ITEM 1. BUSINESS
GENERAL
Olin Corporation is a Virginia corporation, incorporated in 1892, having its principal executive offices in Norwalk, Connecticut. It is a manufacturer concentrated in chemicals, metals and ammunition. The chemicals segment is divided into three areas or divisions: Chlor-Alkali, Chemicals and Microelectronic Materials. Chlor-alkali includes chlor-alkali products, sodium hydrosulfite and high strength bleach products. Chemicals includes pool chemicals, biocides, acids, hydrazine, polyols, propylene glycols and surfactants and fluids. Microelectronic Materials includes image-forming and related specialty chemicals and electronic interconnect materials and services. The metals and ammunition segment is divided into two divisions: the Brass Division and the Winchester Division. Products in the metals and ammunition segment include copper and copper alloy sheet, strip, rod, wire, tube and fabricated parts, stainless steel strip and sporting ammunition.
Information as to the sales and assets attributable to each of Olin's industry segments for each of the last ten fiscal years appears on page 24 of the 1996 Annual Report to Shareholders of Olin ("Shareholders Report") and in Exhibit 13 hereto. Such information in Exhibit 13 with respect to the last three fiscal years is incorporated by reference in this Report.* Information as to operating income of Olin's industry segments for each of the last three fiscal years contained on page 24 of the Share-holders Report and in Exhibit 13 hereto is incorporated herein by reference as contained in Exhibit 13.
The figures and information contained under the captions "Customers and Distribution," "Employees," "Research Activities; Patents," "Environmental and Toxic Substances Controls" and in Item 2

ITEM 2. PROPERTIES
Olin has manufacturing sites at 26 separate locations in 16 states and Puerto Rico and six manufacturing sites in six foreign countries. Most manufacturing sites are owned although a number of small sites are leased. Listed under Item 1 above in the table set forth under the caption "Products and Services" are the locations at or from which Olin's products and services are manufactured, distributed or marketed by segment.
Olin leases warehouses, terminals and distribution offices and space for executive and branch sales offices and service departments throughout the country and overseas.
ITEM 3.

ITEM 3. LEGAL PROCEEDINGS
(a) In December 1979, an action was commenced in the U.S. District Court in New York by the United States against Occidental Chemical Corporation (then known as Hooker Chemical & Plastics Corporation) ("Oxychem"), certain related companies, Olin and the City of Niagara Falls, New York, alleging that chemical wastes are migrating in violation of environmental laws or regulations from a site
in Niagara Falls where Oxychem and Olin own adjacent, inactive chemical waste landfills. The United States is seeking injunctive relief and an order requiring Oxychem and Olin, among other things, to secure the landfill site, install a leachate collection system and treat whatever leachate is collected, as well as an order requiring Oxychem and Olin to place $16.5 million in trust or provide a bond to ensure that the site will be secured. The United States is also seeking civil penalties for each day of alleged violation of the Clean Water Act which currently has a maximum daily penalty of $25,000.
In November 1980, the State of New York filed a complaint as co-plaintiff in the same action based upon essentially the same factual allegations as in the suit brought by the United States. The State is seeking $100 million in compensatory damages and $100 million in punitive damages. The State is also requesting a court order to abate the alleged nuisance and penalties of $10,000 per day for alleged violations of each of four provisions of New York's Environmental Conservation Law. In 1983, the State filed a motion to amend its complaint to include a count under CERCLA (Comprehensive Environmental Response, Compensation and Liability Act of 1980) alleging damage to natural resources. In 1986, the Department of Justice filed a motion to amend its complaint to include a CERCLA and SARA (Superfund Amendments and Reauthorization Act of 1986) count. Oxychem and Olin have filed in opposition to the motions and the court has deferred a ruling on both motions.
The U.S. Environmental Protection Agency ("EPA") notified Olin and Oxychem of an aggregate of $4,600,000 in agency oversight costs on the project plus $1,900,000 for pre-judgment interest.
Under a stipulation entered into by all parties in 1984, Olin and Oxychem undertook a site remedial investigation which was completed in October 1988. Subsequently, the parties entered into a further stipulation under which Oxychem and Olin conducted a feasibility study of possible remedial measures. The remedial investigation and feasibility study was completed in July 1990. On September 24, 1990, EPA issued a Proposed Remedial Action Plan and on September 29, 1990, a Record of Decision ("ROD"). The EPA selected remedy was estimated to cost $30 million. On September 30, 1991, the EPA issued an administrative order directing Olin and Oxychem to implement the remedy identified in the September 29, 1990 Record of Decision. Olin and Oxychem have commenced performance of the remedy identified in such order. The cost of any remedy is expected to be shared by Olin and Oxychem in an agreed-upon proportion. Olin believes that any liability incurred by it in this matter will not be materially adverse to its financial condition or liquidity and, with respect to non-environmental claims, its results of operations. See "Environmental Matters" contained in Item 7 - -Management's Discussion and Analysis and Financial Condition and Results of Operations.
(b) In June 1987, the EPA issued a ROD recommending remedial actions and ecological studies with respect to mercury contamination at the site of Olin's former mercury cell chlor-alkali plant in Saltville, Virginia. In August 1987, EPA, under Section 122 of CERCLA, asked Olin to undertake the work called for in the ROD, and Olin agreed to do so. Olin's commitment was required to be incorporated into a Consent Decree to be filed with a federal district court. EPA's draft of the Consent Decree included a proposed $1.4 million Clean Water Act penalty for past unpermitted discharges from a muck pond at the site, as well as $570,000 in reimbursement of past EPA costs. In response to Olin's request, EPA agreed to reduce the costs to $456,000 and to sever the penalty from the CERCLA action, making it the subject of separate negotiations after execution of the Consent Decree. In 1988, the proposed $1.4 million Clean Water Act penalty was severed from the Consent Decree entered into by Olin and filed with the U.S. District Court for the Western District of Virginia, and the EPA has taken no further action with respect to any proposed penalty. Pursuant to the Decree, in November 1988 Olin submitted to EPA, Region III, a work plan for remedial action, including additional stormwater run-on control around Pond #5 and construction of a wastewater treatment plant for the outfall from Pond #5. Olin also submitted for EPA approval a work plan for further remedial investigation of the impact of mercury from the site on groundwater flowing into the North Fork Holston River and its sediment from the site to a point twenty-seven miles downstream at the Tennessee border. During 1989 work plans
pursuant to the Consent Decree between EPA and Olin were approved by EPA. Payment of past EPA costs of $228,000 plus interest was made on November 21, 1989, in accordance with the Consent Decree.
On September 5, 1991, EPA advised Olin of potential liability for contaminated soils which were being removed in conjunction with construction of the Rte. 634 bridge in Saltville. Olin and EPA signed a Consent Order authorizing Olin to do the soil removal, which has been completed.
Olin completed the remedial investigation and feasibility study of the former chlorine plant site, including Ponds # 5 and 6, in 1994. On January 18, 1995, EPA issued a Proposed Remedial Action Plan for a 30-day public comment period. The plan called for a cap to be constructed over Pond #5, and the excavation and retorting of soil and sediment from the former chlorine plant site. Olin filed comments with the EPA during the public comment period in support of alternatives to the proposed remediation plan for the site. EPA issued a Record of Decision on September 29, 1995, recognizing in substantial part Olin's comments. The Record of Decision calls for covering the former waste ponds, treatment of runoff from the ponds, and additional monitoring and investigation. Olin is presently engaged in negotiations with EPA over the terms of a consent decree under which Olin will implement the Record of Decision and pay approximately $455,000 for EPA's past response costs. The Record of Decision does not address remediation of the former chlorine plant site or the river, which are the subject of the additional investigation.
On August 29, 1994, EPA notified Olin of the company's potential liability with respect to the "Graveyard Dump Site," located north of the former plant site. The site is relatively small, occupying about one half acre. EPA's investigation found about 20 capacitors and miscellaneous debris scattered around the site as well as evidence of PCB contamination in the soils. That work is substantially complete.
Negotiations with EPA ensued and Olin and EPA signed an Administrative Order by Consent, effective January 5, 1995, in which Olin agreed to perform certain response activities at the site, primarily the removal and disposal of PCB- contaminated electrical equipment and soils.
On March 15, 1995, EPA notified Olin of liability for lead and asbestos present at the former steam-generating plant (power plant) at the site. On July 11, 1995, Olin and EPA entered into an Administrative Order on Consent in which Olin agreed to remove asbestos and lead, and demolish the power plant. The work is expected to be completed during 1997. Olin has agreed with the site's Natural Resources Trustees to assess whether there are any natural resource damages to the Holston River associated with releases from the site.
EPA has notified Olin of additional EPA oversight costs in the amount of approximately $1,225,000 for the period 1990-1995.
Olin believes that any liability incurred by it in this matter will not be materially adverse to its financial condition or liquidity. See "Environmental Matters" contained in Item 7 - -Management's Discussion and Analysis of Financial Condition and Results of Operations.
(c) As part of the continuing environmental investigation by federal, state and local governments of waste disposal sites, Olin has entered into a number of settlement agreements requiring it to contribute to the cost of the investigation and cleanup of a number of sites. This process of investigation and cleanup is expected to continue. See "Environmental Matters" contained in Item 7 - -Management's Discussion and Analysis of Financial Condition and Results of Operations.
(d) Olin and its subsidiaries are defendants in various other legal actions arising out of their normal business activities, none of which is considered by management to be material.
ITEM 4.

Item 4 of this Report. The information regarding compliance with Section 16 of the Securities Exchange Act of 1934, as amended, contained in the paragraph entitled "Section 16(a) Beneficial Ownership Reporting Compliance" under the heading "Security Ownership of Directors and Officers" in the Proxy Statement is incorporated by reference in this Report.
ITEM 11. EXECUTIVE COMPENSATION
The information under the heading "Executive Compensation" in the Proxy Statement (but excluding the Report of the Compensation and Nominating Committee on Executive Compensation appearing on pages 12 through 13 of the Proxy Statement and the graph appearing on page 16 of the Proxy Statement) is incorporated by reference in this Report. The information under the headings "Additional Information Regarding the Board of Directors--Compensation of Directors," and "Additional Information Regarding the Board of Directors-- Directors Retirement Plan" in the Proxy Statement is incorporated by reference in this Report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information concerning holdings of Olin stock by certain beneficial owners contained under the heading "Certain Beneficial Owners" in the Proxy Statement and the information concerning beneficial ownership of Olin stock by Directors and officers of Olin under the heading "Security Ownership of Directors and Officers" in the Proxy Statement are incorporated by reference in this Report.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not applicable.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)1. FINANCIAL STATEMENTS
Consolidated financial statements of Olin Corporation and subsidiaries and the related notes thereto together with the report thereon of KPMG Peat Marwick LLP dated January 30, 1997, appearing on pages 26 through 39 of the Shareholders Report and in Exhibit 13 hereto are incorporated by reference in this Report as contained in Exhibit 13.
2. FINANCIAL STATEMENT SCHEDULES
Schedules not included herein are omitted because they are inapplicable or not required or because the required information is given in the consolidated financial statements and notes thereto.
Separate financial statements of 50% or less owned subsidiaries accounted for by the equity method are not summarized herein and have been omitted because, in the aggregate, they would not constitute a significant subsidiary.
3. EXHIBITS
Management contracts and compensatory plans and arrangements are listed as Exhibits 10(a) through 10(ff) below.
- -------- * Previously filed as indicated and incorporated herein by reference. Exhibits incorporated by reference are located in SEC File No. 1-1070 unless otherwise indicated.
Olin is party to a number of other instruments defining the rights of holders of long-term debt. No such instrument authorizes an amount of securities in excess of 10% of the total assets of Olin and its subsidiaries on a consolidated basis. Olin agrees to furnish a copy of each instrument to the Commission upon request.
- -------- * Previously filed as indicated and incorporated herein by reference. Exhibits incorporated by reference are located in SEC File No. 1-1070 unless otherwise indicated.
(b) REPORTS ON FORM 8-K
Except for (i) a Form 8-K dated October 10, 1996 filed on October 11, 1996 with respect to Item 5