECTION 10.     Reacquired Shares.

          Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock, par value $1 per share, of the Corporation, undesignated as to series, and may thereafter be reissued as part of a new series of such Preferred Shares as permitted by law.

          SECTION 11.     Amendment.

          None of the powers, preferences and relative, participating, optional and other special rights of the Series A Preferred Stock as provided herein or in the Articles of Incorporation shall be amended in any manner that would alter or change the powers, preferences, rights or privileges of the holders of Series A Preferred Stock so as to affect such holders adversely without the affirmative vote of the holders of at least 66-2/3% of the outstanding shares of Series A Preferred Stock, voting as a separate class; provided, however, that no such amendment approved by the holders of at least 66-2/3% of the outstanding shares of Series A Preferred Stock shall be deemed to apply to the powers, preferences, rights or privileges of any holder of shares of Series A Preferred Stock originally issued upon exercise of a Right after the time of such approval without the approval of such holder.

FIFTH:     The period of the duration of the Corporation is unlimited and perpetual.

SIXTH:

          1.          The number of directors shall be as specified in the By-laws of the Corporation but such number may be increased or decreased from time to time in such manner as may be prescribed in the By-laws.  In no event shall such number exceed 18.  In the absence of a By-law specifying the number of directors, the number shall be 15.  Commencing with the 1985 annual meeting of stockholders, the Board of Directors shall be divided into three classes, Class I, Class II, and Class III, as nearly equal in number as possible.  At the 1985 annual meeting of stockholders, directors of the first class (Class I) shall be elected to hold office for a term

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expiring at the 1986 annual meeting of stockholders; directors of the second class (Class II) shall be elected to hold office for a term expiring at the 1987 annual meeting of stockholders; and directors of the third class (Class III) shall be elected to hold office for a term expiring at the 1988 annual meeting of stockholders. At each annual meeting of stockholders after 1985, the successors to the class of directors whose term shall then expire shall be identified as being of the same class as the directors they succeed and elected to hold office for a term expiring at the third succeeding annual meeting of stockholders.  When the number of directors is changed, any newly-created directorships or any decrease in directorships shall be so apportioned among the classes by the Board of Directors as to make all classes as nearly equal in number as possible.

          2.          Subject to the rights of the holders of any Preferred Stock then outstanding, directors may be removed only with cause.

          3.          Subject to the rights of the holders of any Preferred Stock then outstanding, newly-created directorships resulting from any increase in the number of directors and any vacancies in the Board of Directors resulting from death, resignation, disqualification, removal or other cause shall be filled solely by the Board of Directors or at an annual meeting of stockholders by the stockholders entitled to vote on the election of directors.  Unless otherwise provided by law, directors so chosen by the stockholders shall hold office for a term expiring at the annual meeting of stockholders at which the term of the class to which they have been elected expires.  If the directors remaining in office constitute fewer than a quorum of the Board, they may fill the vacancy by the affirmative vote of a majority of the directors remaining in office.

SEVENTH:     The amount of real estate to which the holdings of the Corporation at any one time are to be limited is five million (5,000,000) acres.

EIGHTH:        The following provisions are inserted for the regulation of the business and for the conduct of the affairs of the Corporation, and it is expressly provided that the same are to be in furtherance and not in limitation or exclusion of the powers conferred by statute or otherwise:

          1.          Except where other notice is specifically required by statute, written notice of any meeting of stockholders given as provided by the By-laws of the Corporation shall be sufficient without publication or other form of notice.

          2.          A meeting of the stockholders, other than the annual meeting of stockholders, may be held at any time but only upon the call of the Board of Directors, the Chairman of the Board, the President or the holders of a majority of the shares of issued and outstanding stock of the Corporation entitled to vote at the meeting.

          3.          In furtherance and not in limitation of the powers conferred by the laws of the Commonwealth of Virginia, the Board of Directors is expressly authorized and empowered:

                       (a)          To make, alter, amend and repeal the By-laws, subject to the power of the stockholders to alter or repeal the By-laws made by the Board of Directors.

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                       (b)          Subject to the applicable provisions of the By-laws then in effect, to determine, from time to time, whether and to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders, and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the Commonwealth of Virginia, unless and until authorized so to do by resolution of the Board of Directors or of the stockholders of the Corporation.

                       (c)          By resolution passed by a majority of the whole Board of Directors, (i) to designate two or more of their number, to constitute an executive committee, which, to the extent provided in such resolution, shall have and may exercise the power of the Board of Directors in the management of the business and affairs of the Corporation, and may have power to authorize the seal of the Corporation to be affixed to all papers which require it; and (ii) to appoint such other committees, agents and representatives as may be necessary and convenient for the conduct or the management of the business of the Corporation.

                       (d)          To determine whether any, and, if any, what part, of the net earnings of the Corporation or of its net assets in excess of its capital shall be declared in dividends and paid to the stockholders, and to direct and determine the use and disposition of any such net earnings or such net assets in excess of capital for any lawful purpose of the Corporation, and, without limiting the generality of the foregoing, from time to time as the Board of Directors may deem necessary or desirable, to set aside reserves for any purpose, to fix from time to time the amount of earnings to be reserved for working capital and to set aside such reserves or make such other provisions for additions, improvements and betterments to plant and equipment, for expansion of the business of the Corporation (including the acquisition of real and personal property for that purpose), for plans for maintaining employment at the plants of the Corporation, and for other plans for the benefit of employees generally.

                       (e)          To establish pension, bonus, profit-sharing or other types of incentive or compensation plans for the officers and employees (including officers and employees who are also directors) of the Corporation and its subsidiaries and to fix the amount of earnings to be distributed or shared and to determine the persons to participate in any such plans and the amounts of their respective participations.

                       (f)          To issue and sell or grant options for the purchase of shares of Common Stock to officers and employees (including officers and employees who are also directors) of the Corporation and its subsidiaries for such consideration and on such terms and conditions as the Board of Directors may from time to time determine.

          In addition to the powers and authorities hereinbefore or by statute expressly conferred upon it, the Board of Directors may exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the laws of the Commonwealth of Virginia, of these Articles of Incorporation and of the By- laws of the Corporation.

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          4.          No contract or other transaction between the Corporation and any other corporation and no other act of the Corporation shall, in the absence of fraud, in any way be affected or invalidated by the fact that any of the directors of the Corporation are pecuniarily or otherwise interested in, or are directors or officers of, such other corporation.  Any director of the Corporation individually or any firm or association of which any director may be a member, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Corporation, provided that the fact that he individually or such firm or association is so interested shall be disclosed or shall have been known to the Board of Directors or a majority of such members thereof as shall be present at any meeting of the Board of Directors at which action upon any such contract or transaction shall be taken.  Any director of the Corporation who is also a director or officer of such other corporation or who is so interested may be counted in determining the existence of a quorum at any meeting of the Board of Directors which shall authorize any such contract or transaction, and may vote thereat to authorize any such contract or transaction, with like force and effect as if he were not such director or officer of such other corporation or not so interested.  Any director of the Corporation may vote upon any contract or other transaction between the Corporation and any subsidiary or affiliated corporation without regard to the fact that he is also a director of such subsidiary or affiliated corporation.

          Any contract, transaction or act of the Corporation or of the directors, which shall be ratified by a majority of a quorum of the stockholders of the Corporation at any annual meeting, or at any special meeting called for such purpose, shall, insofar as permitted by law or by these Articles of Incorporation, be as valid and as binding as though ratified by every stockholder of the Corporation; provided, however, that any failure of the stockholders to approve or ratify any such contract, transaction or act, when and if submitted, shall not be deemed in any way to invalidate the same or deprive the Corporation, its directors, officers or employees, of its or their right to proceed with such contract, transaction or act.

          Subject to any limitation in the By-laws, the members of the Board of Directors shall be entitled to reasonable fees, salaries or other compensation for their services and to reimbursement for their expenses as such members.  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.”

NINTH:     Except as expressly otherwise required in these Articles of Incorporation, an amendment or restatement of these Articles requiring shareholder approval shall be approved by a majority of the votes entitled to be cast by each voting group that is entitled to vote on the matter, unless in submitting an amendment or restatement to the shareholders the Board of Directors shall require a greater vote.

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EX-3.(B)

EXHIBIT 3(b)

BYLAWS

OF

OLIN CORPORATION

As Amended
Effective
July 30, 2003

BYLAWS
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

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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. 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.

          A shareholder or a shareholder’s duly authorized attorney-in-fact may execute a writing authorizing another person or persons to act for such shareholder as proxy.  Execution may be accomplished by the shareholder or such shareholder’s duly authorized attorney-in-fact or authorized officer, director, employee or agent signing such writing or causing such shareholder’s signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature.

          The President, any Vice President or the Secretary of the Corporation may approve procedures to enable a shareholder or a shareholder’s duly authorized attorney-in-fact to authorize another person or persons to act for such shareholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram, internet transmission, telephone transmission or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission, provided that any such transmission must either set forth or be submitted with information from which the judges or inspectors of election can determine that the transmission was authorized by the shareholder or the shareholder’s duly authorized attorney-in-fact.  If it is determined that such transmissions are valid, the judges or inspectors of election shall specify the information upon which they relied.  Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to this Section 6 may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

          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

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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 Bylaws, 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 Bylaws.  A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting, including the complete text of any resolutions to be presented at the meeting with respect to such business, and the reasons for conducting such business at the meeting, (ii) the name and address of record of the shareholder proposing such business, (iii) the class and number of shares of the Corporation that are beneficially owned by the shareholder and any other person on whose behalf the proposal is made, and (iv) any material interest of the shareholder and any other person on whose behalf the proposal is made, in such business.  In the event that a shareholder attempts to bring business before a meeting without complying with the foregoing procedure, the chairman of the meeting may declare to the meeting that the business was not properly brought before the meeting and, if he shall so declare, such business shall not be transacted.

          SECTION 10.  Special Meeting at Request of Shareholders.  (a)     Any holder or holders of record of a majority of the outstanding shares of Common Stock requesting the Corporation to call a special meeting of shareholders pursuant to Section 2 of Article Eighth of the Restated Articles of Incorporation (collectively, the “Initiating Shareholder”) shall give written notice of such request to the Secretary of the Corporation at its principal executive offices (the “Notice”).  The Notice shall be sent in the manner and contain all the information that would be required in a notice to the Secretary given pursuant to Section 9 of this Article I.

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(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.

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 nine 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 Bylaws.  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

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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 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

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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 Bylaws 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 Bylaws.  Any meeting of the Board may be adjourned by a majority vote of the directors present at such meeting. Notice of any adjourned meeting need not be given.

          SECTION 8.  Waivers of Notice of Meetings.  Anything in these Bylaws 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 Bylaws, 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.

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ARTICLE III.¹
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, 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

¹  Compiler's Note:  This Article III was adopted by the shareholders at the Annual Meeting of Shareholders, April 28, 1994.

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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 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.

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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 Bylaws, 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.

          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 Bylaws 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.

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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 Bylaws. 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.

          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

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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.

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,

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at the time of delivery thereof, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

          SECTION 4.  Vacancies.  Any vacancy in the Board caused by death, resignation, disqualification, removal, an increase in the number of directors, or any other cause, may be filled (a) by the holders of shares of the Corporation entitled to vote on the election of directors, but only at an annual meeting of shareholders, or (b) by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board at any regular or special meeting thereof.  Each director so elected by the Board shall hold office until the next annual election of directors, and each director so elected by the shareholders shall hold office for a term expiring at the annual meeting of shareholders at which the term of the class to which he has been elected expires, and, in each case, until his successor shall be elected, or until his death, or until he shall resign, or until he shall have been removed in the manner hereinabove provided.  Any vacancy in the office of any officer or assistant officer caused by death, resignation, removal or any other cause, may be filled by the Board for the unexpired portion of the term.

ARTICLE VII.
CONTRACTS, LOANS, CHECKS, DRAFTS, DEPOSITS, ETC.

          SECTION 1.  Execution of Contracts.  Except as otherwise provided by law or by these Bylaws, 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

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indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by the Board.

          SECTION 4.  Deposits.  All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board may select or as may be selected by the Treasurer or any other officer, employee or agent of the Corporation to whom such power may from time to time be delegated by the Board.

          SECTION 5.  Voting of Securities.  Unless otherwise provided by the Board, the Chief Executive Officer may from time to time appoint an attorney or attorneys, or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities in any other corporation, any of whose stock or other securities may be held by the Corporation, at meetings of the holders of the stock or other securities of such other corporation, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal, or 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 Bylaws 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

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for the same shall have been surrendered and canceled.  Except as otherwise provided by law, no transfer of shares shall be valid as against the Corporation, its shareholders or creditors, for any purpose, until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.  The Board may also make such additional rules and regulations as it may deem expedient concerning the issue and transfer of certificates representing shares of the capital stock of the Corporation.

          SECTION 3.  Record Date.  For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than seventy days prior to the date on which the particular action, requiring such determination of shareholders, is to be taken.  When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than 120 days after the date fixed for the original meeting.

          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 Bylaws or authorized by the Board.

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ARTICLE X.
AUDITOR.

          The Board shall annually appoint an independent accountant who shall carefully examine the books of the Corporation.  One such examination shall be made immediately after the close of the fiscal year and be ready for presentation at the annual meeting of shareholders of the Corporation, and such other examinations shall be made as the Board may direct.

ARTICLE XI.
SEAL.

          The seal of the Corporation shall be circular in form and shall bear the name of the Corporation and the year “1892.”

ARTICLE XII.
FISCAL YEAR.

          The fiscal year of the Corporation shall end on the 31st day of December in each year.

ARTICLE XIII.
AMENDMENTS.

          The Bylaws of the Corporation may be altered, amended or repealed and new Bylaws 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 BYLAWS.

          SECTION 1.  Definitions.  As used in these Emergency Bylaws,

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          (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 Bylaws, as from time to time amended, shall be operative only during any period of emergency.  To the extent not inconsistent with these Emergency Bylaws, all provisions of the regular Bylaws 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 Bylaws.

          SECTION 3.  Board of Directors.  (a) A meeting of the Board may be called by any director or senior officer of the Corporation.  Notice of any meeting of the Board need be given only to such of the directors as it may be feasible to reach at the time and by such means as may be feasible at the time, including publication or radio, and at a time less 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 Bylaws 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 Bylaws of the Corporation with respect to the election of officers, the Board may

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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 Bylaws 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 Bylaws may make any further or different provision that may be practical and necessary for the circumstances of the emergency.

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EX-12

Exhibit 12

OLIN CORPORATION AND CONSOLIDATED SUBSIDIARIES

Computation of Ratio of Earnings to Fixed Charges (Unaudited)
(In millions)

	Six Months Ended June 30,
	2003			2002
Earnings:
Loss before taxes and cumulative effect of accounting change	$	(4.3	)	$	(24.1	)
Add (deduct):
Equity in income of non-consolidated affiliates		(4.6	)		—
Amortization of capitalized interest		0.2			0.1
Fixed charges as described below		15.9			20.0
Total	$	7.2		$	(4.0	)
Fixed Charges:
Interest expensed and capitalized	$	10.3		$	14.6
Estimated interest factor in rent expense (1)		5.6			5.4
Total	$	15.9		$	20.0
Ratio of earnings to fixed charges (2)		—			—

(1)	Amounts represent those portions of rent expense that are reasonable approximations of interest costs.
(2)	Loss before taxes and cumulative effect of accounting change was insufficient to cover fixed charges by approximately $8.7 million and $24.0 million for the six months ended June 30, 2003 and June 30, 2002, respectively.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

               I, Joseph D. Rupp, certify that:

               1. I have reviewed this quarterly report on Form 10-Q of Olin Corporation (the “registrant”);

               2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

               3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

               4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

               a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

               b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

               c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

               5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

               a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

               b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2003	/s/ JOSEPH D. RUPP
	Joseph D. Rupp President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

               I, Anthony W. Ruggiero, certify that:

               1. I have reviewed this quarterly report on Form 10-Q of Olin Corporation (the “registrant”);

               2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

               3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

               4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

               a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

               b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

               c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

               5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

               a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

               b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2003	/s/ ANTHONY W. RUGGIERO
	Anthony W. Ruggiero Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS
ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Olin Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2003 as filed with the Securities and Exchange Commission (the “Report”), I, Joseph D. Rupp, President and Chief Executive Officer and I, Anthony W. Ruggiero, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to our knowledge: (1) the Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its Staff upon request.

/s/ JOSEPH D. RUPP

Joseph D. Rupp
President and Chief Executive Officer

Dated:  August 14, 2003

/s/ ANTHONY W. RUGGIERO

Anthony W. Ruggiero
Executive Vice President and
Chief Financial Officer

Dated:  August 14, 2003