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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
August 17, 1998
Date of Report
INSILCO HOLDING CO.
(Exact name of registrant as specified in its charter)
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Delaware 06-1158291
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File no.) Identification No.)
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(Address of principal executive offices) (Zip Code)
(614) 792-0468
Registrant's telephone number, including area code
________________________________________________________________________
(Former name or former address, if changed since last report.)
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Item 5. Other Events
Insilco Corporation ("Insilco"), Insilco Holding Co. ("Holdings") and
DLJ Merchant Banking Partners II, L.P. ("DLJMB") announced the closing of
(i) the merger (the "Reorganization Merger") of Insilco ReorgSub Company, a
wholly owned subsidiary of Holdings with and into Insilco, with Insilco
continuing as the surviving corporation and as the wholly owned subsidiary
of Holdings and (ii) promptly after the Reorganization Merger, the merger
of Silkworm Acquisition Corporation, an affiliate of DLJMB and affiliated
funds and entities (the "DLJMB Funds"), with and into Holdings (the
"Merger" and together with the Reorganization Merger, the "Mergers").
As a result of the Mergers, (i) the holders of common stock of Insilco
prior to the Mergers now own approximately 10% of the common stock of
Holdings and (ii) the DLJMB Funds acquired approximately 69.0%, and 399
Venture Partners, Inc. ("CVC") acquired approximately 19.3%, of the
outstanding common stock of Holdings. The Mergers were approved by a
majority of Insilco's stockholders at a special meeting held on August 13,
1998.
The Mergers were financed by (i) approximately $70.2 million of
proceeds from the issuance by Silkworm of Units of Senior Discount Notes
and Warrants, (ii) $35.0 million of proceeds from the issuance by Holdings
to DLJMB and the other DLJMB Funds of 1,400,000 shares of 15% Senior
Exchangeable Preferred Stock Due 2010 and 65,603 Warrants, (iii)
approximately $55.0 million of proceeds from the issuance by Silkworm of
955,556 shares of common stock to DLJMB and the other DLJMB Funds and
266,666 shares of common stock to CVC, and (iv) approximately $43.1 million
of new borrowings under Insilco's existing $200 million credit facility
with various lenders and issuing banks.
The following documents are attached as exhibits: (i) DLJMB's
and Insilco's press release issued August 17, 1998; (ii) Holdings
certificate of incorporation (as amended pursuant to the Mergers); and
(iii) Holding's bylaws.
For purposes of Rule 12g-3(a), Holdings succeeds Insilco by virtue of
the Mergers. As a successor issuer for purposes of Rule 12g-3(a), Holdings
became subject to the Exchange Act reporting obligations of Insilco on the
effective date of the Mergers.
Item 7. Financial Statements and Exhibits
Exhibit No. Description
- ----------- -----------
3.1 Certificate of Incorporation of Holdings
3.2 Bylaws of Holdings
99.1 Press release issued August 17, 1998
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 thereunto duly authorized.
INSILCO HOLDING CO.
By: /s/ Kenneth H. Koch
---------------------------------
Name: Kenneth H. Koch
Title: Vice President and Secretary
August 18, 1998
EXHIBIT 3.1
BYLAWS
OF
INSILCO HOLDING CO
* * * * *
ARTICLE 1
Offices
Section 1.01. Registered Office. The registered office shall be in
the City of Wilmington, County of New Castle, State of Delaware.
Section 1.02. Other Offices. The Corporation may also have offices
at such other places both within and without the State of Delaware as the
Board of Directors may from time to time determine or the business of the
Corporation may require.
Section 1.03. Books. The books of the Corporation may be kept
within or without of the State of Delaware as the Board of Directors may
from time to time determine or the business of the Corporation may require.
ARTICLE 2
Meetings of Stockholders
Section 2.01. Time and Place of Meetings. All meetings of
stockholders shall be held at such place, either within or without the
State of Delaware, on such date and at such time as may be determined from
time to time by the Board of Directors (or the Chairman in the absence of a
designation by the Board of Directors).
Section 2.02. Annual Meetings. Unless directors are elected by
written consent in lieu of an annual meeting as permitted by the General
Corporation Law of the State of Delaware as the same exists or may
hereafter be amended ("Delaware Law"), an annual meeting of stockholders,
commencing with the year 1998, shall be held for the election of directors
and to transact such other business as may properly be brought before the
meeting. Stockholders may, unless the certificate of incorporation
otherwise provides, act by written consent to elect directors; provided,
however, that, if such consent is less than unanimous, such action by
written consent may be in lieu of holding an annual meeting only if all of
the directorships to which directors could be elected at an annual meeting
held at the effective time of such action are vacant and are filled by such
action.
Section 2.03. Special Meetings. Special meetings of stockholders may
be called by the Board of Directors or the Chairman of the Board and shall
be called by the Secretary at the request in writing of holders of record
of a majority of the outstanding capital stock of the Corporation entitled
to vote. Such request shall state the purpose or purposes of the proposed
meeting.
Section 2.04. Notice of Meetings and Adjourned Meetings; Waivers of
Notice. (a) Whenever stockholders are required or permitted to take any
action at a meeting, a written notice of the meeting shall be given which
shall state the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called.
Unless otherwise provided by Delaware Law, such notice shall be given not
less than 10 nor more than 60 days before the date of the meeting to each
stockholder of record entitled to vote at such meeting. Unless these
bylaws otherwise require, when a meeting is adjourned to another time or
place (whether or not a quorum is present), notice need not be given of the
adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting, the
Corporation may transact any business which might have been transacted at
the original meeting. If the adjournment is for more than 30 days, or
after the adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
(b) A written waiver of any such notice signed by the person entitled
thereto, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute
a waiver of notice of such meeting, except when the person attends the
meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 2.05. Quorum. Unless otherwise provided under the
certificate of incorporation or these bylaws and subject to Delaware Law,
the presence, in person or by proxy, of the holders of a majority of the
outstanding capital stock of the Corporation entitled to vote at a meeting
of stockholders shall constitute a quorum for the transaction of business.
If, however, such quorum shall not be present or represented at any meeting
of the stockholders, the stockholders present in person or represented by
proxy shall adjourn the meeting, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such
adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting
as originally notified.
Section 2.06. Voting. (a) Unless otherwise provided in the
certificate of incorporation and subject to Delaware Law, each stockholder
shall be entitled to one vote for each outstanding share of capital stock
of the Corporation held by such stockholder. Any share of capital stock of
the Corporation held by the Corporation shall have no voting rights.
Unless otherwise provided in Delaware Law, the certificate of incorporation
or these bylaws, the affirmative vote of a majority of the shares of
capital stock of the Corporation present, in person or by written proxy, at
a meeting of stockholders and entitled to vote on the subject matter shall
be the act of the stockholders.
(b) Each stockholder entitled to vote at a meeting of stockholders or
to express consent or dissent to a corporate action in writing without a
meeting may authorize another person or persons to act for him by written
proxy, but no such proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period.
Section 2.07. Action by Consent. (a) Unless otherwise provided in
the certificate of incorporation, any action required to be taken at any
annual or special meeting of stockholders, or any action which may be taken
at any annual or special meeting of stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents
in writing, setting forth the action so taken, shall be signed by the
holders of outstanding capital stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were present and
voted and shall be delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in
writing and who, if the action had been taken at a meeting, would have been
entitled to notice of the meeting if the record date for such meeting had
been the date that written consents signed by a sufficient number of
stockholders to take the action were delivered to the Corporation as
provided in Section 2.07(b).
(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be
effective to take the corporate action referred to therein unless, within
60 days of the earliest dated consent delivered in the manner required by
this section and Delaware Law to the Corporation, written consents signed
by a sufficient number of holders to take action are delivered to the
Corporation by delivery to its registered office in Delaware, its principal
place of business, or an officer or agent of the Corporation having custody
of the book in which proceedings of meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be by hand or by
certified or registered mail, return receipt requested.
Section 2.08. Organization. At each meeting of stockholders, the
Chairman of the Board, if one shall have been elected, or in his absence or
if one shall not have been elected, the director designated by the vote of
the majority of the directors present at such meeting, shall act as
chairman of the meeting. The Secretary (or in his absence or inability to
act, the person whom the chairman of the meeting shall appoint secretary of
the meeting) shall act as secretary of the meeting and keep the minutes
thereof.
Section 2.09. Order of Business. The order of business at all
meetings of stockholders shall be as determined by the chairman of the
meeting.
ARTICLE 3
Directors
Section 3.01. General Powers. Except as otherwise provided in
Delaware Law or the certificate of incorporation, the business and affairs
of the Corporation shall be managed by or under the direction of the Board
of Directors.
Section 3.02. Number, Election and Term of Office. The number of
directors which shall constitute the whole Board shall be fixed from time
to time by resolution of the Board of Directors but shall not be less than
three nor more than nine. The directors shall be elected at the annual
meeting of the stockholders by written ballot, except as provided in
Section 2.02 and Section 3.12 herein, and each director so elected shall
hold office until his successor is elected and qualified or until his
earlier death, resignation or removal. Directors need not be stockholders.
Section 3.03. Quorum and Manner of Acting. Unless the certificate of
incorporation or these bylaws require a greater number, a majority of the
total number of directors shall constitute a quorum for the transaction of
business, and the affirmative vote of a majority of the directors present
at meeting at which a quorum is present shall be the act of the Board of
Directors. When a meeting is adjourned to another time or place (whether
or not a quorum is present), notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which
the adjournment is taken. At the adjourned meeting, the Board of Directors
may transact any business which might have been transacted at the original
meeting. If a quorum shall not be present at any meeting of the Board of
Directors the directors present thereat shall adjourn the meeting, from
time to time, without notice other than announcement at the meeting, until
a quorum shall be present.
Section 3.04. Time and Place of Meetings. The Board of Directors
shall hold its meetings at such place, either within or without the State
of Delaware, and at such time as may be determined from time to time by the
Board of Directors (or the Chairman in the absence of a determination by
the Board of Directors).
Section 3.05. Annual Meeting. The Board of Directors shall meet for
the purpose of organization, the election of officers and the transaction
of other business, as soon as practicable after each annual meeting of
stockholders, on the same day and at the same place where such annual
meeting shall be held. Notice of such meeting need not be given. In the
event such annual meeting is not so held, the annual meeting of the Board
of Directors may be held at such place either within or without the State
of Delaware, on such date and at such time as shall be specified in a
notice thereof given as hereinafter provided in Section 3.07 herein or in a
waiver of notice thereof signed by any director who chooses to waive the
requirement of notice.
Section 3.06. Regular Meetings. After the place and time of regular
meetings of the Board of Directors shall have been determined and notice
thereof shall have been once given to each member of the Board of
Directors, regular meetings may be held without further notice being given.
Section 3.07. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board or the President and
shall be called by the Chairman of the Board, President or Secretary on the
written request of three directors. Notice of special meetings of the
Board of Directors shall be given to each director at least three days
before the date of the meeting in such manner as is determined by the Board
of Directors.
Section 3.08. Committees. The Board of Directors may designate one
or more committees, each committee to consist of one or more of the
directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members present
at any meeting and not disqualified from voting, whether or not such member
or members constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent provided
in the resolution of the Board of Directors, shall have and may exercise
all the powers and authority of the Board of Directors in the management of
the business and affairs of the Corporation, and may authorize the seal of
the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to the
following matter: (i) approving or adopting, or recommending to the
stockholders, any action or matter expressly required by Delaware Law to be
submitted to the stockholders for approval or (ii) adopting, amending or
repealing any bylaw of the Corporation. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required.
Section 3.09. Action by Consent. Unless otherwise restricted by the
certificate of incorporation or these bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the
Board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board
or committee.
Section 3.10. Telephonic Meetings. Unless otherwise restricted by
the certificate of incorporation or these bylaws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or such committee, as
the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and such participation in a meeting shall constitute
presence in person at the meeting.
Section 3.11. Resignation. Any director may resign at any time by
giving written notice to the Board of Directors or to the Secretary of the
Corporation. The resignation of any director shall take effect upon
receipt of notice thereof or at such later time as shall be specified in
such notice; and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 3.12. Vacancies. Unless otherwise provided in the certificate
of incorporation, vacancies and newly created directorships resulting from
any increase in the authorized number of directors elected by all the
stockholders having the right to vote as a single class may be filled by a
majority of the directors then in office, although less than a quorum, or
by a sole remaining director. Whenever the holders of any class or classes
of stock or series thereof are entitled to elect one or more directors by
the certificate of incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of directors
elected by such class or classes or series thereof then in office, or by a
sole remaining director so elected. Each director so chosen shall hold
office until his successor is elected and qualified, or until his earlier
death, resignation or removal. If there are no directors in office, then
an election of directors may be held in accordance with Delaware Law.
Unless otherwise provided in the certificate of incorporation, when one or
more directors shall resign from the Board, effective at a future date, a
majority of the directors then in office, including those who have so
resigned, shall have the power to fill such vacancy or vacancies, the vote
thereon to take effect when such resignation or resignations shall become
effective, and each director so chosen shall hold office as provided in the
filling of other vacancies.
Section 3.13. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, at any time by the affirmative vote
of the holders of a majority of the outstanding capital stock of the
Corporation entitled to vote and the vacancies thus created may be filled
in accordance with Section 3.12 herein.
Section 3.14. Compensation. Unless otherwise restricted by the
certificate of incorporation or these bylaws, the Board of Directors shall
have authority to fix the compensation of directors, including fees and
reimbursement of expenses.
ARTICLE 4
Officers
Section 4.01. Principal Officers. The principal officers of the
Corporation shall be a President, one or more Vice Presidents, a Treasurer
and a Secretary who shall have the duty, among other things, to record the
proceedings of the meetings of stockholders and directors in a book kept
for that purpose. The Corporation may also have such other principal
officers, including one or more Controllers, as the Board may in its
discretion appoint. One person may hold the offices and perform the duties
of any two or more of said offices, except that no one person shall hold
the offices and perform the duties of President and Secretary.
Section 4.02. Election, Term of Office and Remuneration. The
principal officers of the Corporation shall be elected annually by the
Board of Directors at the annual meeting thereof. Each such officer shall
hold office until his successor is elected and qualified, or until his
earlier death, resignation or removal. The remuneration of all officers of
the Corporation shall be fixed by the Board of Directors. Any vacancy in
any office shall be filled in such manner as the Board of Directors shall
determine.
Section 4.03. Subordinate Officers. In addition to the principal
officers enumerated in Section 4.01 herein, the Corporation may have one or
more Assistant Treasurers, Assistant Secretaries and Assistant Controllers
and such other subordinate officers, agents and employees as the Board of
Directors may deem necessary, each of whom shall hold office for such
period as the Board of Directors may from time to time determine. The
Board of Directors may delegate to any principal officer the power to
appoint and to remove any such subordinate officers, agents or employees.
Section 4.04. Removal. Except as otherwise permitted with respect to
subordinate officers, any officer may be removed, with or without cause, at
any time, by resolution adopted by the Board of Directors.
Section 4.05. Resignations. Any officer may resign at any time by
giving written notice to the Board of Directors (or to a principal officer
if the Board of Directors has delegated to such principal officer the power
to appoint and to remove such officer). The resignation of any officer
shall take effect upon receipt of notice thereof or at such later time as
shall be specified in such notice; and unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it
effective.
Section 4.06. Powers and Duties. The officers of the Corporation
shall have such powers and perform such duties incident to each of their
respective offices and such other duties as may from time to time be
conferred upon or assigned to them by the Board of Directors.
ARTICLE 5
General Provisions
Section 5.01. Fixing the Record Date. (a) In order that the
Corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the Board of
Directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the
Board of Directors, and which record date shall not be more than 60 nor
less than 10 days before the date of such meeting. If no record date is
fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at
a meeting of stockholders shall apply to any adjournment of the meeting;
provided that the Board of Directors may fix a new record date for the
adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the
Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which date shall not be more than 10
days after the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been fixed by the
Board of Directors, the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting, when no prior
action by the Board of Directors is required by Delaware Law, shall be the
first date on which a signed written consent setting forth the action taken
or proposed to be taken is delivered to the Corporation by delivery to its
registered office in Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been
fixed by the Board of Directors and prior action by the Board of Directors
is required by Delaware Law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall
be at the close of business on the day on which the Board of Directors
adopts the resolution taking such prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or
allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
be not more than 60 days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose shall be
at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
Section 5.02. Dividends. Subject to limitations contained in
Delaware Law and the certificate of incorporation, the Board of Directors
may declare and pay dividends upon the shares of capital stock of the
Corporation, which dividends may be paid either in cash, in property or in
shares of the capital stock of the Corporation.
Section 5.03. Year. The fiscal year of the Corporation shall
commence on January 1 and end on December 31 of each year.
Section 5.04. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization
and the words "Corporate Seal, Delaware". The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 5.05. Voting of Stock Owned by the Corporation. The Board of
Directors may authorize any person, on behalf of the Corporation, to
attend, vote at and grant proxies to be used at any meeting of stockholders
of any corporation (except this Corporation) in which the Corporation may
hold stock.
Section 5.06. Amendments. These bylaws or any of them, may be
altered, amended or repealed, or new bylaws may be made, by the
stockholders entitled to vote thereon at any annual or special meeting
thereof or by the Board of Directors.
EXHIBIT 3.2
CERTIFICATE OF MERGER
OF
SILKWORM ACQUISITION CORPORATION
INTO
INSILCO HOLDING CO.
(Pursuant to Section 251(a) of
the General Corporation Law of the State of Delaware)
*****
The undersigned does hereby certify that:
FIRST: The name and state of incorporation of each of the
constituent corporation is as follows:
Name State of Incorporation
Insilco Holding Co. Delaware
Silkworm Acquisition Delaware
Second: An Agreement and Plan of Merger (the "Agreement")
dated as of March 24, 1998, as amended, among Insilco Corporation, Insilco
Holding Co., Silkworm Acquisition Corporation and Insilco ReorgSub Company has
been approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the requirements of Section 251(c)
of the General Corporation Law of the State of Delaware.
THIRD: The name of the surviving corporation is Insilco
Holding Co.
FOURTH: The certificate of incorporation of Insilco Holding
Co. shall be amended to read in its entirety as set forth on Exhibit A hereto,
and, as so amended, shall be the certificate of incorporation of the surviving
corporation.
FIFTH: The executed Agreement is on file at an office of the
surviving corporation at 425 Metro Place North, Fifth Floor, Dublin, Ohio
43017.
SIXTH: A copy of the Agreement will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any
constituent corporation.
SEVENTH: This Certificate of Merger shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned has caused this instrument
to be duly executed by its authorized officers.
Dated: August 17, 1998
INSILCO HOLDING CO.
By: /s/ Kenneth H. Koch
----------------------------------
Name: Kenneth H. Koch
Title: Vice President and Secretary
EXHIBIT A
FIRST: The name of the Corporation is Insilco Holding Co.
SECOND: The address of its registered office in the State of
Delaware is 1013 Centre Road, Wilmington, New Castle County, Delaware 19805.
the name of its registered agent at such address is Corporation Service
Company."
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware as the same exists or may
hereafter be amended ("Delaware Law").
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 18,000,000, consisting of
15,000,000 shares of Common Stock, par value $0.001 per share (the "Common
Stock") and 3,000,000 shares of Preferred Stock, par value $0.001 per share
(the "Preferred Stock"). The Board of Directors is hereby empowered to
authorize by resolution or resolutions from time to time the issuance of one
or more classes or series of Preferred Stock and fix the designations, powers,
preferences and relative, participating, optional or other rights, if any, and
the qualifications, limitations or restrictions thereof, if any, with respect
to each such class or series of Preferred Stock and the number of shares
constituting each such class or series, and to increase or decrease the number
of shares of any such class or series to the extent permitted by Delaware Law.
Three million shares of Preferred Stock are hereby designated as 15% Senior
Exchangeable Preferred Stock Due 2010 and shall have the designations,
preferences and rights as set forth on Appendix 1 hereto.
FIFTH: The Board of Directors shall have the power to adopt,
amend or repeal the bylaws of the Corporation.
SIXTH: Election of directors need not be by written ballot
unless the bylaws of the Corporation so provide.
SEVENTH: (1) A director of the Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director to the fullest extent permitted by Delaware Law.
(2) (a) Each person (and the heirs, executors or administrators
of such person) who was or is a party or is threatened to be made a party to,
or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, shall be indemnified and held harmless by the Corporation
to the fullest extent permitted by Delaware Law. The right to indemnification
conferred in this ARTICLE SEVENTH shall also include the right to be paid by
the Corporation the expenses incurred in connection with any such proceeding
in advance of its final disposition to the fullest extent authorized by
Delaware Law. The right to indemnification conferred in this ARTICLE SEVENTH
shall be a contract right.
(b) The Corporation may, by action of its Board of Directors,
provide indemnification to such of the officers, employees and agents of the
Corporation to such extent and to such effect as the Board of Directors shall
determine to be appropriate and authorized by Delaware Law.
(3) The Corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any expense,
liability or loss incurred by such person in any such capacity or arising out
of his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under Delaware Law.
(4) The rights and authority conferred in this ARTICLE SEVENTH
shall not be exclusive of any other right which any person may otherwise have
or hereafter acquire.
(5) Neither the amendment nor repeal of this ARTICLE SEVENTH,
nor the adoption of any provision of this Certificate of Incorporation or
bylaws of the Corporation, nor, to the fullest extent permitted by Delaware
Law, any modification of law, shall eliminate or reduce the effect of this
ARTICLE SEVENTH in respect of any acts or omissions occurring prior to such
amendment, repeal, adoption or modification.
EIGHTH: The Corporation reserves the right to amend this
Certificate of Incorporation in any manner permitted by Delaware Law and, with
the sole exception of those rights and powers conferred under the above ARTICLE
SEVENTH, all rights and powers conferred herein on stockholders, directors and
officers, if any, are subject to this reserved power.
NINTH: The name and mailing address of the Incorporator is as
follows:
R.G.Dickerson
229 S. State Street
Dover, DE 19901
APPENDIX 1
15% SENIOR EXCHANGEABLE
PREFERRED STOCK DUE 2010
of
INSILCO HOLDING CO.
(1) Number and Designation. 3,000,000 shares of the Preferred
Stock of the Corporation shall be designated as 15% Senior Exchangeable
Preferred Stock Due 2010 (the "Senior Preferred Stock").
(2) Rank. The Senior Preferred Stock shall, with respect to
dividend rights and rights on liquidation, dissolution and winding up, rank
prior to all classes of or series of common stock of the Corporation,
including the Corporation's common stock, par value $0.001 per share ("Common
Stock"), and each other class of capital stock of the Corporation, the terms
of which provide that such class shall rank junior to the Senior Preferred
Stock or the terms of which do not specify any rank relative to the Senior
Preferred Stock. All equity securities of the Corporation to which the Senior
Preferred Stock ranks prior (whether with respect to dividends or upon
liquidation, dissolution, winding up or otherwise), including the Common
Stock, are collectively referred to herein as the "Junior Securities." All
equity securities of the Corporation with which the Senior Preferred Stock
ranks on a parity (whether with respect to dividends or upon liquidation,
dissolution or winding up) are collectively referred to herein as the "Parity
Securities." The respective definitions of Junior Securities and Parity
Securities shall also include any rights or options exercisable for or
convertible into any of the Junior Securities and Parity Securities, as the
case may be. The Senior Preferred Stock shall be subject to the creation of
Junior Securities.
(3) Dividends. (a) (i) The holders of shares of Senior
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors, out of funds legally available for the payment of
dividends, dividends (subject to Sections 3(a)(ii) and (iii) hereof) at a rate
equal to 15% per annum (on the basis of a 360 day year) (the "Dividend Rate")
on the Liquidation Value of each share of Senior Preferred Stock on and as of
the most recent Dividend Payment Date (as defined below). In the event the
Corporation is unable or shall fail to discharge its obligation to redeem all
outstanding shares of Senior Preferred Stock pursuant to paragraph 5(b) or
5(c) hereof, the Dividend Rate shall increase by .25 percent per quarter
(each, a "Default Dividend") for each quarter or portion thereof following the
date on which such redemption was required to be made until cured, provided
that the aggregate increase shall not exceed 5%. Such dividends shall be
payable in the manner set forth below in Sections 3(a)(ii) and (iii) quarterly
on January 31, April 30, July 31 and October 31 of each year (unless such day
is not a business day, in which event on the next succeeding business day)
(each of such dates being a "Dividend Payment Date" and each such quarterly
period being a "Dividend Period"). Such dividends shall be cumulative from the
date of issue, whether or not in any Dividend Period or Periods there shall be
funds of the Corporation legally available for the payment of such dividends.
(ii) Prior to August 1, 2003 (the "Cash Pay Date"), dividends
shall not be payable in cash to holders of shares of Senior
Preferred Stock but shall, subject to Section 3(b) hereof,
accrete to the Liquidation Value in accordance with Section
4(a) hereof.
(iii) Following the Cash Pay Date, each such dividend shall be
payable in cash on the Liquidation Value per share of the
Senior Preferred Stock, in equal quarterly amounts (to which
the Default Dividend, if any, shall be added), to the holders
of record of shares of the Senior Preferred Stock, as they
appear on the stock records of the Corporation at the close of
business on such record dates, not more than 60 days or less
than 10 days preceding the payment dates thereof, as shall be
fixed by the Board of Directors. Accrued and unpaid dividends
for any past Dividend Periods may be declared and paid at any
time, without reference to any Dividend Payment Date, to
holders of record on such date, not more than 45 days preceding
the payment date thereof, as may be fixed by the Board of
Directors.
(b) At the written request of the holders of a majority of the
shares of Senior Preferred Stock, the Corporation shall, commencing on the
first Dividend Payment Date after such request and ending on the Cash Pay
Date, be required to pay all dividends on shares of Senior Preferred Stock by
the issuance of additional shares of Senior Preferred Stock ("Additional
Shares"). The Additional Shares shall be identical to all other shares of
Senior Preferred Stock, except as set forth in Section 4. For the purposes of
determining the number of Additional Shares to be issued as dividends pursuant
to this Paragraph (b), such Additional Shares shall be valued at their
Applicable Liquidation Value as provided in Section 4(c).
(c) Holders of shares of Senior Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in
excess of the cumulative dividends, as herein provided, on the Senior
Preferred Stock. Except as provided in this Section 3, no interest, or sum of
money in lieu of interest, shall be payable in respect of any dividend payment
or payments on the Senior Preferred Stock that may be in arrears.
(d) So long as any shares of the Senior Preferred Stock are
outstanding, no dividends, except as described in the next succeeding
sentence, shall be declared or paid or set apart for payment on Parity
Securities, for any period unless (to the extent such dividends are payable in
cash) full cumulative dividends have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart
for such payment on the Senior Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of the dividend on such class
or series of Parity Securities. When (to the extent such dividends are payable
in cash) dividends are not paid in full or a sum sufficient for such payment
is not set apart, as aforesaid, all dividends declared upon shares of the
Senior Preferred Stock and all dividends declared upon any other class or
series of Parity Securities shall (in each case, to the extent payable in
cash) be declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Senior Preferred Stock and accumulated and
unpaid on such Parity Securities.
(e) So long as any shares of the Senior Preferred Stock are
outstanding, no dividends (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities) shall be declared or paid or set apart for payment or
other distribution declared or made upon Junior Securities, nor shall any
Junior Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as a "Junior Securities Distribution") for any
consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation,
directly or indirectly (except by conversion into or exchange for Junior
Securities), unless in each case (i) the full cumulative dividends on all
outstanding shares of the Senior Preferred Stock and any other Parity
Securities shall (to the extent payable in cash) have been paid or set apart
for payment for all past Dividend Periods with respect to the Senior Preferred
Stock and all past dividend periods with respect to such Parity Securities and
(ii) (to the extent payable in cash) sufficient funds shall have been paid or
set apart for the payment of the dividend for the current Dividend Period with
respect to the Senior Preferred Stock and the current dividend period with
respect to such Parity Securities.
(4) Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, before any payment or distribution of the assets of the
Corporation (whether capital or surplus) shall be made to or set apart for the
holders of Junior Securities, the holders of the shares of Senior Preferred
Stock shall be entitled to receive an amount equal to the Liquidation Value of
such share plus any accrued and unpaid cash dividends to the date of
distribution. "Liquidation Value" on any date means, with respect to (x) any
share of Senior Preferred Stock other than any Additional Shares, the sum of
(1) $25.00 per share and (2) the aggregate of all dividends accreted on such
share until the most recent Dividend Payment Date upon which an accretion to
Liquidation Value has occurred (or if such date is a Dividend Payment Date
upon which an accretion to Liquidation Value has occurred, such date),
provided that in the event of an actual liquidation, dissolution or winding up
of the Corporation or the redemption of any shares of Senior Preferred Stock
pursuant to Section 5 hereunder, the amount referred to in (2) shall be
calculated by including dividends accreting to the actual date of such
liquidation, dissolution or winding up or the redemption date, as the case may
be, rather than the Dividend Payment Date referred to above and provided
further that in no event will dividends accrete beyond the earlier of (i) the
Cash Pay Date and (ii) the most recent Dividend Payment Date prior to the
Dividend Payment Date on which dividends on the Senior Preferred Stock are
payable in Additional Shares and (y) any Additional Share, the Applicable
Liquidation Value. All accretions to Liquidation Value will be calculated
using compounding on a quarterly basis. Except as provided in the preceding
sentences, holders of shares of Senior Preferred Stock shall not be entitled
to any distribution in the event of liquidation, dissolution or winding up of
the affairs of the Corporation. If, upon any liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of Senior Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid
and liquidating payments on any Parity Securities, then such assets, or the
proceeds thereof, shall be distributed among the holders of shares of Senior
Preferred Stock and any such other Parity Securities ratably in accordance with
the respective amounts that would be payable on such shares of Senior Preferred
Stock and any such other stock if all amounts payable thereon were paid in
full. For the purposes of this paragraph (4), (i) a consolidation or merger of
the Corporation with one or more corporations, or (ii) a sale or transfer of
all or substantially all of the Corporation's assets, shall not be deemed to
be a liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.
(b) Subject to the rights of the holders of any Parity
Securities, after payment shall have been made in full to the holders of the
Senior Preferred Stock, as provided in this paragraph (4), any other series or
class or classes of Junior Securities shall, subject to the respective terms
and provisions (if any) applying thereto, be entitled to receive any and all
assets remaining to be paid or distributed, and the holders of the Senior
Preferred Stock shall not be entitled to share therein.
(c) The "Applicable Liquidation Value" of any Additional Shares
shall be the Liquidation Value of Senior Preferred Stock outstanding
immediately prior to the first Dividend Payment Date occurring after a request
for payment in Additional Shares has been made in accordance with Section 3(b).
(5) Redemption. (a) Redemption At the Option of the
Corporation. To the extent the Corporation shall have funds legally available
for such payment, the Corporation may, at its option, redeem shares of Senior
Preferred Stock, at any time in whole but not in part, at redemption prices
per share in cash set forth in the table below, together with accrued and
unpaid cash dividends thereon to the date fixed for redemption, without
interest:
Prior to
August 1, Percentage of Liquidation Value
--------- -------------------------------
2003 115.000
2004 107.500
2005 105.000
2006 102.500
Thereafter 100.000
(b) Redemption In the Event of a Change of Control. In the
event of a Change of Control, the Corporation shall, to the extent it shall
have funds legally available for such payment, offer to redeem all of the
shares of Senior Preferred Stock then outstanding, and shall redeem the shares
of Senior Preferred Stock of any holder of such shares that shall consent to
such redemption, upon a date no later than 30 days following the Change in
Control, at a redemption price per share equal to 101% of the Liquidation
Value, in cash, plus accrued and unpaid cash dividends thereon to the date
fixed for redemption, without interest.
"Change of Control" means such time as: (a) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), other than any person or group comprised
solely of the Initial Investors, has become the beneficial owner, by way of
merger, consolidation or otherwise, of 50% or more of the voting power of all
classes of voting securities of the Corporation, and such person or group has
become the beneficial owner of a greater percentage of the voting power of all
classes of voting securities of the Corporation than that beneficially owned
by the Initial Investors; or (b) a sale or transfer of all or substantially
all of the assets of the Corporation to any person or group (other than any
group consisting solely of the Initial Investors or their affiliates) has been
consummated; or (c) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election was approved by a
vote of a majority of the directors then still in office, who either were
directors at the beginning of such period or whose election or nomination for
the election was previously so approved) cease for any reason to constitute a
majority of the directors of the Corporation, then in office.
"Initial Investors" means the Stockholders (determined as of
the issuance of the Preferred Stock) and their Permitted Transferees, each as
defined in the Investors' Agreement.
"Investors' Agreement" means the Investors' Agreement dated as
of August 17, 1998 among Insilco Holding Co., DLJ Merchant Banking Partners II,
L.P., DLJ Merchant Banking Partners II-A, L.P., DLJ Offshore Partners II, C.V.,
DLJ Diversified Partners, L.P., DLJ Diversified Partners-A, L.P., DLJ
Millennium Partners, L.P., DLJ Millennium-A, L.P., DLJMB Funding II, Inc., DLJ
EAB Partners, L.P., DLJ First ESC L.P., UK Investment Plan 1997 Partners, DLJ
ESC II, L.P., (collectively, the "DLJMB Funds"), and 399 Venture Partners,
Inc., as amended
(c) Mandatory Redemption. To the extent the Corporation shall
have funds legally available for such payment, on August 1, 2010, if any
shares of the Senior Preferred Stock shall be outstanding, the Corporation
shall redeem all outstanding shares of the Senior Preferred Stock, at a
redemption price equal to the aggregate Liquidation Value, in cash, together
with any accrued and unpaid cash dividends thereon to the date fixed for
redemption, without interest.
(d) Status of Redeemed Shares. Shares of Senior Preferred Stock
which have been issued and reacquired in any manner, including shares
purchased or redeemed, shall (upon compliance with any applicable provisions
of the laws of the State of Delaware) have the status of authorized and
unissued shares of the class of Preferred Stock undesignated as to series and
may be redesignated and reissued as part of any series of the Preferred Stock;
provided that no such issued and reacquired shares of Senior Preferred Stock
shall be reissued or sold as Senior Preferred Stock.
(e) Failure to Redeem. If the Corporation is unable or shall
fail to discharge its obligation to redeem all outstanding shares of Senior
Preferred Stock pursuant to paragraph (5)(b) or 5(c) (each, a "Mandatory
Redemption Obligation"), such Mandatory Redemption Obligation shall be
discharged as soon as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory Redemption Obligation
with respect to the Senior Preferred Stock shall not be fully discharged, the
Corporation shall not (i) directly or indirectly, redeem, purchase, or
otherwise acquire any Parity Security or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Parity
Securities (except in connection with a redemption, sinking fund or other
similar obligation to be satisfied pro rata with the Senior Preferred Stock)
or (ii) in accordance with paragraph 3(e), declare or make any Junior
Securities Distribution, or, directly or indirectly, discharge any mandatory
or optional redemption, sinking fund or other similar obligation in respect of
the Junior Securities.
(f) Failure to Pay Dividends. Notwithstanding the foregoing
provisions of this paragraph (5), unless full cumulative cash dividends
(whether or not declared) on all outstanding shares of Senior Preferred Stock
shall have been paid or contemporaneously are declared and paid or set apart
for payment for all dividend periods terminating on or prior to the applicable
redemption date, none of the shares of Senior Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of
Senior Preferred Stock are redeemed pro rata.
(6) Procedure for Redemption. (a) In the event the Corporation
shall redeem shares of Senior Preferred Stock pursuant to Sections 5(a) or
(c), notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock register of the Corporation;
provided that neither the failure to give such notice nor any defect therein
shall affect the validity of the giving of notice for the redemption of any
share of Senior Preferred Stock to be redeemed except as to the holder to whom
the Corporation has failed to give said notice or except as to the holder
whose notice was defective. Each such notice shall state: (i) the redemption
date; (ii) the number of shares of Senior Preferred Stock to be redeemed;
(iii) the redemption price; (iv) the place or places where certificates for
such shares are to be surrendered for payment of the redemption price; and (v)
that dividends on the shares to be redeemed will cease to accrue on such
redemption date.
(b) In the case of any redemption pursuant to Sections 5(a) or
(c) hereof, notice having been mailed as provided in Section 6(a) hereof, from
and after the redemption date (unless default shall be made by the Corporation
in providing money for the payment of the redemption price of the shares
called for redemption), dividends on the shares of Senior Preferred Stock so
called for redemption shall cease to accrue, and all rights of the holders
thereof as stockholders of the Corporation (except the right to receive from
the Corporation the redemption price) shall cease. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such share shall
be redeemed by the Corporation at the redemption price aforesaid. In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares without
cost to the holder thereof.
(c) In the case of a redemption pursuant to Section 5(b)
hereof, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not more than 10 days following the occurrence of the Change
of Control and not less than 20 days prior to the redemption date, to each
holder of record of the shares to be redeemed at such holder's address as the
same appears on the stock register of the Corporation; provided that neither
the failure to give such notice nor any defect therein shall affect the
validity of the giving of notice for the redemption of any share of Senior
Preferred Stock to be redeemed except as to the holder to whom the Corporation
has failed to give said notice or except as to the holder whose notice was
defective. Each such notice shall state: (i) that a Change of Control has
occurred; (ii) the redemption date; (iii) the redemption price; (iv) that such
holder may elect to cause the Corporation to redeem all or any of the shares
of Senior Preferred Stock held by such holder; (v) the place or places where
certificates for such shares are to be surrendered for payment of the
redemption price; and (vi) that dividends on the shares the holder elects to
cause the Corporation to redeem will cease to accrue on such redemption date.
Upon receipt of such notice, the holder shall, within 20 days
of receipt thereof, return such notice to the Corporation indicating the
number of shares of Senior Preferred Stock such holder shall elect to cause
the Corporation to redeem, if any.
(d) In the case of a redemption pursuant to Section 5(b)
hereof, notice having been mailed as provided in Section 6(c) hereof, from and
after the redemption date (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called
for redemption), dividends on such shares of Senior Preferred Stock as the
holder elects to cause the Corporation to redeem shall cease to accrue, and
all rights of the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the redemption price) shall cease.
Upon surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Board
of Directors of the Corporation shall so require and the notice shall so
state), such share shall be redeemed by the Corporation at the redemption
price aforesaid. In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued representing the
unredeemed shares without cost to the holder thereof.
(7) Exchange. (a) Subject to the provisions of this paragraph
(7) the Corporation may, at its option, at any time and from time to time on
any Dividend Payment Date, exchange, to the extent it is legally permitted to
do so, all, but not less than all, outstanding shares (and fractional shares)
of Senior Preferred Stock, for Exchange Debentures, provided that (i) on or
prior to the date of exchange the Corporation shall have paid to or declared
and set aside for payment to the holders of outstanding shares of Senior
Preferred Stock all accrued and unpaid cash dividends on shares of Senior
Preferred Stock through the exchange date in accordance with the next
succeeding paragraph; (ii) no event of default under the indenture (as defined
in such indenture) governing the Exchange Debentures shall have occurred and
be continuing; and (iii) no shares of Senior Preferred Stock are held on such
date by the DLJMB Funds or any of their Affiliates, or any of their Permitted
Transferees. The principal amount of Exchange Debentures deliverable upon
exchange of a share of Senior Preferred Stock, adjusted as hereinafter
provided, shall be determined in accordance with the Exchange Ratio (as defined
below).
Cash dividends on any shares of Senior Preferred Stock
exchanged for Exchange Debentures which have accrued but have not been paid as
of the date of exchange shall be paid in cash. In no event shall the
Corporation issue Exchange Debentures in denominations other than $1,000 or in
an integral multiple thereof. Cash will be paid in lieu of any such fraction
of an Exchange Debenture which would otherwise have been issued (which shall
be determined with respect to the aggregate principal amount of Exchange
Debentures to be issued to a holder upon any such exchange). Interest will
accrue on the Exchange Debentures from the date of exchange.
Prior to effecting any exchange hereunder, the Corporation
shall appoint a trustee to serve in the capacity contemplated by an indenture
between the Corporation and such trustee, containing customary terms and
conditions.
The Exchange Ratio shall be, as of any Dividend Payment Date,
$1.00 (or fraction thereof) of principal amount of Exchange Debenture for each
$1.00 of (i) Liquidation Value plus (ii) accrued and unpaid cash dividends, if
any, per share of Senior Preferred Stock held by a holder on the applicable
exchange date.
"Affiliates" shall have the meaning ascribed such term in the
Investors' Agreement.
"Exchange Debentures" means 15% Subordinated Exchange Debentures
due 2010 of the Corporation, to be issued pursuant to an indenture between the
Corporation and a trustee, containing customary terms and conditions, in
accordance with the Term Sheet attached as Annex A hereto.
"Permitted Transferees" shall have the meaning ascribed to such
term in the Investors' Agreement.
(b) Procedure for Exchange. (i) In the event the Corporation shall
exchange shares of Senior Preferred Stock, notice of such exchange shall be
given by first class mail, postage prepaid, mailed not less than 30 days nor
more than 60 days prior to the exchange date, to each holder of record of the
shares to be exchanged at such holder's address as the same appears on the
stock register of the Corporation; provided that neither the failure to give
such notice nor any defect therein shall affect the validity of the giving of
notice for the exchange of any share of Senior Preferred Stock to be exchanged
except as to the holder to whom the Corporation has failed to give said notice
or except as to the holder whose notice was defective. Each such notice shall
state: (A) the exchange date; (B) the number of shares of Senior Preferred
Stock to be exchanged and, if fewer than all the shares held by such holder
are to be exchanged, the number of shares to be exchanged from such holder;
(C) the Exchange Ratio; (D) the place or places where certificates for such
shares are to be exchanged for notes evidencing the Exchange Debentures to be
received by the exchanging holder; and (E) that dividends on the shares to be
exchanged will cease to accrue on such exchange date.
(ii) Prior to giving notice of intention to exchange, the
Corporation shall execute and deliver with a bank or trust
company selected by the Corporation an indenture containing
customary terms and conditions. The Corporation will cause the
Exchange Debentures to be authenticated on the Dividend Payment
Date on which the exchange is effective, and will pay interest
on the Exchange Debentures at the rate and on the dates
specified in such indenture from the exchange date.
The Corporation will not give notice of its intention to
exchange under paragraph 6(b)(i) hereof unless it shall file
at the place or places (including a place in the Borough of
Manhattan, The City of New York) maintained for such purpose
an opinion of counsel (who may be an employee of the
Corporation) to the effect that (i) the indenture has been
duly authorized, executed and delivered by the Corporation,
has been duly qualified under the Trust Indenture Act of
1939 (or that such qualification is not necessary) and
constitutes a valid and binding instrument enforceable
against the Corporation in accordance with its terms
(subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles, and subject to such other qualifications
as are then customarily contained in opinions of counsel
experienced in such matters), (ii) the Exchange Debentures
have been duly authorized and, when executed and
authenticated in accordance with the provisions of the
indenture and delivered in exchange for the shares of
Preferred Stock, will constitute valid and binding
obligations of the Corporation entitled to the benefits of
the indenture (subject as aforesaid), (iii) neither the
execution nor delivery of the indenture or the Exchange
Debentures nor compliance with the terms, conditions or
provisions of such instruments will result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust or agreement or instrument, known to such counsel, to
which the Corporation or any of its subsidiaries is a party
or by which it or any of them is bound, or any decree,
judgment, order, rule or regulation, known to such counsel,
of any court or governmental agency or body having
jurisdiction over the Corporation and such subsidiaries or
any of their properties, (iv) the Exchange Debentures have
been duly registered for such exchange with the Securities
and Exchange Commission under a registration statement that
has become effective under the Securities Act of 1933 (the
"Act") or that the exchange of the Exchange Debentures for
the shares of Senior Preferred Stock is exempt from
registration under the Act, and (v) the Corporation has
sufficient legally available funds for such exchange such
that such exchange is permitted under applicable law.
(iii) Notice having been mailed as aforesaid, from and after
the exchange date (unless default shall be made by the
Corporation in issuing Exchange Debentures in exchange for the
shares called for exchange), dividends on the shares of Senior
Preferred Stock so called for exchange shall cease to accrue,
and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive from the Corporation
the Exchange Debentures and any rights such holder, upon the
exchange, may have as a holder of the Exchange Debenture) shall
cease. Upon surrender in accordance with said notice of the
certificates for any shares so exchanged (properly endorsed or
assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state),
such share shall be exchanged by the Corporation for the
Exchange Debentures at the Exchange Ratio. In case fewer than
all the shares represented by any such certificate are
exchanged, a new certificate shall be issued representing the
unexchanged shares without cost to the holder thereof.
(iv) Each exchange shall be deemed to have been effected
immediately after the close of business on the relevant Dividend
Payment Date, and the person in whose name or names any Exchange
Debentures shall be issuable upon such exchange shall be deemed
to have become the holder of record of the Exchange Debentures
represented thereby at such time on such Dividend Payment Date.
(v) Prior to the delivery of any securities which the
Corporation shall be obligated to deliver upon exchange of the
Senior Preferred Stock, the Corporation shall comply with all
applicable federal and state laws and regulations which require
action to be taken by the Corporation.
(c) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
notes evidencing Exchange Debentures on exchange of the Senior Preferred Stock
pursuant hereto; provided that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issue
or delivery of Exchange Debentures in a name other than that of the holder of
the Senior Preferred Stock to be exchanged and no such issue or delivery shall
be made unless and until the person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(8) Voting Rights. (a) The holders of record of shares of Senior
Preferred Stock shall not be entitled to any voting rights except as
hereinafter provided in this paragraph (8), as otherwise provided by law or as
provided in the Investors' Agreement.
(b) If and whenever (i) four consecutive or six quarterly cash dividends
payable on the Senior Preferred Stock have not been paid in full, (ii) for any
reason (including the reason that funds are not legally available for a
redemption), the Corporation shall have failed to discharge any Mandatory
Redemption Obligation (including a redemption in the Event of a Change of
Control pursuant to Section 5(b) hereof), (iii) the Corporation shall have
failed to provide the notice required by Section 6(d) hereof within the time
period specified in such section or (iv) the Corporation shall have failed to
comply with Sections 3(d), 3(e) or 8(c) hereof, (1) the number of directors
then constituting the Board of Directors shall be increased by two and the
holders of a majority of the outstanding shares of Senior Preferred Stock,
together with the holders of shares of every other series of preferred stock
upon which like rights have been conferred and are exercisable (resulting form
either the failure to pay dividends or the failure to redeem) (any such series
is referred to as the "Preferred Shares"), voting as a single class regardless
of series, shall be entitled to elect the two additional directors to serve
on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of the
Senior Preferred Stock and the Preferred Shares called as hereinafter
provided. Whenever (i) all arrears in cash dividends on the Senior Preferred
Stock and the Preferred Shares then outstanding shall have been paid and cash
dividends thereon for the current quarterly dividend period shall have been
paid or declared and set apart for payment, (ii) the Corporation shall have
fulfilled its Mandatory Redemption Obligation, (iii) fulfilled its obligation
to provide notice as specified in subsection (b)(iii) hereof, or (iv) the
Corporation shall have complied with Sections 3(d), 3(e), or 8(c) hereof, as
the case may be, then the right of the holders of the Senior Preferred Stock
to elect such additional two directors shall cease (but subject always to the
same provisions for the vesting of such voting rights in the case of any
similar future (i) arrearage in six consecutive quarterly cash dividends, (ii)
failure to fulfill any Mandatory Redemption Obligation, (iii) failure to
fulfill the obligation to provide the notice required by Section 6(d) hereof
within the time period specified in such section or (iv) failure to comply
with Sections 3(d), 3(e), or 8(c)) and the terms of office of all persons
elected as directors by the holders of the Senior Preferred Stock shall
forthwith terminate and the number of the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of shares of Senior Preferred Stock and the Preferred Shares, the
secretary of the Corporation may, and upon the written request of any holder
of Senior Preferred Stock (addressed to the secretary at the principal office
of the Corporation) shall, call a special meeting of the holders of the Senior
Preferred Stock and of the Preferred Shares for the election of the two
directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the secretary
within 20 days after receipt of any such request, then any holder of shares of
Senior Preferred Stock may call such meeting, upon the notice above provided,
and for that purpose shall have access to the stock books of the Corporation.
The directors elected at any such special meeting shall hold office until the
next annual meeting of the stockholders or special meeting held in lieu
thereof if such office shall not have previously terminated as above provided.
If any vacancy shall occur among the directors elected by the holders of the
Senior Preferred Stock and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the Senior Preferred Stock and the Preferred Shares
or the successor of such remaining director, to serve until the next annual
meeting of the stockholders or special meeting held in place thereof if such
office shall not have previously terminated as provided above.
(c) Without the written consent of a majority of the
outstanding shares of Senior Preferred Stock or the vote of holders of a
majority of the outstanding shares of Senior Preferred Stock at a meeting of
the holders of Senior Preferred Stock called for such purpose, the Corporation
will not (i) amend, alter or repeal any provision of the Certificate of
Incorporation (by merger or otherwise) so as to adversely affect the
preferences, rights or powers of the Senior Preferred Stock; provided that any
such amendment that decreases the dividend payable on or the Liquidation Value
of the Senior Preferred Stock shall require the affirmative vote of holders of
each share of Senior Preferred Stock at a meeting of holders of Senior
Preferred Stock called for such purpose or written consent of the holder of
each share of Senior Preferred Stock; or (ii) create, authorize or issue any
class of stock ranking prior to, or on a parity with, the Senior Preferred
Stock with respect to dividends or upon liquidation, dissolution, winding up
or otherwise, or increase the authorized number of shares of any such class or
series, or reclassify any authorized stock of the Corporation into any such
prior or parity shares or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such prior
or parity shares, except that the Corporation may, without such approval,
create authorize and issue Parity Securities for the purpose of utilizing the
proceeds from the issuance of such Parity Securities for the redemption or
repurchase of all outstanding shares of Senior Preferred Stock in accordance
with the terms hereof or of the Investors' Agreement.
(d) In exercising the voting rights set forth in this paragraph
(8), each share of Senior Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the Senior Preferred Stock as a single class on any matter, then the
Senior Preferred Stock and such other series shall have with respect to such
matters one vote per $25.00 of Liquidation Value or other liquidation
preference. Except as otherwise required by applicable law or as set forth
herein, the shares of Senior Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers and the
consent of the holders thereof shall not be required for the taking of any
corporate action.
(9) Reports. So long as any of the Senior Preferred Stock is
outstanding, the Corporation will furnish the holders thereof with the
quarterly and annual financial reports that the Corporation is required to
file with the Securities and Exchange Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 or, in the event the
Corporation is not required to file such reports, reports containing the same
information as would be required in such reports.
(10) General Provisions. (a)The term "Person" as used herein
means any corporation, limited liability company, partnership, trust,
organization, association, other entity or individual.
(b) The term "outstanding", when used with reference to shares
of stock, shall mean issued shares, excluding shares held by the Corporation
or a subsidiary.
(c) The headings of the paragraphs, subparagraphs, clauses and
subclauses used herein are for convenience of reference only and shall not
define, limit or affect any of the provisions hereof.
(d) Each holder of Senior Preferred Stock, by acceptance
thereof, acknowledges and agrees that payments of dividends, interest, premium
and principal on, and exchange, redemption and repurchase of, such securities
by the Corporation are subject to restrictions on the Corporation contained in
certain credit and financing agreements.
ANNEX A
SUMMARY OF TERMS
OF INDENTURE FOR
15% SUBORDINATED EXCHANGE DEBENTURES
Parties: Insilco Holding Co. (the "Corporation") and
[ ], as trustee.
Issue: 15% Exchange Debentures (the "Exchange
Debentures") to be issued by the Corporation, at
its option, in exchange for any or all the
outstanding shares of 15% Senior Exchangeable
Preferred Stock due 2010 (the "Senior Preferred
Stock") issued on or about August 17, 1998 to
DLJ Merchant Banking Partners II, L.P. and
certain of its affiliates (the "DLJ Entities").
Maturity: August 1, 2010.
Interest: 15% annual rate, payable semi-annually.
Through the tenth semi-annual interest payment
period, quarterly interest will accrete on a
compound basis (i.e. non-cash pay) and increase
the face amount of the Exchange Debentures,
thereafter interest will be payable in cash.
Ranking: The Exchange Debentures will rank senior to all
other subordinated debt (but junior to the Senior
Discount Debentures due 2008 of the Corporation
and the Corporation's guaranty of Insilco
Corporation's indebtedness under its Senior
Credit Facility), preferred stock and common
equity of the Corporation.
Optional Redemption: The Exchange Debentures will be redeemable at
any time at the option of the Corporation, in
whole or in part, at the same redemption prices
set forth in the designation of the Senior
Preferred Stock set forth in Article 4 of the
Restated Certificate of Incorporation of the
Surviving Corporation.
Change of Control In the event of a Change of Control of the
Repurchase Right: Corporation each holder of the Exchange
Debentures will have the right to require the
Corporation to repurchase all or any part of such
holder's Exchange Debentures at a purchase price
of 101% of the sum of the accreted value thereof
plus accrued and unpaid cash interest, if any, to
the repurchase date.
Covenants: The Debentures will contain covenants that are
substantially the same as the covenants contained
in the Indenture for the Senior Discount
Debentures due 2008 of the Corporation and will
limit, among other things, the ability of the
Corporation and its subsidiaries (i) to incur
additional indebtedness, (ii) to pay dividends and
make other distributions on its capital stock, (iii)
to repurchase its capital stock or warrants,
options or other rights to acquire shares of its
capital stock or any Indebtedness subordinated to
the Exchange Debentures, (iv) to make certain
other Restricted Payments, (v) to make certain
investments or asset sales, (vi) to engage in
transactions with affiliates, (vii) to create liens,
(viii) to permit "layering" of indebtedness and
(ix) to merge or consolidate or transfer all or
substantially all of its assets.
EXHIBIT 99.1
Excellence in Electronics, Telecommunications, Automotive, Publishing
- -------------------------------------------------------------------------------
News Release
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For Immediate Release Contact: David A. Kauer
Vice President and
Chief Financial Officer
(614) 792-0468
DLJMB FUNDS COMPLETE ACQUISITION OF INSILCO
August 17, 1998 - DLJ Merchant Banking Partners II, L.P. and
affiliated funds and entities announced the completion of their previously
announced acquisition of Insilco Coporation (NASDAQ:INSL).
Insilco Corporation, based in suburban Columbus, Ohio, is a
diversified manufacturer of industrial components and a supplier of speciality
publications. The Company's industrial business units serve the automotive,
electronics, telecommunications and other industrial markets, and its
publishing business services the school yearbook market. The Company's 1997
revenues exceeded $500 million.
Investor Relations Contact: David A. Kauer or Stephen Smith, (614) 792-0468 or
write to Insilco Corporation, Investor Relations, 425 Metro Place North, Box
7196, Dublin, OH 43017 or call Melodye Demastus, Melrose Consulting,
(614) 771-0860.
