UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported): October 15,
2007
OLIN
CORPORATION
(Exact
name of registrant as specified in its charter)
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Virginia
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1-1070
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13-1872319
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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190
Carondelet Plaza, Suite 1530
Clayton,
MO
(Address
of principal executive offices)
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63105-3443
(Zip
Code)
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(314)
480-1400
(Registrant’s
telephone number, including area
code)
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(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry
into a Material Definitive Agreement.
On
October 15, 2007, Olin Corporation, a corporation organized under the
Commonwealth of Virginia (“Olin”), and Global Brass and Copper
Acquisition Co., a corporation organized under the State of Delaware (the
“Purchaser”), issued a press release announcing that the two companies
had entered into a Purchase Agreement dated as of October 15, 2007 (the
“Purchase Agreement”), pursuant to which the Purchaser has agreed to
purchase, and Olin has agreed to sell, Olin’s metals business (the
“Business”) for $400,000,000 in cash and the assumption of certain
liabilities relating to the Business, subject to a working capital
adjustment. The Purchaser is an affiliate of investment funds managed
by KPS Capital Partners, LP (collectively, the “Sponsor
Funds”). The Business is engaged in the copper and copper alloy
sheet, strip, foil, rod, welded tube, plate, fabricated parts and stainless
steel and aluminum strip manufacturing and distribution business and the
related
research and development activities. The transaction is expected to
be completed in the fourth quarter of 2007.
The
Purchase Agreement contains customary representations, warranties and covenants
of Olin and the Purchaser. In particular, the Purchase Agreement
contains customary non-compete and non-solicitation of employees
covenants.
The
acquisition of the Business is subject to customary closing conditions,
including (a) the receipt of antitrust approval, (b) there not having occurred
a
material adverse effect on the Business since December 31, 2006, (c) the
accuracy of representations and warranties set forth in the Purchase Agreement
as of the closing of the acquisition (the “Closing”) and (d) the
performance of covenants set forth in the Purchase Agreement. The
acquisition of the Business is not subject to a financing
condition. However, if the Purchaser has not received the debt
financing on the date that the Closing would otherwise occur under the Purchase
Agreement, the Purchaser has the right to delay the date of the Closing by
up to
20 calendar days.
Pursuant
to the Purchase Agreement, Olin has agreed to indemnify the Purchaser under
certain circumstances for, among other things, (a) breaches of the
representations, warranties and covenants of Olin included in the Purchase
Agreement, subject to, in the case of the representations and warranties,
a
$5,000,000 deductible and a $30,000,000 cap, (b) certain enumerated
environmental liabilities accruing before the Closing, (c) a portion of other
environmental liabilities accruing before the Closing, subject to a $1,000,000
deductible and a $30,000,000 cap, (d) a portion of certain other liabilities
accruing before the Closing and (e) taxes accrued by the Business prior to
the
Closing.
The
Purchase Agreement may be terminated in certain customary circumstances,
including if the Closing has not occurred by six months after signing of
the
Purchase Agreement. The Purchase Agreement may also be terminated by
Olin if, after all conditions to the obligation of the Purchaser to close
the
acquisition of the Business have been satisfied, the Purchaser has not received
the proceeds of the debt financing. In that event, Olin will be
entitled to a $10,000,000 termination fee, which will be its sole and exclusive
remedy.
Concurrently
with the execution of the Purchase Agreement, the Sponsor Funds delivered
to
Olin limited guarantees of the Purchaser’s obligations under the Purchase
Agreement, up to a maximum of $20,000,000. Olin, on the one hand, and
the Purchaser, on the other hand, are subject to an overall cap on damages
of
$20,000,000 for breaches of the Purchase Agreement.
The
Purchaser has obtained equity and debt financing commitments to finance the
transactions contemplated by the Purchase Agreement from the Sponsor Funds
and a
financial institution.
The
foregoing summary of the Purchase Agreement, and the transactions contemplated
thereby, does not purport to be complete and is subject to, and qualified
in its
entirety by, the full text of the Purchase Agreement, which is attached as
Exhibit 2.1 hereto and incorporated herein by reference.
The
disclosure set forth in Item 5.02 below is hereby incorporated by
reference.
Item
2.06 Material
Impairments.
On
October 15, 2007, Olin concluded that it expects to recognize a loss of
approximately $140,000,000, based on an estimated September 30, 2007 balance
sheet, in connection with the sale of the Business. The final amount
is to be determined following the Closing. Olin expects that goodwill
and property, plant and equipment will be impaired. All of the
impairment charges are expected to be non-cash charges.
Item
5.02 Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On
October 15, 2007, Olin’s Board of Directors authorized Olin to enter into an
Executive Retention Agreement with Jeffrey J. Haferkamp, Vice President and
President, Olin Brass (the “Executive”). This agreement
provides that, in the event of a sale of the Business, on the three-month
anniversary of the closing of the sale, the Executive will be eligible to
receive a lump-sum payment equal to $223,506 (the “Retention Bonus”),
which is seventy-five percent of the Executive’s current annual base
salary. In order to be entitled to the Retention Bonus, the Executive
must remain actively employed by Olin or the purchaser of the Business until
the
date of payment, provided that the Executive will also be entitled to payment
if
the Executive’s employment is terminated within three months before or after the
closing of the sale either (i) involuntarily other than for cause or (ii)
as a
result of death or incapacity.
The
foregoing summary of the Executive Retention Agreement, and the transactions
contemplated thereby, does not purport to be complete and is subject to,
and
qualified in its entirety by, the full text of the form of the Executive
Retention Agreement, which is attached as Exhibit 99.1 hereto and incorporated
herein by reference.
Item
8.01. Other
Events.
Attached
as Exhibit 99.2 and incorporated herein by reference is a copy of the
Registrant’s press release dated October 15, 2007 announcing the entry by Olin
and Purchaser into the Purchase Agreement.
Item
9.01 Financial
Statements and Exhibits.
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Exhibit
No.
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Description
of Exhibit
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2.1
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Purchase
Agreement dated as of October 15, 2007, among Global Brass and
Copper
Acquisition Co. and Olin Corporation
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99.1
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Form
of Executive Retention Agreement between Olin Corporation and Jeffrey
J.
Haferkamp
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99.2
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Press
Release dated October 15, 2007
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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OLIN
CORPORATION |
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By:
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/s/
George H. Pain |
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Name:
George
H.
Pain |
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Title:
Vice
President, General Counsel
and Secretary |
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Date: October
15, 2007
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Exhibit
No.
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Description
of Exhibit
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2.1
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Purchase
Agreement dated as of October 15, 2007, among Global Brass and
Copper
Acquisition Co. and Olin Corporation
|
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99.1
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Form
of Executive Retention Agreement between Olin Corporation and Jeffrey
J.
Haferkamp
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99.2
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Press
Release dated October 15, 2007
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