WASHINGTON, D.C. 20549
(Amendment No. )
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ANNUAL MEETING OF SHAREHOLDERS
To be Held on April 26, 2018IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 26, 2018
Olin’s Notice of Annual Meeting of Shareholders and Proxy Statement and 2017 Annual Report onForm 10-K23, 2020 are available atwww.proxydocs.com/oln. You will need your11-digit control number located in the upper right box on the front of your proxy card or the notice regarding the availability of proxy materials to vote your shares.
GENERAL QUESTIONS
Why did I receive a notice in the mail regarding the availability of proxy materials instead of printed copies of the proxy materials?
In accordance with rules adopted by the U.S. Securities and Exchange Commission (SEC), we may furnish proxy materials to our shareholders by providing access to these documents on the Internet instead of mailing printed copies. Unless you are a participant in the Olin Corporation Contributing Employee Ownership Plan (the CEOP), you will not receive printed copies of the materials unless you request them. Instead, we mailed you the notice regarding the availability of proxy materials (unless you have previously consented to electronic delivery or already requested to receive printed copies), which describes how you may access and review all of the proxy materials on the Internet. The notice regarding the availability of proxy materials provides instructions as to how shareholders can access the proxy materials online, contains a listing of matters to be considered at the meeting, and sets forth instructions as to how shares can be voted. Shares must be voted either on the Internet, by telephone, or by completing and returning a proxy card. Shares cannot be voted by marking, writing on and/or returning the notice regarding the availability of proxy materials. Any notices regarding the availability of proxy materials that are returned will not be counted as votes. Instructions for requesting a paper copy of the proxy materials are set forth on the notice regarding the availability of proxy materials.
This process is designed to expedite shareholders’ receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. However, if you prefer to receive printed proxy materials via mail or receive an e-mail with links to the electronic materials, please follow the instructions included on the notice regarding the availability of proxy materials.
Why did I receive this proxy statement?
You received this proxy statement because you owned shares of Olin
Corporation (Olin) common stock, par value $1 per share, which we sometimes refer to as common stock, at the close of business on February 28,
2018.2020. Olin’s board of directors is asking you to vote at the
20182020 annual meeting FOR each of the director nominees identified in Item 1 and FOR
each of Items 2, 3 and 4 listed in the notice of the annual meeting of shareholders. This proxy statement describes the matters on which we would like you to vote and provides information so that you can make an informed decision.
When was this proxy material mailed to shareholders? We began to mail the proxy statement and form of proxy to shareholders on or about March 12, 2018.27, 2020.
When was the notice regarding the availability of proxy materials mailed to shareholders?
We began to mail the notice regarding the availability of proxy materials to shareholders on or about March 12, 2018.
What if I have questions?
If you have questions, please write them downcontact Olin’s proxy solicitor:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Shareholders call toll free 877-750-9496
Banks and
send them to the Secretary at Olin’s principal executive office at 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA.Brokers call 212-750-5833
Info@innisfreema.com
What will I be voting on?
You will be voting on:
| 1. | the election of the four directors identified in the proxy statement;
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| 2. | the approval of the Olin Corporation 2018 Long Term Incentive Plan;
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| 3. | an advisory vote to approve the compensation for named executive officers;
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| 4. | the ratification of KPMG LLP (KPMG) as Olin’s independent registered public accounting firm for 2018; and
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| 5. | any other business properly presented at the annual meeting.
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1. the election of six directors;
2. an advisory vote to approve the compensation for named executive officers;
3. the ratification of the appointment of KPMG LLP (KPMG) as Olin’s independent registered public accounting firm for 2020;
4. a proposal of the board of directors to declassify the board of directors; and
5. any other business properly presented at the annual meeting.
The proposal to ratify the appointment of KPMG as Olin’s independent registered public accounting firm for 20182020 is considered a discretionary item for which a broker will have discretionary voting power if you do not give instructions with respect to this proposal. The proposals to elect directors, to approve the Olin Corporation 2018 Long Term Incentive Plan and to conduct an advisory vote to approve the compensation for named executive officers and to act on a proposal of the board of directors to declassify the board of directors arenon-routine matters for which a broker will not have discretionary voting power and for which specific instructions from beneficial owners are required. As a result, a broker will not be allowed to vote on these three matters on behalf of its beneficial owner customers if the customers do not return specific voting instructions. If you are a shareholder that holds shares through a broker, please provide specific voting instructions to your broker.
Could other matters be voted on at the annual meeting?
As of March
12, 2018,27, 2020, the items listed in the preceding question are the only matters being considered. If any other matters are properly presented for action, the persons named in the accompanying form of proxy will vote the proxy in accordance with their good faith business judgment as to what is in the best interests of Olin.
How does the board recommend I vote on the proposals?
Our board recommends a vote FOR each of the director nominees identified in Item 1 and FOR Items 2, 3 and 4.
What is a broker non-vote?
A broker non-vote occurs when brokers, banks or other nominees holding shares for a beneficial owner have discretionary authority to vote on “routine” matters brought before a shareholder meeting, but the beneficial owner of the shares fails to provide the broker, bank or other nominee with specific instructions on how to vote any “non-routine” matters brought to a vote at the shareholders meeting.
Brokers, banks and other nominees will be entitled to vote your shares on “routine” matters without instructions from you. The only proposal that would be considered “routine” in such event is the proposal for the ratification of the appointment of KPMG as Olin’s independent registered public accountants. A broker, bank or other nominee will not be entitled to vote your shares on any “non-routine” matters, absent instructions from you. “Non-routine” matters include the election of directors, the approval, on a non-binding advisory basis, of the compensation paid to Olin’s named executive officers and action on the board of directors’ proposal to declassify the board of directors.
Consequently, if you do not submit any voting instructions to your broker, bank or other nominee, your broker, bank or other nominee may exercise its discretion to vote your shares on the proposal to ratify the appointment of KPMG. If you do not direct your broker, bank or other nominee as to how your shares should be voted, your shares will constitute broker non-votes on each of the other proposals. Broker non-votes will count for purposes of determining whether a quorum exists, but will not be counted as votes cast with respect to such proposals.
What do I need to do to attend the
20182020 annual meeting in person?
Each attendee must bring a valid, government-issued photo ID, such as a driver’s license or passport, as well as other verification of Olin common stock ownership. For a shareholder of record or participant in the CEOP,Olin Corporation Contributing Employee Ownership Plan (CEOP), please bring your notice or the upper half of your proxy card (CEOP shares must be voted either on the Internetonline or by telephone no later than April 20, 2020 at 11:59 p.m. Central Daylight Time, on April 22, 2018, or by mail ifreceived by no later than April 20, 2018)18, 2020). If you are a beneficial owner of Olin common stock, but do not hold your
shares in your own name (i.e., your shares are held in street name), please bring the notice or voting instruction form you received from your bank, broker or other nominee. You may also bring your bank or brokerage account statement reflecting your ownership of Olin common stock as of February 28, 2018,2020, the record date.
If you hold your shares through a bank, broker or other nominee, you will not be permitted to vote at the meeting without obtaining a “legal proxy” from that nominee.
Please note that cameras, sound or video recording equipment, cellular telephones, smartphones and other similar devices, as well as purses, briefcases, backpacks and packages, will not be allowed in the meeting room. No one will be admitted to the meeting once it begins.
How can I obtain directions to be able to attend the annual meeting and vote in person? You may obtain directions to the Plaza in Clayton Office Tower in Clayton, MO USA by contacting the Plaza in Clayton Office Towercalling 314-290-5039 or online at1-314-290-5039http://theplazainclayton.axisportal.com/Directions.axis or by accessing its website atwww.theplazainclaytonoffice.com/Directions.axis.
All shareholders of record at the close of business on February 28,
2018,2020, are entitled to vote at the annual meeting.
How many votes can be cast by all shareholders?
At the close of business on February 28, 2018,2020, the record date for voting, we had 167,192,875157,824,531 outstanding shares of common stock. Each shareholder on the record date may cast one vote for each full share owned. The presence in person or by proxy of the holders of a majority of such outstanding shares constitutes a quorum. If a share is
present for any purpose at the meeting, it is deemed to be present for the transaction of all business. Abstentions and shares held in street name that are voted on any matter will be included in determining the number of votes present. Shares held in street name that are not voted on any matter at the meeting will not be included in determining whether a quorum is present.
How do I
vote?vote if I am not the shareholder of record?
If you are not the shareholder of record but hold shares through a custodian, broker or other agent, such agent may have special voting instructions that you should follow. Please see the enclosed materials sent to you by your broker, bank or other nominee for information on how to vote your shares.
How do I vote if I am a shareholder of record?
You may vote either in person at the annual meeting or by proxy. To vote by proxy, you must select one of the following options:
| · | | Vote on the Internet (Internet voting instructions are printed on the notice regarding the availability of proxy materials and/or your proxy card):
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| · | | Accesswww.proxypush.com/oln.
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| · | | Have the notice regarding the availability of proxy materials and/or your proxy card in hand.
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| · | | Follow the instructions provided on the site.
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| · | | Submit the electronic proxy before the required deadline (11:59 p.m. Central Daylight Time on April 25, 2018, for shareholders and 11:59 p.m. Central Daylight Time on April 22, 2018, for CEOP participants).
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| · | | If you are not the shareholder of record but hold shares through a custodian, broker or other agent, such agent may have special voting instructions that you should follow.
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| · | | Vote by telephone (telephone voting instructions are printed on the notice regarding the availability of proxy materials and/or your proxy card):
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| · | | From the U.S. and Canada, call the toll-free voting telephone number:1-866-883-3382.
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| · | | Have the notice regarding the availability of proxy materials and/or your proxy card in hand.
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| · | | Follow and comply with the recorded instructions by the applicable deadline (11:59 p.m. Central Daylight Time on April 25, 2018, for shareholders and 11:59 p.m. Central Daylight Time on April 22, 2018, for CEOP participants).
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| · | | If you are not the shareholder of record but hold shares through a custodian, broker or other agent, such agent may have special voting instructions that you should follow.
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| · | | Complete the enclosed proxy card:
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| · | | Complete all of the required information on the proxy card.
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| · | | Sign and date the proxy card.
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| · | | Return the proxy card in the enclosed postage-paid envelope. We mustreceive the proxy card by April 25, 2018, for shareholders or by April 20, 2018, for CEOP participants, for your proxy to be valid and for your vote to count.
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| · | | If you are not the shareholder of record but hold shares through a custodian, broker or other agent, such agent may have special voting instructions that you should follow.
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•Vote online:
•Access the website listed in the proxy materials you received.
•Have your proxy card in hand.
•Follow the instructions provided on the website.
•Submit the electronic proxy before the required deadline (April 20, 2020 at 11:59 p.m. Central Daylight Time for CEOP participants and April 22, 2020 at 11:59 p.m. Central Daylight Time for shareholders).
•Vote by telephone:
•Call the numbers listed in the proxy materials your received.
•Have your proxy card in hand.
•Follow and comply with the recorded instructions by the applicable deadline (April 20, 2020 at 11:59 p.m. Central Daylight Time for CEOP participants and April 22, 2020 at 11:59 p.m. Central Daylight Time for shareholders).
•Vote by proxy card:
•Complete all of the required information on the enclosed proxy card.
•Sign and date the proxy card.
•Return the proxy card in the enclosed postage paid envelope. We must receive the proxy card no later than April 18, 2020 for CEOP participants and no later than April 22, 2020 for shareholders, for your vote to be counted.
If you vote in a timely manner
on the Internetonline or by telephone, you do not have to return the proxy card for your vote to count.
The Internet and telephone voting procedures appear in the upper right box of the notice regarding the availability of proxy materials or your proxy card. You may also log on to change your vote or to confirm that your vote has been properly recorded.If you want to vote in person at the annual meeting, and you own Olin common stock through a custodian, broker or other agent, you must obtain a
legal proxy from that party in their capacity as owner of record for your shares and bring
thethat legal proxy to the annual meeting.
Where can I access an electronic copy of the Proxy Statement and Annual Report on
Form 10-K for the year ended December 31,
2017?Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be Held on April 26, 2018:
2019?
You may access an electronic, searchable copy of the 20182020 Proxy Statement and the Annual Report on Form 10 -K 10- K for the year ended December 31, 2017,2019, atwww.proxydocs.com/olnwww.olin.com/investors/events-presentations/upcoming-events.
If you specifically mark the proxy card (or vote on the Internetonline or by telephone) and indicate how you want your vote to be cast regarding any matter, your directions will be followed. If you sign and submit the proxy card but do not specifically mark it with your instructions as to how you want to vote, the proxy will be voted FOR the election of the directorsdirector nominees named in this proxy statement in Item 1 and FOR each of Items 2, 3 and 4 listed in the proxy. If you submit a proxy card marked “abstain” on any item, other than Item 2, your shares will not be voted on that item so marked and your vote will not be included in
determining the number of votes cast on that matter. Abstentions on Item 2 will have the same effect as a vote against the proposal. Shares held in street name that are not voted in the election of directorsdirector nominees or on Items 2, 3 or 4 will not be included in determining the number of votes cast on those matters.
As of the date of this proxy statement, the board of directors knows of no business other than that set forth above to be transacted at the annual meeting, but if other matters requiring a vote do arise, it is the intention of the persons named in the proxy card to whom you are granting your proxy to vote in accordance with their good faith business judgment as to what is in the best interests of Olin on such matters.
EQ Shareowner Services tabulates the shareholder votes and provides an independent inspector of election as part of its services as our registrar and transfer agent.
Yes. Whether you vote
on the Internet,online, by telephone or submit a proxy card with your voting instructions, you may revoke or change your vote by:
| · | | casting a new vote on the Internet or by telephone;
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| · | | submitting another written proxy with a later date;
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| · | | sending a written notice of the change in your voting instructions to the Secretary ifreceived by April 25, 2018, for shareholders and by April 20, 2018, for CEOP participants; or
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| · | | revoking the grant of a previously submitted proxy and voting in person at the annual meeting. Please note that your attendance at the annual meeting itself will not revoke a proxy.
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•casting a new vote online or by telephone;
•submitting another written proxy with a later date;
•sending a written notice of the change in your voting instructions to the Secretary if received no later than April 18, 2020 for CEOP participants or no later than April 22, 2020 for shareholders; or
•revoking the grant of a previously submitted proxy and voting in person at the annual meeting. Please note that your attendance at the annual meeting itself will not revoke a proxy.
Proxies submitted by shareholders through the Internetonline, by telephone or by telephoneproxy card will be counted in the vote only if they arereceived no later than April 22, 2020 by 11:59 p.m. Central Daylight Time on April 25, 2018.Time. Shares represented by proxies on the enclosedvoted using a proxy card will be counted in the vote only if wereceive your proxy card byno later than April 25, 2018.22, 2020. Proxies submitted by CEOP participants will be counted in the vote only if they arereceived through the Internet by mail no later than April 18, 2020 or online or by telephone no later than April 20, 2020 by 11:59 p.m. Central Daylight Time on April 22, 2018 orreceivedby mail by April 20, 2018.Time.
How do I vote my shares held in the Olin Contributing Employee Ownership Plan?
On February 28, 2018,2020, the CEOP held 2,642,8502,614,272 shares of our common stock. Voya Institutional Trust Company serves as the Trustee of the CEOP. If you are a CEOP participant, you may instruct the CEOP Trustee on how to vote shares of common stock credited to your CEOP account on the items of business listed on the proxy card by voting on the Internet,online, by telephone or by indicating your instructions on your proxy card and returning it to us.the proxy card in the postage paid envelope provided. The Trustee will vote shares of common stock held in the CEOP for which they donot receive voting instructions in the same manner proportionately as they vote the shares of common stock for which theydo receive instructions. In order for your instructions to be counted by the Trustee, your vote must be received by the Trustee by April 18, 2020.
How do I vote my shares held in the Automatic Dividend Reinvestment Plan?
EQ Shareowner Services is our registrar and transfer agent and administers the Automatic Dividend Reinvestment Plan. If you participate in our Automatic Dividend Reinvestment Plan, EQ Shareowner Services will vote any shares of common stock that it holds for you in accordance with your instructions indicated on the proxy card you return or the vote you make on the Internetonline or by telephone. If you donot submit a proxy card for your shares of record or vote on the Internetonline or by telephone, EQ Shareowner Services willnot vote your dividend reinvestment shares.
Can I contact board members directly?
Our audit committee has established the following methods for shareholders or other interested parties to communicate directly with the board and/or its members.
| · | | Mail—Letters may be addressed to the board or to an individual board member as follows:
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•Mail—Letters may be addressed to the board or to an individual board member as follows:
The Olin Board or (Name of the director)
c/o Office of the Secretary
190 Carondelet Plaza, Suite 1530
Clayton, MO 63105 USA
| · | | E-mail—You may send ane-mail message to Olin’s board at the following address:directors@olin.com. In addition, you may send ane-mail message to an individual board member by addressing thee-mail using the first initial of the director’s first name combined with his or her last name in front of@olin.com.
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| · | | Telephone—Olin has established a safe and confidential process for reporting, investigating and resolving employee and other third party concerns. Shareholders or other interested parties may also use this Help-Line to communicate with one or more directors on any Olin matter. The Olin Help-Line is operated by an independent, third party service 24 hours a day, 7 days a week. In the United States and Canada, the Olin Help-Line can be reached by dialing toll-free1-800-362-8348. Callers outside the United States and Canada can find toll-free numbers for several countries available under “Dialing Options” atwww.OlinHelp.com or can reach the Olin Help-Line by calling the United States collect at1-770-810-1127.
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•E-mail—You may send an e-mail message to Olin’s board at the following address: directors@olin.com. In addition, you may send an e-mail message to an individual board member by addressing the e-mail using the first initial of the director’s first name combined with his or her last name in front of @olin.com.
•Telephone—Olin has established a safe and confidential process for reporting, investigating and resolving employee and other third party concerns. Shareholders or other interested parties may also use this Help-Line to communicate with one or more directors on any Olin matter. The Olin Help-Line is operated by an independent, third party service 24 hours a day, 7 days a week. In the United States and Canada, the Olin Help-Line can be reached by dialing toll-free 800-362-8348. Callers outside the United States and Canada can find toll-free numbers for several countries available under “Dialing Options” at www.OlinHelp.com or can reach the Olin Help-Line by calling the United States collect at 770-810-1127.
Who pays for this proxy solicitation?
Olin will pay the entire expense of
thisits proxy solicitation.
Who solicits the proxies and what is the cost of this proxy solicitation?
Our board is soliciting
Olin has engaged Innisfree M&A Incorporated (Innisfree) to act as Olin’s proxy solicitor in connection with the proxies on behalf of Olin. We have engaged The Proxy Advisory Group, LLC (Proxy Advisory Group), aproposals to be acted upon at the annual meeting. Pursuant to Olin’s agreement with Innisfree, Innisfree will, among other things, provide advice regarding proxy solicitation firm, to assist in the solicitation of proxies and provide related adviceissues and informational support forand solicit proxies from Olin’s shareholders on Olin’s behalf in connection with the annual meeting. For these services, Olin will pay a services fee and the reimbursement of customary disbursements, which are not expectedup to exceed $20,000 in total.plus expenses. Olin has agreed to indemnify Innisfree against certain liabilities relating to, or arising out of, its engagement. In addition, Olin will reimburse brokers and other nominees for their expenses in forwarding proxy solicitation materials to holders.
How will the proxies be solicited?
Proxy Advisory Group will
Innisfree and our directors, officers and employees may solicit proxies by personal interview, e-mail, mail
andor telephone, and
a third party will request brokerage houses and other custodians, brokers and other agents to forward proxy solicitation materials to the beneficial owners of Olin common stock for whom they hold shares.
Our directors, officers and employees may also solicit proxies by personal interview, e-mail and telephone.
How can I submit a shareholder proposal at the
20192021 annual meeting?
If you want to present a proposal to be considered for inclusion in the proxy statement for the 20192021 annual meeting, you must deliver the proposal in writing (and include the information required by Olin’s Bylaws) to the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA no later than November 9, 2018.27, 2020. You must then present your proposal in person at the 20192021 annual meeting.
If you want to present a proposal for consideration at the 20192021 annual meeting without including your proposal in the proxy statement, you must deliver a written notice (containing the information required by Olin’s Bylaws) to the Secretary at Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA no later than January 25, 2019.23, 2021. You must also present your proposal in person at the 20192020 annual meeting.
How can I recommend a director for the slate of candidates to be nominated by Olin’s board for election at the 2021 annual meeting?
You can suggest that our directors and corporate governance committee consider a person for inclusion in the slate of candidates to be proposed by the board for election at the 2021 annual meeting. A shareholder can recommend a person by delivering written notice to Olin’s board no later than October 28, 2020. The notice must include the information described under the heading “What Is Olin’s Director Nomination Process?” on page 21, and must be sent to the address indicated under that heading. The board is not required to include such nominee in the proxy statement.
How can I directly nominate a director for election to the board at the
20192021 annual meeting?
According to Olin’s Bylaws, if you are a shareholder you may directly nominate an individual for election to the board if you deliver a written notice of the nomination to Olin’s Secretary no later than January
25, 2019.23, 2021. Your notice must include:
| · | | the name and address of the person you are nominating;
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| · | | a statement that you are entitled to vote at the annual meeting (stating the number of shares you hold of record) and intend to appear at the annual meeting in person, or by proxy, to make the nomination;
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| · | | a description of arrangements or understandings between you and others (and naming any such other persons), if any, pursuant to which you are making the nomination;
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| · | | such other information about the nominee as would be required in a proxy statement filed under the SEC proxy rules; and
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| · | | the written consent of the nominee to actually serve as a director, if elected.
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•your name and address;
•the name and address of the person you are nominating;
•a statement that you are entitled to vote at the annual meeting (stating the number of shares you hold of record) and intend to appear at the annual meeting in person, or by proxy, to make the nomination;
•a description of arrangements or understandings between you and others (and naming any such other persons), if any, pursuant to which you are making the nomination;
•such other information about the nominee as would be required in a proxy statement filed under the SEC proxy rules; and
•the written consent of the nominee to actually serve as a director, if elected.
Although a shareholder may directly nominate an individual for election as a director, the board is not required to include such nominee in the proxy statement.
How can I recommend a director for the slateProxy Statement Table of candidates to be nominated by Olin’s board for election at the 2019 annual meeting?ContentsIn addition to directly nominating an individual for election to the board as discussed above, you can suggest that our directors and corporate governance committee consider a person for inclusion in the slate of candidates to be proposed by the board for election at the 2019 annual meeting. A shareholder can recommend a person by delivering written notice to Olin’s board no later than October 12, 2018. The notice must include the information described under the heading “What Is Olin’s Director Nomination Process?” on page 20, and must be sent to the address indicated under that heading. As noted above, the board is not required to include such nominee in the proxy statement.
How can I obtain shareholder information?
Shareholders may contact EQ Shareowner Services, our registrar and transfer agent, who also manages our Automatic Dividend Reinvestment Plan at:
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100 USA
Telephone:1-800-401-1957
Internet:www.shareowneronline.com, click on “contact us.”
Shareholders can sign up for online account access through EQ Shareowner Services for fast, easy and secure access 24 hours a day, 7 days a week for future proxy materials, investment plan statements, tax documents and more. To sign up log on towww.shareowneronline.com wherestep-by-step instructions will prompt you through enrollment or you may call1-800-401-1957 from the United States or1-651-450-4064 from outside the United States for customer service.
CERTAIN BENEFICIAL OWNERS
Except as listed below, to our knowledge, no person beneficially owned more than 5% of our common stock as of February
28, 2018. | | | | | | | | |
Name and Address of Beneficial Owner
| | Amount and
Nature of
Beneficial
Ownership
| | | Percent
of Class
| |
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BlackRock, Inc. | | | 16,689,125 | (a) | | | 10.0 | % |
55 East 52nd Street | | | | | | | | |
New York, NY 10055 | | | | | | | | |
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The Vanguard Group, Inc. | | | 14,602,134 | (b) | | | 8.8 | % |
100 Vanguard Boulevard | | | | | | | | |
Malvern, PA 19355 | | | | | | | | |
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TIAA-CREF Investment Management, LLC | | | 9,853,573 | (c) | | | 5.9 | % |
Teachers Advisors, LLC | | | | | | | | |
730 Third Avenue | | | | | | | | |
New York, NY 10017 | | | | | | | | |
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Iridian Asset Management LLC | | | 9,522,830 | (d) | | | 5.7 | % |
276 Post Road West | | | | | | | | |
Westport, CT 06880 | | | | | | | | |
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Adage Capital Partners, L.P. | | | 9,021,489 | (e) | | | 5.4 | % |
200 Clarendon Street, 52nd Floor | | | | | | | | |
Boston, MA 02116 | | | | | | | | |
29, 2020. For each entity included in the table below, percentage ownership is calculated by dividing the number of shares reported as beneficially owned by such entity by the 157,722,254 shares of our common stock outstanding on January 31, 2020. | | | | | | | | | | | | | | |
| Name and Address of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | Percent of Class |
| | | | |
| FMR LLC | | 21,913,604 (a) | Based on Amendment No. 10 to a Schedule 13G filing dated January 17, 2018, as of December 31, 2017,
| | 13.9% | |
| 245 Summer Street | | | | |
| Boston, MA 02210 | | | | |
| | | | |
BlackRock, Inc. had sole dispositive power over all of the shares reported and sole voting power over 16,238,752 of such shares. |
| 19,497,977 (b) | Based on Amendment No. 5 to a Schedule 13G filing dated February 7, 2018, as of December 31, 2017,
| | 12.4% | |
55 East 52nd Street | | | | |
| New York, NY 10055 | | | | |
| | | | |
The Vanguard Group, Inc. had sole voting power over 87,795 shares, sole dispositive power over 14,497,927 shares, shared voting power over 29,157 shares and shared dispositive power over 104,207 shares. | | 15,203,647 (c) | | | 9.6% | |
100 Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., was the beneficial owner of 75,050 shares as a result of serving as investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., was the beneficial owner of 41,902 shares as a result of serving as investment manager of Australian investment offerings.Boulevard | | | | |
(c)Malvern, PA 19355 | Based on Amendment No. 2 to a Schedule 13G filing dated February 14, 2018, as of December 31, 2017, TIAA-CREF Investment
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| | | | |
Sachem Head Capital Management LLC had sole voting and dispositive power over 7,608,017 of such shares and Teachers Advisors, LLC had sole voting and dispositive power over 2,245,556 of such shares. Each of TIAA-CREF Investment Management, LLC and Teachers Advisors, LLC. expressly disclaimed beneficial ownership of the other’s securities holdings and each disclaimed that it was a member of a group with the other.LP |
| 14,950,000 (d) | Based on Amendment No. 1 to a Schedule 13G filing dated February 6, 2018, as of December 31, 2017, all such shares were beneficially owned by Iridian Asset Management, LLC (Iridian) and David H. Cohen and Harold J. Levy also may be deemed to beneficially own such shares by virtue of their indirect ownership and control of Iridian but disclaim beneficial ownership of such shares. The Schedule 13G reported that (i) Mr. Cohen had sole voting and dispositive power over 2,155 shares not included above and (ii) Mr. Levy had sole voting and dispositive power over 1,070 shares not included above.
| | 9.5% | |
| 250 West 55th Street, 34th Floor | | | | |
| New York, NY 10019 | | | | |
| | | | |
| Dimensional Fund Advisors LP | | 8,199,945 (e) | Based on Amendment No. 2 to a Schedule 13G filing dated February 13, 2018, as of December 31, 2017, Adage Capital Partners, L.P. held shared voting and shared dispositive power over all of the reported shares with Adage Capital Partners GP, L.L.C., Adage Capital Advisors, L.L.C., Robert Atchinson and Phillip Gross.
| | 5.2% | |
| Building One | | | | |
| 6300 Bee Cave Road | | | | |
| Austin, TX 78746 | | | | |
(a)Based on Amendment No. 2 to a Schedule 13G filing dated February 6, 2020, as of December 31, 2019, FMR LLC and Abigail P. Johnson had sole dispositive power over all of the shares reported and sole voting power over 280,498 of such shares. Reported ownership includes shares held by subsidiaries listed in the filing.
(b)Based on Amendment No. 12 to a Schedule 13G filing dated February 2, 2020, as of December 31, 2019, BlackRock, Inc. had sole dispositive power over all of the shares reported and sole voting power over 19,089,983 of such shares. Reported ownership includes shares held by subsidiaries listed in the filing.
(c)Based on Amendment No. 7 to a Schedule 13G filing dated February 10, 2020, as of December 31, 2019, The Vanguard Group, Inc. had sole voting power over 86,550 shares, sole dispositive power over 15,108,260 shares, shared voting power over 32,955 shares and shared dispositive power over 95,387 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., was the beneficial owner of 63,432 shares as a result of serving as investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc., was the beneficial owner of 57,073 shares as a result of serving as investment manager of Australian investment offerings.
(d)Based on Amendment No. 1 to a Schedule 13D filing dated March 2, 2020, as of February 29, 2020, Sachem Head Capital Management LP had shared voting power and shared dispositive power over all of the shares reported. Uncas GP LLC had shared voting power and shared dispositive power over all of the shares reported. Sachem Head GP LLC had shared voting power and shared dispositive power over 9,200,000 of such shares. Scott D. Ferguson had shared voting power and shared dispositive power over all of the shares reported.
(e)Based on a Schedule 13G filing dated February 12, 2020, as of December 31, 2019, Dimensional Fund Advisors LP had sole voting power over 7,987,438 shares and sole dispositive power over 8,199,945 shares as a result of
serving as an investment manager to four investment companies. Dimensional Fund Advisors LP expressly disclaims beneficial ownership of all shares.
ITEM 1—PROPOSAL FOR THE ELECTION OF DIRECTORS
Who are the individuals nominated by the board to serve as directors?
The board of directors is currently divided into three classes.
Each class has a term of office for three years, and the term of each class ends in a different year. In 2017,Mr. Randall W. Larrimore, who is currently a Class II director with a term expiring at the 2020 annual meeting, is not standing for re-election and will be retiring from his position as a director at the 2020 annual meeting. Following Olin’s 2019 annual meeting of shareholders, Ms. Heidi S. Alderman, Ms. Beverley A. Babcock, Mr. Scott D. Ferguson and Mr. W. Barnes Hauptfuhrer were elected by the board elected one new director, Mr. Shipp, in accordance with an agreement between Olin and The Dow Chemical Company (Dow), now known as DowDupont, in connection with our acquisition of certain lines of business from Dow on October 5, 2015.directors. Virginia law and Olin’s Bylaws require that any director elected by the board of directors (rather than the shareholders) serve only until the earlier of the next election of directors by the shareholders (in this case, the 2020 annual meeting) and until his or her successor is elected or until his or her earlier death, resignation or removal. For this reason, each of Ms. Alderman, Ms. Babcock, Mr. Ferguson and Mr. Hauptfuhrer is required to be re-elected by shareholders at the 2020 annual meeting.
The board has nominated Ms. Beverley A. Babcock, Mr. BogusGray G. Benoist, Mr. John E. Fischer and Mr. Scott D. Ferguson as Class II directors with terms expiring in 2023, Ms. Heidi S. Alderman as a Class IIIII director with a term expiring in 20202021 and Ms. Williams and Messrs. Shipp and SmithMr. W. Barnes Hauptfuhrer as a Class III directorsI director with a term expiring in 2022. However, the board is also recommending that Olin’s shareholders vote FOR Item 4 to approve an amendment to Olin’s articles of incorporation to declassify the board of directors. If such amendment is adopted by shareholders, all of the foregoing nominees will instead serve one-year terms expiring in 2021.
The board expects that all of the nominees
recommended by it will be able to serve as directors. If any nominee is unable to accept election, a proxy voting in favor of such nominee will be voted for the election of a substitute nominee selected by the board, unless the board reduces the number of directors.
The board of directors recommends a vote FOR the election of
Mr. Bogus as a Class II directorMses. Alderman and
Ms. WilliamsBabcock and Messrs.
ShippBenoist, Ferguson, Fischer and
SmithHauptfuhrer as
Class III directors.
How many votes are required to elect a director?
A nominee will be elected as a director by a majority of the votes cast. A majority of the votes cast means that the number of votes FOR a nominee must exceed the number of votes AGAINST that nominee. Abstentions and
shares held in street name that arebroker non-votes will not
voted inbe counted as votes cast either for or against the nominees and therefore will have no effect on the election of
directors will not be included in determining the
number of votes cast and will not affect the outcome of the vote in the election of directors.nominees.
Business Experience of Nominees
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| Business Experience of Nominees |
Set forth on the following pages are descriptions of the business experience of each director nominee, including a brief summary of the specific experience, qualifications, attributes and skills that led our board to conclude that these individuals should serve as our directors.
CLASS II
NOMINEE FORTWO-YEAR TERM EXPIRING IN 2020
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| | DONALD W. BOGUS, 71, retired in January 2009, from his positions as Senior Vice President of The Lubrizol Corporation, now a subsidiary of Berkshire Hathaway (NYSE: BRK.A; a global supplier of high performance specialty products for personal care, coatings, plastics, and various industrial products) and President of Lubrizol Advanced Materials, Inc., a wholly-owned subsidiary of The Lubrizol Corporation, positions he held since June 2004. Mr. Bogus joined Lubrizol in April 2000, as Vice President and his duties included responsibility for the Fluid Technologies for Industry business section and he served as the head of mergers and acquisitions. Prior to joining Lubrizol, he was an Executive Officer at PPG Industries, Inc. (a manufacturer of coatings and glass products) where he served as Vice President of Specialty Chemicals and Vice President of Industrial Coatings. Mr. Bogus earned a bachelor’s degree in biology and chemistry from Baldwin Wallace University. He serves on the board of trustees for Baldwin Wallace University and on their Business Division’s advisory board. Olin director since July 2005; member of the Compensation Committee and the Directors and Corporate Governance Committee. Mr. Bogus’ executive management positions have provided him with expertise in the chemicals industry, as well as merger and acquisition experience.
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CLASS III
NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 20212023
(OR, IF ITEM 4 IS APPROVED BY SHAREHOLDERS, FOR ONE-YEAR TERMS EXPIRING IN 2021)
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| Beverley A. Babcock Director Since: June 2019 Independent Age: 58
•Olin Committees: Audit Committee and Directors and Corporate Governance Committee •Former Chief Financial Officer and Senior Vice President, Finance and Administration and Controller of Imperial Oil Limited •Former Assistant Controller and Vice President, Corporate Financial Services of ExxonMobil Corporation •Former Member of NYSE Listed Company Advisory Board •Member of the Chartered Professional Accountants of Canada
Ms. Babcock brings a combination of extensive global financial, accounting and treasury management expertise, and relevant industry experience to the Olin Board of Directors.
Ms. Babcock most recently served as Chief Financial Officer and Senior Vice President, Finance and Administration and Controller of Imperial Oil Limited, a publicly-held Canadian petroleum company with 69.6% ownership by ExxonMobil Corporation. Prior to that, Ms. Babcock served as Vice President, Corporate Financial Services of ExxonMobil from 2013 to 2015; and as Assistant Controller, Corporate Accounting Services from 2011 to 2013; and in various other senior leadership positions from 1998 to 2013, all at ExxonMobil Corporation. Earlier in her career, she was an Auditor of Clarkson Gordon, which became part of Ernst & Young. Ms. Babcock is a former member of the NYSE Listed Company Advisory Board, and is a member of the Chartered Professional Accountants of Canada.
Ms. Babcock earned a bachelor’s degree from Queen’s University, and a master’s degree in business administration from McMaster University. She is a member of the board of directors of Forté Foundation and a member of the board of directors and the audit committee of Fraser Institute. |
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| Gray G. Benoist Director Since: February 2009 Independent Age: 67
•Olin Committees: Audit Committee and Directors and Corporate Governance Committee •Former Senior Vice President, Finance, Chief Financial Officer and Chief Accounting Officer of Belden, Inc. •Former Senior Vice President, Director of Finance of Networks Segment at Motorola Inc.
Mr. Benoist brings executive level financial experience, and global accounting expertise across a range of industries to the Olin Board of Directors.
Mr. Benoist most recently served as an officer on special assignment of Belden, Inc., a designer, manufacturer and marketer of signal transmission solutions. Prior to that, he served as Senior Vice President, Finance and Chief Financial Officer of Belden for 6 years, and Chief Accounting Officer. Earlier in his career he served as Senior Vice President, Director of Finance of the Networks Segment of Motorola Inc., a business unit responsible for the global design, manufacturing, and distribution of wireless and wired telecom system solutions. During more than 25 years with Motorola, Mr. Benoist served in senior financial and general management roles across Motorola’s portfolio of businesses, including the Personal Communications Sector, Integrated and Electronic Systems Sector, Multimedia Group, Wireless Data Group, and Cellular Infrastructure Group. |
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| Mr. Benoist earned a bachelor’s degree in finance and accounting from Southern Illinois University and a master’s degree in business administration from the University of Chicago. He is a member of the board of directors of Neurowrx, Inc. and serves as treasurer of MindSpark, Inc. |
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| Scott D. Ferguson Director Since: February 2020 Independent Age: 45
•Olin Committees: Compensation Committee and Operating Improvement Committee •Founder and Managing Partner of Sachem Head Capital Management LP •Former Director of Autodesk, Inc.
Mr. Ferguson brings substantial financial, investment strategy, and corporate governance experience to the Olin Board of Directors.
Mr. Ferguson is the founder and managing partner of Sachem Head Capital Management LP, a value-oriented investment management firm based in New York which he started in 2012. Prior to starting Sachem Head, he spent nine years at Pershing Square Capital Management, which he joined pre-launch as the firm’s first investment professional. Prior to Pershing Square, Mr. Ferguson earned an M.B.A. from Harvard Business School in 2003 and was a vice president at American Industrial Partners, an operations focused private equity firm, from 1999 to 2001. Mr. Ferguson was also a business analyst at McKinsey & Company from 1996 to 1999.
Mr. Ferguson graduated from Stanford University with an A.B. in Public Policy in 1996. He currently serves on the board of directors of the Henry Street Settlement and is also a member of the Robin Hood Leadership Council. He is a former director of Autodesk, Inc., a leading design & engineering software company. |
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| John E. Fischer Director Since: May 2016 Chairman, President and Chief Executive Officer Age: 64
•Chairman, President and Chief Executive Officer of Olin Corporation •Olin Committees: Chair of the Executive Committee
Mr. Fischer’s deep knowledge of Olin Corporation, extensive involvement in the acquisition and integration of certain businesses from The Dow Chemical Company, and operational expertise provide invaluable insight to the Olin Board of Directors.
Mr. Fischer is the Chairman, President and Chief Executive Officer of Olin Corporation. He has served as President and Chief Executive Officer since May 2016, and as Chairman since April 26, 2017. He has spent 26 years with Olin in roles of increasing responsibility including Chief Operating Officer, Senior Vice President and Chief Financial Officer, and as Vice President, Finance and Controller.
Previously, from 1996 through 2001, he directed all financial functions, acquisitions and divestments for Primex Technologies, Inc., a munitions, propellants, satellite propulsion systems and electronic products manufacturing company spun off from Olin in 1996 and now called General Dynamics Ordnance and Tactical Systems. Prior to this, Mr. Fischer was Vice President and Financial Officer for Olin’s Ordnance division where he supervised all division financial reporting and planning and government contract management. He began his career with General Defense Corporation in 1977, serving in various accounting and cost accounting positions prior to being appointed Controller in 1985. |
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| Mr. Fischer earned a bachelor’s degree in accounting and economics from Franklin and Marshall College and a master’s degree in finance from Pennsylvania State University. |
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| CLASS III NOMINEE FOR A ONE-YEAR TERM EXPIRING IN 2021 |
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| Heidi S. Alderman Director Since: August 2019 Independent Age: 60
•Olin Committees: Compensation Committee and Directors and Corporate Governance Committee •Former Senior Vice President of BASF Corporation in Intermediates, North American Petrochemicals, and North American Procurement over the course of her career
Ms. Alderman brings significant chemical expertise and global business management experience to the Olin Board of Directors.
Ms. Alderman most recently served as Senior Vice President, Intermediates of BASF Corporation, a global chemical manufacturing company.
Over a nearly 15 year career at BASF, Ms. Alderman previously held the positions of Senior Vice President, North American Petrochemicals from 2011 to 2016; Senior Vice President, North American Procurement from 2008 to 2011; Vice President, Functional Polymers from 2005 to 2008; and Business Director, Polymers from 2003 to 2005. She also served in various positions in business, operations, research, procurement, product and marketing management at Air Products and Chemicals Inc. from 1995 to 2002 and at Rohm and Haas Company from 1981 to 1995.
Ms. Alderman earned a bachelor’s degree in chemical engineering from Stevens Institute of Technology, a master’s degree in chemical engineering from Drexel University and completed the University of Pennsylvania Wharton Management Program in business administration. |
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CLASS I
NOMINEE FOR A TWO-YEAR TERM EXPIRING IN 2022
(OR, IF ITEM 4 IS APPROVED BY SHAREHOLDERS, FOR A ONE-YEAR TERM EXPIRING IN 2021) | |
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| W. Barnes Hauptfuhrer Director Since: February 2020 Independent Age: 65
•Olin Committees: Directors and Corporate Governance Committee and Operating Improvement Committee •Former Co-Head of Corporate & Investment Banking Division of Wachovia Corporation •Former Chief Executive Officer of Chapter IV Investors, LLC •Director of National Gypsum Company and Former Director of Buckeye Pipeline and Wolverine Tube, Inc.
Mr. Hauptfuhrer brings extensive knowledge of finance, mergers and acquisitions, and corporate governance matters to the Olin Board of Directors.
Mr. Hauptfuhrer most recently served as Chief Executive Officer of Chapter IV Investors, LLC, an investment firm he founded in February 2006. Prior to this, Mr. Hauptfuhrer served as Co-Head of the Corporate & Investment Banking Division of Wachovia Corporation (formerly, First Union Corporation). Earlier in his career, he also served as Senior Executive Vice President of Wachovia and prior to the merger of Wachovia and First Union, Mr. Hauptfuhrer served in roles of increasing responsibility at First Union, including Co-Head of the Corporate & Investment Banking Division, Co-Head of Investment Banking, and Managing Partner of First Union Capital Partners, a private equity investment group within First Union, which he founded. Previously, Mr. Hauptfuhrer served as Managing Director and investment banker at Kidder Peabody. |
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| Mr. Hauptfuhrer currently serves as a director of National Gypsum Company. He previously served as a director of Buckeye Pipeline LLC from September 2006 to March 2008, and of Wolverine Tube, Inc. from May 1998 to October 2005.
Mr. Hauptfuhrer earned a bachelor’s degree from Princeton University and a juris doctorate degree and master’s degree in business administration from the University of Virginia. He is a director of the Foundation for the Carolinas. |
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Business Experience of Continuing Directors |
Set forth on the following pages are descriptions of the business experience of each continuing director. The terms of the following directors will continue after the 2020 annual meeting, as indicated below.
CLASS I
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2022
(OR, IF ITEM 4 IS APPROVED BY SHAREHOLDERS, UNTIL 2021)
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| C. Robert Bunch Director Since: December 2005 Independent Age: 65
•Olin Committees: Chair of the Compensation Committee, Member of Directors and Corporate Governance Committee and Executive Committee •Former Chairman of the Board and Chief Executive Officer of Global Tubing •Former Chairman, President and Chief Executive Officer of Maverick Tube Corporation
Mr. Bunch brings extensive company governance, executive leadership, and business strategy experience to the Olin Board of Directors.
Mr. Bunch most recently served as Chairman of the Board and Chief Executive Officer of Global Tubing, LLC, a privately held company which manufactured and sold coiled tubing and related products and services to the energy industry.
Previously, he served as Chairman, President and CEO of Maverick Tube Corporation, a producer of welded tubular steel products used in energy and industrial applications. Mr. Bunch served on the Board of Directors of Pioneer Drilling Company from May 2004 until August 2008. He began his career in 1999 as Vice President and Chief Administrative Officer at Input/Output, where he later became President and Chief Operating Officer from 2002 to 2003. During this time, he was also an independent oil service consultant.
Mr. Bunch earned a bachelor’s degree in economics and a master’s degree in accounting from Rice University and a juris doctorate degree from the University of Houston. |
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| John M. B. O’Connor Director Since: January 2006 Independent Age: 65
•Olin Committees: Audit Committee, Directors and Corporate Governance Committee and Operating Improvement Committee •Chairman and CEO of J.H. Whitney Investment Management and CEO of Whitney Strategic Services •Former Chief Executive Officer of Tactronics Holdings, LLC •Former Chairman and Executive Partner of JP Morgan Alternative Asset Management, Inc. •Director of Boon Logic, Inc. and Sequoia Holdings Inc. and member of the Department of Defense Business Board
Mr. O’Connor brings substantial financial, investment banking, risk management and strategic consulting experience to the Olin Board of Directors. Mr. O’Connor is Chairman and Chief Executive Officer of J.H. Whitney Investment Management, an alternative investment firm, and CEO of Whitney Strategic Services, a provider of global economic advisory services to the US Department of Defense.
Mr. O’Connor previously served as CEO of Tactronics Holdings, a provider of tactical integrated electronic systems to U.S. and foreign military customers. Prior to this, he was Chairman of JP Morgan Alternative Asset Management, Inc, where he also served as an Executive Partner of JP Morgan Partners. During this time, he was also a member of the Risk Management Committee of JP Morgan Chase, which was responsible for policy formulation and oversight of all market and credit risk taking activities globally. Mr. O’Connor serves on the board of directors of Boon Logic, Inc., a privately held developer of real-time unsupervised machine learning solutions, and Sequoia Holdings Inc., a provider of engineering and cloud orchestration services to the national security sector.
Mr. O’Connor earned a bachelor’s degree in economics from Tulane University and a master’s degree in business administration from Columbia University Graduate School of Business. He is also Chairman and on the advisory boards of American Friends of the Clock Tower Fund, and on the advisory boards of Avenue Impact Strategies, Chart National Capital, Global Guardian, LLC, Grayson-Jockey Club Research Foundation, and New York Green Bank. He is treasurer of the UK Game Conservancy and Wildlife Trust. |
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| Scott M. Sutton Director Since: September 2018 Independent Age: 55
•Olin Committees: Chair of the Operating Improvement Committee, Member of the Audit Committee and Directors and Corporate Governance Committee •Chief Executive Officer and Director of Prince International Corporation •Former Chief Operating Officer at Celanese Corporation •Former President and General Manager of AgroSolutions at Chemtura Corporation
Mr. Sutton brings extensive experience in operations, engineering, manufacturing, finance, sales, marketing and management of complex businesses with worldwide operations to the Olin Board of Directors.
He is currently Chief Executive Officer and a member of the board of directors of Prince International Corporation, a privately held specialty chemicals company. Previously he served in a variety of roles of increasing responsibility at Celanese Corporation, a global chemical and specialty materials company, including Chief Operating Officer, Executive Vice President and President, Materials Solutions, and Vice President and General Manager, Engineered Materials. Earlier in his career, Mr. Sutton served as President and General Manager of Chemtura Corporation’s AgroSolutions business, business manager for Landmark Structures and a division vice president for Albemarle Corporation.
Mr. Sutton earned a bachelor’s degree in civil engineering from Louisiana State University and is a registered professional engineer in Texas. |
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| William H. Weideman Director Since: October 2015 Independent Age: 65
•Olin Committees: Lead Director and Chair of the Audit Committee, Member of the Compensation Committee, Directors and Corporate Governance Committee and Executive Committee •Former Chief Financial Officer and Executive Vice President of The Dow Chemical Company •‘Audit Committee Financial Expert’ under applicable SEC rules •Former Director of Sadara Chemical Company Mr. Weideman brings valuable financial, audit, and business administration expertise to the Olin Board of Directors, as well as extensive knowledge of the businesses Olin acquired from The Dow Chemical Company. Mr. Weideman previously served as Chief Financial Officer and Executive Vice President of The Dow Chemical Company, a diversified chemical manufacturing company, for five years. Prior to this, he served as Interim Chief Financial Officer from November 2009 to March 2010, and Executive Vice President of Finance of Dow Agrosciences & Corporate Strategic Development. From October 30, 2011 until December 31, 2015, he served on the board of directors of Sadara Chemical Company, a joint venture between Saudi Aramco and Dow. From August 30, 2000 until December 31, 2015, he was a director of the Dow Chemical Employees’ Credit Union. Mr. Weideman earned a bachelor’s degree in business administration and accounting from Central Michigan University. He is on the board of directors of the Mid-Michigan Medical Center and the board of trustees for Central Michigan University. |
CLASS III
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2021
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| Earl L. SHIPP, 60, retired in SeptemberShipp Director Since: October 2017 from his position Independent Age: 62
•Olin Committees: Audit Committee, Directors and Corporate Governance Committee •Former Vice President, US Gulf Coast Operations at The Dow Chemical Company •Former President, Dow Africa and Former President, Basic Chemicals Group of Dow •Director of National Grid plc
Mr. Shipp brings substantial chemical industry expertise, and manufacturing, engineering and operations management experience to the Olin Board of Directors.
Mr. Shipp most recently served as Vice President, US Gulf Coast Operations ofat The Dow Chemical Company, now known as DowDupont (NYSE: DWDP; a diversified chemical manufacturing company), a position he held since November 2010.company. Prior to that, Mr. Shippthis, he served as President—President of Dow Africa from June 2009 to October 2010 and President—as President of Basic Chemicals Group at Dow from May 2007 to May 2009.Dow. During hisa 36 yearsyear tenure at Dow, he held a variety of leadership and engineering roles, including appointments as Site Director of Louisiana Operations and Global Operations Director for Propylene Oxide/Propylene Glycol, in 2000, Business Director for Propylene Oxide/Propylene Glycol, in February 2004, Business Vice President for Oxides and Glycols, in July 2005 and Business Vice President—Ethylene Oxide and Ethylene Glycol and President—India, Middle East and Africa Region in February 2006. Mr. ShippRegion.
He serves on the board of directors and the safety, environment and health and nominations and remuneration committees of National Grid plc, a global electricity and gas utility company.
He earned a bachelor’s degree in chemical engineering from Wayne State University and completed the executive education program at Indiana State University School of Business. He is on the board of directors of CHI St. Luke’s Health Texas Division, Brazoria Fort Bend Rail District and The Economic Development Alliance of Brazoria County, Texas. |
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| Vincent J. Smith Director Since: August 2008 Independent Age: 70
•Olin director since October 2017; member of the AuditCommittees: Compensation Committee and the Directors and Corporate Governance Committee. Committee •Former President and Chief Executive Officer of Dow Chemical Canada Mr. Shipp’sSmith brings valuable international and manufacturing experience as well as extensive management expertise in manufacturing and operations provides him with valuable knowledge of the chemical industry. |
chlor-alkali industry to the Olin Board of Directors. | | |
| | VINCENT J. SMITH, 68, retired in 2004, from his positionMr. Smith most recently served as President and Chief Executive Officer of Dow Chemical Canada, a subsidiary of The Dow Chemical Company, now known as DowDupont (NYSE: DWDP; a diversified chemical manufacturing company), a position he held from 2001.company. From 1972 to 2000, he held positions of increasing responsibility in engineering, manufacturing and management, including the position of Business Director for Dow’s global chlor-alkali assets. Mr. Smith
He earned a bachelor’s degree in chemical engineering from McMaster University. |
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| Carol A. Williams Director Since: October 2015 Independent Age: 61
•Olin director since August 2008; memberCommittees: Chair of the Directors and Corporate Governance Committee, Member of the Compensation Committee and the DirectorsExecutive Committee •Former Executive Vice President, Manufacturing and Corporate Governance Committee. Mr. Smith’s executive service has provided him with valuable internationalEngineering, Supply Chain and Environmental, Health & Safety Operations of The Dow Chemical Company •Former Vice President, Chlor-alkali Assets Business of Dow, and Senior Vice President of Basic Chemicals •Independent Board Chair and Director of Owens-Illinois Inc.
Ms. Williams brings extensive management expertise in manufacturing, purchasing and supply chain operations, substantial experience together with extensivein research and development, and comprehensive knowledge of the chlor alkali industry. |
| | CAROL A. WILLIAMS, 59, retired in early 2015, from her positionchlor-alkali and general chemicals industry to the Olin Board of Directors.
Ms. Williams most recently served as special advisor to the Chief Executive Officer of Thethe Dow Chemical Company, now known as DowDupont (NYSE: DWDP; a diversified chemical manufacturing company).company. Prior to her special advisor role,this, she served as Dow’s Executive Vice President of Manufacturing and Engineering, Supply Chain and Environmental, Health & Safety Operations. During Ms. Williams’ 34 year history at Dow, she assumed increasingly more significant management positions in research and development before becoming operations leader and then Vice President for the global chlor-alkali assets business. SheEarlier in her career, she was named Senior Vice President of Basic Chemicals in 2009 and President of Chemicals & Energy in 2010.
Ms. Williams earned a bachelor’s degree in chemical engineering from Carnegie Mellon University. She is the independent board chair and serves on the board of directors and the nominating/governance committee of Owens-Illinois Inc. (a, a leading producer of high quality glass packaging).packaging.
Ms. Williams earned a bachelor’s degree in chemical engineering from Carnegie Mellon University. Ms. Williams is also a member of the Engineering Advisory Board and Energy Futures Institute Presidential Consultation Committee for Carnegie Mellon University. From 2012 through June 2015, she was on the board of directors of Zep, Inc. (a, a supplier of industrial cleaning materials). Olin director since October 2015; member of the Compensation Committee and the Directors and Corporate Governance Committee. Ms. Williams’ extensive management expertise from manufacturing to purchasing to supply chain as well as her substantial experience in research and development provides her with valuable knowledge of the chemicals industry.materials. |
Business Experience of Continuing Directors
Set forth on the following pages are descriptions of the business experience of each continuing director. The terms of the following directors will continue after the 2018 annual meeting, as indicated below.
CORPORATE GOVERNANCE MATTERS
CLASS I
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2019
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| | C. ROBERT BUNCH, 63, served as Chairman of the Board and Chief Executive Officer of Global Tubing, LLC (a privately held company formed in April 2007, to manufacture and sell coiled tubing and related products and services to the energy industry which was acquired by Forum Energy Technologies, Inc. (NYSE: FET) and Quantum Energy Partners in July 2013) from May 2007 until June 2013. Mr. Bunch served as Chairman of Maverick Tube Corporation (a producer of welded tubular steel products used in energy and industrial applications which was acquired by Tenaris, S.A. in October 2006) from January 2005 until October 2006, and as President and Chief Executive Officer from October 2004 until October 2006. Prior to joining Maverick, he was an independent oil service consultant from 2003 until 2004, and from 2002 to 2003, he served as President and Chief Operating Officer at Input/Output, Inc. (an independent provider of seismic imaging technologies and digital, full-wave imaging solutions for the oil and gas industry). From 1999 to 2002, he served as Vice President and Chief Administrative Officer of Input/Output, Inc. Mr. Bunch earned a bachelor’s degree in economics and a master’s degree in accounting from Rice University and a juris doctorate degree from the University of Houston. From May 2004 until August 2008, Mr. Bunch served on the board of directors (and as Chairman from January 2007 to August 2008) of Pioneer Drilling Company (a provider of land contract drilling services to independent and major oil and gas exploration and production companies). Olin director since December 2005; member of the Compensation Committee and the Directors and Corporate Governance Committee. Mr. Bunch’s broad management responsibilities provide relevant experience in a number of strategic and operational areas.
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| | RANDALL W. LARRIMORE, 70, served as Chairman of Olin from April 2003 through June 2005. From 1997 until his retirement in December 2002, he served as President and Chief Executive Officer of United Stationers Inc., now known as Essendant (NASDAQ: ESND; a wholesaler/distributor of business products). From 1988 until 1997, he was President and Chief Executive Officer of MasterBrand Industries, Inc., now known as Fortune Brands Home & Security LLC (NYSE: FBHS; a consumer products company). He holds a bachelor’s degree from Swarthmore College with a major in economics and a minor in chemistry and a master’s degree in business administration from Harvard Business School. He isco-chair of the governance committee and a member of the board of directors and compensation committee of Campbell Soup Company (a manufacturer and marketer of soup and other food products), and a member of the board of directors of Nixon Uniform Service and Medical Wear (a privately held company that provides, launders, and delivers medical apparel, linens, and other reusable products, primarily to healthcare providers) and Chesapeake Conservancy (anon-profit organization to protect and restore the Chesapeake Bay). He was also a Captain in the U.S. Army Reserves. Olin director since January 1998; Chair of the Directors and Corporate Governance Committee and a member of the Audit Committee, the Compensation Committee and the Executive Committee. Mr. Larrimore brings expertise in marketing, sales, strategic planning, mergers and acquisitions and general management.
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| | JOHN M. B. O’CONNOR, 63, is Chairman and Chief Executive Officer of J.H. Whitney Investment Management, LLC (an alternative investment firm), a position he has held since January 2005 and Chief Executive Officer of Whitney Strategic Services, LLC (a provider of global economic advisory services to the US Department of Defense). From January 2009 through March 2011, he served as Chief Executive Officer of Tactronics Holdings, LLC (a Whitney Capital Partners portfolio holding company that provided tactical integrated electronic systems to U.S. and foreign military customers as well as the composite armor solutions for military vehicles through its Armostruxx division). Previously, Mr. O’Connor was Chairman of JP Morgan Alternative Asset Management, Inc. (part of the investment manager arm of JP Morgan) and an Executive Partner of JP Morgan Partners (a private equity firm). He was also a member of the Risk Management Committee of JP Morgan Chase, which was responsible for policy formulation and oversight of all market and credit risk taking activities globally. Mr. O’Connor earned a bachelor’s degree in economics from Tulane University and a master’s degree in business administration from Columbia University Graduate School of Business. Mr. O’Connor is a member of the board of directors at IntegriCo Composites, Inc. (a privately held specialized composite products manufacturer). He also serves on the advisory boards of American Friends of the Clock Tower Fund, Cornell University College of Veterinary Medicine, Game Conservancy USA and UK Game Conservancy and Wildlife Trust, Grayson-Jockey Club Research Foundation, Global Guardian, LLC and New York Green Bank. Mr. O’Connor serves as a member of the Department of Defense BusinessHow Many Meetings Did Board and as the Civilian Aide to the Secretary of the Army (CASA) for New York (South). Olin director since January 2006; member of the Audit Committee and the Directors and Corporate Governance Committee. Mr. O’Connor’s hedge fund and investment banking experience allow him to contribute broad financial and global expertise.
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| | WILLIAM H. WEIDEMAN, 63, retired in January 2015, from his position as Chief Financial Officer and Executive Vice President of The Dow Chemical Company, now known as DowDupont (NYSE: DWDP; a diversified chemical manufacturing company), a position he held since March 2010. Prior to that, Mr. Weideman served as an Interim Chief Financial Officer from November 2009 to March 2010, and Executive Vice President of Finance, Dow Agrosciences & Corporate Strategic Development from April 2010 to September 2012, all at Dow. He joined Dow in 1976 as a Cost Accountant in Midland, Michigan and held a variety of accounting and controller roles for different Dow businesses. Olin’s board of directors has determined that Mr. Weideman qualifies as an “audit committee financial expert” for Olin under applicable SEC rules. Mr. Weideman earned a bachelor’s degree in business administration and accounting from Central Michigan University. He is a director of theMid-Michigan Medical Center and is on the board of trustees for Central Michigan University. From October 30, 2011 until December 31, 2015, he served as a director of Sadara Chemical Company (a joint venture between Saudi Aramco and Dow) and from August 30, 2000 until December 31, 2015, he was a director of the Dow Chemical Employees’ Credit Union. Olin director since October 2015; Chair of the Audit Committee and a member of the Directors and Corporate Governance Committee and Executive Committee. Mr. Weideman’s extensive history with Dow provides him with valuable financial and business administration expertise.
Members Attend? |
CLASS II
DIRECTORS WHOSE TERMS CONTINUE UNTIL 2020
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| | GRAY G. BENOIST, 65, retired in March 2012, from his position as an officer on special assignment of Belden, Inc. (NYSE: BDC; a designer, manufacturer and marketer of signal transmission solutions, including cable, connectivity and active components for mission-critical applications in markets ranging from industrial automation to data centers, broadcast studios, and aerospace), a position he held since January 1, 2012. From August 2006 until January 1, 2012, he served as Senior Vice President, Finance and Chief Financial Officer of Belden and from November 2009 until January 2012, he also served as Chief Accounting Officer and prior to that, as Senior Vice President, Director of Finance of the Networks Segment of Motorola Inc. (a business unit responsible for the global design, manufacturing, and distribution of wireless and wired telecom system solutions). During more than 25 years with Motorola, Mr. Benoist served in senior financial and general management roles across Motorola’s portfolio of businesses, including the Personal Communications Sector, Integrated and Electronic Systems Sector, Multimedia Group, Wireless Data Group, and Cellular Infrastructure Group. He has a bachelor’s degree in finance and accounting from Southern Illinois University and a master’s degree in business administration from the University of Chicago. Mr. Benoist serves on the board of directors of Neurowrx, Inc. (anot-for-profit organization in Canada with the mission of accelerating global STEM employment for autistic individuals). He is also President and Treasurer of MindSpark, Inc. (a registered benefit corporation in California delivering software testing services through the employment of adults with autism spectrum disorder). Olin director since February 2009; member of the Audit Committee and the Directors and Corporate Governance Committee. Mr. Benoist’s chief financial officer experience provides him with valuable financial and accounting expertise.
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| | JOHN E. FISCHER, 62, became Chairman, President and Chief Executive Officer of Olin on April 27, 2017. He held the positions of President and Chief Executive Officer since May 1, 2016, President and Chief Operating Officer from May 2014 until April 30, 2016, Senior Vice President and Chief Financial Officer from October 2010 until May 2014, Vice President and Chief Financial Officer from May 2005 to October 2010, Vice President, Finance and Controller from June 2004 until May 2005, after rejoining Olin in early 2004. From 2002 through 2003, he served as an independent financial consultant to Olin and other unaffiliated companies. From 1996 through 2001, he directed all financial functions, acquisitions and divestments for Primex Technologies, Inc. (a munitions, propellants, satellite propulsion systems and electronic products manufacturing company spun off from Olin in 1996 and is now called General Dynamics Ordnance and Tactical Systems). Prior to this, Mr. Fischer was Vice President and Financial Officer for Olin’s Ordnance division where he supervised all division financial reporting and planning and government contract management. He began his career with General Defense Corporation in 1977, serving in various accounting and cost accounting positions prior to being appointed Controller in 1985. Mr. Fischer earned a bachelor’s degree in accounting and economics from Franklin and Marshall College and a master’s degree in finance from Pennsylvania State University. Mr. Fischer’s extensive financial and executive management experience, deep knowledge of Olin and extensive involvement in the transaction of the acquired businesses from Dow, now known as DowDupont, and his leading the integration provide valuable expertise.
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CORPORATE GOVERNANCE MATTERS
How Many Meetings Did Board Members Attend?
During 2017,2019, the board held eightnine meetings. As part of each regularly scheduled board meeting, thenon-employee directors met in executive session. In 2017, allAll directors attended over 94%80% of the 2019 meetings of the board and committees of the board on which they served. In addition, during his or her entire period of service, each director attended over 89%90% of the meetings of the board and committees of the board on which he or she served during their period of service.served. All of our directors at the time of the 2019 annual meeting attended the 2017meeting, except Mr. Shipp who was absent due to serious extenuating circumstances. We have a policy requiring directors to attend each annual meeting. Our policy regarding directors’ attendance at the annual meeting, is that they are required to attend, absent serious extenuating circumstances.
Which Board Members Are Independent?
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| Which Board Members Are Independent? |
Our board has determined that all of its members, except Mr. Fischer, are independent,
or were independent while serving on the board, in accordance with applicable New York Stock Exchange (NYSE) listing standards and applicable provisions of our Principles of Corporate Governance. In determining independence, the board confirms that a director has no relationship with Olin that violates the “bright line” independence standards under the NYSE listing standards. The board also reviews whether a director has any other material relationship with Olin, after consideration of all relevant facts and circumstances. In assessing the materiality of a director’s relationship to Olin, the board considers the issues from the director’s standpoint and from the perspective of the persons or organizations with which the director has an affiliation. The board reviews commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships.
Our board of directors has adopted a bright line test for the types of de minimis transactions that do not warrant board consideration when making director independence determinations. This policy provides that the following transactions do not impair a director’s independence, and are not considered by our board in its determination of director independence:
| · | | our match of up to $5,000 in charitable contributions made by directors under our 50% matching contribution program, which is available to all employees; and
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| · | | any transaction or series of transactions between Olin (or its subsidiaries) and a director (or an organization in which he/she serves as a director, partner, shareholder or officer) for the purchase or sale of products or services that (i) involve less than $50,000 in the aggregate in any12-month period and (ii) have the same pricing and other terms and conditions as transactions with unrelated and similarly situated customers or suppliers.
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During 2017,•our annual match of up to $5,000 in charitable contributions made by directors under our 50% matching contribution program, which is available to all employees; and
•any transaction or series of transactions between Olin (or its subsidiaries) and a director (or an organization in which he/she serves as a director, partner, shareholder or officer) for the purchase or sale of products or services that (i) involve less than $50,000 in the aggregate in any 12-month period and (ii) have the same pricing and other terms and conditions as transactions with unrelated and similarly situated customers or suppliers.
Except as provided below, during 2019, none of our
current or former non-employee directors had any relationship or transaction other than those which
fell withinare permitted under the bright line
de minimis standards described above.
Does
In 2019, we sold an aggregate of approximately $89,588,000 of chlor alkali products to BASF Corporation and we purchased an aggregate of approximately $37,372,000 of product from BASF Corporation. One of our directors, Heidi Alderman, served as a senior-vice president, intermediates of BASF SE through July 2019. Our board determined that during her employment with BASF, Ms. Alderman had no material interest in these sales transactions and they did not impair Ms. Alderman’s independence. The board based its decision on the facts that (i) Ms. Alderman was not involved in that part of BASF’s business and therefore had no decision-making authority or other involvement in the transactions with Olin, Have Corporate Governance Guidelines(ii) the transactions were made on customary terms and conditions, and (iii) the transactions amounted to less than 0.05% of BASF’s total sales and 1.3% of Olin’s total sales.
In 2019, we sold an aggregate of approximately $133,000 of chlor alkali products to Celanese Corporation and we purchased an aggregate of approximately $527,000 of product from Celanese Corporation. One of our directors, Scott Sutton, served as chief operating officer of Celanese through February 2019. Our board determined that Mr. Sutton had no material interest in these sales transactions and they did not impair Mr. Sutton’s independence because the transactions were made on customary terms and conditions, and amounted to less than 0.008% of Celanese’s total sales and 0.002% of Olin’s total sales.
In 2019, we purchased approximately $3,424,000 of energy-related services from National Grid US. One of our directors, Earl Shipp, is a Codemember of Conduct?the board of directors of National Grid plc and serves on such board’s safety, environment and health committee, its nominations committee and its remuneration committee. Our board determined that Mr. Shipp had no material interest in these transactions and they did not impair Mr. Shipp’s independence because the transactions were made on customary terms and conditions, and amounted to less than 0.02% of National Grid plc’s total sales and 0.05% of Olin’s total sales.
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Does Olin Have Corporate Governance Guidelines and a Code of Conduct? |
The board has adopted Principles of Corporate Governance and a Code of Conduct. The Code of Conduct applies to our directors and all of our employees, including our chief executive officer (CEO), chief financial officer (CFO) and principal accounting officer/controller. We discuss certain provisions of these documents in more detail under the heading “CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.”
Each of our threefour major standing board committees (Audit, Compensation, and Directors and Corporate Governance)Governance and Operating Improvement) acts under a written charter adopted by the board. The committee charters can be viewed on our website atwww.olin.com in the Governance section under Committees, available at:http://www.olin.com/Committeesinvestors/leadership-governance/committees. The Principles of Corporate Governance and Code of Conduct can all be viewed on our website atwww.olin.com in the Governance section under Governance Documents, available at:http://www.olin.com/Governanceinvestors/leadership-governance/governance-documents. In addition, we will disclose on that website any amendment to, or waiver from, a provision of our Code of Conduct for our directors and executive officers, including our CEO, CFO, principal accounting officer/controller or other employees performing similar functions.
Does Olin Prohibit Hedging and PledgingProxy Statement Table of Its Stock by Insiders?Contents
Under our
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| Does Olin Prohibit Hedging and Pledging of Its Stock by Insiders? |
Our insider trading policy
prohibits our directors and executive officers
are prohibited from engaging in
any: | · | | hedging or monetization transactions in our securities where the director or executive officer continues to own the underlying security without all the risks or rewards of ownership; or
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| · | | pledging of our securities whether as part of a hedging transaction or loan transaction.
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any hedging or pledging transactions in our securities. Our policy does not specifically permit any type of hedging transaction, but instead imposes a broad prohibition of any "hedging or monetization transactions" if the director or executive officer "continues to own the underlying security without all the risks and rewards of ownership." Our prohibition on pledging of our securities is similarly broad, and prohibits all pledges of our securities, whether as part of a hedging transaction or a loan transaction.
As of February 28,
2018,2020, no shares of our common stock were pledged by any director or executive officer.
Do Olin’s Board and Committees Conduct Evaluations?
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| Do Olin’s Board and Committees Conduct Evaluations? |
As required by NYSE rules, Olin’s board of directors as well as its Audit, Compensation and Directors and Corporate Governance Committees each conduct an annual performance evaluation.
The Operating Improvement Committee, which was formed in 2020, will also conduct an annual performance evaluation.
What Are the Committees of the Board?
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| What Are the Committees of the Board? |
Our committees of the board are:
TheAudit Committee, which held eightsix meetings during 2017,2019, advises the board on internal and external audit matters affecting us. In accordance with NYSE listing standards and applicable provisions of our Principles of Corporate Governance, the audit committee is comprised solely of directors who meet the enhanced independence standards for audit committee members under the Securities Exchange Act of 1934 (Exchange Act) and the related rules as incorporated into the NYSE standard for independence. Its current members are: William H. Weideman (Chair), Beverley A. Babcock, Gray G. Benoist, Randall W. Larrimore, John M. B. O’Connor, Richard M. Rompala and Earl L. Shipp.Shipp and Scott M. Sutton. The board has determined that Mr. Weideman meets the SEC definition of an “audit committee financial expert,” and that each of the members of the audit committee is financially literate, as such term is interpreted by the board in its business judgment. The audit committee: | · | | has sole authority to directly appoint, retain, compensate, evaluate and terminate our independent registered public accounting firm;
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| · | | reviews with our independent registered public accounting firm the scope and results of their examination of our financial statements and any investigations and surveys by such independent registered public accounting firm;
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| · | | pre-approves and monitors audit andnon-audit services performed by our independent registered public accounting firm;
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| · | | reviews its charter annually and ensures it is publicly available in accordance with SEC regulations;
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| · | | reviews our annual audited and quarterly unaudited financial statements and management’s discussion and analysis of financial condition and operations in our annual reports onForm 10-K and quarterly reports onForm 10-Q before filing or distribution;
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| · | | reviews with management and our independent registered public accounting firm the interim financial results and related press releases before issuance to the public;
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| · | | reviews audit plans, activities and reports of our internal and regulatory audit departments;
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| · | | reviews the presentations by management and our independent registered public accounting firm regarding our financial results;
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| · | | monitors our litigation process including major litigation and other legal matters that impact our financial statements or compliance with the law;
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| · | | monitors compliance with legal and regulatory requirements including environmental, health, safety and transportation compliance;
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| · | | monitors our enterprise risk management process;
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| · | | oversees our ethics and business conduct programs and procedures;
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| · | | reviews our compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and
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| · | | has the authority to hire its own independent advisors.
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•has sole authority to directly appoint, retain, compensate, evaluate and terminate our independent registered public accounting firm;
•reviews with our independent registered public accounting firm the scope and results of their examination of our financial statements and any investigations and surveys by such independent registered public accounting firm;
•pre-approves and monitors audit and non-audit services performed by our independent registered public accounting firm;
•reviews its charter annually and ensures it is publicly available in accordance with SEC regulations;
•reviews our annual audited and quarterly unaudited financial statements and management’s discussion and analysis of financial condition and operations in our annual reports on Form 10-K and quarterly reports on Form 10-Q before filing or distribution;
•reviews with management and our independent registered public accounting firm the interim financial results and related press releases before issuance to the public;
•reviews audit plans, activities and reports of our internal and regulatory audit departments;
•reviews the presentations by management and our independent registered public accounting firm regarding our financial results;
•monitors our litigation process including major litigation and other legal matters that impact our financial statements or compliance with the law;
•monitors compliance with legal and regulatory requirements including environmental, health, safety and transportation compliance;
•monitors our enterprise risk management process;
•oversees our ethics and business conduct programs and procedures;
•reviews our compliance with Section 404 of the Sarbanes-Oxley Act of 2002; and
•has the authority to hire its own independent advisors.
TheCompensation Committee, which held sixfive meetings during 2017,2019, sets policies, develops and monitors strategies for, and administers, the programs that are used to compensate the CEO and other senior executives. In accordance with NYSE listing standards and applicable provisions of our Principles of Corporate Governance, the compensation committee is comprised solely of directors who meet the NYSE standard for independence. Its members are: Richard M. Rompala (Chair), Donald W. Bogus, C. Robert Bunch (Chair), Heidi S. Alderman, Scott D. Ferguson, Randall W. Larrimore, Vincent J. Smith, William H. Weideman and Carol A. Williams. The compensation committee: | · | | approves the salary plans for all executive officers including their total direct compensation opportunity, comprised of base salary, annual incentive standard and long-term incentive guideline award;
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| · | | approves the measures, goals, objectives, weighting, payout matrices, performance certification and actual payouts for the incentive compensation plans;
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| · | | administers the incentive compensation plans, stock option plans, and long-term incentive plans;
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| · | | annually evaluates the performance of the CEO;
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| · | | performs settlor functions for our retirement plans, such as establishing, amending and terminating such plans (which authority has also been delegated to a management committee);
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| · | | approves executive and change in control agreements;
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| · | | reviews and establishes the compensation ofnon-employee directors;
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| · | | reviews and discusses our Compensation Discussion and Analysis with management and, based on that review, makes a recommendation to the board of directors regarding inclusion of the Compensation Discussion and Analysis in our annual proxy statement or annual report on Form 10-K filed with the SEC; and
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| · | | has the authority to hire its own independent advisors.
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•approves the salary plans for all executive officers including their total direct compensation opportunity, comprised of base salary, annual incentive standard and long-term incentive guideline award;
•approves the measures, goals, objectives, weighting, payout matrices, performance certification and actual payouts for the incentive compensation plans;
•administers the incentive compensation plans, stock option plans, and long-term incentive plans;
•annually evaluates the performance of the CEO;
•performs settlor functions for our retirement plans, such as establishing, amending and terminating such plans (which authority has also been delegated to a management committee);
•approves executive and change in control agreements;
•reviews and establishes the compensation of non-employee directors;
•reviews and discusses our Compensation Discussion and Analysis with management and, based on that review, makes a recommendation to the board of directors regarding inclusion of the Compensation Discussion and Analysis in our annual proxy statement or annual report on Form 10-K filed with the SEC; and
•has the authority to hire its own independent advisors.
TheDirectors and Corporate Governance Committee, which held fourfive meetings during 2017,2019, assists the board in fulfilling its responsibility to our shareholders relating to the selection and nomination of officers and directors. In accordance with NYSE listing standards and applicable provisions of our Principles of Corporate Governance, the directors and corporate governance committee is comprised solely of directors who meet the NYSE standard for independence. Its members are: Carol A. Williams (Chair), Heidi S. Alderman, Beverley A. Babcock, Gray G. Benoist, C. Robert Bunch, W. Barnes Hauptfuhrer, Randall W. Larrimore (Chair)(former Chair), Gray G. Benoist, Donald W. Bogus, C. Robert Bunch, John M. B. O’Connor, Richard M. Rompala, Earl L. Shipp, Vincent J. Smith, Scott M. Sutton and William H. Weideman and Carol A. Williams.Weideman. The directors and corporate governance committee: | · | | makes recommendations to the board regarding the election of the CEO;
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| · | | reviews the nominees for our other officers;
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| · | | makes recommendations to the board regarding the size and composition of the board and the qualifications and experience that might be sought in board nominees;
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| · | | seeks out and recommends possible candidates for nomination and considers recommendations by shareholders, management, employees and others for candidates for nomination andre-nomination as directors;
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| · | | assesses whether the qualifications and experience of board nominees meet the current needs of the board;
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| · | | reviews plans for management development and succession;
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| · | | periodically reviews corporate governance trends, issues and best practices and makes recommendations to the board regarding the adoption of best practices most appropriate for the governance of the affairs of the board;
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| · | | reviews and makes recommendations to the board regarding the composition, duties and responsibilities of various board committees;
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| · | | reviews and advises the board on such matters as protection against liability and indemnification;
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| · | | reports periodically to the board on the performance of the board itself as a whole; and
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| · | | has the authority to hire its own independent advisors.
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•makes recommendations to the board regarding the election of the CEO;
•reviews the nominees for our other officers;
•makes recommendations to the board regarding the size and composition of the board and the qualifications and experience that might be sought in board nominees;
•seeks out and recommends possible candidates for nomination and considers recommendations by shareholders, management, employees and others for candidates for nomination and re-nomination as directors;
•assesses whether the qualifications and experience of board nominees meet the current needs of the board;
•reviews plans for management development and succession;
•periodically reviews corporate governance trends, issues and best practices and makes recommendations to the board regarding the adoption of best practices most appropriate for the governance of the affairs of the board;
•reviews and makes recommendations to the board regarding the composition, duties and responsibilities of various board committees;
•reviews and advises the board on such matters as protection against liability and indemnification;
•reports periodically to the board on the performance of the board itself as a whole; and
•has the authority to hire its own independent advisors.
TheOperating Improvement Committee, which was formed in 2020 and has not yet held a meeting, analyzes and makes recommendations to the board of directors regarding operational improvement and supports and informs the board’s review and refinement of Olin’s strategy. Its members are: Scott M. Sutton (Chair), Scott D. Ferguson, W. Barnes Hauptfuhrer and John M. B. O’Connor. The operating improvement committee:
•reviews and evaluates improvements to Olin’s operations, efficiency and profitability;
•makes recommendations to the board regarding operational improvements, including, among other things, with respect to Olin’s business strategies, margin improvements and growth opportunities;
•makes recommendations to the board regarding financial strategies, including, among other things, with respect to capital allocation, capital expenditures, cash flow, short-term and long-term balance sheet optimization plans, net working capital streamlining initiatives and initiatives regarding appropriate financial leverage and share repurchases; and
•makes recommendations to the board regarding portfolio realignment, investor communications and other similar operational matters to enhance shareholder value.
The Executive Committee meets as needed in accordance with Olin’s Bylaws. Between meetings of the board, the executive committee may exercise all the power and authority of the board (including authority and power over our financial affairs) except for matters reserved to the full board by Virginia law and matters for which the board gives specific directions. During 2017,2019, this committee held no meetings. The executive committee members are: John E. Fischer (Chair), Randall W. Larrimore, Richard M. Rompala andC. Robert Bunch, William H. Weideman.
Compensation Committee InterlocksWeideman and Insider ParticipationCarol A. Williams.
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| Compensation Committee Interlocks and Insider Participation |
No member of our compensation committee during
2017 (Messrs.2019 (Mses. Alderman, Streeter and Williams and Messrs. Bogus, Bunch, Larrimore,
Rompala and Smith and
Ms. Williams)Weideman):
| · | | served as an employee for Olin during that year;
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| · | | is currently or has ever been an officer of Olin; or
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| · | | had any relationship with Olin requiring disclosure under Item 404 of RegulationS-K under the Exchange Act.
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•served as an employee for Olin during that year;
•is currently or has ever been an officer of Olin; or
•had any relationship with Olin requiring disclosure under Item 404 of Regulation S-K under the Exchange Act.
None of our executive officers:
•serves on the compensation committee of any other company for which one of our directors serves as an executive officer; or
•serves on the board of directors of any other company where a member of our compensation committee serves as an executive officer.
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serves on the compensation committee of any other company for which one of our directors serves as an executive officer; or
What Is Olin’s Director Nomination Process? |
| · | | serves on the board of directors of any other company where a member of our compensation committee serves as an executive officer.
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What Is Olin’s Director Nomination Process?
Our directors and corporate governance committee acts as our nominating committee. As a policy, the committee considers any director candidates suggested by shareholders if we receive the appropriate information in a timely manner. Our Principles of Corporate Governance provide that the board chair, CEO, lead director, other directors, employees and shareholders may recommend director nominees to the committee. The committee uses the same process to review and evaluate all potential director nominees, regardless of who recommends the candidate. The committee reviews and evaluates each nominee and the committee chair, the board chair, CEO and lead director interview the potential new board candidates selected by the committee. The interview results, along with the committee’s recommended nominees, are submitted to the full board.
Our Principles of Corporate Governance describe criteria for new board members to includeincluding recognized achievement plus skills such as a special understanding or ability to contribute to some aspect of Olin’s business. The committee is tasked with seeking board members with the personal qualities and experience that taken together will ensure a strong board of directors. Although we have no formal policy on diversity for board members, ourOur Principles of Corporate Governance provide that racial, ethnic and gender diversity are important factors in assessing potential board members, in addition to particular qualifications and experience required to meet the needs of the board. Furthermore, as
As part of
the committee’stheir review of board
composition,nominations, the board
considersand the committee consider diversity of experience and background in an effort to ensure that the composition of our directors ensures a strong and effective board. Our Principles of Corporate Governance cite strength of character, an inquiring and independent mind, practical wisdom and mature judgment as among the principal qualities of an effective director.
This year, we have
foursix nominees standing for election or
re-election. re-election, including two women added to the board to fill vacancies in the past year.
A shareholder can suggest a person for nomination as a director by providing the name and address of the candidate, and a detailed description of his or her experience and other qualifications for the position, in writing addressed to the board of directors in care of the Secretary, Olin Corporation, 190 Carondelet Plaza, Suite 1530, Clayton, MO 63105 USA. The notice may be sent at any time, but for a candidate to be considered by the committee as a nominee for an annual meeting, we must
receive the written information at least 150 days before the anniversary of the date of the prior year’s proxy statement. For example, for candidates to be considered for nomination by the committee at the 20192021 annual meeting, we must receive the information from shareholders on or before October 12, 2018.
28, 2020.
In addition to shareholders proposing candidates for consideration by the committee, Olin’s Bylaws allow shareholders to directly nominate individuals at the annual meeting for election to the board by delivering a written notice as described under the heading “MISCELLANEOUS—How can I directly nominate a director for election to the board at the
20192021 annual meeting?” on page
7.6. Although a shareholder may directly nominate an individual for election as a director, the board is not required to include such nominee in the proxy statement.
What Is the Board Leadership Structure?
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| What Is the Board Leadership Structure? |
Our Principles of Corporate Governance state that our board may select either a combined CEO board chair coupled with a lead director or appoint a board chair who does not also serve as CEO. Currently, Mr. Fischer serves as our combined CEO and chairman of the board, and the board selected Mr.
RompalaWeideman as our independent lead director.
The board believes that this leadership structure is best for Olin at the current time, as it appropriately balances the need for the CEO to run the company on aday-to-day basis with significant involvement and authority vested in an outside independent board member—the lead director. Our lead director assumes many functions traditionally within the purview of a chairman of the board. Under our Principles of Corporate Governance, our lead director must be independent, and is responsible for:
•advising on the board meeting schedule to ensure that the independent directors can perform their duties responsibly without interfering with company operations;
•approving agendas for board and committee meetings and information sent to the board;
•advising on quality, quantity, and timeliness of the flow of information from management to independent directors;
•interviewing all potential new board candidates, and making recommendations on candidates;
•chairing all executive sessions of the board’s independent directors;
•acting as principal liaison between the independent directors and the chair on sensitive issues;
•recommending membership and chairs of board committees;
•recommending to the board chair the retention of consultants who report directly to the board;
•calling meetings of the independent directors; and
•being available for direct communication if requested by major shareholders, as appropriate.
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advising onHow Does the board meeting schedule to ensure that the independent directors can perform their duties responsibly without interfering with company operations;
Board Oversee Olin’s Risk Management Process? |
| · | | approving agendas for board and committee meetings and information sent to the board;
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| · | | advising on quality, quantity, and timeliness of the flow of information from management to independent directors;
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| · | | interviewing all potential new board candidates, and making recommendations on candidates;
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| · | | chairing all executive sessions of the board’s independent directors;
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| · | | acting as principal liaison between the independent directors and the chair on sensitive issues;
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| · | | recommending membership and chairs of board committees;
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| · | | recommending to the board chair the retention of consultants who report directly to the board;
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| · | | calling meetings of the independent directors; and
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| · | | being available for direct communication if requested by major shareholders, as appropriate.
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How Does the Board Oversee Olin’s Risk Management Process?
Our board is responsible for oversight of Olin’s risk assessment and management process. The board delegated to the compensation committee basic responsibility for oversight of management’s
compensation risk assessment, and that committee reports to the board on its review. Our board also delegated tasks related to risk process oversight to our audit committee, which reports the results of its review process to the board. The audit committee’s process includes:
| · | | a review, at least annually, of our internal audit process, including the organizational structure and staff qualifications, as well as the scope and methodology of the internal audit process; and
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| · | | a review, at least annually, of our enterprise risk management (ERM) program to ensure that an appropriate ERM process is in place, including discussion of the major risk exposures identified by Olin, the key strategic plan assumptions considered during the assessment and steps implemented to monitor and mitigate such exposures on an ongoing basis.
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•a review, at least annually, of our internal audit process, including the organizational structure and staff qualifications, as well as the scope and methodology of the internal audit process; and
•a review, at least annually, of our enterprise risk management (ERM) program to ensure that an appropriate ERM process is in place, including discussion of the major risk exposures identified by Olin, the key strategic plan assumptions considered during the assessment and steps implemented to monitor and mitigate such exposures on an ongoing basis.
In addition to the reports from the audit and compensation committees, our board periodically discusses risk oversight, including as part of its annual detailed corporate strategy review.
Brian J. Clucas, our Vice President, Global Internal Audit, reports directly to our audit committee and has direct and unrestricted access to that committee. Todd A. Slater, our Vice President and CFO, oversees our ERM process and fulfills the responsibilities of a chief risk officer. Mr. Slater reports to our CEO, but has direct access to our audit committee chair. Messrs. Slater and Clucas, individually or with other members of our management team, periodically meet in executive session with the audit committee.
REPORT OF THE AUDIT COMMITTEE
The audit committee’s primary responsibility is to assist the board in its oversight of the integrity of
the Corporation’sOlin’s financial reporting process and systems of internal control, to evaluate the independence and performance of
the Corporation’sOlin’s independent registered public accounting firm, KPMG LLP
(KPMG), and internal audit functions and to encourage private communication between the audit committee and KPMG and the internal auditors.
The committee held
eightsix meetings during the year. During the second half of
2017,2019, the audit committee also completed a self-assessment.
In discharging its responsibility, the audit committee reviewed and discussed the audited financial statements for fiscal year 20172019 with management and KPMG, including the matters required to be discussed by the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No.1301,Communications with Audit Committees..
In addition, the audit committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the audit committee concerning independence. The audit committee discussed with KPMG the issue of its independence from Olin and reviewed KPMG’s reports on the firm’s quality review procedures and findings, results of peer reviews and investigations and inquiries, including corrective actions taken. The audit committee also negotiated the hiring of KPMG for the
20172019 audit and
pre-approved all fees which SEC rules require the committee to approve to ensure that the work performed was permissible under applicable standards and would not impair KPMG’s independence.
Based on the audit committee’s discussions with management and KPMG and the audit committee’s review of KPMG’s written report and the other materials discussed above, the audit committee recommended that the board of directors include the audited consolidated financial statements in Olin’s Annual Report on Form 10-K for the year ended December 31, 2017,2019, to be filed with the SEC.
| | | | | |
| |
| February 18, 2020 | |
| William H. Weideman, Chair
Beverley A. Babcock
Gray G. Benoist
Randall W. Larrimore
John M. B. O’Connor
Earl L. Shipp
Scott M. Sutton |
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
How much stock is beneficially owned by each director, director nominee and by the named executive officers in the Summary Compensation Table?
This table shows how many shares of our common stock certain persons beneficially owned on
January 15, 2018.February 29, 2020. Those persons include each director, director nominee, each named executive officer (NEO) in the Summary Compensation Table on page
45,43, and all directors and executive officers as a group. A person has “beneficial ownership” of shares if the person has voting or investment power over the shares or the right to acquire such power within 60 days. “Investment power” means the power to direct the sale or other disposition of the shares. Each person has sole voting and investment power over the number of shares listed, except as noted in the following table.
| | | | | | | | |
Name of Beneficial Owner
| | Number of Shares
Beneficially
Owned (a)
| | | Percent of
Common
Stock (b)
| |
Gray G. Benoist | | | 41,630 | | | | — | |
Donald W. Bogus (1) | | | 105,586 | | | | — | |
C. Robert Bunch | | | 16,259 | | | | — | |
Randall W. Larrimore (2) | | | 69,865 | | | | — | |
John M. B. O’Connor (3) | | | 29,402 | | | | — | |
Richard M. Rompala (4) | | | 66,078 | | | | — | |
Earl L. Shipp | | | 3,424 | | | | — | |
Vincent J. Smith | | | 40,599 | | | | — | |
William H. Weideman | | | 16,866 | | | | — | |
Carol A. Williams | | | 16,866 | | | | — | |
John E. Fischer (5) | | | 699,856 | | | | — | |
Todd A. Slater | | | 291,750 | | | | — | |
Pat D. Dawson (6) | | | 200,334 | | | | — | |
John L. McIntosh (7) | | | 404,884 | | | | — | |
James A. Varilek (8) | | | 101,425 | | | | — | |
Directors and executive officers as a group,
including those named above (22 persons) | | | 2,815,444 | | | | 1.7 | |
| | | | | | | | | | | | | | |
| Name of Beneficial Owner | | Number of Shares Beneficially Owned (a) | | Percent of Common Stock (b) |
| Heidi S. Alderman | | 6,046 | | | — | |
| Beverley A. Babcock | | 5,107 | | | — | |
| Gray G. Benoist | | 53,721 | | | — | |
| C. Robert Bunch | | 37,164 | | | — | |
| Scott D. Ferguson (1) | | 14,950,000 | | | 9.5 | |
| W. Barnes Hauptfuhrer | | — | | | — | |
| Randall W. Larrimore (2) | | 82,114 | | | — | |
| John M. B. O’Connor (3) | | 40,307 | | | — | |
| Earl L. Shipp | | 25,780 | | | — | |
| Vincent J. Smith | | 56,504 | | | — | |
| William H. Weideman | | 27,771 | | | — | |
| Carol A. Williams | | 27,771 | | | — | |
| | | | | | | | | | | | | | |
| John E. Fischer (4) | | 1,307,481 | | | — | |
| Todd A. Slater | | 452,253 | | | — | |
| Pat D. Dawson (5) | | 450,167 | | | — | |
| John L. McIntosh (6) | | 528,394 | | | — | |
| James A. Varilek (7) | | 236,901 | | | — | |
Directors and executive officers as a group, including those named above (24 persons) | | 18,831,089 | | | 11.7 | |
_______________________
(1)Mr. Ferguson has shared voting and investment powers over all of the shares, which he shares with Sachem Head Capital Management LP and Uncas GP LLC (each, as to all 14,950,000 of such shares), and with Sachem Head GP LLC (as to 9,200,000 of such shares).
(2)Mr. Larrimore beneficially owns 60,333 shares of common stock through his Revocable Trust, over which he exercises the right to control and dispose of those shares. He disclaims beneficial ownership of 5,200 shares of common stock held by the 15 Seaside Trust, pursuant to a Form 4 filed on December 19, 2019.
(3)Mr. O’Connor shares voting and investment power with his spouse over 8,853 shares of common stock held by the 2001 John M. B. O’Connor Family Trust.
(4)Mr. Fischer beneficially owns 205,292 shares of common stock through his Revocable Trust.
(5)Mr. Dawson beneficially owns 56,500 shares of common stock through his Revocable Trust.
(6)Mr. McIntosh beneficially owns 81,227 shares of common stock with his spouse.
(7)Mr. Varilek beneficially owns 29,004 shares of common stock through his Revocable Trust, in which he and his spouse are co-trustees.
(1) | Mr. Bogus shares voting and investment power with his spouse over 1,000 shares of common stock.
|
(2) | Mr. Larrimore beneficially owns 58,765 shares of common stock through his Family Trust, over which he exercises the right to control and dispose of those shares. He disclaims beneficial ownership of 2,700 shares of common stock held by the 15 Seaside Trust, pursuant to Form 4 footnotes filed on March 3, 2016.
|
(3) | Mr. O’Connor shares voting and investment power with his spouse over 8,853 shares of common stock held by the 2001 John M. B. O’Connor Family Trust.
|
(4) | Mr. Rompala beneficially owns 50,500 shares of common stock through his Revocable Trust.
|
(5) | Mr. Fischer beneficially owns 180,792 shares of common stock through his Revocable Trust.
|
(6) | Mr. Dawson beneficially owns 40,000 shares of common stock through his Revocable Trust.
|
(7) | Mr. McIntosh beneficially owns 55,141 shares of common stock with his spouse.
|
(8) | Mr. Varilek beneficially owns 29,004 shares of common stock through his Revocable Trust.
|
(a) | Includes shares credited under the CEOP on January 15, 2018, phantom stock units credited to deferred accounts under the Amended and Restated 1997 Stock Plan forNon-employee Directors (the Directors Plan) and shares that may be acquired within 60 days (by March 15, 2018)(a) Includes shares credited under the CEOP on February 29, 2020, phantom stock units credited to deferred accounts under the Amended and Restated 1997 Stock Plan for Non-employee Directors (the Directors Plan) and shares that may be acquired within 60 days (by April 29, 2020) through the exercise of stock options as follows:
|
| | | | | | | | |
Name
| | Number of
Phantom Stock
Units Held in
Director Deferred
Accounts*
| | | Number of
Shares Subject
to Options
Exercisable in
60 days
| |
Gray G. Benoist | | | 11,558 | | | | — | |
Donald W. Bogus | | | 23,968 | | | | — | |
C. Robert Bunch | | | 12,399 | | | | — | |
Randall W. Larrimore | | | 11,100 | | | | — | |
John M. B. O’Connor | | | 11,100 | | | | — | |
Richard M. Rompala | | | 15,578 | | | | — | |
Earl L. Shipp | | | 3,424 | | | | — | |
Vincent J. Smith | | | 11,100 | | | | — | |
William H. Weideman | | | 12,400 | | | | — | |
Carol A. Williams | | | 14,633 | | | | — | |
John E. Fischer | | | — | | | | 518,450 | |
Todd A. Slater | | | — | | | | 217,167 | |
Pat D. Dawson | | | — | | | | 160,334 | |
John L. McIntosh | | | — | | | | 340,000 | |
James A. Varilek | | | — | | | | 69,500 | |
Directors and executive officers as a group,
including those named above (22 persons) | | | 127,260 | | | | 1,810,204 | |
* | Such securities have no voting rights.
|
(b) | Unless otherwise indicated, beneficial ownership does not exceed 1% of the outstanding shares of common stock.
|
| | | | | | | | | | | | | | |
| Name | | Number of Phantom Stock Units Held in Director Deferred Accounts* | | Number of Shares Subject to Options Exercisable in 60 days |
| Heidi S. Alderman | | | 4,046 | | | — | |
| Beverley A. Babcock | | | 5,107 | | | — | |
| Gray G. Benoist | | | 20,844 | | | — | |
| C. Robert Bunch | | 20,499 | | | — | |
| Scott D. Ferguson | | — | | | — | |
| W. Barnes Hauptfuhrer | | — | | | — | |
| Randall W. Larrimore | | 21,781 | | | — | |
| John M. B. O’Connor | | 19,200 | | | — | |
| Earl L. Shipp | | 16,862 | | | — | |
| Vincent J. Smith | | 19,200 | | | — | |
| Scott M. Sutton | | 8,890 | | | — | |
| William H. Weideman | | 20,500 | | | — | |
| Carol A. Williams | | 24,135 | | | — | |
| John E. Fischer | | — | | | 1,101,534 | |
| Todd A. Slater | | — | | | 356,367 | |
| Pat D. Dawson | | — | | | 393,667 | |
| John L. McIntosh | | — | | | 436,784 | |
| James A. Varilek | | — | | | 197,784 | |
Directors and executive officers as a group, including those named above (24 persons) | | 181,064 | | | 2,855,239 | |
_______________________
*Such securities have no voting rights.
(b)Unless otherwise indicated, beneficial ownership does not exceed 1% of the outstanding shares of common stock. For each individual, as well as the group included in the table above, percentage ownership is calculated by dividing (1) the number of shares reported as beneficially owned on February 29, 2020, by (2) 157,722,254, which is the number of shares of common stock outstanding on January 31, 2020, plus the number of shares of common stock that such person or group had the right to acquire on or within 60 days of February 29, 2020.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Principles of Corporate Governance and our Code of Conduct include policies and procedures requiring
pre-approval of certain transactions involving our directors and employees and their family members and affiliated organizations if Olin is a direct or indirect participant. The policies define “family member” to mean a spouse, child, sibling, stepchild, parent, stepparent, mother-, father-,
son-, daughter-, brother- or sister-
in-law, or any other person living with the individual (except tenants and household employees). Affiliated organizations include those entities where the individual or family member serves as a director, executive officer or holder of 5% or more of the equity interests.
Our Principles of Corporate Governance require the directors and corporate governance committee (or, if that committee determines it is appropriate, the board) topre-approve the following transactions with directors, family members and affiliated organizations:
Proxy Statement Table of Contents | · | | charitable contributions of more than $10,000 in a fiscal year;
|
| · | | transactions involving more than $120,000 (individually or in the aggregate) in a fiscal year (other than purchases or sales of goods and services contracted for by Olin business units in the normal course of business);
|
| · | | transactions in excess of $120,000 in a fiscal year for consulting or personal services;
|
| · | | transactions in excess of $120,000 in a fiscal year directly with (or involving direct compensation to) a director or family member;
|
| · | | transactions involving more than $120,000 (individually or in the aggregate) in a fiscal year (other than purchases or sales of goods and services contracted for by Olin business units in the normal course of business); and
|
| · | | transactions (even in the ordinary course of business) involving the greater of $1 million or 2% of consolidated gross revenues of either Olin or the other party.
|
•charitable contributions of more than $10,000 in a fiscal year;
•transactions involving more than $120,000 (individually or in the aggregate) in a fiscal year (other than purchases or sales of goods and services contracted for by Olin business units in the normal course of business);
•transactions in excess of $120,000 in a fiscal year for consulting or personal services;
•transactions in excess of $120,000 in a fiscal year directly with (or involving direct compensation to) a director or family member; and
•transactions (even in the ordinary course of business) involving the greater of $1 million or 2% of consolidated gross revenues of either Olin or the other party.
Our Principles of Corporate Governance require our directors and corporate governance committee to
pre-approve service by any senior executive (our CEO and other Section 16 officers) on the board of another public company or on the board of any private company that would represent a material commitment of time. In addition, our Code of Conduct and related Corporate Policy Statements require the approval of the board of directors before an officer may serve as a director or provide services to another organization (as an officer, employee, consultant, etc.). Any such service by other employees must be
pre-approved by our CEO, if the potential for a conflict of interest exists. These provisions also prohibit any employee or family member from having any direct or indirect interest in, or any involvement with or obligation to, any business organization (including any
non-profit entity to which Olin makes contributions) which does or seeks to do business with Olin, or any Olin competitor, without
pre-approval from the employee’s department head.
In granting
pre-approval, the directors and corporate governance committee, board members and management focus on the best interests of Olin.
In addition to thepre-approval process described above, our Code of Conduct and related Corporate Policy Statements prohibit any director or employee from engaging in a transaction that might conflict with the best interests of Olin.
RESPONSIBLE CARE AND SUSTAINABILITY
SECTION 16(a) BENEFICIALOWNERSHIP REPORTING COMPLIANCE
Section 16(a)Throughout its 128-year history, Olin has been known as a responsible corporate citizen. We are committed to leveraging the principles of Responsible Care®within our operations globally to drive excellence in environmental, health, safety and security stewardship. We value our people, the Exchange Act requirescommunities in which we operate, our officerscustomers, and directors,the environment. The Olin Sustainability Platform encompasses actions to manage energy and persons who beneficially own more than 10%climate, ensure resource efficiency of our common stock,operations, measure and assess commercial concerns, and engage our communities and employees on matters most relevant to file reportsOlin and our stakeholders.
During 2018, the chemical division of ownershipOlin achieved third-party certification to the RC 14001:2015 standard, including the internationally recognized ISO 14001:2015 standard for environmental management systems. We also received ISO 50001 (energy) certification in Germany. Our product stewardship policy incorporates the American Chemistry Council’s Product Safety Code in our chemicals business segments and changes in ownershipensures that our product safety performance is properly evaluated and continuously improved, and relevant elements are made publicly available. We are committed to open and transparent reporting and regularly conduct audits to ensure compliance with the SEC,highest global standards.
Olin was honored in 2019 to receive numerous recognitions and these persons must furnish us with copiesaccolades from global agencies and industry associations for our achievements in energy efficiency, waste minimization, reuse and recycling, and safety and environmental stewardship. In 2019, we were awarded the American Association of Railroads’ Grand Slam award for the forms they file. Officers,fourth consecutive year. The award is recognition by at least four North American Class 1 Railroads for our efforts to reduce non-accidental environmental releases.
Olin’s board of directors
and 10% beneficial owners complied with Section 16(a) filing requirements in 2017, except as described below.Due to an internal miscommunication, onehas accountability for oversight of our officers, Mr. O’Keefe, filed one late Form 4environmental and safety performance, which it reviews no less than each quarter. The board also has responsibility for monitoring our response to important public policy issues, including sustainability, which is reviewed on a routine basis. Business ethics, diversity, and talent management are additional key subjects related to sustainability that are discussed by the board. Further, the compensation committee has structured our compensation program to balance financial results with Olin’s achievement of annual goals relating to an option exercise
environmental impact, safety, sustainability, and saleethical conduct. We also have engaged with our shareholders on sustainability matters.
For information about how we manage our commitments to Responsible Care® and sustainability, please visit the Corporate Responsibility page of Olin common stock on March 1, 2017. The transaction was reported on a Form 4 which was due on March 3, 2017, but which was filed with the SEC on January 8, 2018.our website at
www.olin.com/corporate-responsibility. The below table sets forth information regarding our executive officers as of February 28,
2018:2020: | | | | | | | | | | | | | | |
Name and Age
| | Title
| | Served as
an Olin
Officer
Since
|
John E. Fischer (62) (64) | | Chairman, President and CEO | | 2004 |
Eric A. Blanchard (61) (63) | | Vice President, General Counsel and Secretary | | 2017 |
Pat D. Dawson (60) (62) | | Executive Vice President and President, Epoxy & International | | 2015 |
Dolores J. Ennico (65)
| | Vice President, Human Resources
| | 2009 |
Brett A. Flaugher (53) (55) | | Vice President and President, Winchester | | 2018 |
John L. McIntosh (63) (65) | | Executive Vice President Synergies and Systems | | 1999 |
Thomas J. O’Keefe (59)
Valerie A. Peters (56) | | Senior Vice President, Ammunition
Human Resources | | 20112018 |
John M. Sampson (57) (59) | | Vice President and SeniorExecutive Vice President, Business Operations
| | 2015 |
Todd A. Slater (54) (56) | | Vice President and CFO | | 2005 |
Randee N. Sumner (44) (46) | | Vice President and Controller | | 2014 |
James A. Varilek (59) (61) | | Executive Vice President and President, Chlor Alkali Vinyls and Services Chief Operating Officer | | 2015 |
Teresa M. Vermillion (42) (44) | | Vice President and Treasurer | | 2018 |
No family relationship exists between any of the above NEOs or our directors. Such officers were elected to serve, subject to the Bylaws, until their respective successors are chosen.All executive officers, except
Messrs.
Blanchard, Dawson, Flaugher, SampsonFischer, McIntosh and
Varilek and Mses. Sumner and Vermillion,Slater have served as executive officers of Olin for more than five years and
Mr. Flaugherall executive officers except Messrs. Blanchard, Dawson, Sampson and
Mses. Sumner and VermillionVarilek have been employed by Olin for over five years.
All executive officers who have been with Olin for over five years, except Messrs. Fischer, McIntosh, O’Keefe and Slater and Mses. Sumner and Vermillion, have served in their current position for more than five years.
Eric A. Blanchard was appointed Vice President, General Counsel and Secretary of Olin effective March 6, 2017. From 2006 through March 1, 2017, he served as Senior Vice President, General
Counsel and Secretary at Essendant Inc. From 2002 through 2006, he served as Vice President, General Counsel and Corporate Secretary at Tennant Company. From 1999 through 2002, he served as President of Dairy Group; from 1993 through 1999, he served as Vice President, Secretary and Chief Legal Counsel; and from 1986 through 1993, he served as General Counsel and Corporate Secretary, all at Dean Foods Company. From 1981 through 1986, he was an associate attorney at Schiff Hardin & Waite.
Pat D. Dawson was appointed Executive Vice President
of Olin and President, Epoxy & International effective
April 1, 2019. From October 5,
2015.2015 to March 31, 2019, he served as Vice President of Olin and President, Epoxy & International. From July 2013 through October 4, 2015, he was Senior Vice President, Epoxy and Corporate Project Development; from September 2009 to July 2013, he served as the President of Dow Asia Pacific; and from January 2004 to September 2009, he served as Group President for the Polyurethanes Business, all at The Dow Chemical Company, now known as
DowDupont.Dow Inc. His career began at Dow in 1980.
John E. Fischer became Chairman, President and CEO
of Olin effective April 27, 2017. From May 1, 2016 to April 26, 2017, he served as President and CEO; from May 2014 to April 30, 2016, he served as President and Chief Operating Officer; from October 2010 until May 2014, he served as Senior Vice President and CFO; from May 2005 to October 2010, he served as Vice President and CFO; and from June 2004 until May 2005, he served as Vice President, Finance and Controller, all at Olin.
Brett A. Flaugher was appointed
to the positionVice President of
Olin and President, Winchester
Ammunitioneffective January 1, 2018, and assumed his current duties in October 2016. From January 2003 until September 2016, he served as Vice President, Marketing & Sales at Winchester. He joined Olin in 1986 as a Sales Representative in the Winchester Ammunition Division for the Texas and Oklahoma area and held a number of positions of increasing responsibility within Winchester’s sales and marketing department.
John L. McIntosh was appointed as Executive Vice President Synergies and Systems
of Olin effective January 1, 2017. From October 5, 2015 until December 31, 2016, he served as Executive Vice President, Chemicals and Ammunition; from May 2014 until October 4, 2015, he served as Senior Vice President, Chemicals; from January 2011 until April 2014, he served as Senior Vice President, Operations; and from October 2010 until December 2010, he served as Senior Vice President, Chemicals, all at Olin.
Thomas J. O’Keefe
Valerie A. Peters was appointed
Senior Vice President,
AmmunitionHuman Resources of Olin effective
October 14, 2016.September 1, 2018. From
January 2011 until October 13, 2016, heMarch 2018 through August 2018, she served as Vice President,
of OlinHuman Resources—Corporate and
President, Winchester;Shared Services; from
2010March 2016 to
2011, heFebruary 2018, she served as
President, Winchester;Senior Director, Human Resources; from
2008January 2013 to
2010, heFebruary 2016, she served as
Vice President, Operations and Planning; andDirector, Human Resources—Corporate; from
2006 to 2008, he was Vice President, Manufacturing Operations,December 2007 through December 2012, she served as Director Human Resources—Winchester, all at Olin. Her Olin career began in
each case, at Winchester. From 2001 to 2006, he was Vice President, Manufacturing and Engineering for Olin’s former Brass Division.1991.
John M. Sampson was appointed Executive Vice President, andBusiness Operations of Olin effective April 1, 2019. From October 14, 2016 to March 31, 2019, he served as Senior Vice President, Business Operations effective October 14, 2016. FromOperations; from October 5, 2015 until October 13, 2016, he served as Vice President of Olin and Vice President, Manufacturing and Engineering, Chlor Alkali Products & Vinyls/Epoxy; from October 5, 2015 to October 2016, he served as Vice President of Olin and Vice President, Manufacturing and Engineering, Chlor Alkali Vinyls, Epoxy and Global Chlorinated Organics. From February 2014 to October 2015, he served as Vice President, Dow Chlorine Products Operations; from November 2012 to February 2014, he served as Vice President of Environmental, Health, & Safety Operations; from 2011 to 2012, he served as Manufacturing Vice President for Chemicals & Energy; and from 2007 to 2011, he served as Global Business Director for Chlor-Alkali, all at The Dow Chemical Company, now known as DowDupont.Dow Inc. His career began at Dow in 1983.
Todd A. Slater was appointed Vice President and CFO of Olin effective May 4, 2014. From October 2010 until May 3, 2014, he served as Vice President, Finance and Controller; and from May 2005 until September 2010, he served as Vice President and Controller, all at Olin.
Randee N. Sumner was appointed Vice President and Controller
of Olin effective May 4, 2014. From December 2012 until May 3, 2014, she served as Division Financial Officer for Chemical
Distribution. FromDistribution; from 2010 until December 2012, she served as Assistant Controller; from 2008 to 2010, she served as Director, Corporate Accounting and Financial Reporting; and from 2006 to 2008, she served as Manager, Corporate Accounting and Financial Reporting, all at Olin.
James A. Varilek was appointed Executive Vice President and
Chief Operating Officer of Olin effective April 1, 2019. From October 5, 2015 until March 31, 2019, he served as Executive Vice President and President, Chlor Alkali Vinyls and
Services effective October 5, 2015. InServices. From November 2013
to October 4, 2015, he
was namedserved as President of the U.S. Chlor Alkali & Vinyl Business and in March 2015, he assumed additional responsibilities as Chief Operating Officer of Dow Chlorine Products; from December 2010 to November 2013, he was Business Vice President for the Dow Services Business, adding Vice President for Procurement in July 2013; from November 2008 to December 2010, he was Vice President for Business Services, Advanced Materials Division; and from February 2006 to November 2008, he was Vice President of Global Supply Chain, all at The Dow Chemical Company, now known as
DowDupont.Dow Inc. His career began at Dow in 1982.
Teresa M. Vermillion was appointed Vice President and Treasurer
of Olin effective February 1, 2018. From October 1, 2015 through January 2018, she served as Vice President, Tax; and from July 2010 through September 2015, she served as Director, Tax Planning and Financial Analysis, all at Olin. Prior to that, she was a Senior Tax Manager at Ernst & Young.
COMPENSATION DISCUSSION AND ANALYSIS ____________________
This Compensation Discussion and Analysis (CD&A) describes, in detail, our executive compensation philosophy and the compensation programs in which our senior executive team participates. The CD&A explains the decisions the compensation committee of our board of directors (committee) made under those programs
in 2017,for 2019, and the factors it considered in making those decisions. The CD&A focuses on the compensation paid to our NEOs as they are determined under SEC rules. Our NEOs for
20172019 were:
| | | | | | | | |
Name
| | Title
|
John E. Fischer | | Chairman, of the Board, President and CEO |
Todd A. Slater | | Vice President and CFO |
Pat D. Dawson | | Executive Vice President and President, Epoxy & International |
John L. McIntosh | | Executive Vice President Synergies and Systems |
James A. Varilek | | Executive Vice President and President, Chlor Alkali Vinyls and Services Chief Operating Officer |
Mr. Fischer was named Chairman of the Board on April 27, 2017, succeeding Joseph D. Rupp.
Compensation Best Practices
| | |
| Compensation Best Practices |
To enhance investor understanding of our compensation decision making, we summarize below certain executive compensation practices we have implemented to reinforce our objectives and drive Olin performance. We also identify practices we have not implemented because we do not believe they would serve our shareholders’ long-term interests.
| | | | | | | | |
We align executive
compensation with the
interests of our shareholders
| |  | | • Pay for Performance by Ensuring that Executive Compensation is Largely Contingent on Results (pages 30-31) 31-32)
• Target Compensation Expenditures to the Midpoint of Market Practices (page 35)
• Updated Performance Share Program correlates 100%50% of these awards with Relative Total Shareholder Return and 50% with Net Income (pages 39-41)
38-39)
• Require Double-Triggers for Payments under Agreements with Executives and Early Vesting of Stock Option and StockEquity Awards onUnder the Executive Change in Control (page 62) Severance Plan (pages 59-60) |
| | |
We design our executive
compensation programs to
foster sustainable growth
without excessive risk taking | |  | | • Impose Robust Share Ownership Guidelines (page 45)(pages 41-42) • Maintain a Clawback Policy (page 42)39) • Regularly Assess the Risk Inherent in Our Compensation Policies and Programs (page 43)41) |
| | |
We adhere to the best
practices in executive
compensation | | | | • Utilize an Independent Compensation Consulting Firm, which Provides No Other Services to Olin (page 32) • Offer Change in Control Protection under Equity Plans and Agreements that Complies with Prevailing Good Governance Standards, Including No Excise TaxGross-Up (page 66) 60) • Permit No Repricing of Underwater Stock Options • Exclude the Value of Equity Awards in Pension or Severance Calculations • Extend No Perquisites forto NEOs, except $910$1,104 excess liability insurance premium |
At the 20172019 annual meeting of our shareholders, we held an advisory vote on executive compensation. Approximately 98.4%98.3% of the shares voted were cast in support of our 20172019 executive compensation and related
disclosures. The committee viewed the results of this vote as general broad shareholder support for our executive compensation program. While we made no changes to our executive compensation program as a result of that vote, our committee continuously evaluates our executive compensation program and makes changes to respond to market trends and other relevant factors.
We understand that there are different ways to view “pay for performance.” In the following sections, we highlight how the committee thinks about executive pay and Olin performance, and why we believe our executive compensation programs are appropriately aligned with results that benefit our investors.
Compensation Program Construction
Our executive compensation program is designed to align with the long-term interests of our shareholders, to reward employees for producing sustainable growth, and to attract and retain the world-class talent that will ensure we succeed. The committee strongly believes that these objectives will be fulfilled if executive compensation—pay opportunities and pay actually realized—is tied to Olin’s results. The committee measures Olin performance in two primary ways for purposes of establishing executive compensation:
| · | | our financial results, particularly our Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), adjusted cash flow and adjusted earnings per share (Adjusted EPS) (see pages 37-38), and
|
| · | | our return to shareholders over time relative to other companies.
|
•our financial results, particularly our adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), Adjusted Cash Flow and adjusted earnings per share (Adjusted EPS) (see page 36), and
•our relative total return to shareholders over time.
By tying our executives’ pay to Olin’s actual results, our compensation programs (i) align our executives’ interests with those of our shareholders and (ii) induce our management team to achieve our most important goals.
Our total direct compensation package comprises three elements:
| · | | annual incentive (SMICP/MICP); and
|
| · | | long-term incentive (equity) compensation.
|
•base salary;
•annual cash incentive; and
•long-term incentive (equity) compensation (LTI).
Each NEO has a target total compensation opportunity that is reviewed annually by the committee to ensure its alignment with Olin’spay-for-performance objectives. As the following chart shows, 84%86% of the target annual direct compensation of our current CEO and 72%74% of the target annual direct compensation for the other NEOs varies with our financial results and our stock price performance:
NEO TARGET COMPENSATION
Olin
delivered majorgenerated a number of operational accomplishments
that informed the committee’s decision making as it related to executive compensation in
2017:2019. Specifically, in 2019, we recorded our best full-year safety and environmental performance since the Dow acquisition in 2015. Total events, including safety, environmental, process safety and distribution, declined by 6.4%. Individual safety events declined by 5.2% and environmental events declined by 22%, and for the third consecutive year there were no life events. In a year where our businesses faced weaker demand and pressure on product pricing, we did achieve higher than expected productivity improvements. The Winchester business finished the year with two consecutive quarters of year-over-year increased Adjusted EBITDA, resulting in 2019 Adjusted EBITDA that exceeded 2018 results. In the third quarter of 2019, Winchester was awarded the contract by the U.S. Army to operate the Lake City Army Ammunition Plant effective October 1, 2020.
| · | |
Generated improved EBITDA and EPS compared to 2016.
The Compensation Committee |
| · | | Achieved higher than expected improvements in synergies and productivity.
|
| · | | Experienced a record year in safety in the Winchester division.
|
The Compensation Committee
The committee is the body primarily responsible for overseeing compensation to our senior officers. Our committee consists of directors who are independent under the NYSE listing criteria. The committee establishes total compensation opportunities (and each of the individual elements) for the CEO, and approves compensation for the other executive officers, including the NEOs, based on recommendations by the CEO.
To assist in performing its duties, the committee engages Exequity LLP (Exequity), an independent board and management advisory firm. In engaging Exequity, the committee considered a number of factors in assessing Exequity’s independence, including the
factfacts that Exequity performs no other work for Olin, that none of Exequity’s consultants owns stock in Olin, that Exequity’s consultants have no other business interests with any Olin officer or director, and
that the fees
that Exequity receives for services rendered to Olin
restare below a maximum permissible level. In the past several years, the committee discussed its compensation philosophy with Exequity, but otherwise did not impose any specific limitations or constraints on, or otherwise direct, the manner in which Exequity performed its advisory services.
As advisor to the committee, Exequity reviewed the total compensation strategy and pay levels for our NEOs, examined all aspects of our executive compensation programs to ensure their ongoing support of our business strategy, informed the committee of developing legal and regulatory considerations affecting executive compensation and benefit programs, and provided general advice to the committee on all compensation decisions pertaining to the CEO and to all senior executive compensation recommendations submitted by management. The committee routinely meets in executive session (without the CEO or other officers present). As appropriate, Exequity attends some of those executive sessions. In addition to the committee’s retention of Exequity, Olin periodically retains one or more other compensation consulting firms to provide general services, such as actuarial services for pension plans.
In designing and implementing our executive compensation programs, it has been the committee’s practice to review compensation data from a peer group that is adjusted periodically in consultation with Exequity. We refer to this group as the “comparator group.” For awards made in 2017,2019, the comparator group was composedcomprised a community of the 1920 chemical companies listed below,that align reasonably with medianOlin’s revenues, industry affiliation and corporate structure:
| | | | | |
| Air Products and Chemicals, Inc. | PolyOne Corporation |
| Celanese Corporation | PPG Industries, Inc. |
| CF Industries Holdings, Inc. | Praxair, Inc. |
| Eastman Chemical Company | RPM International, Inc. |
| Ecolab Inc. | The Chemours Company |
| Element Solutions, Inc. (formerly Platform Specialty Products Corporation) | The Mosaic Company |
| FMC Corporation | The Scotts Miracle-Gro Company |
| H.B. Fuller Company | The Sherwin-Williams Company |
| Huntsman Corporation | W. R. Grace & Co. |
| Ingevity Corporation | Westlake Chemicals Corporation |
The committee annually evaluates the comparator group composition and makes adjustments as appropriate. For 2020, Praxair, Inc. (which merged with The Linde Group) will be removed from the comparator group. Albemarle Corporation, Ashland Global Holdings Inc., Axalta Coating Systems Ltd., Cabot Corporation, and International Flavors & Fragrances Inc. will be added to the comparator group, as they are chemicals industry companies of $4.4 billion:comparable revenue size to Olin. We believe these modifications will enhance the peer group’s representation of Olin’s revenue position, industry affiliation and corporate structure.
| | |
Air ProductsWhat We Pay and Chemicals, Inc.
| | Ingevity Corporation
|
Ascend Performance Materials Operations LLC
| | Milliken & Company
|
CF Industries, Inc.
| | Mos Holdings Inc. (formerly The Mosaic Company)
|
The Chemours Company
| | NewMarket Corporation
|
The Dow Chemical Company
| | PolyOne Corporation
|
E.I. du Pont de Nemours and Company
| | Praxair, Inc.
|
Eastman Chemical Company
| | The ScottsMiracle-Gro Company
|
Ecolab Inc.
| | The Sherwin-Williams Company
|
H.B. Fuller Company
| | The Valspar Corporation
|
Hexion Inc. (formerly Momentive Specialty
Chemicals Inc.)
| | Why: Elements of Compensation |
For 2018, American Air Liquide Inc., Cabot Microelectronics Corporation, Calgon Carbon Corporation, FMC Corporation, Lyondellbasell Industries Inc., PPG Industries, Inc., Sabic Innovative Plastics US LLC and W. R. Grace & Co. were added to the 2017 comparator group. In future years, the committee intends to continue the practice of evaluating the comparator group and making adjustments as appropriate. For example, in 2018, DowDupont (the combination of The Dow Chemical Company and E.I. du Pont de Nemours and Company) will not be included in the comparator group due to its revenue size and The Valspar Corporation will not be included in the comparator group as it is no longer a separate reporting company, since its acquisition by The Sherwin-Williams Company.
What We Pay and Why: Elements of Compensation
We extend to our executives three elements of total direct compensation: base salary; annual
incentive (SMICP/MICP);cash incentive; and long-term equity awards, plus a limited number of benefits that commonly are available to senior management at other companies of similar stature. The chart below illustrates that
81%75% of the
2017actual 2019 total direct compensation of our NEOs was tied to Olin performance.
Elements of Total Compensation
Below are the primary elements of our executive compensation, together with relevant information about each element:
| | | | | | | | | | | | | | |
Compensation
Element | | Purpose | | Factors Used to
Determine Amount |
| | | | |
Compensation
Element
| | Purpose
| | Factors Used to
Determine Amount
|
Annual Base
Salary | | |
Annual Base
Salary
| | ·• Rewardsday-to-day value of executives consistent with the market
| | ·• Median salaries of the comparator group·• Scope of responsibilities·• Value of the employee in the market·• Individual performance
|
| | | | |
Target Annual
Cash Incentive
Award
(STIP) | | ·• Ties compensation to investor returnsthe achievement of short-term company goals and objectives·• Motivates executives to achieve short-term financial targets andnon-financial strategic objectives·• Communicates key goals of the company to executives
| | ·• Criteria for corporate NEOs:1.Adjusted EBITDA, Adjusted Cash Flow and Adjusted EPS 2.Performance on keynon-financial objectives that we believe are important to our long-term success ·• Criteria for NEOs with divisional responsibility:1.Adjusted Division EBITDA and Adjusted Division Cash Flow 2.Performance on keynon-financial objectives that we believe are important to our long-term success |
| | | | |
Long-Term
Incentive Award
| | ·• Ties compensation to investor returns·• Motivates executives to achieve long-range goals that benefit shareholders·• Aligns financial interests of executives and shareholders
| | ·• Performance share payouts for NEOs and other executive officers based on our performance on key metrics compared to the Performance Share Comparison Group (as defined below)·• Level of target awards for each NEO based on practices of comparator group
|
| | | | |
Retirement and Severance
Benefits
| | ·• Retention of key executivesAllows us to retain and compete for strong employee talent·• Ensures that managers are personally indifferent to the outcome of a transaction in a change in control situation
| | ·• Programs offered by competitors·• Employee’s length of service (forfor defined benefits which were(were frozen on 12/31/07 for Olin plans andplans; frozen on 10/5/15 for the former Dow plans, although Dow planswhich continue to accrue interest)·• Salary and cash incentive
|
The committee determines the total target direct compensation level for the CEO, as well as the appropriate mix of the compensation elements, based on prevailing practices in the comparator group. The CEO relies on comparator group standards to recommend, for the committee’s review and approval, the target levels and mix of elements for the balance of our executive officers. Although the committee is not bound to mirror the comparator group standards when it makes decisions on
compensation levels and the mix of elements, the committee generally relies heavily on the identified competitive norms to ensure that we can compete for executive talent. The committee also reviews the relationship between the CEO’s compensation and the compensation for the other NEOs. In connection with establishing 20172019 compensation, the committee determined that internal pay relationships were appropriate in light ofand reflected the committee’s understanding of the typical CEO-NEO pay relationships at other companies.
As a guideline, the committee intends that the base salaries, total cash compensation (salary and annual cash incentive), and total compensation opportunities (total cash compensation plus the grant date value of long-term incentive awards) extended to our NEOs as a group approximate the market median of the comparator group practices. The committee believes that managing total target pay to the market median for the comparator group allows us to attract, motivate, and retain the quality executive talent Olin needs. Pay levels for any individual NEO, however, may be below or above the market median of the comparator group for that executive’s particular role. The chart below shows how our
20172019 NEO compensation
targetedapproximated the median compensation for the comparator group.
NEO 2019 Target Compensation Against Market Median
Our general practice for an executive who is new in his/her position is to establish compensation opportunities below the market, and to increase them to market level over several years, assuming
that performance warrants such increases. Other material increases in compensation generally relate to promotions or added responsibilities.
The committee normally adjusts NEO salaries annually in respect ofto reflect merit, promotion or change in role and changes in market rates for the job. No increase in base salary is automatic or guaranteed. When warranted by cash flow or other considerations, theThe frequency of adjustments, in fact, has been extended to 18 months or more when warranted by cash flow or other considerations, and on occasion we have frozen executive base salaries for extended periods of time. For example, for 2020, we froze base salaries at 2019 levels for all NEOs (as well as for other officers and participants in our long-term incentive program).
Short Term Incentive Program (Non-equity Incentive Program Compensation)
Annual Cash Incentive(Non-equitySTIP Overview. For 2019, the committee adopted a new Short Term Incentive Plan Compensation)For the past several years, including in 2017, the NEOs participated in the Senior Management Incentive Compensation Plan, or SMICP, an incentive plan approved by our shareholders. The SMICP provides the NEOs with annual cash incentive opportunities comparable to the terms and conditionsProgram (STIP) for cash bonus awards to our other executives (who participate in our Management Incentive Compensation Plan, or MICP). Use of the SMICP for these NEOs was intended to allow us to deduct payments to those individuals subject to the deduction limits of Section 162(m) of the Internal Revenue Code (Code), although the committee reserves the right to make payments that would not be deductible if it determines that doing so would be in our best interests.
The mechanics of the SMICP operation for 2017 awards were as follows:
| | |
Step 1:
| | Determine Comparator Group Metrics.The first step in the SMICP process was a determination of the maximum pool available to pay annual incentives to participating NEOs under the SMICP and to other executives under the MICP. The committee based this determination on the information provided by Exequity regarding the median percentage of net income allocated by the companies in the comparator group to fund annual incentives for their executives.
|
| |
Step 2:
| | Determine Maximum SMICP Funding.The committee then considered and approved 6% of 2017 income to be set aside as a pool to fund annual cash incentives for both the SMICP and the MICP. For this purpose, income was calculated as 2017 Adjusted EPS multiplied by the weighted average number of shares outstanding in 2017, where Adjusted EPS represent consolidated net income from continuing operations before theafter-tax effect of special charges, gains or losses, or the cumulative effect of a change in accounting, divided by the weighted average number of shares outstanding on a fully diluted basis.
|
| |
Step 3:
| | Determine Individual Amount for each NEO.The committee established a target award for each NEO (set forth in the Grants of Plan-Based Awards table). They allocated 30% of the formulated incentive pool to fund a maximum award for the CEO, 20% to fund maximum awards for each of the second and third highest paid NEOs and 30% to fund maximum awards for the other NEOs.
|
| |
Step 4:
| | Establish Final Awards.The committee exercised its discretion after the end of 2017, to determine the award for each of the paid NEOs (not to exceed the maximum award for that NEO set forth in the Grants of Plan-Based Awards table), based on achievement of 2017 financial goals andnon-financial strategic objectives described below. For purposes of this analysis, financial objectives are weighted at 80% andnon-financial objectives are weighted at 20% for NEOs with corporate-wide responsibilities (75% and 25% weighting to financial and non-financial objectives, respectively, for NEOs with divisional responsibilities).
|
As discussed above, the committee established 6% of adjusted net income as the maximum pool for all awards under the SMICP and the MICP for 2017 performance. Our adjusted 2017 net income was $157.3 million, creating an aggregate pool for awards under the SMICP and the MICP of $9.4 million. Total actual payouts under both the SMICP and the MICP plans were $6.348 million, or 67.53% of the available pool. For 2017, in calculating Adjusted EPS used to determine adjusted 2017 net income, we excluded the effect of the following special charges, gains and losses (which were reflected in our 2017 net income): (i) restructuring charges of $32.5 million, (ii) $12.8 million of acquisition-related integration costs, (iii) $5.3 million of information technology costs, (iv) $54.7 million as a result of Hurricane Harvey, representing incremental costs to continue operations and unabsorbed fixed manufacturing costs, as well as reduced profits from lost sales, and (v) $3.3 million of gain on the sale of a former manufacturing facility.
The following table illustrates the portion of each NEO’s cash incentive based on corporate and division financial targets and corporate and divisionnon-financial objectives:
| | | | | | | | | | | | |
NEO
| | Corporate/Division
Financial Targets
| | Corporate/Division
Non-Financial
Objectives
| | Total
|
John E. Fischer | | | 80 | % / 0% | | | 20 | % / 0% | | | 100 | % |
Todd A. Slater | | | 80 | % / 0% | | | 20 | % / 0% | | | 100 | % |
Pat D. Dawson | | | 20 | % / 56.25% | | | 5 | % / 18.75% | | | 100 | % |
John L. McIntosh | | | 80 | % / 0% | | | 20 | % / 0% | | | 100 | % |
James A. Varilek | | | 20 | % / 56.25% | | | 5 | % / 18.75% | | | 100 | % |
awards. Actual payouts of cash incentiveSTIP awards are determined based on our achievement against our financial performance targets as well as against ournon-financial goals, as discussed below.
For the financial portion of the STIP award, no payments are made for any financial target if the actual financial performance is below 75% (threshold) of the target. Achievement of 75% of a financial target results in a 50% payout of
the portion of the target STIP award allocated to that target. For each 1% that actual financial performance exceeds the 75% threshold (up to the target level), the STIP payment is increased by 2%. In 2017,addition, for each 1% by which the actual financial performance exceeds the financial targets (100%), the payout is increased by 4%. The total STIP payout for an NEO cannot exceed 200% of our NEOs with corporate-wide responsibilities (Messrs. Fischer, Slater and McIntosh),that individual’s target STIP award.
For 2019, 80% of
his cash incentive isthe target STIP awards for all officers (including the NEOs) were based on financial targets and 20%
of the target STIP awards were based on
non-financial objectives.
Financial Targets.In 2017, our The following table illustrates the portion of each NEO’s target STIP award based on corporate and division financial performance targets and non-financial objectives for 2019:
| | | | | | | | | | | | | | | | | | | | |
| | Corporate/Division
Financial Targets | | Corporate/Division
Non-Financial
Objectives | | Total |
| NEOs without Divisional Responsibility | | 80% / 0% | | | 20% / 0% | | | 100% | |
| NEOs with Divisional Responsibility | | 20% / 60% | | | 5% / 15% | | | 100% | |
As set forth in the table above, for Messrs. Fischer, Slater and McIntosh, our NEOs with corporate-wide responsibilities (Messrs. Fischer, Slaterresponsibility, target STIP awards were based 80% on corporate financial targets and McIntosh)20% on corporate non-financial objectives.
For Messrs. Dawson and Varilek, target STIP awards were based 25% on corporate results and 75% on division results. Of the 75% component related to division results, 20% (or 15% of the total target STIP award) related to division non-financial objectives and the remaining 80% (or 60% of the total target STIP award) was based on Adjusted Division EBITDA (50%), Adjusted Cash Flow (15%) and Adjusted EPS (15%Division Cash Flow. For Mr. Varilek, who had responsibility for both Chemicals businesses (Chlor Alkali Products and Vinyls (CAPV) and Epoxy) in 2019, his division Adjusted EBITDA financial targets and achievement against those targets were weighted equally between the CAPV and Epoxy divisions.
Financial Targets and Performance Against Objectives.The committee established goals for each of the performance measures relevant to our NEOs. The table below provides information on each financial performance measure, including a weighting, performance target (100%). , performance threshold (75%), performance maximum (125%), 2019 actual performance and related payout percentage earned. Dollar amounts in the table below are shown in millions except for EPS.
| | | | | | | | | | | | | | | | | | | | |
| 2019 | | | | | | |
Performance
Measure | Weighting | Performance
Target (100%) | Performance
Threshold (75%) | Performance
Maximum (125%) | Actual
2019
Performance | Actual 2019
Payout
Percentage |
| Adjusted EBITDA—Corporate | 50% | | $1,252.5 | $939.4 | $1,565.6 | $803.7 | 0% |
| Adjusted Cash Flow—Corporate | 15% | | $374.0 | $280.5 | $467.5 | $180.0 | 0% |
| Adjusted EPS—Corporate | 15% | | $1.84 | $1.38 | $2.30 | $(0.15) | 0% |
| Adjusted EBITDA—CAPV Division | 65% | | $1,151.8 | $863.9 | $1,439.8 | $807.1 | 0% |
| Adjusted EBITDA—Epoxy Division | 65% | | $182.6 | $137.0 | $228.3 | $154.0 | 44.7% |
| Adjusted Cash Flow—CAPV & Epoxy (Chemicals) | 15% | | $945.1 | $708.8 | $1,181.4 | $725.0 | 8.0% |
For 2019, in calculating Adjusted EBITDA, we used 2019 EBITDA excluding the effect of the following special charges, gains and losses (which were reflected in our 2019 EBITDA): (i) environmental insurance recoveries of $4.8 million, reduced by associated legal costs of $1.1 million, (ii) $11.2 million pretax gain on the sale of our equity interest in a non-consolidated affiliate, (iii) restructuring charges of $15.3 million, and (iv) $0.6 million of costs related to the Lake City U.S. Army ammunition facility transition.
Adjusted Cash Flow represents our after taxafter-tax operating cash flows of the business, including interest paid and changes in working capital, reduced by capital expenditures,expenditures.
For 2019, in calculating Adjusted EPS, we used 2019 net loss excluding the after-tax effect of the following special charges, gains and excluding proceeds fromlosses (which were reflected in our 2019 net loss): (i) environmental insurance recoveries. For theserecoveries of $4.8 million, reduced by associated legal costs of $1.1 million, (ii) $11.2 million pretax gain on the sale of our equity interest in a non-consolidated affiliate, (iii) restructuring charges of $15.3 million, (iv) $0.6 million of costs related to the Lake City U.S. Army ammunition facility transition, and (v) $14.3 million tax benefit related to the finalization of the IRS review of the tax years 2013 to 2015.
As described above, for the NEOs, the
80% portion of the
cash incentiveSTIP target award related to financial targets
(80%) would be paid at the target award level (set forth in the Grants of Plan-Based Awards table) if our Adjusted EBITDA, Adjusted Cash Flow and Adjusted EPS equal the financial performance targets. If any of the three metrics fall above or below the target level, the committee adjusts the
STIP cash
incentive, typically by a proportionate adjustment—payment as described above. In the event that
is, by dividing actual Adjusted EBITDA
(Adjusted Cash Flow or Adjusted EPS) byis below the threshold level (75%) of the target Adjusted EBITDA,
(Adjusted Cash Flow or Adjusted EPS), and multiplying that percentage by 50% (or 15%, as applicable). Awardsall STIP payments for
NEOs are subject to a maximum award level—200% of base salary for all NEOs other than Messrs. Dawson and Varilek, which are capped at 200% of the
target award level, as required by their executive retention agreements. | | | | | | | | | | | | | | |
Financial Performance Objectives
| |
| | 2017 Target
| | | 2017 Actual
| | | Weighting
| |
Adjusted EBITDA | | | | $ | 925.0 MM | | | $ | 993.7 MM | | | | 50 | % |
Adjusted Cash Flow | | | | $ | 193.0 MM | | | $ | 36.0 MM | | | | 15 | % |
Adjusted EPS | | | | $ | 0.80 | | | $ | 0.933 | | | | 15 | % |
Thefinancial portion of the actual awardsSTIP award (80% in 2019) are discretionary.
The NEOs with corporate-wide responsibility (Messrs. Fischer, Slater and McIntosh) received no STIP payment for the
NEOsportion of the award related to Adjusted EBITDA,
compared to the 2017 financial target represented achievement of 53.7% of the financial objective, the Adjusted Cash Flow
compared toand Adjusted EPS as the
2017 financial target represented achievement of 2.8%performance threshold was not met for any of the
three financial
objective, and the Adjusted EPS of $0.933 compared to the 2017 financial target represented achievement of 17.5% of the financial objective.Non-Financial Objectives.In 2017, safety and environmental compliance and operational and strategic goals comprised 20% of the award opportunitymetrics.
As noted above, for our NEOs. Operational goals relating to cost reductions and synergies accounted for 10% of the award opportunity. Strategic goals relating to development of long-term strategic plans for each of the businesses accounted for 5% of the award opportunity. Safety objectives accounted for 5% of the award opportunity.
The table below illustrates the 2017 level of achievement for thesenon-financial objectives:
| | |
Objective
| | 2017
Performance
|
Operational goals
| | 7.5% |
Strategic goals
| | 4% |
Safety and environmental compliance
| | 3% |
In 2017, the committee determined that these NEOs achieved a total of 14.5% out of a possible 20% of thenon-financial objectives.
NEOs with Divisional Responsibilities.For each of Messrs. Dawson and Varilek, 25% of the cash incentive was based on corporate results and 75% on division results. Of the 75% component related to division objectives, 25% (or 18.75% of the total cash incentive) related to divisionnon-financial objectives and the remaining 75% (or 56.25% of the total cash incentive) was based on Adjusted Division EBITDA and Adjusted Division Cash Flow.
Financial Targets.For Mr. Dawson, who had Epoxy division responsibility for 2017,2019, his division financial targets and achievement against those targets are set forth in the following chart:
| | | | | | | | | | | | | | |
Division Financial Targets
| |
| | 2017 Target
| | | 2017 Actual
| | | Weighting
| |
Adjusted Division EBITDA
| | | | $ | 133.0 MM | | | $ | 110.2 MM | | | | 50 | % |
Adjusted Division Cash Flow
| | | | $ | 517.0 MM | | | $ | 358.2 MM | | | | 25 | % |
represented achievement of 44.7% for Adjusted Division EBITDA and 8% for Adjusted Chemicals Cash Flow.
For Mr. Varilek, who had
Chlor Alkali Vinyls and Services division responsibility for
2017,both Chemicals businesses for 2019, his division financial targets and achievement against those targets
are set forth inrepresented achievement of 44.7% for Adjusted Division EBITDA–Epoxy and 8% for Adjusted Chemicals Cash Flow. Mr. Varilek received no STIP payment for the
following chart: | | | | | | | | | | | | | | |
Division Financial Targets
| |
| | 2017 Target
| | | 2017 Actual
| | | Weighting
| |
Adjusted Division EBITDA
| | | | $ | 715.0 MM | | | $ | 865.0 MM | | | | 50 | % |
Adjusted Division Cash Flow
| | | | $ | 517.0 MM | | | $ | 358.2 MM | | | | 25 | % |
portion of the award related to Adjusted EBITDA–CAPV as the performance threshold was not met.
Non-Financial Objectives. Division Objectives.The 2017 levelIn 2019, safety and environmental, operation and strategic goals comprised 20% of achievementthe STIP award opportunity for each divisionalour NEOs.
non-financial
objective by Messrs. Dawson and Varilek is set forth below:Mr. Dawson achieved 19%
| | | | | | | | | | | | | | | | | | | | | | | |
| Performance Goal | Corporate | | CAPV | | Epoxy | |
| | Possible | Achieved | Possible | Achieved | Possible | Achieved |
| Operational Goals | 5% | | 5% | | 9% | | 9% | | 9% | | 9% | |
| Strategic Goals | 10% | | 10% | | 6% | | 6% | | 6% | | 6% | |
| Safety and Environmental Goals | 5% | | 5% | | 5% | | 5% | | 5% | | 5% | |
| Total | 20% | | 20% | | 20% | | 20% | | 20% | | 20% | |
For 2019, all NEOs earned 20% of their target STIP award, out of a possible
25%20%, related to achievement of
hisnon-financial objectives as follows: | · | | Safety and environmental compliance—2% out of a possible 6%
|
| · | | Operational goals—5% out of a possible 5%
|
| · | | Strategic goals—12% out of a possible 14%
|
Mr. Varilek achieved 18% out of a possible 25% of hisnon-financial objectives as follows:
| · | | Safety and environmental compliance—2% out of a possible 6%
|
| · | | Operational goals—6% out of a possible 8%
|
| · | | Strategic goals—10% out of a possible 11%
|
2018 Annual Cash Incentive Awards.The committee has determined that 80% of the 2018 annual cash incentive award will be tied to corporate financial objectives and 20% will be tied to
corporatenon-financial objectives for NEOs with corporate-wide responsibilities. For NEOs with divisional responsibilities, 75% of the award will be tied to financial objectives (split 75%/25% between division and corporate objectives) and 25% of the award will be tied to non-financial objectives (again split 75%/25% between division and corporate objectives). The committee also established the maximum cash incentive award for each NEO at 200% of his base salary, and established a maximum pool for all 2018 annual cash incentives for the NEOs and MICP participants at 6% of adjusted net income. Because of recent changes in the Code, performance-based awards are no longer exempt from the $1 million cap on compensation deductions for NEOs.
objectives.
Long-Term Incentive (Equity) Compensation
In
2017,2019, we allocated the value of long-term incentive (equity) compensation awards equally between performance shares and stock options.
| | | | | | | | |
| | |
Why Stock Options? | | Why Performance Shares? |
·• Performance-based because their value is solely tied to Olin’s stock price, which directly correlates to our shareholders’ interests.·• Fosters an environment focused on long-term growth and shareholder value creation.·• Declines in stock price following the grant of stock options detrimentally impact executive pay (i.e., when a stock option is “underwater” it has no value).·• Highly valued by employees; an important retention tool.
| | ·• Performance-based both because the number of shares earned depends on performance againstpre-defined financial goals and the value of the shares fluctuates based on the stock price.·• Motivates decision making that maximizes performance over a multi-year timeframe.·• Tied to key financial metrics—return on capital for 2015 and 2016 awards and both relative total shareholder return and net income for 2017 awards.income.·• Coordinates the activities of all award recipients (including our NEOs) in support of long-term organizational value enhancement.
|
All long-term incentive (equity) compensation plan participants, including NEOs, are assigned target award levels consistent with the competitive data analysis described above under the heading “Benchmarking.”
The target equity award levels for
20172019 were:
| | | | |
NEO
| | Target Award
| |
John E. Fischer | | $ | 3,850,000 | |
Todd A. Slater | | $ | 925,000 | |
Pat D. Dawson | | $ | 1,500,000 | |
John L. McIntosh | | $ | 975,000 | |
James A. Varilek | | $ | 715,000 | |
| | | | | | | | | | | |
| NEO | | Target Award |
| John E. Fischer | | $5,750,000 | |
| Todd A. Slater | | $1,250,000 | |
| Pat D. Dawson | | $1,500,000 | |
| John L. McIntosh | | $1,050,000 | |
| James A. Varilek | | $1,190,000 | |
These target awards are allocated equally between stock options and performance shares. The process the committee follows to determine the level of the actual stock option awards and the formula for actual performance share payouts is described below.
Performance Shares.Half the value of each participant’s 20172019 long-term incentive target award value was delivered in performance shares. The target number of performance shares awarded to each NEO was formulated by dividing half the participant’s target award value by the Black-Scholesfair market value of a performance share.our common stock (the average of the high and low per share sales price of our common stock on the NYSE on the grant date). The total number of performance shares that vest and will be paid to each NEO from awards made in 2017 varies2019 will vary between 0 and 200% of his target number.For 2017 awards,
Half of the
valuetarget number of
half of all performance shares will be
earned based on our relative shareholder return (TSR) over the three-year period ending December 31,
2019.2021. The comparison of our TSR over that period
of time will be made relative to the community of companies in the S&P 1000 Material Index, plus
threetwo selected direct
competitors- competitors–Occidental Petroleum Corporation
DowDupont and Westlake Chemical Corporation. We refer to this group of companies as the Performance Share Comparison Group. The remaining half of
the target number of performance shares
arewill be earned based on our
actual net income
performance compared to the net income goal set by the committee for the same three-year period. The following charts
illustrateidentify the
portionrelationship between the target number of
target TSR Performance Shares
earned and
the portion of target Net Income Performance Shares that will be paid based on the performance
levels reached:generated:
| | | | | |
| If Olin’s TSR for a Performance Cycle is: | | The number of TSR Performance Shares paid as a
percentage of the target TSR Performance
ShareAward Share Award will be: |
At or above the 80th Percentile of the Performance Share Comparison Group | | 200% |
| | |
Above the 50th Percentile, but below the 80th Percentile of the TSR for the Performance Share Comparison Group | | 100% of the target number of TSR Performance Shares plus 3.33% of the target number of TSR Performance Shares for each incremental percentile position above the 50th Percentile |
| |
At the 50th Percentile of the TSR for the Performance Share Comparison Group | | 100% of the target number of TSR Performance Shares |
| |
Above the 20th Percentile, but below the 50th Percentile of the TSR for the Performance Share Comparison Group | | 25% of the target number of TSR Performance Shares plus 2.5% of the target number of TSR Performance Shares for each incremental percentile position above the 20th Percentile |
| |
At the 20th Percentile of the TSR for the Performance Share Comparison Group | | 25% of the target number of TSR Performance Shares |
| |
Below the 20th Percentile of the TSR for the Performance Share Comparison Group | | 0 |
| | | | | |
| If Olin’s Net Income for a Performance Cycle is: | | The number of Net Income Performance Shares
paid as a percentage of the target Net Income
Performance Share Award will be: |
| At least 140% of the Net Income Goal | | 200% |
| | |
| More than 100% but less than 140% of the Net Income Goal | | 100% of the target number of Net Income Performance Shares plus a proportionate number of target Net Income Performance Shares determined using linear interpolation |
| |
| 100% of the Net Income Goal | | 100% |
| | |
| More than 60% but less than 100% of the Net Income Goal | | 50% of the target number of Net Income Performance Shares plus a proportionate number of target Net Income Performance Shares determined using linear interpolation |
| |
| 60% of the Net Income Goal | | 50% |
| | |
Less than 60% of the Net Income Goal | | 0 |
For outstanding performance awards granted in 2015 and 2016, the number of performance shares that may be received vary between 25% and 150% of the NEO’s target number, depending on our average annual return on capital for the relevant three-year period, in relation to the average annual return on capital generated for that period by the Performance Share Comparison Group, as shown in the following chart:
| | |
Olin average annual return on capital
for three-year period compared to
Performance Share Comparison
Group:
| | Percentage of target number of
performance shares that vest:
|
Quintile 5
| | 150% |
Quintile 4
| | 125% |
Quintile 3
| | 100% |
Quintile 2
| | 50% |
Quintile 1
| | 25% |
Stock Options.The remaining half of each participant’s long-term incentive (equity) target award value is delivered in stock options. Stock options are granted annually from a committee-approved pool of option shares. Specifically, the pool of stock options available for issuance each year equals half the value of the overall long-term incentive award value, divided by the Black-Scholes value of options for our common stock (not to be lower than 20% of the then-current market price of our common stock).We
The committee typically approveapproves option awards at the first committee meeting each year. In 2017,2019, the first committee meeting was January 26, 2017.24, 2019. At that meeting, the committee approved the granting of options effective on February 10, 2017, with an19, 2019. The exercise price of $29.75on February 19, 2019 was $26.26 per share, the average of the high and low per share sales price of our common stock on the NYSE on Februarythat date. These awards were made consistent with past practice in which the awards have:
•a grant effective date approximately 10 2017. Whenbusiness days after the first scheduled meeting occurs before or nearrelease of year-end earnings; and
•an exercise price equal to fair market value on the time we release ouryear-endgrant effective date. earnings report, the committee has granted stock options: | · | | with a grant effective date approximately 10 days after the release ofyear-end earnings; and
|
| · | | with an exercise price equal to fair market value on the grant effective date.
|
This practice ensures that the exercise price for stock options reflects all current information. Although we have no formal policy on granting options at a time when inside information may exist, the committee follows the procedure we describe above when necessary to ensure that option exercise prices reflect full disclosure of prior year earnings information. We have not engaged in “back dating” of options, as our policies do not allow back dating. In addition, our equity plans do not permit option grants with an exercise price below the fair market value of our stock on the effective date of the option grant.
The CEO also has authority to grant a
very limited number of options at other times during the year (no more than
50,000100,000 total shares or 5,000 shares per employee) but may not grant options to anyone who is an officer within the definition of the rules under Section 16 of the Exchange Act, or “back date” any options. Consistent with the terms of our equity plans, options granted by the CEO may not have an exercise price below the fair market value of our stock on the effective date of the option grant.
Restricted Stock.In April of 2019, the committee awarded 5,000 restricted stock units that vest on April 1, 2022, to Mr. Varilek in connection with his promotion to Executive Vice President and Chief Operating Officer. In addition, as noted above, the committee froze salaries at 2019 levels for NEOs and other senior employees. In lieu of a 2020 salary adjustment, the committee awarded restricted stock units on January 2, 2020, vesting on January 2, 2023, to those senior management employees affected by the salary freeze. For the NEOs, the number of shares of restricted stock issuable upon vesting of these restricted stock units represents approximately 3% of base salary, calculated based on the fair market value of our stock on the grant date, rounded to the nearest 10 shares. The committee does not award restricted stock or restricted stock units to NEOs on any regular basis.
Clawback Policy
As a participant in the SMICP, each
Each of our NEOs is subject to a clawback policy that applies to all of our executive officers. Amounts that we recover are not included in calculating that executive’s benefits under our Supplemental CEOP, and our recovery of amounts under the policy does not constitute an event that triggers benefits under our severance
agreements.plans. In addition to the clawback policy, our equity plans provide that if a participant renders service to one of our competitors, or discloses confidential information without our consent, or violates other terms of the plan, the committee may terminate any unvested, unpaid or deferred awards held by the participant, or may require the participant to forfeit benefits received under the plan within the six months before the participant’s action.
We also offer a small number of other personal benefits to groups of employees, including our NEOs. We extend some benefits, such as a portion of health insurance premiums and certain retirement benefits, to all eligible employees. We tie the size and construction of these benefits to competitive practices in the market, a decision the committee believes enables us to attract and retain executives with the talents and skill sets we require. We provide other compensatory items, such as certain life insurance benefits and the retirement and change in control benefits described below, to our NEOs and other
senior managers.officers.
Retirement Benefits.We offer retirement benefits as part of the package to recruit and retain employees. Our retirement benefits also reflect an individual’s contributions over his or her career with Olin, as those benefits are based on compensation. In general, we establish retirement benefits based on comparable programs offered by competitors. The committee believes that retirement plans like ours are commonly provided to executives at other companies, and offering these benefits helps us remain competitive for qualified senior-level executive talent. We periodicallyre-evaluate and update those plans to respond to changes in the market.
The following chart summarizes the benefits under our active retirement plans for salaried employees:
| | | | | | | | | | | | | | |
| | | | |
Plan Title
| | Participants/Purpose
| | Benefits
|
Olin Corporation Contributing
Employee Ownership Plan (the CEOP)—Employee Savings Account | | Salaried employees—to provide employees with a tax effective savings vehicle to save primarily for retirement | | Eligible employees may makepre-tax contributions (401(k)), Roth 401(k) contributions and after tax contributions. They may contribute up to 80% of eligible compensation (subject to various Code limits, including the 20172019 pre-tax and Roth 401(k) contribution limit of $18,000)$19,000). Olin generally matches a portion of base payeligible compensation that the participant contributes to the plan |
| | | | |
| CEOP—Defined Contribution Retirement Account | | Salaried employees—to provide retirement benefits in lieu of benefits formerly provided under the Olin Corporation Employees’ Pension Plan (Qualified Plan) prior to benefit accrual freeze | | For eligible employees, Olin makes contributions to the Defined Contribution Retirement Account ofbased on a percentage of eligible compensation |
| | | | |
| Supplemental CEOP—Employee Savings Account | | Senior management (including former Dow employees effective 1/1/18)—management—to compensate for Code limits on CEOP contributions | | Eligible employees may makepre-tax contributions on eligible compensation in excess of Code limits and generally receive Olin matching contributions at the same percentages as the CEOP |
| | | | |
| Supplemental CEOP—Defined Contribution Retirement Account | | Senior management (including former Dow employees effective 1/1/18)—management—to compensate for Code limits on CEOP contributions | | Olin also makes contributions on eligible compensation in excess of Code limits at the same percentages as the CEOP Defined Contribution Retirement Account |
The Supplemental CEOP is an unfunded, nonqualified deferred compensation plan for most of the NEOs and a select group of other senior management employees.
Through 2017, former Dow employees (including Messrs. Dawson and Varilek) have slightly different terms for participation in the Supplemental CEOP to mirror their benefits while at Dow. The committee believes that historically it was common for companies to offer these kinds of nonqualified retirement supplements to executives and offering these benefits has allowed us to remain competitive in the market for qualified senior-level executive talent. Because this plan is unfunded, participants receive benefits only if we have the financial resources to make the payments when due.
Severance and Change in Control Plans.We have historically provided change in control benefits to our senior management to ensure that our executives worked to secure the best outcome for shareholders in the event of a possible change in control, even if it meant that they lost their jobs as a result. Those change in control and severance plans are described under “Potential Payments Upon Termination or Change in Control” and “Executive Severance Plans.”
Risk Assessment.Assessment. Management and the committee regularly evaluate the risks involved with our compensation programs. In January 2018,2020, we conducted a comprehensive risk assessment. The risk assessment includedafter compiling an inventory of incentive plans and programs and conducting an analysis of the risk involvedassociated with each. The assessment considered factors such as the plan metrics, number of plan participants, maximum payments, and risk mitigation factors. Exequity reviewed the risk assessment and advised the committee that it did not have any concerns aboutof its comfort with the level of risk assessment process or its conclusions.inherent in Olin’s compensation programs. Based on the committee’s review of the risk assessment and Exequity’s input, the committee concluded that it did not believe any of our compensation programs or policies create risks that are reasonably likely to have a material adverse impact on Olin. Based on this conclusion, we implemented no material changes to our compensation policies or practices after our risk assessment.
Change in Control Agreements.
We historically provided change in control agreements to our senior management to ensure that our executives work to secure the best outcome for shareholders in the event of a possible change in control, even if it means that they lose their jobs as a result. Currently, each of our NEOs and six other senior executives have agreements that provide certain benefits if the executive’s employment is terminated without cause or constructively terminated after a change in control.We gave notice on August 23, 2016, that those agreements will terminate on January 26, 2019. The committee currently plans to replace those agreements with new change in control agreements at then-current market terms. The current change in control agreements with our NEOs are described in more detail under “Potential Payments Upon Termination or Change in Control.”
Tax and Accounting Considerations
| | |
| Tax and Accounting Considerations |
All elements of compensation, including salaries, generate charges to earnings under generally accepted accounting principles (GAAP). We generally do not adjust compensation based on accounting factors.
The committee considers the deductibility of long-term and annual incentive awards in structuring our executive compensation program, to the extent practical. To hire and retain highly skilled executives and remain competitive, the committee also looks at other factors.
For example, historically, the committee considered thepre-2018 provisions of Code Section 162(m) which permitted deductions for performance-based compensation over $1 million. Prior to 2018, our stock options, the largest portion of our performance shares and our annual cash incentive were intended to meet this exemption for “performance-based” compensation from this Code Section 162(m) deductibility limit.Code Section 409A implemented tax rules applicable to nonqualified deferred compensation arrangements, and Olin has taken steps to comply with such rules to the extent applicable.
As previously noted, Olin’s clawback
policies allowpolicy allows recovery of all or a portion of payments under the
SMICP or the MICPannual cash incentive program and performance share awards from executives who participate in the
SMICPannual cash incentive or the
MICP.Short Term Incentive Program. To recover compensation, our board or the committee must determine that the executive was grossly negligent or engaged in intentional misconduct that was a “significant contributing factor” to:
| (i) | a restatement of our financial statements, or
|
| (ii) | a significant increase in the value of that executive’s incentive awards.
|
(i) a restatement of our financial statements, or
(ii) a significant increase in the value of that executive’s incentive awards.
Amounts recovered are not included in calculating that executive’s benefits under our Supplemental CEOP, and do not trigger benefits under our severance
agreements.plans. In addition, our equity plans provide that if a participant renders service to a competitor, or discloses confidential information without our consent, or violates other terms of the plan, the committee may terminate any unvested, unpaid or deferred awards held by the participant, or may require the participant to forfeit benefits received under the plan within the six months before the participant’s action.
Our equity plans and severance arrangements with NEOsplans do not provide any“gross-up” “gross-up” for the amount of excise tax, if any, due on “excess parachute payments” as defined under Code Section 280G. These agreementsbenefits are described in more detail under “Potential Payments Upon Termination or Change in Control.”
Stock Ownership Guidelines
| | |
| Stock Ownership Guidelines |
Our stock ownership guidelines require executive officers and certain other senior managers to maintain specified ownership levels of our stock within five years after the guideline applies.
Once an officer or other employee covered by the guidelines meets his or her ownership target, such officer or other employee shall not later be deemed non-compliant solely based on a change in the share price of Olin stock. Stringent stock ownership requirements mitigate any risk that options may cause management to focus on short-term stock price movement.
Our committee monitors compliance with the stock ownership guidelines annually. To determine “stock ownership” under the guidelines, we include, in addition to shares the individual owns outright, restricted stock and restricted stock units, shares and phantom shares held in the executive’s CEOP and Supplemental CEOP accounts,
and shares subject to vested stock options with an exercise price below the current market
price and 25% of the total target performance share awards (representing half of the target performance shares that are payable in stock). Beginning in 2018, noprice. No unvested performance share awards
will beare included in the determination of stock ownership.
| | | | | | | | | | | |
| Officer Title
| | | | Base Salary Multiple
|
| CEO | | 6 | |
CEO
| | | 6 | |
Executive Vice President/Senior Vice President | | | 3 | |
| Vice President | | | 2 | |
All of our NEOs met the guidelines
for 2019, to the extent applicable to
them, as of the end of 2017.them.
We describe our stock ownership guidelines for directors under the heading “DIRECTOR COMPENSATION”.COMPENSATION.”
EXECUTIVE COMPENSATION
| | |
| Summary Compensation Table |
The table below summarizes the total compensation paid to or earned by each of the NEOs for the fiscal years ended December 31, 2019, 2018 and 2017:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position (a) | | Year
(b) | | Salary
($)
(c) | | Bonus
(1)
($)
(d) | | Stock
Awards
(2)
($)
(e) | | Option
Awards
(2)
($)
(f) | | Non-equity
Incentive
Plan
Compensation
(3)
($)
(g) | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(4)
($)
(h) | | All Other
Compensation
(5)
($)
(i) | | Total
($)
(j) |
John E. Fischer
Chairman, President and CEO | | 2019 | | $ | 1,150,000 | | | N/A | | $ | 2,378,340 | | | $ | 2,927,080 | | | $ | 299,000 | | | $ | 68,576 | | | $ | 331,045 | | | $ | 7,154,041 | |
| | 2018 | | $ | 1,059,303 | | | N/A | | $ | 1,584,900 | | | $ | 1,893,570 | | | $ | 1,531,878 | | | $ | — | | | $ | 270,692 | | | $ | 6,340,343 | |
| | 2017 | | $ | 960,000 | | | N/A | | $ | 2,712,855 | | | $ | 2,777,460 | | | $ | 1,079,700 | | | $ | 52,113 | | | $ | 197,646 | | | $ | 7,779,774 | |
| | | | | | | | | | | | | | | | | | |
Todd A. Slater
Vice President and CFO | | 2019 | | $ | 600,000 | | | N/A | | $ | 516,936 | | | $ | 636,116 | | | $ | 95,000 | | | $ | 66,263 | | | $ | 120,468 | | | $ | 2,034,783 | |
| | 2018 | | $ | 575,000 | | | N/A | | $ | 396,225 | | | $ | 480,060 | | | $ | 511,520 | | | $ | — | | | $ | 118,586 | | | $ | 2,081,391 | |
| | 2017 | | $ | 544,000 | | | N/A | | $ | 653,700 | | | $ | 669,080 | | | $ | 376,125 | | | $ | 20,391 | | | $ | 92,003 | | | $ | 2,355,299 | |
| | | | | | | | | | | | | | | | | | |
Pat D. Dawson
Executive Vice President and President, Epoxy & International | | 2019 | | $ | 695,000 | | | N/A | | $ | 621,192 | | | $ | 763,880 | | | $ | 351,198 | | | $ | 381,005 | | | $ | 136,333 | | | $ | 2,948,608 | |
| | 2018 | | $ | 675,000 | | | N/A | | $ | 501,885 | | | $ | 613,410 | | | $ | 641,035 | | | $ | — | | | $ | 1,342,007 | | | $ | 3,773,337 | |
| | 2017 | | $ | 655,000 | | | N/A | | $ | 1,078,605 | | | $ | 1,081,420 | | | $ | 460,693 | | | $ | 236,300 | | | $ | 1,047,520 | | | $ | 4,559,538 | |
| | | | | | | | | | | | | | | | | | |
John L. McIntosh
Executive Vice President Synergies and Systems | | 2019 | | $ | 600,000 | | | N/A | | $ | 434,400 | | | $ | 534,716 | | | $ | 100,000 | | | $ | 82,610 | | | $ | 143,818 | | | $ | 1,895,544 | |
| | 2018 | | $ | 577,000 | | | N/A | | $ | 343,395 | | | $ | 408,940 | | | $ | 511,520 | | | $ | — | | | $ | 126,492 | | | $ | 1,967,347 | |
| | 2017 | | $ | 560,000 | | | N/A | | $ | 686,385 | | | $ | 700,200 | | | $ | 354,000 | | | $ | 31,486 | | | $ | 109,017 | | | $ | 2,441,088 | |
| | | | | | | | | | | | | | | | | | |
James A. Varilek
Executive Vice President and Chief Operating Officer | | 2019 | | $ | 609,997 | | | N/A | | $ | 611,044 | | | $ | 605,696 | | | $ | 205,260 | | | $ | 365,644 | | | $ | 112,381 | | | $ | 2,510,022 | |
| | 2018 | | $ | 530,000 | | | N/A | | $ | 343,395 | | | $ | 408,940 | | | $ | 401,505 | | | $ | — | | | $ | 784,614 | | | $ | 2,468,454 | |
| | 2017 | | $ | 487,000 | | | N/A | | $ | 522,960 | | | $ | 513,480 | | | $ | 302,600 | | | $ | 220,795 | | | $ | 729,798 | | | $ | 2,776,813 | |
____________________
(1)The NEOs were not entitled to receive payments which would be characterized as “Bonus” payments. Annual cash incentive payments under our STIP appear in column (g). Each of the NEOs are eligible for certain severance benefits (including additional benefits in the event of a “change in control”), described in more detail under the section entitled “Potential Payments Upon Termination or Change in Control.”
(2) Represents the aggregate grant date fair value of equity awards granted in that year (performance shares and restricted stock units in column (e) and options in column (f)), in each case calculated in accordance with ASC Topic 718. Please see the notes entitled “Stock-Based Compensation” and “Accounting Policies—Stock-Based Compensation” in the notes to our audited financial statements included in our annual report on Form 10-K for the fiscal year in which the award was granted for a discussion of the assumptions underlying these calculations. The performance share amounts in column (e) are calculated based on a payout equal to 100% of the target level for awards made in 2017, 2018 and 2019. Set forth below are the amounts that would have been included for performance share awards, if the grant date fair value had been based on the highest level of performance (for a payout equal to 200% of the target level).
| | | | | | | | | | | | | | | | | | | | |
| NEO | | 2019 Performance
Share / Total | | 2018
Performance Share | | 2017
Performance Share |
| John E. Fischer | | $4,756,680 / $4,756,680 | | | $3,169,800 | | $5,425,710 | |
| Todd A. Slater | | $1,033,872 / $1,033,872 | | | $ 792,450 | | $1,307,400 | |
| Pat D. Dawson | | $1,242,384 / $1,242,384 | | | $1,003,770 | | $2,157,210 | |
| John L. McIntosh | | $868,800 / $868,800 | | | $ 686,790 | | $1,372,770 | |
| James A. Varilek | | $986,088 / $1,104,088 | | | $ 686,790 | | $1,045,920 | |
(3) Amounts listed in this column were determined by the committee under our annual cash incentive program.
(4) Amounts reported in this column represent the total change in the present value of the pension benefits during the applicable year under all of our defined benefit pension plans, and are comprised of the following items:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Increase in Present Value of Pension Benefit Under: | | | | | | | | |
| | | | | | | | |
| NEO | | Year | | Qualified Plan | | Supplemental Plan
(a) | | Senior Plan
(a) |
| | | | | | | | |
| John E. Fischer | | 2019 | | $68,576 | | N/A(a) | | N/A(a) |
| | 2018 | | $(80,393) | | N/A(a) | | N/A(a) |
| | 2017 | | $52,113 | | N/A(a) | | N/A(a) |
| | | | | | | | |
| Todd A. Slater | | 2019 | | $35,234 | | $31,029(b) | | —(b) |
| | 2018 | | $(10,822) | | —(b) | | —(b) |
| | 2017 | | $20,391 | | —(b) | | —(b) |
| | | | | | | | |
| Pat D. Dawson | | 2019 | | $381,005 | | N/A | | N/A |
| | 2018 | | $(90,800) | | N/A | | N/A |
| | 2017 | | $236,300 | | N/A | | N/A |
| | | | | | | | |
| John L. McIntosh | | 2019 | | $82,610 | | N/A(a) | | N/A(a) |
| | 2018 | | $(102,084) | | N/A(a) | | N/A(a) |
| | 2017 | | $31,486 | | N/A(a) | | N/A(a) |
| | | | | | | | |
| James A. Varilek | | 2019 | | $365,644 | | N/A | | N/A |
| | 2018 | | $(91,610) | | N/A | | N/A |
| | 2017 | | $220,795 | | N/A | | N/A |
____________________
(a)All of the accrued benefits under these plans were included in the required payments made in 2015 to participants in connection with our October 2015 acquisition of the U.S. chlor alkali and vinyl, global chlorinated organics and global epoxy business (the Acquisition) of Dow (Required NQ Plan Payments).
(b)Mr. Slater also received his accrued benefits in connection with the Acquisition, but because he was not yet of retirement-eligible age, he did not receive payment for this allowance. As of December 31, 2019, Mr. Slater became entitled to the value of the early retirement allowance (offset by the value of the accrued benefit) at retirement ages below age 65. The value of his remaining early retirement allowance is $31,029. The corresponding values of his remaining early retirement allowance as of December 31, 2017 and December 31, 2018 were $26,733 and $24,887, respectively
Changes in the present value of pension benefits are determined using the assumptions we use for financial reporting purposes and represent changes in assumptions and the fact that each NEO is one year older, rather than any change in the NEO’s accrued pension benefit. For December 31, 2017, the single effective rate (previously described as the ‘discount rate’) was 3.6% for the Qualified Plan and 3.3% for the Supplemental and Senior Plans. For December 31, 2018, the single effective rate (previously described as the ‘discount rate’) was 4.2% for the Qualified Plan and 3.9% for the Supplemental and Senior Plans. For 2019, the single effective rate (previously described as the “discount rate”) was 3.2% for the Qualified Plan and 2.8% for the Supplemental and Senior Plans. For 2017, 2018 and 2019, we used the RP2014
Blue Collar Mortality Tables for Annuitants and Employees, with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projection starting in 2007). Please see the note entitled “Pension Plans and Retirement Benefits” in the notes to our audited financial statements included in our 2019 annual report on Form 10-K for a discussion of these assumptions. The values shown in the table are due to the change of assumptions and the fact that each executive is one year older, as well as the Required NQ Plan Payments. It is not driven by any change in the retirement benefit itself, except for Messrs. Dawson and Varilek. The retirement benefits for Messrs. Dawson and Varilek reflect account balances based on a “pension equity plan” formula acquired from the Dow Employees’ Pension Plan (DEPP), which are then credited with interest until their assumed retirement date. As required by recent federal regulations, effective May 31, 2016, the rate of this credited interest changed from 8% to 6% for the DEPP equity account balances.
To determine the change in the present value of the pension benefits under these plans, for Mr. Slater, we used age 62, the first age at which unreduced pension benefits are payable under the Qualified Plan, the Supplemental Plan and
2015: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position (a)
| | Year
(b)
| | | Salary
($)
(c)
| | | Bonus
(2)
($)
(d)
| | Stock
Awards
(3)
($)
(e)
| | | Option
Awards
(3)
($)
(f)
| | | Non-equity
Incentive
Plan
Compensation
(4)
($)
(g)
| | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings (5)
($)
(h)
| | | All Other
Compensation
(6)
($)
(i)
| | | Total
($)
(j)
| |
John E. Fischer | | | 2017 | | | $ | 960,000 | | | N/A | | $ | 2,712,855 | | | $ | 2,777,460 | | | | $1,079,700 | | | | $ 52,113 | | | | $ 197,646 | | | $ | 7,779,774 | |
| Chairman, President and CEO | | | 2016 | | | $ | 836,000 | | | N/A | | $ | 1,325,320 | | | $ | 334,875 | | | | $ 589,608 | | | | $ 64,075 | | | | $ 152,749 | | | $ | 3,302,627 | |
| | | 2015 | | | $ | 543,000 | | | N/A | | $ | 673,200 | | | $ | 535,500 | | | | $ 364,800 | | | | $ — | | | | $2,940,490 | (1) | | $ | 5,056,990 | |
| | | | | | | | | |
Todd A. Slater | | | 2017 | | | $ | 544,000 | | | N/A | | $ | 653,700 | | | $ | 669,080 | | | | $ 376,125 | | | | $ 20,391 | | | | $ 92,003 | | | $ | 2,355,299 | |
| Vice President and CFO | | | 2016 | | | $ | 518,000 | | | N/A | | $ | 701,640 | | | $ | 175,275 | | | | $ 256,500 | | | | $ 12,764 | | | | $ 86,442 | | | $ | 1,750,621 | |
| | | 2015 | | | $ | 431,008 | | | N/A | | $ | 314,160 | | | $ | 260,100 | | | | $ 239,200 | | | | $ — | | | | $ 181,509 | (1) | | $ | 1,425,977 | |
| | | | | | | | | |
Pat D. Dawson (1) | | | 2017 | | | $ | 655,000 | | | N/A | | $ | 1,078,605 | | | $ | 1,081,420 | | | | $ 460,693 | | | | $236,300 | | | | $1,047,520 | | | $ | 4,559,538 | |
| Executive Vice President and President, Epoxy & International | | | 2016 | | | $ | 636,000 | | | N/A | | $ | 1,286,340 | | | $ | 324,900 | | | | $ 395,733 | | | | $ — | | | | $ 510,436 | | | $ | 3,153,409 | |
| | | 2015 | | | $ | 154,485 | | | N/A | | $ | — | | | $ | — | | | | $ 224,004 | | | | $ — | | | | $ 39,909 | | | $ | 418,398 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
John L. McIntosh | | | 2017 | | | $ | 560,000 | | | N/A | | $ | 686,385 | | | $ | 700,200 | | | | $ 354,000 | | | | $ 31,486 | | | | $ 109,017 | | | $ | 2,441,088 | |
| Executive Vice President Synergies and Systems | | | 2016 | | | $ | 509,000 | | | N/A | | $ | 682,150 | | | $ | 173,850 | | | | $ 264,708 | | | | $ 30,257 | | | | $ 99,594 | | | $ | 1,759,559 | |
| | | 2015 | | | $ | 494,004 | | | N/A | | $ | 1,870,500 | | | $ | 459,000 | | | | $ 300,800 | | | | $ — | | | | $3,868,277 | (1) | | $ | 6,992,581 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| James A. Varilek (1) | | | 2017 | | | $ | 487,000 | | | N/A | | $ | 522,960 | | | $ | 513,480 | | | | $ 302,600 | | | | $220,795 | | | | $ 729,798 | | | $ | 2,776,813 | |
Executive Vice President and President, CAV & Services | | | 2016 | | | $ | 447,000 | | | N/A | | $ | 545,720 | | | $ | 135,375 | | | | $ 213,528 | | | | $ — | | | | $ 474,052 | | | $ | 1,815,675 | |
| | | 2015 | | | $ | 101,025 | | | N/A | | $ | — | | | $ | — | | | | $ 105,796 | | | | $ — | | | | $ 32,730 | | | $ | 239,551 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Generally, the Senior Plan provides a 50% benefit to the executive’s surviving spouse (which we refer to as a “joint and survivorship benefit”) without an actuarial reduction in payments during the executive’s lifetime. An executive also can elect to have payments under the Qualified Plan and the Supplemental Plan extend for the remainder of his or her spouse’s lifetime, but such an election results in an actuarial reduction to benefits paid under those plans. Benefits paid from the Senior Plan are increased by the amount of the actuarial reduction under the Qualified Plan and the Supplemental Plan for a 50% joint and survivorship benefit. However, the value of this benefit was included in the Required NQ Plan Payments. In accordance with the SEC regulations, the pension benefits in the Summary Compensation Table reflect benefits payable in the form of a single life annuity payable only during the life of the executive, and do not reflect any joint and survivorship benefit.
(5) Amounts reported in this column for 2019 are comprised of the following items:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| Executive Officer | | Life Insurance Premiums (a) | | CEOP/Supplemental
CEOP–Retirement
Account (b) | | Perquisites and
other Personal
Benefits (a) | | Other
Acquisition-
Related
Payments (c) | | Total |
| John E. Fischer | | $ | 71,300 | | | $ | 258,641 | | | $ | 1,104 | | | N/A | | $ | 331,045 | |
| Todd A. Slater | | $ | 6,000 | | | $ | 113,364 | | | $ | 1,104 | | | N/A | | $ | 120,468 | |
| Pat D. Dawson | | $ | 1,145 | | | $ | 134,084 | | | $ | 1,104 | | | N/A | | $ | 136,333 | |
| John L. McIntosh | | $ | 31,700 | | | $ | 111,014 | | | $ | 1,104 | | | N/A | | $ | 143,818 | |
| James A. Varilek | | $ | 1,028 | | | $ | 106,363 | | | $ | 1,104 | | | $ | 3,886 | | | $ | 112,381 | |
____________________
(a)Messrs. Dawson and Varilek receive life insurance in an amount equal to their base salary. The other NEOs participate in the key executive life insurance program, consisting of three types of benefits: active employee life insurance, retiree life insurance and survivor income benefits. In this program, at the executive’s option, the survivor income benefit may be exchanged for additional cash value. The amounts shown represent the total premiums we paid in 2019, for the benefits under the relevant program.
(b) The amounts shown represent Olin’s contributions of a total of 7.5% of eligible compensation to the Retirement Account portion of the CEOP and the Supplemental CEOP, as well as Olin matching contributions to the CEOP and the Supplemental CEOP during 2019.
(c) The amount in this column represents relocation payments on behalf of Mr. Varilek related to his transfer to corporate headquarters.
(1) | Messrs. Dawson and Varilek joined Olin in connection with the October 2015 acquisition of the U.S. chlor alkali and vinyl, global chlorinated organics and global epoxy business (the Acquisition) of Dow. The Acquisition triggered change in control provisions in four of our nonqualified pension and deferred compensation plans (the NQ Plans). We were unable to amend those provisions, which had been in effect for more than 30 years, because of the deferred compensation rules under Section 409A of the Code, and so were required to pay out all benefits previously accrued under those plans (the Required NQ Plan Payments). These payments are reflected in the “All Other Compensation” column for 2015 above, and represent benefits accrued by those NEOs over many years of prior service to Olin.
|
(2) | The NEOs were not entitled to receive payments which would be characterized as “Bonus” payments. Annual cash incentive payments under the SMICP appear in column (g). Each of the NEOs has one or more agreements that provide for certain severance benefits (including additional benefits in the event of a “change in control”), described in more detail under the section entitled “Potential Payments Upon Termination or Change in Control.”
|
(3) | Represents the aggregate grant date fair value of equity awards granted in that year (performance shares and restricted stock units in column (e) and options in column (f)), in each case calculated in accordance with ASC Topic 718. Please see the notes entitled “Stock-Based Compensation” and “Accounting Policies—Stock-Based Compensation” in the notes to our audited financial statements included in our annual report on Form 10-KProxy Statement Table of Contents for the fiscal year in which the award was granted for a discussion of the assumptions underlying these calculations. The performance share amounts in column (e) are calculated based on a payout equal to 100% of the target level for awards made in 2015, 2016 and 2017. Set forth below are the amounts that would have been included for performance share awards (as well as the total amount in column (e)), if the grant date fair value had been based on the highest level of performance (for a payout equal to 150% of the target level for 2015 and 2016, and 200% for 2017).
|
| | |
| Grants of Plan-Based Awards | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name (a) | | Grant
Date
(b) | | Compensation
Committee
Meeting
Date | | Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards (1) | | | | | | Estimated Future
Payouts Under Equity
Incentive Plan
Awards (2) | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) (i) | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(3)
(j) | | Exercise
or Base
Price of
Option
Awards
($/
Share)
(3)
(k) | | Grant
Date Fair
Value of
Stock
and
Option
Awards
(4)
(l) |
| | | | | | Thres
hold
($)
(c) | | Target
($)
(d) | | Maximum
($)
(e) | | Threshold
(#)
(f) | | Target
(#)
(g) | | Maxi-
mum
(#)
(h) | | | | | | | | |
| John E. Fischer | | 2/19/2019 | | 01/24/2019 | | — | | | $ | 1,495,000 | | | $ | 2,990,000 | | | | | | | | | — | | | | | | | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | — | | | 109,500 | | | 219,000 | | | — | | | | | | | $ | 2,378,340 | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | | | | | | | — | | | 433,000 | | | $ | 26.26 | | | $ | 2,927,080 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Todd A. Slater | | 2/19/2019 | | 01/24/2019 | | — | | | $ | 475,000 | | | $ | 950,000 | | | | | | | | | — | | | | | | | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | — | | | 23,800 | | | 47,600 | | | — | | | | | | | $ | 516,936 | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | | | | | | | — | | | 94,100 | | | $ | 26.26 | | | $ | 636,116 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| Pat D. Dawson | | 2/19/2019 | | 01/24/2019 | | — | | | $ | 590,000 | | | $ | 1,180,000 | | | | | | | | | — | | | | | | | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | — | | | 28,600 | | | 57,200 | | | — | | | | | | | $ | 621,192 | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | | | | | | | — | | | 113,000 | | | $ | 26.26 | | | $ | 763,880 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| John L. McIntosh | | 2/19/2019 | | 01/24/2019 | | — | | | $ | 500,000 | | | $ | 1,000,000 | | | | | | | | | — | | | | | | | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | — | | | 20,000 | | | 40,000 | | | — | | | | | | | $ | 434,400 | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | | | | | | | — | | | 79,100 | | | $ | 26.26 | | | $ | 534,716 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| James A. Varilek | | 2/19/2019 | | 01/24/2019 | | — | | | $ | 480,000 | | | $ | 960,000 | | | | | | | | | — | | | | | | | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | — | | | 22,700 | | | 45,400 | | | — | | | | | | | $ | 493,044 | |
| | 2/19/2019 | | 01/24/2019 | | | | | | | | | | | | | | — | | | 89,600 | | | $ | 26.26 | | | $ | 605,696 | |
| | 4/01/2019 | | 04/01/2019 | | | | | | | | | | | | | | 5,000 | | | | | | | $ | 118,000 | |
____________________
(1) Amounts in these columns represent the potential annual cash incentives established in early 2019. Actual amounts were determined and paid in early 2020, and are included under column (g) in the Summary Compensation Table. We discuss our annual incentive program under the heading “COMPENSATION DISCUSSION AND ANALYSIS—What We Pay and Why: Elements of Compensation.”
(2) Numbers in these columns represent awards of performance shares under our Performance Share Program described below. The amounts in column (h) represent 200% of the target amounts, the maximum payout of the performance shares.
(3) Numbers in these columns for all NEOs represent nonqualified stock options granted under our long-term incentive plans, vesting in three equal annual installments, beginning on the first anniversary of the grant date. The market closing price on the grant date was $26.51, while the options were granted with an option exercise price equal to the average of the high and low sale prices of our common stock on the grant date ($26.26). Option awards are determined on the first regularly-scheduled committee meeting date in a calendar year (in 2019, January 24, 2019). In recent years, the option awards became effective approximately 10 business days after our year-end earnings release (February 19, 2019 for 2019 grants). The effective date of the option grants has always occurred after the meeting at which they are approved, and we have never engaged in “back dating” practices.
(4) Amounts in this column (i) assume payment of performance shares at the target level and (ii) value options using the Black-Scholes value, in each case calculated for financial statement reporting purposes in accordance with ASC Topic 718. Please see the note entitled “Stock-Based Compensation” in the notes to our audited financial statements included in our 2019 annual report on Form 10-K for a discussion of the assumptions underlying these calculations.
(5) Mr. Varilek received a one-time restricted stock unit award on April 1, 2019 vesting on April 1, 2022 in connection with his promotion to Executive Vice President and Chief Operating Officer.
| | |
NEO
| | 2017
Performance Share/Total
| | | 2016
Performance Share/Total
| | | 2015
Performance Share/Total
| |
| | | |
John E. Fischer
| | | $5,425,710 / $5,425,710 | | | | $1,987,980 / $1,987,980 | | | | $1,009,800 / $1,009,800 | |
Todd A. Slater
| | | $1,307,400 / $1,307,400 | | | | $1,052,460 / $1,052,460 | | | | $ 471,240 / $471,240 | |
Pat. D. Dawson
| | | $2,157,210 / $2,157,210 | | | | $1,929,510 / $1,929,510 | | | | N/A | |
John L. McIntosh
| | | $1,372,770 / $1,372,770 | | | | $1,023,225 / $1,023,225 | | | | $ 841,500 / $2,151,000 | |
James A. Varilek
| | | $1,045,920 / $1,045,920 | | | | $ 818,580 / $818,580 | | | | N/A | |
(4) | Amounts listed in this column were determined by the committee under our SMICP, except that the 2015 amounts for Messrs. Dawson and Varilek consist of Olin’s prorated share of the annual cash payment under the Dow plan, as required by the Acquisition agreements between Dow and Olin.
|
(5) | Amounts reported in this column represent the total change in the present value of the pension benefits during the applicable year under all of our defined benefit pension plans, and are comprised of the following items:
|
| | | | | | | | | | | | | | | | |
Increase in Present Value of Pension Benefit Under: | |
NEO
| | Year
| | | Qualified Plan
| | | Supplemental Plan
| | | Senior Plan
| |
| | | | |
John E. Fischer | | | 2017 | | | | $ 52,113 | | | | — | (a) | | | — | (a) |
| | | | 2016 | | | | $ 64,075 | | | | — | (a) | | | — | (a) |
| | | | 2015 | | | | $ (12,352 | ) | | | — | (a) | | | — | (a) |
| | | | |
Todd A. Slater | | | 2017 | | | | $ 20,391 | | | | — | (b) | | | — | (b) |
| | | | 2016 | | | | $ 12,764 | | | | — | (b) | | | — | (b) |
| | | | 2015 | | | | $ (7,230 | ) | | | — | (b) | | | — | (b) |
| | | | |
Pat D. Dawson | | | 2017 | | | | $ 236,300 | | | | N/A | | | | N/A | |
| | | | 2016 | | | | $ (65,465 | ) | | | N/A | | | | N/A | |
| | | | 2015 | | | | $ (2,780 | )(c) | | | N/A | | | | N/A | |
| | | | |
John L. McIntosh | | | 2017 | | | | $ 31,486 | | | | — | (a) | | | — | (a) |
| | | | 2016 | | | | $ 30,257 | | | | — | (a) | | | — | (a) |
| | | | 2015 | | | | $ (10,955 | ) | | | — | (a) | | | — | (a) |
| | | | |
James A. Varilek | | | 2017 | | | | $ 220,795 | | | | N/A | | | | N/A | |
| | | | 2016 | | | | $ (96,817 | ) | | | N/A | | | | N/A | |
| | | | 2015 | | | | $ (3,753 | )(c) | | | N/A | | | | N/A | |
| (a) | All of the accrued benefits under these plans were included in the required payments made in 2015 to participants in connection with the Acquisition.
|
| (b) | Mr. Slater also received his accrued benefits in connection with the Acquisition, but because he is not yet of retirement-eligible age, he is entitled to the value of the early retirement allowance (offset by the value of the accrued benefit) at retirement ages below age 65. The value of his remaining early retirement allowance is $26,733.
|
| (c) | For Messrs. Dawson and Varilek, this amount reflects the period from October 5, 2015 through December 31, 2015.
|
| Changes in the present value of pension benefits are determined using the assumptions we use for financial reporting purposes and represent changes in assumptions and the fact that each NEO is one year older, rather than any change in the NEO’s accrued pension benefit. For October 5, 2015, the single effective rate (previously described as the ‘discount rate’) was 4.3% for the Qualified Plan. For December 31, 2015, the single effective rate (previously described as the ‘discount rate’) was 4.4% for the Qualified Plan and 3.8% for the Supplemental and Senior Plans. For December 31, 2016, the single effective rate (previously described as the ‘discount rate’) was 4.1% for the Qualified Plan and 3.6% for the Supplemental and Senior Plans. For December 31, 2017, the single effective rate (previously described as the ‘discount rate’) was 3.6% for the Qualified Plan and 3.3% for the Supplemental and Senior Plans. For 2015, 2016 and 2017 we used the RP2014 Blue Collar Mortality Tables for Annuitants and Employees, with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projection starting in 2007). Please see the note entitled “Pension Plans and Retirement Benefits” in the notes to our audited financial statements included in our 2017 annual report onForm 10-K for a discussion of these assumptions. The values shown in the table are due to the change of assumptions and the fact that each executive is one year older, as well as the Required NQ Plan Payments. It is not driven by any change in the retirement benefit itself, except for Messrs. Dawson and Varilek. The retirement benefits for Messrs. Dawson and Varilek reflect account balances based on a “pension equity plan” formula acquired from the Dow Employees’ Pension Plan (DEPP), which are then credited with interest until their assumed retirement date. As required by recent federal regulations, effective May 31, 2016, the rate of this credited interest changed from 8% to 6% for the DEPP equity account balances.
Stock Options |
| To determine the change in the present value of the pension benefits under these plans, for Mr. Slater, we used age 62, the first age at which unreduced pension benefits are payable under the Qualified Plan, the Supplemental Plan and the Senior Plan. For Messrs. Fischer and McIntosh, who are eligible for unreduced pension benefits under the Qualified Plan, the Supplemental Plan and the Senior Plan, we used actual age at December 31, 2017. For Messrs. Dawson and Varilek, we used age 65, which is the retirement age at which they can receive their most valuable benefit due to the specific interest crediting feature of their DEPP account balances.
|
| Generally, the Senior Plan provides a 50% benefit to the executive’s surviving spouse (which we refer to as a “joint and survivorship benefit”) without an actuarial reduction in payments during the executive’s lifetime. An executive also can elect to have payments under the Qualified Plan and the Supplemental Plan extend for the remainder of his or her spouse’s lifetime, but such an election results in an actuarial reduction to benefits paid under those plans. Benefits paid from the Senior Plan are increased by the amount of the actuarial reduction under the Qualified Plan and the Supplemental Plan for a 50% joint and survivorship benefit. However, the value of this benefit was included in the Required NQ Plan Payments. In accordance with the SEC regulations, the pension benefits in the Summary Compensation Table reflect benefits payable in the form of a single life annuity payable only during the life of the executive, and do not reflect any joint and survivorship benefit.
|
(6) | Amounts reported in this column for 2017 are comprised of the following items:
|
| | | | | | | | | | | | | | | | | | |
Executive Officer
| | Life Insurance
Premiums (a)
| | | CEOP/Supplemental
CEOP–Retirement
Account (b)
| | | Perquisites and
other Personal
Benefits (a)
| | | Other
Acquisition-
Related
Payments (c)
| | Total
| |
John E. Fischer | | | $ 51,715 | | | | $ 145,021 | | | | $ 910 | | | N/A | | $ | 197,646 | |
Todd A. Slater | | | $ 14,735 | | | | $ 76,358 | | | | $ 910 | | | N/A | | $ | 92,003 | |
Pat D. Dawson | | | $ 5,566 | | | | $ 53,201 | | | | $ 910 | | | $ 987,843 | | $ | 1,047,520 | |
John L. McIntosh | | | $ 29,453 | | | | $ 78,654 | | | | $ 910 | | | N/A | | $ | 109,017 | |
James A. Varilek | | | $ 3,866 | | | | $ 45,396 | | | | $ 910 | | | $ 679,626 | | $ | 729,798 | |
| (a) | Messrs. Dawson and Varilek receive life insurance in an amount equal to their base salary. The other NEOs participate in the key executive life insurance program, consisting of three types of benefits: active employee life insurance, retiree life insurance and survivor income benefits. In this program, at the executive’s option, the survivor income benefit may be exchanged for additional cash value. The amounts shown represent the total premiums we paid in 2017, for the benefits under the relevant program.
|
| (b) | For Messrs. Fischer, Slater, and McIntosh, the amounts shown represent Olin’s contributions of a total of 7.5% of eligible compensation to the Retirement Account portion of the CEOP and the Supplemental CEOP, as well as Olin matching contributions to the CEOP and the Supplemental CEOP during 2017. For Messrs. Dawson and Varilek, the amounts shown represent Olin’s contributions of 10% of their eligible compensation to the Retirement Account portion of the CEOP.
|
| (c) | Amounts in this column for Mr. Dawson consist of an additional $921,000 cash bonus and $58,433 transitional cash payment required by the terms of the agreements signed in connection with the Acquisition and $8,410 in payments for his relocation to our corporate headquarters, and for Mr. Varilek, an additional $606,750 cash bonus and $53,891 transitional cash payment required by the terms of the agreements signed in connection with the Acquisition and $18,985 in payments for his relocation to our corporate headquarters (including $446 taxgross-up).
|
Grants of Plan-Based Awards
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name (a)
| | Grant
Date
(b)
| | | Compen-
sation
Committee
Meeting
Date
| | | Estimated Future
Payouts Under
Non-Equity Incentive
Plan Awards (1)
| | | Estimated Future
Payouts Under Equity
Incentive Plan
Awards (2)
| | | All Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#)
(i)
| | | All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(3)
(j)
| | | Exercise
or Base
Price of
Option
Awards
($/
Share)
(3)
(k)
| | | Grant
Date Fair
Value of
Stock
and
Option
Awards
(4)
(l)
| |
| | | | Thres-
hold
($)
(c)
| | Target
($)
(d)
| | | Maximum
($)
(e)
| | | Threshold
(#)
(f)
| | | Target
(#)
(g)
| | | Maxi-
mum
(#)
(h)
| | | | | |
John E. Fischer | | | 2/10/2017 | | | | 1/26/2017 | | | — | | $ | 1,220,000 | | | $ | 1,920,000 | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | — | | | | 83,000 | | | | 166,000 | | | | — | | | | | | | | | | | $ | 5,425,710 | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 357,000 | | | | $29.75 | | | $ | 2,777,460 | |
| | | | | | | | | | | | |
Todd A. Slater | | | 2/10/2017 | | | | 1/26/2017 | | | — | | $ | 425,000 | | | $ | 1,088,000 | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | — | | | | 20,000 | | | | 40,000 | | | | — | | | | | | | | | | | $ | 1,307,400 | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 86,000 | | | | $29.75 | | | $ | 669,080 | |
| | | | | | | | | | | | |
Pat D. Dawson | | | 2/10/2017 | | | | 1/26/2017 | | | — | | $ | 573,000 | | | $ | 1,146,000 | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | — | | | | 33,000 | | | | 66,000 | | | | — | | | | | | | | | | | $ | 2,157,210 | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 139,000 | | | | $29.75 | | | $ | 1,081,420 | |
| | | | | | | | | | | | |
John L. McIntosh | | | 2/10/2017 | | | | 1/26/2017 | | | — | | $ | 400,000 | | | $ | 1,120,000 | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | — | | | | 21,000 | | | | 42,000 | | | | — | | | | | | | | | | | $ | 1,372,770 | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 90,000 | | | | $29.75 | | | $ | 700,200 | |
| | | | | | | | | | | | |
James A. Varilek | | | 2/10/2017 | | | | 1/26/2017 | | | — | | $ | 322,000 | | | $ | 644,000 | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | — | | | | 16,000 | | | | 32,000 | | | | — | | | | | | | | | | | $ | 1,045,920 | |
| | | | 2/10/2017 | | | | 1/26/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 66,000 | | | | $29.75 | | | $ | 513,480 | |
(1) | Amounts in these columns represent the potential annual cash incentives established in early 2017, under our SMICP. Actual amounts were determined and paid in early 2018, and are included under column (g) in the Summary Compensation Table. We discuss the SMICP and our annual incentive program under the heading “COMPENSATION DISCUSSION AND ANALYSIS—What We Pay and Why: Elements of Compensation”.
|
(2) | Numbers in these columns represent awards of performance shares under our Performance Share Program described below. The amounts in column (h) represent 200% of the target amounts, the maximum payout of the performance shares.
|
(3) | Numbers in these columns for all NEOs represent nonqualified stock options granted under our long-term incentive plans, vesting in three equal annual installments, beginning on the first anniversary of the grant date. The market closing price on the grant date was $29.81, while the options were granted with an option exercise price equal to the average of the high and low sale prices of our common stock on the grant date ($29.75). Option awards are determined on the first regularly-scheduled committee meeting date in a calendar year (in 2017, January 26, 2017). In recent years, committee meetings have been held before (or shortly after) the time we issued ouryear-end earnings press release, and so the option awards became effective on a later date (February 10, 2017 for 2017 grants), approximately 10 days after our earnings release. The effective date of the option grants has always occurred on or after the meeting date, and we have never engaged in “back dating” practices.
|
(4) | Amounts in this column (i) assume payment of performance shares at the maximum level and (ii) value options using the Black-Scholes value calculated for financial statement reporting purposes in accordance with ASC Topic 718. Please see the note entitled “Stock-Based Compensation” in the notes to our audited financial statements included in our 2017 annual report on Form 10-K for a discussion of the assumptions underlying these calculations.
|
Stock Options
Annually, we grantthe committee grants options to purchase shares of our common stock to a group of key employees, including our executive officers. We describe our stock option program in more detail under the heading “COMPENSATION DISCUSSION AND ANALYSIS—Long-Term Incentive (Equity) Compensation—Stock Options.” All options granted in 2017,2019 were nonqualified options vesting in three equal annual installments beginning on the first anniversary of the grant date. The options generally may be exercised until 10 years after the grant date (but the exercise period may end earlier based on the termination of the participant’s employment).
The committee grants options with an exercise price equal to the average of the high and low prices on the grant effective date. All of our equity plans specifically prohibit repricing, and, except for certain anti-dilution adjustments, other adjustments to the exercise price. We discuss the timing of our option grants under the heading “COMPENSATION DISCUSSION AND ANALYSIS—Long-Term Incentive (Equity) Compensation—Stock Options”.Options.” Our plans and our policies do not permit any “back dating” of options.
Each NEO and certain other key employees received a target number of performance shares in early
2017,2019, which vest at the end of
2019.2021. The total number of performance shares that vest may vary between 0 and 200% of the target number, with half of the performance shares based on TSR over a three-year period compared to the TSR of the companies in the Performance Share Comparison Group and the remaining half based on our net income performance compared to the net income goal set by the committee for the same three-year period. The chart included in the discussion of performance share awards above sets forth this relationship in more detail. Vested performance shares are paid approximately half in cash and half in stock. No dividends or dividend equivalents are paid on unvested performance shares.
Outstanding Equity Awards at FiscalYear-End
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards
| | | Stock Awards
| |
Name (a)
| | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
| | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(c)
| | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
| | Option
Exercise
Price
($)
(e)
| | | Option
Expiration
Date
(f)
| | | Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#) (4)
(g)
| | Market
Value
of
Shares
or Units
of
Stock
That
Have
Not
Vested
($) (4)
(h)
| | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) (5)
(i)
| | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($) (5)
(j)
| |
John E. Fischer | | | — | | | | — | | | — | | | — | | | | — | | | — | | — | | | 83,000 | | | $ | 2,953,140 | |
| | | | — | | | | — | | | — | | | — | | | | — | | | — | | — | | | 68,000 | | | $ | 2,419,440 | |
| | | | — | | | | 357,000 | (1) | | — | | $ | 29.75 | | | | 02/10/2027 | | | — | | — | | | — | | | | — | |
| | | | 58,750 | | | | 117,500 | (2) | | | | $ | 13.14 | | | | 02/11/2026 | | | — | | — | | | — | | | | — | |
| | | | 52,500 | | | | 26,250 | (3) | | — | | $ | 27.40 | | | | 02/12/2025 | | | — | | — | | | — | | | | — | |
| | | | 11,700 | | | | — | | | — | | $ | 27.65 | | | | 05/04/2024 | | | — | | — | | | — | | | | — | |
| | | | 48,000 | | | | — | | | — | | $ | 25.57 | | | | 02/09/2024 | | | — | | — | | | — | | | | — | |
| | | | 49,000 | | | | — | | | — | | $ | 23.28 | | | | 02/10/2023 | | | — | | — | | | — | | | | — | |
| | | | 40,500 | | | | — | | | — | | $ | 21.92 | | | | 02/09/2022 | | | — | | — | | | — | | | | — | |
| | | | 54,000 | | | | — | | | — | | $ | 18.78 | | | | 02/11/2021 | | | — | | — | | | — | | | | — | |
Todd A. Slater | | | — | | | | — | | | — | | | — | | | | — | | | — | | — | | | 20,000 | | | $ | 711,600 | |
| | | | — | | | | — | | | — | | | — | | | | — | | | — | | — | | | 36,000 | | | $ | 1,280,880 | |
| | | | — | | | | 86,000 | (1) | | — | | $ | 29.75 | | | | 02/10/2027 | | | — | | — | | | — | | | | — | |
| | | | 30,750 | | | | 61,500 | (2) | | | | $ | 13.14 | | | | 02/11/2026 | | | — | | — | | | — | | | | — | |
| | | | 25,500 | | | | 12,750 | (3) | | — | | $ | 27.40 | | | | 02/12/2025 | | | — | | — | | | — | | | | — | |
| | | | 16,000 | | | | — | | | — | | $ | 27.65 | | | | 05/04/2024 | | | — | | — | | | — | | | | — | |
| | | | 9,000 | | | | — | | | — | | $ | 25.57 | | | | 02/09/2024 | | | — | | — | | | — | | | | — | |
| | | | 10,000 | | | | — | | | — | | $ | 23.28 | | | | 02/10/2023 | | | — | | — | | | — | | | | — | |
| | | | 8,250 | | | | — | | | — | | $ | 21.92 | | | | 02/09/2022 | | | — | | — | | | — | | | | — | |
| | | | 13,000 | | | | — | | | — | | $ | 18.78 | | | | 02/11/2021 | | | — | | — | | | — | | | | — | |
| | | | 16,250 | | | | — | | | — | | $ | 15.68 | | | | 02/04/2020 | | | — | | — | | | — | | | | — | |
| | | | 16,250 | | | | — | | | — | | $ | 14.28 | | | | 02/05/2019 | | | — | | — | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards
| | | Stock Awards
| |
Name (a)
| | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b)
| | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(c)
| | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)
| | Option
Exercise
Price
($)
(e)
| | | Option
Expiration
Date
(f)
| | | Number
of
Shares
or Units
of
Stock
That
Have
Not
Vested
(#) (4)
(g)
| | | Market
Value
of
Shares
or Units
of
Stock
That
Have
Not
Vested
($) (4)
(h)
| | | Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) (5)
(i)
| | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($) (5)
(j)
| |
| | | | | | | | | |
Pat D. Dawson | | | — | | | | — | | | — | | | — | | | | — | | | | — | | | | — | | | | 33,000 | | | $ | 1,174,140 | |
| | | | — | | | | — | | | — | | | — | | | | — | | | | — | | | | — | | | | 66,000 | | | $ | 2,348,280 | |
| | | | — | | | | 139,000 | (1) | | — | | $ | 29.75 | | | | 02/10/2027 | | | | — | | | | — | | | | — | | | | — | |
| | | | 57,000 | | | | 114,000 | (2) | | — | | $ | 13.14 | | | | 02/11/2026 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | |
John L. McIntosh | | | — | | | | — | | | — | | | — | | | | — | | | | — | | | | — | | | | 21,000 | | | $ | 747,180 | |
| | | | — | | | | — | | | — | | | — | | | | — | | | | — | | | | — | | | | 35,000 | | | $ | 1,245,300 | |
| | | | — | | | | — | | | — | | | — | | | | — | | | | 75,000 | | | | 2,668,500 | | | | — | | | | — | |
| | | | — | | | | 90,000 | (1) | | — | | $ | 29.75 | | | | 02/10/2027 | | | | — | | | | — | | | | — | | | | — | |
| | | | 30,500 | | | | 61,000 | (2) | | — | | $ | 13.14 | | | | 02/11/2026 | | | | — | | | | — | | | | — | | | | — | |
| | | | 45,000 | | | | 22,500 | (3) | | — | | $ | 27.40 | | | | 02/12/2025 | | | | — | | | | — | | | | — | | | | — | |
| | | | 47,000 | | | | — | | | — | | $ | 25.57 | | | | 02/09/2024 | | | | — | | | | — | | | | — | | | | — | |
| | | | 47,000 | | | | — | | | — | | $ | 23.28 | | | | 02/10/2023 | | | | — | | | | — | | | | — | | | | — | |
| | | | 36,750 | | | | — | | | — | | $ | 21.92 | | | | 02/09/2022 | | | | — | | | | — | | | | — | | | | — | |
| | | | 42,000 | | | | — | | | — | | $ | 18.78 | | | | 02/11/2021 | | | | — | | | | — | | | | — | | | | — | |
| | | | 8,750 | | | | — | | | — | | $ | 14.28 | | | | 02/05/2019 | | | | — | | | | — | | | | — | | | | — | |
| | | | | | | | | |
James A. Varilek | | | — | | | | — | | | — | | | — | | | | — | | | | — | | | | — | | | | 16,000 | | | $ | 569,280 | |
| | | | — | | | | — | | | — | | | — | | | | — | | | | — | | | | — | | | | 28,000 | | | $ | 996,240 | |
| | | | — | | | | 66,000 | (1) | | — | | $ | 29.75 | | | | 02/10/2027 | | | | — | | | | — | | | | — | | | | — | |
| | | | 23,750 | | | | 47,500 | (2) | | — | | $ | 13.14 | | | | 02/11/2026 | | | | — | | | | — | | | | — | | | | — | |
(1) | The options vest in three annual equal installments beginning February 10, 2018.
| | | | | | | | | | | | | |
(2)Restricted Stock | The options vest in three annual equal installments beginning February 12, 2017, so the first installment has vested.
|
(3) | The options vest in three annual equal installments beginning February 13, 2016, so the first two installments have vested.
|
(4) | Represents the entire value of all unvested restricted stock based on the December 31, 2017, closing price of our common stock of $35.58.
|
(5) | Represents the entire value of all unvested performance share awards based on the December 31, 2017, closing price of our common stock of $35.58. Vested shares will be paid approximately half in cash and half in stock.
|
Option Exercises and Stock Vested
| | | | | | | | | | | | | | | | |
| | Option Awards
| | | Stock Awards
| |
Name (a)
| | Number of
Shares
Acquired on
Exercise
(#)
(b)
| | | Value Realized
on Exercise
($)
(c) (1)
| | | Number of
Shares
Acquired on
Vesting
(#)
(d) (2)
| | | Value Realized
on Vesting
($)
(e) (3)
| |
John E. Fischer | | | 81,083 | | | | $ 1,292,641 | | | | 7,050 | | | $ | 219,793 | |
Todd A. Slater | | | 10,500 | | | | $ 128,100 | | | | 4,750 | | | $ | 151,368 | |
Pat D. Dawson | | | — | | | | — | | | | — | | | | — | |
John L. McIntosh | | | 69,000 | | | | $ 994,763 | | | | 4,250 | | | $ | 129,880 | |
James A. Varilek | | | — | | | | — | | | | — | | | | — | |
(1) | The amounts in column (c) above represent the difference between the closing market price of the underlying shares on the exercise date and the option exercise price, multiplied by the number of shares subject to the option exercise. Messrs. Fischer, Slater and McIntosh retained 19,942, 3,790 and 16,070, respectively, of the shares issued on exercise, so their actual cash value realized was less than the amount shown above.
|
Our equityplan (the Olin Corporation 2018 Long Term Incentive Plan) allows for the award of restricted stock or restricted stock units by the committee. The CEO also has authority to grant a limited number of restricted stock (no more than 60,000 total shares or 5,000 shares per employee) but may not grant restricted stock to anyone who is an officer within the definition of the rules under Section 16 of the Exchange Act. Under our equity plan, any restricted stock awards must vest over at least three years, or vest no earlier than one year if tied to a performance objective. The committee does not award restricted stock or restricted stock units to NEOs on any regular basis. We describe recent awards of restricted stock units to NEOs under the heading “COMPENSATION DISCUSSION AND ANALYSIS—Long-Term Incentive (Equity) Compensation—Restricted Stock.”
(2) | The shares listed in column (d) above represent (i) performance shares paid in the summer of 2017 (vested based on our performance for the three years ended December 31, 2016), under a performance award made in early 2014 to Messrs. Fischer, Slater and McIntosh, and (ii) for Messrs. Fischer and Slater only, shares of restricted stock granted in 2014 and vested in 2017 (including shares delivered in payment of income tax withholding amounts).
| |
| Outstanding Equity Awards at Fiscal Year-End |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | | | | | | | | | Stock Awards | | | | | | |
Name (a) | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b) | | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | | Option Exercise Price ($) (e) | | Option Expiration Date (f) | | Number of Shares or Units of Stock That Have Not Vested (#) (g) (4) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) (4) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) (5) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) (5) |
| John E. Fischer | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 109,500 | | | $ | 1,888,875 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 60,000 | | | $ | 1,035,000 | |
| | — | | | 433,000(1) | | | — | | | $ | 26.26 | | | 02/19/2029 | | — | | | — | | | — | | | — | |
| | 71,000 | | | 142,000(2) | | | — | | | $ | 32.94 | | | 02/16/2028 | | — | | | — | | | — | | | — | |
| | 238,000 | | | 119,000(3) | | | — | | | $ | 29.75 | | | 02/10/2027 | | — | | | — | | | — | | | — | |
| | 176,250 | | | — | | | — | | | $ | 13.14 | | | 02/11/2026 | | — | | | — | | | — | | | — | |
| | 78,750 | | | — | | | — | | | $ | 27.40 | | | 02/12/2025 | | — | | | — | | | — | | | — | |
| | 11,700 | | | — | | | — | | | $ | 27.65 | | | 05/04/2024 | | — | | | — | | | — | | | — | |
| | 48,000 | | | — | | | — | | | $ | 25.57 | | | 02/09/2024 | | — | | | — | | | — | | | — | |
| | 49,000 | | | — | | | — | | | $ | 23.28 | | | 02/10/2023 | | — | | | — | | | — | | | — | |
| | 40,500 | | | — | | | — | | | $ | 21.92 | | | 02/09/2022 | | — | | | — | | | — | | | — | |
| | 54,000 | | | — | | | — | | | $ | 18.78 | | | 02/11/2021 | | — | | | — | | | — | | | — | |
| Todd A. Slater | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 23,800 | | | $ | 410,550 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 15,000 | | | $ | 258,750 | |
| | — | | | 94,100(1) | | | — | | | $ | 26.26 | | | 02/19/2029 | | — | | | — | | | — | | | — | |
| | 18,000 | | | 36,000(2) | | | — | | | $ | 32.94 | | | 02/16/2028 | | — | | | — | | | — | | | — | |
| | 57,333 | | | 28,667(3) | | | — | | | $ | 29.75 | | | 02/10/2027 | | — | | | — | | | — | | | — | |
| | 92,250 | | | — | | | — | | | $ | 13.14 | | | 02/11/2026 | | — | | | — | | | — | | | — | |
| | 38,250 | | | — | | | — | | | $ | 27.40 | | | 02/12/2025 | | — | | | — | | | — | | | — | |
| | 16,000 | | | — | | | — | | | $ | 27.65 | | | 05/04/2024 | | — | | | — | | | — | | | — | |
| | 9,000 | | | — | | | — | | | $ | 25.57 | | | 02/09/2024 | | — | | | — | | | — | | | — | |
| | 10,000 | | | — | | | — | | | $ | 23.28 | | | 02/10/2023 | | — | | | — | | | — | | | — | |
| | 8,250 | | | — | | | — | | | $ | 21.92 | | | 02/09/2022 | | — | | | — | | | — | | | — | |
| | 13,000 | | | — | | | — | | | $ | 18.78 | | | 02/11/2021 | | — | | | — | | | — | | | — | |
| | 16,250 | | | — | | | — | | | $ | 15.68 | | | 02/04/2020 | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
| Pat D. Dawson | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 28,600 | | | $ | 493,350 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 19,000 | | | $ | 327,750 | |
| | — | | | 113,000(1) | | | — | | | $ | 26.26 | | | 02/19/2029 | | — | | | — | | | — | | | — | |
| | 23,000 | | | 46,000(2) | | | — | | | $ | 32.94 | | | 02/16/2028 | | — | | | — | | | — | | | — | |
| | 92,667 | | | 46,333(3) | | | — | | | $ | 29.75 | | | 02/10/2027 | | — | | | — | | | — | | | — | |
| | 171,000 | | | — | | | — | | | $ | 13.14 | | | 02/11/2026 | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
| John L. McIntosh | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 20,000 | | | $ | 345,000 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 13,000 | | | $ | 224,250 | |
| | — | | | 79,100(1) | | | — | | | $ | 26.26 | | | 02/19/2029 | | — | | | — | | | — | | | — | |
| | 15,334 | | | 30,666(2) | | | — | | | $ | 32.94 | | | 02/16/2028 | | — | | | — | | | — | | | — | |
| | 60,000 | | | 30,000(3) | | | — | | | $ | 29.75 | | | 02/10/2027 | | — | | | — | | | — | | | — | |
| | 91,500 | | | — | | | — | | | $ | 13.14 | | | 02/11/2026 | | — | | | — | | | — | | | — | |
| | 67,500 | | | — | | | — | | | $ | 27.40 | | | 02/12/2025 | | — | | | — | | | — | | | — | |
| | 47,000 | | | — | | | — | | | $ | 25.57 | | | 02/09/2024 | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | | | | | | | | | Stock Awards | | | | | | |
Name (a) | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(b) | | Number of Securities Underlying Unexercised Options (#) Unexercisable (c) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d) | | Option Exercise Price ($) (e) | | Option Expiration Date (f) | | Number of Shares or Units of Stock That Have Not Vested (#) (g) (4) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (h) (4) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i) (5) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j) (5) |
| | 47,000 | | | — | | | — | | | $ | 23.28 | | | 02/10/2023 | | — | | | — | | | — | | | — | |
| | 36,750 | | | — | | | — | | | $ | 21.92 | | | 02/09/2022 | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
| James A. Varilek | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 22,700 | | | $ | 391,575 | |
| | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 13,000 | | | $ | 224,250 | |
| | — | | | — | | | — | | | — | | | — | | | 5,000 | | | $ | 86,250 | | | — | | | — | |
| | — | | | 89,600(1) | | | — | | | $ | 26.26 | | | 02/19/2029 | | — | | | — | | | — | | | — | |
| | 15,334 | | | 30,666(2) | | | — | | | $ | 32.94 | | | 02/16/2028 | | — | | | — | | | — | | | — | |
| | 44,000 | | | 22,000(3) | | | — | | | $ | 29.75 | | | 02/10/2027 | | — | | | — | | | — | | | — | |
| | 71,250 | | | — | | | — | | | $ | 13.14 | | | 02/11/2026 | | — | | | — | | | — | | | — | |
____________________
(1) The options vest in three annual equal installments beginning February 19, 2020.
(2) The options vest in three annual equal installments beginning February 16, 2019, so the first installment has vested.
(3) The options vest in three annual equal installments beginning February 10, 2018, so the first two installments have vested.
(4) Represents the entire value of all unvested restricted stock based on the December 31, 2019, closing price of our common stock of $17.25.
(5) Represents the entire value of all unvested performance share awards based on the December 31, 2019 closing price of our common stock of $17.25. Vested shares will be paid approximately half in cash and half in stock.
(3) | Performance shares are paid approximately half in cash
| |
Option Exercises and half in stock. The cash portion of the performance shares payment was based on the fair market value of the shares as of December 31, 2016 ($25.84), and dollar amounts listed in column (e) above for the stock portion of the payment of performance shares are based on the average of the high and low sales prices for our common stock as of August 22, 2017, the date the shares were issued ($30.56). Of the total performance shares included in column (d) above, 25% vested automatically (25% of the target performance share award). The remaining performance shares vested based on our average annual return on capital for the three-year period ended December 31, 2016, compared to that of the Performance Share Comparison Group. We describe our performance share program in more detail in our “COMPENSATION DISCUSSION AND ANALYSIS—What We Pay and Why: Elements of Compensation” and in the text following the table entitled “Grants of Plan-Based Awards.”Stock Vested |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | | | Stock Awards | | |
Name (a) | | Number of Shares Acquired on Exercise (#) (b) | | Value Realized on Exercise ($) (c) (1) | | Number of Shares Acquired on Vesting (#) (d) (2) | | Value Realized on Vesting ($) (e) (3) |
| John E. Fischer | | — | | | — | | | 17,000 | | | $ | 281,010 | |
| Todd A. Slater | | 16,250 | | | $ | 142,675 | | | 9,000 | | | $ | 148,770 | |
| Pat D. Dawson | | — | | | — | | | 16,500 | | | $ | 272,745 | |
| John L. McIntosh | | — | | | — | | | 8,750 | | | $ | 144,638 | |
| James A. Varilek | | — | | | — | | | 7,000 | | | $ | 115,710 | |
____________________
(1) The amount in column (c) above represents the difference between the closing market price of the underlying shares on the exercise date and the option exercise price, multiplied by the number of shares subject to the option exercise, but Mr. Slater retained 6,086 of the shares issued on exercise, so his actual cash value realized was less than the amount shown above.
(2) The shares listed in column (d) above represent performance shares paid in the summer of 2019 (vested based on our performance for the three years ended December 31, 2018), under a performance award made in early 2016.
(3) Performance shares are paid approximately half in cash and half in stock. The cash portion of the performance shares payment was based on the fair market value of the shares as of December 31, 2018 ($19.89), and dollar amounts listed in column (e) above for the stock portion of the payment of performance shares are based on the average of the high and low sales prices for our common stock as of August 20, 2019, the date the shares were issued ($16.53). Of the performance shares in column (d) above, 25% vested automatically (25% of the target performance share award). The remaining performance shares vested based on our average annual return on capital for the three-year period ended December 31, 2018, compared to that of the Performance Share Comparison Group.
The following table shows the present value of the benefits under
each of the
pension plansQualified Plan as of December 31,
2017,2019, for each NEO. The present values are calculated using:
| · | | for Messrs. Fischer, Slater and McIntosh, the executive’s average compensation (salary and annual incentive, and specific inclusions and exclusions that vary by plan) for the three highest years out of the last 10 years of employment through December 31, 2007,
|
| · | | for Messrs. Fischer, Slater and McIntosh, years of creditable service under each of the plans as of December 31, 2007,
|
| · | | for Messrs. Dawson and Varilek, DEPP account balances as of October 5, 2015, credited with 8% annual interest until May 31, 2016, and 6% from June 1, 2016, until assumed retirement date,
|
| · | | age 62 for Mr. Slater, the first age at which unreduced pension benefits are payable under each of the pension plans, age 65 for Messrs. Dawson and Varilek, the retirement age at which they can receive their most valuable benefit due to the interest crediting feature of their DEPP account balances, and actual age for Messrs. Fischer and McIntosh, who were eligible for unreduced pension benefits on December 31, 2017, and
|
| · | | the assumptions we used for financial reporting as of December 31, 2017, including a 3.6% single effective rate (in lieu of a discount rate) for the Qualified Plan and a 3.3% single effective rate (in lieu of a discount rate) for the Supplemental and Senior Plans and the RP2014 Blue Collar Mortality Tables for Annuitants and Employees, with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projection starting in 2007).
|
•for Messrs. Fischer, Slater and McIntosh, the executive’s average compensation (salary and annual incentive, and specific inclusions and exclusions) for the three highest years out of the last 10 years of employment through December 31, 2007,
•for Messrs. Fischer, Slater and McIntosh, years of creditable service as of December 31, 2007,
•for Messrs. Dawson and Varilek, DEPP account balances as of October 5, 2015, credited with 8% annual interest until May 31, 2016, and 6% from June 1, 2016, until assumed retirement date,
•age 62 for Mr. Slater, the first age at which unreduced pension benefits are payable to him, age 65 for Messrs. Dawson and Varilek, the retirement age at which they can receive their most valuable benefit due to the interest crediting feature of their DEPP account balances, and actual age for Messrs. Fischer and McIntosh, who were eligible for unreduced pension benefits on December 31, 2019, and
•the assumptions we used for financial reporting as of December 31, 2019, including a 3.2% single effective rate (in lieu of a discount rate) for the Qualified Plan and the RP2014 Blue Collar Mortality Tables for Annuitants and Employees, with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projection starting in 2007).
Please see the note entitled “Pension Plans—Pension Plan Assumptions” in the notes to our audited financial statements included in our 20172019 annual report on Form 10-K for a discussion of these assumptions.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name (a) | | Plan Name (b) | | Number of Years Credited Service (#) (c) (1) | | Present Value of Accumulated Benefit ($) (d) (2) | | Payments During Last Fiscal Year ($) (e) |
| | | | | | | | |
| John E. Fischer | | Qualified Plan | | 23.58 | | | $ | 995,958 | | | $ | 0 | |
| | | | | | | | |
| Todd A. Slater (3) | | Qualified Plan | | 5.00 | | | $ | 190,854 | | | $ | 0 | |
| | | | | | | | |
| Pat D. Dawson | | Qualified Plan | | 35.10 | | | $ | 2,596,390 | | | $ | 0 | |
| | | | | | | | |
| John L. McIntosh | | Qualified Plan | | 30.58 | | | $ | 1,270,416 | | | $ | 0 | |
| | | | | | | | |
| James A. Varilek | | Qualified Plan | | 33.20 | | | $ | 2,365,557 | | | $ | 0 | |
____________________
(1)The amounts in the DEPP for Messrs. Dawson and Varilek were rolled into the Qualified Plan at the time of the Acquisition and their benefit accruals were frozen at that time. For the other NEOs, benefit accruals were frozen under all three plans effective December 31, 2007. Employment after that date continues to count toward meeting service and age requirements for vesting and early retirement. Participation in the Qualified Plan generally began when the executive was hired. All of the participating NEOs have met the requirements for vesting. Messrs. Fischer and
| | | | | | | | | | | | | | |
Name (a)
| | Plan Name
(b)
| | Number of Years
Credited Service
(#)
(c) (1)
| | | Present Value of
Accumulated Benefit
($)
(d) (2)
| | | Payments During
Last Fiscal Year
($)
(e)
| |
John E. Fischer | | Qualified Plan | | | 23.58 | | | $ | 1,007,775 | | | $ | 0 | |
| | Supplemental Plan | | | 23.58 | | | $ | 0 | | | $ | 0 | |
| | Senior Plan | | | 3.08 | | | $ | 0 | | | $ | 0 | |
| | | | |
Todd A. Slater | | Qualified Plan | | | 5.00 | | | $ | 166,442 | | | $ | 0 | |
| | Supplemental Plan | | | 5.00 | | | $ | 26,733 | | | $ | 0 | |
| | Senior Plan | | | 2.58 | | | $ | 0 | | | $ | 0 | |
| | | | |
Pat D. Dawson | | Qualified Plan | | | 35.10 | | | $ | 2,306,185 | | | $ | 0 | |
| | Supplemental Plan | | | N/A | | | | N/A | | | | N/A | |
| | Senior Plan | | | N/A | | | | N/A | | | | N/A | |
| | | | |
John L. McIntosh | | Qualified Plan | | | 30.58 | | | $ | 1,289,890 | | | $ | 0 | |
| | Supplemental Plan | | | 30.58 | | | $ | 0 | | | $ | 0 | |
| | Senior Plan | | | 8.92 | | | $ | 0 | | | $ | 0 | |
| | | | |
James A. Varilek | | Qualified Plan | | | 33.20 | | | $ | 2,091,523 | | | $ | 0 | |
| | Supplemental Plan | | | N/A | | | | N/A | | | | N/A | |
| | Senior Plan | | | N/A | | | | N/A | | | | N/A | |
(1) | The amounts in the DEPP for Messrs. Dawson and Varilek were rolled into the Qualified Plan at the time of the Acquisition and their benefit accruals were frozen at that time. For the other NEOs, benefit accruals were frozen under all three plans effective December 31, 2007. Employment after that date continues to count toward meeting service and age requirements for vesting and early retirement. Participation in the Senior Plan began when the executive became a Section 16(b) reporting officer and was selected by the committee (prior to the accrual freeze in 2007). Participation in the Qualified Plan generally began when the executive was hired. Participation in the Supplemental Plan generally began when the executive’s compensation first exceeded the limit imposed by the Code on compensation that was includible when determining benefits under qualified plans (other than Messrs. Dawson and Varilek, who do not participate in this plan). All of the participating NEOs have met the requirements for vesting. Messrs. Fischer and McIntosh have met the requirements for full retirement.
|
(2) | Amounts in this column assume that benefits are paid in the form of an annuity during the executive’s lifetime. As discussed in more detail below, a participant may elect instead to receive benefits over the life of the executive and his or her spouse. For the legacy DEPP benefits, transferred from Dow, the normal form of married participants is 50% joint & survivorship benefit.
|
McIntosh have met the requirements for full retirement.
(2)Amounts in this column assume that benefits are paid in the form of an annuity during the executive’s lifetime. As discussed in more detail below, a participant may elect instead to receive benefits over the life of the executive and his or her spouse. For the legacy DEPP benefits, transferred from Dow, the normal form of married participants is 50% joint & survivorship benefit.
(3)As described in more detail below, all amounts under the Supplemental Plan and Senior Plan were paid out to the NEOs in connection with the Acquisition. At the time of the Acquisition, Mr. Slater had not reached retirement age and so has a residual benefit under these plans. Information regarding the present value of Mr. Slater’s residual benefits under these two plans as of December 31, 2019 is set forth below.
| | | | | | | | | | | | | | | | | | | | |
| Plan Name | | Number of Years Credited Service (#) | | Present Value of Accumulated Benefit ($) | | Payments During Last Fiscal Year ($) |
| Supplemental Plan | | 5.00 | | | $ | 31,029 | | | $ | 0 | |
| Senior Plan | | 2.58 | | | $ | 0 | | | $ | 0 | |
These amounts were calculated using the assumptions set forth in the table above for the Qualified Plan. In addition, the Supplemental Plan and Senior Plan use a 2.8% single effective rate (in lieu of a discount rate) and the RP2014 Blue Collar Mortality Tables for Annuitants and Employees with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projection starting in 2007). Mr. Slater began participating in the Senior Plan when he became a Section 16(b) reporting officer and was selected by the committee and began participating in the Supplemental Plan when Mr. Slater’s compensation that was includible when determining benefits under qualified plans first exceeded the limit imposed by the Code.
The executive may elect payment of benefits under any of the available payment forms under these plans, including payments for the executive’s life (which we sometimes refer to as a “single life annuity”) or payments continuing after the executive’s death for the life of his or her spouse (which we refer to as a “joint and survivorship benefit”). Under the Qualified Plan and the Supplemental Plan, benefit payments are reduced from the single life annuity based on actuarial calculations if the executive elects a different payment form. The Senior Plan generally provides a 50% joint and survivorship benefit without any actuarial reduction, and also provides the executive with an additional amount equal to the amount of the actuarial reduction of benefits payable from the Qualified Plan and the Supplemental Plan for a 50% joint and survivorship benefit election.
The following chart shows the present value of accrued benefits for each of the NEOs who participate in these plans, assuming (i) the executive elected the 50% joint and survivorship benefit and (ii) for Mr. Slater, that he retired at age 62 (the first age at which unreduced pension benefits are payable under the plans), (iii) for Messrs. Fischer and McIntosh that they retired on December 31, 2017,2019, as they are currently eligible for unreduced benefits, and (iv) for Messrs. Dawson and Varilek that they retired at age 65 (the retirement age at which they can receive their most valuable benefit due to the interest crediting feature of their DEPP account balances).
| | | | | | | | | | | | |
Name
| | Qualified Plan
| | | Supplemental Plan
| | | Senior Plan
| |
John E. Fischer | | | $ 1,037,821 | | | | $ 0 | | | | $ 0 | |
| | | |
Todd A. Slater | | | $ 171,592 | | | | $27,632 | | | | $13,844 | |
| | | |
Pat D. Dawson | | | $ 2,506,171 | | | | N/A | | | | N/A | |
| | | |
John L. McIntosh | | | $ 1,344,206 | | | | $ 0 | | | | $ 0 | |
| | | |
James A. Varilek | | | $ 2,215,524 | | | | N/A | | | | N/A | |
| | | | | | | | | | | | | | | | | | | | |
| Name | | Qualified Plan | | Supplemental Plan | | Senior Plan |
| John E. Fischer | | $ | 1,027,019 | | | N/A | | N/A |
| | | | | | |
| Todd A. Slater | | $ | 197,454 | | | $ | 32,220 | | | $ | 16,143 | |
| | | | | | |
| Pat D. Dawson | | $ | 2,879,673 | | | N/A | | N/A |
| | | | | | |
| John L. McIntosh | | $ | 1,328,264 | | | N/A | | N/A |
| | | | | | |
| James A. Varilek | | $ | 2,581,318 | | | N/A | | N/A |
Freeze of Qualified Plan, Supplemental Plan and Senior Plan
| | |
| Freeze of Qualified Plan, Supplemental Plan and Senior Plan |
As part of our ongoing evaluation of benefit plans, in 2005, we amended the Qualified Plan to close participation, so that salaried employees hired on or after January 1, 2005, are not eligible for the Qualified Plan. Benefits accrued by most salaried participants in the Qualified Plan, Supplemental Plan and Senior Plan were “frozen” effective December 31, 2007, and benefits for former Dow employees were assumed by the Qualified Plan and frozen on October 5, 2015, but continue to accrue interest. Participants accrued benefits until December 31, 2007, based on applicable years of service and eligible compensation through that date. Service after December 31, 2007, will count toward meeting the eligibility
requirements for commencing a pension benefit (including vesting and early retirement) under these plans, but not toward the calculation of the pension benefit amount. Compensation earned after 2007 will similarly not count toward the determination of the pension benefit amounts under these plans.
As described above, all of the previously accrued benefits under these Olin plans were required to be paid as part of the Required NQ Plan Payments in connection with the Acquisition.
We describeMr. Slater, who was not yet retirement-eligible at the
terms of our retirement plans in more detail in the narrative discussion following the table entitled “Pension Benefits”.Implicationstime of the Acquisition, on Qualified Plan, Supplemental Plan and Senior Plan
As described above, previously accrued benefits under the Supplemental Plan and Senior Plan were required to be paid to participants as part of the Required NQ Plan Payments in connection with the Acquisition under the “change in control” provisions of these two plans. Accordingly, participants of these plans no longer have an accrued benefit under the plans. Note, however, that participants not yet retirement-eligible may become eligible upon early-retirementearly retirement for an early-retirementearly retirement benefit (offset by the value of the accrued benefit paid as part of the Required NQ Plan Payments).
In addition, in connection with the Acquisition, the Qualified Plan is now responsible for certainDow-related frozen benefits described below for which the Qualified Plan received certain assets from the appropriate Dow pension plans. We describe the terms of our retirement plans in more detail in the narrative discussion below.
As part of our benefits program, we offered defined benefit retirement benefits to salaried employees hired before January 1, 2005, through our Qualified Plan. Benefits under the Qualified Plan are calculated based on the average cash compensation (salary and annual incentive) for the highest three years out of the last 10 years the individual was employed by Olin, through December 31, 2007. The law requires that in determining eligible compensation, the Qualified Plan ignoreignores compensation in excess of a legally-imposed cap (which for 2007, the last year of benefit accruals, was $225,000). An employee’s benefit is generally 1.5% of his or her average compensation during the relevant period multiplied by the number of years of service, less a percentage of his or her primary Social Security benefit based on years of service (not to exceed 50% of such Social Security benefit). Participants who
are at least age 55 with at least 10 years of service when they leave Olin may elect to receive a benefit immediately that is reduced by 4% for each year the participant is younger than age 62 at the time benefit payments begin. Participants who leave Olin before age 55 (with 10 or more years of service) may elect to receive an actuarially reduced benefit with payments beginning at age 55 or later. Participants who leave Olin before age 65 with at least five years of service (but less than 10 years of service) receive a vested retirement benefit beginning the month after their 65th65th birthday. Benefits from the Qualified Plan generally are paid as an annuity with the form of payment (e.g. joint and survivorship benefit, guaranteed period, etc.) selected by the participant, subject to any applicable actuarial reductions.
In conjunction with the Acquisition, the Qualified Plan assumed responsibility for certain
Dow-related frozen benefits. Specifically, nearly all frozen benefits transferred to the Qualified Plan are associated with two benefit formulae—Pension Equity and Cash Balance—eligibility for which is typically determined by the individual participant’s hire date at Dow. The Pension Equity provides a frozen account balance that grows with interest until retirement (which can commence upon separation from Olin), at which time it is converted into a monthly pension benefit. The Cash Balance also provides a frozen account balance that grows with interest (at a different rate) until separation from Olin, at which point the participant can elect an immediate annuity, a deferred annuity or a lump sum. Messrs. Dawson and Varilek are participants of the Pension Equity arrangement.
In lieu of benefits that had been provided under the Qualified Plan, at the time participation was frozen, the CEOP was amended to add a Defined Contribution Retirement Account to help ensure that our benefits program would remain competitive. Depending on the participant’s age,
and whether they joined Olin in connection with the Acquisition, we generally contribute 5%
, or 7.5%
or 10% of eligible compensation to that Defined Contribution Retirement Account.
The Supplemental Plan is an unfunded, nonqualified deferred compensation plan for management employees at specified compensation levels. The Code imposes limits on pension benefits payable from the Qualified Plan. Our Supplemental Plan restores these benefits to affected employees and provides benefits on certain compensation that has been excluded from eligible compensation under the Qualified Plan. The formula used to calculate pension benefits under the Supplemental Plan is the same as under the Qualified Plan, without the Code limitations on benefits and eligible compensation, reduced for the amount payable under the Qualified Plan. Early retirement benefits are payable at the later of termination or age 55 if a participant has at least 10 years of service. Such early retirement benefits use the same reduction factors as the Qualified Plan.
As noted above, previously accrued benefits in the Supplemental Plan were required to be paid to participants as part of the Required NQ Plan Payments in connection with the Acquisition.
The Senior Plan is an unfunded, nonqualified deferred compensation plan for select management employees. An employee who was a Section 16(b) reporting officer, and was selected by the committee prior to the date of the freeze, participates in the Senior Plan. Under the Senior Plan, pension benefits are based on average eligible compensation for the three highest years out of the last 10 years that he or she is employed by Olin through December 31, 2007. Compensation is not subject to the Code and other limitations that apply under the Qualified Plan. Benefits generally equal 3% of the executive’s average compensation multiplied by the number of years of participation in the Senior Plan, plus 1.5% of the executive’s average compensation for years of service in the Qualified Plan and
Supplemental Plan less years of service in the Senior Plan, reduced by the pension benefits accrued under the Qualified Plan and the Supplemental Plan. Benefits are further reduced by 50% of the employee’s primary Social Security benefit.
Early retirement benefits are payable on an immediate basis to a participant whose employment terminates at age 55 or later, regardless of years of service, but are reduced by 4% per year for each year they begin before age 62. The maximum benefit payable from the Senior Plan is 50% of the employee’s average compensation reduced by amounts payable from the Qualified and Supplemental Plans, 50% of the employee’s primary Social Security benefit, and certain other adjustments set forth in the plan documents, if applicable. The Senior Plan provides a joint and survivorship benefit to an executive’s surviving spouse generally equal to 50% of the executive’s benefits from the Senior Plan. In addition, the Senior Plan pension benefits are increased by the amount of the actuarial reduction to benefits under the Qualified and Supplemental Plans if the executive elects the 50% joint and survivorship option under those plans.
The executive may elect any of the forms of payment available under the Senior Plan and Supplemental Plan, including a lump sum payment or the annuity form of payment.
If a participant in the Senior Plan and Supplemental Plan is a specified employee as defined in Code Section 409A, benefits payable upon termination of employment may not be paid in the first six months after retirement, but the first six months of benefits will be paid in a lump sum as soon as practicable thereafter.
As noted above, previously accrued benefits in the Senior Plan were required to be paid to participants as part of the Required NQ Plan Payments in connection with the Acquisition.
Health Insurance and Death Benefits
| | |
| Health Insurance and Death Benefits |
In general, salaried employees who retire at age 55 or later with at least 10 years of service may elect to continue to be covered under our health plan until age 65 by paying at least the same premium as active salaried employees. When the average per capita cost for our health plan exceeds $10,000, as it did in 2015 and 2016, the retiree also must pay the amount by which our average per capita cost for the health plan exceeds $10,000. On the first day of the month in which they become 65, salaried retirees who retired after age 55 with 10 or more years of service are eligible for a Medicare supplemental health care plan. We contribute $20 per covered person per month toward the cost of that plan, but make no contributions if a retiree chooses to participate in another plan. Olin made the decision to discontinue providing retiree health insurance benefits for salaried employees hired after November 23, 2009, so Messrs. Dawson and Varilek are not eligible for this benefit.
In general, salaried employees who retire from Olin under the Qualified Plan at age 55 or later with at least 10 years of service are eligible for a $5,000 death benefit from the Qualified Plan. In addition, full-time employees with job responsibilities at a specified level (based on Hay Points) may retain a percentage of their life insurance coverage when they retire, based on age at retirement, with Olin paying the premiums.
Nonqualified Deferred Compensation
| | |
| Nonqualified Deferred Compensation |
The following table sets forth information with respect to our Supplemental CEOP for each of our NEOs for
2017: | | | | | | | | | | | | | | | | | | | | |
Name (a)
| | Executive
Contributions
in Last FY
($)
(b) (1)
| | | Registrant
Contributions
in Last FY
($)
(c) (2)
| | | Aggregate
Earnings in
Last FY
($)
(d)
| | | Aggregate
Withdrawals/
Distributions
($)
(e)
| | | Aggregate
Balance at
Last FYE
($)
(f)
| |
John E. Fischer | | | $48,300 | | | | $ 116,671 | | | $ | 2,619 | | | $ | 0 | | | $ | 319,072 | |
Todd A. Slater | | | $27,400 | | | | $ 48,007 | | | $ | 55,871 | | | $ | 0 | | | $ | 246,266 | |
Pat D. Dawson | | | $23,100 | | | | $ 15,400 | | | $ | 21,850 | | | $ | 0 | | | $ | 103,555 | |
John L. McIntosh | | | $17,400 | | | | $ 50,303 | | | $ | 51,987 | | | $ | 0 | | | $ | 226,409 | |
James A. Varilek | | | $10,850 | | | | $ 7,595 | | | $ | 10,066 | | | $ | 0 | | | $ | 49,607 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
(a) | | Executive Contributions in Last FY ($) (b) (1) | | Registrant Contributions in Last FY ($) (c) (2) | | Aggregate Earnings in Last FY ($) (d) | | Aggregate Withdrawals/ Distributions ($) (e) | | Aggregate Balance at Last FYE ($) (f) |
| John E. Fischer | | $ | 60,900 | | | $ | 223,641 | | | $ | 16,985 | | | $ | 0 | | | $ | 863,769 | |
| Todd A. Slater | | $ | 32,000 | | | $ | 78,364 | | | $ | (36,092) | | | $ | 0 | | | $ | 291,643 | |
| Pat D. Dawson | | $ | 29,050 | | | $ | 99,953 | | | $ | (32,530) | | | $ | 0 | | | $ | 242,007 | |
| John L. McIntosh | | $ | 19,200 | | | $ | 76,764 | | | $ | (32,867) | | | $ | 0 | | | $ | 256,953 | |
| James A. Varilek | | $ | 23,100 | | | $ | 71,363 | | | $ | (19,234) | | | $ | 0 | | | $ | 160,660 | |
(1) | Amounts in this column are included in the executives’ salaries listed in column (c) of the Summary Compensation Table.
|
(2) | Amounts in this column are included in the amounts listed in column (i) of the Summary Compensation Table and represent company matching contributions and, where applicable, company contributions to the participants’ Supplemental CEOP Defined Contribution Retirement Accounts.
|
____________________
(1)Amounts in this column are included in the executives’ salaries listed in column (c) of the Summary Compensation Table.
(2)Amounts in this column are included in the amounts listed in column (i) of the Summary Compensation Table and represent company matching contributions and, where applicable, company contributions to the participants’ Supplemental CEOP Defined Contribution Retirement Accounts.
In addition to our CEOP, discussed under the heading “COMPENSATION DISCUSSION AND ANALYSIS—What We Pay and Why: Elements of Compensation—Retirement Benefits,” our Supplemental CEOP provides deferral and company matching opportunities to employees eligible to participate in the CEOP whose contributions to the CEOP are limited under the Code because their base pay exceeds the Code’s compensation limit ($
270,000280,000 for
2017)2019). These employees can make
pre-tax contributions to the Supplemental CEOP after their eligible compensation reaches the Code limit. For these purposes, eligible compensation generally includes base compensation but excludes incentive compensation. Employees who contribute to the Supplemental CEOP receive matching contribution credits from Olin at the same level Olin matches CEOP contributions. In addition, in connection with the pension plan freeze, Olin
generally provides the same retirement contribution credits to the Supplemental CEOP as under the CEOP (5% or 7.5%, depending on the employee’s age) on the amount of the excess eligible
compensation, except that former Dow employees receive only matching benefits under the Supplemental CEOP, to mirror their benefits while at Dow.compensation. For these purposes, eligible compensation generally includes base compensation and short-term incentive compensation but excludes long-term incentive compensation.
Employees elect to have their contributions to the Supplemental CEOP invested in phantom shares of Olin common stock or phantom units in an interest bearing fund. Dividends are credited to the phantom stock account based on the dividend rate paid on shares of our common stock. Interest is credited to the phantom interest bearing fund at a rate determined quarterly equal to (i) the Federal Reserve A1/P1 Composite rate for
90-day commercial paper at the end of the last quarter plus 10 basis points, or (ii) such other rate as our board or committee (or any delegate thereof) selects in advance from time to time.
Distributions are paid in cash, in a lump sum or in annual installments for up to 15 years after retirement, at the employee’s election. Our phantom shares of common stock are valued at the average daily closing prices of our common stock on the NYSE for the month before the distribution. Distributions from the interest bearing fund equal the dollar value of the participant’s account (principal and interest). If a participant in the Supplemental CEOP is a specified employee as defined in Code Section 409A, benefit payments payable upon termination of employment generally may not be paid in the first six months after retirement.
Potential Payments Upon Termination or Change in Control
Agreements with
| | |
| Potential Payments Upon Termination or Change in Control |
Our Executive Severance Plans provide our NEOs
providewith compensation in the event of a termination of employment or a change in control of Olin. The following tables show estimated compensation payable to each NEO who was employed on December 31,
2017,2019, upon various triggering events (assuming the event occurred on December 31,
2017)2019). Actual amounts can only be determined upon the triggering event.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
John E. Fischer (1)
| | Quit/Early
Retirement (2)
| | | | | | Normal
Retirement
| | | | | | Termination by
Olin Without
Cause (3)
| | | | | | Termination
by Olin for
Cause (4)
| | | | | | Change in
Control
(5)
| |
Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance (6) | | $ | — | | | | | | | | N/A | | | | | | | $ | 2,180,000 | | | | | | | | N/A | | | | | | | $ | 6,540,000 | |
Equity Awards (7) | | $ | 6,215,649 | | | | | | | $ | 6,215,649 | | | | | | | $ | 6,215,649 | | | | | | | | N/A | | | | | | | $ | 4,917,868 | |
Acceleration of Unvested Equity Awards (8) | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | $ | 10,305,315 | |
Benefits and Perquisites: (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Qualified Plan (10) | | $ | 1,037,821 | | | | | | | $ | 1,037,821 | | | | | | | $ | 1,037,821 | | | | | | | $ | 1,037,821 | | | | | | | $ | 1,037,821 | |
Supplemental CEOP | | $ | 319,072 | | | | | | | $ | 319,072 | | | | | | | $ | 482,572 | | | | | | | $ | 319,072 | | | | | | | $ | 809,572 | |
Life Insurance Premiums | | $ | — | | | | | | | | N/A | | | | | | | $ | 51,715 | | | | | | | $ | — | | | | | | | $ | 155,145 | |
Outplacement Services | | $ | — | | | | | | | | N/A | | | | | | | $ | 25,000 | | | | | | | $ | — | | | | | | | $ | 25,000 | |
TOTAL | | $ | 7,572,542 | | | | | | | $ | 7,572,542 | | | | | | | $ | 9,992,757 | | | | | | | $ | 1,356,893 | | | | | | | $ | 23,790,721 | |
| | | | | | | | | |
Todd A. Slater (1)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance (6) | | $ | — | | | | | | | | N/A | | | | | | | $ | 598,924 | | | | | | | | N/A | | | | | | | $ | 1,938,000 | |
Equity Awards (7) | | $ | 3,034,761 | | | | | | | | N/A | | | | | | | $ | 3,034,761 | | | | | | | | N/A | | | | | | | $ | 2,488,252 | |
Acceleration of Unvested Equity Awards (8) | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | $ | 3,978,215 | |
Benefits and Perquisites: (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Senior and Supplemental Plans (10) | | $ | 13,695 | | | | | | | | N/A | | | | | | | $ | 70,195 | | | | | | | $ | — | | | | | | | $ | 91,734 | |
Qualified Plan (10) | | $ | 142,921 | | | | | | | | N/A | | | | | | | $ | 182,386 | | | | | | | $ | 142,921 | | | | | | | $ | 182,386 | |
Supplemental CEOP | | $ | 246,266 | | | | | | | | N/A | | | | | | | $ | 291,185 | | | | | | | $ | 246,266 | | | | | | | $ | 391,616 | |
Life Insurance Premiums | | $ | — | | | | | | | | N/A | | | | | | | $ | 14,735 | | | | | | | $ | — | | | | | | | $ | 29,470 | |
Outplacement Services | | $ | — | | | | | | | | N/A | | | | | | | $ | 25,000 | | | | | | | $ | — | | | | | | | $ | 25,000 | |
TOTAL | | $ | 3,437,643 | | | | | | | | N/A | | | | | | | $ | 4,217,186 | | | | | | | $ | 389,187 | | | | | | | $ | 9,124,673 | |
| | | | | | | | | |
Pat D. Dawson (1)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance (6) | | $ | — | | | | | | | | N/A | | | | | | | $ | 1,919,582 | | | | | | | | N/A | | | | | | | $ | 1,535,000 | |
Equity Awards (7) | | $ | 2,259,473 | | | | | | | | N/A | | | | | | | $ | 2,259,473 | | | | | | | | N/A | | | | | | | $ | 1,279,066 | |
Acceleration of Unvested Equity Awards (8) | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | $ | 6,890,950 | |
Benefits and Perquisites: (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Qualified Plan (10) | | $ | 2,234,915 | | | | | | | | N/A | | | | | | | $ | 2,234,915 | | | | | | | $ | 2,234,915 | | | | | | | $ | 2,234,915 | |
Supplemental CEOP | | $ | 103,555 | | | | | | | | N/A | | | | | | | $ | 247,524 | | | | | | | $ | 103,555 | | | | | | | $ | 218,680 | |
Life Insurance Premiums | | $ | — | | | | | | | | N/A | | | | | | | $ | 5,566 | | | | | | | $ | — | | | | | | | $ | 11,132 | |
Outplacement Services | | $ | — | | | | | | | | N/A | | | | | | | $ | 25,000 | | | | | | | $ | — | | | | | | | $ | 25,000 | |
TOTAL | | $ | 4,597,943 | | | | | | | | N/A | | | | | | | $ | 6,692,060 | | | | | | | $ | 2,338,470 | | | | | | | $ | 12,194,743 | |
| | | | | | | | | |
John L. McIntosh (1)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance (6) | | $ | — | | | | | | | | N/A | | | | | | | $ | 960,000 | | | | | | | | N/A | | | | | | | $ | 2,193,534 | |
Equity Awards (7) | | $ | 4,480,270 | | | | | | | $ | 4,480,270 | | | | | | | $ | 4,480,270 | | | | | | | | N/A | | | | | | | $ | 3,939,809 | |
Acceleration of Unvested Equity Awards (8) | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | $ | 6,738,570 | |
Benefits and Perquisites: (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Qualified Plan (10) | | $ | 1,344,206 | | | | | | | $ | 1,344,206 | | | | | | | $ | 1,344,206 | | | | | | | $ | 1,344,206 | | | | | | | $ | 1,344,206 | |
Supplemental CEOP | | $ | 226,409 | | | | | | | $ | 226,409 | | | | | | | $ | 298,409 | | | | | | | $ | 226,409 | | | | | | | $ | 390,924 | |
Life Insurance Premiums | | $ | — | | | | | | | $ | — | | | | | | | $ | 29,453 | | | | | | | $ | — | | | | | | | $ | 67,298 | |
Outplacement Services | | $ | — | | | | | | | $ | — | | | | | | | $ | 25,000 | | | | | | | $ | — | | | | | | | $ | 25,000 | |
TOTAL | | $ | 6,050,885 | | | | | | | $ | 6,050,885 | | | | | | | $ | 7,137,338 | | | | | | | $ | 1,570,615 | | | | | | | $ | 14,699,341 | |
| | | | | | | | | |
James A. Varilek (1)
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Compensation: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Severance (6) | | $ | — | | | | | | | | N/A | | | | | | | $ | 1,269,144 | | | | | | | | N/A | | | | | | | $ | 1,011,250 | |
Equity Awards (7) | | $ | 960,625 | | | | | | | | N/A | | | | | | | $ | 960,625 | | | | | | | | N/A | | | | | | | $ | 532,953 | |
Acceleration of Unvested Equity Awards (8) | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | | N/A | | | | | | | $ | 3,016,200 | |
Benefits and Perquisites: (9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Qualified Plan (10) | | $ | 1,986,290 | | | | | | | | N/A | | | | | | | $ | 1,986,290 | | | | | | | $ | 1,986,290 | | | | | | | $ | 1,986,290 | |
Supplemental CEOP | | $ | 49,607 | | | | | | | | N/A | | | | | | | $ | 144,793 | | | | | | | $ | 49,607 | | | | | | | $ | 125,451 | |
Life Insurance Premiums | | $ | — | | | | | | | | N/A | | | | | | | $ | 3,866 | | | | | | | $ | — | | | | | | | $ | 7,732 | |
Outplacement Services | | $ | — | | | | | | | | N/A | | | | | | | $ | 25,000 | | | | | | | $ | — | | | | | | | $ | 25,000 | |
TOTAL | | $ | 2,996,522 | | | | | | | | N/A | | | | | | | $ | 4,389,718 | | | | | | | $ | 2,035,897 | | | | | | | $ | 6,704,876 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| John E. Fischer (1) | | Quit/Early Retirement (2) | | Normal Retirement | | Termination Without Cause (3) | | Termination for Cause (4) | | Change in Control (5) |
| Compensation: | | | | | | | | | | |
| Severance (6) | | $ | — | | | N/A | | $ | 4,140,000 | | | N/A | | $ | 6,851,863 | |
| Equity Awards (7) | | $ | 2,098,644 | | | $ | 2,098,644 | | | $ | 2,098,644 | | | N/A | | $ | 1,440,255 | |
| Acceleration of Unvested Equity Awards (8) | | N/A | | N/A | | N/A | | N/A | | $ | 2,923,875 | |
| Benefits and Perquisites: (9) | | | | | | | | | | |
| Qualified Plan (10) | | $ | 1,027,019 | | | $ | 1,027,019 | | | $ | 1,027,019 | | | $ | 1,027,019 | | | $ | 1,027,019 | |
| Supplemental CEOP | | $ | 863,769 | | | $ | 863,769 | | | $ | 863,769 | | | $ | 863,769 | | | $ | 863,769 | |
| Life Insurance Premiums | | $ | — | | | N/A | | $ | 71,300 | | | $ | — | | | $ | 213,900 | |
| Outplacement Services | | $ | — | | | N/A | | $ | 40,000 | | | $ | — | | | $ | 40,000 | |
| TOTAL | | $ | 3,989,432 | | | $ | 3,989,432 | | | $ | 8,240,732 | | | $ | 1,890,788 | | | $ | 13,360,681 | |
| | | | | | | | | | |
| Todd A. Slater (1) | | | | | | | | | | |
| Compensation: | | | | | | | | | | |
| Severance (6) | | $ | — | | | N/A | | $ | 1,550,000 | | | N/A | | $ | 2,625,000 | |
(1) | Amounts in the tables assume an annual base salary at the level in effect on December 31, 2017.
|
(2) | Messrs. Fischer and McIntosh are eligible for normal retirement (age 62), so amounts in both the “Quit/Early Retirement” and in the “Normal Retirement” columns represent amounts they would receive upon full retirement. Mr. Slater has met the vesting requirements, but is not yet early retirement age, so the amounts reported for him under the “Benefits and Perquisites” section represent the present value of the benefits, assuming the benefits begin at age 65, except for ‘Termination without Cause’ and ‘Change in Control’, which assume benefits begin at age 55 (because he is within 3 years of early retirement age). Messrs. Dawson and Varilek are each eligible to receive benefits based on his account balance at termination, so all amounts reflect immediate commencement of benefits.
|
(3) | Under their Executive Agreements, upon termination without cause each NEO is eligible to receive a contribution to the Supplemental CEOP Defined Contribution Retirement Account based on the amount of severance received. An executive whose employment terminates in connection with the sale of a business unit generally receives the benefits in this column, except that the executive’s stock options may be exercised for two years beyond the date of termination (rather than one year), unless the employee is eligible for retirement in which case the executive’s stock options would be exercisable through the term of the option.
|
(4) | Olin generally may terminate an executive for “cause” if the executive (i) willfully fails to perform his or her duties; (ii) engages in gross misconduct that significantly injures Olin financially; (iii) commits a felony or fraud in the course of his or her employment; or (iv) willfully breaches Olin’s Code of Conduct.
|
(5) | A portion of the amounts for Messrs. Fischer, Slater, Dawson and Varilek constitute “excess parachute payments” under Section 280G of the Code subject to a 20% excise tax payable by the officer. Benefits listed for the Senior Plan and Supplemental Plan (collectively, the “defined benefit plans”) and the Supplemental CEOP would be payable immediately upon a change in control (as defined under these plans). Because the NEOs are specified employees as defined in Code Section 409A, however, benefits may not be paid in the first six months after retirement, but will be paid in a lump sum as soon as practicable thereafter. The benefits reported represent the present value of the benefits under the defined benefit plans on December 31, 2017, and the market value of the phantom investments in the Supplemental CEOP account, plus a contribution to the Defined Contribution Retirement Account based on the amount of severance received. Footnote 8 describes the treatment of equity awards upon a change in control.
|
(6) | For the NEOs other than Messrs. Slater, Dawson and Varilek, severance payments for a termination without cause equal base salary plus a percentage (calculated as the executive’s target bonus for the prior fiscal year divided by the executive’s salary in effect at termination) of base salary. Under our standard severance policy, they would have received severance upon termination without cause in the respective amounts set forth above, based on years of service and base pay at the time of termination. Under the agreements, in the event of a change in control, (a) Mr. Fischer would have received severance payments equal to three times the executive’s base salary plus the higher of his target incentive award under the SMICP or MICP or his average SMICP or MICP payment during the past three years, (b) Mr. McIntosh would have received apro-rated portion of this payment, based on the remaining number of days until he attains age 66, divided by 1,095 (three years), and (c) Messrs. Slater, Varilek and Dawson would have received severance payments equal to two times the executive’s base salary plus the higher of his target incentive award under the SMICP or MICP or his average SMICP or MICP payment during the past three years. In addition, Messrs. Dawson and Varilek would each receive any unpaid retention payments under the retention agreements executed with former Dow executives. The change in control agreements, executive retention agreements and executive severance agreements are described under the heading “Executive Severance and Executive Change in Control Agreements.” In the event of retirement or termination without cause, all NEOs, like all other employees also receive a prorated bonus (based on the portion of the year that the NEO was employed), paid at the time other bonuses are determined and paid.
|
(7) | We have assumed payouts at the level of 50% of the target unvested performance shares and performance shares vested at December 31, 2017, but not yet paid. Under the performance share program, an executive whose employment terminates as the result of disability or retirement receives a pro rata share of unvested performance share awards (based on actual Olin performance for the full performance period and the number of months worked in the performance cycle) payable in cash at the time it would otherwise be payable. In the event of an executive’s death before performance shares have vested, his estate receives a pro rata share of his target award in cash. An executive whose employment terminates for cause or without our consent does not receive any unvested performance awards. All unvested performance shares vest on a change in control and are paid in cash. The committee determines the amount, if any, of unvested performance awards to be paid and the form of payment (cash or stock or a combination) for an executive whose employment terminates for any other reason. Upon the executive’s death, all unvested options vest automatically and his or her estate or heirs could exercise those options within the term of the option.
|
(8) | Amounts in this line represent a cash payout of all restricted stock, stock options and performance shares that were unvested at December 31, 2017. Under equity plans and severance agreements (a) all performance share awards would have vested and been paid upon a change in control (as defined for these awards), and (b) all restricted stock awards and options would have remained outstanding, and would accelerate and vest upon a change in control only if the acquirer does
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Equity Awards (7) | | $ | 731,590 | | | N/A | | $ | 731,590 | | | N/A | | $ | 577,168 | |
| Acceleration of Unvested Equity Awards (8) | | N/A | | N/A | | N/A | | N/A | | $ | 669,300 | |
| Benefits and Perquisites: (9) | | | | | | | | | | |
| Senior and Supplemental Plans (10) | | $ | 75,538 | | | N/A | | $ | 75,538 | | | $ | 61,416 | | | $ | 90,654 | |
| Qualified Plan (10) | | $ | 206,430 | | | N/A | | $ | 206,430 | | | $ | 206,430 | | | $ | 206,430 | |
| Supplemental CEOP | | $ | 291,643 | | | N/A | | $ | 291,643 | | | $ | 291,643 | | | $ | 291,643 | |
| Life Insurance Premiums | | $ | — | | | N/A | | $ | 6,000 | | | $ | — | | | $ | 12,000 | |
| Outplacement Services | | $ | — | | | N/A | | $ | 40,000 | | | $ | — | | | $ | 40,000 | |
| TOTAL | | $ | 1,305,201 | | | N/A | | $ | 2,901,201 | | | $ | 559,489 | | | $ | 4,512,195 | |
| | | | | | | | | | |
| Pat D. Dawson (1) | | | | | | | | | | |
| Compensation: | | | | | | | | | | |
| Severance (6) | | $ | — | | | N/A | | $ | 1,875,000 | | | N/A | | $ | 3,160,000 | |
| Equity Awards (7) | | $ | 1,178,641 | | | N/A | | $ | 1,178,641 | | | N/A | | $ | 987,442 | |
| Acceleration of Unvested Equity Awards (8) | | N/A | | N/A | | N/A | | N/A | | $ | 821,100 | |
| Benefits and Perquisites: (9) | | | | | | | | | | |
| Qualified Plan (10) | | $ | 2,682,663 | | | N/A | | $ | 2,682,663 | | | $ | 2,682,663 | | | $ | 2,682,663 | |
| Supplemental CEOP | | $ | 242,007 | | | N/A | | $ | 242,007 | | | $ | 242,007 | | | $ | 242,007 | |
| Life Insurance Premiums | | $ | — | | | N/A | | $ | 1,145 | | | $ | — | | | $ | 2,290 | |
| Outplacement Services | | $ | — | | | N/A | | $ | 40,000 | | | $ | — | | | $ | 40,000 | |
| TOTAL | | $ | 4,103,311 | | | N/A | | $ | 6,019,456 | | | $ | 2,924,670 | | | $ | 7,935,502 | |
| | | | | | | | | | |
| John L. McIntosh (1) | | | | | | | | | | |
| Compensation: | | | | | | | | | | |
| Severance (6) | | $ | — | | | N/A | | $ | 1,600,000 | | | N/A | | $ | 2,700,000 | |
| Equity Awards (7) | | $ | 689,241 | | | $ | 689,241 | | | $ | 689,241 | | | N/A | | $ | 557,193 | |
| Acceleration of Unvested Equity Awards (8) | | N/A | | N/A | | N/A | | N/A | | $ | 569,250 | |
| Benefits and Perquisites: (9) | | | | | | | | | | |
| Qualified Plan (10) | | $ | 1,328,264 | | | $ | 1,328,264 | | | $ | 1,328,264 | | | $ | 1,328,264 | | | $ | 1,328,264 | |
| Supplemental CEOP | | $ | 256,953 | | | $ | 256,953 | | | $ | 256,953 | | | $ | 256,953 | | | $ | 256,953 | |
| Life Insurance Premiums | | $ | — | | | $ | — | | | $ | 31,700 | | | $ | — | | | $ | 63,400 | |
| Outplacement Services | | $ | — | | | $ | — | | | $ | 40,000 | | | $ | — | | | $ | 40,000 | |
| TOTAL | | $ | 2,274,458 | | | $ | 2,274,458 | | | $ | 3,946,158 | | | $ | 1,585,217 | | | $ | 5,515,060 | |
| | | | | | | | | | |
| James A. Varilek (1) | | | | | | | | | | |
| Compensation: | | | | | | | | | | |
| Severance (6) | | $ | — | | | N/A | | $ | 1,585,000 | | | N/A | | $ | 2,474,993 | |
| Equity Awards (7) | | $ | 570,570 | | | N/A | | $ | 570,570 | | | N/A | | $ | 430,836 | |
| Acceleration of Unvested Equity Awards (8) | | N/A | | N/A | | N/A | | N/A | | $ | 702,075 | |
| Benefits and Perquisites: (9) | | | | | | | | | | |
| Qualified Plan (10) | | $ | 2,324,952 | | | N/A | | $ | 2,324,952 | | | $ | 2,324,952 | | | $ | 2,324,952 | |
| Supplemental CEOP | | $ | 160,660 | | | N/A | | $ | 160,660 | | | $ | 160,660 | | | $ | 160,660 | |
| Life Insurance Premiums | | $ | — | | | N/A | | $ | 1,028 | | | $ | — | | | $ | 2,056 | |
| Outplacement Services | | $ | — | | | N/A | | $ | 40,000 | | | $ | — | | | $ | 40,000 | |
| TOTAL | | $ | 3,056,182 | | | N/A | | $ | 4,682,210 | | | $ | 2,485,612 | | | $ | 6,135,572 | |
| not assume or replace those equity awards or there is a termination of employment without cause or a constructive termination within three years after the change in control. Constructive termination occurs when the executive terminates his or her employment (after appropriate notice and an opportunity to cure) because (i) Olin requires the executive to relocate by more than fifty miles; (ii) Olin reduces or fails to increase the executive’s base salary on a basis consistent with the salary system for executive officers in place before the change in control; (iii) Olin fails to maintain executive’s incentive compensation plans or health, welfare and retirement plans on substantially the terms in effect prior to the change in control; or (iv) the executive is assigned duties inconsistent with the executive’s position prior to the change in control, or Olin takes actions that result in a diminution of the executive’s responsibilities or a substantial reduction in resources to carry out his duties.
|
(9) | Unused vacation for the current year is paid to all salaried employees and is therefore not included in this table. Medical benefits are provided to all salaried employees hired prior to November 23, 2009, who are eligible for early retirement. Messrs. Fischer and McIntosh are currently eligible for full retirement, so no amount is reported for medical benefits for either of them. Under our severance policy, Messrs. Slater, Dawson and Varilek would be eligible for healthcare coverage while receiving severance payments in the event of a without cause termination. In the event of a change in control, Messrs. Slater, Dawson and Varilek would be eligible for healthcare coverage for 24 months at an estimated cost of $31,000.
|
(10) | An executive may elect payment of benefits in any of the available payment forms under the defined benefit plans. Under the Supplemental Plan (applicable only to Mr. Slater) and the Qualified Plan, benefit payments are reduced on an actuarial basis, if the executive elects a form of payment other than a lifetime annuity. The Senior Plan (applicable only to Mr. Slater) provides a 50% joint and survivorship benefit without an actuarial reduction. In addition, pension benefits paid from the Senior Plan are increased by the amount of the actuarial reduction for a 50% joint and survivorship benefit under the Qualified Plan and the Supplemental Plan. The value of the 50% joint and survivorship benefit is reflected in the lump sum pension benefits in the table above with respect to the Senior Plan. The Qualified Plan and Supplemental Plan benefits above assume payment in the form of a joint and survivorship benefit. The executive may also elect to receive benefits from the Senior Plan and the Supplemental Plan in the form of a lump sum. Any payment payable upon termination of employment is paid six months after termination of employment to comply with Code limitations. The value of these benefits is determined using a discount rate that is equal to the rate for a zero coupon Treasury strip, with a maturity that approximates the executive’s life expectancy, determined approximately at the time the lump sum is due to be paid and the RP2014 Blue Collar Mortality Tables for Annuitants and Employees with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projected from 2007). Except with respect to a change in control, the benefits reported for the Senior Plan and Supplemental Plan are based on these assumptions and also include six months of payments in recognition of the deferral of the commencement of benefits required by Code Section 409A.
|
| In the event of a change in control (as defined under the Senior Plan and the Supplemental Plan), each executive participating in the relevant plan receives a cash payment in an amount equal to the cost to purchase an annuity that pays benefits to the executive in an amount such that the annuity payments (together with the monthly payment to the executive from the Qualified Plan) provide the executive with the monthlyafter-tax benefit he or she would have received under the plans. The amounts in the table represent this lump sum cash payment.
|
| The benefit amounts reported in each of the columns above assume a 50% joint and survivorship benefit and use the discount rate applicable for the situation described and the RP2014 Blue Collar Mortality Tables for Annuitants and Employees with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projected from 2007). If the participating executive instead elects annual payments for his or her lifetime, he or she would receive an annual amount from each of the defined benefit pension plans as follows:
|
____________________
(1)Amounts in the tables assume an annual base salary at the level in effect on December 31, 2019.
(2) Messrs. Fischer and McIntosh are eligible for normal retirement (age 62), so amounts in both the “Quit/Early Retirement” and in the “Normal Retirement” columns represent amounts they would receive upon full retirement. Mr. Slater is not yet eligible for normal retirement but is eligible for early retirement and amounts reported under the “Quit/Early Retirement” column reflect amounts he would receive upon early retirement. Messrs. Dawson and Varilek are each eligible to receive benefits based on his account balance at termination, so all amounts reflect immediate commencement of benefits.As of December 31, 2018, under agreements then in effect, upon termination without
cause each NEO is eligible to receive a contribution to the Supplemental CEOP Defined Contribution Retirement Account based on the amount of severance received. An executive whose employment terminates in connection with the sale of a business unit generally receives the benefits in this column, except that the executive’s stock options may be exercised for two years beyond the date of termination (rather than one year), unless the employee is eligible for retirement in which case the executive’s stock options would be exercisable through the term of the option.
(3) As of December 31, 2019, under the Plans then in effect, an executive whose employment terminates in connection with the sale of a business unit generally receives the benefits in this column, except that the executive’s stock options may be exercised for two years beyond the date of the termination (rather than one year), unless the employee is eligible for retirement in which case the executive’s stock options would be exercisable through the original term of the option.
(4) Olin generally may terminate an executive for “cause” if the executive (i) willfully fails to perform his or her duties; (ii) engages in gross misconduct that significantly injures Olin financially; (iii) commits a felony or fraud in the course of his or her employment; or (iv) willfully breaches Olin’s Code of Conduct.
(5) Amounts for Messrs. Fischer and Varilek represent the amounts they would receive on the “best net after-tax” payment approach contemplated by the Olin Corporation Change in Control Severance Plan for Section 16(b) Officers (CIC Severance Plan) described in more detail below. Without the reduction, the amounts for Messrs. Fischer and Varilek would have increased by $2,578,137 and $215,007, respectively. A portion of the amounts for Messrs. Fischer and Varilek constitute “excess parachute payments” under Section 280G of the Code subject to a 20% excise tax payable by the officer. Benefits listed for the Senior Plan and Supplemental Plan (collectively, the “defined benefit plans”) and the Supplemental CEOP would be payable immediately upon a change in control (as defined under these plans). However, because the NEOs are specified employees as defined in Code Section 409A, benefits may not be paid in the first six months after retirement but will be paid in a lump sum as soon as practicable thereafter. The benefits reported represent the present value of the benefits under the defined benefit plans on December 31, 2019 and the market value of the phantom investments in the Supplemental CEOP account. Footnote 8 describes the treatment of equity awards upon a change in control.
(6) For the NEOs, severance payments for a termination without “cause” equal base salary plus the participant’s target bonus opportunity under the STIP. For terminations occurring during or after the second quarter of the calendar year of the qualifying termination, the participant will be entitled to receive a payout of their current year bonus, determined by multiplying the average actual payout (as a percentage of the annual STIP target) for all participants in the STIP in the same organization unit by a fraction, the numerator of which is the number of full weeks in the calendar year prior to the qualifying termination and the denominator of which is 52. In the event of a change in control, the NEOs’ severance payments would be determined in the same manner as described above, except that under the CIC Severance Plan, Mr. Fischer would receive three times the calculated severance value and the other NEOs would receive a multiple of two times the calculated severance value.
(7) For performance shares vested as of December 31, 2019, but not paid as of that date, the amount of the vested performance shares is included. All unvested performance shares vest on a change in control and are paid in cash at the target level. An executive whose employment terminates for “cause” or without our consent does not receive any unvested performance awards. For all other events, we have assumed payouts at 50% of the target unvested performance shares. Under the performance share program, an executive whose employment terminates as the result of disability or retirement receives a pro rata share of unvested performance share awards (based on actual Olin performance for the full performance period and the number of months worked in the performance cycle) payable in cash at the time it would otherwise be payable. In the event of an executive’s death before performance shares have vested, his estate receives a pro rata share of his target award in cash. The committee determines the amount, if any, of unvested performance awards to be paid and the form of payment (cash or stock or a combination) for an executive whose employment terminates for any other reason. Upon the executive’s death, all unvested options vest automatically and his or her estate or heirs could exercise those options within the term of the option.
(8) Amounts in this line represent a cash payout of all stock options and performance shares that were not vested at December 31, 2019. Under equity plans and severance plans (a) all performance share awards vest at target level and are paid upon a change in control (as defined for these awards), and (b) all restricted stock awards and options remain outstanding, and accelerate and vest upon a change in control only if the acquirer does not assume or replace those equity awards or there is a termination of employment without “cause” or a constructive termination within three years after the change in control. Constructive termination occurs when the executive terminates his or her employment (after appropriate notice and an opportunity to cure) because (i) the executive is required to relocate by more than fifty miles; (ii) the executive’s base salary is reduced or is not increased on a basis consistent with the salary system for executive officers in place before the change in control; (iii) the employer fails to maintain the
executive’s incentive compensation plans or health, welfare and retirement plans on substantially the terms in effect prior to the change in control; or (iv) the executive is assigned duties inconsistent with the executive’s position prior to the change in control, or (v) the employer takes actions that result in a diminution of the executive’s responsibilities or a substantial reduction in resources to carry out his duties.
(9) Unused vacation for the current year is paid to all salaried employees and is therefore not included in this table. Medical benefits are provided to all salaried employees hired prior to November 23, 2009, who are eligible for early retirement. Messrs. Fischer and McIntosh are currently eligible for full retirement, so no amount is reported for medical benefits for either of them. Under our severance policy, Messrs. Slater, Dawson and Varilek would be eligible for healthcare coverage while receiving severance payments in the event of a termination without “cause.” In the event of a change in control, Messrs. Slater, Dawson and Varilek would be eligible for healthcare coverage for 24 months at an estimated cost of $33,000.
(10) An executive may elect payment of benefits in any of the available payment forms under the defined benefit plans. Under the Supplemental Plan (applicable only to Mr. Slater) and the Qualified Plan, benefit payments are reduced on an actuarial basis, if the executive elects a form of payment other than a lifetime annuity. The Senior Plan (applicable only to Mr. Slater) provides a 50% joint and survivorship benefit without an actuarial reduction. In addition, pension benefits paid from the Senior Plan are increased by the amount of the actuarial reduction for a 50% joint and survivorship benefit under the Qualified Plan and the Supplemental Plan. The value of the 50% joint and survivorship benefit is reflected in the lump sum pension benefits in the table above with respect to the Senior Plan. The Qualified Plan and Supplemental Plan benefits above assume payment in the form of a joint and survivorship benefit. The executive may also elect to receive benefits from the Senior Plan and the Supplemental Plan in the form of a lump sum. Any amount payable upon termination of employment is paid six months after termination to comply with Code limitations. The value of these benefits is determined using a discount rate equal to the rate for a zero coupon Treasury strip, with a maturity that approximates the executive’s life expectancy, determined approximately at the time the lump sum is due to be paid based on the RP2014 Blue Collar Mortality Tables for Annuitants and Employees with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projected from 2007). Except with respect to a change in control, the benefits reported for the Senior Plan and Supplemental Plan are based on these assumptions and also include six months of payments in recognition of the deferral of the commencement of benefits required by Code Section 409A.
In the event of a change in control, each executive participating in the relevant plan receives a cash payment in an amount equal to the cost to purchase an annuity that pays benefits to the executive in an amount such that the annuity payments (together with the monthly payment to the executive from the Qualified Plan) provide the executive with the monthly after-tax benefit he or she would have received under the plans. The amounts in the table represent this lump sum cash payment.
The benefit amounts reported in each of the columns above assume a 50% joint and survivorship benefit and use the discount rate applicable for the situation described and the RP2014 Blue Collar Mortality Tables for Annuitants and Employees with the Social Security Administration—2014 Intermediate Cost Projections Mortality Improvement Scale (projected from 2007). If the participating executive instead elects annual payments for his or her lifetime, he or she would receive an annual amount from each of the defined benefit pension plans as follows:
Annual Payments Assuming Election for Life of Executive
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Quit/Early Retirement*(2) | | Normal Retirement | | Termination Without Cause (3) | | Termination for Cause (4) | | Change in Control (5) |
| | | | | | | | | |
| John E. Fischer | | | | | | | | | |
| Qualified Plan | $ | 69,429 | | | $ | 69,429 | | | $ | 69,429 | | | $ | 69,429 | | | $ | 69,429 | |
| | | | | | | | | |
| Todd A. Slater | | | | | | | | | |
| Qualified Plan | $ | 14,680 | | | $ | 14,680 | | | $ | 11,105 | | | $ | 14,680 | | | $ | 11,105 | |
| Supplemental Plan | $ | 2,947 | | | $ | 0 | | | $ | 2,947 | | | $ | 2,947 | | | $ | 2,947 | |
| Senior Plan | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | |
| | | | | | | | | |
| Pat D. Dawson | | | | | | | | | |
| Qualified Plan | $ | 163,163 | | | $ | 195,053 | | | $ | 163,163 | | | $ | 163,163 | | | $ | 163,163 | |
| | | | | | | | | |
| John L. McIntosh | | | | | | | | | |
| Qualified Plan | $ | 90,984 | | | $ | 90,984 | | | $ | 90,984 | | | $ | 90,984 | | | $ | 90,984 | |
| | | | | | | | | |
| James A. Varilek | | | | | | | | | |
| Qualified Plan | $ | 140,797 | | | $ | 183,909 | | | $ | 140,797 | | | $ | 140,797 | | | $ | 140,797 | |
____________________
* | | | | | | | | | | | | | | | | | | | | |
| | | Quit/Early
Retirement*(2)
| | | Normal
Retirement
| | | Termination
by Olin
Without
Cause (3)
| | | Termination
by Olin
for
Cause (4)
| | | Change
in
Control (5)
| |
| | | | | |
John E. Fischer | | | | | | | | | | | | | | | | | | | | |
Qualified Plan | | | $ 69,429 | | | | $ 69,429 | | | | $ 69,429 | | | | $ 69,429 | | | | $ 69,429 | |
| | | | | |
Todd A. Slater | | | | | | | | | | | | | | | | | | | | |
Qualified Plan | | | $ 14,680 | | | | $ 14,680 | | | | $ 10,570 | | | | $ 14,680 | | | | $ 10,570 | |
Supplemental Plan | | | $ 0 | | | | $ 0 | | | | $ 2,914 | | | | $ 0 | | | | $ 2,914 | |
Senior Plan | | | $ 0 | | | | $ 0 | | | | $ 0 | | | | $ 0 | | | | $ 0 | |
| | | | | |
Pat D. Dawson | | | | | | | | | | | | | | | | | | | | |
Qualified Plan | | | $140,814 | | | | $195,053 | | | | $140,814 | | | | $140,814 | | | | $140,814 | |
| | | | | | | | | | | | | | | | | | | | |
| | | Quit/Early
Retirement*(2)
| | | Normal
Retirement
| | | Termination
by Olin
Without
Cause (3)
| | | Termination
by Olin
for
Cause (4)
| | | Change
in
Control (5)
| |
| | | | | |
John L. McIntosh | | | | | | | | | | | | | | | | | | | | |
Qualified Plan | | | $ 90,984 | | | | $ 90,984 | | | | $ 90,984 | | | | $ 90,984 | | | | $ 90,984 | |
| | | | | |
James A. Varilek | | | | | | | | | | | | | | | | | | | | |
Qualified Plan | | | $121,587 | | | | $183,909 | | | | $121,587 | | | | $121,587 | | | | $121,587 | |
* | Messrs. Fischer and McIntosh are currently eligible for normal retirement (age 62) at this time, so the amount in this column represents the amount they each would have received had they retired on December 31, 2017.
| |
| Payments Upon Death or Disability |
Payments Upon Death or Disability
Upon the death of a former executive, unless the executive elects to receive the cash value of his or her life insurance at retirement, his or her estate receives life insurance benefits provided the former executive was at least age 55 when employment terminated. Messrs. Dawson and Varilek do not participate in this program, but the other NEOs have attained the age of 55, except Mr. Slater. The amount of life insurance is based on the executive’s age and base salary at the time of termination of employment. Set forth below are the cash value amounts of this life insurance coverage for each of the NEOs as of December 31,
2017:2019: | | | | | | | | | | | |
NEO
| NEO | | Amount
|
| John E. Fischer | | $ | 575,000 | |
John E. Fischer
| Todd A. Slater | | $ | 384,00030,000 | |
Todd A. Slater
| Pat D. Dawson | | — | |
Pat D. Dawson
| John L. McIntosh | | —$ | 300,000 | |
John L. McIntosh
| | $ | 253,000 | |
James A. Varilek | | | — | |
If the employment of
Messrs. Fischer, Slater or McIntoshan NEO terminates in connection with a disability, he would receive disability benefits equal to 60% of base salary until the executive is no longer disabled
or elects to take early retirement
benefits or reaches
the age
of 65 (except in the case of an employee who is over age 61 at the time the disability occurs). If the disability occurs after age 61, the maximum benefit duration extends from
6 to 4812-60 months depending on the executive’s age.
Mr. McIntosh has elected to pay additional premiums to increase his disability coverage to 75% of base salary. Messrs. Fischer and SlaterAll NEOs have elected the 60% level of coverage.
If
| | |
| Executive Severance Plans |
Executive Severance Plans. We have two Executive Severance Plans, both of which cover any officer of Olin who is subject to the reporting rules under Section 16 of the Exchange Act, including all our NEOs. The Olin Corporation Severance Plan for Section 16(b) Officers (Severance Plan) and the Olin Corporation Change in Control Severance Plan for Section 16(b) Officers (CIC Severance Plan) were adopted on December 12, 2018, in each case effective January 27, 2019. We refer to the Severance Plan and CIC Severance Plan as the Executive Severance Plans.
The Severance Plan provides payments and benefits to the NEOs and other covered executives in the event of certain qualifying terminations of their employment of either Mr. Dawson or Mr. Varilek terminates(other than in connection with a disability, he wouldchange in control of Olin) and the CIC Severance Plan provides payments and benefits to the covered executives in the event of certain qualifying terminations of their employment following a change in control of Olin. In adopting the Executive Severance Plans, it was our intention to provide security to our senior executives in the event of a loss of employment generally consistent with the arrangements provided by our peer companies.
Under the Severance Plan, if the executive’s employment is terminated by Olin without “cause” (other than in connection with a change in control of Olin), the executive will receive, disabilityin lieu of severance benefits under any other Olin severance plans or programs:
(1) an amount equal to 50%the sum of (i) the executive’s annual base salary untiland (ii) the executive’s target annual cash incentive opportunity for the year of termination, payable in twelve equal monthly installments;
(2) if the termination occurs in the last three quarters of the year, a pro-rated annual cash incentive payment for the year of termination based on Olin’s actual performance and payable at such time such incentive payments are payable to other employees of Olin;
(3) the continuation of medical, dental and life insurance benefits for the executive and his or her dependents for a period of twelve months at active employee rates under the applicable Olin plans or programs; and
(4) outplacement services for a period of up to twelve months.
Payments and benefits under the CIC Severance Plan are “double trigger”, which means they are paid only if (i) there is no longer disabled, electsa change in control of Olin and (ii) the executive’s employment is terminated by Olin without “cause” or the executive resigns for “good reason,” in either case, upon or within two years following the change in control. If this occurs, the executive will receive, in lieu of severance benefits under any other Olin severance plans or programs:
(1) an amount equal to take early retirement benefits or reaches age 65 (excepttwo times (or three times in the case of an employee who is over age 60 atMr. Fischer) the timesum of (i) the disability occurs). Ifexecutive’s annual base salary and (ii) the disabilityexecutive’s target annual cash incentive opportunity for the year of termination, payable in a lump sum;
(2) if the termination occurs after age 60,in the maximum benefit duration extends from 6 to 60 months dependinglast three quarters of the year, a pro-rated annual cash incentive payment for the year of termination based on the executive’s age. Messrs. Dawsontarget annual cash incentive opportunity for the year of termination, payable in a lump sum;
(3) the continuation of medical, dental and Varilek have electedlife insurance benefits for the executive and his or her dependents for a period of twenty-four months (or thirty-six months in the case of Mr. Fischer) at active employee rates under the applicable Olin plans or programs; and
(4) outplacement services for a period of up to
pay additional premiums to increase their disability coverage to 66.7% of base salary.twelve months.
Such severance payments and benefits under the Executive Severance
and Executive Change in Control Agreements
CIC Agreements in effect until January 26, 2019. We have executive change in control agreements withPlans are not available if the NEOs and five other executive officers. We referexecutive’s employment is terminated for “cause” by Olin, or terminates due to all of these agreementsdeath or “disability”. Except as CIC agreements, and they are identical, except that (i) the CIC agreements for Mr. Slater and seven other executives provide for payments upon a qualifying termination after a change in control at a lower
level than the other CIC agreements and (ii) the CIC agreements with Messrs. Dawson, Varilek and one other executive who executed Retention Agreements upon joining Olin from Dow (such agreements discussed below) provide for paymentsprovided under the CIC agreementsSeverance Plan for resignations due to be reduced“good reason,” an executive is not eligible for severance payments and benefits due to voluntary termination of employment by payments under the Retention Agreements.
All of the CIC agreements:
| · | | require a double trigger (change in control and termination or constructive termination) for early vesting of stock options and restricted stock awards, unless the acquirer fails to assume or replace those awards;
|
| · | | eliminate allgross-up for golden parachute excise taxes, substituting a “best netafter-tax” payment approach that reduces payments and benefits to the executive if the reduction would result in the executive receiving higher payments and benefits on a netafter-tax basis;
|
| · | | condition receipt of severance and other termination benefits on a release of claims by the executive;
|
| · | | contain restrictive covenants that prohibit (i) solicitation and hiring of our employees, (ii) disclosure of certain information relating to our customers and (iii) disparaging us or our business; and
|
| · | | include a provision to allow our board to determine that certain transactions, such as the Acquisition, would not constitute a change in control for purposes of these agreements, a right our board exercised in connection with the Acquisition.
|
In January 2014, we also amended theexecutive.
The provisions of our equity plans
to (i)similarly require a
double trigger“double trigger” (change in control and termination without “cause” or for “good reason” within two years of the change in control) for early vesting of all equity awards,
(otherother than
performance shares and awards the acquirer fails to assume or
replace and performance shares), (ii) eliminate excise taxgross-ups and (iii) conform the definition of change in control to the definition in the CIC agreements, including the ability of our board to determine that certain transactions, such as the Acquisition, would not constitute a change in control for purposes of these plans, a right our board exercised in connection with the Acquisition.The current term of the CIC agreements is scheduled to expire on January 26, 2019, and we provided notice that the term will not be extended. The CIC agreements contain an extensive definition of “change in control,” but generally a change in control occurs if:
| (1) | a person or entity acquires beneficial ownership (as defined in the Exchange Act) of 20% or more of our common stockunless (a) the acquiring party is Olin, our subsidiaries or our benefit plans, an underwriter holding the shares temporarily for an offering, or a group that includes the executive who is a party to the CIC agreement or an entity that such executive controls, (b) the percentage increase occurs solely because the total number of shares outstanding is reduced by Olin repurchasing its stock or (c) the acquisition is directly from Olin;
|
| (2) | a majority of our board members change (other than new members elected or nominated by at least 2/3 of the then-current board, unless such new member became a director pursuant to an actual or threatened proxy contest or similar dispute);
|
| (3) | we (or any of our subsidiaries) sell all or substantially all assets, or merge or engage in a similar transaction, unless,immediately following such transaction, (a) our shareholders own a majority of the voting interest of Olin or its successor (in approximately the same ratios as before the transaction) and (b) neither of the events described in items (1) or (2) above has occurred for Olin or its successor; provided that a transaction that would
|
| otherwise constitute a change in control under this item (3) will not be considered a change in control if: (i) at least a majority of our board members immediately before the transaction remain as board members after the transaction, (ii) at least 75% of our executive officers immediately before the transaction remain as executive officers after the transaction, and our board members at the time of approval of the transaction determine in good faith that such executive officers are expected to remain as executive officers for a significant period after the transaction, and (iii) 2/3 of such board members determine that the transaction shall not be deemed to be a change in control; or
|
| (4) | our shareholders approve a plan of complete liquidation or dissolution of Olin.
|
In connection with the Acquisition, which would otherwise have satisfied the definition of change in control, our board exercised its right under item (3) above to determine that the Acquisition was not a change in control for purposes of the CIC agreements and the equity plans.
If, during the three years after a change in control (or in anticipation of a change in control) the executive’s employment is terminated without cause or for good reason, as defined in the CIC agreements, the executive will receive:
| · | | a lump sum cash severance payment of three times (for Messrs. Fischer and McIntosh) or two times (for Mr. Slater and the seven other executives), (i) the executive’s base salary plus (ii) the higher of the average annual SMICP payment received by the executive for the last three calendar years or the executive’s target SMICP bonus for the year of termination;
|
| · | | 36 months (24 months for Mr. Slater and the seven other executives) of retirement plan contributions under our defined contribution plans, based on the executive’s severance payment;
|
| · | | 36 months (24 months for Mr. Slater and the seven other executives) of coverage under our medical, dental and life insurance plans, followed by coverage pursuant to COBRA (and, if eligibility requirements are met, participation in our post-retirement medical and dental plans until age 65 on the same basis as similarly situated employees of Olin);
|
| · | | if termination of employment occurs after the first calendar quarter of any year, the executive’spro-rated target SMICP or MICP bonus for the year of termination; and
|
| · | | 12 months of outplacement services.
|
Payments under the first three items above are prorated if the executive is within 36 months (24 months for Mr. Slater and the seven other executives) of any mandatory retirement age applicable to him or her, based on the remaining number of days until such age.
To receive these benefits the executive must execute a waiver and release of claims against Olin and its affiliates within a specified period after termination of employment. In addition, if employment is terminated without cause or for good reason during the three-year period after a change in control, the executive would be subject to restrictive covenants until the earlier of one year after termination or any mandatory retirement age applicable to that executive. The executive, regardless of the circumstances of termination, would also be prohibited from disclosing our trade secrets and other confidential information.
replace. Performance shares vest automatically upon a change in control (as defined in the CIC agreements) with or without a termination of employment, and are paid at target levels, in accordance with the applicable plan and award documents.levels. If the other equity awards (options and restricted stock
awards) are not assumed by the acquirer or replaced with comparableequivalent benefits, these equity awards also vest upon the change in control, with or without termination of employment.
The provisionsExecutive Severance Plans contain an extensive definition of our equity plans with respect to vesting of equity awards upon“change in control”, but generally a change in control mirror these provisionsoccurs if:
(1) a person or entity acquires beneficial ownership (as defined in the Exchange Act) of 20% or more of our common stock unless (a) the acquiring party is Olin, our subsidiaries or our benefit plans, an underwriter holding the shares temporarily for an offering, or a group that includes the executive who is a participant in the CIC severance plan or an entity that such executive controls, (b) the percentage increase occurs solely
because the total number of shares outstanding is reduced by Olin repurchasing its stock or (c) the acquisition is directly from Olin;
(2) a majority of our board members change (other than new members elected or nominated by at least 2/3 of the
CIC agreements.then-current board, unless such new member became a director pursuant to an actual or threatened proxy contest or similar dispute);
The CIC agreements also provide(3) we (or any of our subsidiaries) sell all or substantially all assets, or merge or engage in a similar transaction, unless, immediately following such transaction, (a) our shareholders own a majority of the voting interest of Olin or its successor (in approximately the same ratios as before the transaction) and (b) neither of the events described in items (1) or (2) above has occurred for Olin or its successor; provided that if anya transaction that would otherwise constitute a change in control under this item (3) will not be considered a change in control if: (i) at least a majority of our board members immediately before the transaction remain as board members after the transaction, (ii) at least 75% of our executive officers immediately before the transaction remain as executive officers after the transaction, and our board members at the time of approval of the transaction determine in good faith that such executive officers are expected to remain as executive officers for a significant period after the transaction, and (iii) 2/3 of such board members determine that the transaction shall not be deemed to be a change in control; or
(4) our shareholders approve a plan of complete liquidation or dissolution of Olin.
All payments madeand other benefits under the Executive Severance Plans are subject to the executive’s execution and non-revocation of, and continued compliance with, a separation release agreement. The separation release agreement includes a general release of all claims against Olin and the executive’s compliance with restrictive covenants provided under the Executive Severance Plans, including ongoing non-disparagement requirements with respect to Olin and certain non-competition and non-solicitation covenants during the executive’s severance period. The executive, regardless of the circumstances of the executive’s termination of employment, would also be prohibited from disclosing our trade secrets and other confidential information.
If payments and benefits under the CIC Severance Plan to an executive would
constitute an “excess parachute payment” under Code Section 280G and subject the executive to
thegolden parachute excise
taxtaxes under Code Section 4999,
payments under the CIC
agreements will beSeverance Plan utilizes a “best net after-tax” payment approach which reduces the
executive’s payments and benefits to an amount that
producesresults in the greatest
after-tax benefit
tofor the executive, taking into account any such excise
tax.tax and any applicable federal, state and local taxes. The Executive Agreements. In addition to the CIC agreements, Messrs. FischerSeverance Plans and McIntosh and one other executive currently have executive severance agreements (executive agreements). These agreements extend until January 26, 2019, and we provided notice that the term willour equity plans do not be extended. An additional three executives have executed retention agreements (described below), which contain severance benefits different from, and in lieu of, the benefits provided in the executive agreements.
Under the executive agreements if the executive’s employment is terminated (in anon-change in control event) by Olin without cause, the executive will receive, in lieu of severance benefits underprovide for any other Olin severance plans or programs:
| (1) | cash installment payments (which we refer to as the executive severance amount) equal to (a) twelve months salary plus (b) a percentage (calculated as the executive’s target bonus for the prior year divided by the executive’s salary in effect at termination) of base salary;
|
| (2) | 12 months of retirement contributions to all Olin defined contribution plans based on the amount of the cash installment payments (the executive will be treated as if he or she had remained employed for service purposes for 12 months after the termination);
|
| (3) | 12 months of medical, dental and life insurance coverage for the executive and dependents; and
|
| (4) | the same outplacement services and prorated annual incentive compensation award provided under the CIC agreement.
|
Payments under the items above are prorated if the executive is within 12 months of any mandatory retirement age applicable to him or her, based on the remaining number of days until such age.
The executive must sign a waiver and general release of claims and agree toone-year noncompetition andnon-solicitation covenants to receive any severance payments and other benefits. Such severance payments and other benefits under the executive agreements are not available if the executive is terminated for cause, defined as any willful misconduct or willful breaches of the executive’s duties.
If, in connection with the sale or transfer of an Olin business or assets to a third party or to a joint venture, the executive becomes an employee of the buyer or joint venture, the executive agreement continues to applyexcise tax gross-up benefit to any termination from the new employment for 12 months. Payments by Olin are reduced for any cash severance or similar benefits from such buyer or joint venture.
executive.
Retention Agreements
. Messrs. Dawson and Varilek and one other executive who joined Olin from Dow in connection with the Acquisition hold Executive Retention Agreements (Retention Agreements) that extend until October 5, 2018. The Retention Agreements: | · | |
set the executive’s minimum base salary as the salary with Dow immediately prior to the Acquisition;
Treatment of Equity Awards Under Plans |
| · | | provide for performance-based annual cash incentives with a target value no less than that provided to the executive by Dow immediately prior to the Acquisition (with a maximum bonus up to 200% of that target value);
|
| · | | provide for eligibility to receive annual equity incentive awards with an aggregate grant date fair value that is no less than the aggregate grant date fair value of equity-based compensation provided to the executive by Dow immediately prior to the Acquisition;
|
| · | | provide for a 2016 cash or equity-based award equivalent to the grant date fair value of any equity or equity-based compensation forfeited by the executive as a result of terminating employment with Dow, made in 2016 and reflected in the Summary Compensation Table for Messrs. Dawson and Varilek;
|
| · | | award cash retention bonus payments on October 5, 2017, and October 5, 2018, with a value equal to 75% of the executive’s salary and annual cash incentives as of each retention date;
|
| · | | make each executive eligible for benefits with a value substantially comparable to what the executive received at Dow immediately prior to the Acquisition; and
|
| · | | contain restrictive covenants that prohibit (i) competing with Olin, (ii) disclosure of confidential information, and (iii) disparaging us or our business.
|
Under the Retention Agreements, if the executive’s employment is terminated (in anon-change in control event) by Olin without cause or by the executive for “good reason,” the executive will receive:
| (1) | cash severance and continued welfare benefits equal to the greater of what the executive would have received from Dow and what the executive is eligible to receive under Olin’s applicable severance plan;
|
| (2) | if the termination occurs during or after the second calendar quarter, a prorated performance-based annual cash incentive for that calendar year based on the average payout for all participants in the cash incentive plan;
|
| (3) | any retention bonus payments owed to the executive; and
|
| (4) | any accrued and unused vacation or any other amounts or benefits required to be paid or that the executive is eligible to receive.
|
As a condition to receiving these termination benefits, the executive must execute a complete release of claims in favor of Olin, and comply with certain restrictive covenants for one year after termination. These benefits are in lieu of severance benefits under any other Olin severance plans or programs and are not awarded if the executive is terminated for cause. The Retention Agreements define cause in generally the same manner as the executive agreements, but include unsatisfactory performance, dishonesty, unethical conduct, insubordination, or violation of company rules, in the definition. In the event of a termination following a change in control that entitles the executive to severance, any severance payments will be reduced by the value of any accelerated retention bonus payments the executive receives.
Treatment of Equity Awards Under Plans
Retirement.When an employee retires:
| · | | vested stock options may be exercised for the remaining option term;
|
| · | | vested but unpaid performance shares will be paid as specified in the performance share program; and
|
| · | | the retired employee receives a pro rata payout in cash of any unvested performance share award at such time it would otherwise be paid.
|
•vested stock options may be exercised for the remaining option term;
•vested but unpaid performance shares will be paid as specified in the performance share program; and
•the retired employee receives a pro rata payout in cash of any unvested performance share award at such time it would otherwise be paid.
The committee has discretion to waive vesting periods for restricted stock and restricted stock units.
Change in ControlControl. .As noted above, our various equity plans provide that options and restricted stock awards vest upon a change in control (as defined in the CIC agreements)Executive Severance Plans) only if there is also a termination of employment or constructive termination, or the acquiring company fails to assume these awards or substitute equivalent awards. Outstanding performance shares vest and are paid upon a change in control. The plans do not include excise taxgross-up provisions. Qualified PlanPlan. .The Qualified Plan provides that if, within three years after a change in control (as defined in the Qualified Plan), any corporate action is taken or filing made in contemplation of events such as a plan termination or merger or other transfer of assets or liabilities of the plan, and such event later takes place, plan benefits automatically
increase to absorb any surplus plan assets. Under the Qualified Plan, a change in control occurs if:
• | · | | a person or entity acquires control of 20% or more of our common stock;
|
| · | | a majority of our board members change in atwo-year period (other than new members nominated by at least 2/3 of the then-current board);
|
| · | | all or substantially all of our business is sold through a merger or other transaction unless Olin is the surviving corporation or our shareholders own a majority of the voting interest of the new company; or
|
| · | | our shareholders approve a sale of all or substantially all of our assets or the dissolution of Olin.
|
a person or entity acquires control of 20% or more of our common stock;
•a majority of our board members change in a two-year period (other than new members nominated by at least 2/3 of the then-current board);
•all or substantially all of our business is sold through a merger or other transaction unless Olin is the surviving corporation or our shareholders own a majority of the voting interest of the new company; or
•our shareholders approve a sale of all or substantially all of our assets or the dissolution of Olin.
Supplemental Plan and Senior PlanPlan.. In the event of a change in control (defined in a manner compliant with Code Section 409A), we must pay a cash amount sufficient to purchase an annuity that provides the monthly after tax benefit the employee would have received under the Supplemental Plan and the Senior Plan. Those payments would be based on benefits accrued as of the change in control. Benefits were frozen at the end of 2007, although continued employment counts toward years of service for vesting and early retirement eligibility. As described above, as a result of the Acquisition, payments of amounts accrued through October 5, 2015, were made under these two plans in 2015.
As required by applicable law and SEC regulation, we calculated a reasonable estimate of the ratio of the annual total compensation of John E. Fischer, our CEO, compared to that of our median employee in
2017.2019.
Based on the information described below, for 2017,
| | |
| Based on the information described below, for 2019, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 66.77 to 1. |
We used the same median employee for the pay ratio in 2017, 2018 and 2019. There was no significant change in our employee population or in the median
of the annual totalemployee’s compensation
of all employees was 91.68 to 1.arrangement or other material change during those years that would significantly affect our pay ratio calculation. We identified our median employee for the 2017 pay ratio analysis using the methodology and the material assumptions, adjustments, and estimates described below.
Employee Population and Compensation.As of December 31, 2017, our global employee population consisted of 6,526 individuals working at Olin and its consolidated subsidiaries. This includes 5,536 U.S. employees. At the end of 2019, our global employee population consisted of 6,615 individuals, including 5,341 U.S. employees. Given the geographical distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements of our employees.
| · | | Base salary and overtime pay—the fixed portion of compensation, paid without regard to financial or operational performance.
|
| · | | Annual cash bonus/variable compensation plans—in which approximately 70% of our full-time employees globally participate, and discretionary annual bonuses—for which 60% of the hourly employees in our manufacturing organizations in North America are eligible.
|
| · | | Other benefit programs, such as health insurance and retirement plan contributions, depending on the practices and laws of the country of employment, and for certain employees, equity awards.
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•Base salary and overtime pay—the fixed portion of compensation, paid without regard to financial or operational performance.
•Annual cash bonus/variable compensation plans—in which approximately 70% of our full-time employees globally participate.
•Other benefit programs, such as health insurance and retirement plan contributions, depending on the practices and laws of the country of employment, and for certain employees, equity awards.
Adjustment and Assumptions. WeIn determining the median employee in 2017, we applied the allowed “de minimis” exception to exclude 325 employees in the following countries: China (130); Italy (48); South Korea (36); Switzerland (33); Netherlands (23); Japan (11); United Arab Emirates (8); Hong Kong (6); Taiwan (5); Russia (4); Singapore (3); Thailand (4); India (2); Denmark (1); Poland (1); Turkey (1); South Africa (1); United Kingdom (1); and Mexico (1). If we excluded any employees from a country using this de minimis exception, all employees from that country were excluded. We selected gross earnings (unreduced by anypre-tax medical or other benefits in the U.S.) as the appropriate measure of compensation and applied the same measure for employees innon-U.S. countries. This approach allowed us to include all elements of compensation while simplifying the process of gathering the relevant information. It also allowed us to reasonably compare compensation for North American employees and that of employees in multiple international locations. We obtained the information for ournon-North American-based employees from information maintained by a third party payroll processing provider in each country.
We considered gross earnings for all of our employees (other than those
non-U.S. employees excluded under the “de minimis” exemption described above), during the
12-month period ended December 31,
2017—2019—our fiscal year. We did not make
cost-of-living adjustments and did not annualize compensation of employees hired during
2017.2019.
In calculating employee compensation ofnon-U.S. employees, we averaged themonth-end exchange rates for each month in 20172019 and applied this average exchange rate to the relevant foreign currencies to convert compensation to U.S. dollars.
Median Employee.Using the methodology described, above, we determined that the “median employee” for the 12-month period ended December 31, 2017, was a full-time, salariednon-exempt lab technician in our Chlor Alkali Products and Vinyls division, working in the U.S., with gross earnings (wages, overtime pay and variable compensation) for the12-month period ended December 31, 2017 of approximately $78,838.
We determined the annual total compensation of this “median employee” by calculating the elements of 2017 compensation in accordance with the requirements that apply to the Summary Compensation Table for our NEOs on page 45. This resulted in annual total compensation of $84,855. As noted above, we used 2017 gross earnings to identify this employee as our median employee, which include the bonus for 2016 performance paid in 2017. The
As noted above, we are using the same median employee for the 2019 pay ratio calculation.
For the 12-month period ended December 31, 2019, the median employee had gross earnings (wages, overtime pay and variable compensation) of approximately $93,907. We determined the annual total compensation
forof this “median employee” by calculating the
median employee calculatedelements of 2019 compensation in accordance with the requirements
ofthat apply to the Summary Compensation Table
includes (i) the bonus for
2017 performance determined and paidour NEOs on page 43. This resulted in
2018, which was $1,025 higher, and (ii) employer contributions to the 401(k) plan and employer-paid life insurance premiumsannual total compensation of
$5,262.$107,139.
For the annual total compensation of our CEO, we used the amount reported in the “Total” column (column (j)) of our Summary Compensation Table on page
45.43.
In 2017,2019, our compensation package fornon-employee directors consisted of:
• | · | | an annual retainer of $80,000, of which at least $40,000 must be taken in shares of common stock;
|
| · | | phantom stock units with an aggregate fair market value equal to $115,000, rounded to the nearest 100 shares which are credited to a deferred account and not paid out until the director leaves the board (or an earlier change in control);
|
| · | | a fee of $2,500 per board meeting and committee meeting attended, or $1,250 forin-person board or committee meeting attended telephonically;
|
| · | | a $30,000 annual fee for the Lead Director and an additional $2,500 for each meeting he attends with management to prepare for board/committee meetings;
|
| · | | a $10,000 annual fee for the chair of each of the compensation and directors and corporate governance committees, and a $15,000 annual fee for the audit committee chair;
|
| · | | reimbursement for expenses incurred in the performance of their duties as directors;
|
| · | | participation in a charitable gift program, where we make a 50% matching contribution (up to $5,000 per year) for the director’s gifts to charities that meet the requirements of Code Section 501(c)(3); and
|
| · | | director liability insurance, personal excess liability coverage of $5 million per director, and coverage under our business travel accident insurance policy while on Olin business.
|
an annual retainer of $80,000, of which at least $40,000 must be taken in shares of common stock (for 2020, $120,000 of which at least $40,000 must be taken in shares of common stock, reflecting the elimination of meeting fees and the reallocation of those amounts to the annual retainer);
•phantom stock units with an aggregate fair market value equal to $115,000 at the measurement date, rounded to the nearest 100 shares which are credited to a deferred account and not paid out until the director leaves the board (or an earlier change in control);
•a fee of $2,500 per board meeting and committee meeting attended, or $1,250 for in-person board or committee meeting attended telephonically (all of which are eliminated in 2020);
•a $30,000 annual fee for the Lead Director and an additional $2,500 for each meeting he attends with management to prepare for board/committee meetings (with the meeting fees eliminated for 2020);
•a $10,000 annual fee for the chair of each of the compensation and directors and corporate governance committees, and a $15,000 annual fee for the audit committee chair (for 2020, a $15,000 annual fee for the chair of the directors and corporate governance committee, a $20,000 annual fee for the chair of the compensation committee, and a $25,000 annual fee for the chair of the audit committee);
•reimbursement for expenses incurred in the performance of their duties as directors;
•participation in a charitable gift program, where we make a 50% matching contribution (up to $5,000 per year) for the director’s gifts to charities that meet the requirements of Code Section 501(c)(3); and
•director liability insurance, personal excess liability coverage of $5 million per director, and coverage under our business travel accident insurance policy while on Olin business.
Fair market value for determining the number of shares included in all phantom stock and common stock awards described above is equal to the average of the high and low sale prices of our common stock on March 1 of the applicable year or the first day in March on which the NYSE is open for trading.
Each of Olin’s
non-employee directors participates in the Directors Plan, under which the stock and phantom stock amounts are paid. In addition to the phantom stock which must be deferred, a director may elect to defer other payments (cash and/or shares of our common stock). Amounts deferred in respect of common stock are credited as phantom shares of our common stock.
The following table shows all cash and stock retainers, meeting fees and other compensation we paid to each of ournon-employee directors during 2017.2019. Each of the directors listed below, except for Messrs. SchulzMses. Alderman, Babcock and Shipp,Streeter and Mr. Bogus, served for the entire year.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name (a) | | Fees Earned or Paid in Cash ($) (b) | | Stock Awards (1) ($) (c) | | Option Awards ($) (d) | | Non-equity Incentive Plan Compensation ($) (e) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings (f) | | All Other Compen- sation (2) ($) (g) | | Total ($) (h) |
| Heidi S. Alderman | | $ | 44,167 | | | $ | 73,759 | | | N/A | | N/A | | N/A | | $ | 0 | | | $ | 117,926 | |
| | | | | | | | | | | | | | |
| Beverley A. Babcock | | $ | 55,834 | | | $ | 92,794 | | | N/A | | N/A | | N/A | | $ | 5,793 | | | $ | 154,421 | |
| | | | | | | | | | | | | | |
| Gray G. Benoist | | $ | 90,000 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 15,354 | | | $ | 260,167 | |
| | | | | | | | | | | | | | |
| Donald W. Bogus | | $ | 0 | | | $ | 217,341 | | | N/A | | N/A | | N/A | | $ | 6,404 | | | $ | 223,745 | |
| | | | | | | | | | | | | | |
| C. Robert Bunch | | $ | 100,000 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 17,999 | | | $ | 272,812 | |
| | | | | | | | | | | | | | |
| Randall W. Larrimore | | $ | 86,250 | | | $ | 183,606 | | | N/A | | N/A | | N/A | | $ | 21,031 | | | $ | 290,887 | |
| | | | | | | | | | | | | | |
| John M. B. O’Connor | | $ | 87,500 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 14,460 | | | $ | 256,773 | |
| | | | | | | | | | | | | | |
| Earl L. Shipp | | $ | 75,000 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 14,750 | | | $ | 244,563 | |
| | | | | | | | | | | | | | |
| Vincent J. Smith | | $ | 90,000 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 14,460 | | | $ | 259,273 | |
| | | | | | | | | | | | | | |
| Stephanie A. Streeter | | $ | 0 | | | $ | 0 | | | N/A | | N/A | | N/A | | $ | 0 | | | $ | 0 | |
| | | | | | | | | | | | | | |
| Scott M. Sutton | | $ | 85,000 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 5,898 | | | $ | 245,711 | |
| | | | | | | | | | | | | | |
| William H. Weideman | | $ | 147,500 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 20,500 | | | $ | 322,813 | |
| | | | | | | | | | | | | | |
| Carol A. Williams | | $ | 83,750 | | | $ | 154,813 | | | N/A | | N/A | | N/A | | $ | 18,251 | | | $ | 256,814 | |
____________________
(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name (a)
| | Fees
Earned
or Paid
in Cash
($)
(b)
| | | Stock
Awards
(1)
($)
(c)
| | | Option
Awards
($)
(d)
| | | Non-equity
Incentive
Plan
Compensation
($)
(e)
| | | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
(f)
| | | All Other
Compen-
sation
(2)
($)
(g)
| | | Total
($)
(h)
| |
Gray G. Benoist | | $ | 90,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 9,890 | | | $ | 255,139 | |
Donald W. Bogus | | $ | 0 | | | $ | 240,353 | | | | N/A | | | | N/A | | | | N/A | | | $ | 17,307 | | | $ | 257,660 | |
C. Robert Bunch | | $ | 82,500 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 9,199 | | | $ | 246,948 | |
Randall W. Larrimore | | $ | 115,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 13,160 | | | $ | 283,409 | |
John M. B. O’Connor | | $ | 90,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 8,160 | | | $ | 253,409 | |
Richard M. Rompala | | $ | 165,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 11,308 | | | $ | 331,557 | |
Philip J. Schulz | | $ | 65,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 6,539 | | | $ | 226,788 | |
Earl L. Shipp | | $ | 0 | | | $ | 123,025 | | | | N/A | | | | N/A | | | | N/A | | | $ | 638 | | | $ | 123,663 | |
Vincent J. Smith | | $ | 85,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 8,160 | | | $ | 248,409 | |
William H. Weideman | | $ | 100,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 14,200 | | | $ | 269,449 | |
Carol A. Williams | | $ | 85,000 | | | $ | 155,249 | | | | N/A | | | | N/A | | | | N/A | | | $ | 15,861 | | | $ | 256,110 | |
(1) | This column represents the grant date fair value of 2017 stock awards to directors calculated in accordance with ASC Topic 718. These stock awards are deferred as stock units. A director can elect to defer additional portions of his or her compensation in stock units as well. The following table lists the phantom stock units held by each director in his or her deferred stock account, except for Mr. Schulz who retired on April 27, 2017, at December 31, 2017 (payable upon the director’s retirement from our board, or a later date selected by the director, in cash or stock at the director’s election, or upon an earlier change in control).
|
| | | | | | |
Name
| | Total Deferred
Stock Account
Balance
(in Shares)*
|
| Heidi S. Alderman | | 4,046 | |
Gray G. Benoist
Beverley A. Babcock | | | 11,5585,107 | |
Donald W. Bogus
Gray G. Benoist | | | 23,96820,844 | |
C. Robert Bunch
Donald W. Bogus | | | 12,3990 | |
Randall W. Larrimore
C. Robert Bunch | | | 11,10020,499 | |
Randall W. Larrimore | | 21,781 | |
| John M. B. O’Connor | | | 11,10019,200 | |
Richard M. Rompala
Earl L. Shipp | | | 15,57816,862 | |
PhilipVincent J. Schulz
Smith | | | 019,200 | |
Earl L. Shipp
Stephanie A. Streeter | | | 3,4240 | |
Vincent J. Smith
Scott M. Sutton | | | 11,1008,890 | |
William H. Weideman | | | 12,40020,500 | |
Carol A. Williams | | | 14,63324,135 | |
| * | Total includes stock awards of the type listed in column (c) above, additional amounts a director elects to defer in stock units and dividend equivalents on stock units held in the deferred stock account.
|
(2) | Consists of (i) the fair value of “dividend equivalents” paid to directors in 2017 on all Olin deferred stock units amounts, determined under ASC Topic 718, and (ii) amounts we contributed in 2017 to charities on behalf of directors under our matching charitable gifts program available to all employees and directors, as follows:
|
| | | | | | | | |
Name
| | Dividend
Equivalents
Paid on
Deferred Stock
Units
| | | Charitable
Gift Matching
Contributions
| |
Gray G. Benoist | | $ | 8,390 | | | $ | 1,500 | |
Donald W. Bogus | | $ | 17,307 | | | $ | 0 | |
C. Robert Bunch | | $ | 9,199 | | | $ | 0 | |
Randall W. Larrimore | | $ | 8,160 | | | $ | 5,000 | |
John M. B. O’Connor | | $ | 8,160 | | | $ | 0 | |
Richard M. Rompala | | $ | 11,308 | | | $ | 0 | |
Philip J. Schulz | | $ | 1,539 | | | $ | 5,000 | |
Earl L. Shipp | | $ | 638 | | | $ | 0 | |
Vincent J. Smith | | $ | 8,160 | | | $ | 0 | |
William H. Weideman | | $ | 9,200 | | | $ | 5,000 | |
Carol A. Williams | | $ | 10,861 | | | $ | 5,000 | |
| Differences in the amounts shown above among directors for dividend equivalents reflect the number of shares held as deferred stock units. Messrs. Benoist, Rompala, Schulz and Shipp elected to receive their dividend equivalents in the form of additional deferred stock units, while the other directors elected to receive the dividend equivalent payments in cash (current or deferred). Does not include perquisites and other personal benefits which did not exceed, in the aggregate, $10,000 for any director.
|
____________________
*Total includes stock awards of the type listed in column (c) above, additional amounts a director elects to defer in stock units and dividend equivalents on stock units held in the deferred stock account.
(2)Consists of (i) the fair value of “dividend equivalents” paid to directors in 2019 on all Olin deferred stock units amounts, determined under ASC Topic 718, and (ii) amounts we contributed in 2019 to charities on behalf of directors under our matching charitable gifts program available to all employees and directors, as follows:
| | | | | | | | | | | | | | |
| Name | | Dividend Equivalents Paid on Deferred Stock Units* | | Charitable Gift Matching Contributions |
| Heidi S. Alderman | | $ | 0 | | | $ | 0 | |
| Beverley A. Babcock | | $ | 2,043 | | | $ | 3,750 | |
| Gray G. Benoist | | $ | 15,354 | | | $ | 0 | |
| Donald W. Bogus | | $ | 6,404 | | | $ | 0 | |
| C. Robert Bunch | | $ | 15,499 | | | $ | 2,500 | |
| Randall W. Larrimore | | $ | 16,031 | | | $ | 5,000 | |
| John M. B. O’Connor | | $ | 14,460 | | | $ | 0 | |
| Earl L. Shipp | | $ | 12,250 | | | $ | 2,500 | |
| Vincent J. Smith | | $ | 14,460 | | | $ | 0 | |
| Stephanie A. Streeter | | $ | 0 | | | $ | 0 | |
| Scott M. Sutton | | $ | 5,898 | | | $ | 0 | |
| William H. Weideman | | $ | 15,500 | | | $ | 5,000 | |
| Carol A. Williams | | $ | 18,251 | | | $ | 0 | |
____________________
* Differences in the amounts shown above among directors for dividend equivalents reflect the number of shares held as deferred stock units. Messrs. Benoist and Shipp elected to receive their dividend equivalents in the form of additional deferred stock units, while the other directors elected to receive the dividend equivalent payments in cash (current or deferred). Does not include perquisites and other personal benefits which did not exceed, in the aggregate, $10,000 for any director.
The board of directors determines the total amounts of the annual retainer, meeting, lead director and board/committee chair fees, based on recommendations from the committee and input from Exequity. All stock-based
compensation for our directors is governed by the Directors Plan. The annual stock grant, retainer stock grant and cash retainer are paid for the
12-month period running from May 1 to April 30, with payments made on March 1 or the first day in March on which the NYSE is open for trading.
Under the Directors Plan, directors may choose to receive common stock instead of cash for any portion of their compensation. Directors may also elect to defer payments (cash or stock). We credit their deferred accounts with quarterly interest (on the cash portion) and with dividend equivalents (on the phantom stock portion). Phantom stock units are paid out in shares of our common stock or, at the director’s election, in cash. We also pay the balance of any deferred account to the director if there is a change in control—generally if:
| · | | a person or group acquires 40% or more of our assets, 30% or more of our stock, or a majority of the market value or voting power of our stock, or
|
| · | | a majority of our board members are not endorsed by the directors in office at the time of election.
|
•a person or group acquires 40% or more of our assets, 30% or more of our stock, or a majority of the market value or voting power of our stock, or
•a majority of our board members are not endorsed by the directors in office at the time of election.
We have stock ownership guidelines for ournon-employee directors where each such director is expected to own shares of our common stock with a market value of at least five times the amount of the annual retainer, within five years after the director joins our board. Eachnon-employee director met these guidelines and is in compliance with these guidelines as of the date of this Proxy Statement.
COMPENSATION COMMITTEE REPORT
The compensation committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on the review and discussions, recommends that it be included in Olin’s
20172019 annual report on Form
10-K and Proxy Statement for the
2018 Annual Meeting2020 annual meeting of
Shareholders.Richard M. Rompala, Chairman
Donald W. Bogus
C. Robert Bunch
Randall W. Larrimore
Vincent J. Smith
Carol A. Williams
February 15, 2018
ITEM 2—PROPOSAL TO APPROVE THE
OLIN CORPORATION 2018 LONG TERM INCENTIVE PLAN
The board of directors proposes that the shareholders approve the Olin Corporation 2018 Long Term Incentive Plan, or 2018 LTIP, as adopted by the board on February 16, 2018.
The 2018 LTIP, if approved, will provide for the issuance of 9,000,000 shares, plus any shares that were subject to outstanding awards to employees under our other equity plans that are cancelled, terminate, are unearned, expire, are forfeited, lapse for any reason or are settled in cash without the delivery of shares. If the 2018 LTIP is approved, no additional awards will be granted under our other equity incentive plans, except the Directors Plan.
The principal features of the 2018 LTIP are summarized below. The summary is not intended to be a complete description of the 2018 LTIP, and you should review the entire 2018 LTIP, a copy of which is included in this Proxy Statement as Appendix A.
General Nature and Purpose
The principal purposes of the 2018 LTIP are to (a) attract and retain employees, (b) provide competitive compensation packages to participants, (c) motivate participants to achieve long-range goals and (d) further align participants’ interests with those of Olin’s shareholders.
Under the 2018 LTIP, shares may be issued upon exercise or granting of options, stock appreciation rights (SARs), restricted stock, restricted stock units, performance shares and other stock-based awards (collectively, “awards”).
The LTIP provides that any employee of Olin or a subsidiary is eligible to participate in the plan. The number of participants in our equity plans has ranged between 190 and 240 in the past two years. Awards are made to officers and certain other senior-level employees annually as part of their overall compensation package. In addition,one-time special awards are made to other employees to recognize specific performance.
The board considered a number of factors in determining the number of shares of Olin common stock to be included in the 2018 LTIP for approval, including:
| · | | the number of participants;
| | |
| ·C. Robert Bunch, Chairman
Heidi S. Alderman
Randall W. Larrimore
Vincent J. Smith
William H. Weideman
Carol A. Williams |
| February 18, 2020 | | the historic burn rate associated with Olin equity compensation;
|
| · | | the potential dilutive impact of the issuance of shares under the 2018 LTIP on our stockholders; and
|
| · | | projections regarding future share usage.
|
Burn rate measures our usage of shares for our stock plans as a percentage of our outstanding stock. For 2017, 2016, and 2015, our burn rate was 0.88%, 0.98% and 0.83%, respectively. The rates were calculated by dividing the number of shares subject to awards granted during the fiscal year net of forfeitures and cancellations by the weighted average number of shares outstanding during the fiscal year. We have been advised by independent consultants that our average annual burn rate of 0.90% over this three-year period is considered reasonable by most institutional stockholders.
The board believes that the historic and proposed levels of dilution and burn rates are reasonable and in line with those of peer companies.
Administration
The board designated the compensation committee to administer the 2018 LTIP. The committee has full power to interpret the 2018 LTIP, including to determine eligibility for awards, and to adopt rules, forms and guidelines under the 2018 LTIP. Each member of the committee must be (i) a“non-employee director” for purposes of Rule16b-3 under the Exchange Act (Rule16b-3) and (ii) “independent” under the NYSE listing criteria. The full board also may elect to take any action under the 2018 LTIP that would otherwise be the responsibility of the compensation committee. The committee may delegate partial or full authority to one or more members of Olin’s management under the 2018 LTIP with respect to eligible employees who are not “officers” for purposes of Section 16(b) of the Exchange Act.
Subject to the terms and conditions of the 2018 LTIP, the committee has the authority to select the employees to whom awards are to be made, to determine the number of shares to be subject to awards and the terms and conditions of awards, and to make all other determinations and to take other actions necessary or advisable for the administration of the 2018 LTIP (other than to reprice outstanding options). The committee may at any time suspend or terminate the 2018 LTIP. Shareholder approval is required to reprice options. Shareholder approval is also required to increase the maximum number of shares subject to awards or other award limits or to reduce the minimum option exercise price, except that the committee is allowed to make appropriate proportionate adjustments for stock dividends, stock splits or similar events as allowed in Section 4(b) of the 2018 LTIP.
Eligibility
Awards under the 2018 LTIP may be granted to employees of Olin (or any current or future subsidiaries) selected by the committee for participation in the 2018 LTIP.
Awards
The 2018 LTIP provides that the committee will specify the type, terms and conditions of the award. Each award may be set forth in a separate agreement with the person receiving the award.
The 2018 LTIP provides that:
| · | | awards may be granted under the 2018 LTIP for up to 9,000,000 shares of Olin common stock, plus any shares subject to outstanding awards to employees under any other equity plan to the extent such awards expire, or are cancelled, forfeited or otherwise terminated without the issuance of shares after the effective date for the 2018 LTIP;
|
| · | | no more than 5,000,000 shares may be subject to grants of Incentive Stock Options (ISO);
|
| · | | no more than 2,000,000 shares may be subject to full value awards (restricted stock, restricted stock units, performance shares and other full value stock-based awards);
|
| · | | no more than 750,000 shares may be subject to options granted to any one individual in a calendar year;
|
| · | | no more than 750,000 shares may be subject to SARs granted to any one individual in a calendar year;
|
| · | | no more than 750,000 shares may be subject to restricted stock and restricted stock units granted to any one individual in a calendar year;
|
| · | | no more than 750,000 shares may be subject to performance shares granted to any one individual in a calendar year; and
|
| · | | no more than 750,000 shares may be subject to other stock-based awards granted to any one individual in a calendar year.
|
Shares exchanged or withheld to pay the purchase or exercise price of an award (including shares withheld to satisfy the exercise price of a SAR settled in stock), or to satisfy tax withholding obligations, count against the numerical limits.
The 2018 LTIP allows for grants of options, or the right to purchase Olin common stock at a specified price. Options may be nonqualified stock options (NQSOs) or ISOs. Total ISO awards are limited to 5,000,000 shares. No option exercise price may be less than the fair market value on the date of grant, which, unless the committee determines otherwise, is the closing price of Olin common stock on such date. The closing price of Olin common stock as of February 16, 2018 was $32.67. An option will become exercisable (at the discretion of the committee) in one or more installments on or after the grant date, subject to the participant’s continued employment with Olin.
ISOs will be designed to comply with certain restrictions contained in the Code. ISOs may be subsequently modified to disqualify them from treatment as ISOs. In the case of an ISO granted to an individual who owns (or is deemed to own) at least 10% of the total combined voting power of all classes of stock of Olin, the exercise price must be at least 110% of the fair market value of a share of Olin common stock on the date of grant, and the ISO must expire no later than the fifth anniversary of the date of its grant.
Restricted stock refers to stock that is subject to risk of forfeiture or other restrictions as the committee determines. Such restrictions will lapse under such circumstances as the committee may determine, including upon the achievement of performance criteria. In general, restricted stock may not be sold, or otherwise transferred or hypothecated, until the restrictions (if any) are removed or expire. Recipients of restricted stock may have voting rights and receive dividends paid with respect to such stock prior to the time when the restrictions lapse, as determined by the committee.
A restricted stock unit entitles the holder to receive shares of Olin common stock or cash at the end of a specified deferral period but does not entitle the holder to any voting rights. If the committee determines, holders of unvested restricted stock units may receive dividends or dividend equivalent payments.
The committee may issue shares of restricted stock or restricted stock units up to an aggregate 5% of the total number of shares available for issuance under this plan without any minimum vesting period. Grants of restricted stock and restricted stock units above that level must include a minimumone-year vesting period for performance-based grants and a minimum three-year vesting period for grants without any performance-based component.
Performance shares provide for future issuance of shares to the recipient upon the attainment of corporate performance goals established by the committee over specified performance periods. Prior to payment of performance shares, the committee will certify that the performance objectives were satisfied. Performance objectives may vary from individual to individual and will be based upon one or more performance criteria the committee may deem appropriate, including the criteria described above.
SARs may be granted in connection with stock options or separately, and are payable in cash. The term of a SAR may not exceed ten years. A SAR entitles the holder to receive, with respect to each share subject to the SAR, an amount equal to the excess of the fair market value of one share of Olin common stock on the date of exercise over the exercise price of the SAR set by the committee as of the date of grant. There are no restrictions specified in the 2018 LTIP on the amount of gain realizable from the exercise of SARs, although restrictions may be imposed by the committee.
Dividend equivalents represent the value of any dividends per share paid by Olin, calculated with reference to the number of shares covered by the awards held by the participant. This value is converted into cash or additional shares of Olin common stock, as determined by the committee. Payment may be made concurrently with actual dividend payments or may be deferred, at the election of the committee.
The committee may make other stock-based awards in such amounts and subject to such terms and conditions as the committee shall determine.
General
Method of Exercise. To exercise an option, the optionee must deliver to Olin a notice of exercise and full payment for the shares. The option price may be paid in cash, or by tendering shares of Olin common stock already issued or issuable upon exercise of the option or by any other form of payment, which is approved by the committee and is consistent with the 2018 LTIP and applicable law, or by any combination of the above.
Termination of Employment. Awards terminate upon termination of the participant’s employment by Olin for cause or by the employee without Olin’s written consent. Vested options held
at the time an optionee’s employment terminates for any other reason (excluding retirement) may be exercised for three months after termination, or such longer period as the committee provides. Vested options held at the time an optionee’s employment terminates due to retirement may be exercised at any time until the expiration date of the option, or such shorter period as the committee provides at the time of the termination. In no event, however, can an option be extended beyond the expiration date.
Non-Compete. If a participant renders service to a competitor of Olin, or discloses confidential information without Olin’s consent, or violates other terms of the 2018 LTIP, generally the committee may terminate any unvested, unpaid or deferred awards held by the participant, or may require the participant to forfeit benefits received under the 2018 LTIP within the six months prior to such action.
Non-Transferability. Awards may be transferred only by will or by the laws of descent and distribution, and during a participant’s lifetime are exercisable only by the participant. However, the committee may in its discretion permit transfers by gift to a member of the holder’s family members or related entities or pursuant to certain domestic relations orders.
Change in Control. In the event of a Change in Control of Olin (except for performance shares, which will become immediately and fully vested), the vesting of awards will only be accelerated if:
| · | | the acquiring company does not continue the restricted stock units (or a comparable award) after the Change in Control; or
|
| · | | the recipient’s employment is terminated (or in certain cases, constructively terminated) upon or following the Change in Control.
|
A “Change in Control” occurs if:
| · | | the incumbent directors (or their successors approved by at leasttwo-thirds of the incumbent directors) cease to constitute at least a majority of the members of the board (except directors initially added to the board as a result of an actual or threatened election contest);
|
| · | | a person or group of persons other than Olin, a subsidiary, employee benefit plan (or related trust) of Olin or a subsidiary, the participant or any group including the participant, or an underwriter on a temporary basis, becomes the beneficial owner (as that term is defined under Rule13d-3 of the Exchange Act), of 20% or more of Olin’s then-outstanding voting stock;
|
| · | | Olin or a subsidiary consummates a merger or similar transaction or sells all or substantially all of its assets to an unaffiliated entity, unless immediately following such transaction: (1) more than 50% of the total voting power of the surviving entity or of the acquiring entity is represented by Olin common stock or securities into which such shares were converted, (2) no person (other than an employee benefit plan sponsored or maintained by the surviving entity or the acquiring entity) becomes the beneficial owner of 20% or more of the total voting power and (3) at least a majority of the members of the board (or similar body) of the surviving entity or the acquiring entity were incumbent directors of Olin’s board at the time Olin’s board approved the initial agreement for such transaction; or
|
| · | | Olin’s shareholders approve a plan of complete liquidation or dissolution of Olin.
|
ERISA. The 2018 LTIP is neither a qualified pension, profit sharing or stock bonus plan under Code Section 401(a) nor an “employee benefit plan” subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended.
Adjustments Upon Change in Capitalization. If the outstanding shares of Olin common stock are changed into or exchanged for a different number or kind of shares of Olin or other securities of Olin by reason of merger, consolidation, recapitalization, stock split, stock dividend, combination or exchange of shares,split-up,split-off,spin-off or other similar change in capitalization or any distribution to shareholders other than cash dividends, the committee will make an appropriate and equitable adjustment in the number, kind and prices of shares as to which all outstanding awards will be awarded, including adjustments to the limitations on the maximum number and kind of shares subject to the award limits.
Shares Available for Awards. Subject to adjustment as provided in the 2018 LTIP, the aggregate number of shares of our common stock reserved and available for issuance for awards granted under the 2018 LTIP is the sum of (i) 9,000,000 shares not previously authorized for issuance under any other plan, plus (ii) any shares currently subject to any outstanding award under the prior equity plans for employees as of the effective date of the 2018 LTIP, to the extent forfeited. For details regarding the shares subject to outstanding equity awards, see the table entitled “Equity Compensation Plan Information” on page 77. Shares subject to awards under the existing employee equity plans or the 2018 LTIP that are cancelled, forfeited or otherwise terminated, or that by their terms are settled entirely in cash instead of shares, will be added back to the shares available under the 2018 LTIP. Shares exchanged or withheld to pay the purchase or exercise price of an award (including shares withheld to satisfy the exercise price of a SAR settled in stock) or to satisfy tax withholding obligations count against the numerical limits. Of these shares, a maximum of 5,000,000 shares may be subject to grants of Incentive Stock Options (ISOs) and 2,000,000 shares may be “full value awards” (restricted stock, restricted stock units, performance shares and other full value stock-based awards).
Changes from 2016 LTIP. The 2018 LTIP is modeled after our current 2016 LTIP, approved by shareholders at the 2016 annual meeting. The primary substantive change from the 2016 LTIP is an increase in the number of shares subject to the plan from 6,000,000 to 9,000,000 shares, coupled with a prohibition on any additional awards under our other equity plans for employees. Any shares subject to outstanding awards under any of our other equity plans for employees that may expire, be cancelled, forfeited or otherwise terminated without the issuance of shares after the date the 2018 LTIP is approved by shareholders will be added to the 2018 LTIP.
The 2018 LTIP also includes appropriate increases in the various caps on different types of awards and if the 2018 LTIP is approved, no additional awards will be granted under our other equity plans (our 2000, 2003, 2006, 2009, 2014 and 2016 Long Term Incentive Plans), except for the Directors Plan.
Amendment. The compensation committee generally may amend the 2018 LTIP, except for amendments that would increase the total number of shares available for awards or for any category of awards, reduce the minimum option exercise price, or permit repricing of options (other than such amendments made pursuant to permitted adjustments under the 2018 LTIP).
Benefits Under 2018 LTIP
No awards have been granted under the 2018 LTIP, so that benefits accruing pursuant to the 2018 LTIP are not presently determinable.
Federal Income Tax Consequences
We believe that under present law, the following discussion summarizes the U.S. federal income tax consequences generally arising with respect to awards under the 2018 LTIP.
Stock Options. The grant of a NQSO is not a taxable event either for the optionee or for Olin. Upon exercise of a NQSO, the optionee will recognize ordinary income in an amount equal to the excess of the fair market value of the shares of Olin common stock acquired upon exercise, determined at the date of exercise, over the exercise price of such option. Olin will be entitled to a business expense deduction equal to such amount, subject to the limitations imposed by Code Section 162(m). Generally, Code Section 162(m) restricts deductibility by Olin of compensation above $1 million paid to the CEO, the CFO and the three highly paid officers (other than the CEO and CFO), and any person who was a CEO, CFO, or one of the other three highest paid officers in any year after 2016.
An optionee recognizes no taxable income upon the grant or exercise of an ISO, although payment of the option price with shares of Olin common stock may result in taxable income on the transfer of the shares. The payment in shares will not affect the favorable tax treatment of the Olin common stock received as a result of exercising the option. If an optionee meets the various holding period requirements, any gain or loss on the subsequent disposition of such Olin common stock will be taxed to the optionee as long-term capital gain or loss, and Olin will not be entitled to a deduction. To the extent that an optionee recognizes ordinary income by reason of failing to meet those requirements, Olin will be entitled to a corresponding business expense deduction, subject to the limit imposed by Code Section 162(m).
Restricted Stock and Restricted Stock Units. A holder of restricted stock generally will recognize ordinary income in an amount equal to the fair market value of the Olin common stock upon lapse of the restrictions. A holder of restricted stock units generally will recognize ordinary income in an amount equal to the fair market value of the Olin common stock upon issuance of the shares (or upon receipt of the cash payment, in an amount equal to the cash payment, if the restricted stock units are settled in cash). Subject to the limit imposed by Code Section 162(m), Olin is entitled to a business expense deduction that corresponds to the amount of ordinary income recognized by the holder.
SARs. Generally, the holder of a SAR recognizes no income upon the grant of a SAR. Upon exercise, the holder will recognize as ordinary income the excess of the value of the SAR on the date of exercise over the value as of the date of grant. Olin is entitled to a business expense deduction that corresponds to the amount of ordinary income recognized by the holder, subject to the limit imposed by Code Section 162(m).
Dividend Equivalents and Deferred Payments of Restricted Stock. In general, recipients of dividend equivalents and deferred payments of restricted stock are taxable upon receipt. Subject to the limit imposed by Code Section 162(m), Olin is entitled to a business expense deduction that corresponds to the amount of ordinary income recognized by the recipient.
Payment of Withholding Taxes
Olin may withhold, or require a participant to remit to Olin, an amount sufficient to satisfy any federal, state or local withholding tax requirements associated with awards under the 2018 LTIP. Recipients of awards may elect, subject to the approval of the committee, to satisfy the withholding requirement by having Olin withhold shares.
Vote Required for Approval
The affirmative vote of the holders of a majority of the votes cast is required to approve this proposal. If you hold your shares through a broker and you do not instruct the broker on how to vote on
this proposal, your broker will not have authority to vote your shares. Under applicable NYSE rules, abstentions will be treated as votes cast on this proposal, but shares held in street name that are not voted on this proposal will not be treated as votes cast on this proposal. As a result, shares held in street name that are not voted on this proposal will have no effect on the proposal to approve the 2018 LTIP. Abstentions will have the same effect as a vote AGAINST the proposal to approve the 2018 LTIP. Signed proxies will be voted FOR approval of the proposal unless otherwise specified.
The board recommends a vote FOR approval of the 2018 Long Term Incentive Plan.
Equity Compensation Plan Information
| | | | | | | | | | | | |
| | | (a)
| | | (b)
| | | (c)
| |
Plan Category
| | Number of
securities
to be issued upon
exercise of
outstanding
options, warrants
and rights (1)
| | | Weighted-average
exercise
price of
outstanding
options, warrants
and rights
| | | Number of securities
remaining available for
future issuance under
equity compensation
plans excluding
securities reflected in
column (a) (1)
| |
Equity compensation plans approved by security holders (2) | | | 6,517,212 | (3) | | $ | 22.72 | (3) | | | 5,798,415 | |
Equity compensation plans not approved by security holders | | | N/A | | | | N/A | | | | N/A | |
| | |
|
|
| |
|
|
| |
|
|
|
| | | |
Total | | | 6,517,212 | | | $ | 22.72 | (3) | | | 5,798,415 | |
| | |
|
|
| |
|
|
| |
|
|
|
(1) | Number of shares is subject to adjustment for changes in capitalization for stock splits and stock dividends and similar events. As described above, if the 2018 LTIP is approved by shareholders, no awards will be made under any of these plans, other than tonon-employee directors under the Directors Plan.
|
(2) | Consists of the 2000 Long Term Incentive Plan, the 2003 Long Term Incentive Plan, the 2006 Long Term Incentive Plan, the 2009 Long Term Incentive Plan, the 2014 Long Term Incentive Plan, the 2016 Long Term Incentive Plan and the Directors Plan.
|
| · | | 5,342,526 shares issuable upon exercise of options with a weighted average exercise price of $22.72, and a weighted average remaining term of 7.1 years;
|
| · | | 192,200 shares issuable under restricted stock unit grants, with a weighted average remaining term of 1.3 years;
|
| · | | 855,225 shares issuable in connection with outstanding performance share awards, with a weighted average term of 2.1 years remaining in the performance measurement period; and
|
| · | | 127,261 shares under the Directors Plan which represent stock grants for retainers, other board and committee fees, and dividends on deferred stock under the plan.
|
ITEM 3—2—PROPOSAL TO CONDUCT AN ADVISORY VOTE TO
APPROVE THE COMPENSATION FOR NAMED EXECUTIVE OFFICERS
Following the advisory vote on the frequency of a shareholder vote on executive compensation at last year’s annual meeting of shareholders, our board of directors decided to continue with the annual advisory vote by shareholders to approve the compensation for NEOs.
You are being asked to cast an advisory vote on approval of the compensation of our NEOs at the annual meeting. This proposal, commonly known as a
“say-on-pay” “say-on-pay” proposal, is required under Section 14A of the Exchange Act. The proposal gives you the opportunity, on an advisory vote basis, to approve or not approve the compensation of the NEOs through the following resolution:
“RESOLVED, that the compensation paid to the Olin named executive officers, as disclosed pursuant to Item 402 of Regulation
S-K, including the Compensation Discussion and Analysis, compensation tables and narrative disclosure, is hereby APPROVED.”
Because your vote is advisory, it will not be binding on the board and it will not directly affect or otherwise limit any existing compensation or award arrangement of any of our NEOs. Our compensation committee does intend to take into account the outcome of the vote when considering future executive compensation arrangements.
Vote Required for Approval
| | |
| Vote Required for Approval |
Approval of this proposal requires that more votes be cast FOR this proposal than are cast AGAINST.AGAINST this proposal. Abstentions and broker non-votes, if any, will not be included in determining the number of votes cast on this proposal and brokernon-votes will not be counted as votes cast and thus will not have any effect on the result of the vote.
The board of directors recommends a vote FOR approval of this resolution.
ITEM
4—3—PROPOSAL TO RATIFY APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG was our independent registered public accounting firm for
20172019 and
2016.2018. A summary of the KPMG fees by year follows:
| | | | | | | | |
| | | Fees ($ in thousands)
|
| | | 2017
| | 2016
|
Nature of Service
| | $
| | %
| | $
| | %
|
Audit Fees(1) | | $4,965 | | 100% | | $5,010 | | 100% |
Audit Related Fees | | — | | — | | — | | — |
Tax Fees | | | | | | | | |
Tax Compliance | | — | | — | | — | | — |
Tax Consultation and Planning | | — | | — | | — | | — |
All Other Fees | | — | | — | | — | | — |
| | |
| |
| |
| |
|
| | | $4,965 | | 100% | | $5,010 | | 100% |
| | |
| |
| |
| |
|
(1) | Includes costs associated with the annual audit, including quarterly financial reviews, services required under Section 404 of the Sarbanes-Oxley Act, statutory audits, comfort letters, attest services, consents and assistance with and review of filings with the SEC, including registration statements filed in both 2016 and 2017.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Fees ($ in thousands) | | | | | | |
| | 2019 | | | | 2018 | | |
| Nature of Service | | $ | | % | | $ | | % |
| Audit Fees (1) | | $5,225 | | | 100% | | | $5,050 | | | 100% | |
| Audit Related Fees | | — | | | — | | | — | | | — | |
| Tax Fees | | | | | | | | |
| Tax Compliance | | — | | | — | | | — | | | — | |
| Tax Consultation and Planning | | — | | | — | | | — | | | — | |
| All Other Fees | | — | | | — | | | — | | | — | |
| | $5,225 | | | 100% | | | $5,050 | | | 100% | |
____________________
(1)Includes costs associated with the annual audit, including quarterly financial reviews, services required under Section 404 of the Sarbanes-Oxley Act, statutory audits, comfort letters, attest services, consents and assistance with and review of filings with the SEC, including registration statements filed in both 2018 and 2019.
Our audit committee has a policy that all audit services by any independent registered public accounting firm and all
non-audit services performed by our independent registered public accounting firm are subject to
pre-approval by the audit committee at each scheduled meeting. The policy includes specific procedures for approval of such services. Excerpts from this policy follow:
Olin’s audit committee is solely responsible forpre-approving all audit services by any independent registered public accounting firm and allnon-audit services performed by Olin’s independent registered public accounting firm. The process for such approval is as follows:
• | · | | The annual budget for all such services will be submitted to the committee for approval in the first quarter of each year. The budget submission will include details of actual expenditures for each audit andThe annual budget for all such services will be submitted to the committee for approval in the first quarter of each year. The budget submission will include details of actual expenditures for each audit and non-audit service for the prior year versus the prior year budget and estimated spending for services in the current year. The budget will also provide for certain specific services that will be pre-approved within a limited dollar range per service. These pre-approved services are also subject to an annual spending cap.
•At each subsequent audit committee meeting, the budget will be updated for changes in estimated spending involving previously approved services. The budget will also be updated to include any new services identified by operations management that need to be submitted for approval. •Any services not detailed in the budget or on the list of specific services that will bepre-approved within a limited dollar range per service. Thesepre-approved services are also subject to an annual spending cap. |
| · | | At each subsequent audit committee meeting, the budget will be updated for changes in estimated spending involving previously approved services. The budget will also be updated to include any new services identified by operations management that need to be submitted for approval.
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| · | | Any services not detailed in the budget or on the list of specificpre-approved services must be approved by the committee. In the event that approval is needed for a service in advance of a regularly scheduled audit committee meeting, the Chair of the committee is authorized to approve the service and report such approval to the other committee members at the next regularly scheduled committee meeting.
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In 2017,the event that approval is needed for a service in advance of a regularly scheduled audit committee meeting, the Chair of the committee is authorized to approve the service and report such approval to the other committee members at the next regularly scheduled committee meeting.
In 2019, the audit committeepre-approved all audit and audit-related services.
Who has the audit committee selected as Olin’s independent registered public accounting firm for 2018?
2020?
Olin’s audit committee is solely responsible for hiring and compensating Olin’s independent registered public accounting firm. After considering KPMG’s
20172019 performance and the fees proposed for their preliminary audit plan for
2018,2020, the committee has selected KPMG as our independent registered public accounting firm for
2018.2020.
Is a shareholder vote required to approve Olin’s independent registered public accounting firm?
Neither Virginia law nor Olin’s Bylaws require Olin to submit this matter to the shareholders at the annual meeting. However, the board and audit committee chose to submit it to the shareholders to ascertain their views.
Will I have an opportunity to hear from KPMG and ask them questions?
We expect representatives of KPMG to be present at the annual meeting. They will have an opportunity to make a statement, if they desire to do so, and to respond to appropriate questions.
Vote Required for Approval
| | |
| Vote Required for Ratification |
To ratify the appointment of KPMG as Olin’s independent registered public accounting firm for
20182020 the votes cast FOR this proposal must exceed the votes cast AGAINST this proposal. Abstentions and shares held in street name that are not voted on this proposal will not be included in determining the number of votes cast on this proposal and will not have any effect on the result of the vote.
If the shareholders’ ratification vote does not support the audit committee’s decision to appoint KPMG as Olin’s independent registered public accounting firm for
2018,2020, the audit committee will take the vote into consideration in making next year’s selection.
The board of directors recommends a vote FOR ratification of the appointment of KPMG as our independent registered public accounting firm for 2018.2020.
Appendix A
OLIN CORPORATION
2018 LONG TERM INCENTIVE PLAN
Section 1.Purpose.
The general purposes
ITEM 4—APPROVAL OF AMENDMENT TO AMENDED AND RESTATED ARTICLES OF INCORPORATION TO DECLASSIFY
THE BOARD OF DIRECTORS
Olin’s current Amended and Restated Articles of Incorporation (Current Articles) divide the board of directors into three classes. Each class is elected for a three-year term, with the terms staggered so that approximately one-third of the Olin Corporation 2018 Long Term Incentive Plan aredirectors stands for election each year.
The board of directors recommends amendments to (i) attractthe Current Articles (collectively, the Declassification Amendment) that would declassify the board and retain persons eligiblerequire each director nominee to participatebe elected annually for a one-year term. Under the proposed amendments, the annual election of all directors would commence at the 2021 annual meeting. Declassification would therefore result in the Plan; (ii) motivate Participants, byshortening of the existing terms of each of the directors whose terms extend beyond the 2021 annual meeting.
Many public companies have had classified boards, intended to provide continuity among directors and encourage the independence and long-term focus of directors, reasoning that directors serving longer terms are less subject to outside influence. However, classified board structures have come to be viewed as a negative governance practice due to the perception that directors elected to staggered multi-year terms are less accountable to shareholders. Director elections are the primary means for shareholders to express their views on the performance of appropriate incentives, to achieve long-range goals; (iii) provide incentive compensation opportunitiesindividual directors, and a classified board structure affords shareholders this opportunity only once every three years for each director. A declassified board of directors has become a corporate governance “best practice”.
The board of directors considered the advantages and disadvantages of the current classified structure and determined that are competitive with those of other similar companies; and (iv) further align Participants’the Declassification Amendment is in the best interests with those of other shareholders of Olin Corporation through compensation that is based on Olin’s common stock; and thereby promote the long-term financial interest of Olin and its Affiliates, including growth inshareholders.
If approved by shareholders, the valueDeclassification Amendment would become effective upon the Company receiving a Certificate of Olin’s equity and enhancement of long-term shareholder return.Section 2.Definitions.
As used inAmendment from the Plan:
(a) | “Affiliate” means any corporation, partnership, joint venture or other entity during any period in which Olin owns, directly or indirectly, at least 50% of the total voting or profits interest.
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(b) | “Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Other Stock-Based Award or Dividend Equivalent granted under the Plan.
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(c) | “Award Agreement” means any written or electronic agreement or other instrument or document evidencing an Award granted under the Plan, regardless of whether a Participant signature is required.
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(d) | “Board” means the Board of Directors of Olin, or if applicable following a Change in Control (described in Section 2(e)(iii)), the board of directors (or similar governing body in the case of an entity other than a corporation) of the Parent Entity (as defined in Section 2(e)(iii)) or, if there is no Parent Entity, the Surviving Entity (as defined in Section 2(e)(iii)).
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(e) | “Change in Control” means the occurrence of any of the following events:
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| (i) | the Incumbent Directors cease for any reason to constitute at least a majority of the Board; or
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| (ii) | any Person is or becomes a “beneficial owner” (as such term is defined in Rule13d-3 under the Exchange Act), directly or indirectly, of securities of Olin representing 20% or more of the combined voting power of the Olin Voting Securities; provided, however, that the event described in this subsection (ii) shall not be deemed to be a Change in Control if such event results from any of the following: (A) the acquisition of Olin Voting Securities by Olin or any of its subsidiaries, (B) the acquisition of Olin Voting Securities directly from Olin; (C) the acquisition of Olin Voting Securities by any employee benefit plan (or related trust) sponsored or maintained by Olin or any of its subsidiaries, (D) the acquisition of Olin Voting Securities by any underwriter temporarily holding securities pursuant to an offering of such securities, (E) the acquisition of Olin Voting Securities pursuant to aNon-Qualifying Transaction (as defined in Section 2(e)(iii)), or (F) the acquisition of Olin Voting Securities by Participant or any Group of Persons including Participant (or any entity controlled by Participant or any Group of Persons including Participant); or
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| (iii) | the consummation of a Reorganization or a Sale, unless immediately following such Reorganization or Sale: (1) more than 50% of the total voting power (in respect of the
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| election of directors, or similar officials in the case of an entity other than a corporation) of (x) Olin (or, if Olin ceases to exist, the entity resulting from such Reorganization), or, in the case of a Sale, the entity which has acquired all or substantially all of the assets of Olin (in either case, the “Surviving Entity”), or (y) if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of more than 50% of the total voting power (in respect of the election of directors, or similar officials in the case of an entity other than a corporation) of the Surviving Entity (the “Parent Entity”), is represented by Olin Voting Securities that were outstanding immediately prior to such Reorganization or Sale (or, if applicable, is represented by shares into which or for which such Olin Voting Securities were converted or exchanged pursuant to such Reorganization or Sale) with ownership of such Olin Voting Securities (or, if applicable, shares into which or for which such Olin Voting Securities were converted or exchanged pursuant to such Reorganization or Sale) continuing in substantially the same proportions as the ownership of Olin Voting Securities immediately prior to consummation of such Reorganization or Sale (excluding any outstanding voting securities of the Surviving Entity or Parent Entity that are held immediately following the consummation of such Reorganization or Sale as a result of ownership prior to such consummation of voting securities of any corporation or other entity involved in or forming part of such Reorganization or Sale other than Olin or any of its subsidiaries), (2) no Person (other than any employee benefit plan (or related trust) sponsored or maintained by Olin, the Surviving Entity, or the Parent Entity), is or becomes the beneficial owner, directly or indirectly, of 20% or more of the total voting power (in respect of the election of directors, or similar officials in the case of an entity other than a corporation) of the outstanding voting securities of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) and (3) at least a majority of the members of the Board following the consummation of the Reorganization or Sale were, at the time of the approval by the Board of the execution of the initial agreement providing for such Reorganization or Sale (or, in the absence of any such agreement, at the time of approval by the Board of such Reorganization or Sale), Incumbent Directors (any Reorganization or Sale which satisfies all of the criteria specified in (1), (2) and (3) above being deemed to be a“Non-Qualifying Transaction”); provided, however, that if, in connection with a Reorganization or Sale that would otherwise be considered a Change in Control pursuant to this Plan, (I) the immediately preceding clause (3) is satisfied, (II) at least seventy-five percent (75%) of the individuals who were executive officers (within the meaning of Rule3b-7 under the Exchange Act) of Olin immediately prior to consummation of such Reorganization or Sale become executive officers of the Parent Entity (or, if there is no Parent Entity, the Surviving Entity) immediately following such Reorganization or Sale, and (III) the Incumbent Directors at the time of approval by the Board of such Reorganization or Sale determine in good faith that such individuals are expected to remain executive officers for a significant period of time following such Reorganization or Sale, then such directors shall be permitted to determine by at least atwo-thirds vote that such Reorganization or Sale shall not constitute a Change in Control of Olin for purposes of this Plan; or
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| (iv) | the stockholders of Olin approve a plan of complete liquidation or dissolution of Olin.
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Notwithstanding the foregoing, if any Person becomes the beneficial owner, directly or indirectly, of 20% or moreState Corporation Commission of the combined voting powerCommonwealth of Olin Voting Securities solely as a resultVirginia. Conforming amendments would also be made to Olin’s Bylaws, conditioned on the effectiveness of the acquisitionArticles of Olin Voting SecuritiesAmendment. Shareholder approval is not required to make these amendments to Olin’s Bylaws and the board has already approved the amendments to Olin’s Bylaws, contingent on the receipt by Olin which reduces the number of Olin Voting Securities outstanding, such increased amount shall be deemed not to result in a Change in Control; provided, however, that if such Person subsequently becomes the beneficial owner, directly or indirectly, of additional Olin Voting Securities that increases the percentage of outstanding Olin Voting Securities beneficially owned by such Person, a Change in Control of Olin shall then be deemed to occur.
(f) | “Code” means the Internal Revenue Code of 1986, as amended. A reference to any provision of the Code shall include reference to any successor provision of the Code.
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(g) | “Committee” means a committee of the Board designated by the Board to administer the Plan, each member of which is (i) “independent” under the New York Stock Exchange listing criteria, and (ii) a“non-employee director” for the purpose of Rule16b-3, and, to the extent the Committee delegates authority to one or more individuals in accordance with the Plan, such individual(s).
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(h) | “Dividend Equivalent” means any right granted under Section 6(c)(ii) of the Plan.
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(i) | “Effective Date” means the date this Plan is approved by Olin’s shareholders.
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(j) | “Employee” means any employee of Olin or of an Affiliate designated as such on the applicable payroll records, regardless of whether an individual is subsequently retroactively reclassified as a common law employee of Olin or an Affiliate during the applicable period.
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(k) | “Exchange Act” means the Securities Exchange Act of 1934.
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(l) | “Fair Market Value” means, (i) with respect to shares of Olin common stock, a price that is based on the opening, closing, actual, high, low, average or mean selling prices of such common stock on the New York Stock Exchange as of the relevant date, or the last preceding trading date or the next succeeding trading date, if such Shares were not traded on such date, or an average of trading days, as determined by the Committee in its discretion; however, unless the Committee determines otherwise, Fair Market Value with respect to shares of Olin common stock shall mean the mean of the high and low sales price per share of such common stock as reported on the New York Stock Exchange as of the relevant date, or the last preceding trading date, if such Shares were not traded on such date, and, (ii) with respect to any other property (including, without limitation, securities other than Shares), the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee.
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(m) | “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,mother-in-law,father-in-law,son-in-law,daughter-in-law,brother-in-law orsister-in-law, including adoptive relationship, or any person sharing the Participant’s household, other than a tenant or employee.
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(n) | “Good Reason Event” means:
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| (i) | Olin (A) requires Participant to relocate Participant’s principal place of employment by more than fifty (50) miles from the location in effect immediately prior to the Change in Control and such relocation increases the commuting distance, on a daily basis, between Participant’s residence at the time of relocation and principal place of employment; or (B) requires Participant to travel on business to a substantially greater extent than, and inconsistent with, Participant’s travel requirements prior to the Change in Control (taking into account the number and/or duration (both with respect to airtime and overall time away from home) of such travel trips following the Change in Control as compared to a comparable period prior to the Change in Control);
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| (ii) | Olin reduces Participant’s base salary or fails to increase Participant’s base salary on a basis consistent (as to frequency and amount) with Olin’s salary system for Participant officers as in effect immediately prior to the Change in Control;
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| (iii) | Olin fails to substantially maintain its health, welfare and retirement benefit plans as in effect immediately prior to the Change in Control, unless arrangements (embodied in an
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| on-going substitute or alternative plan) are then in effect to provide benefits that are substantially similar to those in effect immediately prior to the Change in Control; or
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| (iv) | (A) Participant is assigned any duties inconsistent in any adverse respect with Participant’s position (including status, offices, titles and reporting lines), authority, duties or responsibilities immediately prior to the Change in Control or (B) Olin takes any action that results in a diminution in such position (including status, offices, titles and reporting lines), authority, duties or responsibilities or in a substantial reduction in any of the resources available to carry out any of Participant’s authorities, duties or responsibilities from those resources available immediately prior to the Change in Control.
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(o) | “Group” means Persons acting together for the purpose of acquiring Olin stock and includes owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with Olin. If a Person owns stock in both Olin and another corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such Person is considered to be part of a Group only with respect to ownership prior to the merger or other transaction giving rise to the change and not with respect to the ownership interest in the other corporation. Persons will not be considered to be acting as a Group solely because they purchase assets of the same corporation at the same time, or as a result of the same public offering.
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(p) | “Incentive Stock Option” means an option to purchase Shares granted under the Plan that is intended to meet the requirements of Section 422 of the Code.
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(q) | “Incumbent Directors” means those individuals who, on the Effective Date, constitute the Board; provided that any person becoming a director subsequent to the Effective Date, whose election or nomination for election was approved by a vote of at leasttwo-thirds of the directors who were, as of the date of such approval, Incumbent Directors, shall be an Incumbent Director; provided, however, that no individual initially appointed, elected or nominated as a director of Olin pursuant to an actual or threatened election contest with respect to directors or pursuant to any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be an Incumbent Director.
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(r) | “Non-Qualified Stock Option” means an option to purchase Shares granted under the Plan that is not intended to be (or does not meet the requirements of) an Incentive Stock Option.
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(s) | “Non-Qualifying Transaction” has the meaning set forth in the definition of Change in Control.
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(t) | “Olin” means Olin Corporation and any successor entity.
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(u) | “Olin Voting Securities” means Olin’s then outstanding securities eligible to vote for the election of the Board.
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(v) | “Option” means an Incentive Stock Option or aNon-Qualified Stock Option.
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(w) | “Other Stock-Based Awards” means other types of equity-based or equity-related Awards not otherwise described by the terms of this Plan (including the grant or offer for sale of unrestricted Shares).
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(x) | “Parent Entity” has the meaning set forth under the definition of Change in Control.
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(y) | “Participant” means an Employee granted an Award under the Plan.
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(z) | “Performance Share” means any grant of a right to receive Shares which is contingent on the achievement of performance or other objectives during a specified period.
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(aa) | “Person” has the meaning of such term in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.
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(bb) | “Plan” means this Olin Corporation 2018 Long Term Incentive Plan.
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(cc) | “Qualifying Termination” means:
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| (i) | Participant is discharged by Olin, upon or following a Change in Control, other than for cause and other than due to Participant’s death or disability (which will be deemed to occur if Participant becomes eligible to commence immediate receipt of disability benefits under the terms of Olin’s long-term disability plan); or
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| (ii) | A Good Reason Event occurs upon or following a Change in Control and (A) within 90 days following the occurrence of the Good Reason Event, Participant provides written notice to Olin of the occurrence of such Good Reason Event, which notice sets forth the exact nature of the event and the conduct required to cure such event, and (B) Olin does not cure such Good Reason Event within 30 days after its receipt of such notice; provided that such30-day period to cure shall terminate in the event that Olin informs Participant that it does not intend to cure such event (such period, whether 30 days or less, the “Cure Period”), and (C) Participant terminates employment as a result of such Good Reason Event during the 45 day period that follows the Cure Period.
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If (x) Participant’s employment is terminated prior to a Change in Control for reasons that would have constituted a Qualifying Termination if they had occurred upon or following a Change in Control, (y) Participant reasonably demonstrates that such termination of employment (or event described in Section 2(cc)(ii) above) occurred at the requestCompany of a third party who had indicated an intention or taken steps reasonably calculated to effect a Change in Control and (z) a Change in Control involving such third party (or a party competing with such third party to effectuate a Change in Control) does occur within two years followingCertificate of Amendment from the date of Participant’s termination of employment, then for purposes of this Plan, the date immediately preceding the date of such termination of employment (or event described in Section 2(cc)(ii) above) shall be treated as the dateState Corporation Commission of the Change in Control, except that for purposesCommonwealth of determining Participant’s entitlementVirginia.In order to payments and benefits described in Section 9 andfacilitate the timing of such payments and benefits, the date of the actual Change in Control shall be treated as Participant’s date of termination of employment. In the event that Participant’s employment terminates under the circumstances described in clauses (x), (y) and (z) of the preceding sentence (any such termination, an “Anticipatory Termination”), such termination will be considered a Qualifying Termination for purposes of this Plan, and Participant will be entitledtransition from staggered three-year terms to receive the payments and benefits described in Section 9 of this Plan, provided that any such payments and benefits due under Section 9 shall be reduced by the payments and benefits Participant has already received pursuant to any applicable employment, severance or termination agreement, plan, arrangement or policy (collectively, the “Other Arrangements”), in respect of Participant’s termination of employment with Olin, and the remainder of the payments and benefits payable pursuant to the Other Arrangements shall be forfeited. For purposes of implementing thenon-staggered one-year terms, of Section 9 in the event of an Anticipatory Termination, all outstanding and unvested Options, Restricted Stock and other equity-based Awards (including, without limitation, Performance Shares) that Participant holds on the date of the Anticipatory Termination shall be deemed to remain outstanding until the date of the Change in Control (but in the case of any Options, noteach director whose term extends beyond the date that such Options would have expired if Participant had remained continuously employed from the date of the Anticipatory Termination until the date of the Change in Control) and become immediately vested and exercisable as of the date of the Change in Control.
(dd) | “Released Securities” means securities that were Restricted Securities with respect to which all applicable restrictions imposed under the terms of the relevant Award have expired, lapsed or been waived or satisfied.
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(ee) | “Reorganization” means a merger, consolidation, statutory share exchange or similar form of corporate transaction involving (i) Olin or (ii) any of its subsidiaries pursuant to which, in the case of this clause (ii), Olin Voting Securities are issued or issuable.
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(ff) | “Restricted Securities” means Awards of Restricted Stock or other Awards under which outstanding Shares are held subject to certain restrictions.
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(gg) | “Restricted Stock” means any grant of Shares subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals related to completion of service by the Participant, or achievement of performance or other objectives, as determined by the Committee.
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(hh) | “Restricted Stock Unit” means the grant of a contractual right to receive a stated number of Shares in the future, or, if provided by the Committee on the Grant Date, cash equal to the Fair Market Value of such Shares, under the Plan at the end of a specified period of time or upon the occurrence of a specified event.
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(ii) | “Retirement” refers to retirement (including any early retirement) pursuant to any applicable retirement plan of Olin or of an Affiliate as provided under such retirement plan and which retirement was not caused by the Participant being terminated for cause by Olin or any Affiliate.
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(jj) | “Rule16b-3” means Rule16b-3 promulgated by the Securities and Exchange Commission under the Exchange Act.
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(kk) | “Sale” (when the term is capitalized) means the sale or other disposition of all or substantially all of the assets of Olin to an entity that is not an Affiliate of Olin.
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(ll) | “Shares” means the common stock of Olin and such other securities or property as may become the subject of Awards pursuant to an adjustment made under Section 4(b) of the Plan.
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(mm) | “Stock Appreciation Right” or “SAR” means any such right granted under Section 6(b) of the Plan.
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(nn) | “Surviving Entity” has the meaning set forth under the definition of Change in Control.
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Section 3.Administration.
(a) | Powers of Committee. The Plan shall be administered by the Committee which shall have full and exclusive discretionary power to interpret the terms and conditions of the Plan and any Award Agreement or other agreement or document ancillary to or in connection with the Plan, to determine eligibility for Awards and to adopt such rules, regulations, forms, instruments and guidelines for administering this Plan as the Committee may deem necessary or proper. Without limiting such authority, the Committee may: (i) designate Participants; (ii) determine the Awards to be granted to Participants; (iii) determine the number of Shares (or securities convertible into Shares) to be covered by Awards; (iv) determine the terms and conditions of any Award; (v) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards, or other property, or canceled, substituted, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, substituted, forfeited or suspended; (vi) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the Participant or of the Committee; (vii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan;
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| (viii) establish, amend, suspend or waive such rules and guidelines and appoint such agents as it shall deem appropriate for the administration of the Plan; and (ix) make any other determination and take any other action that it deems necessary or desirable for such administration.
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(b) | Committee Discretion. All designations, determinations, interpretations and other decisions with respect to the Plan or any Award shall be within the sole discretion of the Committee and shall be final, conclusive and binding upon all Persons, including Olin, any Affiliate, any Participants, any holder or beneficiary of any Award, any shareholder and any Employee of Olin or of any Affiliate. The Committee’s powers include the adoption of modifications, amendments, procedures, subplans and the like as are necessary or desirable to comply with, or to take account of, provisions of the laws of other countries in which Olin or an Affiliate may operate in order to assure the viability of Awards granted under the Plan and to enable Participants employed in such other countries to receive benefits under the Plan and such laws.
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(c) | Board Authority. If the Committee does not exist, or for any other reason determined by the Board, the Board may take any action under the Plan that would otherwise be the responsibility of the Committee.
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(d) | Delegation. Notwithstanding any provision of the Plan to the contrary, except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may delegate to one or more officers or managers of Olin or any Affiliate, or a committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights or conditions with respect to, alter, discontinue, suspend, or terminate Awards held by, Employees who are not officers or directors of Olin for purposes of Section 16 of the Exchange Act, provided that no such action shall result in repricing of Options prohibited by Section 3(e).
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(e) | Prohibition on Option Repricing. Except in connection with a corporate transaction involving Olin (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation,split-up,spin-off, combination or exchange of shares), the terms of outstanding awards may not be amended to reduce the exercise price of outstanding Options or SARs or cancel outstanding Options or SARs in exchange for cash, other Awards or Options or SARs with an exercise price that is less than the exercise price of the original Option or SAR without shareholder approval. Any such adjustment shall be made in accordance with Treasury RegulationSection 1.409A-1(b)(5)(v).
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Section 4.Shares Available for Awards.
(a) | Shares Available. Subject to adjustment as provided in Section 4(b) of the Plan, the aggregate number of Shares available for granting Awards under the Plan shall be the sum of (i) 9,000,000 new Shares not previously authorized for issuance under any plan, plus (ii) any Shares subject to outstanding awards under any other Long Term Incentive Plan of Olin as of the Effective Date, to the extent such awards may expire, be cancelled, forfeited or otherwise terminated without the issuance of Shares after the Effective Date.
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(b) | Adjustments. In the event of any change in the Shares by reason of an event or transaction described in Section 3(e) of the Plan, (i) the numbers, class and prices of Shares covered by outstanding Awards under the Plan, (ii) the aggregate number and class of Shares available under the Plan, and (iii) the numbers and class of Shares that may be the subject of Awards pursuant to Section 4(c), shall be adjusted by the Committee, whose determination shall be conclusive.
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| (i) | Without limiting the foregoing, in the event of anysplit-up,split-off,spin-off or other distribution to shareholders of shares representing a part of Olin’s business, properties and assets, the Committee may modify an outstanding Award so that such Award shall thereafter relate to Shares of Olin and shares of capital stock of the corporation owning the business, properties and assets sosplit-up,split-off,spun-off or otherwise distributed to shareholders of Olin in the same ratio in which holders of the Shares became entitled to receive shares of capital stock of the corporation owning the business, properties and assets sosplit-up,split-off orspun-off or otherwise distributed.
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| (ii) | With respect to Awards of Incentive Stock Options, no such adjustment shall be authorized to the extent that such authority would cause the Plan to violate Section 422 of the Code or any successor provision thereto, unless the holder of such Award of Incentive Stock Options agrees to convert such options toNon-qualified Stock Options.
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| (iii) | Notwithstanding the foregoing, a Participant to whom Dividend Equivalents or dividend units have been awarded shall not be entitled to receive a special or extraordinary dividend or distribution unless the Committee shall have expressly authorized such receipt.
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(c) | Additional Restrictions. Subject to adjustment as provided in Section 4(b), the maximum number of Shares subject to various types of Awards under the Plan shall be as set forth below:
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| | | | |
Maximum Number of Shares Subject to:
| | Maximum
Number of Shares
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Total Incentive Stock Options
| | | 5,000,000 | |
All Restricted Stock, Restricted Stock Units, Performance Shares and Other “full value” Stock-Based Awards granted
| | | 2,000,000 | |
Options granted to a single Participant in any calendar year
| | | 750,000 | |
SARs granted to a single Participant in any calendar year
| | | 750,000 | |
Restricted Stock and Restricted Stock Units granted to a single Participant in any calendar year
| | | 750,000 | |
Performance Shares granted to a single Participant in any calendar year
| | | 750,000 | |
Other Stock-Based Awards granted to a single Participant in any calendar year
| | | 750,000 | |
(d) | No Recycling of Shares. Except for cancelled or forfeited Shares and Shares settled in cash for Awards from the Plan or awards outstanding under the Company’s other Long Term Incentive Plans as of the Effective Date, the Plan is intended to restrict the “recycling” of Shares back into the Plan. The full number of Shares underlying an Award (other than Awards payable, by their terms, only in cash) shall count against the numerical limits of the Plan. Shares exchanged or withheld to pay the purchase or exercise price of an Award or to satisfy tax withholding obligations count against the numerical limits of the Plan.
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Section 5.Eligibility.
Any Employee, including any officer2021 annual meeting has agreed to tender his or Employee-director, shall be eligible to be designated a Participant, subject to any restrictions imposed by applicable law. An Award may be granted to an Employee prior to the date the Employee first performs services for Olin or the Affiliate, provided that such Awards shall not become vested prior to the date the Employee first performs such services.
Section 6.Awards.
(a) | Options. The Committee is authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine:
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| (i) | Exercise Price. The per Share exercise price shall be determined by the Committee, provided that such exercise price shall not be less than the Fair Market Value of a Share on the date of the Option grant.
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| (ii) | Option Term. The term of each Option shall be fixed by the Committee, provided that in no event shall the term of an Option be more than a period of ten years from the date of its grant.
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| (iii) | Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part, and the method or methods by which, and the form or forms in which payment of the exercise price with respect thereto may be made, provided that Options shall become vested and exercisable no earlier than one (1) year after the date of grant.
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| (iv) | Incentive Stock Options. The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code, or any successor provision thereto, and any regulations promulgated thereunder. Without limiting the preceding sentence, the aggregate Fair Market Value (determined at the time an Option is granted) of Shares with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year (under the Plan and any other plan of the Participant’s employer corporation and its parent and subsidiary corporations providing for Options) shall not exceed such dollar limitation as shall be applicable to Incentive Stock Options under Section 422 of the Code or a successor provision.
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| (v) | Termination of Employment Without Cause/With Olin Consent. Unless otherwise specified in the applicable Award Agreement or policies adopted by the Compensation Committee, in the event the employment of a Participant to whom an Option has been granted under the Plan shall be terminated by Olin or an Affiliate without cause or by the Participant with the consent of Olin or an Affiliate, such Option may be exercised (to the extent of the number of shares that the Participant was entitled to purchase under such Option at the termination of employment) at any time within three months after such termination (which three-month period may be extended by the Committee), but in no event shall such three-month period or any such extension permit the exercise of an Option after the expiration date of the Option. Options granted under the Plan shall not be affected by any change of duties or position so long as the Participant continues to be an Employee.
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| (vi) | Termination for Cause or Without Consent. Unless otherwise specified in the applicable Award Agreement or policies adopted by the Compensation Committee, upon termination of such Participant’s employment either (a) for cause, or (b) voluntarily on the part of the Participant and without the written consent of Olin or an Affiliate, any Awards held by him or her under the Plan, to the extent not exercised or paid, shall terminate immediately.
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| (vii) | Termination due to Retirement. Unless otherwise specified in the applicable Award Agreement or policies adopted by the Compensation Committee, in the event the employment of a Participant to whom an Option has been granted under the Plan shall be terminated due to Retirement, such Option may be exercised (to the extent of the number of shares that the Participant was entitled to purchase under such Option at the termination of employment) at any time until the expiration date of the Option; provided, however, that such exercise period may be shortened by the Committee in its discretion at the time of termination.
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| (viii) | Death. Unless otherwise specified in the applicable Award Agreement or policies adopted by the Compensation Committee, if a Participant to whom an Option has been granted shall die while an Employee, such Option may be exercised by the Participant’s executors, administrators, personal representatives or distributees or permitted transferees at any time within a period of one year after the Participant’s death (which period may be extended by the Committee), regardless of whether or not such Option had vested at the time of death. If a Participant to whom an Option has been granted shall die after his or her employment has terminated but while the Option remains exercisable, the Option may be exercised by the persons described above at any time within the longer of (a) the period that the Participant could have exercised the Option had he or she not died, or (b) one year after the date of death (which period may be extended by the Committee), but only to the extent the Option was exercisable at the time of the Participant’s death.
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| (ix) | Disability. Unless otherwise specified in the applicable Award Agreement or policies adopted by the Compensation Committee, if a Participant to whom an Option has been granted shall become totally and permanently disabled, as that term is defined in Section 22(e)(3) of the Code (or a successor provision), and the Participant’s employment is terminated as a result, such option may be exercised by the Participant or permitted transferee within one year after the date of termination of employment, to the extent that the Option was exercisable at the time of termination of employment.
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(b) | Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights to Participants which may, but need not, relate to a specific Option granted under the Plan. Subject to the terms of the Plan and any applicable Award Agreement, each Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof, up to the excess of (i) the Fair Market Value of one Share on the date of exercise over (ii) the exercise price of the right as specified by the Committee, which shall not be less than the Fair Market Value of one Share on the date of grant of the Stock Appreciation Right. Subject to the terms of the Plan and any applicable Award Agreement, the exercise price, term, methods of exercise, methods of payment or settlement, including whether such SAR shall be paid in cash or Shares, and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee, provided that SARs granted to a Participant shall become vested and exercisable no earlier than one (1) year after the grant, and in no event shall the term of a Stock Appreciation Right exceed a period of ten years from the date of its grant.
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| (i) | Issuance. The Committee is authorized to grant Awards of Restricted Stock, Restricted Stock Units and Performance Shares to Participants. The Committee may make such Other Stock-Based Awards in such amounts and subject to such terms and conditions, as the Committee shall determine, provided that no such Award shall become vested and exercisable earlier than one (1) year after grant. Such Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.
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| (ii) | Dividends and Dividend Equivalents. An Award (other than unvested Options, Performance Shares or Stock Appreciation Rights) may provide the Participant with the right to receive dividend payments or dividend equivalent payments with respect to Shares subject to the Award (both before and after the Shares subject to the Award are earned, vested, or acquired), which payments may be either made currently or credited to an account for the Participant, and may be settled in cash or Shares as determined by the Committee; provided, however, that no dividend payments or dividend equivalent payments shall be
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| provided, permitted or credited to the extent that such payments would cause a Restricted Stock Unit or Stock Appreciation Right to be subject to Code Section 409A. Any such settlements, and any such crediting of dividends or dividend equivalents or reinvestment in Shares, may be subject to such conditions, restrictions and contingencies as the Committee shall establish, including the reinvestment of such credited amounts in Share equivalents.
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| (iii) | Restrictions. Any such Award shall be subject to such conditions, restrictions and contingencies as the Committee may impose (including, without limitation, any limitation on the right to vote Restricted Stock or the right to receive any dividend or other right or property), which may lapse separately or in combination at such time or times, as the Committee may deem appropriate, provided that in order for a Participant to vest in Awards of Restricted Stock or Restricted Stock Units, the Participant must remain in the employ of Olin or an Affiliate for a period of not less than one (1) year after the grant of Restricted Stock or Restricted Stock Units that includes one or more performance criteria, and not less than three (3) years after the grant of Restricted Stock or Restricted Stock Units that does not include one or more performance criteria, in each case subject to Section 9 hereof and subject to relief for specified reasons as may be approved by the Committee.
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| (iv) | Forfeiture. Except as otherwise determined by the Committee or as specified in the relevant Award Agreement, upon termination of employment for any reason during the applicable restriction period, all Shares of Restricted Stock still subject to restriction shall be forfeited and reacquired by Olin.
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(d) | Forms of Payment Under Awards. Subject to the terms of the Plan and of any applicable Award Agreement, payments to be made by Olin or an Affiliate upon the grant, exercise, or payment of an Award may be made in such form or forms as the Committee shall determine, including, without limitation, cash, Shares, other securities, other Awards, or other property or any combination thereof, and may be made in a single payment or transfer, in each case in accordance with rules and procedures established by the Committee and in accordance with Code Section 409A to the extent applicable. Notwithstanding the foregoing, the payment of the exercise price of an Option shall be subject to the following:
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| (i) | Subject to the following provisions of this subsection the full exercise price for Shares purchased upon the exercise of any Option shall be paid at the time of such exercise (except that, in the case of an exercise arrangement approved by the Committee and described below, payment may be made as soon as practicable after the exercise).
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| (ii) | The exercise price shall be payable in cash or by tendering, by either actual delivery of Shares or by attestation, Shares acceptable to the Committee, which Shares were either acquired at least six months before the exercise date or purchased on the open market, and valued at Fair Market Value as of the day of exercise, or in any combination thereof, as determined by the Committee.
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| (iii) | The Committee may permit a Participant to elect to pay the exercise price upon the exercise of an Option by irrevocably authorizing a third party to sell Shares (or a sufficient portion of the Shares) acquired upon exercise of an Option and remit to Olin a sufficient portion of the sale proceeds to pay the entire exercise price and any tax withholding resulting from such exercise.
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(e) | Limits on Transfer of Awards. No Award (other than Released Securities) or right thereunder shall be assignable or transferable by a Participant, other than:
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| (i) | by will or the laws of descent and distribution (or, in the case of an Award of Restricted Securities, to Olin); or
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| (ii) | in the case of Awards other than Incentive Stock Options, to the extent permitted under the terms of the Award, by a gift or domestic relations order to any Family Member, to a trust in which the Participant and/or his or her Family Members hold more than 50% of the beneficial interest, to a foundation in which the Participant and/or Family Members control the management of assets, and any other entity in which the Participant and/or his or her Family Members own more than 50% of the voting interests.
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For purposes of this provision, a transfer to an entity in exchange for an interest in that entity shall constitute a gift.
| (i) | No Cash Consideration for Awards. Participants shall not be required to make any cash payment for the granting of an Award except for such minimum consideration as may be required by applicable law.
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| (ii) | Awards May Be Granted Separately or Together. Awards may be granted either alone or in addition to, in tandem with, or in substitution for any other Award or any award or benefit granted under any other plan or arrangement of Olin or any Affiliate, or as payment for or to assure payment of an award or benefit granted under any such other such plan or arrangement, provided that the purchase or exercise price under an Option or other Award encompassing the right to purchase Shares shall not be reduced by the cancellation of such Award and the substitution of another Award. Awards so granted may be granted either at the same time as or at a different time from the grant of such other Awards or awards or benefits.
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| (iii) | General Restrictions. Delivery of Shares or other amounts under the Plan shall be subject to the following:
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| (A) | Notwithstanding any other provision of the Plan, Olin shall have no liability to deliver any Shares under the Plan or make any other distribution of benefits under the Plan unless such delivery or distribution would comply with all applicable laws (including, without limitation, the requirements of the Securities Act of 1933), and the applicable requirements of any securities exchange or similar entity.
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| (B) | To the extent that the Plan provides for issuance of stock certificates to reflect the issuance of Shares the issuance may be effected on anon-certificated basis, to the extent not prohibited by applicable law or the applicable rules of any stock exchange.
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| (iv) | Beneficiary. A Participant may, in the manner established by the Committee, designate a beneficiary or beneficiaries with respect to any Award to exercise the rights of the Participant, and to receive any property distributable, upon the death of the Participant. Each Award, and each right under any Award, shall be exercisable, during the Participant’s lifetime, only by the Participant or a permitted transferee, or, if permissible under applicable law by the Participant’s guardian or legal representative.
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| (v) | No Lien or Security Interest. No Award (other than Released Securities), and no right under any such Award, may be pledged, attached or otherwise encumbered other than in favor of Olin, and any purported pledge, attachment, or encumbrance thereof other than in favor of Olin shall be void and unenforceable against Olin or any Affiliate.
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| (vi) | No Rights to Awards. No Employee, Participant or other Person shall have any claim to be granted an Award, and there is no obligation for uniformity of treatment of Employees,
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| Participants or beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. The prospective recipient of any Award under the Plan shall not, with respect to such Award, be deemed to have become a Participant, or to have any rights with respect to such Award, until and unless such recipient shall have executed an agreement or other instrument accepting the Award required by the Committee and delivered a fully executed copy thereof to Olin, and otherwise complied with the then applicable terms and conditions.
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| (vii) | Withholding. All distributions under the Plan are subject to withholding of all applicable taxes, and, except as otherwise provided by the Committee, the delivery of any Shares or other benefits under the Plan to a Participant are conditioned on satisfaction of the applicable withholding requirements. With respect to withholding required upon the exercise of Options or SARs, upon the lapse of restrictions on Restricted Stock and Restricted Stock Units, or upon the achievement of performance goals related to Performance Shares, or any other taxable event arising as a result of an Award granted hereunder, Participants may elect to satisfy the withholding requirement, in whole or in part, by having Olin withhold Shares having a Fair Market Value on the date the tax is to be determined (A) subject to the approval of the Committee, equal to the minimum statutory total tax that could be imposed on the transaction, or (B) solely to the extent authorized by the Committee in advance, at a higher rate up to the maximum statutory total tax that could be imposed on the transaction. All such elections shall be irrevocable, made in writing, and signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
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| (viii) | Other Compensation Arrangements. Nothing contained in the Plan shall prevent Olin or any Affiliate from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases.
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| (ix) | No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of Olin or any Affiliate. Nothing in the Plan or any Award Agreement shall limit the right of Olin or an Affiliate at any time to dismiss a Participant from employment, free from any liability or any claim under the Plan or the Award Agreement.
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| (x) | Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance with the laws of the State of Missouri, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan or any Award Agreement to the substantive law of another jurisdiction.
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| (xi) | Severability. If any provision of the Plan or any Award is determined to be invalid, illegal or unenforceable, or as to any Person or Award, or would disqualify the Plan or any Award, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such Person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.
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| (xii) | No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between Olin or any Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from Olin or any Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of Olin or any Affiliate.
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| (xiii) | No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated.
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| (xiv) | Share Certificates. All certificates for Shares or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares or other securities are then listed, and any applicable Federal or state securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
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| (xv) | Award Agreement. The terms of any plan or guideline adopted by the Committee and applicable to an Award shall be deemed incorporated in and a part of the related Award Agreement. The Committee may provide for the use of electronic, internet or othernon-paper Award Agreements, and the use of electronic, internet or othernon-paper means for the Participant’s acceptance of, or actions under, an Award Agreement. In the event of any inconsistency or conflict between the terms of the Plan and an Award Agreement, the terms of the Plan shall govern.
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| (xvi) | Olin Policies. All Awards shall be subject to any “clawback,” compensation recoupment or similar policy of Olin applicable to such Award, regardless of when such policy is adopted.
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(g) | Agreement to Service. Each Participant receiving an Award shall, by accepting the Award, agree that he or she will, during employment, devote his or her entire time, energy and skill to the service of Olin and the promotion of its interests, subject to vacations, sick leave and other absences in accordance with the regular policies of, or other reasons satisfactory to, Olin and its Affiliates.
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(h) | Exception toOne-Year Vesting and Performance Period. Notwithstanding anything in this Plan to the contrary, Awards for an aggregate number of Shares not to exceed 5% of the total number of shares available for issuance under this Plan may vest or become exercisable in less than one (1) year after the date of grant, including immediate vesting.
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Section 7.Amendment and Termination.
(a) | Amendments to the Plan. The Committee may amend, suspend, discontinue or terminate the Plan, including, without limitation, any amendment, suspension, discontinuation or termination that would impair the rights of any Participant, or any other holder or beneficiary of any Award theretofore granted, without the consent of any shareholder, Participant, other holder or beneficiary of an Award, or other Person; provided, however, that, notwithstanding any other provision of the Plan or any Award Agreement, without the approval of the shareholders of Olin, no such amendment, suspension, discontinuation or termination shall be made that would:
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| (i) | increase the total number of Shares available for Awards under the Plan or the total number of Shares subject to one or more categories of Awards pursuant to Section 4(c), in either case except as provided in Section 4(b);
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| (ii) | reduce the minimum Option exercise price, except as provided in Section 4(b); or
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| (iii) | permit repricing of Options prohibited by Section 3(e); and
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providedfurther that no amendment, suspension, discontinuation or termination (i) that would impair the rights of such Participant, holder or beneficiary shall be made with respect to Section 9 of the Plan after a Change in Control and (ii) may increase the amount of payment of any Award to any Participant.
(b) | Amendments to Awards. The Committee may waive any conditions or rights with respect to, or amend, alter, suspend, discontinue, or terminate, any unexercised Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or beneficiary of an Award, provided that no amendment, alteration, suspension, discontinuation or termination of an Award that would impair the rights of such Participant, holder or beneficiary shall be made after a Change in Control; provided further that the Committee may not increase the payment of any Award granted any Participant.
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(c) | Adjustments of Awards Upon Certain Acquisitions. In the event Olin or any Affiliate shall assume outstanding employee awards or the right or obligation to make future such awards in connection with the acquisition of another business or another Person, the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate.
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(d) | Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee may make adjustments in the terms and conditions of Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4(b) hereof) affecting Olin, any Affiliate, or the financial statements of Olin or any Affiliate, or of changes in applicable laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits to be made available under the Plan.
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(e) | 409A Compliance. To the extent any provision of the Plan (or any Award) or action by the Board or Committee would subject any Participant to liability for interest or additional taxes under Code Section 409A(a)(1)(B), it will be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. It is intended that the Plan (and any Award) will comply with Code Section 409A, and the Plan (and any Award) shall be interpreted and construed on a basis consistent with such intent. The Plan (and any Award) may be amended in any respect deemed necessary (including retroactively) by the Committee in order to preserve compliance with Code Section 409A. The preceding shall not be construed as a guarantee of any particular tax effect for Plan benefits or Awards. A Participant (or beneficiary) is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on the Participant (or beneficiary) in connection with any distributions to such Participant (or beneficiary) under the Plan (including any taxes and penalties under Code Section 409A), and neither Olin nor any Affiliate shall have any obligation to indemnify or otherwise hold a Participant (or beneficiary) harmless from any or all of such taxes or penalties.
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Section 8.Additional Conditions to Enjoyment of Awards.
(a) | The Committee may cancel any unexpired, unpaid or deferred Awards if at any time the Participant is not in compliance with all applicable provisions of the Award Agreement, the Plan and the following conditions:
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| (i) | A Participant shall not render services for any Person or engage, directly or indirectly, in any business which, in the judgment of the Committee is or becomes competitive with Olin or any Affiliate, or which is or becomes otherwise prejudicial to or in conflict with the interests of Olin or any Affiliate. Such judgment shall be based on the Participant’s positions and responsibilities while employed by Olin or an Affiliate, the Participant’s post
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| employment responsibilities and position with the other Person or business, the extent of past, current and potential competition or conflict between Olin or an Affiliate and the other Person or business, the effect on customers, suppliers and competitors of the Participant’s assuming the post employment position, the guidelines established in any ethical or business conduct standards of Olin then in effect, and such other considerations as are deemed relevant given the applicable facts and circumstances. The Participant shall be free, however, to purchase as an investment or otherwise, stock or other securities of such Person or business so long as they are listed upon a recognized securities exchange or traded over the counter, and such investment does not represent a substantial investment to the Participant or a greater than 1% equity interest in the organization or business.
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| (ii) | Participant shall not, without prior written authorization from Olin, disclose to anyone outside Olin, or use in other than Olin’s business, any secret or confidential information, knowledge or data, relating to the business of Olin or an Affiliate in violation of his or her agreement with Olin or the Affiliate.
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| (iii) | A Participant, pursuant to his or her agreement with Olin or an Affiliate, shall disclose promptly and assign to Olin or the Affiliate all right, title and interest in any invention or idea, patentable or not, made or conceived by the Participant during employment by Olin or the Affiliate, relating in any manner to the actual or anticipated business, research or development work of Olin or the Affiliate and shall do anything reasonably necessary to enable Olin or the Affiliate to secure a patent where appropriate in the United States and in foreign countries.
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(b) | Notwithstanding any other provision of the Plan, the Committee in its sole discretion may cancel any Award at any time prior to the exercise thereof, if the employment of the Participant shall be terminated, other than by reason of death, unless the conditions in this Section 8 are met.
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(c) | Failure to comply with the conditions of this Section 8 prior to, or during the six months after, any exercise, payment or delivery pursuant to an Award shall cause the exercise, payment or delivery to be rescinded. Olin shall notify the Participant in writing of any such rescission within two years after such exercise payment or delivery and within 10 days after receiving such notice, the Participant shall pay to Olin the amount of any gain realized or payment received as a result of the exercise, payment or delivery rescinded. Such payment shall be made either in cash or by returning to Olin the number of Shares that the Participant received in connection with the rescinded exercise, payment or delivery.
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(d) | Upon exercise, payment or delivery pursuant to an Award, the Committee may require the Participant to acknowledge the terms and conditions of the Plan and to certify on a form acceptable to the Committee, that he or she is in compliance with the terms and conditions of the Plan.
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(e) | Nothing herein shall be interpreted to limit the obligations of a Participant under his or her employment agreement or any other agreement with Olin.
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Section 9.Change in Control.
(a) | Notwithstanding any provision to the contrary in this Plan or any applicable Award Agreement and except as otherwise provided in this Section 9, all outstanding Options, Restricted Stock and other equity Awards held by Participant (other than any Performance Shares), regardless of whether granted before, at or after the Change in Control, shall not automatically become fully vested and immediately exercisable and, instead, each such Award shall continue to vest in accordance with its terms following a Change in Control.
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(b) | Except as the Board or the Committee may expressly provide otherwise prior to a Change in Control, in the event of a Qualifying Termination upon or following a Change in Control:
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| (i) | all Options and Stock Appreciation Rights then outstanding shall become immediately and fully exercisable, notwithstanding any provision therein for the exercise in installments; and
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| (ii) | all restrictions and conditions of all Restricted Stock then outstanding shall be deemed satisfied as of the date of the Qualifying Termination.
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Notwithstanding the foregoing sentence, unless provision is made in connection with a Change in Control for (i) assumption of such Awards or (ii) substitution of such Awards for new awards covering stock of a successor corporation or its “parent corporation” (as defined in Section 424(e) of the Code) or “subsidiary corporation” (as defined in Section 424(f) of the Code) with appropriate adjustments as to the number and kinds of shares and exercise prices (if applicable) that preserve the material terms and conditions of such Awards as in effecther resignation effective immediately prior to election of directors at the Change in Control (including, without limitation, with respect to2021 annual meeting, conditioned upon Olin’s shareholders approving the vesting schedules,Declassification Amendment and Olin receiving a Certificate of Amendment from the intrinsic valueState Corporation Commission of the AwardsCommonwealth of Virginia.
If the Declassification Amendment does not receive the required number of votes in favor, neither the Current Articles nor Olin’s Bylaws will be amended and the board of directors will remain classified. In such event, as described under “Item 1—Proposal for the Election of Directors”, Ms. Beverley A. Babcock, Mr. Gray G. Benoist, Mr. Scott D. Ferguson and Mr. John E. Fischer will serve as Class II directors with terms expiring in 2023 if elected, Ms. Heidi S. Alderman will serve as a Class III director with a term expiring in 2021 if elected, Mr. W. Barnes Hauptfuhrer will serve as a Class I director with a term expiring in 2022 if elected and the other directors will continue to serve for their current terms and until his or her successor is elected or until his or her earlier death, resignation or removal.
The foregoing discussion does not purport to be complete or cover all aspects in which Olin’s governance would differ from the governance provisions currently in effect. For complete information, you should read the full text of the
Change in Controlproposed Amended and
transferabilityRestated Articles of Incorporation included as Appendix A to this Proxy Statement, which has been marked to show changes from the text of the
shares underlying such Awards), all such Awards shall become fully vested and immediately exercisable, as the case may be, as of immediately prior to the Change in Control.Current Articles.
(c) | Notwithstanding anything in this Plan to the contrary, all Performance Shares held by the Participant on the date of the Change in Control shall become vested and deemed earned or satisfied in full, notwithstanding that the applicable performance cycle, retention cycle or restriction conditions shall not have been completed or met. Such Performance Shares shall be paid, cash units in cash and phantom stock units in the Shares represented thereby or such other securities, property or cash as may be deliverable in respect of Shares as a result of a Change in Control, to the Participant no later than ten (10) business days following such Change in Control.
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(d) | In the event that a Participant participates or agrees to participate by loan or equity investment (other than through ownership of less than 1% of publicly traded securities of another company) in a transaction which would result in an event described in subsections (i) or (ii) of the definition of Change in Control, Participant must promptly disclose such participation or agreement to Olin, and such transaction will not be considered a Change in Control with respect to Participant for purposes of this Plan.
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(e) | Following a Change in Control, no action shall be taken under the Plan that will cause any Award that has previously been determined to be (or is determined to be) subject to Code Section 409A to fail to comply in any respect with Code Section 409A without the written consent of Participant.
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Section 10.Effective Date and Term.
The Plan shall be effective as of the Effective Date and shall be unlimited in duration. In the event of a Plan termination, the Plan shall remain in effect as long as any Awards under it are outstanding; provided; however, that, to the extent required by the Code, no Incentive Stock Option may be granted under the Plan on a date that is more than ten years from the date the Plan is adopted.
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 | | Shareowner Services
P.O. Box 64945
St. Paul, MN 55164-0945
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| | Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.
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| |  | | INTERNET – www.proxypush.com/oln
Use the Internet to vote your proxy until 11:59 p.m. (CT) on April 25, 2018. CEOP participants may vote until 11:59 p.m. (CT) on April 22, 2018.
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| | TELEPHONE – 1-866-883-3382
Use a touch-tone telephone to vote your proxy until 11:59 p.m. (CT) on April 25, 2018. CEOP participants may vote until 11:59 p.m. (CT) on April 22, 2018.
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| |  | | MAIL – Mark, sign and date your proxy card and return it in the postage-paid envelope. CEOP participants’ proxy cards must bereceived by April 20, 2018.
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| | If you vote your proxy by Internet, mobile or by phone, you do NOT need to mail back your Proxy Card. |
TO VOTE BY MAIL, SIMPLY COMPLETE THE ITEMS BELOW.
SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENVELOPE PROVIDED.
Please detach here
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| | The Board of Directors Recommends a Vote FOR each of the listed nominees and FOR Items 2, 3 and 4.
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1. | | Election of directors: | | FOR | | AGAINST | | ABSTAIN | | | | FOR | | AGAINST | | ABSTAIN | | | | |
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| | 01 Donald W. Bogus
| | ☐ | | ☐ | | ☐ | | 03 Vincent J. Smith | | ☐ | | ☐ | | ☐ | | | | |
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| | 02 Earl L. Shipp
| | ☐ | | ☐ | | ☐ | | 04 Carol A. Williams | | ☐ | | ☐ | | ☐ | | | | |
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2. | | Approval of the Olin Corporation 2018 Long Term Incentive Plan. | | | | | | ☐ | | For | | ☐ | | Against | | ☐ | | Abstain | | |
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3. | | Advisory vote to approve named executive officer compensation. | | | | | | ☐ | | For | | ☐ | | Against | | ☐ | | Abstain | | |
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4. | | Ratification of appointment of independent registered public accounting firm. | | | | | | ☐ | | For | | ☐ | | Against | | ☐ | | Abstain | | |
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| | | | THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTEDFOR EACH OF THE LISTED NOMINEES ANDFOR ITEMS 2, 3 AND 4.SHOULD ANY NOMINEE BE UNABLE TO SERVE, THIS PROXY MAY BE VOTED FOR A SUBSTITUTE NOMINEE SELECTED BY THE BOARD OF DIRECTORS.
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| | ☐ Please mark this box if you plan to attend the meeting. | | | | | | | | | | | | | | | | | | | | |
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| | Address Change? Mark box, sign, and indicate changes below: ☐ | | | | Date | | | | |
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| | | | | | Signature(s) in Box | | | | | | | | | | |
| | | | | | Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.
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Approval of this proposal requires the approval of a majority of the votes entitled to be cast on the proposal. Abstentions and broker non-votes, if any, will have the same effect as votes AGAINST the proposal.
For the reasons described above, the board of directors recommends a vote FOR the Declassification Amendment.
Appendix A
AMENDED AND RESTATED ARTICLES OF SHAREHOLDERSINCORPORATION OF OLIN CORPORATION
Thursday, April 26, 2018(As amended effective 8:00 a.m. Central TimeOctober 1, 2015
THE PLAZA IN CLAYTON OFFICE TOWER[ ] 2020
190 Carondelet Plaza)
Annex Room – 16th Floor
Clayton, MO 63105
Important Notice Regarding
FIRST: The name of the AvailabilityCorporation shall be Olin Corporation.
SECOND: The principal office of Proxy Materialsthe 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 Annual Meeting:purpose of taking and condemning lands within the Commonwealth of Virginia within the meaning of the statutes thereof):
(1)The 2018 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 2017 Annual Reportother 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
(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 Form 10-K are available atwww.proxydocs.com/oln.any experimental and research work; If you plan (10)to attendmanufacture, 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 Annual Meeting, please markpurpose of this Article THIRD, includes, without limitation of the boxgenerality 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 proxy and bring this card,Board of Directors of the Corporation may determine; which will serve as your Admission Card,(16)to guarantee or become surety in respect to the meeting.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 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; | | | | | | |
 | | Olin(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 Corporation190 Carondelet Plaza, Suite 1530
Clayton, Missouri 63105
| | | proxy | |
This proxy is solicitedorganized, 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.
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 240,000,000 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;
(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
for usewith respect to any series at the
Annual Meeting on April 26, 2018.Thetime of the creation thereof.
(3) So long as any shares of OlinPreferred Stock are outstanding, the Corporation shall not declare and pay or set apart for payment any dividends (other than dividends payable in Common Stock youor 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.
(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.
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 withUntil the 19852021 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. AtBeginning with the 19852021 annual meeting of stockholders, the foregoing classification of directors of the first class (Class I) shall be elected to hold office for a term 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 officer for a term expiring at the 1989 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 officecease and each director, regardless of when elected, shall stand for election for a term expiring at the thirdnext succeeding annual meeting of stockholders. When and until a successor shall have been elected and qualified or until such director’s prior death, resignation, disqualification or removal. For so long as the Board of Directors is classified, when the number of directors is changed, any newly-created directorships or any decrease in yourdirectorships 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, directorseach director so chosen by the stockholders shall hold office for a term expiring at the first annual meeting of stockholders at which the term of the class to which they have been elected expiressubsequent to the annual meeting of stockholders at which such director was so chosen by the stockholders. 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.
(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 a dividend reinvestment account will be voted as you specify onsuch resolution, shall have and may exercise the reverse side. This card also provides confidential voting instructions for shares heldpower of the Board of Directors in the Olinmanagement of the business and affairs of the Corporation, Contributing Employee Ownership Plan (CEOP). If youand 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 a participantalso directors) of the Corporation and haveits 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
Olin Common Stock
allocated to
your CEOP account, please read the Trustee’s Authorization below regarding voting of those shares.If no choice is specified, the proxy will be votedFOR eachofficers and employees (including officers and employees who are also directors) of the listed nomineesCorporation andFOR Items 2, 3 its subsidiaries for such consideration and 4.
By signingon such terms and conditions as the proxy, you revokeBoard 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 prior proxiessuch powers and appoint JOHN E. FISCHERdo all such acts and RICHARD M. ROMPALA,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 each of them with full powerthe By-laws of substitution, to vote your shares on the matters shown onCorporation.
(4) No contract or other transaction between the reverse sideCorporation and any other matterscorporation 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 come beforebe a member, may be a party to, or may be pecuniarily or otherwise interested in, any contract or transaction of the Annual MeetingCorporation, 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
held on April 26, 2018 at 8:00 a.m. Central Time and all adjournments or postponements thereof.Trustee’s Authorization: As a named fiduciary, you may direct Voya Institutional Trust Company, as Trustee of the CEOP, howcast by each voting group that is entitled to vote the shares of Olin Common Stock allocated to your CEOP account on the four matters listed onmatter, unless in submitting an amendment or restatement to the reverse side by completing and mailing this Proxy/Voting Instruction Form or sending your voting instructions via phone, mobile or Internet. The Trustee will voteshareholders the shares represented by this Proxy/Voting Instruction Form as instructed if proper instructions are received via phone, mobile or Internet before 11:59 p.m. Central Time on April 22, 2018 or via mail by April 20, 2018. The Trustee will vote all shares for which no instructions are received in the same proportion as shares for which they receive instructions.
Board of Directors shall require a greater vote.
See reverse for voting instructions.
